<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
(MARK ONE)
__ X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-9654
OHM CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-1503050
(State of Incorporation) (I.R.S. Employer Identification Number)
16406 U.S. ROUTE 224 EAST, FINDLAY, OH. 45840
(Address of principal executive offices) (Zip Code)
(419) 423-3529
(Registrant's telephone number, including area code)
Indicate by check 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 filing such
requirement for the past 90 days. Yes X No _____
The number of shares of Common Stock outstanding on July 31, 1995
was 26,539,960.
<PAGE> 2
OHM CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1995 (Unaudited)
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Income (Unaudited) for the Three and Six Months
Ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Cash Flows (Unaudited) for the Six Months
Ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . 4
Independent Accountants' Review Report . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . 10
PART II
OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<TABLE>
Item 1. FINANCIAL STATEMENTS
OHM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<CAPTION>
June 30, December 31,
1995 1994
---------- ----------
ASSETS (Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,928 $ 4,930
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,318 86,663
Costs and estimated earnings on contracts in process in excess of billings . . 60,785 65,437
Materials and supply inventory, at cost . . . . . . . . . . . . . . . . . . . 11,797 10,099
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . 14,463 7,252
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,612 6,744
Refundable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 205
-------- --------
237,040 181,330
-------- --------
Property and Equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,347 57,240
-------- ---------
Other Noncurrent Assets:
Deferred debt issuance and financing costs . . . . . . . . . . . . . . . . . . 1,906 2,381
Investment in affiliated company . . . . . . . . . . . . . . . . . . . . . . . 23,633 23,352
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 336
Intangible assets relating to acquired businesses, net . . . . . . . . . . . . 3,725 370
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,192 7,537
-------- ---------
41,792 33,976
-------- ---------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $363,179 $272,546
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,051 $ 47,936
Billings on contracts in process in excess of costs and estimated earnings . . 4,782 40
Accrued compensation and related taxes . . . . . . . . . . . . . . . . . . . . 5,877 3,874
Federal, state and local taxes . . . . . . . . . . . . . . . . . . . . . . . . 261 102
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 17,822 9,652
Current portion of noncurrent liabilities . . . . . . . . . . . . . . . . . . 4,284 3,262
-------- --------
79,077 64,866
-------- --------
Noncurrent Liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,508 127,279
Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 92
Pension agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899 906
-------- --------
123,477 128,277
-------- --------
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,112 2,483
-------- --------
Shareholders' Equity:
Preferred stock, $10.00 par value, 2,000,000 shares
authorized; none issued and outstanding . . . . . . . . . . . . . . . . . . - -
Common stock, $.10 par value, 50,000,000 shares authorized;
Shares issued: 1995 - 26,516,379; 1994 - 15,848,089 . . . . . . . . . . . 2,651 1,584
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . 138,046 63,294
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,129 14,598
-------- --------
156,826 79,476
Less treasury stock, 1995 - 25,994; 1994 - 211,624 . . . . . . . . . . . . . . . (313) (2,556)
-------- --------
156,513 76,920
-------- --------
Total Liabilities and Shareholders' Equity . . . . . . . . . . . . . . . . . $363,179 $272,546
======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
1
<PAGE> 4
OHM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ----------------------
1995 1994 1995 1994
------- ------ -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Gross Revenues . . . . . . . . . . . . . . . . . . . . . $99,501 $94,686 $179,718 $169,717
Less direct subcontract costs . . . . . . . . . . . . 28,887 29,659 52,555 52,879
Net Revenues . . . . . . . . . . . . . . . . . . . . . . 70,614 65,027 127,163 116,838
Cost of services . . . . . . . . . . . . . . . . . . 54,470 51,336 98,109 92,763
------- ------- -------- --------
Gross Profit . . . . . . . . . . . . . . . . . . . . . . 16,144 13,691 29,054 24,075
Selling, general and administrative expenses . . . . . 13,285 8,316 20,966 15,603
------- ------- -------- --------
Operating Income . . . . . . . . . . . . . . . . . . . . 2,859 5,375 8,088 8,472
------- ------- -------- --------
Other (Income) Expenses:
Investment income . . . . . . . . . . . . . . . . . . (13) (6) (23) (16)
Interest expense . . . . . . . . . . . . . . . . . . . 2,832 2,185 6,071 3,969
Equity in net earnings of affiliate . . . . . . . . . (198) (293) (281) (361)
Miscellaneous expense, net . . . . . . . . . . . . . . 7 199 39 283
------- ------- -------- --------
2,628 2,085 5,806 3,875
------- ------- -------- --------
Income Before Income Taxes (Benefit) . . . . . . . . . . 231 3,290 2,282 4,597
Income taxes (benefit) . . . . . . . . . . . . . . . . (3) 1,221 761 1,723
------- ------- -------- --------
Net Income . . . . . . . . . . . . . . . . . . . . . . . $ 234 $ 2,069 $ 1,521 $ 2,874
======= ======= ======== ========
Net Income Per Share . . . . . . . . . . . . . . . . . . $ 0.01 $ 0.13 $ 0.08 $ 0.18
======= ======= ======== ========
Weighted average number of common and
common equivalent shares outstanding . . . . . . . . . 20,593 16,212 18,135 16,207
======= ======= ======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
2
<PAGE> 5
<TABLE>
OHM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<CAPTION>
Six Months Ended
June 30,
----------------------------
1995 1994
---------- ----------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,521 $ 2,874
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 3,780 3,154
Amortization of other noncurrent assets . . . . . . . . . . . . . . . . . . 1,400 1,215
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . (239) 1,573
Loss (gain) on sale of property and equipment . . . . . . . . . . . . . . . (22) 213
Equity in net earnings of affiliate's continuing operations . . . . . . . . . (281) (361)
Deferred translation adjustments and other . . . . . . . . . . . . . . . . . 59 31
Changes in current assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,905) (34,154)
Costs and estimated earnings on contracts in process in excess of billings . 7,209 (4,977)
Materials and supply inventory . . . . . . . . . . . . . . . . . . . . . . . (1,698) (574)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . (3,191) (858)
Refundable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 68 -
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,161) 7,313
Billings on contracts in process in excess of costs and estimated earnings . 2,376 (252)
Accrued compensation and related taxes . . . . . . . . . . . . . . . . . . . (148) 532
Federal, state and local income taxes . . . . . . . . . . . . . . . . . . . 159 (162)
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (748) (1,654)
-------- --------
Net cash flow used in operating activities . . . . . . . . . . . . . . . . (14,821) (26,087)
-------- --------
Cash flows from investing activities:
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . (7,148) (6,365)
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . 872 1,742
Increase in other noncurrent assets . . . . . . . . . . . . . . . . . . . . (1,144) (947)
Cash acquired from purchase of business . . . . . . . . . . . . . . . . . . 16,670 -
-------- --------
Net cash provided by (used in) investing activities . . . . . . . . . . . 9,250 (5,570)
-------- --------
Cash flows from financing activities:
Increase in long term debt . . . . . . . . . . . . . . . . . . . . . . . . . 1,945 -
Payments on long-term debt and capital leases . . . . . . . . . . . . . . . (1,646) (807)
Proceeds from borrowing under revolving credit and term loan . . . . . . . . 73,800 73,900
Payments on revolving credit agreement . . . . . . . . . . . . . . . . . . . (77,900) (42,600)
Payments on pension agreement . . . . . . . . . . . . . . . . . . . . . . . (55) (54)
Proceeds from public offering of common stock . . . . . . . . . . . . . . . . - 863
Proceeds from private placement of common stock . . . . . . . . . . . . . . 10,000 -
Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . 1,425 402
-------- --------
Net cash provided by financing activities . . . . . . . . . . . . . . . . 7,569 31,704
-------- --------
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . 1,998 47
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . 4,930 5,039
-------- --------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . $ 6,928 $ 5,086
======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
3
<PAGE> 6
OHM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
by OHM Corporation (the "Company") and reflect all adjustments of a normal
recurring nature which are, in the opinion of management, necessary for a fair
presentation of financial results for the three and six months ended June 30,
1995 and 1994, in accordance with generally accepted accounting principles for
interim financial reporting and pursuant to Article 10 of Regulation S-X.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. These
interim consolidated financial statements should be read in conjunction with
the Company's Annual Report to Shareholders for the year ended December 31,
1994. The results of operations for the three and six months ended June 30,
1995 and 1994, are not necessarily indicative of the results for the full year.
The unaudited consolidated financial statements include the accounts of the
Company and its subsidiaries. The Company's 40% owned asbestos abatement
affiliate, NSC Corporation ("NSC"), has been accounted for using the equity
method. All material intercompany transactions and balances have been
eliminated in consolidation.
The consolidated financial statements at June 30, 1995, and for the three and
six months then ended have been reviewed, prior to filing, by Ernst & Young
LLP, the Company's independent accountants, and their report is included
herein.
NOTE 2 - SUPPLEMENTARY CASH FLOW INFORMATION
As supplemental information related to the consolidated statements of cash
flows, cash paid for interest was $5,952,000 and $3,946,000 and cash paid for
income taxes was $330,000 and $293,000 for the six months ended June 30, 1995
and 1994, respectively.
NOTE 3 - RECLASSIFICATIONS
Certain amounts presented for the three and six months ended June 30, 1994 have
been reclassified to conform to the June 30, 1995 presentation.
NOTE 4 - INVESTMENTS IN AFFILIATED COMPANY
The Company owns a 40% equity interest in NSC, a nationwide asbestos abatement
services company, which has been included in the Company's financial statements
using the equity method. The following summarizes the income statements of NSC
for the three and six months ended June 30, 1995 and 1994:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1995 1994 1995 1994
-------- -------- -------- --------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Gross revenues . . . . . . . . . . . . . $31,966 $35,150 $61,510 $69,353
Gross profit . . . . . . . . . . . . . . 5,203 5,382 9,903 9,900
Operating income . . . . . . . . . . . . 1,075 1,494 1,623 1,873
Net income . . . . . . . . . . . . . . . 493 731 713 899
Company's interest in net income . . . . 198 293 281 361
</TABLE>
4
<PAGE> 7
NOTE 5 - INCOME TAXES
The reasons for differences between the provisions for income taxes and the
amount computed by applying the statutory federal income tax rate to income
before income taxes are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Federal statutory rate . . . . . . . . . . . . . . . 34.0 % 34.0 % 34.0 % 34.0 %
Add (deduct):
State income taxes, net of federal benefit . . . 1.7 % 4.1 % 4.5 % 4.2 %
Equity in net earnings of affiliate . . . . . . (23.3)% (2.4)% (3.3)% (2.1)%
Other, net . . . . . . . . . . . . . . . . . . . (13.7)% 1.4 % (1.9)% 1.4 %
---- ---- ---- ----
(1.3)% 37.1 % 33.3% 37.5 %
==== ==== ==== ====
</TABLE>
NOTE 6 - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
<TABLE>
<CAPTION>
June 30, Dec. 31,
1995 1994
---------- ----------
(In Thousands)
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 374 $ 257
Buildings and improvements . . . . . . . . . . . . . . . . . 17,734 17,179
Machinery and equipment . . . . . . . . . . . . . . . . . . 95,226 74,270
Construction in progress . . . . . . . . . . . . . . . . . . 12,385 4,190
-------- --------
125,719 95,896
Less accumulated depreciation and amortization . . . . . . . (41,372) (38,656)
-------- --------
$ 84,347 $ 57,240
======== ========
</TABLE>
NOTE 7 - NET INCOME PER SHARE INFORMATION
Net income per share amounts are based on the weighted average number of common
and common equivalent shares outstanding during the respective periods. Shares
of common stock issuable upon conversion of the 8% Convertible Subordinated
Debentures due 2006 are not considered to be common stock equivalents and were
antidilutive in each of the periods presented.
NOTE 8 - SEASONALITY
The timing of revenues is dependent on the Company's backlog, contract awards
and the performance requirements of each contract. The Company's revenues are
also affected by the timing of its clients' planned remediation work which
generally increases during the third and fourth quarters. Because of this
change in demand, the Company's quarterly revenues can fluctuate, and revenues
for the first and second quarters of each year can normally be expected to be
lower than the third and fourth quarters. Although the Company believes that
the historical trend in quarterly revenues for the third and fourth quarters of
each year are generally higher than the first and second quarters, there can be
no assurance that this will occur in future periods. Accordingly, quarterly or
other interim results should not be considered indicative of results to be
expected for any quarter or for the full year.
NOTE 9 - ACQUISITION
On May 30, 1995, the Company completed the acquisition of substantially all of
the assets and certain liabilities of the hazardous and nuclear waste
remediation service business (the "Division") of Rust International Inc.
("Rust") in exchange for 9,668,000 shares of common stock of the Company, or
approximately 37% of the outstanding shares of the Company's common stock.
Such shares issued to Rust are subject to a number of restrictions set forth in
a Standstill and Non-Competition Agreement that was entered into pursuant to
the Agreement and Plan of Reorganization dated December 5, 1994, as amended
(the "Reorganization Agreement"), among the Company, Rust and certain of its
subsidiaries. In addition to the net assets of the division, the Company
received $16,670,000 in cash pursuant to provisions of the Reorganization
Agreement that provided for an adjustment based on the average per share price
of the Company's common stock for a 20 trading day period prior to closing.
For purposes of calculating
5
<PAGE> 8
the consideration given by the Company for the Division, such 20 trading day
average per share price of $11.25 was used, adjusted to reflect a discount for
the restricted nature of the common stock issued. In exchange for a warrant to
purchase up to 700,000 shares of the Company's common stock at an exercise
price of $15.00 per share during the five years following the closing date,
Rust's parent company, WMX Technologies, Inc. ("WMX"), will provide the Company
with a credit enhancement in the form of guarantees, issued from time to time
upon request of the Company, of up to $62,000,000 of the Company's
indebtedness, which will increase proportionately up to $75,000,000 upon
issuance of shares under the warrant.
The acquisition of the Division has been accounted for using the purchase
method and, accordingly, the acquired assets and assumed liabilities, including
goodwill, have been recorded at their estimated fair values as of May 30, 1995.
The Company's consolidated financial statements for the three and six month
periods ended June 30, 1995, include the results of operations for the Division
since May 30, 1995. The following table sets forth the unaudited combined pro
forma results of operations for the six months ended June 30, 1995 and 1994,
giving effect to the acquisition of the Division as if such acquisition had
occurred on January 1, 1994.
<TABLE>
<CAPTION>
Pro Forma
Six Months Ended
June 30,
------------------------
1995 1994
---------- ----------
(In Thousands, Except Per Share Data)
<S> <C> <C>
Gross revenue . . . . . . . . . . . . . . . . . . . . . . . $242,258 $276,015
Net income . . . . . . . . . . . . . . . . . . . . . . . . . 2,851 5,076
Net income per share . . . . . . . . . . . . . . . . . . . . $0.11 $0.20
</TABLE>
The actual purchase accounting adjustments to reflect the fair value of assets
and liabilities acquired have not been finalized and, as a result, the
accompanying consolidated financial statements and combined pro forma results
of operations have been prepared on the basis of preliminary estimates of such
adjustments. The combined pro forma results of operations for the six months
ended June 30, 1995 are based upon certain assumptions and estimates which the
Company believes are reasonable. The combined pro forma results of operations
may not be indicative of the operating results that actually would have been
reported had the transaction been consummated on January 1, 1994, nor are they
necessarily indicative of results which will be reported in the future.
NOTE 10 - CAPITAL STOCK
On March 28, 1995, the Company sold to H. Wayne Huizenga and an affiliated
family foundation 1,000,000 shares of its common stock and options for an
aggregate purchase price of $10,000,000. The options are exercisable over five
years for the purchase of 620,000 shares of common stock upon payment of $10.00
per share and 380,000 shares of common stock upon payment of $12.00 per share.
NOTE 11 - CREDIT AGREEMENT
On May 31, 1995, the Company entered into a $150,000,000 revolving credit
agreement with a group of banks (the "Bank Group") to provide letters of credit
and cash borrowings. The agreement has a five year term and is scheduled to
expire on May 30, 2000. WMX has issued a guarantee of up to $62,000,000
outstanding under the credit agreement in favor of the Bank Group (See Note 9 -
Acquisition). Under the terms of the agreement the entire credit facility can
be used for either cash borrowings or letters of credit subject to certain
covenants. Cash borrowings bear interest at either the prime rate plus a
percentage up to 0.625% or, at the Company's option, the Eurodollar market rate
plus a percentage ranging from 0.325% to 1.625%. The percentage over the prime
rate or the Eurodollar market is based on the aggregate amount borrowed under
the facility, the presence of the WMX guarantee, and the Company's financial
performance as measured by an interest coverage ratio and a total funded debt
ratio. The arrangement provides the participating banks and WMX with a
security interest in the Company's equipment, inventories, accounts
receivables, general intangibles and in the Company's investment in the common
stock of NSC as well as the Company's other subsidiaries. The agreement also
imposes, among other covenants, a minimum tangible net worth covenant and a
restriction on all of the Company's retained earnings including the declaration
and payment of cash dividends.
The Company had $23,357,000 and $34,771,000 of letters of credit and
$53,600,000 and $57,700,000 of cash borrowings outstanding under its revolving
credit facility at June 30, 1995 and December 31, 1994, respectively.
6
<PAGE> 9
NOTE 12 - LITIGATION AND CONTINGENCIES
The Company's accounts receivable at June 30, 1995 include a claim receivable
aggregating approximately $24,391,000 in direct costs relating to a major
remediation project which was performed by the Company for Citgo Petroleum
Corporation ("Citgo") at its Lake Charles, Louisiana refinery during 1993 and
1994. This claim receivable represents direct costs to date for activities
which the Company's management believed exceeded the scope of the existing
contract due to deficient project specifications provided by Citgo and Oxy USA,
Inc. ("Oxy") as well as differing site conditions. In addition, at June 30,
1994, the Company has recorded in its financial statements approximately
$5,381,000 of accounts receivable that are in dispute for work performed under
the terms of the Company's base contract with Citgo. In April 1994, the
Company submitted to Citgo a request for equitable adjustment and Citgo
responded by filing an action in the U.S. District Court for the Western
District of Louisiana seeking a declaratory judgment that the Company is not
entitled to additional compensation under the contract and certain other
relief. The Company's answer to the declaratory judgment action was filed in
July 1994, together with counterclaims against Citgo for negligent
misrepresentation, breach of contract and quantum meruit seeking damages in
excess of $35,000,000. In August 1994, Citgo amended its complaint seeking
damages under the contract. In January 1995, Citgo filed a third party
complaint against Occidental Oil and Gas Corporation and Oxy as third party
defendants in such litigation because of their prior involvement with the Citgo
site and preparation of the contract specifications. Additionally, in July
1995, the Company filed a complaint against Oxy for negligent misrepresentation
as a result of its involvement with the development of sampling and analytical
data relied upon by the Company in preparation of its bid and cost estimates
for work at the site.
The Company has also become involved in litigation with Occidental Chemical
Corporation ("Occidental") relating to a separate project performed in 1993 and
1994 for Occidental. The Company's accounts receivable at March 31, 1995
include a claim receivable of $8,297,000 in direct costs relating to this
project. The litigation arises from an October 1993 contract between the
Company and Occidental for work at a contaminated site in North Tonawanda, New
York. The Company's work was substantially delayed and its costs of performance
were substantially increased as a result of conditions at the site which the
Company's management believes were materially different than as represented by
Occidental. The Company believes that Occidental has implicitly acknowledged
the existence of differing conditions at the site through its previous
execution and partial payment of a change order relating to the Company's
position. In October 1994, Occidental issued a deductive change order deleting
substantially all remaining work from the contract. On December 30, 1994,
while the Company was in the process of developing a comprehensive request for
equitable adjustment, Occidental filed suit against the Company in U.S.
District Court for the Western District of New York alleging damages in excess
of $50,000, the jurisdictional minimum. On March 3, 1995, Occidental filed an
amended complaint seeking $8,806,000 in damages primarily for alleged costs
incurred as a result of project delays and added volumes of incinerated wastes.
On April 6, 1995, the Company filed its answer and counterclaim denying any
liability to Occidental and seeking an amount in excess of $9,200,000 for
damages arising from Occidental's breach of contract, misrepresentation and
failure to pay outstanding contract amounts.
During the fourth quarter of 1994, the Company recorded a $25,000,000 pre-tax
charge, $15,000,000 after-tax or $0.96 per share, to establish a reserve for
accounts receivable, primarily where such accounts are in litigation.
Management believes that it has established adequate reserves should the
resolution of such accounts receivable be lower than the amounts recorded and
such resolution should not have a material adverse impact upon the Company's
consolidated results of future operations or financial condition.
The Company was named in April 1994 as one of 33 third party defendants in a
case titled United States of America v. American Cyanamid Company, Inc., et
al., pending in the United States District Court for the Southern District of
West Virginia. This litigation arises out of claims made against several
potentially responsible parties ("PRPs") by the Environmental Protection Agency
("EPA") for amounts in excess of $24,000,000 for response costs arising out of
releases and threatened releases of hazardous waste at the Fike Chemical, Inc.
Superfund site (the "Site") in Nitro, West Virginia. The Company was retained
as a response action contractor for the site under contracts with the United
States Army Corps of Engineers ("USACE") and the EPA. The third party
complaint alleges that the Company was an operator of the Site during the
remediation and that the Company caused releases or threatened releases of
hazardous substances at the Site as a result of its negligent conduct, grossly
negligent conduct or intentional misconduct. The third party complaint seeks
damages and contribution from the Company and the other third party defendants.
The Company has submitted claims for indemnification related to the lawsuit
under its contract with the USACE and the EPA and has notified its contractors
pollution liability insurance carrier. The Company believes the lawsuit is
without merit, intends to vigorously defend against it and does not believe
that it will have a material adverse effect on the results of future operations
and financial condition of the Company. The Company has also been subject to
an investigation by the government relating to the Company's billings to the
EPA for its work at the Site.
7
<PAGE> 10
The investigation was prompted by allegations made by certain of the PRPs in
defense of the main cost recovery action. Those PRPs have also filed a qui tam
suit against the Company under seal. The Company cooperated fully with the
investigation and has been informed that the government will not be proceeding
criminally against the Company. The Company is in the process of discussing
with the government the potential disposition of any civil or administrative
action by the government, including the qui tam suit.
In addition to the above, the Company is subject to a number of claims and
lawsuits in the ordinary course of its business. In the opinion of management,
the outcome of these actions, which are not clearly determinable at the present
time, are either adequately covered by insurance, or if not insured, will not,
in the aggregate, have a material adverse impact upon the Company's
consolidated financial position or the results of future operations.
NOTE 13 - INTEGRATION EXPENSES
The Company's consolidated statements of income for the three and six months
ended June 30, 1995, include expenses aggregating $2,428,000 (net of
$1,426,000 income tax benefit) or $0.12 per share, for integration costs
related to the acquisition of the Division. The costs were recorded in
selling, general and administrative expenses and were primarily for severance
and relocation costs for certain of the Company's personnel and the closing of
certain of the Company's offices as a result of combining the operations of the
Division and the Company.
8
<PAGE> 11
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
OHM Corporation
We have reviewed the accompanying consolidated balance sheet of OHM Corporation
and subsidiaries as of June 30, 1995, and the related consolidated statements
of income for the three and six month periods ended June 30, 1995 and 1994 and
the consolidated statements of cash flows for the six month periods ended June
30, 1995 and 1994. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of OHM Corporation and subsidiaries
as of December 31, 1994, and the related consolidated statements of operations,
changes in shareholders' equity, and cash flows for the year then ended (not
present herein) and in our report dated February 1, 1995, except for Note 19,
as to which the date is May 4, 1995, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31, 1994,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
ERNST & YOUNG LLP
Columbus, Ohio
August 10, 1995
9
<PAGE> 12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company provides a broad range of environmental, hazardous and
nuclear waste remediation services to its clients located primarily in the
United States. The timing of the Company's revenues is dependent on its
backlog, contract awards and the performance requirements of each contract.
The Company's revenues are also affected by the timing of its clients' planned
remediation activities which generally increase during the third and fourth
quarters. Because of this change in demand, the Company's quarterly revenues
can fluctuate, and revenues for the first and second quarters of each year have
historically been lower than for the third and fourth quarters, although there
can be no assurance that this will occur in this year or future years.
Accordingly, quarterly or other interim results should not be considered
indicative of results to be expected for any quarter or full fiscal year.
On March 28, 1995, the Company sold to H. Wayne Huizenga and an
affiliated family foundation 1,000,000 shares of its common stock and options
for an aggregate purchase price of $10,000,000. The options are exercisable
over five years for the purchase of 620,000 shares of common stock upon payment
of $10.00 per share and 380,000 shares of common stock upon payment of $12.00
per share.
On May 30, 1995, the Company completed the acquisition of
substantially all of the assets and certain liabilities of the hazardous and
nuclear waste remediation service business (the "Division") of Rust
International Inc. ("Rust") in exchange for 9,668,000 shares of common stock
of the Company, or approximately 37% of the outstanding shares of the Company's
common stock. In exchange for a warrant to purchase up to 700,000 shares of
the Company's common stock at an exercise price of $15.00 per share during the
five years following the closing date, Rust's parent company, WMX Technologies,
Inc. ("WMX"), will provide the Company with a credit enhancement in the form of
guarantees, issued from time to time upon request of the Company, of up to
$62,000,000 of the Company's indebtedness, which will increase proportionately
up to $75,000,000 upon issuance of shares under the warrant. The acquisition
of the Division has been accounted for using the purchase method and,
accordingly, the acquired assets and assumed liabilities, including goodwill,
have been recorded at their estimated fair values as of May 30, 1995. The
Company's consolidated financial statements for the three and six month periods
ended June 30, 1995, include the results of operation for the Division since
May 30, 1995.
The Company's consolidated statements of income for the three and six
months ended June 30, 1995, include expenses of $3,854,000 pre- tax, $2,428,000
after-tax or $0.12 per share, for integration costs related to the acquisition
of the Division. The costs were recorded in selling, general and
administrative expenses and were primarily for severance and relocation costs
for certain of the Company's personnel and the closing of certain of the
Company's offices as a result of combining the operations of the Division and
the Company.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995 VERSUS
THREE MONTHS ENDED JUNE 30, 1994
GROSS REVENUES. The following table sets forth the Company's gross
revenues by client type for the three months ended June 30, 1995 and 1994 (in
thousands, except percentages):
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
<S> <C> <C> <C> <C>
Government . . . . . . . . . . . . . . . . . . . $75,907 76% $47,669 50%
Industrial . . . . . . . . . . . . . . . . . . . 23,594 24% 47,017 50%
-------- -- -------- ---
$99,501 100% $94,686 100%
======== === ======= ===
</TABLE>
Total gross revenues increased by $4,815,000 to $99,501,000 for the
three months ended June 30, 1995 from $94,686,000 for the same period in 1994.
Gross revenues reflect all amounts to be billed by the Company to its clients
for work performed and include subcontract costs that are generally passed
through to clients with a minimal amount of mark-up. The Company's management
believes that net revenues represent a better measurement of the Company's
ability to generate profit from activities performed by the Company and,
accordingly, management's discussion and analysis of revenues focuses on net
revenues.
10
<PAGE> 13
DIRECT SUBCONTRACT COSTS. Direct subcontract costs for the three
months ended June 30, 1995 decreased 3% to $28,887,000 from $29,659,000 for the
same period in 1994. Increases or decreases in direct subcontract costs
generally result from varying requirements for the use of subcontractors in the
projects performed by the Company. Direct subcontract costs as a percentage of
gross revenues were 29% for the three months ended June 30, 1995, compared to
31% for the same period in 1994.
NET REVENUES. The following table sets forth the Company's net
revenues by client type for the three months ended June 30, 1995 and 1994 (in
thousands, except percentages):
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
<S> <C> <C> <C> <C>
Government . . . . . . . . . . . . . . . . . . . $52,203 74% $32,163 49%
Industrial . . . . . . . . . . . . . . . . . . . 18,411 26% 32,864 51%
-------- -- -------- ---
$70,614 100% $65,027 100%
======== === ======= ===
</TABLE>
Net revenues for the three months ended June 30, 1995 increased 9% to
$70,614,000 from $65,027,000 for the same period in 1994 and were positively
impacted by the inclusion of net revenues for the month of June from the
Division acquired on May 30, 1995.
Net revenues from government agencies for the three months ended June
30, 1995 increased 62% to $52,203,000 from $32,163,000 for the same period in
1994. Such improvement resulted primarily from increased net revenues from the
Company's term contracts with the U.S. Navy, the Environmental Protection
Agency and the Air Force, as well as increased revenues from other government
agencies and certain state and local governments. The Company expects to
experience a continued increase in net revenues from such contracts for the
balance of 1995 when compared to the same periods in 1994 and the Company
continues to experience a significant amount of proposal activity with the
various Department of Defense agencies. However, further reductions by
Congress in future environmental remediation budgets of government agencies may
adversely impact future revenues from such agencies and the funding of the
Company's government term contracts included in contract backlog.
The Company experienced a $14,453,000 or 44% decrease in net revenues
from industrial clients during the three months ended June 30, 1995 as compared
to the same period in 1994. The second quarter of 1994 included significant
net revenues from a project that was performed for Citgo Petroleum Corporation
("Citgo") (see "Note 12 to the Consolidated Financial Statements") that ended
during June 1994. The Company's industrial sector revenues remain sluggish,
which the Company believes is due to anticipated changes in the Superfund law
pending its reauthorization and current economic conditions in certain industry
and geographic sectors. The Company cannot predict the impact upon the
environmental industry of the failure of Congress to reauthorize the Superfund
law. Further delays in Superfund reauthorization may have an adverse impact
upon the demand for the Company's services in the form of project delays as
clients and potential clients wait for and anticipate changes in the
regulations. Demand for the Company's services from the private sector will
remain dependant on general economic conditions and the outcome of the proposed
changes to the Superfund regulations. Industrial sector net revenues as a
percentage of total net revenues decreased to 26% for the three months ended
June 30, 1995 from 51% for the same period in 1994.
COST OF SERVICES AND GROSS PROFIT. Cost of services for the three
months ended June 30, 1995 increased 6% to $54,470,000 from $51,336,000 for the
same period in 1994 primarily due to increased net revenues. Cost of services
as a percentage of net revenues was 77% and 79% for the three months ended June
30, 1995 and 1994, respectively. Cost of services as a percentage of net
revenues was negatively impacted during the second quarter of 1994 by contract
claims arising out of the Company's project with Citgo, which was recorded
without gross profit margin. Gross profit for the three months ended June 30,
1995 increased 18% to $16,144,000 from $13,691,000 for the same period in 1994,
as a result of factors discussed above.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SGA") expenses for the three months ended June 30, 1995
increased 60% to $13,285,000 from $8,316,000 for the same period in 1994.
Selling, general and administrative expenses for the three months ended June
30, 1995, include expenses of $3,854,000 for integration costs related to the
acquisition of the Division. The expenses were primarily for severance and
relocation costs for certain of the Company's personnel and the closing of
certain of the Company's offices as a result of combining the operations of the
Division and the Company. SGA expense as a percentage of net revenues
increased to 19% for the first quarter of 1995 from 13% in the same period in
1994.
11
<PAGE> 14
OPERATING INCOME. Operating income for the three months ended June
30, 1995 decreased 47% to $2,859,000 from $5,375,000 for the same period in
1994. The decrease is primarily due to the integration expenses discussed
above. Without such expenses, operating income would have been $6,713,000
during the second quarter of 1995 and would have reflected a 25% increase from
the same period in 1994.
OTHER (INCOME) EXPENSES. Other (income) expenses, excluding the
Company's equity in net earnings of NSC, increased $448,000 to $2,826,000 from
$2,378,000 for the three months ended June 30, 1995 when compared to the same
period in 1994. Such increase is primarily due to the increase in interest
expense for the three months ended June 30, 1995 of $647,000 to $2,832,000 from
$2,185,000 for the same period in 1994. The increased interest expense was
primarily due to additional borrowing under the Company's credit facility as a
result of the increased working capital requirements of certain large
remediation projects and government contracts.
EQUITY IN NET EARNINGS OF AFFILIATE. The Company's equity interest in
NSC's net earnings for the three months ended June 30, 1995 was $198,000
compared to $293,000 for the same period in 1994. The asbestos abatement
industry in general continues to experience competitive pressures in the market
place which have negatively impacted the gross margin on NSC's projects.
NET INCOME. Net income for the three months ended June 30, 1995 was
$234,000 or $0.01 per share compared to $2,069,000 or $0.13 per share for the
same period in 1994. The effective income tax rate was (1.3)% for the three
months ended June 30, 1995, compared to 37% for the same period in 1994. See
"Note 5 to the Consolidated Financial Statements" for a reconciliation of the
statutory federal income tax rate to the effective income tax rate.
SIX MONTHS ENDED JUNE 30, 1995 VERSUS
SIX MONTHS ENDED JUNE 30, 1994
GROSS REVENUES. The following table sets forth the Company's gross
revenues by client type for the six months ended June 30, 1995 and 1994 (in
thousands, except percentages):
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
<S> <C> <C> <C> <C>
Government . . . . . . . . . . . . . . . . . . . $137,715 77% $ 89,434 53%
Industrial . . . . . . . . . . . . . . . . . . . 42,003 23% 80,283 47%
--------- -- --------- --
$179,718 100% $169,717 100%
======== === ======== ===
</TABLE>
Total gross revenues increased by $10,001,000 to $179,718,000 for the
six months ended June 30, 1995 from $169,717,000 for the same period in 1994.
Gross revenues reflect all amounts to be billed by the Company to its clients
for work performed and include subcontract costs that are generally passed
through to clients with a minimal amount of mark-up. The Company's management
believes that net revenues represent a better measurement of the Company's
ability to generate profit from activities performed by the Company and,
accordingly, management's discussion and analysis of revenues focuses on net
revenues.
DIRECT SUBCONTRACT COSTS. Direct subcontract costs for the six months
ended June 30, 1995 decreased 1% to $52,555,000 from $52,879,000 for the same
period in 1994. Increases or decreases in direct subcontract costs generally
result from varying requirements for the use of subcontractors in the projects
performed by the Company. Direct subcontract costs as a percentage of gross
revenues were 29% for the six months ended June 30, 1995, compared to 31% for
the same period in 1994.
12
<PAGE> 15
NET REVENUES. The following table sets forth the Company's net
revenues by client type for the six months ended June 30, 1995 and 1994 (in
thousands, except percentages):
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
<S> <C> <C> <C> <C>
Government . . . . . . . . . . . . . . . . . . . $ 94,693 74% $ 59,481 51%
Industrial . . . . . . . . . . . . . . . . . . . 32,470 26% 57,357 49%
--------- --- --------- ---
$127,163 100% $116,838 100%
======== === ======== ===
</TABLE>
Net revenues for the six months ended June 30, 1995 increased 9% to
$127,163,000 from $116,838,000 for the same period in 1994 and were positively
impacted by the inclusion of net revenues for the month of June from the
Division acquired on May 30, 1995.
Net revenues from government agencies for the six months ended June
30, 1995 increased 59% to $94,693,000 from $59,481,000 for the same period in
1994. Such improvement resulted primarily from increased net revenues from the
Company's term contracts with the U.S. Navy, the Environmental Protection
Agency and the Air Force, as well as increased revenues from other government
agencies and certain state and local governments. The Company expects to
experience a continued increase in net revenue from such contracts for the
balance of 1995 when compared to the same periods in 1994 and the Company
continues to experience a significant amount of proposal activity with the
various Department of Defense agencies. However, further reductions by Congress
in future environmental remediation budgets of government agencies may
adversely impact future revenues from such agencies and the funding of the
Company's government term contracts included in contract backlog.
The Company experienced a $24,887,000 or 43% decrease in net revenues
from industrial clients during the six months ended June 30, 1995 as compared
to the same period in 1994. The first half of 1994 included significant net
revenues from a project that was performed for Citgo Petroleum Corporation
("Citgo") (see "Note 12 to the Consolidated Financial Statements") that ended
during June 1994. The Company's industrial sector revenues remain sluggish,
which the Company believes is due to anticipated changes in the Superfund law
pending its reauthorization and current economic conditions in certain industry
and geographic sectors. The Company cannot predict the impact upon the
environmental industry of the failure of Congress to reauthorize the Superfund
law. Further delays in Superfund reauthorization may have an adverse impact
upon the demand for the Company's services in the form of project delays as
clients and potential clients wait for and anticipate changes in the
regulations. Demand for the Company's services from the private sector will
remain dependant on general economic conditions and the outcome of the proposed
changes to the Superfund regulations. Industrial sector net revenues as a
percentage of total net revenues decreased to 26% for the six months ended June
30, 1995 from 49% for the same period in 1994.
COST OF SERVICES AND GROSS PROFIT. Cost of services for the six
months ended June 30, 1995 increased 6% to $98,109,000 from $92,763,000 for the
same period in 1994 primarily due to increased net revenues. Cost of services
as a percentage of net revenues was 77% and 79% for the six months ended June
30, 1995 and 1994, respectively. Cost of services as a percentage of net
revenues was negatively impacted during the first half of 1994 by contract
claims arising out of the Company's project with Citgo, which was recorded
without gross profit margin. Gross profit for the six months ended June 30,
1995 increased 21% to $29,054,000 from $24,075,000 for the same period in 1994,
as a result of factors discussed above.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SGA") expenses for the six months ended June 30, 1995
increased 34% to $20,966,000 from $15,603,000 for the same period in 1994.
Selling, general and administrative expenses for the six months ended June 30,
1995, include expenses of $3,854,000 for integration costs related to the
acquisition of the Division. The expenses were primarily for severance and
relocation costs for certain of the Company's personnel and the closing of
certain of the Company's offices as a result of combining the operations of the
Company and the Division acquired in May 1995. SGA expense as a percentage of
net revenues increased to 17% for the first six months of 1995 from 13% in the
same period in 1994.
OPERATING INCOME. Operating income for the six months ended June 30,
1995 decreased 5% to $8,088,000 from $8,472,000 for the same period in 1994.
The decrease is primarily due to the integration expenses incurred during the
second quarter of 1995 related to combining the operations of the Company and
the Division acquired.
13
<PAGE> 16
OTHER (INCOME) EXPENSES. Other (income) expenses, excluding the
Company's equity in net earnings of NSC, increased $1,851,000 to $6,087,000
from $4,236,000 for the six months ended June 30, 1995 when compared to the
same period in 1994. Such increase is primarily due to the increase in
interest expense for the six months ended June 30, 1995 of $2,102,000 to
$6,071,000 from $3,969,000 for the same period in 1994. Such increase was due
to additional borrowing under the Company's credit facility as a result of the
increased working capital requirements of certain large remediation projects
and government contracts.
EQUITY IN NET EARNINGS OF AFFILIATE. The Company's equity interest in
NSC's net earnings for the six months ended June 30, 1995 was $281,000 compared
to $361,000 for the same period in 1994. The asbestos abatement industry in
general continues to experience competitive pressures in the market place which
have negatively impacted the gross margin on NSC's projects.
NET INCOME. Net income for the six months ended June 30, 1995 was
$1,521,000 or $0.08 per share compared to $2,874,000 or $0.18 per share for the
same period in 1994. The decrease in net income is primarily due to the
integration expenses incurred during the second quarter of 1995 related to
combining the operations of the Company and the Division acquired in May 1995.
The effective income tax rate was 33% for the six months ended June 30, 1995,
compared to 38% for the same period in 1994. See "Note 5 to the Consolidated
Financial Statements" for a reconciliation of the statutory federal income tax
rate to the effective income tax rate.
CONTRACT BACKLOG
The following table lists, at the dates indicated, (i) the Company's
backlog, defined as the unearned portion of the Company's existing contacts and
unfilled orders, and (ii) the Company's term contracts, defined as the
potential value of government term contracts (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Backlog . . . . . . . . . . . . . . . . . . . . . . $ 381,000 $ 255,000
Term contracts . . . . . . . . . . . . . . . . . . . 1,627,000 1,498,000
--------- -----------
Total contract backlog . . . . . . . . . . . . . $ 2,008,000 $ 1,753,000
=========== ===========
</TABLE>
The Company received more new awards from clients or delivery orders
issued under the Company's term contracts in the first half of 1995 than was
recorded as revenue, which resulted in the increase in backlog at June 30,
1995. In accordance with industry practice, substantially all of the Company's
contracts in backlog may be terminated at the convenience of the client. In
addition, the amount of the Company's backlog is subject to changes in the
scope of services to be provided under any given contract. The Company
estimates that approximately 60% of the backlog at June 30, 1995 will be
realized within the next year.
Term contracts are typically performed under delivery orders, issued
by the contracting government entity, for a large number of small- to
medium-sized remediation projects throughout the geographic area covered by the
contract. The Company's government term contracts generally may be canceled,
delayed or modified at the sole option of the government, and typically are
subject to annual funding limitations and public sector budget constraints.
Accordingly, such government contracts represent the potential dollar value
that may be expended under such contracts, but there is no assurance that such
amounts, if any, will be actually spent on any projects or of the timing
thereof. In addition, further reductions by Congress in future environmental
remediation budgets of government agencies may adversely impact future revenues
from such agencies and the funding of the Company's government term contracts
included in contract backlog.
14
<PAGE> 17
LIQUIDITY AND CAPITAL RESOURCES
On May 31, 1995, the Company entered into a $150,000,000 revolving
credit agreement with a group of banks (the "Bank Group") to provide letters of
credit and cash borrowings. The agreement has a five year term and is
scheduled to expire on May 30, 2000. WMX has issued a guarantee of up to
$62,000,000 outstanding under the credit agreement in favor of the Bank Group
(See Note 9 - Acquisition). Under the terms of the agreement the entire credit
facility can be used for either cash borrowings or letters of credit subject to
certain covenants. Cash borrowings bear interest at either the prime rate plus
a percentage up to 0.625% or, at the Company's option, the Eurodollar market
rate plus a percentage ranging from 0.325% to 1.625%. The percentage over the
prime rate or the Eurodollar market is based on the aggregate amount borrowed
under the facility, the presence of the guaranty, and the Company's financial
performance as measured by an interest coverage ratio and a total funded debt
ratio. The agreement provides the participating banks with a security interest
in the Company's equipment, inventories, accounts receivables, general
intangibles and in the Company's investment in the common stock of NSC as well
as the Company's other subsidiaries. The agreement also imposes, among other
covenants, a minimum tangible net worth covenant and a restriction on all of
the Company's retained earnings including the declaration and payment of cash
dividends. The Company had $23,357,000 and $34,771,000 of letters of credit and
$53,600,000 and $57,700,000 of cash borrowings outstanding under its revolving
credit facility at June 30, 1995 and December 31, 1994, respectively.
Capital expenditures for the six months ended June 30, 1995 and 1994
were $7,148,000 and $6,365,000, respectively. The Company's capital
expenditures are primarily related to the purchase of heavy equipment and the
fabrication of custom equipment by the Company for the execution of remediation
projects. Capital expenditures for fiscal year 1995 are expected to range
between $15,000,000 and $20,000,000. The Company's long-term capital
expenditure requirements are dependent upon the type and size of future
remediation projects awarded to the Company.
During the first six months of 1995, the Company derived 77% of its
gross revenues from government agencies compared to 53% during the same period
in 1994. Revenues from government agencies historically have required greater
working capital, the major component of which is accounts receivable, than
revenues from industrial sector clients. In addition, the Company is bidding
on a number of large, long-term contract opportunities which, if awarded to the
Company, would also increase working capital needs and capital expenditures.
The Company believes it will be able to finance its increased working capital
needs and capital expenditures in the short term through a combination of cash
flows from continuing operations, borrowing under its Revolving Credit
Facility, proceeds from permitted asset sales and other external sources. In
addition, under the terms of its recently completed acquisition of Rust's
hazardous and nuclear waste remediation business, Rust's parent company, WMX,
has provided the Company with a credit guarantee of up to $62,000,000 of the
Company's indebtedness outstanding until May 30, 2000. Such credit guarantee
has allowed the Company to expand its borrowing capacity and lower its cost of
capital under its new credit facility entered into on May 31, 1995.
The Company's identified long-term capital needs consist of payments
due upon the maturity of the Company's Revolving Credit Facility in 2000 and
sinking fund payments commencing in 1996 as well as payments due upon maturity
of its Convertible Debentures in 2006. The Company believes that it will be
able to refinance this indebtedness as necessary.
ENVIRONMENTAL MATTERS AND GOVERNMENT CONTRACTING
Although the Company believes that it generally benefits from
increased environmental regulations and from enforcement of those regulations,
increased regulation and enforcement also create significant risks for the
Company. The assessment, remediation, analysis, handling and management of
hazardous substances necessarily involve significant risks, including the
possibility of damages or injuries caused by the escape of hazardous materials
into the environment, and the possibility of fines, penalties or other
regulatory action. These risks include potentially large civil and criminal
liabilities for violations of environmental laws and regulations, and
liabilities to customers and to third parties for damages arising from
performing services for clients, which could have a material adverse effect on
the Company.
15
<PAGE> 18
The Company does not believe there are currently any material
environmental liabilities which should be recorded or disclosed in its
financial statements. The Company anticipates that its compliance with various
laws and regulations relating to the protection of the environment will not
have a material effect on its capital expenditures, future earnings or
competitive position.
Because of its dependence on government contracts, the Company also
faces the risks associated with such contracting, which could include civil and
criminal fines and penalties. As a result of its government contracting
business, the Company has been, is, and may in the future be subject to audits
and investigations by government agencies. See "Note 12 to the Consolidated
Financial Statements." The fines and penalties which could result from
noncompliance with the Company's government contracts or appropriate standards
and regulations, or the Company's suspension or debarment for future government
contracting, could have a material adverse effect on the Company's business.
16
<PAGE> 19
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
In October 1993, the Company was retained by Citgo for the removal of
surface impoundment sludge at its Lake Charles, Louisiana refinery. Based
on information provided to the Company by Citgo and Oxy USA, Inc. ("Oxy"),
the Company bid and was awarded a contract for approximately $28,600,000.
During April 1994, the Company submitted to Citgo a request for a
substantial equitable adjustment to the contract as a result of deficient
project specifications provided by Citgo as well as other unplanned events
controlled by Citgo. On April 29, 1994, Citgo filed a declaratory
judgment action in the United States District Court for the Western
District of Louisiana requesting a declaratory judgement that the Company
is not entitled to additional compensation and requesting an order for
specific performance requiring the Company to perform the contract. The
Company accounts receivable as of June 30, 1995 reflect a claim receivable
and other accounts receivable relating to performance of the Citgo project
aggregating approximately $24,391,000. The Company's answer to the
declaratory judgement action was filed on July 28, 1994, together with
counterclaims against Citgo for negligent misrepresentation, breach of
contract and quantum meruit seeking damages in excess of $35,000,000.
Subsequent to filing of the Company's answer and counterclaim, Citgo
amended its complaint seeking damages under the contract, which the
Company believes approximates the amount of disputed accounts receivable
that Citgo is currently withholding. In January 1995, Citgo filed a third
party complaint against Occidental Oil and Gas Corporation and Oxy
asserting various claims relating to their prior involvement with the
Citgo site and its contract specifications. Additionally, in July 1995,
the Company filed a complaint against Oxy for negligent misrepresentation
as a result of its involvement with the development of sampling and
analytical data relied upon by the Company in preparation of its bid and
cost estimates for work at the site.
The Company was named in April 1994 as one of 33 third party defendants in
a case titled United States of America v. American Cyanamid Company, Inc.,
et al., pending in the United States District Court for the Southern
District of West Virginia. This litigation arises out of Superfund cost
recovery claims made against several potentially responsible parties
("PRPs") by the Environmental Protection Agency ("EPA") for amounts in
excess of $24,000,000 for response costs arising out of releases and
threatened releases of hazardous waste at the Fike Chemical, Inc.
Superfund site (the "Site") in Nitro, West Virginia. The Company was
retained as a response action contractor for the Site under contracts with
the United States Army Corps of Engineers ("USACE") and the EPA. The
third party complaint alleges that the Company was an operator of the Site
during the remediation and that the Company caused releases or threatened
releases of hazardous substances at the Site as a result of its negligent
conduct, grossly negligent conduct or intentional misconduct. The third
party complaint seeks damages and contribution from the Company and the
other third party defendants. The Company has submitted claims for
indemnification related to this lawsuit under its contract with the USACE
and the EPA and has notified its contractors pollution liability insurance
carrier. The Company believes the lawsuit is without merit, intends to
vigorously defend against it and does not believe that it will have a
material adverse effect on the results of operations and financial
condition of the Company. The Company has also been subject to an
investigation by the government relating to the Company's billings to the
EPA for its work at the Site. The investigation was prompted by
allegations made by certain of the PRPs in defense of the main cost
recovery action. Those PRPs also filed a qui tam suit against the Company
under seal. The Company cooperated fully with the investigation and has
been informed that the government will not be proceeding criminally
against the Company. The Company is in the process of discussing with the
government the potential disposition of any civil or administrative action
by the government, including the qui tam suit.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of the Company's shareholders was held on May
23, 1995.
17
<PAGE> 20
(b)(1) At the Annual Meeting, the following persons were elected as
directors of the Company, to serve until the next Annual Meeting
of Shareholders, with the votes for and withheld with respect to
each person, respectively, set forth after such name:
<TABLE>
<CAPTION>
For Withheld
------------- --------
<S> <C> <C>
Ivan W. Gorr . . . . . . . . . . . . 10,042,228 54,342
Charles D. Hollister . . . . . . . . 10,042,228 54,342
James L. Kirk . . . . . . . . . . . . 10,041,763 54,807
Joseph R. Kirk . . . . . . . . . . . 10,041,928 54,642
Richard W. Pogue . . . . . . . . . . 10,042,228 54,342
Charles W. Schmidt . . . . . . . . . 10,041,528 55,042
</TABLE>
Subsequently, on June 1, 1995, pursuant to the Reorganization
Agreement, the Board of Directors increased the number of
directors to nine and elected Herbert A. Getz, Rodney C. Gilbert
and James E. Koenig to the Board of Directors.
(b)(2) A proposal to issue (i) an aggregate of 9,668,000 shares of the
Company's common stock (the "Common Stock"), to subsidiaries of
Rust in connection with the merger of a wholly-owned subsidiary
of Rust with and into OHM Remediation Services Corp., a wholly-
owned subsidiary of the Company, pursuant to the Reorganization
Agreement, and (ii) a warrant, exercisable for five years, to
purchase 700,000 shares of Common Stock at $15.00 per share to
WMX in connection with a Guarantee Agreement between the Company
and WMX to be entered into in connection with the Reorganization
Agreement, was approved by 94.8% of the Company's common stock
present and voting at the meeting. The results of the vote on
the proposal were:
<TABLE>
<S> <C>
For 9,223,675
Against 5,888
Abstain 496,086
</TABLE>
(b)(3) A proposal to approve the Company's Directors' Deferred Fee Plan
was approved by 98.67% of the Company's Common Stock present and
voting at the meeting. The results of the vote on the proposal
were:
<TABLE>
<S> <C>
For 9,869,429
Against 11,728
Abstain 21,213
</TABLE>
The total number of shares of the Registrant's Common Stock
outstanding as of March 31, 1995, the record date for the Annual
Meeting, was 16,636,465.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10(a) Amendment No. 1 to OHM Corporation Retirement Savings
Plan, as amended and restated as of January 1, 1994
10(b) Amendment No. 1 to OHM Corporation Directors'
Deferred Fee Plan
10(c) Standstill and Non-Competition Agreement by and among
the Company, WMX Technologies, Inc., and Rust
International Inc., dated May 30, 1995
10(d) Warrant Agreement by and between WMX Technologies,
Inc., and the Company, dated May 30, 1995
10(e) Revolving Credit Agreement dated as of May 31, 1995
among OHM Corporation and OHM Remediation Services
Corp., and the banks named therein, Citicorp USA,
Inc., as Administrative Agent and Bank of America
Illinois, as Issuing and Paying Agent and Co-Agent
18
<PAGE> 21
10(f) First Amendment dated as of May 31, 1995 to Pledge
Agreement dated as of May 11, 1993 by and between the
Company and Bank of America Illinois as Issuing and
Paying Agent
10(g) Second Amendment dated as of May 31, 1995 to Security
Agreement dated as of May 11, 1993 by and among the
Company, OHM Remediation Services Corp., and Bank of
America Illinois as Issuing and Paying Agent
10(h) Intercreditor Agreement dated May 31, 1995 by and
among Citicorp USA, Inc., as Administrative Agent,
Bank of America Illinois, as Issuing and Paying Agent
and WMX Technologies, Inc.
10(i) Guarantee Agreement by and among the Company and WMX
Technologies, Inc., dated May 30, 1995
10(j) Reimbursement Agreement dated as of May 31, 1995
among the Company, OHM Remediation Services Corp. and
WMX Technologies, Inc.
10(k) Security Agreement dated as of May 31, 1995 by and
between the Company, OHM Remediation Services Corp.,
and WMX Technologies, Inc.
10(l) Pledge Agreement dated as of May 31, 1995 by and
between the Company and WMX Technologies, Inc.
11 Statement Re Computation of Per Share Earnings
15 Letter Re Unaudited Financial Information
27 Financial Data Schedule
(b) Reports on Form 8-K.
On June 13, 1995, the Company filed a Current Report on Form
8-K with respect to the consummation, on May 30, 1995, of the
transactions contemplated by an Agreement and Plan of
Reorganization dated December 5, 1995, as amended, by and
among the Company, Rust Remedial Services Inc., Enclean
Environmental Services Group, Inc., Rust Environmental, Inc.
and Rust International Inc. ("Rust"), pursuant to which the
Company acquired the hazardous and nuclear waste remediation
services businesses of Rust. The following financial
statements and pro forma financial information were filed as
part of such Form 8- K by incorporation by reference to the
Registrant's definitive Proxy Statement, dated May 10, 1995
for its 1995 Annual Meeting of Shareholders.
Audited financial statements of the Business Acquired.
Unaudited Pro Forma consolidated balance sheet and
consolidated statement of income of the Company for the
year ended December 31, 1994 that gives effect to the
acquisition as if the transaction had taken place on
January 1, 1994.
19
<PAGE> 22
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.
OHM CORPORATION
Date: August 14, 1995 By /s/ JAMES L. KIRK
---------------------------------
James L. Kirk
Chairman of the Board
President and Chief Executive Officer
(Duly Authorized Officer)
Date: August 14, 1995 By /s/ Harold W. Ingalls
---------------------------------
Harold W. Ingalls
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: August 14, 1995 By /s/ KRIS E. HANSEL
---------------------------------
Kris E. Hansel
Vice President and Controller
(Principal Accounting Officer)
20
<PAGE> 23
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Exhibit
Number Description
------ -----------
<S> <C>
10(a) Amendment No. 1 to OHM Corporation Retirement Savings Plan, as amended and restated as of January 1, 1994
10(b) Amendment No. 1 to OHM Corporation Directors' Deferred Fee Plan
10(c) Standstill and Non-Competition Agreement by and among the Registrant, WMX Technologies, Inc., and Rust International
Inc., dated May 30, 1995
10(d) Warrant Agreement by and between WMX Technologies, Inc., and the Registrant, dated May 30, 1995
10(e) Revolving Credit Agreement dated as of May 31, 1995 among OHM Corporation and OHM Remediation Services Corp., and the
banks named therein, Citicorp USA, Inc., as Administrative Agent and Bank of America Illinois, as Issuing and Paying
Agent and Co-Agent
10(f) First Amendment dated as of May 31, 1995 to Pledge Agreement dated as of May 11, 1993 by and between the Registrant and
Bank of America Illinois as Issuing and Paying Agent
10(g) Second Amendment dated as of May 31, 1995 to Security Agreement dated as of May 11, 1993 by and between the Registrant,
OHM Remediation Services Corp., and Bank of America Illinois as Issuing and Paying Agent
10(h) Intercreditor Agreement dated May 31, 1995 by and among Citicorp USA, Inc., as administrative agent, Bank of America
Illinois, as issuing and paying agent and WMX Technologies, Inc.
10(i) Guarantee Agreement by and among the Registrant and WMX Technologies, Inc., dated May 30, 1995
10(j) Reimbursement Agreement dated as of May 31, 1995 among WMX Technologies, Inc., OHM Corporation, and OHM Remediation
Services Corp.
10(k) Security Agreement dated as of May 31, 1995 by and between the Registrant, OHM Remediation Services Corp., and WMX
Technologies, Inc.
10(l) Pledge Agreement dated as of May 31, 1995 by and between the Registrant and WMX Technologies, Inc.
11 Statement Re Computation of Per Share Earnings
15 Letter Re Unaudited Financial Information
27 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 10(a)
AMENDMENT NUMBER ONE
TO THE
OHM CORPORATION RETIREMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994)
WHEREAS, OHM Corporation (the "Company") previously adopted
the OHM Corporation Retirement Savings Plan (the "Plan"); and
WHEREAS, Article 15.1 of the Plan provides that the Company
may amend the Plan at any time.
NOW, THEREFORE, the Company hereby amends the Plan to read as
follows:
I.
Effective June 1, 1995, Section 1.40 of the Plan is hereby
amended by adding the following sentence at the end thereof:
With the approval of the Plan Committee, Years of Service will
be credited to an Employee for service with an entity that is
acquired by the Employer to the extent and for the purposes
listed on Schedule A to the Plan.
II.
Effective June 1, 1995, Section 3.11 of the Plan is hereby
amended to read as follows:
3.11 Elective Transfers. The Plan may accept an
elective transfer of assets from another qualified plan if the
following provisions are satisfied.
(a) The person electing the transfer
must become an Employee as the result of a corporate
transaction for which the Committee deems this provision
should be applicable.
(b) The plan from which the benefits are
transferred must provide that the transfer is conditioned upon
a voluntary, fully informed election by the participant to
transfer such participant's benefit to this Plan.
(c) The plan from which the benefits are
transferred must either offer the participant the opportunity
to leave his or her assets in that plan or must terminate and
make a distribution of all appropriate benefits.
<PAGE> 2
(d) Any spousal consent requirements or
notice requirements imposed on the elective transfer by the
Code must be satisfied.
(e) The Employee who elects the transfer
must be eligible under the terms of the transferor plan to
receive an immediate distribution from that plan.
(f) The amount of the benefit
transferred must equal the entire nonforfeitable accrued
benefit under the plan of the participant whose benefit is
transferred and the Employee shall be fully vested in the
transferred benefit under this Plan.
III.
Effective June 1, 1995, Section 4.1 of the Plan is hereby
amended by adding the following sentence to the end thereof:
Matching Employer Contributions may be made, at the discretion
of the Company, in the form of Company Stock.
IV.
Effective June 1, 1995, Section 5.5 of the Plan is hereby
amended to read as follows:
5.5 Investment Options. All Profit Sharing
Contributions will be invested by the Trustee at the direction
of the Committee. All Matching Employer Contributions made in
the form of Company Stock will be initially invested in the
Company Stock Fund. Each Participant will, by written
direction to the Committee, direct that all Before-Tax
Contributions, After-Tax Contributions, Matching Employer
Contributions (other than Matching Employer Contributions made
in the form of Company Stock) and Rollover Contributions made
by or for the Participant be invested in one or more of the
Investment Funds in multiples of 5%. An investment option
selected by a Participant will remain in effect and be
applicable to all subsequent Before-Tax Contributions,
After-Tax Contributions, Matching Employer Contributions
(other than Matching Employer Contributions made in the form
of Company Stock) and Rollover Contributions made by or for
the Participant unless and until an investment change is made
by the Participant and becomes effective pursuant to Section
5.6. In the absence of an effective investment direction,
Before-Tax Contributions, After-Tax Contributions, Matching
Employer Contributions (other than Matching Employer
2
<PAGE> 3
Contributions made in the form of Company Stock) and Rollover
Contributions made to the Trust by or for a Participant will
be invested in a fixed income fund or its equivalent
maintained pursuant to Section 5.1.
V.
Effective June 1, 1995, Section 5.6 of the Plan is hereby
amended to read as follows:
5.6 Change of Investment Option. Subject to any
limitation imposed by the terms of an Investment Fund, a
Participant may, as of any Enrollment Date, upon at least 15
days prior written notice filed with the Committee, change his
or her investment option to any other option specified in
Section 5.5 with respect to all subsequent Before-Tax
Contributions, After-Tax Contributions, Matching Employer
Contributions (other than Matching Employer Contributions made
in the form of Company Stock) and Rollover Contributions made
by or for the Participant. In addition, subject to any
limitation imposed by the terms of an Investment Fund, a
Participant may, as of any Enrollment Date, upon at least 15
days prior written notice filed with the Committee, change his
or her investment option to any other option specified in
Section 5.5 with respect to all previous Before-Tax
Contributions, After-Tax Contributions, Matching Employer
Contributions (including Matching Employer Contributions made
in the form of Company Stock) and Rollover Contributions made
by or for the Participant.
Executed this 1st day of June, 1995.
OHM Corporation
/s/ RANDALL M. WALTERS
-----------------------------------
By: Randall M. Walters
Vice President, General Counsel
and Secretary
3
<PAGE> 1
Exhibit 10(b)
AMENDMENT NO. 1 TO
OHM CORPORATION
DIRECTORS' DEFERRED FEE PLAN
WHEREAS, on November 3, 1994, the Board of Directors of OHM Corporation
(the "Company") adopted the OHM Corporation Directors' Deferred Fee Plan (the
"Plan") to provide benefits upon termination of service or death for Directors
of the Company or their beneficiaries;
WHEREAS, Article IX of the Plan grants to the Board of Directors the
power, subject to certain limitations, to amend the Plan;
WHEREAS, in order to conform the operation of the Plan to certain
rules and regulations of the Securities and Exchange Commission, the Board of
Directors of the Company, by resolution duly adopted, hereby amends the Plan as
follows:
1. Section 4.2 of the Plan is hereby amended by adding to the end
of Section 4.2 the phrase "provided; however that until such
time as the Vice President, General Counsel and Secretary of
the Company shall have made a written determination that the
provisions of Rule 16b-3 of the Securities Exchange Act of
1934, as amended (or any successor rule), have been amended to
permit the receipt by a "disinterested person" (as defined in
such Rule) to receive an amount equal to 25% of such Deferred
Fees for such calendar year, the additional amount referred to
above which shall be credited to the Participant's Deferred
Benefit Account shall be equal to 10% of such Deferred Fees
for such calendar year.
2. Except as expressly amended herein, the Plan shall remain in
full force and effect.
<PAGE> 1
Exhibit 10(c)
STANDSTILL AND NON-COMPETITION AGREEMENT
This STANDSTILL AND NON-COMPETITION AGREEMENT ("Agreement") is made and
entered into this 30th day of May, 1995 by and among OHM Corporation, an Ohio
corporation ("OHM"), WMX Technologies, Inc., a Delaware corporation ("WMX"),
and Rust International Inc., a Delaware corporation ("Rust").
WHEREAS, Rust, Rust Remedial Services Inc. ("Remedial"), Enclean
Environmental Services Group, Inc. ("Enclean"), Rust Environmental Inc. and OHM
have entered into that certain Agreement and Plan of Reorganization dated as of
December 5, 1994, as amended (the "Reorganization Agreement") whereby Rust
Environmental shall merge with and into a wholly-owned subsidiary of OHM, OHM
Remediation Services Corp. ("Acquisition") with Acquisition being the
surviving entity and OHM shall issue to Rust or certain of its subsidiaries
shares of its common stock (the "OHM Common Stock");
WHEREAS, OHM and WMX propose to enter into that certain Guarantee Agreement,
dated the date hereof ("Guarantee Agreement"), whereby WMX will agree to
guarantee certain indebtedness of OHM and OHM shall issue to WMX, a warrant to
purchase 700,000 shares of OHM Common Stock (the "Warrant");
WHEREAS, the parties desire to provide for certain agreements with respect
to the ownership and voting by WMX and its affiliates of OHM Common Stock and
other matters after such Merger; and
WHEREAS, in order to induce OHM to enter into the Reorganization Agreement,
WMX and certain of its affiliates are willing to enter into certain agreements
which define the rights of WMX and certain of its affiliates to engage in the
environmental remediation business after such Merger;
WHEREAS, the execution and delivery of this Agreement is a condition of, and
in consideration for, the consummation of the transactions contemplated by the
Reorganization Agreement.
NOW, THEREFORE, in consideration of the agreements, rights, obligations, and
covenants contained herein, OHM, Rust and WMX hereby agree as follows:
1.0 AGREEMENTS REGARDING VOTING AND SHARES
The parties agree that during the Term of this Agreement:
1.1 ACQUISITION OF VOTING SECURITIES. No member of the WMX Group will,
directly or indirectly, acquire Voting Securities or
<PAGE> 2
securities convertible into or exercisable or exchangeable for Voting
Securities, including the Warrant ("Convertible Securities") (all such Voting
Securities and Convertible Securities owned by members of the WMX Group being
referred to herein as "Restricted Securities"), other than (i) the acquisition
by Rust and/or its subsidiaries of Restricted Securities pursuant to the
Reorganization Agreement, (ii) the acquisition by WMX of the Warrant (but not
including shares of OHM Common Stock upon exercise thereof) pursuant to the
Guarantee Agreement, and (iii) acquisitions of securities (including by
conversion, exercise or exchange of Convertible Securities, including the
Warrant) which do not result in the WMX Group being the Beneficial Owner of
Restricted Securities constituting more than 40% of the Voting Securities then
outstanding (the "Ownership Limit"); provided, however, that if the transaction
resulting in the WMX Group's being the Beneficial Owner of less than the
Ownership Limit was a sale or transfer by the WMX Group of Restricted
Securities (the "Voluntary Transaction"), the percentage ownership of Voting
Securities then outstanding resulting from the consummation of such Voluntary
Transaction shall thereafter be deemed to be the Ownership Limit. In the event
that the WMX Group's ownership of Restricted Securities exceeds the Ownership
Limit, the WMX Group will be obligated to dispose of Restricted Securities as
promptly as practicable in accordance with law in such amount so that the
ownership by the WMX Group of Restricted Securities following such disposition
is equal to or less than the Ownership Limit; provided, however, that the WMX
Group shall not be obligated to dispose of any Restricted Securities if the
aggregate percentage ownership of the WMX Group is increased as a result of (a)
any action taken by any person other than a member of the WMX Group, including
without limitation any recapitalization of OHM, repurchase of Voting Securities
by OHM or any similar transaction; or (b) stock dividends or other
distributions or offerings made available to holders of Voting Securities
generally.
1.2 VOTING. The WMX Group shall take such action as may be required so that
all Restricted Securities at any time entitled to vote are voted:
(a) for the election of the slate of nominees for election to the
Board of Directors of OHM selected by a majority of the directors of OHM
other than the designees of Rust pursuant to Section 2.5 hereof serving
as directors of OHM (such directors so designated by Rust being referred
to herein as the "Rust Directors" and the remaining directors being
referred to herein as the "Other Directors"), provided that such slate
includes the nominees designated by Rust pursuant to Section 2.5 hereof;
and
(b) on all other matters to be voted on by the holders of Voting
Securities, (i) in accordance with the recommendation of a majority of
the Other Directors of OHM
-2-
<PAGE> 3
if any recommendation is made or, (ii) in the absence of a
recommendation, in the same proportion as other stockholders of OHM
shall vote on such matter.
1.3 QUORUM. A representative or representatives of the members of the WMX
Group, as holders of Restricted Securities, shall be present, in person or by
proxy, at any meeting of shareholders of OHM so that all Restricted Securities
may be counted for the purpose of determining the existence of a quorum at such
meeting.
1.4 VOTING TRUST OR ARRANGEMENT. No member of the WMX Group shall deposit
any Restricted Securities in a voting trust or subject any Restricted
Securities to any arrangement or agreement with respect to the voting of such
Restricted Securities.
1.5 PROXY SOLICITATIONS. No member of the WMX Group shall solicit proxies
or initiate, propose or become a "participant" in a "solicitation" (as such
terms are defined in Regulation 14A under the Securities Exchange Act of 1934,
as amended, or any similar successor statute (the "Exchange Act")), in
opposition to any matter which has been recommended by a majority of the Other
Directors or in favor of any matter which has not been approved by a majority
of the Other Directors or seek to advise, encourage or influence any Person
with respect to the voting of Voting Securities in such manner, or induce or
attempt to induce any Person to initiate any stockholder proposal.
1.6 GROUP PARTICIPATION. No member of the WMX Group shall join a
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any other person, for the purpose of acquiring, holding, voting or
disposing of Voting Securities (other than solely with members of the WMX Group
in a manner consistent with the purposes hereof).
1.7 SOLICITATIONS OF OFFERS. No director or executive officer of any member
of the WMX Group shall, and no member of the WMX Group shall permit any of its
other officers, employees or agents (including investment bankers) to, induce
or attempt to induce or give encouragement to any third person, or enter into
any serious substantive discussions or negotiations with any third person, in
furtherance of any tender offer or business combination transaction in which
shares of Voting Securities would be acquired; provided, however, that nothing
in this Section 1.7 shall, or shall be construed, directly or indirectly, to
limit any rights of the WMX Group to offer, sell or otherwise dispose of shares
of Restricted Securities pursuant to any transaction effected in accordance
with Section 1.8 hereof.
-3-
<PAGE> 4
1.8 DISPOSITIONS:
(a) WMX hereby agrees that, except as otherwise permitted by this
Agreement, no member of the WMX Group shall, directly or indirectly, offer,
sell, transfer or hypothecate shares of Restricted Securities other than as
follows:
(i) to other members of the WMX Group;
(ii) in a distribution registered under the Securities Act in which such
Restricted Securities are offered and sold to the general public;
(iii) in compliance with Rule 144 of the General Rules and Regulations under
the Securities Act (or any similar successor rule); provided, however, that
WMX shall notify OHM at least three business days prior to the date of
entering any sale or transfer order in respect of Restricted Securities
pursuant to Rule 144 (or such successor rule), and provided further that, if
OHM shall thereupon notify the WMX Group of the pendency of a sale or any
public offering by OHM of Voting Securities, no member of the WMX Group
shall effect any sales of Restricted Securities under such rule within 10
calendar days prior to the commencement of or during such offering;
(iv) a merger or consolidation, approved by a majority of the Other
Directors, in which OHM is acquired;
(v) in a sale or sales to any person approved by a majority of the Other
Directors; or
(vi) in privately negotiated transactions in which Restricted Securities
are not sold or transferred to any other person or group who or which would
immediately thereafter, to the knowledge of the WMX Group after reasonable
inquiry, beneficially own or have the right to acquire more than 5% of the
Voting Securities then outstanding, unless such other person agrees to
execute and deliver to OHM an agreement containing obligations similar to
the obligations of the WMX Group contained in this Article 1, which
agreement shall be approved by a majority of the Other Directors;
provided, however, that in any transaction or transactions described in clauses
(ii) or (iii), the WMX Group will use its reasonable efforts to effect the
transfer thereof in a manner which will effect the broadest possible
distribution with no sales or transfers of Restricted Securities to any person
or
-4-
<PAGE> 5
group of persons (within the meaning of Section 13(d) of the Exchange Act) in
excess of 5% of the then outstanding Voting Securities.
1.9 LEGENDS, STOP TRANSFER ORDERS AND NOTICE. The WMX Group agrees:
(a) to the placement on the certificate or other instrument
representing Restricted Securities of the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 and may not be sold or
transferred except in compliance with such Act. The securities
represented by this certificate are subject to the provisions of an
Agreement, dated ____________, 1995 among OHM Corporation, Rust
International Inc. and WMX Technologies, Inc., a copy of which is on
file at the office of the Secretary of OHM Corporation.
(b) to the entry of stop transfer orders with the transfer agent (or
agents) and the registrar (or registrars) of OHM against the transfer other
than in compliance with the requirements of this Agreement of legended
securities of which the WMX Group from time to time is the Beneficial Owner.
(c) OHM agrees to the removal of the legend required by Section
1.9(a) and the stop transfer orders in Section 1.9(b) hereof following the
later of three years from the date of Closing or the expiration of the Term
of the Agreement.
2.0 OTHER AGREEMENTS REGARDING VOTING STOCK
2.1 ANTI-DILUTION OPTIONS.
(a) In the event the WMX Group is the Beneficial Owner of Restricted
Securities constituting less than 20% of all Voting Securities then
outstanding, OHM hereby grants to Rust a cumulative, continuing option (the
"Anti-Dilution Option") to purchase (or to have its affiliate or nominee
purchase) that number of shares as may be necessary, when added to all other
shares of which the WMX Group shall on the relevant date be the Beneficial
Owner (not including the Warrant or shares underlying the unexercised
Warrant), to enable the WMX Group to be the Beneficial Owner of Restricted
Securities (not including the Warrant or shares underlying the unexercised
Warrant) constituting not less than 20% and not more than 21% of all Voting
Securities outstanding after the exercise of the Anti-Dilution Option.
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OHM agrees to notify Rust, as provided in Section 6.3 hereof, promptly upon
becoming aware that the WMX Group is the Beneficial Owner of Restricted
Securities (not including the Warrant or shares underlying the unexercised
Warrant) constituting less than 20% of the then outstanding Voting Securities
(the "OHM Notice"). The Anti-Dilution Option may be exercised by Rust by
written notice to OHM and shall be exercisable for a period commencing on the
date that the WMX Group is the Beneficial Owner of Restricted Securities (not
including the Warrant or shares underlying the unexercised Warrant)
constituting less than 20% of the then outstanding Voting Securities and
continuing for a period of ten business days following the date that Rust has
received the OHM Notice (the "Option Period") ; provided, however, that in
the event that, during the Option Period, OHM has not released to the public
material information which, in the reasonable judgment of OHM is reasonably
likely to have a material and adverse effect upon the price of the Voting
Securities, OHM will extend the Option Period until the date which is two
business days following the release of such material information to the
public. The Anti-Dilution Option shall be terminated if the transaction
resulting in the WMX Group being the Beneficial Owner of less than 20% of all
Voting Securities (not including the Warrant or shares underlying the
unexercised Warrant) was a sale or transfer of Voting Securities by the WMX
Group or if the WMX Group sells or transfers, and thereby reduces, any or all
of its beneficial ownership of Restricted Securities at a time when the WMX
Group was the Beneficial Owner of Restricted Securities (not including the
Warrant or shares underlying the unexercised Warrant) constituting less than
20% of all Voting Securities or any Option Period shall have expired without
Rust exercising such Anti-Dilution Option. It is the intention of the
parties hereto that the existence and exercise, from time to time, of an
Anti-Dilution Option, in combination with the WMX Group's right herein to
designate persons to OHM's Board of Directors shall assist the WMX Group in
accounting for its ownership in OHM on the equity method.
(b) The price per share payable upon each exercise of an Anti-Dilution
Option shall be an amount equal to the average closing price per share of the
Voting Securities for the five trading days prior to the date that Rust
notifies OHM that it is exercising the Anti-Dilution Option on the New York
Stock Exchange or other nationally recognized exchange or over-the-counter
market on which the Voting Securities primarily trade and shall be payable by
wire transfer in immediately available funds to an account designated by OHM.
(c) The Voting Securities issued pursuant to an exercise of an
Anti-Dilution Option shall be duly
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authorized, validly issued and fully paid and non-assessable.
(d) OHM shall reserve for issuance at all times during the period any
Anti-Dilution Option is exercisable that number of Voting Securities equal to
the number of Restricted Securities issuable upon exercise of each
Anti-Dilution Option.
2.2 INDEPENDENT DIRECTORS. For so long as the WMX Group owns at least 20%
of the outstanding Voting Securities, WMX shall take such action as may be
reasonably within its control so that OHM's Board of Directors at all times
includes at least three directors not affiliated with the WMX Group or employed
by OHM or its subsidiaries (the "Independent Directors").
2.3 TRANSACTIONS WITH OHM. For so long as the WMX Group is the Beneficial
Owner of at least 20% of the outstanding Voting Securities, no member of the
WMX Group shall attempt to enter, or enter into any material transaction or
agreement, out of the ordinary course of business, other than transactions
contemplated by Section 2.4 hereof, with OHM or its subsidiaries unless such
transaction or agreement is approved by a majority of the Independent Directors
or a committee including only Independent Directors.
2.4 WMX GROUP ACQUISITION OF ADDITIONAL VOTING SECURITIES. For so long as
the WMX Group is the Beneficial Owner of at least 20% of the outstanding Voting
Securities and whether or not the Term of the Agreement for purposes of Article
1 hereof has expired, no member of the WMX Group shall, directly or indirectly,
propose to purchase, attempt to purchase or purchase or otherwise acquire any
Voting Securities (including by conversion of securities convertible into
Voting Securities, by merger or by other business combination), or make any
public announcement with respect thereto, except acquisitions to the Ownership
Limit pursuant to Section 1.1 hereof, unless (i) such purchase or other
acquisition is pursuant to an offer for all of the outstanding Voting
Securities at the same price per share and (ii) such purchase or other
acquisition is either (x) approved by the Independent Directors or a committee
including only Independent Directors or (y) if not so approved, approved by a
majority of the outstanding Voting Securities (other than the Restricted
Securities beneficially owned by the WMX Group) at a meeting of shareholders
called for that purpose pursuant to the provisions of Article X of OHM's
Amended and Restated Articles of Incorporation in effect on the date hereof.
2.5 BOARD REPRESENTATION. Immediately following the Closing Date, OHM will
elect to its Board of Directors three qualified designees of the WMX Group
mutually acceptable to the WMX Group and OHM. Thereafter, for so long as the
WMX Group is the Beneficial Owner of at least 20% of the outstanding Voting
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Securities or the Anti-Dilution Option has not expired, OHM will include among
its Board of Directors' nominees for election a number of qualified designees
acceptable to the WMX Group and OHM such that the percentage of the Board of
Directors proposed to be composed of such designees is proportionately equal
(to the lowest corresponding whole directorship) to the percentage of
outstanding Voting Securities which the WMX Group then has Beneficial
Ownership.
2.6 LISTING ON SECURITIES EXCHANGES. For so long as the WMX Group is the
Beneficial Owner of at least 20% of the outstanding Voting Securities, OHM will
list the Restricted Securities, and will maintain the listing thereof, on each
national securities exchange on which any Common Stock may be listed, subject
to official notice of issuance, the Restricted Securities.
2.7 FILE REPORTS AND COOPERATE IN RULE 144 TRANSACTIONS. For as long as the
WMX Group shall continue to hold any Voting Securities, OHM shall use
reasonable efforts to file on a timely basis all annual, quarterly and other
reports required to be filed by it under Sections 13 and 15(d) of the Exchange
Act, and the Rules and Regulations of the Commission thereunder, as amended
from time to time. In the event of any proposed sale of Voting Securities by
any member of the WMX Group pursuant to Section 1.8(a)(iii) above, OHM shall
cooperate with the WMX Group so as to enable such sales to be made in
accordance with applicable laws, rules and regulations, the requirements of
OHM's transfer agent and the reasonable requirements of the broker through
which the sales are proposed to be executed, and shall, upon request, furnish
unlegended certificates representing Voting Securities in such numbers and
denominations as the transferor shall reasonably require for delivery pursuant
to such sales.
2.8 DEFINITIONS. For purposes of Article 1 and Article 2 of this Agreement,
the following terms shall have the following meanings.
(a) Affiliate. "Affiliate" shall have the meaning ascribed to it in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
(b) Beneficial Owner. A person shall be deemed a "Beneficial Owner"
of or to have "Beneficially Owned" any Voting Securities (i) in accordance
with the term "beneficial ownership" as defined in Rule 13d-3 under the
Exchange Act, as in effect on the date hereof, and (ii) shall also include
Voting Securities which such person or any Affiliate of such person has the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
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or understanding or upon the exercise of conversion rights, exchange
rights, warrant or options, or otherwise.
(c) Person. A "person" shall mean any individual, firm,
corporation, partnership or other entity.
(d) Term of this Agreement. "Term of this Agreement" for purposes
of Article 1 hereof, but not for Article 2 hereof, shall mean a period
commencing with the date of this Agreement and ending on the first to occur
of (i) the failure of OHM to pay, upon the expiration of a ten (10) day
grace period following OHM's receipt of a written demand, a copy of which
shall be sent to the Independent Directors, any of OHM's Reimbursement
Obligations as such term is defined in the Guarantee Agreement following
the payment by WMX of any amounts under the guarantee or guarantees
provided for in Section 9.6 of the Reorganization Agreement, or (ii) the
date that the WMX Group is the Beneficial Owner of Restricted Securities
constituting less than 20% of the then outstanding Voting Securities and
the Option Period has expired without exercise of the Anti-Dilution
Option.
(e) Voting Securities. "Voting Securities" includes Common Stock
and any other securities of OHM entitled to vote generally for the election
of directors, in each case now or hereafter outstanding.
(f) WMX Group. "WMX Group" shall mean WMX, Rust and their
respective Affiliates (regardless of whether such person is an Affiliate on
the date hereof), both in their individual capacities and collectively. An
individual shall not be deemed to be an Affiliate for purposes of this
definition if such individual is the Beneficial Owner of less than 50,000
shares of Voting Securities solely for investment purposes and is not a
member of a "group" which includes the WMX Group as defined by Section
13(d) of the Exchange Act.
3.0 CERTAIN BUSINESS AGREEMENTS
3.1 WMX AND AFFILIATES RESTRICTIVE COVENANTS.
(a) Neither WMX nor Rust, or their respective wholly-owned
(directly or indirectly) subsidiaries, which do not include Wheelabrator
Technologies Inc. and Waste Management International plc and their
respective subsidiaries (collectively, the "WMX Affiliates") shall, for a
period of seven years from the Closing Date, engage in North America in the
business of providing field services for the on-site remediation of
hazardous waste, radioactive materials, mixed waste, waste contaminated
with petroleum, hydrocarbons, crude oil, PCBs, or any "Hazardous
Substances" as such term is defined in the Comprehensive Environmental
Response,
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Compensation and Liability Act of 1980 as amended ("CERCLA") (individually
and collectively, "Contaminants"), which services involve the on- site
treatment (in-situ, ex-situ, chemical, physical, thermal, biological or
otherwise), neutralization, destruction, recharacterization, detoxifying,
dewatering, excavation or staging (for removal, storage, treatment,
disposal or otherwise) of Contaminants, whether or not such services (i)
are provided on an emergency response, planned, on-going, periodic, or
other basis, or (ii) are provided for private sector or governmental
clients, including without limitation, state and local governments and
federal government agencies such as the Department of Defense, the
Department of Energy, Department of the Interior, and the Environmental
Protection Agency (the "Business"); provided, however, that the Business
shall not include (A) services for loading, removal and transportation to
an off-site treatment, storage or disposal facility of Contaminants which
have already been staged or prepared (in drum, bulk or otherwise) for such
removal and transportation, (B) services typically performed in the
industrial cleaning and maintenance services businesses or nuclear service
business at operating chemical, industrial, manufacturing, refining,
utility or other operating facilities in connection with the servicing for,
or support of such facilities (e.g.: routine maintenance; industrial
cleaning; special services such as filter pressing, centrifuging and drying
of various wastes; cleaning of lagoons and tanks for re-use; packaging of
wastes related to these services for storage on-site or shipment off-site);
(C) services performed in the decontamination or decommissioning of nuclear
power plants in the electric utilities industry; (D) services provided
in-plant for the analysis, management and staging for transportation or
disposal at an off-site treatment, or disposal facility of Contaminants
which are generated in the ordinary course of an on-going manufacturing or
industrial process; (E) services provided by a WMX Affiliate incidental to
the on-going operations of a treatment, storage or disposal facility owned
or operated by such WMX Affiliate in the ordinary course of the business of
such facility, (F) engineering, design, program management, or construction
management services typically performed in connection with an environmental
restoration program; (G) on-site environmental remediation services which
are provided by a contractor or other person not directly or indirectly
affiliated with a WMX Affiliate under a subcontract or teaming arrangement
with a WMX Affiliate, provided that Rust has complied with its obligations
under Section 3.3 hereof with respect to such services; or (H) on site
environmental remediation services in connection with and incidental to
services of the type described in (A) and (B) above; provided that the
price for such remediation services (excluding the price of waste
loading, removal,
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transportation and disposal) does not exceed $100,000 per project.
(b) Notwithstanding anything in this Agreement to the contrary,
neither WMX nor any WMX Affiliate shall be prohibited from acquiring the
capital stock or assets of any other entity unless such entity's
predominate business is the Business and provided, further, that if WMX or
the WMX Affiliate shall acquire the capital stock or assets of any other
entity engaged in the Business, WMX or the WMX Affiliate shall promptly
offer to sell such Business to OHM at a price equal to the fair market
value thereof. WMX or the WMX Affiliate shall make such offer by giving OHM
prompt written notice of such offer, disclosing all material information
pertaining to such Business, the fair market value thereof, and such other
terms and conditions to such offer as may be reasonable. OHM shall have a
period of 60 days after receipt of such notice to elect to purchase such
Business at such price and on such terms and conditions, which election
shall be in writing and shall be signed by a duly authorized officer of
OHM. Should OHM fail to purchase such Business, WMX or the WMX Affiliate
shall nevertheless be required to dispose of such Business.
(c) Notwithstanding the failure by OHM to purchase any Business
pursuant to the preceding paragraph, prior to selling any Business to any
third party, WMX or the WMX Affiliate shall give OHM prompt written notice
of any such proposed sale or other disposition of a Business, disclosing
all material information pertaining to such third party sale, including,
without limitation, the price and other terms and conditions of such sale,
and offering to sell such Business to OHM for such price and on such terms
and conditions. OHM may elect within 15 days following receipt of such
notice (the "Option Period") to purchase such Business at such price and on
such terms and conditions as were contemplated in the third party sale,
which election shall be in writing and shall be signed by a duly authorized
officer of OHM. If OHM shall not have exercised its right to purchase in
accordance with the preceding sentence, WMX or the WMX Affiliate may,
within 90 days of the expiration of the Option Period, enter into a binding
agreement to sell or otherwise dispose of such Business to (but only to)
the person who was the subject of the third party sale upon (but only upon)
the material terms and conditions offered to OHM pursuant to the preceding
sentence. If for any reason such a binding agreement shall not have been
entered into within such 90-day period or the transaction contemplated
thereby shall not be consummated, WMX or the WMX Affiliate shall be
obligated to offer OHM the opportunity to purchase such Business in
accordance with the terms of this paragraph before making any sale or
disposition of such Business, whether to the same third party or to a
different third
COMAIN Doc: 50065_12
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party and whether on the same material terms and conditions or on different
terms and conditions.
(d) Neither WMX nor the WMX Affiliates shall, for a period commencing
from the date of this Agreement and ending two years following the Closing
Date, solicit, employ or offer employment to or agree to employ any employee
of the Division other than an employee of the Division who is not offered
employment by OHM or its subsidiaries immediately following the Closing.
3.2 BLUE PENCIL PROVISIONS. If any provision of Section 3.1, as applied to
any party or to any circumstances, is adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other provision of the said
Section 3.1 or any other part of this Agreement, the application of such
provision in any other circumstances, or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced. Upon breach of any provision of
Section 3.1, the other party hereto will be entitled to injunctive relief,
since the remedy at law would be inadequate and insufficient. In addition,
such other party will be entitled to such damages as it can show it has
sustained by reason of such breach.
3.3 PREFERRED PROVIDER STATUS. For so long as the WMX Group owns at least
20% of the outstanding Voting Securities, WMX, on behalf of itself and the WMX
Affiliates, agrees and agrees to cause the WMX Affiliates to agree that OHM
will be a Preferred Provider with respect to any and all services coming within
the scope of the Business, as defined in Section 3.1 (whether as prime
contractor, subcontractor or otherwise) that WMX or the WMX Affiliates contract
for, control, direct, influence or subcontract, provided it is not violative of
law, rule, regulation or other contractual obligations. Rust shall provide OHM
and its subsidiaries access to and the services of its engineering, consulting,
design and project management services personnel on the same basis and at the
same cost as Rust provides them to the WMX Affiliates. For so long as the WMX
Group owns at least 20% of the outstanding Voting Securities, OHM, on behalf of
itself and its subsidiaries (the "OHM Affiliates"), agrees and agrees to cause
the OHM Affiliates to agree, that WMX Affiliates will be a Preferred Provider
with respect to all engineering, consulting and design, environmental and waste
management services commonly provided by the WMX Affiliates (whether as prime
contractor, subcontractor or otherwise) that OHM or the OHM Affiliates contract
for, control, direct, influence or subcontract, provided it is not violative of
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law, rule, regulation or other contractual obligations. As used herein, the
term "Preferred Provider" means that the person purchasing or contracting for
such services (the "Purchaser") shall not purchase such services from any third
party unless the Purchaser has reasonably determined in good faith that the
overall value, in terms of price, terms and conditions, quality, documentation,
service and other matters, of such services from parties other than the
Preferred Provider significantly exceeds the value of such services available
from the Preferred Provider, provided that the Purchaser shall be excused from
the foregoing obligation with respect to any specific provision of services if
(i) the Preferred Provider has failed to respond within a reasonable period of
time to a request by the Purchaser for a price quotation or other terms or
information with respect to the services or has failed to commit to provide
such services within the time period in which the Purchaser shall have required
such services to be provided, which time period, in either case, shall not be
substantially shorter than the time period that the Purchaser would have
required from or allowed to a third party or, if the Preferred Provider shall
have made no such commitment, within a reasonable period of time after the
Purchaser has requested them, or (ii) in the Purchaser's reasonable, good faith
judgment, the particular project or product is not appropriate for the
Preferred Provider in light of the nature of the Preferred Provider's expertise
and experience with similar projects.
3.4 GUARANTEED REMEDIATION PROJECTS. During the period commencing on the
Closing Date and ending on December 31, 1996, WMX shall, or shall cause its
affiliates to, contract with OHM to provide environmental remediation services
to WMX or its affiliates involving revenues to OHM prior to December 31, 1996
of at least $20,000,000 with respect to services typically performed by OHM
(the "Revenue Amount"). Such services shall be performed at mutually agreed
upon rates, which may include as appropriate and as mutually agreed to rates
established from time to time by OHM's government cost accounting system
("OHM's Government Rates"). In the event WMX shall have contracted, or caused
its affiliates to contract with OHM for environmental remediation services
which involve an amount of revenues to OHM prior to December 31, 1996, which
are in an amount less than the Revenue Amount (the "Revenue Shortfall"), WMX
shall pay to OHM an amount equal to 10% of the difference between the Revenue
Amount and the Revenue Shortfall.
4.0 REPRESENTATIONS AND WARRANTIES OF OHM.
OHM represents and warrants to Rust and WMX as follows:
4.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF OHM. OHM
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Ohio, with full corporate power and authority to
execute and deliver this
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Agreement and all other agreements to be delivered by OHM, to perform OHM's
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. This Agreement and each of the other
agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of OHM. This Agreement has been duly executed and delivered by
OHM and will, after approval by its shareholders, constitute a legal, valid,
and binding obligation of OHM, enforceable against OHM in accordance with its
terms.
4.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not conflict with, or result
in any violation of or default under, any provision of the Restated Articles of
Incorporation or Regulations of OHM, or of any agreement or instrument binding
upon OHM.
5.0 REPRESENTATIONS AND WARRANTIES OF WMX AND RUST.
5.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF RUST. Rust
and WMX are corporations duly organized, validly existing, and in good standing
under the laws of the State of Delaware, with full corporate power and
authority to execute and deliver this Agreement and all other agreements to be
delivered by them, to perform their obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. This Agreement
and each of the other agreements contemplated hereby and the consummation of
the transactions contemplated hereby and thereby will, at the Closing, have
been duly authorized by all necessary corporate action of Rust and WMX,
respectively. This Agreement has been duly executed and delivered by Rust and
WMX, respectively, and constitutes a legal, valid, and binding obligation of
each of them, enforceable against each of them in accordance with its terms.
5.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not conflict with, or result
in any violation of or default under, any provision of the Certificate of
Incorporation or By-Laws of Rust or WMX, or of any agreement or instrument
binding upon Rust, WMX or their affiliates.
6.0 MISCELLANEOUS.
6.1 SPECIFIC ENFORCEMENT. The parties acknowledge and agree that OHM
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that OHM shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
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specifically enforce this Agreement and the terms and provisions thereof in any
action instituted in any court of the United States or any state thereof having
subject matter jurisdiction, in addition to any other remedy to which OHM may
be entitled, at law or in equity.
6.2 MODIFICATION; WAIVER. This Agreement may be modified in any manner
and at any time by written instrument executed by the parties hereto. Any of
the terms, covenants, and conditions of this Agreement may be waived at any
time by the party entitled to the benefit of such term, covenant, or condition.
6.3 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission:
(a) if to OHM to:
16406 U.S. Route 224 East
Findlay, Ohio 45840
Attention: General Counsel
Telecopy: (419) 424-4985
(b) if to Rust to:
100 Corporate Parkway
Birmingham, Alabama 35242
Attention: General Counsel
Telecopy: (205) 995-7914
(c) if to WMX to:
3003 Butterfield Road
Oak Brook, Illinois 60521
Attention: General Counsel
Telecopy: (708) 218-1553
(d) or, in each case, at such other address or to such other
person as may be specified in writing to the other party.
6.4 PARTIES IN INTEREST; ASSIGNMENT. This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests, and obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties hereto. Nothing in this Agreement, whether expressed or implied,
shall be construed to give any person other
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than the parties hereto any legal or equitable right, remedy, or claim under or
in respect of this Agreement.
6.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.
6.6 HEADINGS. The article and section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
6.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Ohio applicable to contracts
made and to be performed therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
OHM CORPORATION
By: /s/ Randall M. Walters
--------------------------
Title: Vice President
RUST INTERNATIONAL INC.
By: /s/ Michael T. Brown
--------------------------
Title: Vice President
WMX TECHNOLOGIES, INC.
By: /s/ Linda R. Witte
--------------------------
Title: Vice President
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<PAGE> 1
Exhibit 10(d)
==============================================================================
------------------------------------------------------------------------------
WARRANT AGREEMENT
by and between
WMX TECHNOLOGIES, INC.
and
OHM CORPORATION
Dated as of May 30, 1995
------------------------------------------------------------------------------
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
1. GRANT OF WARRANT . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Grant . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Shares To Be Issued; Reservation of Shares . . . . . . . 2
2. ADJUSTMENTS TO WARRANT RIGHTS . . . . . . . . . . . . . . . . . 2
2.1 Stock Combinations . . . . . . . . . . . . . . . . . . . 2
2.2 Reorganizations . . . . . . . . . . . . . . . . . . . . 2
2.3 Adjustment Upon Changes in Capitalization . . . . . . . 3
2.4 Notice . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Fractional Interests . . . . . . . . . . . . . . . . . . 4
2.6 Effect of Alternate Securities . . . . . . . . . . . . . 4
2.7 Successive Application . . . . . . . . . . . . . . . . . 4
3. EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Exercise of Warrant . . . . . . . . . . . . . . . . . . 5
3.2 Issuance of Warrant Shares . . . . . . . . . . . . . . . 5
4. RIGHTS OF HOLDER . . . . . . . . . . . . . . . . . . . . . . . . 5
5. TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 5
6. LEGEND ON WARRANT SHARES . . . . . . . . . . . . . . . . . . . . 5
7. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . 5
7.1 Transfer of Registration Rights . . . . . . . . . . . . 6
7.2 Piggyback Registration . . . . . . . . . . . . . . . . . 6
7.3 Registration Procedures . . . . . . . . . . . . . . . . 7
7.4 Further Information . . . . . . . . . . . . . . . . . . 9
8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . 9
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . 9
8.3 Waiver By Consent . . . . . . . . . . . . . . . . . . . 10
8.4 No Implied Waiver; Rights Are Cumulative . . . . . . . . 10
8.5 Governing Law . . . . . . . . . . . . . . . . . . . . . 10
8.6 Severability . . . . . . . . . . . . . . . . . . . . . . 11
8.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . 11
8.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
-i-
<PAGE> 3
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY APPLICABLE
STATE LAW AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER OR SUCH STATE SECURITIES LAWS. THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE PROVISIONS OF AN
AGREEMENT, DATED MAY 30, 1995, AMONG OHM CORPORATION, RUST
INTERNATIONAL INC. AND WMX TECHNOLOGIES, INC., A COPY OF WHICH IS ON
FILE AT THE OFFICE OF THE SECRETARY OF OHM CORPORATION.
WARRANT AGREEMENT
This WARRANT AGREEMENT (the "Warrant") is being entered into
this 30th day of May, 1995, by and between OHM Corporation, an Ohio corporation
(together with its successors and permitted assigns, the "Company") and WMX
Technologies, Inc., a Delaware corporation (together with his successors and
permitted assigns, the "Buyer"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Standstill Agreement (as defined below).
RECITALS
WHEREAS, the Company and Buyer have entered into a Guarantee
Agreement of even date herewith pursuant to which Buyer has agreed to guarantee
certain indebtedness of the Company and the Company has agreed to grant to
Buyer the right to purchase Seven Hundred Thousand (700,000) additional shares
of the Company's common stock, par value $.10 per share (the "Common Stock"),
at an exercise price of fifteen dollars ($15.00) per share pursuant to the
terms and conditions of this Warrant; and
WHEREAS, the Company, Rust International Inc. ("Rust") and
Buyer have entered into a Standstill and Non-Competition Agreement dated as of
the date hereof (the "Standstill Agreement") pursuant to which Rust and Buyer
have agreed to certain limitations on their aggregate ownership of the Company,
which limitations shall also apply to any shares of Common Stock issued
pursuant to this Warrant;
NOW, THEREFORE, for the consideration set forth in the
Guarantee Agreement and other good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, the Company agrees with Buyer as
follows:
<PAGE> 4
1. GRANT OF WARRANT.
1.1 GRANT. The Company hereby grants to Buyer this
Warrant, which, subject to the terms and conditions of the Standstill
Agreement, is exercisable as provided herein, in whole or in part, at any time
and from time to time during the period commencing on the date hereof (the
"Closing Date") and ending on the fifth anniversary of the Closing Date at 6:00
p.m., local time in New York, New York, (the "Exercise Period") to purchase an
aggregate of up to Seven Hundred Thousand (700,000) shares of Common Stock (the
"Warrant Shares"), at an exercise price of fifteen dollars ($15.00) per share
(as it may be hereinafter adjusted, the "Exercise Price"). Buyer and its
permitted successors and assigns are hereinafter referred to as "Holder."
1.2 SHARES TO BE ISSUED; RESERVATION OF SHARES. The
Company covenants and agrees that all Warrant Shares will, upon issuance, be
duly authorized, validly issued and outstanding, fully paid and non-assessable,
and free from all taxes, liens and charges with respect to the issuance
thereof, except as otherwise provided in the Reorganization Agreement. The
Company further covenants and agrees that it will from time to time take all
actions required to assure that the par value per share of the Common Stock is
at all times equal to or less than the effective Exercise Price. The Company
further covenants and agrees that, during the Exercise Period, the Company will
at all times have authorized and reserved sufficient shares of Common Stock to
provide for the exercise of this Warrant in full.
2. ADJUSTMENTS TO WARRANT RIGHTS.
2.1 STOCK COMBINATIONS. In case the Company shall
combine all of the outstanding Common Stock proportionately into a smaller
number of shares, the Exercise Price per Warrant Share hereunder in effect
immediately prior to such combination shall be proportionately increased and
the number of Warrant Shares issuable to the Holder upon exercise of this
Warrant shall be proportionately decreased, as of the effective date of such
combination, as follows: (a) the number of Warrant Shares purchasable upon the
exercise of the Warrant immediately prior to the effective date of such
combination, shall be adjusted so that the holder of the Warrant exercised
after that date shall be entitled to receive the number and kind of Warrant
Shares which the holder of the Warrant would have owned and been entitled to
receive as a result of the combination had the Warrants been exercised
immediately prior to that date, and (b) the Exercise Price in effect
immediately prior to such adjustment shall be adjusted by multiplying such
Exercise Price by a fraction, the numerator of which is the aggregate number of
shares of Common Stock purchasable upon exercise of the Warrants immediately
prior to such adjustment, and the denominator of which is the aggregate number
of shares of Common Stock purchasable upon exercise of the Warrants immediately
thereafter.
2.2 REORGANIZATIONS. If any of the following
transactions (each, a "Special Transaction") shall become effective after the
Closing Date: (i) a capital reorganization or reclassification of the capital
stock of the Company, (ii) a consolidation or merger of the Company with and
into another entity, or (iii) a sale or conveyance of all or substantially all
2
<PAGE> 5
of the Company's assets, then, as a condition of any such Special Transaction,
lawful and adequate provision shall be made whereby the Holder shall thereafter
have the right to purchase and receive, at any time after the consummation of
such Special Transaction until the expiration of the Exercise Period, upon the
basis and upon the terms and conditions specified herein, and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of this Warrant
for the aggregate Exercise Price in effect immediately prior to such
consummation, such shares of stock, other securities, cash or other assets as
may be issued or payable in and pursuant to the terms of such Special
Transaction with respect to or in exchange for a number of outstanding shares
of Common Stock equal to the number of Warrant Shares immediately theretofore
issuable upon exercise of this Warrant had such Special Transaction not taken
place (pro rated in the case of any partial exercises). In connection with any
Special Transaction, appropriate provision shall be made with respect to the
rights and interests of the Holder to the end that the provisions of this
Warrant (including without limitation provisions for adjustment of the Exercise
Price and the number of Warrant Shares issuable upon the exercise of the
Warrant), shall thereafter be applicable, as nearly as may be, to any shares of
stock, other securities, cash or other assets thereafter deliverable upon the
exercise of this Warrant. The Company shall not effect any Special Transaction
unless prior to or simultaneously with the closing the successor entity (if
other than the Company), if any, resulting from such consolidation or merger or
the entity acquiring such assets shall assume by a written instrument executed
and mailed by certified mail or delivered to the Holder at the address of the
Holder appearing on the books of the Company, the obligation of the Company or
such successor corporation to deliver to such Holder such shares of stock,
securities, cash or other assets as, in accordance with the foregoing
provisions, such Holder has rights to purchase.
2.3 ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the
event of any change in the Common Stock by reason of stock dividends, stock
splits, recapitalizations or reclassifications, the type and number of Warrant
Shares issuable upon exercise of this Warrant, and the Exercise Price, as the
case may be, shall be adjusted as follows: (a) the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to the record
date for such dividend or distribution, or the effective date of such
recapitalization or reclassification shall be adjusted so that the holder of
the Warrant exercised after that date shall be entitled to receive the number
and kind of Warrant Shares which the holder of the Warrant would have owned and
been entitled to receive as a result of the dividend, distribution,
recapitalization or reclassification had the Warrants been exercised
immediately prior to that date, and (b) the Exercise Price in effect
immediately prior to such adjustment shall be adjusted by multiplying such
Exercise Price by a fraction, the numerator of which is the aggregate number of
shares of Common Stock purchasable upon exercise of the Warrants immediately
prior to such adjustment, and the denominator of which is the aggregate number
of shares of Common Stock purchasable upon exercise of the Warrants immediately
thereafter. No such adjustment shall be made on account of any dividend
payable other than in securities of the Company.
2.4 NOTICE. Whenever this Warrant or the number of
Warrant Shares issuable hereunder is to be adjusted as provided herein or a
dividend or distribution (in cash, stock or otherwise and including, without
limitation, any liquidating distributions) is to be
3
<PAGE> 6
declared by the Company, or a definitive agreement with respect to a Special
Transaction has been entered into, the Company shall forthwith cause to be sent
to the Holder at the last address of the Holder shown on the books of the
Company, by first-class mail, postage prepaid, at least ten (10) days prior to
the record date specified in (A) below or at least twenty (20) days before the
date specified in (B) below, a notice stating in reasonable detail the relevant
facts and any resulting adjustments and the calculation thereof, if applicable,
and stating (if applicable):
(A) the date to be used to determine (i) which
holders of Common Stock will be entitled to receive notice of such dividend,
distribution, subdivision or combination (the "Record Date"), and (ii) the date
as of which such dividend distribution, subdivision or combination shall be
made; or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution,
subdivision or combination are to be determined (provided, that in the event
the Company institutes a policy of declaring cash dividends on a periodic
basis, the Company need only provide the relevant information called for in
this clause (A) with respect to the first cash dividend payment to be made
pursuant to such policy and thereafter provide only notice of any changes in
the amount or the frequency of any subsequent dividend payments), or
(B) the date on which a Special Transaction is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon consummation of
the Special Transaction (the "Exchange Date").
2.5 FRACTIONAL INTERESTS. The Company shall not be
required to issue fractions of shares of Common Stock on the exercise of this
Warrant. If any fraction of a share of Common Stock would, except for the
provisions of this Section 2.5, be issuable upon the exercise of this Warrant,
the Company shall, upon such issuance, purchase such fraction for an amount in
cash equal to the current value of such fraction, computed on the basis of the
last reported close price of the Common Stock on the New York Stock Exchange
("NYSE") on the last business day prior to the date of exercise upon which such
a sale shall have been effected, or, if the Common Stock is not so listed on
the NYSE, as the Board of Directors of the Issuer may in good faith determine.
2.6 EFFECT OF ALTERNATE SECURITIES. If at any time, as a
result of an adjustment made pursuant to this Section 2, the holder of the
Warrants shall thereafter become entitled to receive any securities of the
Company other than shares of Common Stock, then the number of such other
securities receivable upon exercise of an Warrant shall be subject to
adjustment from time to time on terms as nearly equivalent as practicable to
the provisions with respect to shares of Common Stock contained in this Section
2.
2.7 SUCCESSIVE APPLICATION. The provisions of this
Section 2 shall similarly apply to successive events covered by this Section.
4
<PAGE> 7
3. EXERCISE.
3.1 EXERCISE OF WARRANT. (a) The Holder may exercise
this Warrant by (i) surrendering this Warrant, with the form of exercise notice
attached hereto as Exhibit "A" duly executed by Holder, and (ii) making payment
to the Company of the aggregate Exercise Price for the applicable Warrant
Shares in cash, by certified check or bank check or by wire transfer to an
account designated by the Company. Upon any partial exercise of this Warrant,
the Company, at its expense, shall forthwith issue to the Holder for its
surrendered warrant a replacement Warrant identical in all respects to this
Warrant, except that the number of Warrant Shares shall be reduced accordingly.
(b) Record Date for ownership of Warrant Shares. Each
person in whose name any Warrant Share certificate is issued upon exercise of
the Warrants shall for all purposes been deemed to have become the holder of
record of the Warrant Shares for which such Warrants were exercised on, and
such Warrant Share certificate shall be dated the date upon which the Warrant
exercise notice was duly surrendered and payment of the Exercise Price was
tendered to the Company.
3.2 ISSUANCE OF WARRANT SHARES. The Warrant Shares
purchased shall be issued to the Holder exercising this Warrant as of the close
of business on the date on which all actions and payments required to be taken
or made by Holder, pursuant to Section 3.1, shall have been so taken or made.
Certificates for the Warrant Shares so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) days after this Warrant
is surrendered.
4. RIGHTS OF HOLDER. Holder shall not, solely by virtue
of this Warrant and prior to the issuance of the Warrant Shares upon due
exercise thereof, be entitled to any rights of a shareholder in the Company.
5. TRANSFERABILITY. Holder hereby represents and
warrants that it is acquiring this Warrant and, upon the exercise thereof, the
Warrant Shares, for investment and not with a view to resale or distribution
thereof. Holder may not sell, assign, transfer or otherwise dispose of this
Warrant or any Warrant Shares, except in accordance with federal and state
securities laws. Subject to compliance with federal and state securities laws
and with the Reorganization Agreement, if applicable, the Holder may sell,
assign, transfer or otherwise dispose of any Warrant Shares acquired upon any
exercise hereof at any time and from time to time.
6. LEGEND ON WARRANT SHARES. Certificates evidencing
the Warrant Shares shall bear the legend set forth on the first page of this
Warrant.
7. REGISTRATION RIGHTS. The Warrant Shares will be
subject to the following registration rights to successors and assigns of Buyer
(other than any successor and assign which is a member of the WMX Group (as
defined in the Standstill Agreement)) as hereinafter set forth. For purposes
of this Article VII, the term "Registrable Securities" means any of the Warrant
Shares and any other shares of Common Stock or other securities
5
<PAGE> 8
issued in respect of the Warrant Shares by way of stock dividend or stock split
or in connection with any recapitalization, merger, consolidation or
reorganization; provided that, as to any particular securities, such securities
will cease to be Registrable Securities when they have been sold pursuant to
Rule 144 promulgated by the Securities and Exchange Commission or any similar
rule then in force ("Rule 144").
7.1 TRANSFER OF REGISTRATION RIGHTS. Buyer may assign
the registration rights with respect to the Warrant Shares to any party or
parties to which it may from time to time transfer the Warrants or Warrant
Shares, other than any member of the WMX Group. Upon assignment of any
registration rights pursuant to this Section 7.1, Buyer shall deliver to
Company a notice of such assignment which includes the identity and address of
any assignee (each such subsequent holder is referred to as a "Holder").
7.2 PIGGYBACK REGISTRATION.
(a) If at any time, and from time to time, the Company
proposes to effect a registration for its account or for the account of a
security holder or holders (other than a registration on Form S-8, or any
similar or successor form thereto, relating to an employee or director stock
option, stock purchase or other benefit plan, or a registration relating to
shares issuable in a merger, consolidation, exchange offer, purchase of assets
or any similar transaction) ("Piggyback Registration"), the Company shall:
(i) promptly give to each Holder of Registrable
Securities written notice thereof (which written notice shall
include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under or
otherwise comply with the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any related
qualification under or other compliance with blue sky or other
state securities laws), and in any underwriting involved
therein on the same terms and conditions as the securities
being issued thereunder, all the Registrable Securities
specified in a written request, made within 15 days after
receipt of such written notice from the Company, by any holder
of Registrable Securities; provided that if such registration
is a registration in which the managing underwriter advises
the Company that marketing factors require a limitation of the
number of shares of Common Stock to be underwritten in such
registration (a "Cutback Registration"), then (i) if such
registration is a primary registration, whether or not it
includes a secondary registration, on behalf of the Company,
the Company shall register in such registration (A) first, the
shares of Common Stock the Company proposes to sell in such
registration, and (B) second, shares of Common Stock held by
each holder of Registrable Securities and any holder of Common
Stock, other than the holders of Registrable Securities (in
their respective capacities as such) who has the right to
request inclusion of Common Stock held by such holder in such
registration (the "Electing Holders") on a pro rata basis,
based upon the number of shares of Common
6
<PAGE> 9
Stock the holders of Registrable Securities and any Electing Holders
originally sought to include in such registration; and (ii) if such
registration is a Piggyback Registration which is solely a secondary
registration on behalf of holders of Common Stock, the Company shall
register in such registration shares of Common Stock held by each
holder of Registrable Securities and the Electing Holders on a pro
rata basis, based upon the number of shares of Common Stock the
holders of Registrable Securities and any Electing Holders originally
sought to include in such registration andprovided, further, that if
such registration is a Cutback Registration, the Company shall use its
best efforts to include all shares of Registrable Securities specified
in the Holder's written request, but such best efforts shall not
include an obligation on the part of the Company to reduce the number
of shares of the Company or the other Electing Holders included in
such Cutback Registration beyond that expressly provided for in this
Section.
(b) If the registration of which the Company gives notice
is pursuant to an effective registration statement under the Securities Act
involving an underwriting, the Company shall so advise each Holder as part of
the written notice given pursuant to subclause (i) above. In such event, the
right of each such Holder to registration pursuant to this Section shall be
conditioned upon such Holder's participation in such underwriting, the
inclusion of the Registrable Securities in the underwriting and such Holder
entering into an underwriting agreement, containing customary terms and
conditions in a form reasonably acceptable to the Holder and the Company, with
the underwriter or underwriters selected for such underwriting by the Company;
provided that if such underwriting agreement shall not be acceptable to Holder
and after reasonable efforts by Company cannot be made acceptable to Holder,
the Company may proceed with such registration without registering the stock of
Holder in such registration.
7.3 REGISTRATION PROCEDURES. (a) In case of each
registration, qualification or compliance effected by the Company subject to
this Article VII, the Company shall keep Holder advised in writing as to the
initiation of each such registration, qualification and compliance and as to
the completion thereof. In addition, at its expense, the Company shall:
(i) before filing a registration
statement or prospectus or any amendment or supplements
thereto subject to this Article VII, the Company shall furnish
to counsel selected by Holder copies of all such documents
proposed to be filed and the portions of such documents
provided in writing by Holder for use therein and for which
Holder shall indemnify the Company shall be subject to such
Holders approval;
(ii) update, correct, amend and
supplement such registration, qualification or compliance
as necessary;
7
<PAGE> 10
(iii) furnish such number of prospectuses,
including preliminary prospectuses, and other documents
incident thereto as Holder may reasonably request from time to
time, which shall be a Selling Expense;
(iv) register or qualify such Registrable
Securities under such other securities or blue sky laws of
such jurisdictions of the United States (up to five of which
shall be at the expense of the Company, and any additional of
which shall be at the expense of Holder) as Holder may deem
reasonable to enable it to consummate the disposition in such
jurisdiction of the Registrable Securities (provided that
Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this section, or (ii) consent to
general service of process in any such jurisdiction);
(v) notify Holder at any time when a
prospectus relating to the Registrable Securities is required
to be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the
statement therein not misleading, and at the request of
Holder, Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers
of such shares, such prospectus will not contain any untrue
statements of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(vi) cause all such Registrable
Securities to be listed on each securities exchange on which
similar securities issued by Company are then listed;
(vii) provide a transfer agent and
registrar for all such Registrable Securities not later than
the effective date of such registration statement;
(viii) upon the sale of any Registrable
Securities pursuant to such registration statement, remove all
restrictive legends from all certificates or other instruments
evidencing the Registrable Securities;
(ix) furnish, at the request of Holder,
on the date that such Registrable Securities are delivered to
the underwriter for sale in connection with a registration
pursuant to this section, if such Registrable Securities are
being sold through an underwriter, or if such Registrable
Securities are not being sold through an underwriter, on the
date that the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion dated
such date of the counsel representing Company for purpose of
such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering,
addressed to such underwriter, if any, and to
8
<PAGE> 11
Holder; and (ii) a letter dated as of such date from the
independent certified public accountant of Company, in form
and substance as is customarily given by independent certified
public accountants to underwriters in connection with a public
offering, addressed to the underwriter, if any, and to Holder;
and
(x) make available for inspection by
Holder, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney,
accountant or any other agent retained by Holder or such
underwriter, all financial and other records, pertinent
corporate documents and properties of Company, and cause
Company's officers, directors and employees to supply all
information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection with
such registration statement.
(b) Except as required by law, all expenses incurred by
the Company in complying with this Section 7, including but not limited to, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses in
accordance with Section 7.3(a)(iv) hereof, including fees and disbursements of
counsel related to all blue sky matters, but excluding the compensation of
regular employees of the Company which shall be paid in any event by the
Company ("Registration Expenses") incurred in connection with any registration,
qualification or compliance pursuant to such Sections shall be borne by the
Company. All underwriting discounts and selling commissions applicable to a
sale ("Selling Expenses") incurred in connection with any registration of
Registrable Securities and the legal fees of Holder shall be born by Holder.
7.4 FURTHER INFORMATION. If Registrable Securities owned
by a Holder are included in any registration, such Holder shall furnish the
Company such information regarding itself and the distribution proposed by such
Holder as the Company may reasonably request and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
8. MISCELLANEOUS.
8.1 AMENDMENTS. The parties may, from time to time,
enter into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Warrant or changing in any manner the
rights of either of the parties hereunder. No amendment, supplement or
modification shall be binding on either party unless made in writing and signed
by a duly authorized representative of each party.
8.2 NOTICES. All notices, requests, demands, claims, and
other communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission, which transmission is confirmed
by delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery:
9
<PAGE> 12
(a) if to the Company to:
OHM Corporation
16406 U.S. Route 224 East
Findlay, Ohio 45840
Attention: General Counsel
Telecopy: (419) 424-4985
with a copy to:
Jones, Day, Reavis & Pogue
41 South High Street
1900 Huntington Center
Columbus, OH 43215
Attention: Robert J. Gilker, Esq.
Telecopy: (614) 469-4198
(b) if to Buyer to:
WMX Technologies, Inc.
3003 Butterfield Road
Oak Brook, Illinois 60521
Attention: General Counsel
Telecopy: (708) 218-1553
(c) or, in each case, at such other address or to such
other person as may be specified in writing to the other party.
8.3 WAIVER BY CONSENT. The Holder may execute and
deliver to the Company a written instrument waiving, on such terms and
conditions as the Holder may specify in such instrument, any of the
requirements of this Warrant.
8.4 NO IMPLIED WAIVER; RIGHTS ARE CUMULATIVE. The
failure to exercise or the delay in exercising by either party of any right,
remedy, power or privilege under this Warrant, shall not operate as a waiver
thereof. The single or partial exercise of any right, remedy, power or
privilege under this Warrant shall not preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
8.5 GOVERNING LAW. This Warrant and rights and
obligations of the parties hereunder shall be governed by, construed and
interpreted in accordance with the
10
<PAGE> 13
laws of the State of Ohio applicable to agreements executed by residents of
that state, and fully to be performed, in that state.
8.6 SEVERABILITY. If any provision of this Warrant is
found to be unenforceable for any reason whatsoever, such provision shall be
deemed null and void to the extent of such unenforceability but shall be deemed
separable from and shall not invalidate any other provision of this Warrant.
8.7 CAPTIONS. Captions to the various paragraphs of this
Agreement are provided for convenience only and shall not be used to construe
the provisions of this Warrant.
8.8 ENTIRE AGREEMENT. This Warrant, the Guarantee
Agreement and the Standstill Agreement constitute the entire understanding of
the parties with respect to the subject matter of the Warrant and supersedes
all prior discussions, agreements and representations, whether oral or written,
concerning the subject matter hereof and whether or not executed by Buyer and
the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Warrant to be duly executed and delivered by the proper and duly authorized
officers as of the day and year first above written.
OHM CORPORATION
By: /s/ Randall M. Walters
------------------------------
Name: Randall M. Walters
Title: Vice President
WMX TECHNOLOGIES, INC.
By: /s/ Linda R. Witte
-----------------------------
Name: Linda R. Witte
Title: Vice President
11
<PAGE> 14
EXHIBIT "A"
-----------
[To be signed only upon exercise of Warrant]
To OHM Corporation:
The undersigned, the Holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _____________ shares of the common stock, par
value $.10 per share, of OHM Corporation and herewith makes payment of
$___________ thereof or, and requests that the certificates for such shares be
issued in the name of, and be delivered to, ______________ whose address is
___________________________.
Dated:
_________________________
_______________________________________________
(Signature must conform in all respects to name
of Holder as specified on the face of the Warrant)
_______________________________________________
Address
<PAGE> 1
EXECUTION COPY
Exhibit 10(e)
$150,000,000
REVOLVING CREDIT AGREEMENT
DATED AS OF MAY 31, 1995
AMONG
OHM CORPORATION
AND
OHM REMEDIATION SERVICES CORP.,
AS BORROWERS
AND
CITICORP USA, INC.,
AS ADMINISTRATIVE AGENT
AND
BANK OF AMERICA ILLINOIS,
AS ISSUING AND PAYING AGENT AND CO-AGENT
AND
THE FINANCIAL INSTITUTIONS SET FORTH ON
THE SIGNATURE PAGES HERETO
<PAGE> 2
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT . . . . . . . . . . . . . . . 20
SECTION 2.01. The Advances and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.03. Making the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.04. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.05. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.06. Joint and Several Liability; Repayment of Advances and Letters of Credit . . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.08. Additional Interest on Eurodollar Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.09. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.10. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.11. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.13. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.14. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.15. Termination or Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE III
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.01. Conditions Precedent to the Effectiveness of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.02. Conditions Precedent to Each Extension of Credit Hereunder . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.01. Representations and Warranties of the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE V
COVENANTS OF THE BORROWERS . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.01. Affirmative Covenants of the Borrowers Other Than Reporting Requirements . . . . . . . . . . . . . . . . . . 45
SECTION 5.02. Negative Covenants of the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.03. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE VI
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VII
THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.02. Agents' Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.03. Citicorp USA, BAI and Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.06. Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.01. No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.02. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.03. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.05. Obligations Several . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.06. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.07. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.08. Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.09. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.10. MUTUAL WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.11. CONSENT TO JURISDICTION; SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.12. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.13. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.14. Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.15. The Transaction Documents; Actions by the Banks; Release and Re-Grant of Collateral; Release of WMX
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.16. Termination of Prior Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.17. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
</TABLE>
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<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
Annexes
-------
ANNEX A -- FACILITY A RATE DETERMINATION TABLE
ANNEX B -- FACILITY B RATE DETERMINATION TABLE
Exhibits
--------
EXHIBIT A -- FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B -- FORM OF NOTE
EXHIBIT C -- FORM OF NOTICE OF BORROWING
EXHIBIT D -- FORM OF SECURITY AGREEMENT AMENDMENT
EXHIBIT E -- FORM OF PLEDGE AGREEMENT AMENDMENT
EXHIBIT F -- FORM OF WMX GUARANTY
EXHIBIT G -- FORM OF WMX INTERCREDITOR AGREEMENT
EXHIBIT H -- FORM OF BORROWERS' OPINION OF COUNSEL
EXHIBIT I -- FORM OF OPINION OF SPECIAL COUNSEL TO THE AGENT
EXHIBIT J -- FORM OF REQUEST FOR RELEASE OF COLLATERAL
Schedules
---------
SCHEDULE 2.12 -- DOMESTIC AND EURODOLLAR LENDING OFFICES
SCHEDULE 2.14(d) -- EXISTING LETTERS OF CREDIT
SCHEDULE 4.01(k) -- DOMESTIC AND FOREIGN SUBSIDIARIES
SCHEDULE 5.02(a)(iv) -- EXISTING LIENS
SCHEDULE 5.02(i)(ii) -- EXISTING INVESTMENTS
SCHEDULE 5.02(j)(vii) -- EXISTING INDEBTEDNESS
</TABLE>
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EXECUTION COPY
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of May 31, 1995 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time hereafter, the "Agreement") is among OHM Corporation, an Ohio
corporation ("OHM"), OHM Remediation Services Corp., an Ohio corporation
("Remediation" and, together with OHM, sometimes hereinafter referred to
collectively as the "Borrowers" and each individually as a "Borrower"), the
financial institutions listed on the signature pages hereto (together with any
other financial institutions from time to time parties hereto, the "Banks" and
each a "Bank"), Citicorp USA, Inc., a Delaware corporation, in its individual
capacity (in such capacity, "Citicorp USA") and as administrative agent (in
such capacity as administrative agent, the "Administrative Agent") for the
Banks, and Bank of America Illinois, in its individual capacity (in such
capacity, "BAI"), as issuing and paying agent and co-agent (in such capacity as
issuing and paying agent and co- agent, the "Issuing and Paying Agent"). In
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"A Commitment" means, with respect to any Bank at any time,
such Bank's Contractual Percentage multiplied by the Total A Commitment at such
time.
"Accounts Receivable Reserve" means the charge taken by the
Borrowers in the fiscal quarter ending December, 1994 in the amount of
$25,000,000, in connection with certain accounts receivable or other amounts
due from clients of the Borrowers, primarily related to certain litigation
between the Borrowers and CITGO Petroleum Corporation.
"Advance" means an advance by a Bank to either Borrower as
part of a Borrowing and refers to a Eurodollar Rate Advance or a Base Rate
Advance, each of which shall be a "Type" of Advance.
<PAGE> 6
"Affiliate" means, as to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with such Person or is a director or officer of such Person.
"Alternate Base Rate" means the fluctuating rate per annum as
shall be in effect from time to time which rate per annum shall at all times be
equal to the highest of (but in no event higher than the maximum rate permitted
by law):
(a) The rate of interest announced publicly by Citibank
in New York, New York, from time to time, as Citibank's base rate;
(b) The sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i)
1/2 of 1% per annum, plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money market banks, such three-week
moving average being determined weekly on each Monday (or, if any such
day is not a Business Day, on the next succeeding Business Day) for
the three-week period ending on the previous Friday by Citibank on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus (iii) the average
during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the United
States; and
(c) The sum of (i) 1/2 of 1% per annum plus (ii) the
Federal Funds Rate.
"Applicable Base Rate Margin" means the Facility A Base Rate
Margin for Facility A Advances and the Facility B Base Rate Margin for Facility
B Advances.
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"Applicable Eurodollar Margin" means the Facility A Eurodollar
Margin for Facility A Advances and the Facility B Eurodollar Margin for Facility
B Advances.
"Applicable Issuance Fee Percentages" means the Facility A
Issuance Fee Percentages for Facility A Letters of Credit and the Facility B
Issuance Fee Percentages for Facility B Letters of Credit.
"Applicable Lending Office" means, with respect to each Bank,
(i) such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and (ii) such Bank's Domestic Lending Office in the case of a Base Rate
Advance or a participation in a Letter of Credit.
"Applicable Rate Determination Table" means, with respect to
Facility A, the Facility A Rate Determination Table and, with respect to
Facility B, the Facility B Rate Determination Table.
"Assignee" has the meaning specified in Section 8.08.
"Assignment" has the meaning specified in Section 8.08.
"Assignment and Acceptance" means an Assignment and Acceptance
in the form attached hereto as Exhibit A.
"Authorized Officer" means, with respect to either Borrower,
any of the Chairman of the Board, the President, any Executive Vice President,
any Vice President, the Treasurer, the Secretary, the Controller, any Assistant
Treasurer or any Assistant Controller of such Borrower, as has been duly
authorized to act on behalf of such Borrower hereunder.
"B Commitment" means, with respect to any Bank at any time,
such Bank's Contractual Percentage multiplied by the Total B Commitment at such
time.
"Bank of Tokyo Agreement" means that certain Master Loan and
Security Agreement dated as of May 11, 1993, between Remediation and BOT
Financial Corporation, as the same has been or may be amended from time to
time, providing for loans of up to $8,000,000 to finance the capital
expenditures in connection with Remediation's Baird and McGuire incineration
project in Holbrook, Massachusetts.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.07(b).
"Base Rate Margin" has the meaning specified in Section
2.07(b).
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<PAGE> 8
"Borrower" and "Borrowers" have the meanings specified in the
Preamble.
"Borrowing" means a borrowing consisting of Advances of the
same Type made on the same day by the Banks.
"Business Day" means any day on which banks are not required
or authorized to close in New York City or Chicago, Illinois and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in each interbank eurodollar market.
"Capital National" means Capital National Insurance Corp., a
Vermont corporation and a wholly-owned subsidiary of OHM.
"Citibank" means Citibank, N.A., a national banking
association.
"Collateral" means all property and interests in property now
owned or hereafter acquired by either or both of the Borrowers or any
Subsidiary in or upon which a security interest, lien or mortgage is granted to
the Issuing and Paying Agent by such Borrower or Subsidiary, as the case may
be, whether under this Agreement, the other Transaction Documents, or under any
other documents, instruments or writings executed and delivered by such
Borrower or Subsidiary, as the case may be, pursuant thereto or in connection
therewith.
"Commitment" means, as to each Bank, the amount in U.S.
dollars set forth opposite the name of such Bank on the signature pages hereof
(or, if applicable, on the signature pages of the Assignment and Acceptance
pursuant to which such Bank became a Bank hereunder or last made an Assignment
hereunder, in each case, pursuant to Section 8.08) with respect to amounts it
will make available to the Borrowers by way of Advances and participations in
Letters of Credit pursuant to the terms of this Agreement, as such amount may
be reduced from time to time pursuant to Section 2.15.
"Commitment Fee Agreement" means that certain letter agreement
dated April 19, 1995, executed by each of the Borrowers, the Administrative
Agent and the Issuing and Paying Agent, with respect to the payment of
commitment fees payable in connection with this Agreement.
"Consolidated" refers to the consolidation of the accounts of
the Borrowers and their Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation; provided,
however, that for purposes of calculating all of the financial covenants for
all periods, each of the NSC Companies shall be de-consolidated from OHM and
its other Consolidated Subsidiaries and shall be accounted for on
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<PAGE> 9
an equity basis, in each case, in accordance with generally accepted accounting
principles.
"Contractual Percentage" means, as to each Bank at any time,
such Bank's Commitment at such time divided by the Total Commitment at such
time.
"Credit Rating" means, at any time, with respect to WMX, the
credit rating on the long-term senior unsecured debt of WMX then most recently
publicly announced by either Moody's or Standard & Poor's.
"Customary Permitted Liens" shall mean:
(i) Liens (other than Environmental Liens) for taxes,
assessments or governmental charges or claims not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with the provisions of generally
accepted accounting principles;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with the provisions of
generally accepted accounting principles;
(iii) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of borrowed
money), statutory obligations and other similar obligations or arising
as a result of progress payments under government contracts, or Liens
arising under statute or by operation of law (through principles of
subrogation) to secure surety, indemnity, payment, performance or
other similar bonds in the ordinary course of business;
(iv) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering with the ordinary conduct of
the business of the applicable Borrower or its Subsidiaries; and
(v) extensions, renewals or replacements of any Lien referred
to in paragraphs (i) through (iv) above,
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<PAGE> 10
provided that the principal amount of the obligation secured thereby
is not increased and further provided that any such extension, renewal
or replacement is limited to the property originally encumbered
thereby.
"Debentures" means those certain 8% Convertible Subordinated
Debentures due October 1, 2006 in the original principal amount of $57,500,000
issued by OHM (formerly known as Environmental Treatment and Technologies
Corp.) under that certain Indenture dated as of October 1, 1986 between OHM and
United States Trust Company of New York, as Trustee, as amended (the
"Indenture").
"Default" means any event or condition which with the giving
of notice or passage of time, or both, would constitute an Event of Default.
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" opposite its
name on Schedule 2.12 hereto, or such other office of such Bank as such Bank
may from time to time specify to the Borrowers, the Administrative Agent and
the Issuing and Paying Agent.
"EBITDA" means, for any period, on a Consolidated basis for
the Borrowers and their Subsidiaries, gross revenues minus direct subcontract
costs minus costs of services minus selling, general and administration
expenses plus depreciation expense and amortization expense for such period (in
each case to the extent such items were included in selling, general and
administration expenses and other costs of services), plus, in the case of any
period which includes the fiscal quarter ending December 31, 1994, the amount
of the Accounts Receivable Reserve.
"EBITDA to Interest Expense Ratio" means, as of the last day
of any fiscal quarter, the ratio of (i) EBITDA for the preceding four fiscal
quarter period ending as of such day to (ii) Interest Expense for such period.
"Effective Date" has the meaning specified in Section 3.01.
"EFSC" means Environmental Financial Services Corp., a
Delaware corporation and a wholly-owned subsidiary of OHM.
"Eligible Interest Rate Contract" has the meaning specified in
Section 2.16.
"Environmental Laws" means any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980,
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<PAGE> 11
as amended, the Superfund Amendments and Authorization Act of 1986, the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act or
any other federal, state or local statute, regulation, ordinance, order, or
decree, or common law, whether in existence now or hereafter enacted, and as
such may be amended from time to time, relating to health, safety or the
environment.
"Environmental Lien" means a lien in favor of any governmental
entity for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such
governmental entity in response to a release of a hazardous or toxic waste,
substance or constituent, or other substance into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
"ERISA Affiliate" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the IRC) as either Borrower; (ii) partnership or other trade or
business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the IRC) with either Borrower; and (iii)
member of the same affiliated service group (within the meaning of Section
414(m) of the IRC) as either Borrower, any corporation described in clause (i)
above or any partnership, trade or business described in clause (ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Bank,
the office of such Bank specified as its "Eurodollar Lending Office" opposite
its name on Schedule 2.12 hereto, or such other office of such Bank as such
Bank may from time to time specify to the Borrowers, the Administrative Agent
and the Issuing and Paying Agent.
"Eurodollar Margin" has the meaning specified in Section
2.07(a).
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate
per annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in U.S. dollars are offered by the principal office of
each of the Reference Banks to prime banks in the interbank eurodollar market
at approximately 11:00 A.M. (New York City time) two Business Days before the
first day of such
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<PAGE> 12
Interest Period in an amount substantially equal to such Reference Bank's
Eurodollar Rate Advance comprising part of such Borrowing and for a period
equal to such Interest Period. The Eurodollar Rate for the Interest Period for
each Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Issuing and Paying Agent on the basis of applicable rates
furnished to and received by the Issuing and Paying Agent from the Reference
Banks two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.09.
"Eurodollar Rate Advance" means an Advance which bears
interest as provided in Section 2.07(a).
"Eurodollar Rate Reserve Percentage" of any Bank for the
Interest Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Bank with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Existing Letters of Credit" has the meaning specified in
Section 2.14(d).
"Facility A Advances" means, on any date, all Advances, or
portions thereof, which are part of Facility A Outstandings on such date.
"Facility A Base Rate Margin" means the Base Rate Margin
determined in accordance with the Facility A Rate Determination Table.
"Facility A Eurodollar Margin" means the Eurodollar Margin
determined in accordance with the Facility A Rate Determination Table.
"Facility A Issuance Fee Percentages" means the Issuance Fee
Percentages determined in accordance with the Facility A Rate Determination
Table.
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<PAGE> 13
"Facility A Letters of Credit" means, on any date, all Letters
of Credit, or any portion thereof, which are part of Facility A Outstandings on
such date.
"Facility A Outstandings" means, on any date, all Advances and
Letters of Credit on such date other than Advances and Letters of Credit, or
any portions thereof, which are Facility B Outstandings.
"Facility A Rate Determination Table" means the table set
forth as Annex A to this Agreement.
"Facility B Advances" means, on any date, all advances, or
portions thereof, which are part of Facility B Outstandings on such date.
"Facility B Base Rate Margin" means the Base Rate Margin
determined in accordance with the Facility B Rate Determination Table.
"Facility B Issuance Fee Percentages" means the Issuance Fee
Percentages determined in accordance with the Facility B Rate Determination
Table.
"Facility B Letters of Credit" means, on any date, all Letters
of Credit, or any portion thereof, which are part of Facility B Outstandings on
such date.
"Facility B Level 1 Period" means any period of time during
which the Margins and Issuance Fee Percentages for Facility B Outstandings are
calculated by reference to Level 1 on the Facility B Rate Determination Table.
"Facility B Level 2 Period" means any period of time during
which the Margins and Issuance Fee Percentages for Facility B Outstandings are
calculated by reference to Level 2 on the Facility B Rate Determination Table.
"Facility B Level 3 Period" means any period of time during
which the Margins and Issuance Fee Percentages for Facility B Outstandings are
calculated by reference to Level 3 on the Facility B Rate Determination Table.
"Facility B Level 4 Period" means any period of time during
which the Margins and Issuance Fee Percentages for Facility B Outstandings are
calculated by reference to Level 4 on the Facility B Rate Determination Table.
"Facility B Level 5 Period" means any period of time during
which the Margins and Issuance Fee Percentages for Facility B Outstandings are
calculated by reference to Level 5 on the Facility B Rate Determination Table.
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<PAGE> 14
"Facility B Outstandings" means, on any date, the aggregate
amount of Advances and Letters of Credit outstanding on such date minus the
amount of the Total A Commitment on such date. The amount of Advances and
Letters of Credit consisting of Facility A Outstandings and Facility B
Outstandings, respectively, will be determined on a daily basis. In making
such daily allocation, all outstanding Advances, up to the amount of the Total
A Commitment, will be part of Facility A Outstandings. If the Total A
Commitment exceeds the amount of outstanding Advances on such date, the
aggregate undrawn face amount of Letters of Credit, up to the amount by which
the Total A Commitment exceeds the amount of outstanding Advances, will be
Facility A Outstandings on such date.
"Facility B Rate Determination Table" means the table set
forth as Annex B to this Agreement.
"Facing Fee" has the meaning specified in Section 2.04(c).
"Federal Funds Rate" means, 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 Issuing and Paying Agent from
three Federal funds brokers of recognized standing selected by it.
"Financial Letter of Credit" means each Letter of Credit
determined by the Issuing Bank to be of the type of letter of credit defined as
"financial guaranty-type standby letters of credit" in footnote 13 to Appendix
A to the Risk Based Capital Guidelines issued by the Comptroller of the
Currency.
"Funded Debt" means any Indebtedness of either Borrower,
created, issued, incurred, assumed or guaranteed (other than the undrawn face
amount of letters of credit), whether secured or unsecured, and regardless of
maturity date. Funded Debt includes, without limitation, the Notes.
"Freeze Event" means a "Freeze Event" under and as defined in
the WMX Guaranty.
"Freeze Notice" means a "Freeze Notice" under and as defined
in the WMX Guaranty.
"Funded Debt to EBITDA Ratio" means, as of the last day of any
fiscal quarter, the ratio of (i) the aggregate amount of Funded Debt of the
Borrowers and their Subsidiaries on a
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<PAGE> 15
Consolidated basis as at such date to (ii) EBITDA for the preceding four fiscal
quarter period ending as of such date.
"Government" means the government of any country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or any department, agency, public corporation or other instrumentality
of any of the foregoing.
"Guaranties" means, for any Person, (i) all indebtedness or
other obligations of any other Person the payment or collection of which such
Person has guaranteed (except by reason of endorsement for collection in the
ordinary course of business) or in respect of which such Person is liable,
contingently or otherwise, including, without limitation, liable by way of
agreement to purchase, to provide funds for payment, to supply funds to or
otherwise to invest in such other Person, or otherwise to assure a creditor
against loss and (ii) all indebtedness or other obligations of any other Person
for borrowed money or for the deferred purchase price of property or services
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness or obligations.
"Guaranty Release Date" has the meaning specified in Section
2.04(d).
"Indebtedness" means, for any Person, (i) all indebtedness or
other obligations of such Person for borrowed money, including the deferred
purchase price of property or services which would constitute indebtedness for
purposes of generally accepted accounting principles, (ii) all Guaranties of
such Person, (iii) Long Term Lease Obligations of such Person, (iv) withdrawal
liability incurred under ERISA by such Person to any Multiemployer Plan, (v)
all obligations of such Person in respect of any letter of credit issued for
the account of such Person and (vi) all liabilities in respect of unfunded
vested benefits under any Plan; provided, however, that "Indebtedness" shall
not include (a) non-recourse indebtedness as to which the obligor has no
personal liability and which is not secured by any Lien upon any of the
obligor's property or (b) credit card indebtedness incurred by or on behalf of
either Borrower in the ordinary course of business to purchase property or
services if and to the extent such indebtedness is paid in full not less often
than monthly, or (c) short-term obligations for the deferred payment of
insurance premiums.
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<PAGE> 16
"Indenture" has the meaning specified in the definition of
"Debentures".
"Interest Expense" means, for any period, total interest
expense of the Borrowers and their Subsidiaries on a Consolidated basis,
whether paid or accrued (including the interest component of capital leases),
and all commissions, fees and discounts with respect to (i) letters of credit,
to the extent such expenses have not otherwise been accounted for as costs of
services and (ii) all other Funded Debt, but excluding interest expense not
payable in cash (including amortization of discount), all as determined in
conformity with generally accepted accounting principles.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date of
such Advance, or the date of the conversion of such Advance into a Eurodollar
Rate Advance, and ending on the last day of the period selected by the
Borrowers pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the applicable Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be 1, 2, 3 or 6 months, as the applicable Borrower may, upon notice
received by the Issuing and Paying Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the first day of such Interest
Period with respect to such Eurodollar Rate Advance, select; provided, however,
that:
(i) the Borrowers may not select any Interest Period
which ends after the Stated Termination Date;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the same
duration; and
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, in the case of any Interest Period for a
Eurodollar Rate Advance, that if such extension would cause the last
day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day.
"Interest Rate Contracts" means interest rate cap agreements,
interest rate swap agreements, interest rate collar agreements, options on any
of the foregoing, or any other agreements or arrangements designed to provide
protection against fluctuations in interest rates.
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<PAGE> 17
"Interest Rate and Fee Adjustment Date" means, with respect to
each fiscal quarter of the Borrowers ending after September 30, 1995, (a) the
first day of the month (occurring in such fiscal quarter) in which the
Borrowers shall be deemed to have delivered to the Administrative Agent and the
Issuing and Paying Agent, the certificate described in Section 5.03(e) setting
forth the calculation of the EBITDA to Interest Expense Ratio and the Funded
Debt to EBITDA Ratio for the Measurement Period ending on the last day of the
immediately preceding fiscal quarter, in the case of any reduction of the
applicable interest rates or fees hereunder, pursuant to Section 2.07 or
Section 2.04, respectively, based on the information contained in such
certificate, and (b) the first day of such fiscal quarter, in the case of any
increase in the applicable interest rates or fees hereunder, pursuant to
Section 2.07 or 2.04, respectively, based on the information contained in such
certificate. Notwithstanding anything contained herein to the contrary, if the
Borrowers shall deliver such certificate to the Administrative Agent and the
Issuing and Paying Agent later than the 25th day of any month, it shall be
deemed to have been delivered in the succeeding month. In all other cases, the
certificate shall be deemed delivered in the month of its actual delivery to
the Administrative Agent and the Issuing and Paying Agent.
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time, the regulations and rules promulgated thereunder, as in effect
from time to time, and any successor statute and/or regulations and rules.
"IRS" means the Internal Revenue Service (or any successor).
"Issuance Fee" has the meaning specified in Section 2.04(b).
"Issuance Fee Percentage" has the meaning specified in Section
2.04(b).
"Issuing Bank" means, as the context may require, any Bank in
its capacity as the issuing bank with respect to any Letter of Credit
hereunder.
"Letters of Credit" has the meaning specified in Section
2.14(a), and shall include any and all Existing Letters of Credit.
"Level" means each of the pricing levels set forth in the Rate
Determination Tables.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights of way, zoning restrictions
and the like), lien (statutory
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<PAGE> 18
or other), preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement (other than a financing statement filed by a "true" lessor pursuant
to Section 9-408 of the Uniform Commercial Code) naming the owner of the asset
to which such Lien relates as debtor, under the Uniform Commercial Code or
other comparable law of any jurisdiction.
"Long Term Lease Obligations" means, at any time for any
Person, the total principal payments remaining at such time in respect of the
rental or hire of real or personal property of any kind by such Person (whether
or not designated therein as rental or additional rental) under capitalized
leases (the principal component of any payments under capitalized leases being
determined in accordance with generally accepted accounting principles).
"Majority Banks" means Banks having Commitments totaling at
least 51% of the Total Commitment.
"Margin Stock" has the meaning assigned to such term in
Regulation U of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Margins" means the Eurodollar Margin and the Base Rate Margin.
"Measurement Period" means, with respect to any fiscal quarter
of the Borrowers, the four fiscal quarter period ending on the last day of the
immediately preceding fiscal quarter.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan", as defined
in Section 4001(a)(3) of ERISA.
"Net Income" means, with respect to any fiscal period of the
Borrowers and their Subsidiaries, the Consolidated net income of the Borrowers
and their Subsidiaries after provision for income taxes for such fiscal period,
as determined in accordance with generally accepted accounting principles and
reported on the Consolidated financial statements of the Borrowers and their
Subsidiaries for such fiscal period, less any gain arising from (and plus any
loss arising from) extraordinary items or any other non-recurring transaction,
as determined in accordance with generally accepted accounting principles.
"Net Worth" means as at any date of determination, an amount
equal to (i) total assets of the Borrowers and their
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<PAGE> 19
Subsidiaries (on a Consolidated basis) as at such date, minus (ii) total
liabilities of the Borrowers and their Subsidiaries (on a Consolidated basis)
as at such date; provided, however, that the Accounts Receivable Reserve shall
not be reflected in the calculation of Net Worth for the purposes of this
Agreement.
"Non-Financial Letter of Credit" means each Letter of Credit
which, in the determination of the Issuing Bank, is not a Financial Letter of
Credit.
"Non-Use Fee" has the meaning specified in Section 2.04(a).
"Note" means any of the Revolving Credit Notes of the
Borrowers payable to the order of each of the Banks, in substantially the form
of Exhibit B, in each case, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
"Notice of Borrowing" means a telephone, cable or telex notice
from either Borrower to the Issuing and Paying Agent, in each case confirmed
immediately by a letter in substantially the form of Exhibit C.
"NSC Companies" means NSC Corporation, National Surface
Cleaning, Inc. and National Service Cleaning Corp., and any other wholly-owned
direct or indirect Subsidiary of any of the foregoing.
"NSC Corporation" means NSC Corporation, a Delaware
corporation.
"Obligations" means and includes all loans, advances, debts,
liabilities, obligations, covenants and duties owing to either the
Administrative Agent, the Issuing and Paying Agent or any of the Banks or any
of their respective Affiliates from either or both of the Borrowers of any kind
or nature, present or future, arising under this Agreement, under the other
Transactions Documents, and under any other agreement, instrument or document
executed pursuant to or in connection with this Agreement, whether or not for
the payment of money, whether arising by reason of an extension of credit,
opening of a letter of credit, loan, guaranty, indemnification or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and the performance obligations of either Borrower under any Eligible Interest
Rate Contracts. The term includes, without limitation, the principal amount of
all Advances, all Letters of Credit, together with interest, charges, expenses,
fees, attorneys' and paralegals' fees and expenses, and any other sums
chargeable to either or both of the Borrowers under this Agreement and the
other Transaction Documents.
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<PAGE> 20
"Other Taxes" has the meaning specified in Section 2.12(b).
"Participant" has the meaning specified in Section 8.08.
"Participation" has the meaning specified in Section 8.08.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Permitted Other Indebtedness" has the meaning specified in
Section 5.02(j)(ix).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of either Borrower or any of its
ERISA Affiliates and covered by Title IV of ERISA.
"Pledge Agreement Amendment" has the meaning specified in
Section 3.01(a)(iv).
"Prior Credit Agreement" means that certain Revolving Credit
Agreement dated as of May 11, 1993, among the Borrowers, Citibank, as agent,
BAI, as administrative agent and certain other Persons identified therein, as
the same has been amended from time to time.
"Rate Determination Table" means each of the Facility A Rate
Determination Table and the Facility B Rate Determination Table.
"Reference Banks" means Citibank, BAI and The First National
Bank of Boston. The Borrowers may, with the consent of the Administrative
Agent and the Issuing and Paying Agent, substitute any Bank as a Reference Bank
for any of the above-named Banks.
"Reorganization Agreement" means that certain Agreement and
Plan of Reorganization dated December 5, 1994, as the same may have been and
may be amended from time to time among OHM, Rust Remedial Services Inc.,
Enclean Environmental Services Group, Inc., Rust Environmental, Inc. and Rust
International Inc.
"Reportable Event" has the meaning assigned to that term in
Title IV of ERISA.
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"Rust Transactions" means the transactions contemplated by the
Reorganization Agreement.
"Secured Period" means any period prior to the time when the
Issuing and Paying Agent and the Banks are required to release their security
interests pursuant to Section 8.15(b)(iii), or after the Issuing and Paying
Agent are entitled to a re-grant of security interests pursuant to the terms of
Section 8.15(b).
"Security Agreement Amendment" has the meaning specified in
Section 3.01(a)(iii).
"Standard & Poor's" means Standard & Poor's Corporation.
"Stated Termination Date" means May 30, 2000.
"Subsidiary" means any Person the financial statements of
which are Consolidated with those of either Borrower.
"Subordinated Indebtedness" means the Debentures and any other
Indebtedness of either Borrower that is subordinated, in a manner satisfactory
in form and substance to the Majority Banks (evidenced by their written
confirmation thereof), as to right and time of payment of principal thereof and
interest thereon to the Notes and all obligations of the Borrowers under this
Agreement, the Notes and the other Transaction Documents. The parties hereto
specifically agree that all obligations of the Borrowers hereunder and under
the Notes and the other Transaction Documents, whether for principal, interest,
fees or otherwise, shall be Senior Indebtedness as defined in the Indenture.
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Date" means the Stated Termination Date or the
earlier date of the termination in whole of the Commitments pursuant to Section
2.15 or Section 6.01.
"Termination Event" means (a) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), (b) the withdrawal of either Borrower or any of its
ERISA Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
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<PAGE> 22
"Total A Commitment" means, at any time, an amount equal to
the maximum liability of WMX at such time under the WMX Guaranty; provided,
however, that at any time that WMX is in default with respect to any
indebtedness of WMX with a principal amount that equals or exceeds $50,000,000,
the amount of the Total A Commitment shall be zero.
"Total B Commitment" means, at any time, an amount equal to
the Total Commitment at such time minus the Total A Commitment at such time.
"Total Commitment" means at any time, the aggregate sum of the
Banks' Commitments at such time.
"Total Unused Commitment" means the aggregate sum of the
Banks' Unused Commitments.
"Transaction Documents" means this Agreement, together with
all other instruments, documents and agreements executed and/or delivered in
connection therewith, including all notes, security agreements, letters of
credit, letter of credit reimbursement agreements, letter of credit
applications, guaranties, pledge agreements, including, without limitation, the
Notes, the Letters of Credit, the Security Agreement and the Pledge Agreement,
in each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Underbillings" means, at any time, the amount set forth on
the Borrowers' financial statements as "costs and estimated earnings on
contracts in process in excess of billings," less any such amounts attributable
to (a) Citgo Petroleum Corp. in connection with work done at Citgo's Lake
Charles, Louisiana refinery, (b) Occidental Chemical Corporation for work done
in North Tonawanda, New York, (c) the Baird & McGuire project and (d) any
contracts performed on a "time and materials," "cost plus," or "cost
reimbursable" basis, or on any other basis other than a fixed price or fixed
unit price basis.
"Underbillings Reserve" means, at any time, the excess of (i)
the amount of Underbillings at such time, over (ii) thirty five percent (35%)
of Net Worth at such time; provided, that during any Facility B Level 1 Period
or Facility B Level 2 Period, there will be no Underbillings Reserve. The
Underbillings Reserve shall be calculated at the end of each fiscal quarter,
and at such other times as the Borrowers may elect.
"Unsecured Period" means any period other than a Secured
Period.
"Unused A Commitment" means, as to each Bank at any time, (i)
such Bank's A Commitment at such time less (ii) the sum of (a) such Bank's
outstanding Facility A Advances at such time,
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<PAGE> 23
plus (b) such Bank's participation in the undrawn face amount of Facility A
Letters of Credit at such time, plus (c) such Bank's participation interest in
any unpaid reimbursement obligations owing by either Borrower in respect of any
Facility A Letters of Credit; provided, however, that if the amount described
in the foregoing clause (ii) equals or exceeds the amount described in the
foregoing clause (i), then such Bank's Unused A Commitment shall be zero.
"Unused B Commitment" means, as to each Bank at any time, (i)
such Bank's B Commitment at such time less (ii) the sum of (a) such Bank's
outstanding Facility B Advances at such time, plus (b) such Bank's
participation in the undrawn face amount of Facility B Letters of Credit at
such time, plus (c) such Bank's participation interest in any unpaid
reimbursement obligations owing by either Borrower in respect of any Facility B
Letters of Credit; provided, however, that if the amount described in the
foregoing clause (ii) equals or exceeds the amount described in the foregoing
clause (i), then such Bank's Unused B Commitment shall be zero.
"Unused Commitments" means, as to each Bank at any time, such
Bank's Unused A Commitment at such time plus the Bank's Unused B Commitment at
such time.
"WMX" means WMX Technologies, Inc., a Delaware corporation.
"WMX Group" means WMX, Rust and their respective Affiliates.
"WMX Guaranty" means that certain Guaranty dated as of the
Effective Date, executed by WMX in favor of the Administrative Agent, the
Issuing and Paying Agent and the Banks.
"WMX Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the date hereof among WMX, the Administrative Agent and
the Issuing and Paying Agent, acknowledged by the Borrowers.
"WMX Reimbursement Agreement" means the reimbursement
agreement to be entered into between WMX and the Borrower providing for the
reimbursement of WMX by the Borrowers upon payment being made by WMX under the
WMX Guaranty.
SECTION 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistently applied, and all financial data
submitted pursuant to this Agreement shall be prepared in accordance with such
principles.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
SECTION 2.01. The Advances and Letters of Credit. (a) Each
Bank severally agrees, on the terms and subject to the conditions hereinafter
set forth, to make Advances to the Borrowers from time to time on any Business
Day during the period on and from the Effective Date to but not including the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Bank's Commitment minus such Bank's Contractual Percentage of the
Underbillings Reserve at such time. Each Borrowing shall be in an aggregate
amount of not less than $500,000 and in increments of $100,000 in excess of
such amount and shall consist of Advances of the same Type, having the same
Interest Period and made on the same day by the Banks ratably according to
their respective Contractual Percentages at the date of Borrowing. Within the
limits of the Total Commitment (minus any applicable Underbillings Reserve),
the Borrowers may borrow, prepay pursuant to Section 2.05 or repay pursuant to
Section 2.06 and reborrow under this Section 2.01.
(b) Each Bank severally agrees on the terms and subject
to the conditions hereinafter set forth, to acquire participations in the
Letters of Credit issued by an Issuing Bank as provided in Sections 2.14(a) and
2.14(d), in an aggregate undrawn face amount not to exceed at any time
outstanding such Bank's Commitment minus such Bank's Contractual Percentage of
the Underbillings Reserve at such time. Within the limits of the Total
Commitment (minus any applicable Underbillings Reserve), the Borrowers may
request the issuance of Letters of Credit on a revolving basis.
(c) Notwithstanding the foregoing, the sum of (i) a
Bank's outstanding Advances pursuant to Section 2.01(a) plus (ii) such Bank's
outstanding participation in Letters of Credit pursuant to Section 2.01(b) plus
(iii) the aggregate amount of such Bank's ratable share of any unpaid
reimbursement obligations in respect of any Letters of Credit, shall not exceed
at any time such Bank's Commitment minus such Bank's Contractual Percentage of
any applicable Underbillings Reserve. Furthermore, in no event shall the sum
of (1) the aggregate amount of the outstanding Advances, plus (2) the aggregate
undrawn face amount of all of the Letters of Credit, plus (3) the aggregate
amount of any unpaid reimbursement obligations in respect of any Letters of
Credit exceed the Total Commitment at any time minus the Underbillings Reserve
at such time.
SECTION 2.02. The Notes. The Advances made by each Bank
shall be evidenced by the Note received by the Administrative Agent for the
account of such Bank. The Borrowers shall execute and deliver additional
promissory notes to separately evidence Eurodollar Rate Advances made or to be
made
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<PAGE> 25
pursuant hereto upon the request of the Administrative Agent or any Bank.
SECTION 2.03. Making the Advances. (a) The Borrower
requesting a Borrowing shall give the Issuing and Paying Agent a Notice of
Borrowing not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Borrowing, in the case of Eurodollar Rate
Advances, or on the day of the proposed Borrowing, in the case of Base Rate
Advances. Each Notice of Borrowing shall specify therein the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
consisting of Eurodollar Advances, Interest Period for such Borrowing. In the
case of a proposed Borrowing comprised of Eurodollar Rate Advances, the Issuing
and Paying Agent shall promptly notify each Bank of the applicable interest
rate under Section 2.07. The Issuing and Paying Agent shall, on the date of
receipt of the Notice of Borrowing, give telephone notice to each Bank of each
proposed Borrowing. Each Bank shall, before 1:00 P.M. (New York City time) on
the date of each Borrowing, make available for the account of its Applicable
Lending Office to the Issuing and Paying Agent at 231 South LaSalle Street,
Chicago, Illinois in same day funds, such Bank's Contractual Percentage of such
Borrowing. After the Issuing and Paying Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Issuing
and Paying Agent will make such funds available to the Borrower requesting the
Borrowing at the Issuing and Paying Agent's aforesaid address or at such other
location or in such other manner as the Issuing and Paying Agent and such
Borrower may from time to time agree. The Issuing and Paying Agent shall keep
all Notices of Borrowing on file and available for inspection by the
Administrative Agent and the Banks.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) if any Bank shall, at least one Business Day before
the date of any requested Borrowing, notify the Issuing and Paying
Agent that the introduction of or any change in or in the judicial,
administrative or other governmental interpretation of any law or
regulation makes it unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Bank or
its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances hereunder, (A) the right of the Borrowers to select
Eurodollar Rate Advances for such Borrowing or any subsequent
Borrowing shall be suspended until such Bank shall notify the Issuing
and Paying Agent that the circumstances causing such suspension no
longer exist or such Bank shall cease to be party hereto, and each
Advance comprising such Borrowing shall be a Base Rate
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Advance, and (B) the Borrowers shall, within five Business Days of its
receipt of notice thereof from the Issuing and Paying Agent, at their
option, either (1) prepay in full all Eurodollar Rate Advances of all
Banks then outstanding, together with interest accrued thereon, or (2)
convert all Eurodollar Rate Advances of all Banks then outstanding
into Base Rate Advances (subject, in each case, to the payment of any
amounts required pursuant to subsection (c) below);
(ii) if none of the Reference Banks furnish timely
information to the Issuing and Paying Agent for determining the
Eurodollar Rate for Eurodollar Rate Advances for any Borrowing, the
right of the Borrowers to select Eurodollar Rate Advances for such
Borrowing or any subsequent Borrowing shall be suspended until the
Issuing and Paying Agent shall notify the Borrowers and the Banks that
the circumstances causing such suspension no longer exist, and each
Advance comprising such Borrowing shall be a Base Rate Advance; and
(iii) if the Majority Banks shall at least one Business Day
before the date of any requested Borrowing, notify the Issuing and
Paying Agent that the Eurodollar Rate for Eurodollar Rate Advances
comprising such Borrowing will not adequately reflect the cost to such
Majority Banks of making or funding their respective Eurodollar Rate
Advances for such Borrowing, the right of the Borrowers to select
Eurodollar Rate Advances for such Borrowing or any subsequent
Borrowing shall be suspended until the Issuing and Paying Agent shall
notify the Borrowers and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing
shall be a Base Rate Advance.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrowers. Each Borrower shall jointly and severally indemnify
each Bank against any loss, cost or expense incurred by such Bank as a result
of any payment of principal of any Eurodollar Rate Advance to or for the
account of such Bank other than on the last day of the Interest Period
therefor, or any failure to fulfill on or before the date specified in any
Notice of Borrowing for a Borrowing which is to be comprised of Eurodollar Rate
Advances, the applicable conditions set forth in Article III, including,
without limitation, any loss (including loss, if any, of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund or maintain such Advance
or the Advance to be made by such Bank as part of such Borrowing when such
Advance, as a result of such failure, is not made on such date.
(d) Unless the Issuing and Paying Agent shall have
received notice from a Bank prior to the date of any Borrowing that such Bank
will not make available to the Issuing and Paying
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Agent such Bank's portion of such Borrowing (which notice shall not of itself
relieve such Bank of any of its obligations hereunder), the Issuing and Paying
Agent may assume that such Bank has made such portion available to the Issuing
and Paying Agent on the date of such Borrowing in accordance with subsection
(a) of this Section 2.03 and the Issuing and Paying Agent may, in reliance upon
such assumption, make available to the Borrower requesting the Borrowing on
such date a corresponding amount. If and to the extent such Bank shall not
have so made such portion available to the Issuing and Paying Agent, such Bank
and the Borrowers severally agree to repay to the Issuing and Paying Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day on and from the date such amount is made available to the
requesting Borrower until the date such amount is repaid to the Issuing and
Paying Agent, at (i) with respect to the Borrowers, the interest rate
applicable at the time to Advances comprising such Borrowing or (ii) with
respect to such Bank, the Federal Funds Rate. If such Bank (rather than the
Borrowers) shall repay to the Issuing and Paying Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Advance as part of
such Borrowing for purposes of this Agreement. If the Borrowers (rather than
such Bank) shall repay to the Issuing and Paying Agent such corresponding
amount, such Borrowing shall not be deemed to include such repaid amount.
(e) The failure of any Bank to make the Advance to be
made by it as part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other Bank
to make the Advance to be made by such other Bank on the date of any Borrowing.
SECTION 2.04. Fees. (a) Non-Use Fee. The Borrowers jointly
and severally agree to pay to the Issuing and Paying Agent, for the ratable
account of each Bank based on their respective Contractual Percentages, a fee
(the "Non-Use Fee") on the average daily Total Unused Commitment from the
Effective Date to and including the Termination Date, as follows: (1) on the
average daily Total Unused A Commitment, at the rate described in the Facility
A Rate Determination Table for the applicable Level set forth on such Table,
such rate to change when and as the Credit Rating of WMX changes, and (ii) on
the average daily Total Unused B Commitment, at the rate described in the
Facility B Rate Determination Table for the applicable Level set forth on such
Table for the then applicable Measurement Period. The Non-Use Fee shall be
payable in arrears on the first day of each January, April, July and October,
commencing on the first such day occurring on or after the Effective Date, and
on the Termination Date.
(b) Issuance Fee. The Borrowers jointly and severally agree
to pay to the Issuing and Paying Agent for the account of each Bank a Letter of
Credit issuance fee (the "Issuance Fee") on
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such Bank's participation in the average daily outstanding undrawn face amount
of all Letters of Credit issued or outstanding hereunder, payable in arrears
for the immediately preceding quarter on the first day of each January, April,
July and October hereafter, and on the Termination Date, at the respective
rates (the "Issuance Fee Percentages") described (i) for Facility A Letter of
Credit, on the Facility A Rate Determination Table for the applicable Level set
forth on such Table, such rate to change when and as the Credit Rating of WMX
changes, and (ii) for Facility B Letters of Credit, on the Facility B Rate
Determination Table for the applicable Level set forth on such Table for the
then applicable Measurement Period. Effective as of each Interest Rate and Fee
Adjustment Date, the Facility B Issuance Fee Percentage shall be increased or
decreased, if and as applicable, to the rate described on the Facility B Rate
Determination Table for the applicable Level set forth on such Table for the
then applicable Measurement Period; provided, however, that no decrease in the
Facility B Issuance Fee Percentage shall in any event apply to any quarter
ending on or prior to the actual date of delivery to the Administrative Agent
and the Issuing and Paying Agent of the applicable certificate containing the
calculations justifying such decrease. Notwithstanding the foregoing, (i) no
decreases in the respective Issuance Fee Percentages shall in any event become
effective on any Interest Rate and Fee Adjustment Date or other date on which a
Default or an Event of Default shall have occurred and be continuing, and (ii)
upon the occurrence of a Default or an Event of Default, until the next
subsequent date, in the case of Facility A Letters of Credit, or the next
subsequent Interest Rate and Fee Adjustment Date, in the case of Facility B
Letters of Credit, on which there shall not exist any Default or Event of
Default, (x) if, at the time of such Default or Event of Default, the
respective Issuance Fee Percentages are determined by reference to Level 5 on
the Applicable Rate Determination Table, the Issuance Fee Percentages shall
continue to be determined by reference to such Level, and (y) if, at the time
of such Default or Event of Default, the Issuance Fee Percentages are
determined by reference to any Level other than Level 5, the Issuance Fee
Percentages shall be automatically increased as of the date of such Default or
Event of Default, if and to the extent necessary, to the respective rates
described at Level 4 on the Applicable Rate Determination Table. From and
including the Effective Date until the first date thereafter, in the case of
Facility A Letters of Credit, or the first Interest Rate and Fee Adjustment
Date thereafter, in the case of the Facility B Letters of Credit, on which a
change is called for by application of the Applicable Rate Determination Table,
the Facility A Issuance Fee Percentage shall be determined in accordance with
Level 2 on the Facility A Rate Determination Table and the Facility B Issuance
Fee Percentage shall be determined in accordance with Level 4 on the Facility B
Rate Determination Table.
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(c) Facing Fee. The Borrowers jointly and severally
agree to pay to each Issuing Bank, solely for its own account, a fee (the
"Facing Fee") on the average daily undrawn face amount of each Letter of Credit
issued by such Issuing Bank which is outstanding at any time during the period
from the Effective Date to and including the Termination Date, at a rate of
0.125% per annum, payable in arrears on the first day of January, April, July
and October, commencing on the first such day occurring on or after the
Effective Date, and on the Termination Date.
(d) Commitment Fee. If the WMX Guaranty is released pursuant
to the provisions of Section 8.15(c), then on such date (the "Guaranty Release
Date"), the Borrowers jointly and severally agree to pay to the Issuing and
Paying Agent, for the ratable account of each Bank based on the Banks'
Contractual Percentages, a fee equal to the amount, if any, by which (1) the
amount of the commitment fee which would have been payable to such Bank under
the Commitment Fee Agreement had its Commitment on the Effective Date been in
the amount of its Commitment on the Guaranty Release Date (after giving effect
to any reduction of the Commitments on such date pursuant to Section 2.15) and
had such Commitment been treated as entirely a B Commitment, exceeds (2) the
amount of the Commitment Fee which was paid to such Bank on the Effective date
under the Commitment Fee Agreement.
(e) Fees Non-Refundable. All fees paid by the Borrowers
pursuant to this Section 2.04 shall be deemed fully earned by performance when
paid and shall be non-refundable.
SECTION 2.05. Prepayments. The Borrowers may, upon notice to
the Issuing and Paying Agent not later than 11:00 A.M. (New York City time) on
the day of such prepayment, prepay, without penalty, the outstanding amount of
Base Rate Advances comprising the same Borrowing in whole at any time or from
time to time ratably in part; provided, however, that each partial prepayment
shall be in an aggregate principal amount of not less than $100,000 and in
increments of $100,000 in excess of such amount. Notwithstanding the
foregoing, any mandatory prepayments of Advances required to be made by the
Borrowers hereunder may be made in any amount and such prepayments shall be
applied first to the outstanding Base Rate Advances and second to any
outstanding Eurodollar Rate Advances in such order as the Issuing and Paying
Agent, in its sole discretion, may determine. Any such prepayment of any
Eurodollar Rate Advance shall be accompanied by a payment of all accrued and
unpaid interest on the amount so prepaid and any losses, costs or expenses of
the type described in Section 2.03(c) as a result of such prepayment.
SECTION 2.06. Joint and Several Liability; Repayment of
Advances and Letters of Credit. (a) Each Borrower shall be jointly and
severally obligated to repay the unpaid principal amount of each Advance made
by each Bank in accordance with the Notes to the order of such Bank, and to
reimburse each Bank with
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respect to its ratable portion of each drawing on a Letter of Credit, in each
case, regardless of whether such Borrower requested the Borrowing or the Letter
of Credit or received any funds in respect thereof.
(b) Notwithstanding anything contained in this Agreement or
any of the other Transaction Documents to the contrary, upon the occurrence of
the Termination Date for whatever reason whatsoever, all Obligations
(including, without limitation, all unpaid principal of, accrued interest on,
and prepayment penalties, if any, with respect to the Advances and the
reimbursement obligations in respect of the Letters of Credit, all accrued and
unpaid fees and any and all other amounts) shall become immediately due and
payable. Additionally on such date, the Borrower shall be required to deliver
to each Issuing Bank for cancellation any Letters of Credit issued by such
Issuing Bank outstanding at such time or provide to the Issuing and Paying
Agent, for the benefit of the Banks, cash collateral in the aggregate amount of
the undrawn face amount of any such outstanding Letters of Credit.
Notwithstanding the foregoing, until all Obligations are paid and performed in
full and all outstanding Letters of Credit are canceled, the Administrative
Agent, the Issuing and Paying Agent and the Banks shall retain all of their
rights hereunder and under the other Transaction Documents (including, without
limitation, the security interest in, and all rights and remedies in respect
of, all then existing and after-arising or acquired Collateral for the
Obligations).
SECTION 2.07. Interest. The Borrowers shall pay interest on
the unpaid principal amount of each Advance owing to each Bank from the date of
such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(a) Eurodollar Rate Advances. If such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during
the Interest Period for such Advance to the sum of the Eurodollar Rate
for such Interest Period plus a per annum amount (the " Eurodollar
Margin") equal to the rate described on the Applicable Rate
Determination Table for the applicable Level set forth on such Table,
payable on the last day of such Interest Period (and if such Interest
Period is 6 months, then also on the last day of the third month of
such Interest Period) and as otherwise set forth herein. The Facility
A Eurodollar Margin for any Eurodollar Rate Advances shall be
determined by reference to the Facility A Rate Determination Table on
the first day of the Interest Period for such Advances. The Facility
B Eurodollar Margin shall be adjusted, if applicable, on each Interest
Rate and Fee Adjustment Date and the Facility B Eurodollar Margin for
any Eurodollar Rate Advances for any Interest Period shall be
determined by reference to the Facility B Rate Determination Table as
of the Interest Rate
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and Fee Adjustment Date occurring on or immediately prior to the first
day of such Interest Period; provided, however, that (i) no decrease
in the Facility B Eurodollar Margin shall in any event apply to any
Interest Period ending on or prior to the actual date of delivery to
the Administrative Agent and the Issuing and Paying Agent of the
applicable certificate containing the calculations justifying such
decrease or to any part of an Interest Period with respect to which
interest became due and payable pursuant to the terms hereof prior to
such date of delivery; and (ii) no decrease in the Facility B
Eurodollar Margin shall in any event become effective on any Interest
Rate and Fee Adjustment Date on which a Default or an Event of Default
shall have occurred and be continuing. The Applicable Eurodollar
Margin in effect for Advances on the first day of an Interest Period
pursuant to the preceding provisions shall be the effective Eurodollar
Margin for such Advances throughout such Interest Period; provided,
however, that upon the occurrence of a Default or an Event of Default,
until the next subsequent date, in the case of Facility A Advances, or
the next subsequent Interest Rate and Fee Adjustment Date, in the case
of Facility B Advances, on which there shall not exist any Default or
Event of Default, (x) if, at the time of such Default or Event of
Default, as the case may be, either Applicable Eurodollar Margin is
determined by reference to Level 5 on the Applicable Rate
Determination Table, such Eurodollar Margin shall continue to be
determined by reference to such Level, and (y) if, at the time of such
Default or Event of Default, as the case may, either Applicable
Eurodollar Margin is determined by reference to any Level other than
Level 5, such Eurodollar Margin shall be automatically increased as
of the date of such Default or Event of Default, if and to the extent
necessary, to the rate described at Level 4 on the Applicable Rate
Determination Table. From and including the Closing Date until the
first date thereafter, in the case of Facility A Advances, or the
first Interest Rate and Fee Adjustment Date thereafter, in the case of
Facility B Advances, on which a change is called for by application of
the Applicable Rate Determination Table, the Facility A Eurodollar
Margin shall be determined in accordance with Level 2 on the Facility
A Rate Determination Table and the Facility B Eurodollar Margin shall
be determined in accordance with Level 4 on the Facility B Rate
Determination Table.
(b) Base Rate Advances. If such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Alternate Base
Rate in effect from time to time plus a per annum amount (the "Base
Rate Margin") equal to the rate described on the Applicable Rate
Determination Table for the applicable Level set forth on such Table,
payable in arrears on the first Business Day of each calendar quarter
following
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a quarter during which such Advance was outstanding and as otherwise
set forth herein. The Facility A Base Rate Margin for any Base Rate
Advances shall change when and as the Credit Rating of WMX changes.
The Facility B Base Rate Margin shall be adjusted, if applicable, on
each Interest Date and Fee Adjustment Date; provided, however, that no
decrease in the Facility B Base Rate Margin shall in any event apply
to any quarter ending on or prior to the actual date of delivery to
the Administrative Agent and the Issuing and Paying Agent of the
applicable certificate containing the calculations justifying such
decrease. Notwithstanding the foregoing, (i) no decrease in either
Applicable Base Rate Margin shall in any event become effective on any
date on which a Default or an Event of Default shall have occurred and
be continuing, and (ii) upon the occurrence of a Default or an Event
of Default, until the next subsequent date, in the case of Facility A
Advances, or the next subsequent an Interest Rate and Fee Adjustment
Date, in the case of Facility B Advances, on which there shall not
exist any Default or Event of Default, (x) if, at the time of such
Default or Event of Default, as the case may be, either Applicable
Base Rate Margin is determined by reference to Level 5 on the
Applicable Rate Determination Table, such Base Rate Margin shall
continue to be determined by reference such Level, and (y) if, at the
time of such Default or Event of Default, as the case may, either
Applicable Base Rate Margin is determined by reference to any Level
other than Level 5, such Base Rate Margin shall be automatically
increased as of the date of such Default or Event of Default, if and
to the extent necessary, to the rate described at Level 4 on the
Applicable Rate Determination Table. From and including the Closing
Date until the first date thereafter, in the case of Facility A
Advances, or the first Interest Rate and Fee Adjustment Date
thereafter, in the case of Facility B Advances, on which a change is
called for by application of the Applicable Rate Determination Table,
the Facility A Base Rate Margin shall be determined in accordance with
Level 2 on the Facility A Rate Determination Table and the Facility B
Base Rate Margin shall be determined in accordance with Level 4 on the
Facility B Rate Determination Table.
(c) Default Rate. Without limiting anything contained in
Sections 2.07(a) or 2.07(b) to the contrary, following the occurrence
and during the continuance of an Event of Default, the outstanding
principal balance of the Advances shall bear interest, payable on
demand, at a rate per annum equal at all times to 2% per annum above
the higher of (a) the Alternate Base Rate in effect from time to time
or (b) the interest rate applicable to each such Advance at the date
of such default (after giving effect, upon the occurrence of such
default, to any increase in the Applicable Eurodollar Margin or
Applicable Base Rate Margin, as the
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case may be, if and to the extent required by the provisos to the
preceding Sections 2.07(a) and 2.07(b)).
(d) Limitation on Interest Rates. In no event shall any
interest rate provided for hereunder or under the Notes exceed the
maximum rate permissible for corporate borrowers under applicable law
(the "Maximum Rate"). If, for any period, any interest rate, absent
such limitation, would have exceeded the Maximum Rate, then the
interest rate for that period shall be the Maximum Rate, and, if in
future periods, that interest rate would otherwise be less than the
Maximum Rate, then, to the extent permitted by applicable law, that
interest rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which
would have been paid if the same had not been limited by the Maximum
Rate. In the event that, upon payment in full of the Obligations
under this Agreement, the total amount of interest paid or accrued
under the terms of this Agreement is less than the total amount of
interest which would, but for this Section 2.07(d), have been paid or
accrued if the interest rates otherwise set forth in this Agreement
and the Notes had at all times been in effect, then the Borrowers
shall, to the extent permitted by applicable law, pay the Banks an
amount equal to the difference between (a) the lesser of (i) the
amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which
would have accrued had the interest rates otherwise set forth in this
Agreement, at all times, been in effect and (b) the amount of interest
actually paid or accrued under this Agreement. In the event that a
court determines that any Bank has received interest and other charges
hereunder in excess of the Maximum Rate, such excess shall be deemed
received on account of, and shall automatically be applied to reduce,
the Obligations other than interest, in the inverse order of maturity,
and if there are no Obligations outstanding, such Bank shall refund to
the Borrowers such excess. In determining whether any interest rate
provided for hereunder or under the Notes exceeds the Maximum Rate,
all sums paid or agreed to be paid to the Administrative Agent, the
Issuing and Paying Agent, any Issuing Bank, or any Bank for the use,
forbearance or detention of the Commitments or the Obligations shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Commitments or
Obligations (including the period of any renewal or extension thereof)
so that the interest on the Obligations shall not exceed the Maximum
Rate.
SECTION 2.08 Additional Interest on Eurodollar Rate
Advances. The Borrowers shall pay to the Issuing and Paying Agent for the
account of each Bank additional interest on the unpaid principal amount of each
Eurodollar Rate Advance of such
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Bank, from the date of such Advance until such principal amount is paid in
full, at a rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage, if any, of such
Bank for such Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest shall be determined by such
Bank and notified to the Borrowers through the Issuing and Paying Agent.
SECTION 2.09. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Issuing and Paying Agent timely
information for the purpose of determining each Eurodollar Rate, as applicable.
If any one or more of the Reference Banks shall not furnish such timely
information to the Issuing and Paying Agent for the purpose of determining any
such interest rate, the Issuing and Paying Agent shall (subject to the
requirements of Section 2.03 (b)(ii)) determine such interest rate on the basis
of timely information furnished by the remaining Reference Bank.
(b) The Issuing and Paying Agent shall give prompt notice
to the Borrowers and the Banks of the applicable interest rate determined by the
Issuing and Paying Agent for purposes of Section 2.07(a) or (b), and the
applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section 2.07(a).
(c) The Borrower may, on any Business Day, upon notice
given to the Issuing and Paying Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed conversion
and subject to the provisions of Section 2.03(b), convert all Advances of one
Type comprising the same Borrowing into Advances of another Type; provided;
however, that, other than as required pursuant to Section 2.03(b)(i), any
conversion of any Eurodollar Rate Advances into Base Rate Advances shall be
made on, and only on, the last day of an Interest Period for such Eurodollar
Rate Advances. Each such notice of a conversion shall, within the restrictions
specified above, specify (i) the date of such conversion, (ii) the Advances to
be converted, and (iii) if such conversion is into Eurodollar Rate Advances,
the duration of the Interest Period for each such Advance.
(d) If the Borrowers shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Issuing and Paying Agent will forthwith so notify the Borrowers and the
Banks and such Advances will automatically, on the last day of the then
existing Interest Period therefor, convert into Base Rate Advances.
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(e) On the date on which the aggregate unpaid principal
amount of Advances comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $500,000, such Advances shall, if they
are Eurodollar Rate Advances, automatically convert into Base Rate Advances,
and on and after such date the right of the Borrower to convert such Advances
into Advances of a Type other than Base Rate Advances shall terminate; provided
however, that if and so long as each such Advance shall be of the same Type and
have the same Interest Period as Advances comprising another Borrowing or other
Borrowings, and the aggregate unpaid principal amount of all such Advances
shall equal or exceed $500,000, the Borrower shall have the right to continue
all such Advances as, or to convert all such Advances into, Eurodollar Rate
Advances having such Interest Period.
SECTION 2.10. Increased Costs. (a) If, due to either (i)
the introduction of, or any change (other than any change by way of imposition
or increase of reserve requirements included, in the case of Eurodollar Rate
Advances, in the Eurodollar Rate Reserve Percentage) in, or in the judicial,
administrative or other governmental interpretation of, any law or regulation
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost (other than taxes described in clauses (i)
through (iv) of Section 2.12(a)) to any Bank of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances or Letter of Credit
participations, then the Borrowers shall from time to time, upon demand by such
Bank (with a copy of such demand to the Issuing and Paying Agent), pay to the
Issuing and Paying Agent for the account of such Bank additional amounts
sufficient to compensate such Bank for such actual increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrowers
and the Issuing and Paying Agent by such Bank, shall be prima facie evidence of
such amount for all purposes, absent manifest error.
(b) If either (i) the introduction of, or any change in, or
in the judicial, administrative or other governmental interpretation of, any
law or regulation or (ii) compliance with any guideline or request from any
central bank or other govern- mental authority (whether or not having the force
of law) affects or would affect the amount of capital required to be maintained
by any Bank or any corporation controlling any Bank and such Bank determines
that the amount of such capital is increased by or based upon the existence of
such Bank's Commitment hereunder and other similar commitments, then, upon
demand by such Bank (with a copy of such demand to the Issuing and Paying
Agent), the Borrowers shall pay to the Issuing and Paying Agent for the account
of such Bank from time to time as specified by such Bank additional amounts
sufficient to compensate such Bank in the light of such circumstances, to the
extent that such Bank reasonably determines such increase in capital to be
allocable to the
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existence of such Bank's Commitment hereunder. A certificate as to such
amounts, submitted to the Borrowers and the Issuing and Paying Agent by such
Bank, shall be prima facie evidence of such amounts for all purposes, absent
manifest error.
SECTION 2.11. Payments and Computations. (a) The Borrowers
shall make each payment hereunder not later than 11:00 A.M. (New York City
time) on the day when due in U.S. dollars to the Issuing and Paying Agent at
its address referred to in Section 2.03(a) in same day funds. The Issuing and
Paying Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest, facility fees or other amounts
to the Banks for the account of their respective Applicable Lending Offices, in
each case to be applied in accordance with the terms of this Agreement. The
payment of an amount by either Borrower to the Issuing and Paying Agent for the
account of any Bank shall satisfy the obligation of the Borrowers to pay such
amount to such Bank, and the Borrowers shall not be responsible for the Issuing
and Paying Agent's failure to cause a timely distribution of such amounts to
such Bank.
(b) Each Borrower hereby authorizes each Bank, if and to the
extent payment owed to such Bank is not made to the Issuing and Paying Agent
when due hereunder, to charge from time to time against any or all of such
Borrower's accounts with such Bank any amount so due.
(c) All computations of interest and per annum fees hereunder
shall be made by the Issuing and Paying Agent, including computations of
additional interest pursuant to Section 2.08, shall be made by a Bank, on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or facility fees are payable. Each determination by
the Issuing and Paying Agent (or, in the case of Section 2.08, by a Bank) of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or such fee, as the case may be;
provided, however, if such extension would cause payment of interest on or
principal of any Eurodollar Rate Advance to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Issuing and Paying Agent shall have received
notice from the Borrowers prior to the date on which any payment is due to the
Bank hereunder that the Borrowers will not make such payment in full, the
Issuing and Paying Agent may assume that the Borrowers have made such payment
in full to the
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Issuing and Paying Agent on such date and the Issuing and Paying Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent
that the Borrowers shall not have so made such payment in full to the Issuing
and Paying Agent, each Bank shall repay to the Issuing and Paying Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Issuing and Paying Agent, at
the Federal Funds Rate.
(f) All payments of principal and interest in respect of
outstanding Advances, all payments of fees and all other payments in respect of
any other Obligations, shall be allocated among such of the Banks and Issuing
Banks as are entitled thereto, in proportion to their respective ratable shares
of the Advances or otherwise as provided herein, and shall be applied by the
Administrative Agent in respect of the Obligations in the following order:
(i) FIRST, to the repayment of and interest on any
distribution made by the Issuing and Paying Agent to any Bank pursuant
to Section 2.11(e) for which the Issuing and Paying Agent has not then
been repaid by such Bank;
(ii) SECOND, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the Administrative
Agent or the Issuing and Paying Agent;
(iii) THIRD, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the Banks and each
Issuing Bank;
(iv) FOURTH, to pay interest due in respect of Advances and
outstanding reimbursement obligations in respect of Letters of Credit;
(v) FIFTH, to pay outstanding reimbursement obligations in
respect of Letters of Credit;
(vi) SIXTH, to the ratable payment or prepayment of principal
outstanding on Advances in such order as the Administrative Agent may
determine in its sole discretion;
(vii) SEVENTH, to pay the Borrowers' performance obligations
under Eligible Interest Rate Contracts; and
(viii) EIGHTH, to the ratable payment of all other
Obligations.
The order of priority set forth in this Section 2.11(f) and the related
provisions of this Agreement are set forth solely to
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determine the rights and priorities of the Administrative Agent, the Issuing
and Paying Agent, the Banks and each Issuing Bank. The order of priority set
forth in clauses (iii) through (viii) of this Section 2.11(f) may at any time
and from time to time be changed by the Majority Banks without necessity of
notice to or consent of or approval by either of the Borrowers or any other
Person. The order of priority set forth in clause (i) of this Section 2.11(f)
may be changed only with the prior written consent of the Issuing and Paying
Agent. The order of priority set forth in clause (ii) of this Section 2.11(f)
may be changed only with the prior written consent of the Administrative Agent
or the Issuing and Paying Agent, as applicable.
SECTION 2.12. Taxes. (a) Any and all payments by the
Borrowers hereunder shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding:
(i) in the case of each Bank, the Administrative Agent or
the Issuing and Paying Agent, taxes imposed on its income, franchise
taxes and similar taxes imposed on it, by the jurisdiction under the
laws of which such Bank, the Administrative Agent or the Issuing and
Paying Agent (as the case may be) is organized or any political
subdivision thereof,
(ii) in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof,
(iii) in the case of each Bank, withholding taxes payable
with respect to payments to such Bank at its original Applicable
Lending Office specified in Schedule 2.12 hereto under laws (including,
without limitation, any treaty, ruling, determination or regulation) in
effect on May 31, 1995, but not any increase in withholding tax
resulting from any subsequent change in such laws, and
(iv) in the case of any assignment by a Bank of an interest
herein to an assignee pursuant to Section 8.08, or any change of an
Applicable Lending Office in one jurisdiction to an Applicable Lending
Office in another jurisdiction, any excess of the withholding tax
applicable to such assignee, or Applicable Lending Office, over the
withholding tax (other than any withholding tax which was excluded from
the definition of Taxes under clause (iii) or this clause (iv) of this
Section 2.12(a)) which was applicable to the former Bank, or former
Applicable Lending Office, as the case may be, in each case as
determined under laws (including without limitation, any treaty,
ruling, determination or
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regulation) in effect on the date of such assignment or change, but
not including any increase in withholding tax resulting from any
subsequent change in such laws;
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Bank, the Administrative Agent or the Issuing
and Paying Agent, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Bank, Administrative
Agent or Issuing and Paying Agent, as the case may be, receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrowers will jointly and severally indemnify
each Bank, the Administrative Agent and the Issuing and Paying Agent for the
full amount of all Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) paid by such Bank, the Administrative Agent or the Issuing and
Paying Agent, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. The
Borrowers shall make any such payment to such Bank, the Administrative Agent or
the Issuing and Paying Agent, as the case may be, within 30 days from the date
such Bank, the Administrative Agent or the Issuing and Paying Agent, as the
case may be, makes written demand therefor. If any Bank receives a refund in
respect of any Taxes or Other Taxes for which such Bank has received payment
from the Borrowers hereunder, such Bank shall, within 30 days of such receipt,
deliver a notice thereof to the Borrowers. The Borrowers may, within 30 days
of receipt of such notice, deliver to such Bank a written request for the
amount of such refund in respect of Taxes or Other Taxes, together with a
reaffirmation of this Section 2.12 executed by the Borrowers to repay such
refund to such Bank (plus any penalties, interest or other charges) in the
event that such Bank is required to repay such refund. After receipt of such
request, such Bank shall deposit with the Administrative Agent for delivery to
the Borrowers the amount of such refund.
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(d) Within 30 days after the date of any payment of Taxes
or Other Taxes withheld by the Borrowers in respect of any payment to any Bank,
the Borrower will furnish to the Administrative Agent and the Issuing and
Paying Agent, at their respective addresses referred to in Section 8.03, the
original or a certified copy of a receipt evidencing payment thereof.
(e) Prior to the date of the initial Borrowing in the
case of each Bank, and from time to time thereafter if requested by the
Borrowers, the Administrative Agent or the Issuing and Paying Agent (and, in
any event, annually or as often as may otherwise be required by law or
regulation), each Bank organized under the laws of a jurisdiction outside the
United States shall provide the Administrative Agent, the Issuing and Paying
Agent and the Borrowers with the forms prescribed by the IRS certifying as to
such Bank's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Bank
hereunder or other documents satisfactory to the Borrowers, the Issuing and
Paying Agent and the Administrative Agent indicating that all payments to be
made to such Bank hereunder are subject to such tax at a rate reduced by an
applicable tax treaty. Unless the Borrowers, the Issuing and Paying Agent and
the Administrative Agent have received forms or other documents satisfactory to
them indicating that payments hereunder are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrowers or the Issuing and Paying Agent shall withhold taxes
from such payments at the applicable statutory rate in the case of payments to
or for any Bank organized under the laws of a jurisdiction outside the United
States.
(f) Without prejudice to the survival of any other
agreement hereunder, the agreements and obligations contained in this Section
2.12 shall survive the payment in full of principal and interest hereunder and
the termination of this Agreement.
SECTION 2.13. Sharing of Payments, Etc. If any Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Obligations owing to it
(other than pursuant to Section 2.08, 2.10 or 2.12) in excess of its ratable
share (in accordance with the outstanding Advances and Letter of Credit
reimbursement obligations of the respective Banks) of payments obtained by all
the Banks on account of Advances or reimbursement obligations then due and
payable or other amounts then due and payable hereunder, such Bank shall
forthwith purchase from the other Banks such participation in the Advances or
other Obligations owing to them hereunder as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the
purchase price to the
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extent of such recovery together with an amount equal to such Bank's ratable
share (according to the proportion of (i) the amount of such Bank's required
repayment to (ii) the total amount so recovered from the purchasing Bank) of
any interest or other amount paid or payable by the purchasing Bank in respect
of the total amount so recovered. Each Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.13 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were the direct creditor of such Borrower in the amount of such
participation.
SECTION 2.14. Letters of Credit. (a) Subject to the
satisfaction of the conditions provided by Article III hereof, each Issuing
Bank agrees to issue its irrevocable clean, standby and documentary Letters of
Credit (collectively, the "Letters of Credit") for the account of the Borrowers
or either of them as account parties from time to time, with prior notice to
the Issuing and Paying Agent, on any Business Day during the period on and from
the Effective Date to but not including the Termination Date in an aggregate
undrawn face amount not to exceed at any time the amounts set forth in Sections
2.01(b) and 2.01(c) (and no Issuing Bank shall issue a Letter of Credit unless
it shall have received confirmation from the Issuing and Paying Agent that the
aggregate undrawn face amount of all Letters of Credit, after giving effect to
such issuance, would not exceed such amounts). Each Letter of Credit shall be
issued by the Issuing Bank with respect to such Letter of Credit on behalf of
the Banks ratably according to their respective Contractual Percentages, shall
be in such Issuing Bank's standard form and issued pursuant to a Borrower's
letter of credit application in such Issuing Bank's standard form (or, in
either case, such other form as the Administrative Agent and the Issuing and
Paying Agent may approve). The expiration date of any Letter of Credit shall
not extend beyond the Stated Termination Date.
(b) Immediately upon any drawing under a Letter of Credit,
the Borrowers shall jointly and severally reimburse the Issuing Bank with
respect to such Letter of Credit and the Banks participating in such Letter of
Credit for the amount of such drawing in accordance with this Agreement and the
letter of credit application relating thereto. If at the date of such drawing
the Borrowers would be able to request a Borrowing hereunder in an amount equal
to the amount of such drawing, then the Borrowers shall be deemed, without
further act, to have requested such a Borrowing in such amount, to be made by
the Banks in accordance with their Contractual Percentages (after giving effect
to the payment of such reimbursement obligation) on the date of such drawing
and to be applied by the Issuing and Paying Agent to such reimbursement
obligation. If any such reimbursement obligation is not paid when due, such
reimbursement obligation shall bear interest, from the date when due until paid
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in full, payable on demand, at a rate per annum equal at all times to 2% per
annum above the Alternate Base Rate in effect from time to time.
(c) Each Letter of Credit shall be issued by an Issuing Bank,
and the Banks shall participate therein according to their respective
Contractual Percentages.
(d) The parties hereto acknowledge that, prior to the
Effective Date, BAI has issued Letters of Credit under the Prior Credit
Agreement for the account of one or more of the Borrowers, as more fully
described in Schedule 2.14(d) hereto (collectively, the "Existing Letters of
Credit"). Each such Existing Letter of Credit shall, for all purposes of this
Agreement, be treated as, and be deemed to be, a Letter of Credit issued
hereunder and shall be subject to the terms and restrictions contained herein.
On the Effective Date, each of the Banks shall be required to, and shall,
purchase a ratable participation interest in any such Existing Letter of Credit
in accordance with their Contractual Percentages, and BAI, as the Issuing Bank,
and the Issuing and Paying Agent shall make appropriate adjustments to their
records to reflect such participation.
(e) Notwithstanding anything in Section 2.01(b) or this
Section 2.14 to the contrary, if any Bank shall, at least one Business Day
before the date of issuance of any Letter of Credit, notify the Issuing and
Paying Agent that it is unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Bank or its
Applicable Lending Office to perform its obligation hereunder to acquire a
participation in such Letter of Credit or to fund or maintain any such
participation hereunder, then such Bank shall not participate in such Letter of
Credit and the other Banks shall participate in such Letter of Credit ratably
according to their respective Contractual Percentages (calculated without
including the Commitment of the Bank giving such notice); provided, however,
that if such recalculation would result in any Bank's outstanding Advances,
Letter of Credit participations and aggregate ratable share of any unpaid
reimbursement obligations in respect of Letters of Credit exceeding, in the
aggregate, such Bank's Commitment minus such Bank's Contractual Percentage of
any applicable Underbillings Reserve, or (ii) the sum of (1) the aggregate
amount of all outstanding Advances, plus (2) the aggregate undrawn face amounts
of all of the Letters of Credit, plus (3) the aggregate amount of all unpaid
Letter of Credit reimbursement obligations exceeding the Total Commitment minus
the sum of the Commitment of the Bank giving such notice and any applicable
Underbillings Reserve, then such Letter of Credit shall not be issued.
SECTION 2.15. Termination or Reduction of the Commitments.
The Borrowers shall have the right, upon at least two Business Days' notice to
the Administrative Agent and the
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Issuing and Paying Agent, to terminate in whole or reduce ratably in part the
Unused Commitments of the Banks; provided, however, that each partial reduction
shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.16. Interest Rate Contracts. At any time a Bank
may, but shall have no obligation to, enter into Interest Rate Contracts with
respect to the Advances, provided, however, that the notional amount for all
such Interest Rate Contracts in effect at any time shall not exceed $40,000,000
in the aggregate. The Borrower and the Bank entering into an Interest Rate
Contract shall give written notice to the Administrative Agent, at least three
(3) Business Days prior to entering into any Interest Rate Contract, specifying
the term thereof, the notional amount thereof and requesting that such contract
shall be secured by the Collateral. The Administrative Agent shall, within two
(2) Business Days of such notice, notify the applicable Bank and Borrower
whether, after giving effect to the proposed Interest Rate Contract, such
notional amounts are within the limit set forth above, and if the aggregate
notional amount is within such limit at such time, then the Interest Rate
Contract shall be secured by the Collateral and shall be deemed an "Eligible
Interest Rate Contract" (whether or not the aggregate notional amount for all
Interest Rate Contracts subsequently exceeds such limit).
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of
This Agreement. This Agreement shall become effective and be deemed effective
on the first Business Day that all of the following conditions precedent shall
have been satisfied (the "Effective Date"):
(a) The Administrative Agent shall have received on or
before the Effective Date all of the following, each dated such day, in form
and substance satisfactory to the Administrative Agent (and, where indicated,
each of the Banks):
(i) 15 original counterparts of this Agreement,
fully-executed, together with all Exhibits and Schedules
hereto, completed to the satisfaction of the Administrative
Agent and the Banks.
(ii) A Note of each of the Borrowers drawn to the
order of each Bank.
(iii) 15 original counterparts of a Security Agreement
(the "Security Agreement Amendment"), fully
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executed, in substantially the form attached hereto as Exhibit
D.
(iv) 15 original counterparts of a Pledge Agreement
(the " Pledge Agreement Amendment"), fully executed,
substantially in the form attached hereto as Exhibit E.
(v) 15 original counterparts of the WMX Guaranty in
the form attached hereto as Exhibit F.
(vi) 15 original counterparts of the WMX Intercreditor
Agreement in the form attached hereto as Exhibit G.
(vii) Certified copies of the resolutions of the
respective Board of Directors of each Borrower evidencing
approval, as applicable, of this Agreement, the Notes and all
of the other instruments, documents and agreements to be
executed and/or delivered in connection with the foregoing, in
each case, to the extent such Borrower is a party thereto, and
all of the other matters contemplated hereby and thereby, and
of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the
foregoing.
(viii) A favorable opinion of Randall M. Walters,
Esq., counsel for each of the Borrowers, in the form attached
hereto as Exhibit H.
(ix) A certificate of the Secretary or an Assistant
Secretary of each Borrower certifying (a) the names and true
signatures of the officers of such Person authorized to sign
this Agreement and the other Transaction Documents and the
other documents or certificates to be delivered pursuant to
this Agreement or such other Transaction Documents and (b)
copies attached thereto of the by-laws of such Person, or, to
the extent applicable, that such by-laws of such Person have
not been amended, supplemented or otherwise modified since May
11, 1993.
(x) Articles/Certificates of Incorporation for each
Borrower, certified by the Secretary of State of the State of
Ohio in which such Person is incorporated.
(xi) Good Standing Certificates for each Borrower
from the Secretaries of State of each state in which the
nature of such Person's business requires that it qualify to
do business.
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(xii) Requests for Information (form UCC-11) and
such other search reports (including, without limitation, tax
lien and judgment searches) regarding each Borrower from such
jurisdictions as the Administrative Agent deems appropriate.
(xiii) Evidence that all insurance required to be
maintained by each Borrower pursuant to Section 5.01(a) is in
effect.
(xiv) Certificates of insurance (or other evidence
of insurance satisfactory to the Administrative Agent) and
lender's loss payable endorsements in respect of any such
insurance policy covering the "Equipment" or "Inventory" (as
such terms are defined in the Security Agreement) of each
Borrower.
(xv) A favorable opinion of Sidley & Austin, special
local counsel to the Administrative Agent, in the form
attached hereto as Exhibit I.
(xvi) A certificate from the Treasurer of OHM
certifying (a) that the conditions precedent set forth in
Section 3.01(b), (f) and (g) have been fulfilled and (b) that
all representations and warranties of and the Borrowers
contained herein and in all of the other Transaction Documents
are true and correct, in each case, as of the Effective Date.
(xvii) Such other agreements, documents and
instruments as shall be reasonably requested by the
Administrative Agent or the Issuing and Paying Agent.
(b) The Rust Transactions shall have been consummated in
compliance with all applicable laws.
(c) All commitment and other fees required to be paid to
the Administrative Agent, the Issuing and Paying Agent or any of the Banks by
the Borrowers hereunder or in connection herewith on or prior to the Effective
Date shall have been paid.
(d) All of the representations and warranties of each of the
Borrowers contained in this Agreement and in any other Transaction Document
shall be true and complete in all material respects on and as of the Effective
Date as though made on and as of such date, except to the extent such
representation or warranty expressly speaks only as of a different date.
(e) No Default or Event of Default shall have occurred and be
continuing or would result from the execution of this Agreement or any of the
other Transaction Documents and the consummation of the transactions and the
extensions of credit
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contemplated by this Agreement and the other Transaction Documents.
(f) There shall not have occurred since December 31, 1994 any
event which, in the reasonable judgment of the Majority Banks, has had a
material adverse effect on the financial condition, operations or businesses of
the Borrowers taken as a whole.
(g) The Prior Credit Agreement shall have been terminated.
The acceptance by either Borrower of the proceeds of any
extensions of credit hereunder shall constitute a representation and warranty
by each of the Borrowers as of the Effective Date that all of the conditions
contained in this Section 3.01 have been satisfied.
SECTION 3.02. Conditions Precedent to Each Extension of
Credit Hereunder. The obligation of each Bank to make an Advance on the
occasion of each Borrowing (including the initial Borrowing hereunder) and the
obligation of each Issuing Bank to issue, and each Bank to participate in, each
Letter of Credit shall be subject to the conditions precedent that on the date
of such Borrowing or issuance:
(a) The following statements shall be true, and, if
requested by the Administrative Agent, the Administrative Agent shall have
received for the account of such Bank or Issuing Bank a certificate or
certificates signed by a duly authorized officer of each Borrower dated the
date of such Borrowing or issuance, stating that:
(i) the representations and warranties contained
in Section 4.01 are correct on and as of the date of such
Borrowing or issuance as though made on and as of such date,
and
(ii) no event has occurred and is continuing, or
would result from such Borrowing or issuance, which
constitutes a Default or an Event of Default, which event has
not been waived by the Majority Banks.
In the absence of a request for such a certificate, the delivery by a
Borrower of a Notice of Borrowing or of a Letter of Credit application
shall constitute each Borrower's representation that each such
statement is and, on the date of such Advance or issuance, shall be
true and correct.
(b) There shall not have occurred since December 31,
1994, in the reasonable judgment of the Majority Banks, a material adverse
change in the financial condition, operations or
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businesses of the Borrowers and their Subsidiaries taken as a whole.
(c) The Administrative Agent shall have received such
other documents or instruments as any Bank or the Issuing Bank through the
Administrative Agent may reasonably request.
(D) Such Borrowing or issuance shall not violate any law,
rule, regulation, writ, order or judgment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows:
(a) Each Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
indicated at the beginning of this Agreement and is duly qualified as a foreign
corporation wherever the failure to so qualify would have a material adverse
effect on such Borrower.
(b) The execution, delivery and performance by each
Borrower of this Agreement and the other Transaction Documents to which it is a
party are within such Borrower's corporate powers, have been duly authorized by
all necessary corporate action, have received all necessary governmental
approvals and do not contravene (i) such Borrower's certificate of incorporation
or by-laws, (ii) any law or (iii) any contractual restriction binding on such
Borrower.
(c) This Agreement and the other Transaction Documents to
which each Borrower is a party are, and the Letter of Credit applications when
delivered by each Borrower hereunder will be, legal, valid and binding
obligations of such Borrower enforceable against it in accordance with their
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency and similar laws affecting the rights of creditors
generally and by general principles of equity.
(d) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by either Borrower of
this Agreement or the Transaction Documents to which it is a party.
(e) Except as disclosed in OHM's Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1994, there
is no pending or, to its knowledge, threatened action or proceeding before any
court, governmental agency or arbitrator, in which there is a reasonable
probability of a determination adverse to either Borrower, any Subsidiary, or
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any Affiliate of either Borrower which may, in any such case, materially
adversely affect the financial condition or operations of the Borrowers taken
as a whole.
(f) The Consolidated balance sheets of OHM and its
Subsidiaries as at December 31, 1994 and March 31, 1995, and the related
statements of income and cash flow for the fiscal year and the three (3)
months, respectively, then ended (copies of which have been furnished to each
Bank) fairly present the Consolidated financial condition of such Persons as at
such dates and the results of the Consolidated operations of such Persons for
the year and the three (3) months, respectively, ended on such dates, all in
accordance with generally accepted accounting principles consistently applied,
and since December 31, 1994 there has been no material adverse change in the
financial condition, operations, or businesses of the Borrowers taken as a
whole.
(g) As of the Effective Date, neither Borrower maintains
any Plan. No Termination Event has occurred nor is reasonably expected to
occur with respect to any Plan; each Schedule B (Actuarial Information) to an
annual report (Form 5500 Series) hereafter delivered to the Banks with respect
to any Plan will be complete and accurate and fairly present the funding status
of such Plan; and neither Borrower has incurred nor reasonably expects to incur
(either as a result of its own actions or the actions of any ERISA Affiliate)
any withdrawal liability in excess of $100,000 under ERISA to any Multiemployer
Plan, which liability is not reserved for on the books of such Borrower.
(h) Neither Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance or Letter of Credit will be
used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock in either case for any
purpose inconsistent with said Regulation U.
(i) No proceeds of any Advance or Letter of Credit will
be used to acquire any security in any transaction which is subject to Section
13 or 14 of the Exchange Act, which transaction shall not have received the
prior approval of the board of directors of each Person which is an issuer of
securities to be acquired in such transaction.
(j) The proceeds of the Advances hereunder will be used
for general corporate purposes.
(k) Attached hereto as Schedule 4.01(k) is a true and
complete list of all domestic Subsidiaries and of all foreign Subsidiaries,
including in each case the jurisdiction
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of incorporation of such Subsidiaries and the ownership of the capital stock
thereof.
(l) As of the Effective Date, (i) such Borrower is in
compliance in all material respects with all Environmental Laws and health and
safety statutes and regulations, (ii) there are no material governmental
investigations of the environmental matters of such Borrower, (iii) there are
no contingent liabilities which could reasonably be expected to have a material
adverse effect on the financial condition or operations of such Borrower taken
as a whole, and (iv) the transactions set forth herein and contemplated hereby
shall not subject the Administrative Agent, the Issuing and Paying Agent, the
Banks, any Issuing Bank or any of their respective Affiliates or properties to
any Environmental Law (including without limitation, any clean- up
responsibility law or restrictive transfer law or regulation).
(m) The Rust Transactions have been consummated in
accordance with all applicable laws.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants of the Borrowers Other
Than Reporting Requirements. So long as any Note or any payment due hereunder
shall remain unpaid or any Bank shall have any Commitment hereunder, each
Borrower will, unless the Majority Banks shall otherwise consent in writing,
and shall cause each Subsidiary to:
(a) Maintenance of Insurance. Maintain with financially
sound and reputable insurers, insurance with respect to its properties and
business against such liabilities, casualties, risks and contingencies and in
such types and amounts as is customary in the case of Persons engaged in the
same or similar businesses and similarly situated.
(b) Maintenance of Properties, Etc. Except as otherwise
permitted pursuant to Section 5.02(c), maintain and preserve all of its
properties, necessary in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(c) Keeping of Records and Books of Account. Keep
adequate records and books of account, in which complete entries will be made
in accordance with generally accepted accounting principles consistently
applied, reflecting all financial transactions of such Person.
(d) Preservation of Corporate Existence, Etc. Preserve
and maintain its corporate existence, rights and privileges in the jurisdiction
of its incorporation, and qualify
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<PAGE> 50
and remain qualified as a foreign corporation in each jurisdiction in which the
failure to so qualify would have a material adverse effect on such Person;
provided, however, that nothing herein contained shall prevent any merger or
consolidation permitted under this Agreement.
(e) Law. Comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges and liens imposed upon it or upon its
property, except to the extent contested in good faith and by appropriate
proceedings and to the extent adequate reserves are maintained with respect
thereto in accordance with generally accepted accounting principles.
(f) Visitation Rights. At any reasonable time and from
time to time on reasonable notice, permit any of the Banks or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, such Borrower,
and to discuss the affairs, finances and accounts of such Person with any of
their respective officers or directors.
(g) Subsidiary Guaranties. Cause each existing or future
Subsidiary (other than any Subsidiary which is a Borrower) to execute and
deliver, upon request of the Administrative Agent, to the Issuing and Paying
Agent an unconditional secured guaranty of the Obligations, and, upon request
of the Administrative Agent during a Secured Period, pledge the stock of any
such Subsidiary to the Issuing and Paying Agent, for the benefit of the Banks.
SECTION 5.02. Negative Covenants of the Borrowers. So long
as any Note or any payment due hereunder shall remain unpaid or any Bank shall
have any Commitment hereunder, neither of the Borrowers nor any Subsidiary
will, unless the Majority Banks shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist
any Lien upon or with respect to any of its properties, now owned or hereafter
acquired, or assign or otherwise convey, any right to receive income; provided,
however, that the foregoing restrictions shall not be applicable to the
following:
(i) Liens granted to or held by the Issuing and
Paying Agent securing payment and performance of the
Obligations;
(ii) Customary Permitted Liens;
(iii) contracts with or for the Government, directly
or indirectly providing for advance, partial or progress
payments on such contracts or for any lien, paramount to all
other liens, upon moneys advanced or
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<PAGE> 51
paid pursuant to such contracts, or upon any material or
supplies in connection with the performance of such contracts
to secure such payments to the Government; and liens or other
evidences of interest in favor of the Government, paramount to
all other liens, directly or indirectly, for the Government to
secure Indebtedness incurred and owing to the Government in
connection with any such contracts;
(iv) Liens listed on Schedule 5.02(a)(iv) hereto
(but not any increase in the debt secured thereby or any
enlargement of properties or assets covered thereby);
(v) Liens with respect to judgments which do not
result in an Default or Event of Default under or a breach of
this Agreement;
(vi) Liens on the assets of Remediation securing
Indebtedness under the Bank of Tokyo Agreement, to the extent
such Indebtedness does not exceed $8,000,000 and provided that
such Liens attach only to those assets the acquisition of
which was financed or refinanced with the proceeds of such
Indebtedness;
(vii) Liens securing Permitted Other Indebtedness;
provided that such Liens attach only to those assets which are
acquired with the proceeds of any purchase money Indebtedness
constituting Permitted Other Indebtedness or the assets which
are the subject of any Long-Term Lease Obligation constituting
part of Permitted Other Indebtedness;
(viii) rights reserved to or vested in any
municipality or governmental, statutory or public authority by
the terms of any right, power, franchise, grant, license or
permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase,
condemn, expropriate or recapture or to designate a purchaser
of any of the property of any Borrower;
(ix) rights reserved to or vested in any
municipality or governmental, statutory or public authority to
control or regulate any property of any Borrower or to use
such property in a manner which does not materially impair the
use of such property for the purposes for which it is held by
such Borrower;
(x) rights of a common owner of any interest in real
estate, rights of way or easements held by any Borrower and
such common owner as tenants in common or through other common
ownership;
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<PAGE> 52
(xi) zoning, planning, ordinances and municipal
regulations;
(xii) servitudes, easements, restrictions, rights of
way and other similar rights in real or immovable property or
any interest therein, provided the same does not materially
impair the use of such property for the purposes for which it
is held by any Borrower;
(xiii) Liens on the assets of a Subsidiary at the
time it becomes a Subsidiary; and
(xiv) Liens securing obligations owed to WMX under
the WMX Reimbursement Agreement or arising in favor of WMX
under principles of subrogation as a result of payments made
by WMX under the WMX Guaranty.
(b) Mergers, Etc. Except as otherwise permitted pursuant
to Section 5.02(c) and this Section 5.02(b), merge or consolidate with, or
sell, assign, lease, dispose of or otherwise transfer (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, any Person, except that
(i) any Subsidiary may merge into or consolidate with or so transfer its assets
to any wholly owned Subsidiary and (ii) any Person (other than a Subsidiary)
may merge into or so transfer its assets to OHM or a wholly owned Subsidiary
thereof; provided, however, that (1) both immediately before and after giving
effect thereto, no Default or Event of Default shall be outstanding or result
therefrom, (2) in the case of any such merger or consolidation to which OHM is
a party, OHM is the surviving corporation, (3) the resulting Person of any such
merger or consolidation is OHM or a wholly owned Subsidiary and (4) neither
Borrower may merge or consolidate with, or transfer its assets to, the other
Borrower.
(c) Sales, Etc. of Assets. Sell, assign, lease or
otherwise dispose of a substantial part of its assets, other than:
(i) in connection with a transaction permitted by Section
5.02(b);
(ii) the sale or other disposition of obsolete, unnecessary
or redundant equipment;
(iii) the sale or other disposition of equipment to be
replaced with other equipment acquired with the proceeds of such sale
or other disposition, provided that the acquisition of the replacement
equipment is otherwise permitted pursuant to the terms of this
Agreement;
(iv) the sale of assets (other than those described in the
immediately preceding clauses (ii) and (iii)) in the
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<PAGE> 53
ordinary course of such Persons's business in an aggregate amount not
to exceed 5% of Net Worth during any Secured Period or 10% of Net
Worth during any Unsecured Period (based on the higher of the book or
market value of such assets at the time of such sale) in any fiscal
year of such Person; and
(v) the sale by OHM of shares of the common stock of NSC
Corporation currently owned by OHM; provided, however, that prior to
the date of any such proposed sale, an Authorized Officer of OHM shall
have delivered a certificate to the Administrative Agent and the
Issuing and Paying Agent certifying that the board of directors of OHM
has approved such sale and had determined that the sale price was at
or above the fair market value of the stock being sold;
(vi) the sale or other transfer of assets to any Person other
than an Affiliate of either Borrower, which sale or transfer is
promptly followed by the lease by either Borrower, as lessee, of the
same assets.
(d) Operating Leases. Enter into any operating lease as
lessee if (after giving effect to such lease) the aggregate amount of the lease
payments under all operating leases which are required to be made by the
Borrowers during any consecutive 12 month period would exceed $15,000,000;
provided, that the limitation with respect to operating leases under this
Section shall apply only (i) if the WMX Guaranty is no longer in effect, if the
Borrowers' financial performance has failed, as of the end of any fiscal
quarter, to satisfy the conditions for Level 4 set forth on the Facility B Rate
Determination Table, or (ii) if the WMX Guaranty is in effect, if (A) the
Borrowers' financial performance has failed, as of the end of any fiscal
quarter, to satisfy the conditions for Level 4 set forth on the Facility B Rate
Determination Table, and (B) the aggregate outstanding Advances plus the
aggregate undrawn face amount of outstanding Letters of Credit plus any unpaid
reimbursement obligations in respect of Letters of Credit, computed as an
average daily amount, exceeds the Total A Commitment for either (1) the thirty
day period prior to the occurrence of such failure or (2) any thirty day period
so long as such failure continues.
(e) Nature of Business. Materially change the nature of
its business as conducted at the Effective Date.
(f) Restricted Payments. (i) Declare or pay any
dividends (other than stock dividends payable in common stock of OHM),
purchase, redeem, retire or otherwise acquire for value any of its capital
stock, return any capital to its stockholders as such or make any distribution
to its stockholders as such, in each case with respect to its capital stock or
that of the other Borrower or (ii) make any payment or prepayment of principal
of, premium, if any, or interest on, or any redemption, purchase,
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<PAGE> 54
retirement, defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness of either Borrower (all such payments, collectively,
"Restricted Payments"), except that so long as no Default or Event of Default
exists or would result therefrom (A) Remediation may make Restricted Payments
to OHM, (B) either Borrower may make regularly scheduled payments of principal,
interest or sinking fund payments on Subordinated Indebtedness, and (C) the
Borrowers may make Restricted Payments in an aggregate amount not to exceed
$5,000,000 in order to make non-current sinking fund payments on the Debentures
or to purchase or redeem the Debentures, provided that any such sinking fund
payments are applied in the order of maturity. In addition, (1) during any
Facility B Level 3 Period, the Borrowers may make Restricted Payments so long
as, after giving effect thereto, the aggregate Restricted Payments made since
the Effective Date shall not exceed $10,000,000, (2) during any Facility B
Level 2 Period, the Borrowers may make Restricted Payments so long as, after
giving effect thereto, the aggregate Restricted Payments made since the
Effective Date shall not exceed $25,000,000, and (c) during any Facility B
Level 1 Period, the Borrowers may make Restricted Payments so long as no
Default or Event of Default is outstanding (or would result therefrom) and the
making of such Restricted Payment would not cause the Borrowers' performance to
fall below Level 1 for Facility B.
(g) Accounting Treatment. Make any significant change in
accounting treatment or reporting practices except either (i) as required by
changes in generally accepted accounting principles or (ii) as permitted in
accordance with generally accepted accounting principles and, in each such
case, concurred in by such Person's independent public accountants, or change
its Consolidated fiscal year end.
(h) Affiliate Transactions. Enter into any loan,
purchase, sale or other transaction, whether or not in the ordinary course of
business, with any Affiliate of such Person other than on terms and conditions
at least as favorable to such Person as would be obtainable at the time in a
comparable arm's-length transaction with a Person other than such Affiliate;
provided, however, that all Indebtedness of either Borrower arising from any
such transaction (other than Indebtedness of OHM to Remediation pursuant to
clause (iii) below) shall constitute Subordinated Indebtedness; and provided,
further, that:
(i) Either of the Borrowers may enter into any purchase, sale
or other transaction (other than a loan transaction) with the other
Borrower on terms which are other than arm's-length, in each case, to
the extent such purchase, sale or other transaction is otherwise
permitted pursuant to the terms of this Agreement and the other
Transaction Documents;
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<PAGE> 55
(ii) (A) Either Borrower may make Investments in wholly-owned
Subsidiaries as permitted by Section 5.02(i)(v), (B) OHM may make
advances to or borrow from Capital National in connection with OHM's
self-insurance program, (C) as permitted by Section 5.02(i)(iv) and
5.02(j)(vi), and (D) OHM may have Indebtedness owing to EFSC as
permitted by Section 5.02(j)(v);
(iii) Remediation may make loans to OHM;
(iv) the Borrower may enter into and perform their
obligations under the WMX Reimbursement Agreement and any related
security agreement; and
(v) OHM may (a) issue to WMX, pursuant to the terms of the
Reorganization Agreement, warrants to purchase common stock of OHM,
(B) issue common stock to WMX upon the exercise of any such warrants;
and (C) otherwise perform its obligations under such warrants.
(i) Investments. Make any investment in any Person,
whether by way of loan, advance, capital contribution, acquisition of stock or
other security or otherwise ("Investments"); provided, however, that the
foregoing restrictions shall not be applicable to the following:
(i) Loans or advances to either Borrower
constituting Subordinated Indebtedness, which loans and
advances are evidenced by appropriate entries in the books and
records of such Person;
(ii) Investments existing as of the Effective Date
and listed on Schedule 5.02(i)(ii) hereto (but not any
subsequent enlargement thereof);
(iii) advances by OHM to Capital National in
connection with OHM's self-insurance program;
(iv) Investments in wholly-owned Subsidiaries of
either Borrower, each which Investment shall be specifically
related to an environmental remediation project undertaken or
to be undertaken by the applicable wholly-owned Subsidiary;
provided, however, that during any Secured Period, the
aggregate amount of such Investments by both Borrowers at any
time outstanding shall not exceed 10% of Net Worth at such
time;
(v) Investments in wholly-owned Subsidiaries in
nominal amounts (individually and in the aggregate) to cover
normal operating expenses of such Subsidiaries in the ordinary
course of business;
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<PAGE> 56
(vi) Investments in (A) direct obligations and
repurchase agreements of the United States or any agency
or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States or
have a rating of "A-1" or better by Standard and Poor's
Corporation or "P-1" or better by Moody's Investors
Service Inc., in each case having a maturity of three
months or less, (B) commercial paper, in an aggregate
amount not exceeding $2,000,000 per issuer, issued by
corporations organized in the United States and having a
rating of "A-1" or better by Standard & Poor's
Corporation or "P-1" or better by Moody's Investors
Service Inc., in each case having a maturity of three
months or less, (C) certificates of deposit or bankers
acceptances having a maturity of three months or less
issued by members of the Federal Reserve System organized
in the United States and having deposits in excess of
$100,000,000 and ratings equivalent to those described in
the preceding clause (B), in an aggregate amount not
exceeding $2,000,000 per issuer, and (D) Eurodollar time
deposits in domestic or foreign commercial banks with
assets in excess of $10,000,000,000 having a maturity of
three months or less and ratings equivalent to those
described in the preceding clause (B), in an aggregate
amount not to exceed $2,000,000 per issuer;
(vii) any transaction permitted by Section 5.02
(b);
(viii) any Investment in any joint venture with
any other Person entered into specifically for the
purpose of performing and completing a specific
environmental remediation project or projects, which
Investments shall be made to fund (a) capital
expenditures made by such joint venture in connection
with any such project or (b) the ordinary course working
capital requirements of such joint venture relating to
such project or projects; and
(ix) Investments in nominal amounts of the
capital stock of competitors of the Borrower and of other
Persons involved in the environmental service industry
for purposes of acquiring the quarterly and annual
reports, shareholder reports and other information
distributed by such competitors and such other Persons,
respectively, to their shareholders, provided that, if
requested by the Administrative Agent, such stock is
pledged to the Issuing and Paying Agent for the benefit
of the Banks.
(j) Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness other than:
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<PAGE> 57
(i) the Indebtedness under this Agreement, the Notes,
the Letters of Credit and the other Transaction Documents;
(ii) Subordinated Indebtedness other than that
represented by the Debentures;
(iii) Indebtedness evidenced by the Debentures, in the
amount outstanding as of the Effective Date (as the same may be
amortized from time to time);
(iv) Indebtedness outstanding under (and in accordance
with) the Bank of Tokyo Agreement for financing capital
expenditures at the Baird and McGuire incineration project in
Holbrook, Massachusetts, in an amount not exceeding $8,000,000,
in the aggregate, at any time outstanding;
(v) Indebtedness of OHM to EFSC in an aggregate amount
not to exceed $91,000,000 at any time outstanding;
(vi) Indebtedness of OHM to Capital National created by
loans or advances from Capital National to OHM in connection with
OHM's fronted self-insurance program;
(vii) other Indebtedness existing as of the Effective
Date and listed on Schedule 5.02(j)(vii) hereto (but not any
subsequent increases thereof);
(viii) at any time other than during a Facility B Level
5 Period, unsecured Indebtedness;
(ix) any other purchase money Indebtedness (or
refinancings thereof secured by the same assets) and Long Term
Lease Obligations provided, that purchase money Indebtedness (and
refinancings thereof) and Long-Term Lease Obligations permitted
under this clause are limited to such purchase money Indebtedness
(and refinancings thereof) and Long-Term Lease Obligations which,
at the time of incurrence of any such purchase money Indebtedness
(or the refinancings thereof) or Long-Term Lease Obligations (and
after giving effect to such incurrence), would not in the
aggregate exceed (a) $30,000,000 during any Facility B Level 5
Period, Facility B Level 4 Period or Facility B Level 3 Period,
(b) twenty-five percent (25%) of Net Worth during any Facility B
Level 2 Period, or (c) thirty percent (30%) of Net Worth during
any Facility B Level 1 Period (purchase money Indebtedness and
Long Term Lease Obligations described in this clause (ix) being
"Permitted Other Indebtedness"); and
(x) any Indebtedness owed to WMX under the WMX
Reimbursement Agreement as a result of payments made by WMX under
the WMX Guaranty or any subrogation rights of WMX
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<PAGE> 58
arising as a result of payments made by WMX under the WMX
Guaranty.
(k) Issuance of Additional Equity. Issue any additional
stock or other equity securities; provided, however, that OHM shall be
permitted to issue additional stock (including, without limitation, the
issuance of additional stock in connection with any conversion of the
Debentures into common shares of OHM or pursuant to OHM's stock option
plans) so long as (i) no such stock or equity shall have preferential
(other than class voting rights of preferred stockholders under certain
circumstances) or weighted voting rights or be convertible into
Indebtedness, (ii) no mandatory redemption thereof shall be scheduled to
occur prior to the maturity of the Debentures, (iii) the issuance thereof
would not violate the terms of the Debentures or cause a Default or Event
of Default under Section 6.01(m), and (iv) if such stock is preferred
stock (x) the stated dividend rate thereof shall not exceed the stated
interest rate of the Debentures and (y) no sinking fund payment shall be
required to be made in respect thereof in any amount greater than the
amount of, or on any date prior to the date upon which, the stinking fund
payments in respect of the Debentures are required to be made.
(l) Capital Expenditures. Make, or permit any of
their Consolidated Subsidiaries to make, any capital expenditures (whether
payable in cash or other property or accrued as a liability), whether by
purchase, capital lease or otherwise, if, following such incurrence, total
Capital Expenditures for the then current fiscal quarter and the three
immediately preceding fiscal quarters would exceed (i) $30,000,000 during
a Facility B Level 5 Period, (ii) $35,000,000 during a Facility B Level 4
Period, (iii) $40,000,000 during a Facility B Level 3 Period or (iv)
$50,000,000 during a Facility B Level 2 Period. This Section will not
limit the incurrence of Capital Expenditures during any Facility B Level 1
Period.
(m) Minimum Net Worth. Permit Net Worth as at the end
of any fiscal quarter of the Borrowers to be less than the sum of (1) Net
Worth as of March 31, 1995, minus (2) $______ (which amount constitutes
twenty-five percent (25%) of the net cash proceeds received by OHM from
the issuance of common stock of OHM completed on March 28, 1995), plus (3)
$______ (which amount constitutes fifty percent (50%) of the increase in
Net Worth arising from the Rust Transactions, plus (4) fifty percent (50%)
of the net income of the Borrowers and their Consolidated Subsidiaries for
each fiscal quarter following March 31, 1995 (it being agreed that if net
income is negative for any fiscal quarter, it shall be deemed to be zero
for the purposes of this clause (4)), minus (5) the amount of any
reductions to Net Worth as a result of purchase accounting adjustments
made within one year of the closing of the Rust Transactions in connection
with the Rust Transactions, minus (6) the amount of any other
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<PAGE> 59
reductions to Net Worth, but not to exceed $3,000,000, as a result of
accounting adjustments (other than purchase accounting adjustments) made
within one year of the closing of the Rust Transactions in connection with
the Rust Transactions.
(n) EBITDA to Interest Expense Ratio. Permit the EBITDA
to Interest Expense Ratio to be less than the following amounts on the
last day of each fiscal quarter of the Borrowers in each of the following
fiscal years:
<TABLE>
<CAPTION>
Minimum EBITDA to
Fiscal Year Interest Expense Ratio
----------- ----------------------
<S> <C>
1995 3.00 to 1.0
1996 3.00 to 1.0
1997 3.25 to 1.0
1998 3.25 to 1.0
1999 3.25 to 1.0
2000 3.25 to 1.0
</TABLE>
(o) Maximum Funded Debt to EBITDA Ratio. Permit the
Funded Debt to EBITDA Ratio to exceed the following amounts as of the last
day of any of the following fiscal quarters of the Borrowers:
<TABLE>
<CAPTION>
Maximum Funded Debt
Fiscal Quarter Ending to EBITDA Ratio
--------------------- -------------------
<S> <C>
June 30, 1995 4.75 to 1.0
September 30, 1995 and 4.50 to 1.0
on the last day of
each fiscal quarter
ending thereafter
</TABLE>
SECTION 5.03. Reporting Requirements. So long as any
Note or any payment due hereunder shall remain unpaid or any Bank shall
have any Commitment hereunder, the Borrowers will furnish to the
Administrative Agent, the Issuing and Paying Agent and each Bank, unless
the Majority Banks shall otherwise consent in writing:
(a) during any Facility B Level 5 Period, as soon as
available and in any event within 30 days after the end of each calendar
month (or 45 days with respect to the months of January, February, March,
June, September and December), Consolidated and consolidating balance
sheets of the Borrowers as of the end of such month, and a Consolidated
statement of cash flow and Consolidated and consolidating statements of
income for the Borrowers (and a Consolidated statement of cash flow for
Remediation) for such month and for the period commencing at the end of
the previous fiscal year and ending with the end of such month;
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(b) (i) as soon as available and in any event within
45 days after the end of each of the first three quarters of each fiscal
year of OHM, Consolidated and consolidating balance sheets of the
Borrowers as of the end of such quarter and a Consolidated statement of
cash flow and Consolidated and consolidating statements of income of the
Borrowers (and a Consolidated statement of cash flow for Remediation) for
the period commencing at the end of the previous fiscal year and ending
with the end of such quarter, and (ii) as soon as available such other
financial statements as may be prepared from time to time for any
unconsolidated subsidiary of either Borrower, each certified by the chief
financial officer, the chief accounting officer or the treasurer of such
unconsolidated subsidiary;
(c) as soon as available and in any event within 90
days after the end of each fiscal year of OHM, (i) a copy of the annual
report for such year of OHM, containing financial statements for such year
certified in an unqualified manner by Ernst & Young (or any successor to
such firm) or any other independent public accountants acceptable to the
Majority Banks and (ii) consolidating balance sheets of the Borrowers as
of the end of such year and consolidating statements of income of the
Borrowers (and a Consolidated statement of cash flow for Remediation) for
such year, each certified by the chief financial officer, the chief
accounting officer or the treasurer of OHM and, if applicable,
Remediation;
(d) together with each delivery pursuant to
paragraph (b) or (c) of this Section 5.03, a certificate of the chief
financial officer, the chief accounting officer or the treasurer of OHM,
in form reasonably acceptable to the Administrative Agent, with respect to
the Borrowers' compliance with the provisions of Sections 5.01 and 5.02;
(e) within 45 days after the end of each fiscal
quarter of OHM, a certificate of the chief financial officer, the chief
accounting officer or the treasurer of OHM, in form reasonably acceptable
to the Administrative Agent, setting forth the EBITDA to Interest Expense
Ratio and the Funded Debt to EBITDA Ratio, together with the calculations
thereof, for the preceding four fiscal quarter period then ending, and if
a Facility B Level 3 Period, Facility B Level 4 Period or Facility B Level
5 Period is then in effect, such certificate shall also set forth the
amount of the Underbillings Reserve as of the end of such fiscal quarter
together with the calculation thereof;
(f) promptly after the sending, filing or issuance
thereof, copies of all reports or other material which either Borrower
sends pursuant to any requirement of the Securities Act of 1933 or the
Exchange Act to any of its security holders, copies of all reports and
registration statements which such Person files with the Securities and
Exchange Commission or any national securities exchange and copies of all
press releases
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<PAGE> 61
issued by either Borrower; and within 30 days after receipt thereof by
either Borrower, copies of any report or other material which any of the
NSC Companies sends pursuant to any requirement of the Securities Act of
1933 or the Exchange Act to any of its security holders;
(g) as soon as possible and in any event (i) within
fifteen days after either Borrower or any of its Affiliates knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred and
(ii) within fifteen days after either Borrower or any of its Affiliates
knows or has reason to know that any other Termination Event with respect
to any Plan has occurred, a detailed statement of the chief financial
officer of such Borrower describing such Termination Event and the action,
if any, which such Borrower or such Affiliate proposes to take with
respect thereto;
(h) promptly and in any event within five Business
Days after receipt thereof by either Borrower or any of its Affiliates
from the PBGC, copies of each notice received by such Borrower or any such
Affiliate of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(i) from time to time upon request of the
Administrative Agent, copies of each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each Plan;
(j) promptly and in any event within ten Business
Days after receipt thereof by either Borrower or any of its Affiliates
from a Multiemployer Plan sponsor, a copy of each notice received by such
Borrower or such Affiliate concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA in any individual
instance or in the aggregate in excess of $1,000,000;
(k) within two Business Days after the occurrence of
any event which constitutes a Default or Event of Default, notice of such
occurrence together with a detailed statement of the chief financial
officer or the chief accounting officer of OHM of the action being taken
by the Borrowers to cure the effect of such event;
(l) as soon as available and in any event not later
than February 28 of each fiscal year, a business plan for such fiscal year
of the Borrowers, such business plan to include a statement in reasonable
detail of the assumptions and goals underlying such business plan and such
business plan to address such matters concerning the business, operations
and finances of the Borrowers as any Bank through the Administrative Agent
may reasonably request;
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<PAGE> 62
(m) promptly and in any event within five Business
Days after receipt thereof by either Borrower or either of the Borrowers'
respective Subsidiaries, a copy of each notice, citation or other
communication from the United States Environmental Protection Agency, any
state environmental protection agency, any court or any other governmental
Person, and of each consent agreement, consent decree, judgment or other
document with any such Person, in each case asserting an actual or
potential violation, fine, penalty, enforcement action or liability of or
against such Borrower, any such Subsidiary or any of the NSC Companies
under any Environmental Law, the effect or adverse determination of which
may have a materially adverse effect on the properties, condition
(financial or otherwise), operations or business of the Borrowers taken as
a whole;
(n) as soon as available and in any event within 45
days after the end of each calendar quarter, a report with respect to
projects having a value in excess of $1,000,000 being performed by
Remediation (including any of the projects acquired as part of the Rust
Transactions) at the end of such quarter (other than "time and materials"
or "cost plus" projects), such report to include information in reasonable
detail with respect to such matters and to be otherwise in form and
substance satisfactory to the Banks;
(o) not less often than quarterly, a summary
accounts receivable aging in form and detail reasonably satisfactory to
the Administrative Agent, with respect to the accounts of the Borrowers;
(p) promptly, and in any event within two Business
Days, after either Borrower learns of the same, notice of any default by
WMX with respect to any indebtedness of WMX with a principal amount of
$50,000,000 or more, or of any change in the Credit Rating of WMX;
(q) immediately upon receipt thereof, a copy of any
Freeze Notice sent by WMX under the WMX Guaranty; and
(r) such other information respecting the condition
(financial or otherwise) or operations of either Borrower or any of their
Subsidiaries as any Bank through the Administrative Agent may from time to
time reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events (the "Events of Default") shall occur:
(a) Either Borrower shall fail to pay (i) any
installment of principal of any Note when due; or (ii) any reimbursement
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obligation with respect to a drawing under any Letter of Credit when due;
or (iii) any interest on any Note, or any fees or other Obligations
hereunder, in each case when due or within one Business Day thereafter;
provided, however, that if the Borrowers, in good faith, shall dispute the
amount of interest or fees that are owing and shall give notice of such
dispute to the Issuing and Paying Agent prior to the time when such
payment became due, no Event of Default shall be deemed to exist if such
disputed amount of interest or fees is not paid for such period as the
Borrowers shall be diligently working with the Issuing and Paying Agent to
resolve such dispute, which period shall in no event exceed five Business
Days after the date on which such interest or fees were originally due or,
if shorter, one Business Day after such dispute is resolved; and provided,
further, that nothing in the preceding proviso shall permit or be deemed
to permit a deferral of the payment of any non- disputed portion of any
interest or fees which are due hereunder; or
(b) Any representation or warranty made or deemed
made by either of the Borrowers under this Agreement, the Notes, any
Letter of Credit application, any other Transaction Document or in any
certificate furnished pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) Either Borrower shall fail to perform or observe
any of the covenants set forth in Sections 5.02(b), 5.02(e) - (g),
inclusive, 5.02(i) (excluding 5.02(i)(vi)), 5.02(j) or 5.02(k); or
(d) Either of the Borrowers shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement
on its part to be performed or observed and any such failure shall remain
unremedied for (20) twenty Business Days after written notice thereof
shall have been given to such Borrower by the Administrative Agent; or
(e) Either of the Borrowers shall fail to pay any
Indebtedness (including accrued and unpaid interest, if any) of such
Borrower, or any interest or premium thereon, with respect to which the
aggregate outstanding principal balance equals or exceeds five percent
(5%) of Net Worth, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or any other
default under any agreement or instrument relating to any such
Indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to cause the
acceleration of the maturity of, or to permit the holder or holders
thereof to accelerate the maturity of, Indebtedness of
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either of the Borrowers in an aggregate outstanding principal amount which
equals or exceeds five percent (5%) of Net Worth; or
(f) Either of the Borrowers shall fail to perform or
observe any other term, covenant or agreement contained in any of the
Transaction Documents (other than this Agreement) on its part to be
performed or observed, or an event of default under any such Transaction
Document shall occur, and any such failure or event of default shall
remain unremedied or uncured, as the case may be, for ten (10) days after
written notice thereof shall have been given to such Borrower by the
Administrative Agent; or
(g) Either of the Borrowers shall admit in writing
its inability to pay its debts generally as they become due, or shall make
an assignment for the benefit of creditors; or either of the Borrowers
shall apply for or consent to the appointment of any receiver, custodian,
interim trustee, trustee, or similar officer for it or for all or any
substantial part of its property; or any such receiver, custodian, interim
trustee, trustee or similar officer shall be appointed without the
application or consent of either of the Borrowers and such appointment
shall continue undischarged for a period of 60 days; or either of the
Borrowers shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to it under the laws of any jurisdiction; or any such proceeding
shall be instituted (by petition, application or otherwise) against either
of the Borrowers and either an order for relief is granted in such
proceeding or such proceeding shall remain undismissed for a period of 60
days; or either of the Borrowers shall take any corporate action to
authorize any of the actions set forth above in this subsection (g); or
any judgment, writ, warrant of attachment or execution or similar process
shall be issued or levied against a substantial part of the property of
either of the Borrowers and such judgment, writ, or similar process shall
not be released, vacated or fully bonded within 60 days after its issue or
levy; or an order for relief under Title 11 of the United States Code
shall be entered against either of the Borrowers;
(h) Any Termination Event with respect to a Plan
shall have occurred and within 30 days thereafter (i) such Termination
Event (if correctable) shall not have been corrected and (ii) the then
present value of such Plan's vested benefits exceeds the then current
value of assets accumulated in such Plan by more than two and one-half
percent (2.50%) of Net Worth (or in the case of a Termination Event
described in clause (b) of the definition of Termination Event, the
withdrawing employers' proportionate share of such excess shall in the
aggregate exceed such amount); or any Borrower or any of its ERISA
Affiliates as an employer under a Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plan and the plan
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sponsor of such Multiemployer Plan shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability in an
annual amount exceeding two and one-half percent (2.50%) of Net Worth; or
(i) This Agreement, the Notes, the Security
Agreement, the Pledge Agreement, the WMX Guaranty or any of the other
Transaction Documents shall be terminated (other than pursuant to their
respective terms), revoked, or declared void or invalid; or
(j) Any judgment or judgments is or are entered
against either of the Borrowers in an aggregate amount in excess of (i)
$20,000,000 (whether or not covered by insurance), the execution of which
has not been stayed by appeal or otherwise within 30 days after the date
of entry thereof, or which is paid by either Borrower or on which
enforcement proceedings have been commenced or (ii) two and one-half
percent (2.50%) of Net Worth which is not covered by insurance and is not
stayed by appeal or otherwise within 30 days after the date of entry
thereof, or which is paid by either Borrower or on which enforcement
proceedings have been commenced; or
(k) The loss, destruction, condemnation, seizure,
appropriation or taking of any material and substantial portion (taken as
a whole) of the property of the Borrowers; or
(l) During any Secured Period, this Agreement and/or
the other Transaction Documents shall cease to create valid and perfected
security interests (which, prior to the commencement of the first
Unsecured Period, shall be first priority) in any material and substantial
portion of the Collateral covered thereby, except in accordance with the
terms thereof;
(m) Any "person" (within the meaning of Section
13(d) of the Exchange Act) other than the WMX Group shall directly or
indirectly acquire beneficial ownership (within the meaning of Rule 13d-3
and Rule 13d-5 of the Securities and Exchange Commission under the
Exchange Act) of 40% or more (on a fully diluted basis) of the aggregate
voting stock and other voting securities (including all other securities
convertible into voting stock or other voting securities) of OHM entitled
to vote for the election of director; or
(n) The occurrence of any Freeze Event or the
sending by WMX of a Freeze Notice;
then, (i) upon the occurrence of an Event of Default of the type described
in the immediately preceding clause (g), the obligation of each Bank to
make Advances and participate in Letters of Credit and the obligation of
any Issuing Bank to issue Letters of Credit shall, in each case,
automatically and immediately terminate and all amounts owing by the
Borrowers hereunder, under the Notes, and under all of the other
Transaction Documents,
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including all accrued interest and fees and all contingent liabilities
under the Letters of Credit (which liabilities may be satisfied by the
Borrowers delivering to, and continuing to maintain with, the Issuing and
Paying Agent cash collateral in the aggregate amount of all Letters of
Credit outstanding at such time), shall become immediately due and
payable, without demand, presentment, notice or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or
accelerate and of acceleration) all of which are hereby waived by the
Borrowers, and (ii) upon the occurrence of any other Event of Default, the
Administrative Agent shall at the request of the Majority Banks, or may
with the consent of the Majority Banks, (1) declare the obligations of
each Bank to make Advances and participate in Letters of Credit and the
obligation of any Issuing Bank to issue Letters of Credit, to be
terminated, whereupon the same shall forthwith terminate, (2) declare all
amounts owing by the Borrowers hereunder, under the Notes, and under all
of the other Transaction Documents, including all accrued interest and
fees and all contingent liabilities under the Letters of Credit to be
forthwith due and payable, whereupon such amounts shall immediately become
due and payable without demand, presentment, notice or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or
accelerate and of acceleration) all of which are hereby waived by the
Borrowers, and (3) require the Borrowers to deposit with the Issuing and
Paying Agent cash collateral in an amount equal to the aggregate undrawn
face amount of all Letters of Credit outstanding at such time.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Bank
hereby appoints and authorizes each of the Administrative Agent and the
Issuing and Paying Agent (collectively, for purposes of this Article VII,
the "Agents") to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such Agent by the
terms hereof together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes)
the Agents shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Banks and such instructions shall be binding
upon all Banks and all holders of Notes; provided, however, that neither
Agent shall be required to take any action which exposes such Agent to
personal liability or which is contrary to this Agreement or applicable
law.
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SECTION 7.02. Agents' Reliance, Etc. Neither Agent nor
any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by them in good faith
under or in connection with this Agreement, except for their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (i) may treat the payee of any Note as the
holder thereof until such Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form satisfactory to such
Agent; (ii) may consult with legal counsel (including counsel for the
Borrowers), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Bank; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
this Agreement on the part of either Borrower or to inspect the property
(including the books and records) of either Borrower; (v) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
instrument or document furnished pursuant hereto, or any Collateral
covered hereby; and (vi) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citicorp USA, BAI and Affiliates. With
respect to its Commitment, the Advances made by it, the Letters of Credit
in which it participates and the Notes issued to it, each of Citicorp USA
and BAI shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not an Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated,
include Citicorp USA in its individual capacity and BAI in its individual
capacity. Citicorp USA and BAI and their affiliates may accept deposits
from, lend money to, act as a trustee under indentures of, and generally
engage in any kind of business with, either Borrower, and any person or
entity who may do business with or own securities of either Borrower, all
as if Citicorp USA or BAI were not an Agent and without any duty to
account therefor to the Banks.
SECTION 7.04. Bank Credit Decision. Each Bank
acknowledges that it has, independently and without reliance upon either
Agent or any other Bank and based on the financial statements referred to
in Section 4.01(f) and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon either Agent or any other Bank and
based on
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such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. The Banks agree to
indemnify each Agent (to the extent not reimbursed by the Borrowers)
ratably according to the respective amounts of such Banks' Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by such Agent under this
Agreement, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. Without limitation of the foregoing,
each Bank agrees to reimburse each Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees)
incurred by such Agent in connection with the enforcement of, or legal
advice in respect of rights and responsibilities under, this Agreement to
the extent that such Agent is not reimbursed for such expenses by the
Borrowers.
SECTION 7.06. Successor Agents. Each of the Agents may
resign at any time by giving ten (10) Business Day's prior written notice
thereof to the Banks and the Borrowers and may be removed at any time with
or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor
Administrative Agent or Issuing and Paying Agent, as the case may be;
provided, however, that upon the resignation or removal of the
Administrative Agent, the Issuing and Paying Agent shall immediately be
and become (and hereby accepts appointment as) the Administrative Agent
hereunder unless and until a successor Administrative Agent is appointed
as provided in this Section 7.06. Subject to such provision, if no
successor Administrative Agent or Issuing and Paying Agent, as the case
may be, shall have been so appointed by the Majority Banks, and shall have
accepted such appointment, within seven days after the retiring Agent's
giving of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks,
appoint a successor Administrative Agent or Issuing and Paying Agent, as
the case may be, which shall be a commercial bank organized under the laws
of the United States of America or any state thereof and having a combined
capital and surplus of at least $100,000,000. Except for the automatic
appointment of the Issuing and Paying Agent as Administrative Agent upon
resignation or removal of the Administrative Agent, each appointment of a
successor Agent hereunder shall require the consent of the Borrowers,
which consent shall not be unreasonably withheld. Upon the acceptance of
any appointment as an Agent hereunder by a successor Agent,
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such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal
hereunder, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was such
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. No Waiver; Cumulative Remedies. No failure
or delay on the part of the Administrative Agent, the Issuing and Paying
Agent, any Bank, any Issuing Bank or any holder of any Note in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.02. Amendments, Etc. No amendment,
modification or waiver of any provision of this Agreement or of the Notes,
nor consent to any departure by either Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Majority Banks (or by the Agent on behalf of the Majority Banks), and then
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified
in Article III, (b) increase the Commitments of the Banks or subject the
Banks or any Issuing Bank to any additional obligations, (c) reduce the
principal of, or interest on, the Notes or any fees hereunder, (d) postpone
any date fixed for any payment of principal of, or interest on, the Notes
or any fees hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Notes, or the number of Banks,
which shall be required for the Banks or any of them to take any action
hereunder, (f) release any guarantor of the Obligations, other than the
release of WMX from the WMX Guaranty as provided for, and in accordance
with the terms of, Section 8.15, (g) release all or a substantial portion
of the Collateral, other than as required for any Unsecured Period pursuant
to the terms of Section 8.15; provided further that no amendment, waiver or
consent subjecting either the Agent or the Issuing and Paying Agent to any
additional obligations or otherwise affecting the Agent or the Issuing and
Paying Agent shall be effective, unless in writing and signed by the Agent
or the Issuing and Paying Agent, as applicable, in addition to the
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Banks required by the above provisions of this Section; and provided
further, that no amendment of the provisions of Sections 5.02(h)(iv) or
(v) may be made without the consent of WMX.
SECTION 8.03. Notices, Etc. All notices, requests,
demands, directions and other communications provided for hereunder shall
be in writing (including telex or facsimile communication) and mailed or
telexed or delivered or sent by courier service or facsimile transmission
to the applicable party at the addresses indicated below:
If to the Borrowers or either of them:
OHM Corporation
16406 U.S. Route 224 East
P.O. Box 551
Findlay, Ohio 45839-0551
Attention: Vice President, Treasurer
and Assistant Secretary
Telecopier: (419) 424-4985
If to the Administrative Agent:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
200 South Wacker Drive
31st Floor
Chicago, Illinois 60606
Attention: Emily Rosenstock, Vice President
Telecopier: (312) 993-1050
If to the Issuing and Paying Agent:
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Agency Management Services - Illinois
Telecopier: (312) 974-9101
If to any Bank:
at the address of its Domestic Lending Office
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery
with the terms of this Section. If any notice is sent with respect to a
Default or Event of Default at any time while the WMX Guaranty is
outstanding, a copy of such notice shall be sent to WMX at the following
address: WMX Technologies, Inc., 3003 Butterfield Road, Oak Brook,
Illinois 60521, Attention: Chief Financial Officer, Telecopier: (708)
572-1340, provided, that any failure or delay in delivering such copy
shall not affect the effectiveness of such notice. All such
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notices, requests, demands, directions and other communications shall,
when mailed or telexed or sent by courier service, be effective when
deposited in the mails or telexed, answerback received, or delivered to
the courier service, respectively, addressed as aforesaid, except that
notices or requests or directions to either the Administrative Agent or
the Issuing and Paying Agent pursuant to any of the provisions of Articles
II, III, IV or V shall not be effective until received by the
Administrative Agent or the Issuing and Paying Agent, as applicable.
SECTION 8.04. Costs and Expenses. The Borrowers jointly
and severally agree to pay on demand all reasonable out-of-pocket costs and
expenses of the Administrative Agent and each Issuing Bank in connection
with the preparation, printing, execution and delivery of this Agreement,
the Notes, the Letters of Credit and the other instruments and documents
to be delivered hereunder, and all amendments, waivers, modifications and
extensions hereof or thereof, including, without limitation, customary
issuance fees of each Issuing Bank in connection with the issuance of
Letters of Credit and the reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent and each Issuing Bank with respect to
the foregoing, and of local counsel, if any, who may be retained by said
counsel with respect thereto, and all reasonable costs and expenses, if
any, of the Administrative Agent, the Issuing and Paying Agent, each
Issuing Bank or any Bank in connection with the enforcement of this
Agreement, the Notes, the Letters of Credit and the other instruments and
documents to be delivered hereunder.
SECTION 8.05. Obligations Several. The obligation of
each Bank hereunder is several, and none of the Administrative Agent, the
Issuing and Paying Agent, any Bank or any Issuing Bank shall be
responsible for the obligation and Commitment of any other Bank hereunder,
nor will the failure of any Bank to perform any of its obligations
hereunder relieve the other Banks from the performance of their respective
obligations hereunder. Nothing contained in this Agreement and no action
taken by the Banks pursuant hereto shall be deemed to constitute the Banks
a partnership, association, joint venture or other entity.
SECTION 8.06. Right of Setoff. Upon the occurrence and
during the continuance of any Event of Default, each Bank is hereby
authorized at any time and from time to time to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank to or
for the credit or the account of either Borrower against any and all of
the obligations of such Borrower now or hereafter owing under this
Agreement, the Notes and the Letters of Credit (including, without
limitation, unmatured reimbursement obligations under Letters of Credit).
The rights of each Bank under this Section are in addition to
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other rights and remedies (including, without limitation, other rights of
setoff) which such Bank may have.
SECTION 8.07. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 8.08. Binding Effect; Assignment. (a) This
Agreement shall be binding upon and inure to the benefit of each Borrower,
the Administrative Agent, the Issuing and Paying Agent, each Issuing Bank
and each Bank and their respective successors and assigns, except that no
Borrower shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of all of the Banks.
(b) Each Bank shall have the right to sell or assign all
or any part of its Commitment, Advances, Notes, Letter of Credit
participations, and other rights and obligations under this Agreement and
related documents (such transfer, an "Assignment") to any commercial
lender, other financial institution or other entity (an "Assignee");
provided, however, that (i) any Assignment to an entity other than an
Affiliate of the Assigning Bank, a commercial lender or financial
institution shall require the consent of the Administrative Agent and OHM,
such consent not to be unreasonably withheld and (ii) any assignment to an
entity other than an Affiliate of the Assigning Bank shall require the
consent of all Issuing Banks, such consent not to be unreasonably
withheld; and provided, further, that (1) each such assignment shall be of
a constant, and not a varying, percentage of all rights and obligations
under this Agreement; (2) the amount of the Commitment of the assigning
Bank being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (i) $5,000,000 and (ii) 100%
of the assigning Bank's remaining Commitment; (3) the parties to each such
assignment shall execute and deliver to the Administrative Agent and the
Issuing and Paying Agent for acceptance and recording, an Assignment and
Acceptance; and (4) the parties to each such assignment shall pay to the
Issuing and Paying Agent a processing fee of $3000. Upon such Assignment
becoming effective, the assigning Bank shall be relieved from the portion
of the Commitment, obligations to indemnify the Agent and other
obligations hereunder to the extent assumed and undertaken by the
Assignee, and to such extent the Assignee shall have the rights and
obligations of a "Bank" hereunder. Upon such execution, delivery and
acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance,
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have the rights and obligations of a Bank hereunder and (y) the Bank
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrowers or the performance or observance by the
Borrowers of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, the Issuing and Paying Agent, such
assigning Bank 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 decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes the Administrative Agent and the
Issuing and Paying Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent and the Issuing and Paying Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required
to be performed by it as a Bank.
(d) The Issuing and Paying Agent shall maintain at its
address referred to in Section 8.03 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the Commitment of
each Bank from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrowers, the Administrative Agent and the Issuing and Paying
Agent and the Banks may treat each Person whose name is recorded in the
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Register as a Bank hereunder, as their respective interests may appear,
for purposes of this Agreement. The Register shall be available for
inspection by the Borrowers or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee together with any Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrowers. Within five Business Days after
its receipt of such notice, the Borrowers, at their own expense, shall
execute and deliver to the Administrative Agent in exchange for the
surrendered Notes, a Note to the order of such assignee in an amount equal
to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a Commitment hereunder, a new Note
to the order of the assigning Bank in an amount equal to the Commitment
retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit B
hereto.
(f) Each Bank shall also have the right to grant or sell
a participation (a "Participation") in all or any part of its Commitment,
Advances, Notes and Letter of Credit participations to an Affiliate of
such Bank, any commercial lender or other financial institution, or, with
the consent of the Administrative Agent and OHM, not to be unreasonably
withheld, any other entity (a "Participant"); provided however, that (i)
no Participant shall have any direct rights hereunder, (ii) the Borrowers,
the Administrative Agent and the Issuing and Paying Agent, each Issuing
Bank, and the Banks other than the selling Bank shall deal solely with the
selling Bank and shall not be obligated to extend any rights or make any
payments to, or seek any consent of, the Participant, (iii) no
Participation shall relieve the selling Bank from its Commitment to make
Advances hereunder and to participate in Letters of Credit, or from any of
its other obligations hereunder, and such Bank shall remain solely
responsible for the performance thereof, and (iv) no Participant, other
than an affiliate of the selling Bank, shall or shall be entitled to
require such selling Bank to take or omit to take any action hereunder,
except that such Bank may agree with such Participant that such Bank will
not, without such Participant's consent, take any action which would, in
the case of any principal, interest or fee in which the Participant has an
ownership or beneficial interest, (A) extend the final maturity of any
Advances or extend the Stated Termination Date, (B) reduce the interest
rate on the Advances or the rate of fees paid on the
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Commitment or the Letters of Credit, (C) forgive any principal of, or
interest on, the Advances or any fees, (D) increase the amount of the
Total Commitment, or (E) release all or substantially all of the
Collateral.
(g) Notwithstanding any other provision contained in
this Agreement or any of the other Transaction Documents to the contrary,
any Bank may, without notice or consent of any kind, at any time assign or
grant a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it) and
the other Transaction Documents (including, without limitation, the Notes)
in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the Federal Reserve System.
(h) Any Bank and the Administrative Agent may, in
connection with any such Assignment or Participation, disclose to the
Assignee or Participant or to any prospective Assignee or Participant any
nonpublic information relating to the Borrowers furnished by or on behalf
of any of them to such Bank or the Administrative Agent, provided that
such Assignee or Participant, or prospective Assignee or Participant,
agrees to maintain the confidentiality thereof.
SECTION 8.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 8.10. MUTUAL WAIVER OF JURY TRIAL. BECAUSE
DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER
THAN ARBITRATION RULES), EACH OF THE PARTIES DESIRES THAT ITS DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, EACH OF THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM IN RESPECT
TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. EACH OF
THE BORROWERS, THE ADMINISTRATIVE AGENT, THE ISSUING AND PAYING AGENT AND
EACH BANK HEREBY EACH AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 8.11. CONSENT TO JURISDICTION; SERVICE OF
PROCESS. (a) SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE,
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EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENT, THE ISSUING AND PAYING
AGENT AND EACH OF THE BANKS HEREBY AGREE TO THE EXCLUSIVE JURISDICTION OF
THE FEDERAL COURTS OF THE NORTHERN DISTRICT OF ILLINOIS AND THE SOUTHERN
DISTRICT OF THE STATE OF NEW YORK OR, IF THE FEDERAL COURT LACKS
JURISDICTION, TO THE STATE COURTS LOCATED WITHIN COOK COUNTY ILLINOIS AND
NEW YORK COUNTY, NEW YORK AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM
NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN, AND AGREE
THAT ANY DISPUTE CONCERNING THE RELATIONSHIP BETWEEN THE ADMINISTRATIVE
AGENT, THE ISSUING AND PAYING AGENT, THE BANKS AND THE BORROWERS OR THE
CONDUCT OF ANY SUCH PARTY IN CONNECTION WITH THIS AGREEMENT, ANY OF THE
OTHER TRANSACTION DOCUMENTS OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS
DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING THE ADMINISTRATIVE AGENT,
THE ISSUING AND PAYING AND THE BANKS SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST EITHER OF THE BORROWERS OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION AS THE ADMINISTRATIVE AGENT, THE
ISSUING AND PAYING AGENT AND/OR BANK DEEMS NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE SECURITY FOR THE OBLIGATIONS AND LIABILITIES OWING
TO THEM BY THE BORROWERS HEREUNDER AND UNDER THE OTHER TRANSACTION
DOCUMENTS.
(b) EACH OF THE BORROWERS HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED
TO SUCH BORROWER AT ITS ADDRESS SET FORTH IN SECTION 8.03 AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED THREE (3) DAYS AFTER THE SAME SHALL
HAVE BEEN SO DEPOSITED IN THE U.S. MAIL.
(C) NOTHING IN THIS SECTION 8.11 SHALL AFFECT THE RIGHT
OF THE ADMINISTRATIVE AGENT, THE ISSUING AND PAYING AGENT OR THE BANKS TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT, THE ISSUING AND PAYING AGENT AND/OR THE
BANKS TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE BORROWERS OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 8.12. Remedies. The Administrative Agent's, the
Issuing and Paying Agent's and each Bank's rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and
remedies which such Persons may have under any other agreement, including
without limitation, the other Transaction Documents, by operation of law
or otherwise.
SECTION 8.13. Severability of Provisions. Any provision
of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
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SECTION 8.14. Indemnities.
(a) The Borrowers hereby jointly and severally agree
to indemnify and hold harmless the Banks, the Administrative Agent, the
Issuing and Paying Agent and each Issuing Bank and each of their
affiliates and their respective directors, officers, employees and agents
from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, reasonable fees and disbursements
of counsel) which may be incurred by or asserted against any such
indemnified party in connection with or arising out of any investigation,
litigation or proceeding, whether or not such indemnified party is a party
thereto, related to any transaction or proposed transaction contemplated
by this Agreement or any use of any Letter of Credit or the proceeds of
any Advance.
(b) To the full extent permitted by applicable law,
the Borrowers hereby jointly and severally agree to defend, indemnify and
hold harmless the Banks, the Administrative Agent, the Issuing and Paying
Agent and each Issuing Bank and each of their affiliates and their
respective directors, officers, employees and agents from and against any
and all loss, cost, expense or liability incurred in connection with any
and all claims or proceedings (whether brought by private party or
governmental agencies) for bodily injury, property damage, abatement or
remediation, environmental damage or impairment or any other injury or
damage resulting from or relating to any hazardous or toxic substance or
contaminated material located upon or migrating into, from or through the
property of either Borrower (whether or not the release of such materials
was caused by any of such Persons, a tenant or subtenant or a prior owner
or tenant on any such property and whether or not the alleged liability is
attributable to the handling, storage, generation, remediation,
transportation or disposal of such substance or the mere presence of the
substance on any such property), which any such indemnified party may
incur due to the making of loans to either Borrower, the exercise of any
of its rights under this Agreement, or otherwise. For purposes of this
indemnity, hazardous or toxic substances or contaminated material includes
but is not limited to oil and petroleum products and those substances
within the scope of all federal, state and local environmental laws,
regulations and ordinances, including, without limitation, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act and the Superfund Amendment and
Reauthorization Act of 1986. This indemnity will survive foreclosure of
any mortgage or conveyance in lieu of foreclosure and the repayment of the
Notes and the discharge and release of any mortgage and any other loan
documents.
SECTION 8.15. The Transaction Documents; Actions by the
Banks; Release and Re-Grant of Collateral; Release of WMX Guaranty. (a)
Each Bank and each Issuing Bank hereby consents
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and agrees to the terms of the Transaction Documents and authorizes and
directs the Administrative Agent and Issuing and Paying Agent to execute
the Transaction Documents. Each Bank and each Issuing Bank hereby agrees,
and each holder of any Note by the acceptance thereof will be deemed to
agree, that any action taken by the Majority Banks, the Issuing and Paying
Agent or the Administrative Agent (as appropriate), in accordance with the
provisions of this Agreement or the Transaction Documents, and the exercise
by the Majority Banks, the Issuing and Paying Agent or the Administrative
Agent (as appropriate), of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Banks, Issuing Banks and the holders
of any Note.
(b) Prior to the indefeasible payment in full of the
Obligations, the release of any Collateral may occur only as follows:
(i) the Issuing and Paying Agent, on behalf of the
Banks, shall release the Lien on any Collateral to the extent
sold, assigned, transferred or otherwise disposed of in
accordance with Section 5.02(c);
(ii) the Majority Banks may direct the Issuing and
Paying Agent to release the Lien on any Collateral; provided,
that in no event may all or a substantial portion of the
Collateral be released under this clause (ii) without the prior
written consent of all Banks; and
(iii) upon the Borrowers' written request in the form
attached hereto as Exhibit J, delivered to the Administrative
Agent and the Issuing and Paying Agent at any time after the
delivery to the Banks of the required financial statements and
compliance documentation pursuant to Section 5.03 for any fiscal
quarter ending on or after December 31, 1995, the Issuing and
Paying Agent shall release all of the Collateral if (A) the
Borrowers' performance as of the end of the fiscal quarter most
recently ended satisfies the conditions for Level 2 set forth on
the Facility B Rate Determination Table and (B) prior to or
simultaneously with such release, WMX shall have released all
liens and security interests in its favor with respect to any
property of either Borrower.
At any time following the release of Collateral pursuant to clause (iii)
above, the Borrowers will, upon the direction of the Majority Banks, be
required to execute any necessary collateral documents and re-grant all
such Collateral to the Issuing and Paying Agent for the benefit of the
Banks, (A) if the WMX Guaranty has been released pursuant to subsection
(c) below, and the Borrowers' financial performance has failed, as of the
end of any fiscal quarter, to satisfy the conditions for Level 4 set forth
on the Facility B Rate Determination Table, or (B) if the
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WMX Guaranty is still in effect, if (i) the Borrowers' financial
performance has failed, as of the end of any fiscal quarter, to satisfy
the conditions for Level 4 set forth on the Facility B Rate Determination
Table, and (ii) the aggregate outstanding Advances plus the aggregate
undrawn face amount of outstanding Letters of Credit, plus the aggregate
unpaid reimbursement obligations with respect to the Letters of Credit,
computed as an average daily amount, exceeds the amount of the Total A
Commitment for either (A) the thirty day period prior to the occurrence of
such failure or (B) any thirty day period so long as such failure
continues.
(c) Upon the written request of the Borrowers prior to
the one hundred twentieth (120th) calendar day following the Effective
Date, which request certifies the Borrowers' intent to use a guaranty by
WMX in support of other Indebtedness of the Borrowers, the Administrative
Agent and the Issuing and Paying Agent shall release and terminate the WMX
Guaranty in whole or in part, as requested by the Borrowers.
SECTION 8.16. Termination of Prior Credit Agreement.
On the Effective Date, the Prior Credit Agreement shall terminate and,
together with the "Notes" issued thereunder (the "Prior Notes"), shall
cease to be of any further force or effect (other than rights of
indemnification set forth therein, which shall survive such termination).
Each Bank shall use its reasonable efforts to return the Prior Notes
issued to it to the Borrowers for cancellation on or before the Effective
Date; provided, that in the event that any Bank fails to return its Prior
Note on or before the Effective Date, the Effective Date shall
nevertheless occur, and each such Bank agrees to indemnify and hold the
Borrowers harmless from and against any and all liability, loss, damage,
and expense, including reasonable legal fees and expenses, in connection
with, or arising out of, the issuance of such Bank's Note or the failure
to return such Prior Note.
SECTION 8.17. Headings. The Article and Section
headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any
other purpose.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWERS:
OHM CORPORATION
Attest: By_________________________________
Title:
__________________________
Secretary
OHM REMEDIATION SERVICES CORP.
By_________________________________
Title:
Commitment: BANKS
$25,000,000 CITICORP USA, INC., Individually
and as Administrative Agent
By_________________________________
Vice President
BANK OF AMERICA ILLINOIS,
as Issuing and Paying Agent
By_________________________________
Vice President
$25,000,000 BANK OF AMERICA ILLINOIS
By_________________________________
Title:
$25,000,000 NBD BANK, N.A.
By_________________________________
Title:
$20,000,000 THE FIRST NATIONAL BANK OF BOSTON
By_________________________________
Title:
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<PAGE> 81
$15,000,000 NATIONAL CITY BANK
By_________________________________
Title:
$15,000,000 COMERICA BANK
By_________________________________
Title:
$12,500,000 BHF BANK
By_________________________________
Title:
$12,500,000 BANK ONE, LIMA, N.A.
By_________________________________
Title:
$150,000,000 TOTAL COMMITMENT
___________
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<PAGE> 82
ANNEX A
to
REVOLVING CREDIT AGREEMENT
Facility A Rate Determination Table
Attached.
<PAGE> 83
ANNEX B
to
REVOLVING CREDIT AGREEMENT
Facility B Rate Determination Table
Attached.
<PAGE> 1
Exhibit 10(f)
EXECUTION COPY
FIRST AMENDMENT
Dated as of May 31, 1995
to
PLEDGE AGREEMENT
Dated as of May 11, 1993
This FIRST AMENDMENT TO PLEDGE AGREEMENT dated as of May 31,
1995 (this "Amendment") is entered into by and between OHM Corporation, an Ohio
corporation (the "Pledgor"), and Bank of America Illinois ("BAI"), as issuing
and paying agent (in such capacity, the "Issuing and Paying Agent") on behalf
of the "Banks" parties to the "Credit Agreement" referred to below.
PRELIMINARY STATEMENT:
A. The Pledgor and OHM Remediation Services Corp., an
Ohio corporation (together with the Pledgor, the "Borrowers"), entered into
that certain Revolving Credit Agreement dated as of May 11, 1993 (as previously
amended and otherwise modified, the "Prior Credit Agreement") with the
financial institutions from time to time party thereto, BAI (formerly known as
Continental Bank N.A.) in its separate capacities as the administrative agent
and issuing bank thereunder, and Citicorp USA, Inc. ("Citicorp"), in its
capacity as agent thereunder.
B. In connection with the Prior Credit Agreement, the
Pledgor executed that certain Pledge Agreement dated as of May 11, 1993 (as
previously amended and otherwise modified, the "Pledge Agreement") in favor of
the "Administrative Agent" thereunder.
C. The Prior Credit Agreement has been substituted and
replaced by that certain Revolving Credit Agreement dated as of May 31, 1995
(as amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") among the Borrowers, the financial institutions from
time to time party thereto as banks (the "Banks"), the Issuing and Paying Agent
and Citicorp, in its capacity as administrative agent (the "Administrative
Agent") for the Banks.
D. In connection with the Credit Agreement, the
Borrowers, the Banks, the Issuing and Paying Agent and the Administrative Agent
have agreed that the Pledge Agreement is to be amended as set forth herein.
<PAGE> 2
E. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE PLEDGE AGREEMENT.
1.1 General Definitions. Capitalized terms used in the
Pledge Agreement and defined in the Credit Agreement shall have the respective
meanings ascribed to such terms in the Credit Agreement.
1.2 Replaced Terms. As used in the Pledge Agreement, each of
the following terms shall be deemed to be replaced as follows:
(a) The term Administrative Agent shall be replaced
by and shall mean and be a reference to the term Issuing and Paying
Agent.
(b) The term Agent shall be replaced by and shall
mean and be a reference to the term Administrative Agent.
(c) The term Issuing Bank shall be replaced by and
shall mean and be a reference to the term Issuing Banks.
1.3 Other Changes.
(a) Each reference in the Pledge Agreement to the
Credit Agreement shall mean and be a reference to the Credit Agreement
as defined herein, and each reference in the Pledge Agreement to a
section or provision of the Prior Credit Agreement shall mean and be a
reference to the corresponding section or provision of the Credit
Agreement.
(b) Schedule I to the Pledge Agreement is hereby
amended to (i) delete the reference to Analytical Services Corp.
therein and (ii) delete the number "3,710,000" opposite the reference
to NSC Corporation therein and to substitute therefor "4,010,000".
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Pledgor
hereby represents and warrants that each of the representations and warranties
set forth in Section 5 of the Pledge Agreement are true and correct on and as
of the Effective Date of the Credit Agreement as if made on and as of such
date.
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<PAGE> 3
SECTION 3. EFFECT ON THE PLEDGE AGREEMENT.
3.1 Upon the effectiveness of this Amendment, each reference
in the Pledge Agreement to "this Agreement," "hereunder," "hereof," "herein,"
or words of like import shall mean and be a reference to the Pledge Agreement
as amended hereby, and each reference to the Pledge Agreement in any of the
Transaction Documents and any other document, instrument or agreement executed
and/or delivered in connection with the Pledge Agreement shall mean and be a
reference to the Pledge Agreement as amended hereby.
3.2 Except as specifically set forth herein, the Pledge
Agreement shall remain in full force and effect and is hereby ratified and
confirmed. Without limiting the generality of the foregoing, the Pledgor
hereby acknowledges and agrees that the grant of Liens and security interests
contained in the Pledge Agreement shall run in favor of the Issuing and Paying
Agent for the benefit of itself, the Banks and the Administrative Agent, and
shall constitute security for the prompt payment and performance of the
Obligations under the Credit Agreement and the other Transaction Documents.
3.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Issuing and Paying Agent under the Pledge Agreement or any other document,
instrument or agreement executed in connection therewith, nor constitute a
waiver of any provision contained therein, except as specifically set forth
herein.
SECTION 4. EXECUTION IN COUNTERPARTS. This Amendment may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
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<PAGE> 4
SECTION 6. SECTION TITLES. Section titles in this Amendment
are included herein for convenience of reference only and shall not affect in
any way the interpretation of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the day and year first written above.
OHM CORPORATION
Attest: By___________________________
Title: Treasurer
________________________
Secretary
BANK OF AMERICA ILLINOIS, as
Issuing and Paying Agent
By___________________________
Title: Vice President
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<PAGE> 1
Exhibit 10(g)
EXECUTION COPY
SECOND AMENDMENT
Dated as of May 31, 1995
to
SECURITY AGREEMENT
Dated as of May 11, 1993
This SECOND AMENDMENT TO SECURITY AGREEMENT dated as of May
31, 1995 (this "Amendment") is entered into by and among OHM Corporation, an
Ohio corporation ("OHM"), OHM Remediation Services Corp., an Ohio corporation
("Remediation", and together with OHM, the "Borrowers"), and Bank of America
Illinois ("BAI"), as issuing and paying agent (in such capacity, the "Issuing
and Paying Agent") on behalf of the "Banks" parties to the "Credit Agreement"
referred to below.
PRELIMINARY STATEMENT:
A. The Borrowers entered into that certain Revolving
Credit Agreement dated as of May 11, 1993 (as previously amended and otherwise
modified, the "Prior Credit Agreement") with the financial institutions from
time to time party thereto, BAI (formerly known as Continental Bank N.A.) in
its separate capacities as the administrative agent and issuing bank
thereunder, and Citicorp USA, Inc. ("Citicorp"), in its capacity as agent
thereunder.
B. In connection with the Prior Credit Agreement, the
Borrowers and Analytical Services Corp., an affiliate of the Borrowers,
executed that certain Security Agreement dated as of May 11, 1993 (as
previously amended and otherwise modified, the "Security Agreement") in favor
of the "Administrative Agent" thereunder.
C. The Prior Credit Agreement has been substituted and
replaced by that certain Revolving Credit Agreement dated as of May 31, 1995
(as amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") among the Borrowers, the financial institutions from
time to time party thereto as banks (the "Banks"), the Issuing and Paying Agent
and Citicorp, in its capacity as administrative agent (the "Administrative
Agent") for the Banks.
D. In connection with the Credit Agreement, the
Borrowers, the Banks, the Issuing and Paying Agent and the Administrative Agent
have agreed that the Security Agreement is to be amended as set forth herein.
<PAGE> 2
E. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE SECURITY AGREEMENT.
1.1 General Definitions. Capitalized terms used in the
Security Agreement and defined in the Credit Agreement shall have the
respective meanings ascribed to such terms in the Credit Agreement.
1.2 Replaced Terms. As used in the Security Agreement, each
of the following terms shall be deemed to be replaced as follows:
(a) The term Administrative Agent shall be replaced
by and shall mean and be a reference to the term Issuing and Paying
Agent.
(b) The term Agent shall be replaced by and shall
mean and be a reference to the term Administrative Agent.
(c) The term Continental shall be replaced by and
shall mean and be a reference to the term BAI.
(d) The term Issuing Bank shall be replaced by and
shall mean and be a reference to the term Issuing Banks.
1.3 Other Changes.
(a) As used in the Security Agreement, the term
Co-Agents shall refer to the Issuing and Paying Agent and the
Administrative Agent.
(b) Each reference in the Security Agreement to
Analytical Services Corp. (and each provision in the Security
Agreement relating solely to Analytical Services Corp.) shall be
deleted in its entirety.
(c) Each reference in the Security Agreement to the
Credit Agreement shall mean and be a reference to the Credit Agreement
as defined herein, and each reference in the Security Agreement to a
section or provision of the Prior Credit Agreement shall mean and be a
reference to the corresponding section or provision of the Credit
Agreement.
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<PAGE> 3
(d) Each reference in the Security Agreement to the
Grantors shall mean and be a reference to the Borrowers.
(e) Section 8(c) of the Security Agreement is
amended by deleting the first sentence thereof and substituting
therefor the following:
"Notwithstanding anything contained herein to
the contrary, upon (i) the occurrence and during the
continuance of an Event of Default, or (ii) during any Secured
Period, (A) any loss, damage or destruction of any Inventory
or Equipment in excess of 2.5% of Net Worth in any one
occurrence or in any related series of occurrences, or (B) any
loss, damage or destruction of any Inventory or Equipment in
excess of 2.5% of Net Worth in any twelve-month period in the
aggregate, then (1) in the case of clause (i) above, all
insurance payments in respect of loss, damage or destruction
of Equipment or Inventory, (2) in the case of clause (ii)(A)
above, any insurance proceeds in respect of such lost, damaged
or destroyed Equipment or Inventory, and (3) in the case of
clause (ii)(B) above, all insurance proceeds in excess of such
amount paid in respect of losses occurring in such
twelve-month period, shall, in each case, be paid to the
Issuing and Paying Agent and, at the Issuing and Paying
Agent's sole option, may be applied by the Issuing and Paying
Agent (after deducting from such proceeds the expenses, if
any, incurred by the Issuing and Paying Agent in the
collection of handling thereof) as specified in Section
14(b)."
(f) The Schedule to the Security Agreement is
amended and restated in its entirety as set forth on Annex I hereto.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each of the
Borrowers hereby represents and warrants that each of the representations and
warranties set forth in Section 5 of the Security Agreement are true and
correct on and as of the Effective Date of the Credit Agreement as if made on
and as of such date.
SECTION 3. EFFECT ON THE SECURITY AGREEMENT.
3.1 Upon the effectiveness of this Amendment, each reference
in the Security Agreement to "this Agreement," "hereunder," "hereof," "herein,"
or words of like import shall mean and be a reference to the Security Agreement
as amended hereby, and each reference to the Security Agreement in any of the
Transaction Documents and any other document, instrument or
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<PAGE> 4
agreement executed and/or delivered in connection with the Security Agreement
shall mean and be a reference to the Security Agreement as amended hereby.
3.2 Except as specifically set forth herein, the Security
Agreement shall remain in full force and effect and is hereby ratified and
confirmed. Without limiting the generality of the foregoing, each of the
Borrowers hereby acknowledges and agrees that the grant of Liens and security
interests contained in the Security Agreement shall run in favor of the Issuing
and Paying Agent for the benefit of itself, the Banks and the Administrative
Agent, and shall constitute security for the prompt payment and performance of
the Obligations under the Credit Agreement and the other Transaction Documents.
3.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Issuing and Paying Agent under the Security Agreement or any other document,
instrument or agreement executed in connection therewith, nor constitute a
waiver of any provision contained therein, except as specifically set forth
herein.
SECTION 4. EXECUTION IN COUNTERPARTS. This Amendment may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
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<PAGE> 5
SECTION 6. SECTION TITLES. Section titles in this Amendment
are included herein for convenience of reference only and shall not affect in
any way the interpretation of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the day and year first written above.
OHM CORPORATION
Attest: By____________________________
Title: Treasurer
________________________
Secretary
OHM REMEDIATION SERVICES CORP.
By____________________________
Title: Treasurer
BANK OF AMERICA ILLINOIS, as
Issuing and Paying Agent
By____________________________
Title: Vice President
-5-
<PAGE> 6
ANNEX I
TO
SECOND AMENDMENT
SCHEDULE
to
SECURITY AGREEMENT
<TABLE>
<CAPTION>
Grantor Location of Chief Executive Office
------- ----------------------------------
<S> <C>
OHM Corporation 16406 U.S. Route 224 East
Findlay, Ohio 45840
OHM Remediation Services 16406 U.S. Route 224 East
Corp. Findlay, Ohio 45840
Records Concerning
Accounts also kept at: 200 Horizon Center Boulevard
Trenton, New Jersey 08691-1904
5335 Triangle Parkway
Suite 450
Norcross, Georgia 30092
5371 West Las Positas Boulevard
Pleasanton, California 94588
Trade Names: OHM
O.H. Materials Corp.
OHM Corporation the Environmental
Service Company
</TABLE>
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<PAGE> 1
Exhibit 10(h)
Execution Copy
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "Agreement") is made and
executed as of this 31st day of May, 1995 by and among CITICORP USA, INC., as
administrative agent (the "Administrative Agent") for the "Banks" parties to
the "Revolving Credit Agreement" described below, BANK OF AMERICA ILLINOIS, as
issuing and paying agent (the "Issuing and Paying Agent") for such Banks and
WMX TECHNOLOGIES, INC. ("WMX"), with respect to certain financing arrangements
with OHM Corporation and its wholly-owned subsidiary OHM Remediation Services
Corp. (each, a "Borrower" and, collectively, the "Borrowers").
W I T N E S S E T H:
WHEREAS, the Borrowers are parties to that certain Revolving
Credit Agreement dated as of May 31, 1995 (as amended, restated, supplemented
or otherwise modified from time to time, the "Credit Agreement") with the
financial institutions from time to time party thereto (the "Banks"), the
Issuing and Paying Agent and the Administrative Agent (the Banks, the Issuing
and Paying Agent and the Administrative Agent being referred to collectively
as, the "Lender Parties");
WHEREAS, the Borrowers have granted to the Issuing and Paying
Agent, on behalf of the Lender Parties, in order to secure the "Obligations"
(as defined in the Credit Agreement), a security interest in substantially all
of their personal property;
WHEREAS, WMX has executed that certain Guaranty dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from
time to time, the "WMX Guaranty") pursuant to which WMX has guaranteed the
prompt and complete repayment of the Borrowers' Obligations up to limits set
forth in the WMX Guaranty;
WHEREAS, upon payment by WMX of any of the obligations
pursuant to the WMX Guaranty, WMX shall be entitled, to the extent of such
payment, to seek reimbursement from the Borrowers under applicable principles
of subrogation and under that certain reimbursement agreement dated as of the
date hereof between WMX and the Borrower (the "Reimbursement Agreement");
WHEREAS, the Borrowers have granted to WMX, in order to secure
their respective reimbursement obligations with respect to
<PAGE> 2
payments by WMX under the WMX Guaranty, a security interest in substantially
all of their personal property; and
WHEREAS, the Administrative Agent and the Issuing and Paying
Agent, each on behalf of itself and the other Lender Parties, and WMX desire to
set forth certain agreements, rights and interests with respect to and in
connection with their respective interests with respect to the Borrowers and
their security interests and liens in and upon the "Collateral" (as defined
below).
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Administrative Agent, the
Issuing and Paying Agent and WMX hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Agent" shall means either the Administrative Agent or the
Issuing and Paying Agent.
"Business Day" means any day on which banks are not required
or authorized to close in New York, New York, Chicago, Illinois or Pittsburgh,
Pennsylvania.
"Claim" shall mean either the Lenders' Claim or the WMX Claim,
as the case may be.
"Collateral" shall mean all property and interests in property
now owned or hereafter acquired by the Borrowers in or upon which a security
interest, lien or mortgage has been or is hereafter granted to the Issuing and
Paying Agent or any of the other Lender Parties under any of the Lender
Documents, or WMX under any of the WMX Documents, or, in each case, under any
other documents, instruments or writings executed by either Borrower and
delivered to the Issuing and Paying Agent, any other Lender Party or WMX in
connection therewith.
"Enforcement" shall mean, collectively or individually, any
demand for payment or acceleration of the indebtedness of the Borrowers owing
to the Lender Parties or WMX, as the case may be, repossession of any of the
Collateral, exercise of any set- off rights, or commencement of judicial
enforcement of any of the rights and remedies under the Lender Documents, the
WMX Documents, any related agreements or applicable law.
"Enforcement Notice" shall mean a written notice delivered
pursuant to Section 2.01 hereof at a time when a Lender Default or a
Reimbursement Default has occurred and is continuing, announcing the intent of
the party delivering such notice to commence Enforcement, which notice shall
(i) if given
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<PAGE> 3
by either Agent, state that a Lender Default has occurred and is outstanding,
or if given by WMX, state that a Reimbursement Default has occurred and is
outstanding, (ii) set forth the current balance of the Lenders' Claim or the
WMX Claim, as applicable, and (iii) request the current balance of the other
Claim.
"Enforcement Stay Period" shall mean, with respect to any
Enforcement Notice, a period of time beginning on the date of receipt of such
Enforcement Notice by the intended recipients thereof, and ending at the close
of business on the 10th Business Day thereafter, or on such earlier date as the
Agents and WMX may agree.
"Lender Default" shall mean an "Event of Default" (as defined
in the Credit Agreement).
"Lender Documents" shall mean the "Transactions Documents" (as
defined in the Credit Agreement).
"Lender Group" means each of (a) the Lender Parties and (b)
WMX.
"Lenders' Claim" shall mean all of the "Obligations" (as
defined in the Credit Agreement) of the Borrowers to the Lender Parties,
including, but not limited to, all outstanding credit extended by the Lender
Parties to or for the benefit of the Borrowers at any time in connection with
the Lender Documents, any interest thereon, any fees and expenses in connection
therewith, and any costs or expense of collection or enforcement, including
reasonable attorneys' and paralegals' fees and costs.
"Lenders' Pro Rata Share" shall mean, with respect to any
proceeds of Collateral, payments, or amounts received by exercise of any
set-off, a fraction calculated at the time such proceeds arise or such payments
or amounts are received, but prior to the application thereof to the Lenders'
Claim or the WMX Claim, the numerator of which is the amount of the Lenders'
Claim, and the denominator of which is the sum of the Lenders' Claim and the
WMX Claim.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Reimbursement Default" shall mean any failure by the
Borrowers to reimburse WMX with respect to the WMX Claim under applicable
principles of subrogation or in accordance with the terms of the Reimbursement
Agreement.
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<PAGE> 4
"Sale Notice" shall mean a written notice delivered a any time
following the expiration of an Enforcement Stay Period by either Agent to WMX
or by WMX to the Agents, as the case may be, stating the intent of the party
delivering such notice to conduct either a public or private sale of all or a
portion of the Collateral, which notice shall, in reasonably sufficient detail,
(i) specify the time and place of such sale, (ii) indicate whether such sale is
a public or private sale, and (iii) identify the Collateral which will be the
subject of such sale.
"WMX Claim" shall mean, at any time, the outstanding claim of
WMX against the Borrowers at such time, under applicable legal or equitable
principles of indemnity or subrogation or under the Reimbursement Agreement
between WMX and the Borrowers, following payment by WMX under the WMX Guaranty,
together with any costs or expenses of collection or enforcement, including
reasonable attorneys, and paralegals' fees and costs; provided, however, that
if for any purpose hereunder the amount of the WMX Claim is to be determined
prior to the time a payment is made under the WMX Guaranty, or at any time that
a partial draw has been made on the Guaranty and further amounts may be drawn
under the Guaranty, the amount of the WMX Claim shall be deemed to be equal to
the then applicable WMX Guaranty Cap.
"WMX Documents" shall mean the Reimbursement Agreement, that
certain Security Agreement between the Borrowers and WMX dated as of the date
hereof, and that certain Pledge Agreement between OHM and WMX dated as of the
date hereof.
"WMX Guaranty Cap" shall mean, at any time, the then
applicable "Guaranteed Amount" under and as defined in the WMX Guaranty, or, if
WMX's liability under the WMX Guaranty shall have been limited pursuant to
Section 3(c) of the WMX Guaranty, such lesser amount to which such liability
shall have been so limited.
"WMX' Pro Rata Share" shall mean, with respect to any proceeds
of Collateral, payments, or amounts received by exercise of any set-off, a
fraction, calculated at the time such proceeds arise or such payments or
amounts are received, but prior to the application thereof to the Lenders'
Claim or the WMX Claim, the numerator of which is the amount of the WMX Claim,
and the denominator of which is the sum of the Lenders' Claim and the WMX
Claim.
SECTION 2. Intercreditor Agreement.
2.01. Enforcement Notices; Enforcement Stay Period;
Enforcement. Before commencing Enforcement against either Borrower, the Agents
shall deliver an Enforcement Notice to WMX. Before commencing Enforcement
against either Borrower, WMX shall deliver an Enforcement Notice to the Agents
with a copy to the Borrowers. None of the Lender Parties shall commence
Enforcement
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<PAGE> 5
with respect to any Lender Default referenced in an Enforcement Notice given by
the Agents during the Enforcement Stay Period with respect to such Enforcement
Notice, provided that during such Enforcement Stay Period, demand for payment
may be made, the maturity of any portion of the Lender's Claim may be
accelerated, and any commitment to extend credit pursuant to the Credit
Agreement may be terminated. WMX shall not commence Enforcement with respect
to any Reimbursement Default referenced in an Enforcement Notice given by WMX
during the Enforcement Stay Period with respect to such Enforcement Notice
provided that such Enforcement Stay Period, demand for payment may be made.
Notwithstanding the foregoing, the Lender Parties and WMX may each commence
Enforcement without giving a prior Enforcement Notice or prior to the
expiration of an Enforcement Stay Period if a petition is filed by or against
either Borrower for relief under title 11 of the United States Code, as amended
from time to time, or under any similar state statute. Each Lender Group may
join with the other Lender Group in such other Lender Group's Enforcement.
The Agents and WMX each agree to use good faith efforts to
cooperate with respect to any proposed or continuing Enforcement in order to
maximize the amount of proceeds obtained therefrom. The Agents and WMX agree
to exchange, upon request, information regarding the Collateral (including, but
not limited to, appraisals and third party offers to purchase, or inquiries as
to, the Collateral). Each Lender Group agrees to use its best efforts to
notify the other Lender Group, prior to incurring any material expense in
connection with Enforcement, or with any appraisal of or evaluation of the
Collateral.
2.02. Sale Notice. If either Lender Group intends to
conduct a public or private sale of any of the Collateral, then such Lender
Group shall provide a Sale Notice with respect to such Collateral being sold.
To be effective, such Sale Notice must be delivered in one of the manners set
forth in Section 3.01 hereof, with an actual or deemed receipt date (pursuant
to the provisions of Section 3.01) at least ten (10) days prior to such
proposed sale.
2.03. The Collateral; Distribution of Proceeds of
Collateral. The Agents and WMX each acknowledge and agree that the Borrowers
have, pursuant to the Lender Documents and the WMX Documents, granted liens and
security interests in all of the Collateral to both the Issuing and Paying
Agent (for the benefit of the Lenders) and WMX. To the extent that either
Agent or WMX receives at any time while a WMX Claim is outstanding, or at any
time after the obligations under the Credit Agreement have become due by their
terms at maturity or the Administrative Agent has accelerated the maturity of
the obligations under the Credit Agreement and terminated the Banks' agreement
to lend under the Credit Agreement, whether or not a payment has been made by
WMX under the WMX Guaranty, proceeds of any Collateral, or payments
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<PAGE> 6
in respect of the WMX Claim or the Lenders' Claim (including any amounts
received by exercise of set-off), such proceeds or payments (net of the
reasonable costs of enforcement and collection) shall be held in trust (until
distributed or retained as set forth below) and shall be promptly paid (or
retained) as follows:
(a) The Lenders' Pro Rata Share of such net
proceeds or payments shall be paid to (or retained by) the Agents; and
(b) WMX' Pro Rata Share of such net proceeds or
payments shall be paid to (or retained by) WMX.
Amounts paid to or retained by the Agents pursuant to clause (a) above shall be
applied in accordance with the Lender Documents, and amounts paid to or
retained by WMX pursuant to clause (b) above shall be applied in accordance
with the WMX Documents; provided, that any amounts so paid to or retained by
WMX prior to WMX's having made payment under the WMX Guaranty shall be held by
WMX as cash collateral for the Borrowers' contingent obligations under the
Reimbursement Agreement. By its consent hereto, each of the Borrowers consents
to WMX' so holding or retaining any such proceeds as cash collateral, agrees
that such cash collateral need not be segregated, and agrees that WMX may apply
such cash collateral to the Borrowers' obligation to reimburse WMX for any
payment made by WMX under the WMX Guaranty.
Upon the Lenders' receipt of payment in full in cash
(including any amounts received by exercise of any set-off) of the Lenders'
Claim while the WMX Claim is still outstanding, all further proceeds of
Collateral shall be paid to or retained by WMX and applied toward satisfaction
of the WMX Claim, and upon payment in full in cash (including amounts received
by exercise of any set-off) of the WMX Claim while the Lenders, Claim is still
outstanding, all further proceeds of Collateral shall be paid to or retained by
the Agents in satisfaction of the Lenders' Claim. If both the Lenders' Claim
and the WMX Claim shall have been paid in full (in cash), all further proceeds
of Collateral shall be paid to the Borrowers or as otherwise required by law.
2.04. Invalidated Payments. To the extent that any
payments on the Lenders' Claim or the WMX Claim, or any application of any
proceeds of Collateral to the reduction of the Lenders' Claims or the WMX
Claim, are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other
Person under any bankruptcy law, state or federal law, common law, or equitable
cause, then, to the extent of such payment or proceeds application, the
Lenders' Claim or the WMX Claim, or part thereof, as the case may be, intended
to be satisfied shall be revived and continue in full force and effect as if
such payments or proceeds had not been received.
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<PAGE> 7
2.05. Additional Collateral. To the extent that either
Agent, any other Lender Party or WMX is granted a lien upon or security
interest in any additional real or personal property to secure the repayment or
performance of the Lenders' Claim or the WMX Claim, such additional collateral
shall be deemed Collateral hereunder, subject to all of the terms and
provisions hereof.
2.06. Notice of Defaults. (a) The Agents and WMX each
agree to use their good faith efforts to give to the other copies of any notice
of the occurrence or existence of a Lender Default or a Reimbursement Default,
as applicable, sent simultaneously with the sending of such notice to the
Borrowers, but the failure to do so shall not affect the validity of any such
notice to the Borrowers or create a cause of action against the party failing
to give such notice or create any claim or right on behalf of any third party.
The sending of any such notice by or on behalf of a Lender Group shall not give
the other Lender Group any obligation or right to cure such Lender Default or
Reimbursement Default, as applicable.
(b) WMX agrees to give to each of the Agents notice of
any default or event of default (which continues beyond any applicable grace
period) under any indebtedness of WMX with a principal amount of $50,000,000 or
more, or under any of the documents executed in connection with any such
indebtedness, such notice to be given within ten (10) days after WMX has notice
of any such default or event of default, provided, however, that WMX shall have
no liability to the Lender Parties for failure to give such notice with respect
to indebtedness of WMX with a principal amount of less than 5% of the
stockholders' equity of WMX.
2.07. Agency for Perfection. The Agents hereby appoint
WMX, and WMX hereby appoints each of the Agents, as agent for purposes of
perfecting their respective security interests in Collateral. In the event any
party hereto obtains possession of any Collateral, any proceeds arising
therefrom shall be applied in accordance with Section 2.03 above. Without
limiting the generality of the foregoing, the Issuing and Paying Agent hereby
agrees that it shall hold the stock certificates evidencing the issued and
outstanding stock pledged pursuant to the "Pledge Agreement" (as defined in the
Credit Agreement) as bailee for WMX for purposes of perfecting WMX's lien with
respect to such stock as granted under the WMX Documents. Upon indefeasible
payment in full in cash of the Lenders' Claim, the Issuing and Paying Agent
hereby agrees to deliver the certificates evidencing such stock to WMX, unless
the Issuing and Paying Agent has received prior written notice from WMX that
the WMX Claim has been paid in full. By its consent hereto, each of the
Borrowers hereby authorizes the Issuing and Paying Agent to so deliver the
certificates evidencing such stock to WMX upon indefeasible payment in full in
cash of the Lenders' Claim and the Issuing and Paying Agent shall have no
liability to either Borrower with respect to such
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<PAGE> 8
delivery. Notwithstanding the foregoing, neither Lender Group makes any
representation to the other Lender Group with respect to the perfection or
priority of its security interests in any of the Collateral, and neither Lender
Group shall be liable to the other for failure to properly perfect its security
interests in any of the Collateral.
SECTION 3. Miscellaneous.
3.01. Notices. All notices and other communications
required or desired to be served, given or delivered hereunder shall be in
writing or by a telecommunications device capable of creating a printed record
and recording the date and time of transmission, and shall be addressed to the
party to be notified as follows:
if to WMX, at:
WMX Technologies, Inc.
3003 Butter field Road
Oak Brook, Illinois 60521
Attention: Chief Financial Officer
Telecopy: (708) 572-1340
if to the Issuing and Paying Agent, at
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Service Industries
Telecopy: (312) 828-1974
if to the Agent, at
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
200 South Wacker Drive
31st Floor
Chicago, Illinois 60606
Attention: Emily Rosenstock
Vice President
Telecopy: (312) 993-1050
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall
be deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mails, with proper postage prepaid; (ii) upon
delivery thereof if delivered by hand to the party to be notified; (iii) one
day following delivery thereof to a reputable overnight courier service, with
delivery charges prepaid; or (iv) upon confirmation of receipt thereof if
transmitted by a telecommunications device.
-8-
<PAGE> 9
3.02. Contesting Liens or Security Interests. No Lender
Party shall contest the validity, perfection, priority or enforceability of any
lien or security interest granted by either Borrower to WMX, or petition any
court to equitably subordinate the WMX Claim, and WMX shall not contest the
validity, perfection, priority or enforceability of any lien or security
interest granted by either Borrower to any Lender Party or petition any court
to equitably subordinate the Lenders' Claim. All parties agree all future
security interests granted in any of the Collateral during the term of this
Intercreditor Agreement are subject to the terms of this Intercreditor
Agreement.
3.03. No Additional Rights for Borrower or Other Parties
Hereunder. This Agreement sets forth certain rights and obligations of the two
Lender Groups as between themselves, and is solely for their benefit. In no
event shall the Borrowers or any third party obtain any rights with respect to
any Lender Party or WMX as a result of this Agreement. Without limiting the
generality of the foregoing, if the Agents or WMX shall fail to comply with the
terms of this Agreement, the Borrowers agree that they shall not use such
failure as a defense to any Enforcement under the Lender Documents and/or the
WMX Documents nor assert such failure as a counterclaim or basis for set-off or
recoupment of any kind or nature.
3.04. Independent Credit Investigations. Neither Lender
Group, nor any of the directors, officers, agents or employees of any member of
either Lender Group, shall be responsible to the other Lender Group or to any
other Person for either Borrower's solvency, financial condition or ability to
repay the Lenders' Claim or the WMX Claim, or for statements of either
Borrower, oral or written, or for the validity, sufficiency or enforceability
of the Lenders' Claim or the WMX Claim, the Lenders' Documents, the WMX
Documents, or any liens or security interests granted by either Borrower to any
Lender Party or WMX in connection therewith. Each Lender Group has entered
into its respective financing agreements with the Borrowers based upon its own
independent investigation, and makes no warranty or representation to, nor does
it rely upon any warranty or representation of, the other Lender Group with
respect to matters identified or referred to in this Section 3.04.
3.05. Amendments to Financing Arrangements; Release of
Collateral. Each Lender Group, at any time and from time to time, may enter
into such agreement or agreements with either Borrower as such Lender Group may
deem proper, extending the time of payment of or renewing or otherwise
altering, in accordance with the terms of such documents, the terms of the
Lender Documents (in the case of the Lender Parties) or the WMX Documents (in
the case of WMX) or affecting the security underlying any or all of the
Lenders' Claim (in the case of the Lender Parties) or the WMX Claim (in the
case of WMX), and may
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<PAGE> 10
exchange, sell, release, surrender or otherwise deal with any such security,
without in any way thereby impairing or affecting this Agreement. The Agents
and WMX shall each use its good faith efforts to notify the other of any
amendment of or modification to the Lender Documents or the WMX Documents, as
the case may be, but the failure to do so shall not create a cause of action
against the party failing to give such notice or create any claim or right on
behalf of any third party. The Agents and WMX shall, upon request of the
other, provide copies of all such modifications or amendments and copies of all
other documentation relevant to the Collateral hereunder.
3.06. Amendments. All modifications or amendments of this
Agreement must be in writing and duly executed by an authorized officer of each
party hereto to be binding and enforceable.
3.07. Term. This Agreement shall be effective upon the
execution hereof by the parties hereto, and shall continue in effect and may
not be revoked by any, of the parties hereto prior to the earliest of (a) the
indefeasible payment in full in cash of the Lenders' Claims and the termination
of the Lender Documents, (b) the indefeasible payment in full in cash of the
WMX Claim and the termination of the WMX Guaranty and the WMX Documents, and
(c) the termination of the WMX Guaranty in accordance with its terms without
the WMX Guaranty having been drawn on. The Agreement shall terminate upon the
earlier to occur of (a), (b) and (c) above, provided that the provisions of the
last paragraph of Section 2.03 shall survive such termination.
3.08. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of each of the parties hereto, but does not otherwise create, and shall not be
construed as creating, any rights enforceable by any Person other than the two
Lender Groups.
3.9. Governing Law. This Agreement shall be governed as
to validity, interpretation, enforcement and effect by the laws (including
Section 5-1401 of the General Obligations Law, but otherwise without regard to
conflicts of law principles) and decisions of the State of New York.
3.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
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<PAGE> 11
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
CITICORP USA, INC., as
Administrative Agent
By:______________________________
Title:
BANK OF AMERICA ILLINOIS, as
Issuing and Paying Agent
By:______________________________
Title:
WMX TECHNOLOGIES, INC.
By:______________________________
Title:
By:______________________________
Title:
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<PAGE> 12
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges and agrees to the foregoing terms
and provisions. By executing this Agreement, each of the undersigned agrees to
be bound by the provisions hereof as they relate to the relative rights of the
Lender Parties and WMX as between themselves, and in the event of any conflict
or inconsistency between the terms of this Agreement and the Lender Documents
or the WMX Documents (or any such other documents as the case may be), the
terms of this Agreement shall govern. Each of the undersigned further agrees,
as provided in Section 3.03 of this Agreement, that the terms of this Agreement
shall not give such undersigned any rights against any Lender Party or WMX, and
agrees that this Agreement may be amended or modified by the Lender Parties and
WMX without the consent of the undersigned.
OHM CORPORATION
By:______________________________
Title:
OHM REMEDIATION SERVICES CORP.
By:______________________________
Title:
Dated as of: May 31, 1995
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<PAGE> 1
Exhibit 10(i)
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Agreement") is made and entered into this 30th
day of May, 1995 by and among OHM Corporation, an Ohio corporation ("OHM"), and
WMX Technologies, Inc., a Delaware corporation ("WMX").
WHEREAS, OHM, Rust International Inc. and WMX have entered into a Standstill
and Non-Competition Agreement, dated the date hereof (the "Standstill
Agreement"), providing for certain agreements with respect to the ownership and
voting by WMX and its affiliates of OHM Common Stock and other matters after
the date hereof; and
WHEREAS, WMX is willing to guarantee certain indebtedness of OHM in exchange
for a warrant to purchase 700,000 shares of OHM Common Stock (the "Warrant");
NOW, THEREFORE, in consideration of the agreements, rights, obligations, and
covenants contained herein, OHM and WMX hereby agree as follows:
1. GUARANTEE. (a) WMX hereby agree to issue from time to time, for a period
of five years following the Closing, at the direction of and for the benefit of
OHM as determined by a majority of the Other Directors (as defined in the
Standstill Agreement), a guaranty or guarantees, as the case may be, of the
indebtedness of OHM and/or its subsidiaries outstanding from time to time in an
aggregate amount not to exceed the Guaranteed Amount (as defined in Section
1(b) hereof), upon the satisfaction of the following conditions in each
instance a guaranty is issued:
(i) the form of each such guarantee shall be reasonably satisfactory to
WMX and the Independent Directors (as defined in the Standstill Agreement;
(ii) OHM shall execute and deliver to WMX a reimbursement agreement, in
form and substance satisfactory to WMX, obligating OHM to reimburse WMX for
any and all payments made or obligations incurred by WMX under any such
guarantees (the "Reimbursement Obligations");
(iii) if required by WMX in its sole discretion and subject to clause (v)
below, OHM shall grant WMX a perfected first priority mortgage, lien or
security interest in such collateral owned by OHM (the "Collateral") as WMX
shall request to secure OHM's Reimbursement Obligations;
<PAGE> 2
(iv) OHM shall execute and deliver such mortgages, security agreements and
other documents, in form and substance reasonably satisfactory to WMX, and
shall take such other action, as WMX shall reasonably request to perfect its
mortgage, lien or security interest in the Collateral;
(v) in the event any of the Collateral requested by WMX is subject to a
prior mortgage, lien, security interest, negative pledge or other
encumbrance (the "Prior Liens"), OHM shall cause the holders of the
indebtedness secured by such Prior Liens to execute and deliver to WMX an
intercreditor agreement, in form and substance reasonably satisfactory to
WMX, the effect of which is to provide WMX with a security interest, lien,
mortgage or negative pledge in or with respect to any such Collateral pari
passu with such Prior Liens upon any payment made by WMX under any such
guaranty; and
(vi) OHM shall execute and deliver such other documents, certificates and
opinions relating to such Guaranty as WMX may reasonably request.
(b) As used herein, the term "Guaranteed Amount" shall mean $62,000,000 as
of the Closing Date and thereafter shall be increased from time to time by an
amount equal to the product of (i) $13,000,000, times (ii) a fraction, (A) the
numerator of which shall be the number of shares of OHM Common Stock purchased
by WMX or its affiliates upon exercise of all or any portion of the Warrant (as
hereinafter defined) or, if WMX shall sell, assign or transfer all or any part
of the Warrant to any person other than an affiliate, the number of shares of
OHM Common Stock underlying the Warrant (or portion thereof) which are sold,
assigned or transferred, but not more in the aggregate (taking into account all
prior adjustments as a result of any exercise or sale of any portion of the
Warrant) than 700,000 and (B) the denominator of which shall be 700,000.
2. WARRANT. Simultaneously herewith, OHM shall issue to WMX a warrant,
exercisable for a period of five years from the date hereof, to purchase
700,000 shares of OHM Common Stock at an exercise price of $15.00 in the form
attached hereto as Exhibit A.
3. MODIFICATION; WAIVER. This Agreement may be modified in any manner and at
any time by written instrument executed by the parties hereto. Any of the
terms, covenants, and conditions of this Agreement may be waived at any time by
the party entitled to the benefit of such term, covenant, or condition.
4. PARTIES IN INTEREST; ASSIGNMENT. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the
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<PAGE> 3
rights, interests, and obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
Nothing in this Agreement, whether expressed or implied, shall be construed to
give any person other than the parties hereto any legal or equitable right,
remedy, or claim under or in respect of this Agreement.
5. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall constitute one and the same instrument.
6. HEADINGS. The article and section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
7. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Ohio applicable to contracts
made and to be performed therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
OHM CORPORATION
By /s/ Randall M. Walters
------------------------------
Name: Randall M. Walters
Title: Vice President
WMX TECHNOLOGIES, INC.
By /s/ Linda R. Witte
------------------------------
Name: Linda R. Witte
Title: Vice President
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<PAGE> 1
Exhibit 10(j)
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement, dated as of May 31, 1995, among WMX
Technologies, Inc., a Delaware corporation (the "Guarantor"), OHM Corporation,
an Ohio corporation ("OHM"), and OHM Remediation Services Corp., an Ohio
corporation ("Remediation") (and, together with OHM, collectively the
"Borrowers" and individually a "Borrower"),
RECITALS:
WHEREAS, the Borrowers are parties to that certain Revolving Credit
Agreement dated as of May 31, 1995 (as amended and supplemented from time to
time, the "Credit Agreement") among the Borrowers, Citicorp USA, Inc., as
Administrative Agent (the "Agent"), Bank of America Illinois, as Issuing and
Paying Agent and Co-Agent (the "Paying Agent") and the financial institutions
from time to time party thereto (collectively, with the Agent and the Paying
Agent, the "Lenders" and individually a "Lender"); and
WHEREAS, Rust International Inc. ("Rust"), a subsidiary of the
Guarantor, owns approximately 37% of the outstanding common stock of OHM; and
WHEREAS, the Lenders have required as a condition to the entry by the
Borrowers and the Lenders in and to the Credit Agreement that the Guarantor
execute and deliver that certain Guaranty dated as of May 31, 1995 (as amended
and supplemented from time to time, the "Guaranty") by the Guarantor in favor
of the Lenders pursuant to which the Guarantor has guaranteed the prompt and
complete repayment of the Obligations (as defined in the Guaranty) subject to
the limitations set forth in the Guaranty; and
WHEREAS, the Guarantor has agreed to execute and deliver guarantees
and OHM has issued certain warrants for the purchase of common stock of OHM
pursuant to the Guarantee Agreement dated May 31, 1995 by and between OHM and
the Guarantor entered into pursuant to the Reorganization Agreement; and
WHEREAS, the Borrowers desire to execute and deliver this
Reimbursement Agreement; and
WHEREAS, the obligations of the Borrowers under and pursuant to this
Reimbursement Agreement are secured under and pursuant to the Security
Documents; and
WHEREAS, the Lenders and the Guarantor each desire to execute and
deliver that certain Intercreditor Agreement dated as of May 31, 1995 (the
"Intercreditor Agreement") by and among the Agent, the Paying Agent and the
Guarantor in order to set forth certain agreements, rights and interests with
respect to and in connection with their respective interests with respect to
the Borrowers as well as their respective security interests in and liens on
certain collateral specified therein;
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
REIMBURSEMENT
SECTION 1.01 AGREEMENT TO REIMBURSE GUARANTOR. (a) Reimbursement. The
Borrowers absolutely and unconditionally agree, jointly and severally, to
reimburse the Guarantor immediately on demand for each payment made by the
Guarantor following a written demand under the Guaranty ("Guaranty Payments") by
either or both of the Agent or the Paying Agent by paying to the Guarantor as
provided herein an amount equal to the amount of such Guaranty Payment (a
"Reimbursement Payment"). Payment shall be made by the Borrowers upon receipt
of written demand for payment from the Guarantor setting forth the amount due
and owing but without any need of further documentation. A copy of such written
demand for payment shall be given to OHM addressed to "Independent Directors" in
the manner set forth in Section 5.08 hereof for notice to either Borrower. Any
defects or omissions regarding such copy of written demand for payment to
"Independent Directors" will not terminate or modify in any way the Borrowers'
obligations pursuant to this Agreement.
Each Reimbursement Payment to be made by the Borrowers hereunder shall
be made in lawful money of the United States of America by wire transfer of
immediately available funds to Mellon Bank, N.A. Pittsburgh, Pennsylvania,
A.B.A. Number 043000261, for credit to the account of the Guarantor, Account
Number: 1979409 (or to such other bank or account as the Guarantor may specify
in writing).
If the Borrowers fail to pay any amount payable by the Borrowers
hereunder when due (including, without limitation, accrued but unpaid
interest), such amount shall bear interest (computed on the basis of a 360 day
year and actual days elapsed) from the due date thereof until paid in full, at
a rate per annum equal to the lesser of (i) the sum of the Prime Rate from time
to time in effect plus 2% or (ii) the maximum non-usurious rate permitted by
applicable law, payable on demand.
(b) Obligations Absolute. The obligations of the Borrowers under
this Agreement shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances whatsoever irrespective of:
(i) any lack of validity or enforceability of any of the
Obligations, the Credit Agreement, this Agreement, any of the Security
Documents or any of the Transaction Documents;
(ii) the absence of any attempt by, or on behalf of, the
Guarantor to collect or to take any other action to enforce, all or
any part of the obligations hereunder whether from or against either
Borrower, any other guarantor of the Obligations or any other person;
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(iii) the election of any remedy by, or on behalf of, the
Guarantor with respect to all or any part of the obligations of the
Borrowers hereunder;
(iv) the waiver, consent, extension, forbearance or
granting of any indulgence by, or on behalf of, the Lenders or the
Guarantor with respect to any provision of any of the Transaction
Documents;
(v) any lack of validity or enforceability of, or any
waiver or forbearance by or on behalf of the Guarantor, of the
Guarantor's subrogation rights under or in connection with the
Guaranty, the Intercreditor Agreement or the Transaction Documents;
(vi) any amendment or waiver of or any consent to
departure from all or any of the Transaction Documents, the
Intercreditor Agreement, this Agreement or Security Agreements;
(vii) the existence of any claim, set-off, defense or other
rights which either Borrower may have at any time against the Agent,
the Paying Agent, any Lender or the Guarantor (other than the defense
of payment to the Guarantor in accordance with the terms of this
Agreement), or any other person or entity, whether in connection with
this Agreement, the Security Documents, the Transaction Documents, the
Intercreditor Agreement or any unrelated transaction;
(viii) any statement or any other document presented under
the Guaranty proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect whatsoever;
(ix) the failure of the Guarantor to take any steps to
perfect and maintain its security interest in or to preserve its
rights to, any security or collateral for the obligations of the
Borrowers hereunder;
(x) the election by, or on behalf of, the Guarantor in
any proceeding instituted under Chapter 11 of Title 11 of the United
States Code (11 U.S.C. 101 et. seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code;
(xi) the disallowance under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of the Guarantor for payment
of all or any part of the obligations of the Borrowers hereunder or
any expenses in connection herewith;
(xii) the invalidity, unenforceability or avoidance of any
obligation of the Guarantor to make any payment to the Guaranteed
Parties under the Guaranty or the failure of or waiver by the
Guarantor to contest, object to or otherwise challenge any request by
any Lender for the Guarantor to make any payment under the Guaranty;
or
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<PAGE> 4
(xiii) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of either
Borrower.
(c) Liability of the Guarantor. Each Borrower assumes all risks
of the acts or omissions of the Agent, the Paying Agent or any Lender with
respect to its use of the Guaranty. Neither the Guarantor nor any of its
officers or directors shall be liable or responsible for: (i) the use which
may be made of the Guaranty or for any acts or omissions of the Agent, the
Paying Agent or any Lender or any transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents, or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (iii) any other
circumstances whatsoever in making or failing to make payment under the
Guaranty.
The Borrowers acknowledge and agree that the Guarantor shall not in
any way be responsible and shall not bear any liability for any failure by or
on behalf of any Lender to extend credit or provide funds to either Borrower or
for any other action or inaction of any Lender under and pursuant to the Credit
Agreement or otherwise.
Except as otherwise expressly provided in this Agreement or any other
agreement between or among the parties hereto, the Guarantor shall have no
liability to the Borrowers (i) on account of making payment upon receipt of a
demand under the Guaranty or (ii) except for damages arising out of the gross
negligence or willful misconduct of the Guarantor, with respect to any other
matters pertaining hereto.
(d) Subrogation. In addition to, but not in limitation of, all of
the rights, interest and remedies of the Guarantor under this Agreement, the
Security Documents and the Intercreditor Agreement, each Borrower acknowledges
and agrees that the Guarantor shall upon and to the extent of any payment made
by the Guarantor pursuant to a claim made under the Guaranty be subrogated to,
and a beneficiary of, all of the rights and interests of the Lenders, the Agent
and the Paying Agent under and to the Credit Agreement, the Transaction
Documents and any collateral or security granted by either Borrower thereunder.
SECTION 1.02 PAYMENT OF INTEREST AND FEES. If any sum becomes payable
pursuant to this Agreement on a day which is not a Business Day, the date for
payment thereof shall be extended, without penalty, to the next succeeding
Business Day, and such extended time shall be included in the computation of
interest and fees.
SECTION 1.03 NO DEDUCTIONS. All sums payable by the Borrowers
hereunder, whether of Reimbursement Amount, interest, expenses or otherwise,
shall be paid in full, without any deduction or withholding whatsoever. In the
event that either Borrower is compelled by any present or future law, rule or
regulation to make any such deduction or withholding, such Borrower shall
nevertheless pay the Guarantor such amounts as will result in the receipt by the
Guarantor of the sum it would have received had no such deduction or withholding
been required to be made.
In furtherance of and in addition to the foregoing, each of the
Borrowers hereby waives any and all rights, whether now existing or from time
to time arising, to set off and apply any and
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all trade deposits or other accounts of the Guarantor of any kind whatsoever at
any time held by either Borrower and any other indebtedness at any time owing
by the Guarantor to or for the credit or the account of either Borrower against
any and all of the obligations of either Borrower now or hereafter owing under
this Agreement.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.01 REPRESENTATIONS AND WARRANTIES. The Borrowers represent
and warrant to the Guarantor that as of the date hereof:
(a) Existence, Power and Authority. Each Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio, has all requisite power and
authority to execute and deliver this Agreement, the Security
Documents and the other Transaction Documents to which it is a party,
to perform its obligations thereunder, and to own and operate its
properties and to carry on its business as now conducted and as
presently proposed to be conducted.
(b) Binding Agreement, Etc. The execution and delivery
and compliance with all of the provisions of this Agreement, the
Security Documents and the other Transaction Documents to which it is
a party (i) are within the corporate powers of each Borrower, (ii) do
not violate any provisions of any law or any order of any court,
regulatory or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the articles of
incorporation or By-laws of either Borrower or result in the
imposition of any liens or encumbrances on any property of either
Borrower (except as contemplated by the Security Documents) and (iii)
have been duly authorized by proper corporate action on the part of
either Borrower (no action by the stockholders of either Borrower
being required by law, by the articles of incorporation or By-laws of
such Borrower or otherwise), executed and delivered by each Borrower.
This Agreement, the Security Documents and such other Transaction
Documents constitute the legal, valid and binding obligations,
contracts and agreements of each Borrower enforceable in accordance
with their terms.
(c) Authorizations and Approvals. No authorization or
approval or other action by, and no notice to or filing (except for
filing required under any applicable Uniform Commercial Code pursuant
to the Security Documents) with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by either Borrower of this Agreement, the Guaranty or any
other Transaction Document to which it is a party.
SECTION 2.02 LIENS; MERGERS, CONSOLIDATIONS AND SALES. Each of the
Borrowers covenants and agrees with the Guarantor that so long as any amounts
may be drawn under the
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<PAGE> 6
Guaranty and thereafter, so long as any amounts remain outstanding or
obligations remain unfulfilled or unpaid under this Agreement, such Borrower
will not and will not permit any subsidiary to, directly or indirectly, unless
the Guarantor shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist
any Lien upon or with respect to any of its properties, now owned or
hereafter acquired, or assign or otherwise convey, any right to
receive income; provided, however, that the foregoing restrictions
shall not be applicable to the following:
(i) Liens granted to or held by the Guarantor pursuant to
the Security Documents;
(ii) Liens arising under the Bank Security Documents;
(iii) Customary Permitted Liens;
(iv) contracts with or for the Government, directly or
indirectly providing for advance, partial or progress payments on such
contracts or for any lien, paramount to all other liens, upon moneys
advanced or paid pursuant to such contracts, or upon any material or
supplies in connection with the performance of such contracts to
secure such payments to the Government; and liens or other evidences
of interest in favor of the Government, paramount to all other liens,
directly or indirectly, for the Government to secure indebtedness
incurred and owing to the Government in connection with any such
contracts;
(v) Liens listed on Schedule 5.02(a)(iii) to the Credit
Agreement as in effect on the date hereof (but not any increase in the
debt secured thereby or any enlargement of properties or assets
covered thereby);
(vi) Liens with respect to judgments which do not result
in a Default or Event of Default under or a breach of the Credit
Agreement;
(vii) Liens on the assets of Remediation securing
indebtedness under the Bank of Tokyo Agreement, to the extent such
indebtedness does not exceed $8,000,000 and provided that such Liens
attach only to those assets the acquisition of which was financed or
refinanced with the proceeds of such indebtedness;
(viii) Liens securing Permitted Other Indebtedness;
(ix) rights reserved to or vested in any municipality or
governmental, statutory or public authority by the terms of any
rights, power, franchise, grant, license or permit, or by any
provision of law, to terminate such right, power, franchise, grant,
license or permit or to purchase, condemn, expropriate or recapture or
to designate a purchaser of any of the property of either Borrower;
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(x) rights reserved to or vested in any municipality or
governmental, statutory or public authority to control or regulate any
property of either Borrower or to use such property in a manner which
does not materially impair the use of such property for the purpose
for which it is held by such Borrower;
(xi) rights of a common owner of any interest in real
estate, rights of way or easements held by either Borrower and such
common owner as tenants in common or through other common ownership;
(xii) zoning, planning, ordinances and municipal
regulations;
(xiii) servitudes, easement, restrictions, rights of way and
other similar rights in real or immovable property or any interest
therein, provided the same does not materially impair the use of such
property for the purposes for which it is held by either Borrower; and
(xiv) Liens on the assets of a Subsidiary at the time it
becomes a Subsidiary.
(b) Mergers, Consolidations and Sales. Be a party to any
merger or consolidation, nor sell, transfer, lease or otherwise
dispose of all or any substantial part of its property, assets or
business unless the surviving, continuing or resulting corporation (if
not a Borrower) or the corporation that purchases, leases or otherwise
acquires all or substantially all of the property, assets or business
of such Borrower (the "Surviving Company") is a solvent corporation
organized under the laws of the United States of America or any
jurisdiction thereof and expressly and unconditionally assumes the due
and punctual performance of all obligations of such Borrower hereunder
and under the Security Documents, by an instrument in writing
delivered to the Guarantor in form and substance reasonably
satisfactory to the Guarantor, which instrument shall have been
delivered to the Guarantor at the time of or prior to the consummation
of the transaction in question. No such transaction shall be
consummated unless the form and substance of such instrument shall
have been approved in writing by the Guarantor in advance of such
consummation. The Borrowers and the Surviving Company (if not a
Borrower) shall, prior to or simultaneously with such merger,
consolidation, sale, transfer, lease or other disposition, take all
such actions and execute and deliver all such agreements, documents
and instruments necessary to continue and maintain the perfection of
the liens and security interests under and pursuant to the Security
Documents for the benefit of the Guarantor and at least the same
rights with respect to the security interests in the Collateral which
the Guarantor had immediately prior to such transaction. Nothing in
this clause (b) shall constitute a release of or an agreement to
release any security interests created by any Security Document. All
liens and security interests under the Security Documents shall
survive all such transactions.
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<PAGE> 8
SECTION 2.03 FREEZE EVENTS. If at any time the aggregate of all
amounts outstanding under the Credit Agreement are less than the Guarantied
Amount, each of the Borrowers covenants and agrees with the Guarantor that,
after the occurrence of a Freeze Event, such Borrower shall not deliver either a
letter of credit application or a Notice of Borrowing (as defined in the Credit
Agreement) to the Agent, the Paying Agent or any other Lender under the Credit
Agreement unless and until the Guarantor is notified of the amount of the
Obligations outstanding following such Freeze Event in accordance with Section 3
of the Guaranty. If at any time the aggregate of all amounts outstanding under
the Credit Agreement are less than the Guarantied Amount, each of the Borrowers
further covenants and agrees that, in the event that a Freeze Event shall occur
subsequent to the delivery by such Borrower of either a letter of credit
application or a Notice of Borrowing but prior to the issuance of such letter of
credit or the making of such Advance (as defined in the Credit Agreement), such
Borrower shall terminate such letter of credit application and not accept such
Advance.
SECTION 2.04. REPORTS AND OTHER INFORMATION. Each of the Borrowers
covenants and agrees with the Guarantor that, so long as any amounts may be
drawn under the Guaranty and thereafter, so long as any amounts remain
outstanding or obligations remain unfulfilled or unpaid under the Agreement,
the Borrowers will furnish to the Guarantor all financial statements, reports,
certificates and any other information required to be delivered to any Lender
under and pursuant to the Credit Agreement. In furtherance of the foregoing,
each of the Borrowers covenants and agrees with the Guarantor that the
Borrowers shall furnish to the Guarantor all correspondence and other
information of either Borrower relating to or resulting from any default or
event of default under the Credit Agreement.
ARTICLE III
EVENTS OF DEFAULT
SECTION 3.01 EVENTS OF DEFAULT. If the Borrowers shall fail to pay
when due any amounts payable under this Agreement (herein called an "Event of
Default"), then the Guarantor, may, at its option and in addition to any right,
power or remedy permitted by law or equity, without further notice to either
Borrower except as may be required by law or the Security Documents, pursue any
action available at law or in equity, including without limitation, any actions
or remedies under and pursuant to the Security Documents.
ARTICLE IV
DEFINITIONS
SECTION 4.01 CERTAIN DEFINED TERMS. Capitalized terms when used in
this Agreement shall have the same meanings as defined in the Credit Agreement
or the Guaranty, unless otherwise defined herein. In addition, as used in this
Agreement, the following terms shall have the respective meanings set forth
below (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"AGENT" shall have the meaning set forth in the Recitals hereto.
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"AGREEMENT" shall mean this Reimbursement Agreement as the same may be
amended, supplemented or otherwise modified.
"BANK OF TOKYO AGREEMENT" shall have the meaning ascribed thereto in
the Credit Agreement.
"BANK SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement (as defined in the Credit Agreement), the Pledge Agreement (as
defined in the Credit Agreement) and all other agreements, documents and
instruments executed and delivered in connection therewith, as the same may be
amended, supplemented or otherwise modified from time to time..
"BORROWER AND BORROWERS" shall have the meaning set forth in the
Recitals hereof.
"BUSINESS DAY" shall mean any day on which banks are not required or
authorized to close in New York, New York, Chicago, Illinois or Pittsburgh,
Pennsylvania.
"COLLATERAL" shall mean the Collateral (as defined in the Security
Agreement) and the Pledged Collateral (as defined in the Pledge Agreement).
"CONSOLIDATED" refers to the consolidation of the accounts of the
Borrowers and their Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation.
"CREDIT AGREEMENT" shall have the meaning set forth in the Recitals
hereof.
"CUSTOMARY PERMITTED LIENS" shall have the meaning ascribed thereto in
the Credit Agreement.
"EVENT OF DEFAULT" shall have such meaning as is ascribed to it in
Section 3.01.
"FREEZE EVENT" shall have the meaning ascribed thereto in the Guaranty.
"GOVERNMENT" means the government of any country or sovereign state,
or of any state, province, municipality or other political subdivision thereof,
or any department, agency, public corporation or other instrumentality of any
of the foregoing.
"GUARANTIED AMOUNT" shall have the meaning ascribed thereto in the
Guaranty.
"GUARANTY" shall have the meaning set forth in the Recitals hereof.
"GUARANTY PAYMENTS" shall have the meaning set forth in Section 1.01
hereof.
"GUARANTOR" shall have the meaning set forth in the Recitals hereof.
"INTERCREDITOR AGREEMENT" shall have the meaning set forth in the
Recitals hereof.
"LENDERS" shall have the meaning set forth in the Recitals hereof.
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"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights of way, zoning restrictions and the like),
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing and the filing
of any financing statement (other than a financing statement filed by a "true"
lessor pursuant to Section 9-408 of the Uniform Commercial Code) naming the
owner of the asset to which such Lien relates as debtor, under the Uniform
Commercial Code or other comparable law of any jurisdiction.
"OHM" shall have the meaning set forth in the Recitals hereof.
"OBLIGATIONS" shall have the meaning set forth in Section 1 of the
Guaranty.
"PAYING AGENT" shall have the meaning set forth in the Recitals hereto.
"PERMITTED OTHER INDEBTEDNESS" shall have the meaning ascribed thereto
in the Credit Agreement.
"PERSON" shall mean an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association,
joint venture or other entity or a government or any political subdivision or
agency thereof.
"PLEDGE AGREEMENT" shall mean that certain Pledge Agreement dated as
of May 31, 1995 from OHM to the Guarantor as the same may be amended or
supplemented from time to time in accordance with the terms and provisions
thereof.
"PRIME RATE" shall mean the rate of interest publicly announced from
time to time by Bank of America Illinois, Chicago, Illinois, as its Prime Rate
(or its equivalent) for United States Dollar loans. Any change in the Prime
Rate shall take effect on the day specified in the public announcement of such
change.
"REMEDIATION" shall have the meaning set forth in the Recitals hereof.
"REORGANIZATION AGREEMENT" shall mean that certain Agreement and Plan
of Reorganization dated December 5, 1994 by and among OHM Rust Remedial
Services, Inc., Enclean Environmental Services Group, Inc., Rust Environmental,
Inc. and Rust International, Inc., as the same may be amended, supplemented or
otherwise modified from time to time.
"SECURITY AGREEMENT" shall mean that certain Security Agreement dated
as of May 31, 1995 among the Borrowers and the Guarantor as the same may be
amended or supplemented from time to time in accordance with the terms and
provisions thereof.
"SECURITY DOCUMENTS" shall mean the Security Agreement and the Pledge
Agreement, together with any and all other agreements, documents and
instruments heretofore or hereafter
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securing the Borrowers' obligations under this Agreement, including, without
limitation, any UCC-1 financing statements filed pursuant to or in connection
therewith.
"SUBSIDIARY" shall mean any Person the financial statements of which
are Consolidated with those of either Borrower.
"TRANSACTION DOCUMENTS" shall mean the Guaranty, the Credit Agreement,
the Security Documents, this Agreement, the Bank Security Documents and any
other document, agreement or instrument executed and/or delivered in connection
therewith.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 INDEMNITY, COSTS, EXPENSES AND TAXES. The Borrowers
hereby jointly and severally agree to indemnify and hold harmless the Guarantor
and each of its affiliates and their respective directors, officers, employees
and agents from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, reasonable fees and disbursements of
counsel) which may be incurred by or asserted against any such indemnified party
in connection with or arising out of any investigation, litigation or
proceeding, whether or not such indemnified party is a party thereto, related to
any transaction or proposed transaction contemplated by the Transaction
Documents or any use of the Guaranty or any payment thereunder. The Borrowers
also hereby jointly and severally agree to indemnify and hold the Guarantor
harmless from and against, and to pay on demand, any and all reasonable fees and
expenses, if any, in connection with the enforcement or defense of the rights of
the Guarantor in connection with this Agreement, the Security Documents or the
Guaranty, or the collection of any monies due under this Agreement, the
Guaranty, the Security Documents or such other documents which may be delivered
in connection with this Agreement, the Security Documents or the Guaranty. Any
and all amounts due and owing under this Section 5.01 shall be payable by the
Borrowers upon demand by the Guarantor. Payment of all such amounts shall be
made in accordance with Section 1.01 hereof.
SECTION 5.02 SURVIVAL OF THIS AGREEMENT. All covenants, agreements,
representations and warranties (such representations and warranties being true
and correct only as of the date hereof) made in this Agreement shall survive the
issuance by the Guarantor of the Guaranty and shall continue in full force and
effect so long as the Guaranty shall be unexpired or any sums due hereunder
shall be outstanding and unpaid, regardless of any investigation made by any
person. Whenever in this Agreement the Guarantor is referred to, such reference
shall be deemed to include the successors and assigns of the Guarantor and all
covenants, promises and agreements by or on behalf of the Borrowers which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Guarantor. The rights and duties of the Borrowers, however, may
not be assigned or transferred, except as specifically provided in this
Agreement or with the prior written consent of the Guarantor, and all
obligations of the Borrowers hereunder shall continue in full force and effect
notwithstanding any assignment by either Borrower of any of its rights or
obligations under any of the Transaction Documents or the Credit Agreement or
any
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<PAGE> 12
entering into, or consent by either Borrower to, any supplement or amendment to
any of the Transaction Documents or the Credit Agreement.
SECTION 5.03 MODIFICATION OF THIS AGREEMENT. No amendment,
modification or waiver of any provision of this Agreement shall be effective
unless the same shall be in writing and signed by the Guarantor and the
Borrowers. Any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on either
Borrower in any case shall entitle either Borrower to any other or further
notice or demand in the same, similar or other circumstances.
SECTION 5.04 WAIVER OF RIGHTS BY THE GUARANTOR. No course of dealing
or failure or delay on the part of the Guarantor in exercising any right, power
or privilege hereunder or under the Guaranty or any other Transaction Document
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other
right or privilege. The rights of the Guarantor under the Guaranty and the
rights of the Guarantor under this Agreement are cumulative and not exclusive of
any rights or remedies which the Guarantor would otherwise have.
SECTION 5.05 SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 5.06 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
SECTION 5.07 CONSENT TO JURISDICTION; COUNTERCLAIMS; FORUM NON
CONVENIENS.
(a) Exclusive Jurisdiction. Except as provided in subsection (b)
of this Section 5.07, the Borrowers and the Guarantor agree that all disputes
between them arising out of or related to the relationship established between
them in connection with this Agreement, whether arising in contract, tort,
equity or otherwise, shall be resolved only by state or federal courts located
in Chicago, Illinois, but the parties acknowledge that any appeals from those
courts may have to be heard by a court located outside of Chicago, Illinois.
(b) Other Jurisdictions. The Guarantor shall have the right to
proceed against the Borrowers or their real or personal property in a court in
any location to enable the Guarantor to obtain personal jurisdiction over the
Borrowers or to enforce a judgment or other court order entered in favor of the
Guarantor.
(c) Venue; Forum Non Conveniens. Each of the Borrowers and the
Guarantor waives any objection that it may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this Section 5.07.
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<PAGE> 13
SECTION 5.08 NOTICES. All notices and other communications required or
desired to be served, given or delivered hereunder shall be in writing or by a
telecommunications device capable of creating a printed record and recording the
date and time of transmission and shall be addressed to the party to be notified
as follows:
If to the Guarantor, to: WMX Technologies, Inc.
3003 Butterfield Road
Oak Brook, IL 60521
Attention: Chief Financial Officer
Telecopy: (708) 572-1340
If to the Borrowers or
either of them, to: OHM Corporation
16406 U.S. Route 224 East
P.O. Box 551
Findlay, OH 45839-0551|
Attention: General Counsel
Telecopy: (419) 424-4985
If to the Agent or the Lenders,
or any of them, to: Citicorp USA, Inc.
c/o Citicorp North America, Inc.
200 South Wacker Drive
31st Floor
Chicago, IL 60606
Attention: Emily Rosenstock,
Vice President
Telecopy: (312) 993-1050
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall
be deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mail, with proper postage prepaid; (ii) upon
delivery thereof if delivered by hand to the party to be notified; (iii) one
(1) day following delivery thereof to a reputable overnight courier service
with delivery charges prepaid; or (iv) upon confirmation of receipt thereof if
transmitted by a telecommunications device.
SECTION 5.09 DESCRIPTIVE HEADINGS, ETC. The descriptive headings of
the several Articles, Sections and Subsections of this Agreement are inserted
for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
SECTION 5.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but both or all of
which, when taken together, shall constitute but one instrument, and shall
become effective when a set of copies hereof which, when taken together, bear
the signatures of each of the parties hereto shall be delivered to each of the
Borrowers and the Guarantor.
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<PAGE> 14
SECTION 5.11 FURTHER ASSURANCES. So long as this Agreement or the
Guaranty remains in effect or any amount is or may become due or owing to the
Guarantor hereunder, each Borrower shall execute and deliver to the Guarantor
all such documents and instruments and do all such other acts and things as may
be necessary or required by the Guarantor to enable the Guarantor to exercise
and enforce its rights under this Agreement and to realize thereon, and record
and file and re-record and refile all such documents and instruments, at such
time or times, in such manner and at such place or places, all as may be
necessary or required by the Guarantor to validate, preserve and protect the
position of the Guarantor under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective duly authorized officers as of
the date first above written.
OHM CORPORATION
By:______________________________
Name:______________________
Title:_____________________
OHM REMEDIATION SERVICES CORP.
By:______________________________
Name:______________________
Title:_____________________
WMX TECHNOLOGIES, INC.
By:______________________________
Name:______________________
Title:_____________________
By:______________________________
Name:______________________
Title:_____________________
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<PAGE> 15
Each of the undersigned hereby acknowledges receipt of a copy of this
Agreement.
Acknowledged:
CITICORP USA, INC., as
Administrative Agent
By:____________________________
Name:____________________
Title:___________________
BANK OF AMERICA ILLINOIS, as
Issuing and Paying Agent
By:____________________________
Name:____________________
Title:___________________
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<PAGE> 1
Exhibit 10(k)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of May 31, 1995 (this
"Agreement") is made by OHM CORPORATION, an Ohio corporation ("OHM"), OHM
Remediation Services Corp., an Ohio corporation ("Remediation"), a subsidiary
of OHM, and those of OHM's other subsidiaries that are parties hereto (together
with OHM and Remediation, each a "Grantor" and collectively the "Grantors") in
favor of WMX TECHNOLOGIES, INC., a Delaware corporation (the "Guarantor").
PRELIMINARY STATEMENTS:
(1) OHM, Remediation (OHM and Remediation are sometimes
hereinafter referred to collectively as the "Borrowers"), the Banks, Citicorp
USA, Inc., as Administrative Agent (the "Agent") for the Banks which are
parties to the Credit Agreement (as hereinafter defined, the "Banks") and Bank
of America Illinois, in its capacity as Issuing and Paying Agent and Co- Agent
for the Banks (the "Paying Agent"; together with the Agent and the Banks, the
"Lenders" and individually a "Lender") have entered into that certain Revolving
Credit Agreement dated as of May 31, 1995 as the same may be amended,
supplemented or otherwise modified from time to time (the "Credit Agreement").
(2) The Lenders have required as a condition to the entry
by the Borrowers and the Lenders in and to the Credit Agreement that the
Guarantor execute and deliver that certain Guaranty dated as of May 31, 1995
(as amended, supplemented or otherwise modified from time to time, the
"Guaranty") by the Guarantor in favor of the Lenders pursuant to which the
Guarantor has guaranteed the prompt and complete repayment of the Obligations
(as defined, the "Guaranty") subject to the limitations set forth in the
Guaranty.
(3) The Guarantor has required as a condition to the
entry by the Guarantor in and to the Guaranty that the Borrowers execute and
deliver that certain Reimbursement Agreement dated as of May 31, 1995 (as
amended, supplemented or otherwise modified from time to time, the
"Reimbursement Agreement") among the Guarantor and the Borrowers pursuant to
which the Borrowers covenant and agree to promptly and completely reimburse the
Guarantor for all payments made by the Guarantor under and pursuant to the
Guaranty.
(4) The Guarantor has required and the Borrowers have
agreed that the obligations of the Borrowers under and pursuant to the
Reimbursement Agreement shall be secured under and pursuant to the Security
Documents.
(5) The Guarantor and the Lenders each desire to execute
and deliver that certain Intercreditor Agreement dated as of May 31, 1995 (the
"Intercreditor Agreement") by and among the Agent, the Paying Agent and the
Guarantor in order to set forth certain agreements, rights and interests with
respect to and in connection with their respective interests with respect to
the Grantors as well as their respective security interests in and liens on
certain collateral specified therein.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to induce Guarantor to enter into the Guaranty,
the Grantors each hereby agrees as follows:
SECTION 1. Defined Terms. (a) Unless otherwise defined
herein, capitalized terms used herein shall have the meanings assigned to them
in the Reimbursement Agreement.
(b) In addition to the terms defined above, in this
Agreement the following terms shall have the meanings set forth below:
"Accounts" means, with respect to each Grantor, all of such
Grantor's now owned or hereafter acquired or arising accounts,
contract rights, and any other rights to payment for the sale or lease
of goods or rendition of services, whether or not they have been
earned by performance.
"Code" means the Uniform Commercial Code (or any successor
statute), as in effect in the State of Illinois or other applicable
jurisdiction from time to time.
"Collateral" shall have the meaning assigned in Section 2 of
this Agreement.
"Equipment" means, with respect to each Grantor, all of such
Grantor's now owned and hereafter acquired machinery, equipment,
furniture, furnishings, fixtures, trade fixtures and other tangible
personal property (except Inventory), including, without limitation,
computers, computer software, peripheral computer equipment, motor
vehicles, fork lifts, construction equipment, tools, and office
equipment, as well as all of such types of property leased by such
Grantor and all of such Grantor's rights and interests with respect
thereto under such leases (including, without limitation, options to
purchase); together with all present and future additions and
accessions thereto, replacements therefor, component and auxiliary
parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any
of the foregoing is located.
"General Intangibles" means, with respect to each Grantor, all
of such Grantor's now owned or hereafter acquired general intangibles,
choses in action and causes of action and all other intangible
personal property of such Grantor of every kind and nature (other than
Accounts), including, without limitation, all Proprietary Rights,
corporate or other business records, inventions, designs, blue-prints,
plans, specifications, trade secrets, goodwill, computer software,
customer lists, registrations, licenses, franchises, tax refund
claims, reversions of funds or any rights thereto and any other
amounts payable to such Grantor from any Plan or other employee
benefit plan, leasehold interests in real and personal property,
rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds
thereof, proceeds of insurance covering the lives of key employees on
which such Grantor is beneficiary, and any letter of credit,
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<PAGE> 3
guarantee, claim, security interest or other security held by or
granted to such Grantor to secure payment of any of the Accounts.
"Guarantor Documents" shall mean the Reimbursement Agreement,
the Security Documents and any other document, agreement or instrument
executed and/or delivered in connection therewith.
"Inventory" means, with respect to each Grantor, all of such
Grantor's now owned and hereafter acquired inventory, goods,
merchandise, work in process, spare parts and other personal property,
wherever located, to be furnished under any contract of service or
held for sale or lease, all returned goods, and materials and supplies
of any kind, nature or description which are or might be consumed in
such Grantor's businesses (except Equipment), or used in connection
with the servicing or provision of parts or supplies for or with
respect to the Equipment, and all documents of title or other
documents representing them.
"Permitted Liens" shall have the meaning assigned in Section
5(b) of this Agreement.
"Proprietary Rights" means, with respect to each Grantor, all
of such Grantor's now owned and hereafter arising or acquired:
licenses, franchises, permits, patents, patent rights, patent
applications, copyrights, works which are the subject matter of
copyrights, trademarks, service marks, trade names, trade styles,
patent, trademark and service mark applications, and all licenses and
rights related to any of the foregoing, and all other rights under any
of the foregoing, all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing, and
all rights to sue for past, present and future infringement of any of
the foregoing.
(c) Unless otherwise defined herein, terms used in
Article 9 of the Code are used herein as therein defined.
SECTION 2. Grant of Security. Each Grantor hereby grants,
pledges and assigns to the Guarantor, for the benefit of the Guarantor, a
continuing security interest in, liens on, assignment of and right of set-off
against, all of such Grantor's right, title and interest in and to the
following property, whether now owned or hereafter acquired or arising and
wheresoever located (the "Collateral"):
(i) all Accounts, contract rights, letters of credit,
chattel paper, instruments, notes, documents, and documents of title;
(ii) General Intangibles;
(iii) Inventory;
(iv) Equipment;
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<PAGE> 4
(v) all monies, securities and other property of any kind
of such Grantor in the possession or under the control of either of
the Agent, any Bank, the Paying Agent, a bailee of any of the
foregoing, or any of the foregoing's Affiliates;
(vi) all of such Grantor's deposit accounts, credits, and
balances with and other claims against the Agent, any of the Banks,
the Paying Agent or any Affiliates of the foregoing or any other
financial institution with which such Grantor maintains deposits;
(vii) all books, records and other property relating to or
referring to any of the foregoing, including, without limitation, all
books, records, ledger cards, data processing records, computer
software and other property and general intangibles at any time
evidencing or relating to any of the foregoing; and
(viii) all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing,
including, but not limited to, proceeds of any insurance policies,
claims against third parties, and condemnation or requisition payments
with respect to all or any of the foregoing.
SECTION 3. Security for Secured Obligations. This Agreement
secures the payment of (i) all obligations of the Borrowers now or hereafter
existing under the Reimbursement Agreement, and all of the other Guarantor
Documents, whether for principal, interest, fees, expenses or otherwise and (ii)
all obligations of the Grantors now or hereafter existing under this Agreement
(all such obligations of the Borrowers and other obligations of the Grantors
being collectively referred to herein as, the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts which constitute part of the Secured Obligations and would be owed
by any of the Grantors to the Guarantor under the Reimbursement Agreement and
the other Guarantor Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Grantor.
SECTION 4. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) the Grantors shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of their duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Guarantor of any of the rights hereunder shall not release the Grantors from any
of their duties or obligations under the contracts and agreements included in
the Collateral and (c) the Guarantor shall not have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement, nor shall the Guarantor be obligated to perform any of the
obligations or duties of the Grantors thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
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<PAGE> 5
SECTION 5. Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) The chief place of business and chief executive
office of such Grantor and the office where such Grantor keeps its records
concerning the Accounts, and the originals of all chattel paper that evidence
Accounts, are located at its addresses specified in Schedule A hereto.
(b) Such Grantor is the legal and beneficial owner of its
Collateral free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement or any such lien, security interest, option, charge or encumbrance
permitted pursuant to Section 3.02(a) of the Reimbursement Agreement
(collectively, the "Permitted Liens"). No effective financing statement or
other document similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Guarantor relating to this Agreement or in favor of a secured party with
respect to any Permitted Liens. The exact corporate name of such Grantor is as
set forth on the Schedule A hereto and such Grantor has no trade names and is
not doing business under or creating Accounts under any other name, in each
case, except as set forth in the Schedule A hereto. Each of the Grantors will
warrant and defend the Collateral against any claims and demands (other than
Permitted Liens) of all persons at any time claiming the same or any interest
in the Collateral adverse to the Guarantor.
(c) Subject to the rights of owners and clients with
respect to Equipment and Inventory located at project sites from time to time,
such Grantor has exclusive possession and control of its Equipment and
Inventory.
(d) This Agreement creates a valid security interest in
the Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect a first
priority security interest in the Collateral (subject, however, to Permitted
Liens) in respect of which a security interest can be perfected by filing under
the Code have been duly taken, except for the filing of one or more notices of
the assignment of Accounts pursuant to the Federal Assignment of Claims Act.
(e) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (i) for the grant by such Grantor of
the security interest granted hereby or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) for the perfection or
maintenance of the security interest created hereby (including the first
priority nature (subject to Permitted Liens) of such security interest), other
than the execution and filing of appropriate financing statements under the
Code, or (iii) for the exercise by the Guarantor of its rights and remedies
hereunder, except in each case for the filing of one or more notices of the
assignment of Accounts pursuant to the Federal Assignment of Claims Act.
(f) Such Grantor has, independently and without reliance
upon the Guarantor and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
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<PAGE> 6
SECTION 6. Further Assurances; Expenses. (a) The Grantors
agree that from time to time, at the expense of the Grantors, the Grantors will
promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that the Guarantor
may request, to perfect and protect any security interest granted or purported
to be granted hereby or to enable the Guarantor to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Grantor will: (i) after the occurrence of
an Event of Default, if any Account shall be evidenced by a promissory note or
other instrument, deliver and pledge to the Guarantor hereunder such note or
instrument duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the
Guarantor; (ii) subject to the terms of this Agreement, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Guarantor
may request, to perfect and preserve the security interest granted or purported
to be granted hereby; and (iii) file such notices and other documents under the
Federal Assignment of Claims Act as may be required from time to time with
respect to the Accounts.
(b) The Grantors hereby authorize the Guarantor to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of any
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
The Grantors agree to indemnify the Guarantor and its counsel from and against
any and all expenses, fees and other liabilities including, without limitation,
any recording and/or filing fees, taxes or other expenses relating to the
filing or recordation of financing and/or continuation statements.
(c) The Grantors will furnish to the Guarantor from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Guarantor may reasonably request, all in reasonable detail.
(d) The Grantors agree to promptly execute and deliver
any and all instruments and take such other action as may be necessary to
remove or otherwise terminate any security interests in or liens on the
Collateral (other than Permitted Liens) whether or not in existence at the time
of execution of this Agreement or whether or not known by either Grantor on the
date hereof.
SECTION 7. As to Equipment and Inventory.
(a) The Grantors shall cause the Equipment to be
maintained and preserved in good condition, repair and working order, ordinary
wear and tear excepted, and shall forthwith, or in the case of any loss or
damage to any of the Equipment as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith as are necessary or desirable to such end.
The Grantors shall promptly furnish to the Guarantor a statement respecting any
loss or damage to any of the Equipment in excess of $300,000.
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<PAGE> 7
(b) The Grantors shall pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory.
(c) The Grantors each represents and warrants to the
Guarantor that all of such Grantor's Inventory is and will be held for sale or
lease, or to be furnished in connection with the rendition of services, in the
ordinary course of such Grantor's business, and is and will be fit for such
purposes. Each Grantor will keep its Inventory in good and marketable
condition, at its own expense.
SECTION 8. Insurance. (a) The Grantors shall, at their own
expense, maintain insurance with respect to the Collateral in such amounts,
against such risks, in such form and with such insurers, as is typical for
businesses similarly situated. After an Event of Default shall have occurred
and be continuing, the Grantors shall cause each policy for property damage
insurance covering the Inventory and Equipment to provide that all insurance
proceeds in respect of loss, damage or destruction of any such Inventory or
Equipment in excess of $100,000 per occurrence or in any related series of
occurrences or $300,000, in the aggregate, in any calendar year, are to be paid
directly to the Guarantor. Such amounts shall, subject to the limitations set
forth in this subsection (a) and in subsection (c) of this Section 8 and after
deducting from such proceeds the expenses, if any, incurred by the Guarantor in
the collection or handling thereof, be returned to such Grantor, which Grantor
shall make or cause to be made the necessary repairs to or replacements of such
Inventory or Equipment. All such replacements or repairs shall be made with
materials and property of substantially as good a quality as existed before
such loss, damage or destruction, and such Grantor shall commence the
replacement or repair of such property as soon as practicable and proceed
diligently with it until completion. Plans for any such repair or replacement
shall be reasonably satisfactory to the Guarantor and shall be subject to the
reasonable approval of the Guarantor prior to the release of insurance proceeds
to the applicable Grantor.
Each such property policy covering the Equipment or Inventory
shall in addition to the foregoing (i) name the appropriate Grantor and the
Guarantor as insured parties thereunder (without any representation or warranty
by or obligation upon the Guarantor) as their interests may appear, (ii)
provide that there shall be no recourse against the Guarantor for payment of
premiums or other amounts with respect thereto, (iii) provide that at least 30
days' prior written notice of cancellation of or lapse shall be given to the
Guarantor by the insurer, and (iv) contain a clause or endorsement stating that
the interest of the Guarantor shall not be impaired or invalidated by any act
or neglect of the Grantor insured thereunder or the owner of any premises for
purposes more hazardous than are permitted by such policy. After an Event of
Default shall have occurred and be continuing, each such property policy shall
also contain the agreement by the insurer that losses thereunder shall be
payable to the Guarantor, subject to the terms and limitations set forth in the
first sentence of this Section 8, notwithstanding any action, inaction or
breach of representation or warranty by the Grantor. The Grantors shall, if so
requested by the Guarantor, deliver to the Guarantor duplicate policies of such
insurance and, as often as the Guarantor may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, the
Grantors shall, at the request of the Guarantor, duly execute and deliver
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<PAGE> 8
instruments of assignment of such insurance policies to comply with the
requirements of Section 6 and cause the insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any liability insurance
maintained by any Grantor pursuant to this Section 8 may be paid directly to
the Person who shall have incurred liability covered by such insurance.
(c) Notwithstanding anything contained herein to the
contrary, upon the occurrence and during the continuance of an Event of
Default, any loss, damage or destruction of any Inventory or Equipment in
excess of $1,000,000 in any one occurrence or in any related series of
occurrences any insurance proceeds in respect of such lost, damaged or
destroyed Equipment or Inventory shall be paid to the Guarantor and, at the
Guarantor's sole option, may be applied by the Guarantor (after deducting from
such proceeds the expenses, if any, incurred by the Guarantor in the collection
or handling thereof) as specified in Section 14(b). Notwithstanding anything
contained in this Agreement to the contrary, if any of the Grantors shall
receive any insurance proceeds which, pursuant to the terms of this Section 8,
are required to be delivered to the Guarantor, such Grantor (1) shall be deemed
to be holding such proceeds in trust for the Guarantor, (2) shall segregate
such proceeds from such Grantor's funds and (3) shall promptly upon its receipt
thereof remit such proceeds to the Guarantor in the same form as received by
such Grantor, other than for any necessary endorsements.
SECTION 9. As to Accounts. (a) Each Grantor shall keep its
chief place of business and chief executive office and the office where it
keeps its records concerning the Accounts, and the originals of all chattel
paper that evidence Accounts, at the location therefor specified in Section
5(a) or, upon 30 days' prior written notice to the Guarantor, at any other
locations in jurisdictions where all actions required by Section 6 shall have
been taken with respect to the Accounts. The Grantors will hold and preserve
such records and chattel paper and will permit the Guarantor or its
representatives at any time during normal business hours to inspect and make
abstracts from such records and chattel paper.
(b) Except as otherwise provided in this subsection (b),
the Grantors shall continue to collect, at their own expense, all amounts due
or to become due the Grantors under the Accounts. In connection with such
collections, the Grantors may take such action as the Grantors or the Guarantor
may deem necessary or advisable to enforce collection of the Accounts;
provided, however, that the Guarantor shall have the right at any time, upon
the occurrence and during the continuance of an Event of Default and upon
written notice to the Grantors of its intention to do so, to notify the account
debtors or obligors under any Accounts of the assignment of such Accounts to
the Guarantor and to direct such account debtors or obligors to make payment of
all amounts due or to become due to the Grantors thereunder directly to the
Guarantor and, upon such notification and at the expense of the Grantors, to
enforce collection of any such Accounts, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as the
Grantors might have done. After receipt by the Grantors of the notice from the
Guarantor referred to in the proviso to the preceding sentence, (i) all amounts
and proceeds (including instruments) received by any Grantor in respect of the
Accounts shall be received in trust for the benefit of the Guarantor hereunder,
shall be segregated
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<PAGE> 9
from other funds of such Grantor and shall be forthwith paid over to the
Guarantor in the same form as so received (with any necessary endorsement) and
either (A) released to the applicable Grantor so long as no Event of Default
shall have occurred and be continuing or (B) if any Event of Default shall have
occurred and be continuing, applied as provided by Section 14(b), and (ii) the
Grantors shall not adjust, settle or compromise the amount or payment of any
Account, release wholly or partly any account debtor or obligor thereof, or
allow any credit or discount thereon.
SECTION 10. Transfers and Other Liens. The Grantors shall
not (i) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, any of the Collateral, except
Inventory and Equipment in the ordinary course of business and except as
otherwise expressly permitted under the terms of the Reimbursement Agreement,
or (ii) create or permit to exist any lien, security interest, option or other
charge or encumbrance upon or with respect to any of the Collateral, except for
Permitted Liens.
SECTION 11. Guarantor Appointed Attorney-in-Fact. Upon the
occurrence and during the continuance of an Event of Default, each Grantor
hereby irrevocably appoints the Guarantor as such Grantor's attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, from time to time in the Guarantor's discretion, to
take any action and to execute any instrument which the Guarantor may deem
necessary or advisable to accomplish the purposes of this Agreement (subject to
the rights of the Grantors under Section 9), including, without limitation:
(a) to obtain and adjust insurance required to be paid to
the Guarantor pursuant to Section 8,
(b) to ask, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in connection with the Collateral,
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection therewith, and
(d) to file any claims or take any action or institute
any proceedings which the Guarantor may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of the Guarantor with respect to any of the Collateral.
SECTION 12. Guarantor May Perform. If any Grantor fails to
perform any agreement contained herein, the Guarantor may itself perform, or
cause performance of, such agreement, and the expenses of the Guarantor
(including, without limitation, reasonable attorney's fees and expenses)
incurred in connection therewith shall be payable by the Grantors under Section
15(b).
SECTION 13. The Guarantor's Duties. The powers conferred on
the Guarantor hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession and
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<PAGE> 10
the accounting for moneys actually received by it hereunder, the Guarantor
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. The Guarantor shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its possession if
such Collateral is accorded treatment substantially equal to that which
Continental accords its own property.
SECTION 14. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Guarantor may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Code (whether or not the Code
applies to the affected Collateral), and also may (i) require the
Grantors to, and the Grantors hereby agree that they will at their
expense and upon request of the Guarantor forthwith, assemble all or
part of the Collateral as directed by the Guarantor and make it
available to the Guarantor at a place to be designated by the
Guarantor which is reasonably convenient to the Guarantor and the
Grantors and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Guarantor's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as
the Guarantor may deem commercially reasonable. The Grantors agree
that, to the extent notice of sale shall be required by law, at least
ten days' notice to the Grantors of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Guarantor shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Guarantor may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) Any cash held by the Guarantor as Collateral and all
cash proceeds received by the Guarantor in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Guarantor, be held by the
Guarantor as collateral for, and/or then or at any time thereafter be
applied (after payment of any amounts payable to the Guarantor
pursuant to Section 15) in whole or in part by the Guarantor for the
benefit of the Guarantor against, all or any part of the Secured
Obligations in such order as the Guarantor shall elect. Any surplus
of such cash or cash proceeds held by the Guarantor and remaining
after payment in full of all the Secured Obligations shall be paid
over to the Grantors or to whomsoever may be lawfully entitled to
receive such surplus.
SECTION 15. Indemnity and Expenses. (a) The Grantors agree
to indemnify the Guarantor from and against any and all expenses, claims,
losses and liabilities (including reasonable attorneys' fees and disbursements)
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
from the Guarantor's gross negligence or willful misconduct.
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<PAGE> 11
(b) The Grantors will upon demand pay to the Guarantor
the amount of any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, which the Guarantor
may incur in connection with (i) the custody, preservation, use or operation
of, or the sale of, collection from, or other realization upon, any of the
Collateral, (ii) the exercise or enforcement of any of the rights of the
Guarantor hereunder or (iii) the failure by any Grantor to perform or observe
any of the provisions hereof.
SECTION 16. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Grantors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Guarantor or the Grantors, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 17. Notices. All notices and other communications
required or desired to be served, given or delivered hereunder shall be given
in the manner and to the addresses set forth in the Reimbursement Agreement.
SECTION 18. Continuing Security Interest; Assignments under
Reimbursement Agreement. This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of (x) the payment in full of the Secured Obligations and all other
amounts payable under this Agreement, (y) the expiration or termination of the
Reimbursement Agreement and (z) the expiration or termination of the Guaranty,
(ii) be binding upon the Grantors, their successors and assigns and (iii) inure
to the benefit of, and be enforceable by, the Guarantor and its successors,
transferees and assigns. Upon the payment in full of the Secured Obligations,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the respective Grantors. Upon any such termination,
the Guarantor will, at the Grantors' expense, execute and deliver to the
Grantors such documents as the Grantors shall reasonably request to evidence
such termination.
SECTION 19. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
SECTION 20. Joint and Several Obligations. Except to the
extent the context may otherwise necessarily imply, all obligations and
agreements of the Grantors hereunder shall be joint and several.
SECTION 21. Incorporation of Preliminary Statements. The
Preliminary Statements to this Agreement are hereby incorporated herein by this
reference thereto.
SECTION 22. Counterparts. This Agreement may be executed in
any number of counterparts, and by the Guarantor and any of the Grantors in
separate counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.
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<PAGE> 12
SECTION 23. Captions. The captions contained in this
Agreement are for convenience of reference only, are without substantive
meaning and should not be construed to modify, enlarge, or restrict any
provision.
SECTION 24. Severability of Provisions. Any provision of
this Agreement or of any other instrument, document or agreement executed
and/or delivered in connection herewith which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
IN WITNESS WHEREOF, the Grantors have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
OHM CORPORATION
By:_______________________________
Name:_________________________
Title:________________________
Attest:
____________________________
Secretary
OHM REMEDIATION SERVICES CORP.
By:_______________________________
Name:_________________________
Title:________________________
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<PAGE> 13
SCHEDULE A
TO
SECURITY AGREEMENT
<TABLE>
<CAPTION>
Grantor Location of Chief Executive Office
------- ----------------------------------
<S> <C>
OHM Corporation 16406 U.S. Route 224 East
Findlay, OH 45840
OHM Remediation Services Corp. 16406 U.S. Route 224 East
Findlay, OH 45840
Records concerning
Accounts also kept at: 200 Horizon Center Boulevard
Trenton, NJ 08650
5335 Triangle Parkway
Suite 450
Norcross, GA 30092
5731 West Las Positas Blvd.
Pleasanton, CA 94588
Trade Names: None.
Records concerning
Account also kept at: None.
Trade Names: None.
</TABLE>
<PAGE> 1
Exhibit 10(l)
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
May 31, 1995, is executed by and between OHM Corporation, an Ohio corporation
(the "Pledgor"), and WMX Technologies, Inc. (the "Pledgee") under the
Reimbursement Agreement referred to below. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Reimbursement Agreement referred to below.
PRELIMINARY STATEMENTS:
(1) The Pledgor, OHM Remediation Services Corp., an Ohio
corporation ("Remediation"; Pledgor and Remediation are sometimes hereinafter
collectively referred to as the "Borrowers"), Citicorp USA, Inc. as
Administrative Agent (the "Agent") for the Banks which are parties to the
Credit Agreement (as hereinafter defined) (the "Banks") and Bank of America
Illinois in its capacity as Issuing and Paying Agent and Co-Agent for the Banks
(the "Paying Agent"; together with the Agent and the Banks, the "Lenders" and
individually a "Lender") have entered into that certain Revolving Credit
Agreement dated as of May 31, 1995 as the same may be amended, supplemented or
otherwise modified from time to time (the "Credit Agreement").
(2) The Lenders have required as a condition to the entry
by the Borrowers and the Lenders in and to the Credit Agreement that the
Pledgee execute and deliver that certain Guaranty dated as of May 31, 1995 (as
amended, supplemented or otherwise modified from time to time, the "Guaranty")
by the Pledgee in favor of the Lenders pursuant to which the Pledgee has
guaranteed the prompt and complete repayment of the Obligations (as defined,
the "Guaranty") subject to the limitations set forth in the Guaranty.
(3) The Pledgee has required as a condition to the entry
by the Pledgee in and to the Guaranty that the Borrowers execute and deliver
that certain Reimbursement Agreement dated as of May 31, 1995 (as amended,
supplemented or otherwise modified from time to time, the "Reimbursement
Agreement") among the Pledgee and the Borrowers pursuant to which the Borrowers
covenant and agree to promptly and completely reimburse the Pledgee for all
payments made by the Pledgee under and pursuant to the Guaranty.
(4) The Pledgor is the owner of the issued and
outstanding capital stock of each of the corporations (collectively, the
"Corporations" and individually, a "Corporation") set forth on Schedule I
hereto.
(5) The Lenders and the Pledgee each desire to execute
and deliver that certain Intercreditor Agreement dated as of May 31, 1995 (the
"Intercreditor Agreement") by and among the Agent, the Paying Agent and the
Pledgee in order to set forth certain agreements, rights and interests with
respect to and in connection with their respective interests with respect to
the Borrowers as well as their respective security interests in and liens on
certain collateral specified therein.
<PAGE> 2
(6) The Pledgee has required, as a condition to its
entering into the Reimbursement Agreement, that the Pledgor execute and deliver
this Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to induce the Pledgee to enter into the Guaranty,
the Pledgor and the Pledgee hereby agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the
Pledgee, for its benefit, and grants to the Pledgee for its benefit, a security
interest in, the following (collectively, the "Pledged Collateral"):
(a) The shares of the capital stock of each of the
Corporations, now or at any time or times hereafter owned by the
Pledgor, and the certificates representing the shares of such capital
stock (such now-owned shares being identified on Schedule I attached
hereto and made a part hereof), all options and warrants for the
purchase of shares of the stock of the Corporations now or hereafter
held in the name of the Pledgor (all of said capital stock, options
and warrants and all capital stock held in the name of the Pledgor as
a result of the exercise of such options or warrants being hereinafter
collectively referred to as the "Pledged Stock"), and all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for,
any or all of the Pledged Stock;
(b) All additional shares of stock of the Corporations
from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares (any such additional
shares shall constitute part of the Pledged Stock and the Pledgee is
irrevocably authorized to amend Schedule I from time to time to
reflect such additional shares), and all options, warrants, dividends,
cash, instruments and other rights and options from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares;
(c) The property and interests in property described in
Section 3 below; and
(d) All proceeds of the foregoing.
The Pledgor has on the date hereof delivered to the Agent on behalf of
the Lenders the certificates representing the Pledged Stock pursuant to the
Pledge Agreement (as defined in the Credit Agreement). The Pledgor covenants
and agrees that upon the expiration or termination of such Pledge Agreement,
the Pledgor shall cause such certificates representing the Pledged Stock to be
promptly delivered to the Pledgee accompanied by stock powers in form and
substance satisfactory to the Pledgee duly executed in blank (the "Powers").
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<PAGE> 3
SECTION 2. Security for Obligations. The Pledged Collateral
secures the prompt payment, performance and observance of the obligations of
the Borrowers under and pursuant to the Reimbursement Agreement.
SECTION 3. Pledged Collateral Adjustments. If, during the
term of this Pledge Agreement:
(a) Any stock dividend, reclassification, readjustment or
other change is declared or made in the capital structure of any
Corporation, or any option included within the Pledged Collateral is
exercised, or both, or
(b) Any warrants or any other rights or options shall be
issued in connection with the Pledged Collateral,
then all new, substituted and additional shares, warrants, rights, options or
other securities, issued by reason of any of the foregoing, shall be
immediately delivered to and held by the Pledgee under the terms of this Pledge
Agreement and shall constitute Pledged Collateral hereunder.
SECTION 4. Subsequent Changes Affecting Pledged Collateral.
The Pledgor represents and warrants that it has made its own arrangements for
keeping itself informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that the Pledgee shall not
have any obligation to inform the Pledgor of any such changes or potential
changes or to take any action or omit to take any action with respect thereto.
The Pledgee may, after the occurrence and during the continuance of an Event of
Default, without notice and at its option, transfer or register the Pledged
Collateral or any part thereof into its or its nominee's name with or without
any indication that such Pledged Collateral is subject to the security interest
hereunder. In addition, the Pledgee may at any time exchange certificates or
instruments representing or evidencing Pledged Shares for certificates or
instruments of smaller or larger denominations.
SECTION 5. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of
the issued and outstanding common stock of each Corporation in
the amounts and percentages set forth on Schedule I, free and
clear of any Lien except for the security interest created by
this Pledge Agreement and that certain Pledge Agreement dated
as of May 31, 1995 from the Pledgor to the Agent (as amended,
supplemented or otherwise modified from time to time, the
"Bank Pledge Agreement");
(b) The Pledgor has full corporate power and authority to
enter into this Pledge Agreement;
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<PAGE> 4
(c) There are no restrictions upon the voting rights
associated with, or upon the transfer of, any of the Pledged
Collateral;
(d) The Pledgor has the right to vote, pledge and grant a
security interest in or otherwise transfer such Pledged
Collateral free of any Liens other than the Lien of the Bank
Pledge Agreement;
(e) No authorization, approval, or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge of the
Pledged Collateral pursuant to this Pledge Agreement or for
the due execution, delivery or performance of this Pledge
Agreement by the Pledgor or (ii) for the exercise by the
Pledgee of the voting or other rights provided for in this
Pledge Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Pledge Agreement (except as may be
required in connection with such disposition by laws affecting
the offering and sale of securities generally and except as
set forth in the Intercreditor Agreement);
(f) The pledge of the Pledged Collateral pursuant to this
Pledge Agreement creates a valid and perfected security
interest in the Pledged Collateral, in favor of the Pledgee
for its benefit, securing the payment and performance of the
Obligations subject in priority only to the security interest
created under the Bank Pledge Agreement; and
(g) The Powers are duly executed and give the Pledgee the
authority they purport to confer.
SECTION 6. Voting Rights. During the term of this Pledge
Agreement, and except as provided in this Section 6 below, the Pledgor shall
have the right to vote the Pledged Stock on all corporate questions in a manner
not inconsistent with the terms of this Pledge Agreement, the Reimbursement
Agreement, the Intercreditor Agreement and any other Security Document. After
the occurrence and during the continuance of an Event of Default, the Pledgee
may, at the Pledgee's option and following written notice from the Pledgee to
the Pledgor, exercise all voting powers pertaining to the Pledged Collateral,
including the right to take action by shareholder consent, and Pledgor hereby
irrevocably appoints and constitutes the Pledgee as its attorney for such
purpose.
SECTION 7. Dividends and Other Distributions. (a) So long as
no Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to receive and retain
any and all dividends and interest paid in respect of the Pledged
Collateral, provided, however, that any and all
4
<PAGE> 5
(A) dividends and interest paid or payable other
than in cash with respect to, and instruments and other
property received, receivable or otherwise distributed with
respect to, or in exchange for, any of the Pledged Collateral;
(B) dividends and other distributions paid or
payable in cash with respect to any of the Pledged Collateral
on account of a partial or total liquidation or dissolution or
in connection with a reduction of capital, capital surplus or
paid-in surplus; and
(C) cash paid, payable or otherwise distributed
with respect to principal of, or in redemption of, or in
exchange for, any of the Pledged Collateral;
shall be Pledged Collateral, and shall be forthwith delivered (subject to the
expiration and termination of the Pledge Agreement (as defined in the Credit
Agreement)) to the Pledgee to hold for its benefit, as Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the Pledgee, for
its benefit, be segregated from the other property or funds of the Pledgor, and
be delivered immediately to the Pledgee as Pledged Collateral in the same form
as so received (with any necessary endorsement); and
(ii) The Pledgee shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to receive the dividends or interest payments
which it is authorized to receive and retain pursuant to clause (i)
above.
(b) After the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor to receive the dividends
and interest payments which it would otherwise be authorized to
receive and retain pursuant to Section 7(a) (i) hereof shall cease,
and all such rights shall thereupon become vested in the Pledgee, for
its benefit, which shall thereupon have the sole right to receive and
hold as Pledged Collateral such dividends and interest payments
(subject to the Bank Pledge Agreement); and
(ii) All dividends and interest payments which are
received by the Pledgor contrary to the provisions of clause (i) of
this Section 7(b) shall be received in trust for the Pledgee, for its
benefit, shall be segregated from other funds of the Pledgor and shall
be paid over immediately to the Pledgee as Pledged Collateral in the
same form as so receive (with any necessary endorsements) (subject to
the Bank Pledge Agreement).
SECTION 8. Transfers and Other Liens. The Pledgor agrees
that it will not (i) sell or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral without the prior written consent of
the Pledgee, or (ii) create or permit to exist any Lien upon or
5
<PAGE> 6
with respect to any of the Pledged Collateral, except for the security interest
under this Pledge Agreement and the Bank Pledge Agreement. Notwithstanding the
foregoing, the Pledgor may at any time sell or otherwise dispose of, in whole
or in part, for fair market value as determined by the Board of Directors of
the Pledgor the shares of common stock of NSC Corporation owned by the Pledgor,
provided however, that any of such shares owned by the Pledgor shall remain
subject to the lien of this Pledge Agreement.
SECTION 9. Remedies. (a) The Pledgee shall have, in addition
to any other rights given under this Pledge Agreement or by law, all of the
rights and remedies with respect to the Pledged Collateral of a secured party
under the Uniform Commercial Code as in effect in the State of Illinois. In
addition, after the occurrence and during the continuance of an Event of
Default, the Pledgee shall have such powers of sale and other powers as may be
conferred by applicable law. With respect to the Pledged Collateral or any
part thereof which shall then be in or shall thereafter come into the
possession or custody of the Pledgee or which the Pledgee shall otherwise have
the ability to transfer under applicable law, the Pledgee may, in its sole
discretion, without notice except as specified below, after the occurrence and
during the continuance of an Event of Default, sell or cause the same to be
sold at any exchange, broker's board or at public or private sale, in one or
more sales or lots, at such price as the Pledgee may deem best, for cash or on
credit or for future delivery, without assumption of any credit risk, and the
purchaser of any or all of the Pledged Collateral so sold shall thereafter own
the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Pledgee, may, in its own name, or in the name of a designee or
nominee, buy the Pledged Collateral at any public sale and, if permitted by
applicable law, buy the Pledged Collateral at any private sale. The Pledgor
will pay to the Pledgee all reasonable expenses (including, without limitation,
court costs and reasonable attorneys' and paralegals' fees and expenses) of, or
incident to, the enforcement of any of the provisions hereof. The Pledgee
agrees to distribute any proceeds of the sale of the Pledged Collateral in
satisfaction of the obligations under the Reimbursement Agreement and the
Pledgor shall remain liable for any deficiency following the sale of the
Pledged Collateral. Any balance remaining subsequent to the foregoing shall be
returned to the Pledgor or such other persons as are entitled thereto.
(b) Unless any of the Pledged Collateral threatens to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Pledgee will give the Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale
or other intended disposition is to be made. Any sale of the Pledged
Collateral conducted in conformity with reasonable commercial practices of
banks, commercial finance companies, insurance companies or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, the Pledgor agrees that any requirements of
reasonable notice shall be met if such notice is received by the Pledgor as
provided in Section 19 below at least five (5) Business Days before the time of
the sale or disposition; provided, however, that the Pledgee may give any
shorter notice that is commercially reasonable under the
6
<PAGE> 7
circumstances. Any other requirement of notice, demand or advertisement for
sale is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities
laws may impose certain restrictions on the method by which a sale of the
Pledged Collateral may be effected after the occurrence and during the
continuance of an Event of Default, the Pledgor agrees that after the
occurrence and during the continuance of an Event of Default, the Pledgee may,
from time to time, attempt to sell all or any part of the Pledged Collateral by
means of a private placement restricting the bidders and prospective purchasers
to those who are qualified and will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, the
Pledgee may solicit offers to buy the Pledged Collateral, or any part of it,
from a limited number of investors deemed by the Pledgee, in its reasonable
judgment, to be financially responsible parties who might be interested in
purchasing the Pledged Collateral. If the Pledgee solicits such offers from
not less than four (4) such investors, then the acceptance by the Pledgee of
the highest offer obtained therefrom shall be deemed to be a commercially
reasonable method of disposing of such Pledged Collateral; provided, however,
that this Section does not impose a requirement that the Pledgee solicit offers
from four or more investors in order for the sale to be commercially
reasonable.
SECTION 10. Pledgee Appointed Attorney-in-Fact. The Pledgor
hereby appoints the Pledgee its attorney-in-fact, with full authority, in the
name of the Pledgor or otherwise, after the occurrence and during the
continuance of an Event of Default, from time to time in the Pledgee's sole
discretion, to take any action and to execute any instrument which the Pledgee
may deem necessary or advisable to accomplish the purposes of this Pledge
Agreement, including, without limitation, to exercise voting rights with
respect to any of the Pledged Collateral, to receive, endorse and collect all
instruments made payable to the Pledgor representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same and to arrange for the transfer
of all or any part of the Pledged Collateral on the books of any Corporation to
the name of the Pledgee or the Pledgee's nominee.
SECTION 11. Waivers. The Pledgor waives presentment and
demand for payment of any of the Obligations, protest and notice of dishonor or
Event of Default with respect to any of the Obligations and all other notices
to which the Pledgor might otherwise be entitled except as otherwise expressly
provided herein or in the Reimbursement Agreement.
SECTION 12. Term. This Pledge Agreement shall remain in full
force and effect until the later to occur of (a) the Obligations have been
fully and indefeasibly paid in cash or (b) the Reimbursement Agreement and the
Guaranty have terminated pursuant to their respective terms. Upon the
termination of this Pledge Agreement as provided above (other than as a result
of the sale of the Pledged Collateral), the Pledgee will release the security
interest created hereunder and, if it then has possession of the Pledged Stock,
will deliver the Pledged Stock and the Powers to the Pledgor.
7
<PAGE> 8
SECTION 13. Definitions. The singular shall include the
plural and vice versa and any gender shall include any other gender as the
context may require.
SECTION 14. Successors and Assigns. This Pledge Agreement
shall be binding upon and inure to the benefit of the Pledgor, the Pledgee, for
its benefit, and their respective successors and assigns. The Pledgor's
successors and assigns shall include, without limitation, a receiver, trustee
or debtor-in-possession of or for the Pledgor.
SECTION 15. Governing Law. Any dispute between the Pledgee
and the Pledgor arising out of or related to the relationship established
between them in connection with this Pledge Agreement, and whether arising in
contract, tort, equity, or otherwise, shall be resolved in accordance with the
laws of the State of Illinois.
SECTION 16. Severability. Whenever possible, each provision
of this Pledge Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but, if any provision of this Pledge Agreement
shall be held to be prohibited or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Pledge Agreement.
SECTION 17. Further Assurances. The Pledgor agrees that it
will, at its expense, cooperate with the Pledgee and will execute and deliver,
or cause to be executed and delivered, all such other stock powers, proxies,
instruments and documents, and will take all such other actions, including,
without limitation, the execution and filing of financing statements, as the
Pledgee may request from time to time to carry out the provisions and purposes
of this Pledge Agreement.
SECTION 18. The Pledgee's Duty of Care. The Pledgee shall
not be liable for any acts, omissions, errors of judgment or mistakes of fact
or law including, without limitation, acts, omissions, errors or mistakes with
respect to the Pledged Collateral, except for those arising out of or in
connection with the Pledgee's (i) gross negligence or willful misconduct, or
(ii) failure to use reasonable care with respect to the safe custody of the
Pledged Collateral in the Pledgee's possession. Without limiting the
generality of the foregoing, the Pledgee shall be under no obligation to take
any steps necessary to preserve rights in the Pledged Collateral against any
other parties but may do so at its option. All expenses incurred in connection
therewith shall be for the sole account of the Pledgor, and shall constitute
part of the Obligations secured hereby.
SECTION 19. Notices. All notices and other communications
required or desired to be served, given or delivered hereunder shall be given
in the manner and to the addresses set forth in the Reimbursement Agreement.
SECTION 20. Amendments. Waivers and Consents. No amendment
or waiver of any provision of this Pledge Agreement nor consent to any
departure by the Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Pledgee, and
8
<PAGE> 9
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 21. Section Headings. The section headings herein
are for convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
SECTION 22. Execution in Counterparts. This Pledge Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall together constitute one and the same
agreement.
SECTION 23. Merger. This Pledge Agreement represents the
final agreement of the Pledgor with respect to the matters contained herein and
may not be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Pledgor and the Pledgee.
9
<PAGE> 10
IN WITNESS WHEREOF, the Pledgor and the Pledgee have executed
this Pledge Agreement as of the date set forth above.
OHM CORPORATION
By:____________________________
Name:______________________
Title:_____________________
WMX TECHNOLOGIES, INC.
By:____________________________
Name:______________________
Title:_____________________
By:____________________________
Name:______________________
Title:_____________________
10
<PAGE> 11
ACKNOWLEDGMENT
The undersigned each hereby acknowledges receipt of a copy of
the foregoing Pledge Agreement, agrees promptly to note on its books the
security interests granted under such Pledge Agreement, and waives any rights
or requirement at any time hereafter to receive a copy of such Pledge Agreement
in connection with the registration of any Pledged Collateral in the name of
the Pledgee or its nominee or the exercise of voting rights by the Pledgee.
ENVIRONMENTAL FINANCIAL
SERVICES CORP.
By:____________________________
Name:______________________
Title:_____________________
CAPITAL NATIONAL INSURANCE
COMPANY
By:____________________________
Name:______________________
Title:_____________________
OHM REMEDIATION SERVICES CORP.
By:____________________________
Name:______________________
Title:_____________________
NSC CORPORATION
By:____________________________
Name:______________________
Title:_____________________
11
<PAGE> 12
OHM CORPORATION, A NEVADA
CORPORATION
By:____________________________
Name:______________________
Title:_____________________
OHM ENVIRONMENTAL RESOURCE
MANAGEMENT CORP.
By:____________________________
Name:______________________
Title:_____________________
OHM ASBESTOS ABATEMENT CORP.
By:____________________________
Name:______________________
Title:_____________________
12
<PAGE> 13
SCHEDULE I
to
PLEDGE AGREEMENT
Pledged Stock Certificates
<TABLE>
<CAPTION>
Percentage of Shares of Common
Issued and Outstanding Stock owned by
Common Stock owned the Pledgor Subject
Name by the Pledgor to Pledge
----
<S> <C> <C>
Environmental
Financial
Services Corp. 100% 100
Capital National
Insurance Company 100% 100,000
OHM Remediation
Services Corp. 100% 100
NSC Corporation 40% 4,010,000
OHM Corporation, a
Nevada corporation 100% 100
OHM Environmental
Resource Management Corp. 100% 100%
OHM Asbestos
Abatement Corp. 100% 100
</TABLE>
13
<PAGE> 1
<TABLE>
EXHIBIT 11
Statement Re Computation of Per Share Earnings
OHM CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(In Thousands, Except Per Share Data)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -----------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY:
Average Shares Outstanding 20,100 15,578 17,903 15,559
Net effect of dilutive stock options and warrants--
based on the treasury stock method 493 634 232 648
------- ------- ------- -------
Total 20,593 16,212 18,135 16,207
======= ======= ======= =======
Net Income $ 234 $ 2,069 $ 1,521 $ 2,874
======= ======= ======= =======
Per Share Amount $ 0.01 $ 0.13 $ 0.08 $ 0.18
======= ======= ======= =======
FULLY DILUTED: (1)
Average Shares Outstanding 20,100 15,578 17,903 15,559
Net effect of dilutive stock options and warrants--
based on the treasury stock method 623 634 553 648
------- ------- ------- -------
Total 20,723 16,212 18,456 16,207
======= ======= ======= =======
Net Income $ 234 $ 2,069 $ 1,521 $ 2,874
======= ======= ======= =======
Per Share Amount $ 0.01 $ 0.13 $ 0.08 $ 0.18
======= ======= ======= =======
<FN>
(1) Fully dilutive effect of stock options and warrants on per share
amounts for the three and six months ended June 30, 1995 and 1994, has
not been presented in the statements of income since any reduction of
less than 3% in the aggregate need not be considered as dilution.
</TABLE>
<PAGE> 1
EXHIBIT 15
Letter Re Unaudited Financial Information
Board of Directors and Shareholders
OHM Corporation
We are aware of the incorporation by reference into the Registration Statements
(Form S-8 No. 33-24953 and Form S-8 No. 33-28025) of OHM Corporation of our
report dated August 10, 1995, relating to the unaudited consolidated interim
financial statements of OHM Corporation which are included in its Form 10-Q for
the quarter ended June 30, 1995.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
Columbus, Ohio
August 10, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AND THE UNAUDITED CONSOLIDATED STATEMENTS
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 6,928
<SECURITIES> 0
<RECEIVABLES> 215,664
<ALLOWANCES> 27,343
<INVENTORY> 11,797
<CURRENT-ASSETS> 237,040
<PP&E> 125,719
<DEPRECIATION> 41,372
<TOTAL-ASSETS> 363,179
<CURRENT-LIABILITIES> 79,077
<BONDS> 122,578
<COMMON> 2,651
0
0
<OTHER-SE> 154,175
<TOTAL-LIABILITY-AND-EQUITY> 363,179
<SALES> 0
<TOTAL-REVENUES> 179,718
<CGS> 0
<TOTAL-COSTS> 150,664
<OTHER-EXPENSES> 20,701
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,071
<INCOME-PRETAX> 2,282
<INCOME-TAX> 761
<INCOME-CONTINUING> 1,521
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,521
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
