EXHIBIT 10.59
THIRD AMENDMENT TO CREDIT AGREEMENT AND COMPOSITE
AMENDMENT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND COMPOSITE
AMENDMENT AGREEMENT ("Amendment") is made and entered into as of this 19th day
of October, 2000 is by and among HI-RISE RECYCLING SYSTEMS, INC., a Florida
corporation ("Hi-Rise"), IDC ACQUISITION SUB, INC., a New York corporation
("IDC"), XXXXXXXXX COMPANY, INC., an Ohio corporation ("Xxxxxxxxx"), RECYCLTECH
ENTERPRISES INC., an Ontario corporation ("Recycltech"), HESCO SALES, INC., a
Florida corporation ("Hesco"), UNITED TRUCK AND BODY CORPORATION, a Florida
corporation ("United Truck"), HESCO EXPORT CORPORATION, a Florida corporation
("Hesco Export"), BES-PAC, INC., formerly known as BPI ACQUISITION CORP., a
South Carolina corporation ("Bes-Pac Acquisition Corp."), and DII ACQUISITION
CORP., a Connecticut corporation ("Xxxxxx Acquisition Corp.") (Hi-Rise, IDC,
Xxxxxxxxx, Recycltech, Hesco, United Truck, Hesco Export, Bes-Pac Acquisition
Corp and Xxxxxx Acquisition Corp. are sometimes collectively referred to herein
as the "Borrowers" and individually as a "Borrower"); ACME CHUTE COMPANY, INC.,
a Florida corporation ("Acme Chute"), XXXXXX INDUSTRIES, INC., a Connecticut
corporation ("Xxxxxx"), ECOLOGICAL TECHNOLOGIES, INC., a Connecticut corporation
("Eco"), KE CORPORATION, a Delaware corporation ("Xxxxxxx Acquisition Corp."),
and AMERICAN GOOSENECK, INC., an Arizona corporation ("American Gooseneck")
(Acme Chute, DeVivo, Eco, Xxxxxxx Acquisition Corp. and American Gooseneck are
sometimes collectively referred to herein as the "Subsidiary Guarantors" and,
together with the Borrowers, the "Credit Parties"); GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation (in its individual capacity, "GE Capital"),
BANK OF AMERICA, N.A., successor in interest to NATIONSBANK, N.A., a national
banking association (in its individual capacity, "NationsBank"), KEY CORPORATE
CAPITAL, INC., (in its individual capacity, "KCCI"), the other Lenders signatory
hereto from time to time, GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent for the Lenders ("Administrative Agent"), and BANK OF
AMERICA, N.A., successor in interest to NATIONSBANK, N.A., as Revolver Agent for
the Lenders ("Revolver Agent") and, together with Administrative Agent,
"Agents").
W I T N E S S E T H
WHEREAS, Borrowers, GE Capital, Nationsbank, KCCI and Agents
have entered into that certain Credit Agreement, dated as of October 28, 1998
(the "Credit Agreement"), as amended by that certain First Amendment to Credit
Agreement and Composite Amendment Agreement, dated as of September 17, 1999 (the
"First Amendment") and that certain Second Amendment to Credit Agreement and
Composite
Amendment Agreement dated as of June 30, 2000 (the "Second Amendment"), pursuant
to which Credit Agreement the Lenders extended revolving and term credit
facilities to the Borrowers of up to Sixty-Three Million and No/100 Dollars
($63,000,000.00) in the aggregate for the purpose of funding certain
Acquisitions and refinancing certain indebtedness of the Borrowers, to provide
working capital financing for the Borrowers and to finance capital expenditures
of the Borrowers; and
WHEREAS, the Credit Parties acknowledge that they are in
default under the Credit Agreement and related Loan Documents (defined below) as
a result of, among other things, (i) an over-advance under Revolving Loan
(Revolver A) and Revolving Loan (Revolver B) as contemplated in Sections 1.1(a)
and 1.1(b) of the Credit Agreement and the Credit Parties' failure to
immediately repay such over-advances in accordance with the provisions of
Sections 1.3(b)(i) and 1.3(b)(ii) of the Credit Agreement, (ii) the failure to
make the interest payment due October 2, 2000 and (iii) the failure to meet the
financial covenants set forth in Section 6.10 and Annex G of the Credit
Agreement for the Fiscal Quarter ending September 30, 2000 (collectively, the
"Pending Defaults"); and
WHEREAS, the Credit Parties have requested certain additional
fundings of up to $500,000.00 (the "Overline Advance") under the Credit
Agreement notwithstanding the existence of the Pending Defaults; and
WHEREAS, the Lenders have agreed to fund the Overline Advance
subject to the terms and conditions of this Amendment;
NOW THEREFORE, in consideration of the premises, and in
reliance thereon, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
RECITATIONS; DEFINITIONS
Section 1.1 Recitations. Each of the Credit Parties hereby jointly and
severally confirms the truth and accuracy of each of the preambles and recitals
set forth in the introduction to this Amendment and agrees that each of the
preambles and recitals set forth in the introduction to this Amendment are
incorporated herein by reference and are and shall be deemed to be a part of
this Amendment as if fully set forth herein.
Section 1.2 Definitions. Capitalized terms not otherwise defined in
this Amendment shall have the meaning ascribed thereto in the Credit Agreement.
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ARTICLE 2
FORBEARANCE
Section 2.1 Forbearance. Provided that each of the Credit Parties
complies with all of the requirements contained in this Amendment and the Loan
Documents, the Agents and Lenders shall forbear from enforcing their respective
remedies with respect to the Pending Defaults for the period (the "Forbearance
Period") beginning on the date hereof and ending on the Overline Termination
Date (defined below). If at any time any of the Credit Parties fails to comply
with any of the requirements set forth herein or if any additional Default or
Event of Default occurs under this Amendment, the Credit Agreement or the other
Loan Documents, Agents and Lenders may immediately commence, proceed or
otherwise continue with any or all rights and remedies available under the Loan
Documents, under applicable law or otherwise (collectively, "Lenders' Remedies")
without demand or notice to any Credit Party, but as among Agents and Lenders,
subject to the provisions of the Credit Agreement with respect to exercising
remedies. The matters disclosed on Schedule 1 hereto shall not constitute
additional Defaults or Events of Default during the Forbearance Period. At the
end of the Forbearance Period, if Borrower has not paid, in full, all amounts
due and owing under the Loan Documents, or otherwise cured the Pending Defaults
to the full satisfaction of Agents and Lenders in their respective sole and
absolute discretion, Agents and Lenders may proceed with Lenders' Remedies
without any notice or demand to any Credit Party or any other party, but as
among Agents and Lenders, subject to the provisions of the Credit Agreement with
respect to exercising remedies. Lenders and Agents are entering into this
Amendment as an accommodation to the Credit Parties and the Credit Parties
remain bound to perform their respective obligations under the Loan Documents.
The "Overline Termination Date" shall mean October 30, 2000, or if earlier, the
date upon which occurs any Default or Event of Default other than the Pending
Defaults, including, without limitation, the Credit Parties' failure to timely
make the October Interest Payment as required in Section 3.3 below.
ARTICLE 3
AMENDMENTS TO CREDIT AGREEMENT
Section 3.1 Overline Advances. Subject to the terms and conditions of
the Credit Agreement as amended hereby, each Revolving Lender agrees to make
available from time to time until the Overline Termination Date its Pro Rata
Share of up to $500,000.00 outstanding at any one time as an Overline Advance on
a revolving basis under Revolving Loan (Revolver A). The Overline Advance shall
be available notwithstanding any shortfall in the Borrowing Base (Revolver A) or
the existence of the Pending Defaults but shall otherwise be subject to the
terms and conditions of the Credit Agreement with respect to advances. No
Overline Advances shall be available from and
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after the Overline Termination Date. For the purpose of the Overline Advance and
until the Overline Termination Date, the Maximum Amount under the Revolving Loan
(Revolver A) shall be $19,000,000 notwithstanding the provisions of the Credit
Agreement that seasonally reduce such Maximum Amount to $17,000,000; provided
that no more than $500,000 in advances made after October 10, 2000 may be
outstanding at any one time.
Section 3.2 No Other Advances. Except for the Overline Advance and for
advances permitted in Credit Agreement Section 1.12(b), no further advances
under any of the Loans or issuance of Letters of Credit shall be available to
the Credit Parties unless and until Lenders and Agents agree in writing, in
their sole and absolute discretion, to make such further advances. The Credit
Parties have been advised that additional fundings may not be forthcoming and
that alternative sources of fundings should be explored.
Section 3.3 Interest Payment. The Credit Parties acknowledge that the
interest and loan fee payment due October 2, 2000 in the amount of $526,842.92
(the "October Interest Payment") was not timely made. The Credit Parties shall
make the October Interest Payment on or before 2:00 p.m., EDT, October 20, 2000,
as of which date time is of the essence, without notice, demand or grace period.
If the Credit Parties fail to timely make the October Interest Payment, the
Forbearance Period shall automatically, and without further action by any party,
terminate and the Overline Termination Date shall be deemed to have occurred.
Section 3.4 Commitment Amounts. Each of the Term Loan Commitment (Term
A), Term Loan Commitment (Term B) and Acquisition Loan Commitment are hereby
reduced to the current outstanding balance thereof as set forth on Schedule 1
hereto.
Section 3.5 Notice Address. The notice address for GE Capital and
Administrative Agent set forth on Annex I to the Credit Agreement is hereby
amended to be:
Mr. Xxxxxxx Xxxxx
GE Capital Corporation
Capital Funding Inc,
000 Xxxxxxx Xxxxx
0xx Xxxxx
Xxxxxxx XX 00000
Telecopy: (000) 000-0000
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with a copy to:
Xxxxx Xxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Section 3.6 Certain Definitions.
3.6.1 All references in the Credit Agreement to "this
Agreement," "herein," hereof" or sections thereof shall be deemed to mean
references to the Credit Agreement as amended by this Amendment.
3.6.2 The definition of "Loan Documents" is hereby amended to
include the Credit Agreement, as amended by this Amendment, together with all
other documents and instruments heretofore, contemporaneous herewith or from
time to time hereafter executed and delivered to or in favor of the
Administrative Agent, the Revolver Agent and/or the Lenders, or any one or more
of them, in connection with the Credit Agreement, as amended by this Amendment,
and/or evidencing and/or securing all or any portion of the obligations and
indebtedness of the Borrowers, and each of them, to the Lenders and the Agents
under the Credit Agreement, as amended by this Amendment, together with any and
all modifications, renewals and replacements therefor made from time to time.
ARTICLE 4
COMPOSITE AMENDMENT
Section 4.1 Additional Definitions. All references in each of the Loan
Documents to the "Agreement" and the "Credit Agreement" shall mean the Credit
Agreement, as amended by this Amendment, and all modifications, amendments and
extensions therefor from time to time.
Section 4.2 Ratification. The parties hereto agree that the Collateral
Documents, and each of them, secure, in addition to all obligations presently
secured thereby, the full and timely payment performance by the Borrowers, and
each of them, of their respective obligations and indebtedness under and in
respect of the Credit Agreement, as amended by this Amendment, including,
without limitation, the repayment of the Overline Advances and each of the
Notes, as the same may be consolidated,
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amended and restated, in each case whether presently existing or hereafter
created or incurred, all of which obligations are and shall be equally secured
with and have the same priority as the obligations originally secured by the
Collateral Documents, and each of them, provided that nothing herein shall be
deemed or construed to mean that the Collateral Documents by their own terms do
not presently secure such obligations and indebtedness.
ARTICLE 5
CREDIT PARTY ACKNOWLEDGMEnts
Section 5.1 Indebtedness. The principal amount outstanding under the
Notes as of the date hereof, is as set forth on the schedule attached hereto as
Schedule "1".
Section 5.2 No Offsets or Defenses. As a material inducement to Lenders
and Agents to enter into this Agreement, each of the Borrowers and Subsidiary
Guarantors hereby acknowledges and agrees that the Indebtedness and all Loan
Documents are valid and binding liabilities and obligations of each Borrower and
Subsidiary Guarantors. Each of the Credit Parties hereby jointly and severally
ratifies and confirms each of their respective obligations and indebtedness
under the Credit Agreement and represents and warrants to the Lenders and the
Agents that none of them has or claims any defenses, offsets or counterclaims to
any of their respective obligations and indebtedness under the Credit Agreement
or any of the other Loan Documents, in each case as amended by this Amendment.
Section 5.3 No Waiver or Estoppel. None of this Amendment, the Overline
Advances or any negotiations or other action undertaken with respect to the
Loans shall constitute a waiver of any party's rights under the Loan Documents,
except to the extent specifically stated in a written agreement executed by all
of the parties to this Amendment. In addition, except as expressly provided in
this Amendment, none of this Amendment, the Overline Advances or any
negotiations or other action undertaken with respect to the Loans shall
restrict, inhibit or estop Lenders or Agents from exercising any right, remedy
or power available to such party at any time (whether or not negotiations are
continuing) including all rights, remedies and powers granted under the Loan
Documents or otherwise available at law or in equity, or require any delay in
the exercise of any such right, remedy or power, but subject to the terms and
conditions of the Loan Documents. The Credit Parties agree that no failure to
exercise and no delay in exercising any rights, remedies, and powers under the
Loan Documents or otherwise available at law or in equity shall operate as a
waiver of any such rights, remedies or powers, including the right to charge
interest at the Default Rate on all outstanding amounts (including the Overline
Advances) from the time of the Pending Defaults or the date of Overline Advance,
as applicable.
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Section 5.4 Partial Payments. The Credit Parties acknowledge that any
partial payments made, either before or after the execution of this Amendment,
may be applied to the Notes in partial satisfaction of the Obligations and that
neither the acceptance nor application by Agents or Lenders of any partial
payment shall constitute a cure or waiver of any default under any of the Loan
Documents, constitute any extension or other modification of the Loans or any
Loan Document, or prejudice any of Lenders' rights under any Loan or any Loan
Documents.
Section 5.5 Representations and Warranties. Each of the Credit Parties
hereby jointly and severally represents and warrants that, except as set forth
on Schedule 2 hereto, each of the representations and warranties of the Credit
Parties, and each of them, set forth in the Credit Agreement and in each of the
other Loan Documents, in each case as amended by this Amendment, is true and
correct as of the date hereof and other than the Pending Defaults, no Default or
Event of Default has occurred and is continuing under the Credit Agreement or
any of the other Loan Documents, in each cases as amended by this Amendment.
Section 5.6 No Litigation. The Credit Parties hereby represent and
warrant to Administrative Agent and the Lenders that, except as set forth on
Schedule 2 hereto, no litigation, investigation or proceeding before or by an
arbitrator or Governmental Authority is continuing or, to the knowledge of any
Credit Party, threatened against the Credit Parties, or any of them, or any of
their officers, directors or Affiliates (i) with respect to the Credit
Agreement, as amended by this Amendment, the Notes, or any of the other Loan
Documents, in each case as amended by this Amendment, or any of the transactions
contemplated hereby or thereby, or (ii) which could have a Material Adverse
Effect on Business, prospects or financial condition of the Credit Parties, or
any of them.
Section 5.7 Turnaround Consultant. The Credit Parties represent and
warrant that a turnaround consultant selected by the Credit Parties, Xxxxxxxx,
Xxxxx and Coldress ("Company's Consultants") have been, and at all times prior
to the Overline Termination Date will be, engaged by them. On or before the
Overline Expiration Date, the Credit Parties and the Company's Consultants shall
present to the Lenders and Agents a proposal with respect to the repayment of
the Loans.
ARTICLE 6
Additional Covenants
Section 6.1 Further Information and Cooperation. The Credit Parties
acknowledge that Agents have invoked the right to access to the Credit Parties'
books, records and other items pursuant to Credit Agreement Section 1.15 and to
communicate with the Credit Parties' accountants pursuant to Credit Agreement
Section 4.2. From and after the date hereof, Agents, Lenders and their
respective designees shall have continued
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access and communication without respect to any requirement of notice, hours or
other matters set forth in said Sections.
Section 6.2 Subordinated Debt. The Credit Parties acknowledge that
pursuant to Credit Agreement Section 3.24 and the Subordinated Notes referred to
therein, no payments shall be made on the Subordinated Debt during the existence
of the Pending Defaults.
Section 6.3 Payments to Insiders. During the Forbearance Period, no
payment shall be made to any employee, director, shareholder or any person or
entity in control of any Credit Party or any entity controlled directly or
indirectly by any of the foregoing (each, an "Insider") except for existing
payroll amounts and reimbursement of business related expenses consistent with
past practices and inter-company transfers pursuant to the Cash Management
Systems. The Credit Party shall obtain each Insider's written consent to the
requirements of this Section 6.3.
Section 6.4 Cash Management. The Credit Parties acknowledge that the
Cash Management Systems are to be maintained by the Credit Parties. No Credit
Party shall use any deposit account that is not a Lockbox Account. At Agents'
request, the Credit Parties shall implement additional cash management
arrangements so as to further secure Lenders' and Agents' security interests in
the cash flow of the Credit Parties.
Section 6.5 Waiver of the Automatic Stay.
6.5.1 The Credit Parties hereby agree that, in consideration
for the Overline Advances in the event that any Borrower or Subsidiary Guarantor
shall (i) file with any bankruptcy court of competent jurisdiction or be the
subject of any petition under Title 11 of the U.S. Code, as amended ("Bankruptcy
Code"), (ii) be the subject of any order for relief issued under the Bankruptcy
Code, (iii) file or be the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors, (iv) have sought or
consented to or acquiesced in the appointment of any trustee, receiver,
conservator, or liquidator, or (v) be the subject of an order, judgment or
decree entered by any court of competent jurisdiction approving a petition filed
against Credit Parties for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or relief
for debtors (any of the foregoing clauses (i) - (v) being a "Filing"), then,
subject to court approval, Agents and Lenders shall thereupon be entitled and
the Credit Parties hereby irrevocably consent to and agree to stipulate to
relief from any automatic stay imposed by Section 362 of the Bankruptcy Code, or
otherwise, on or against the exercise of the rights and remedies otherwise
available to Lenders as provided in the Loan Documents, and as otherwise
provided by law, and Credit Parties hereby irrevocably
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waive any rights to object to such relief. This covenant is a material
inducement for Lenders to accept this Amendment.
6.5.2 Lenders, Agents and Credit Parties shall cooperate in
defending the validity of the transactions contemplated by the Credit Agreement,
this Amendment or any of the other Loan Documents in any court, administrative
or judicial proceeding.
Section 6.6 Release. Credit Parties hereto desire to fully comprise,
release and settle any and all claims, counterclaims, liabilities, damages,
defenses, demands and causes of action that Credit Parties have or may have
against the Agents or Lenders related to or that may have arisen, may arise or
are or become assertable as a result of events occurring in connection with the
Lending Relationship (as defined below), including any claims, causes of action
or defenses based on the negligence of Agents or Lenders or on any "lender
liability" theories of, among others, bad faith, unfair dealings, duress,
coercion, control, misrepresentation, omission, misconduct, overreaching,
unconscionability, disparate bargaining position, reliance, equity
subordination, fraud, failure of consideration in whole or in part, or
otherwise, and do hereby intend to release, compromise and settle all such
claims and matters, whether known or unknown, whether reduced to judgment,
liquidated or unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured and whether they arose
collaterally, directly, derivately, or otherwise between the Credit Parties on
the one hand, and Agents or Lenders, on the other hand (collectively, the
"Released Claims"). The Credit Parties hereby stipulate, agree, covenant,
warrant and represent unto the Lenders and Agents that no Borrower or Subsidiary
Guarantor has any outstanding claims, counterclaims, liabilities, damages,
defenses, demands or causes of action against any Lender or Agent and their
respective successors, assigns, directors, officers, employees, agents and/or
attorneys. The Credit Parties do hereby unconditionally forever release, acquit,
settle and discharge each Agent and Lender, and their respective successors,
assigns, directors, officers, employees, agents and attorneys of and from the
Released Claims and Credit Parties hereby declare the Released Claims forever
released, acquitted, settled and discharged. As used herein, the term "Lending
Relationship" shall mean a collective reference to the Notes, any Loan,
Collateral Documents, Guaranties, or any other Loan Documents, together with any
and all negotiations, discussions, acts, omissions, renewals, extensions,
collateral documents, loan agreements, term sheets and other agreements and
actions related thereto.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Free and Voluntary Act. All Borrowers and Subsidiary
Guarantors are freely and voluntarily entering into this Amendment and will
enter into any document necessary to fulfill the agreements contemplated herein
after full
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consultation with legal, financial and other counsel of their choosing. Each
Borrower and Subsidiary Guarantor has individually read this Amendment and have
discussed this Amendment with their respective legal, financial and other
counsel. All Borrowers and the Subsidiary Guarantors understand this Amendment
and the risk inherent in, and significance of, same.
Section 7.2 No Implied Terms. Any and all duties or obligations that
Agents and Lenders may have to any Borrower or Subsidiary Guarantor, are limited
to those expressly stated in the Loan Documents as amended hereby, and neither
the duties and obligations of Lenders and Agents nor the rights of the Credit
Parties shall be expanded beyond the express terms of the Loan Documents as so
amended.
Section 7.3 Fair Consideration. Agents' and Lenders' agreements
contained herein constitutes valuable, adequate and fair consideration for the
obligations of the Credit Parties hereunder.
Section 7.4 No Lender Control. No Lender will, nor has ever been, a
partner, joint venturer, alter ego, manager, or controlling person of any of the
Credit Parties.
Section 7.5 No Other Representation. The Credit Parties acknowledge and
agree that no Agent, Lender or any person or entity acting on their behalf has
made any representation or promise to any Borrower or Subsidiary Guarantor which
is not expressly set forth herein or in the other Loan Documents.
Section 7.6 Captions. The captions and headings used in this Amendment
are for convenience of reference only and do not in any way affect, limit,
amplify or modify the terms and provisions of this Amendment.
Section 7.7 Counterpart Execution. This Amendment may be executed in
several counterparts, each of which shall constitute an original, but together
such counterparts shall constitute one and the same instrument.
Section 7.8 Successors and Assigns. This Amendment shall inure to the
benefit of and be binding upon the parties hereto and their permitted legal
representatives, heirs, successors and assigns.
Section 7.9 Time; Construction; Exhibits. Time is of the essence of
each provision of this Amendment. All references to the singular or plural
number or masculine, feminine or neuter gender shall, as the context requires,
include all others. All exhibits attached hereto are by this reference made a
part of this Amendment for all purposes. All references to sections, paragraphs,
and exhibits are to this Amendment unless otherwise specifically noted. The use
of the words "hereof", "hereunder", "herein" and words of similar import shall
refer to this entire Agreement and not to any particular
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section, paragraph or portion of this Amendment unless otherwise specifically
noted. All references to "including" shall mean "including without limited to."
Section 7.10 Severability. If for any reason any provision of this
Amendment shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 7.11 Authority. Each individual executing this Amendment on
behalf of any party to this Amendment represents and warrants that he or she is
authorized to enter into this Amendment on behalf of that party and that this
Amendment binds that party.
Section 7.12 Parties in Interest. Nothing in this Amendment is intended
to confer any rights or remedies under or by reason of this Amendment on any
person other than the parties hereto and their respective permitted successors
and assigns, nor is anything in this Amendment intended to relieve or discharge
any obligation of any third person or any party hereto or to give any third
person any right to subrogation or action over or against any party to this
Amendment.
Section 7.13 Further Assurances. The Credit Parties shall, at their own
expense, execute, acknowledge and deliver any further assignments, conveyances,
transfers or other assurances, documents or instruments reasonably requested by
any Agent and will take any other action consistent with the terms of this
Amendment or which may reasonably be requested by any Agent in order to
accomplish and effectuate the intent hereof.
Section 7.14 Expenses; Documentary Stamp Taxes. The Credit Parties
shall pay all costs and expenses incurred by Lenders or Agents in connection
with the execution and delivery of this Amendment. This Amendment and the Second
Amended and Restated Promissory Note have been executed and delivered outside
the State of Florida and are not intended to be brought into the State of
Florida except for collection purposes. It is the parties understanding that no
Florida documentary stamp tax levied pursuant to Chapter 201 of the Florida
statutes is due with respect to this Amendment. However, the Credit Parties
agree to indemnify the Lenders and Agents and hold them harmless from and
against any losses, costs or expense, and hereby agree to pay any and all
stamps, duties and taxes, together with any penalty that any Lender or Agent may
be called upon to pay in the event the Florida Department of Revenue or any
other governmental agency should in the future determine that any such amounts
have been, are or will at any time in the future become due and payable.
Section 7.15 Law Governing; Consent to Jurisdiction. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN
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ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
THE CREDIT PARTIES, AGENTS AND LENDERS PERTAINING TO THIS AMENDMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENTS, LENDERS AND
THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK
AND, PROVIDED, FURTHER, NOTHING IN THIS AMENDMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
ADMINISTRATIVE AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH IN THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF
OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
Section 7.16 WAIVER OF JURY TRIAL. AGENTS, LENDERS, BORROWERS AND
SUBSIDIARY GUARANTORS DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT WHICH THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED
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HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE
EXHIBITS, ANY TRANSACTION CONTEMPLATED HEREIN, OR ANY COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY ARISING OUT OF OR
RELATED IN ANY MANNER WITH THIS AMENDMENT, ANY NOTE, ANY LOAN OR THE COLLATERAL
(INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AMENDMENT
AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS AMENDMENT WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER BY LENDERS, BORROWERS AND
SUBSIDIARY GUARANTORS IS A MATERIAL INDUCEMENT FOR AGENTS AND LENDERS TO ENTER
INTO THIS AMENDMENT.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, this Amendment was made and executed as of the date
first above written.
BORROWERS: HI-RISE RECYCLING SYSTEMS, INC., a Florida
corporation
IDC ACQUISITION SUB, INC., a New York corporation
XXXXXXXXX COMPANY, INC., an Ohio corporation
RECYCLTECH ENTERPRISES INC.,
an Ontario corporation
HESCO SALES, INC., a Florida corporation
BES-PAC, INC., formerly known as BPI ACQUISITION
CORP., a South Carolina corporation
DII ACQUISITION CORP., a Connecticut corporation
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: Chairman and CEO of Hi-
Rise Recycling Systems and
CEO of other entities listed
above
ACME CHUTE COMPANY, INC., a Florida corporation
XXXXXX INDUSTRIES, INC., a Connecticut corporation
ECOLOGICAL TECHNOLOGIES, INC., a Connecticut
corporation
KE CORPORATION, a Delaware corporation
AMERICAN GOOSENECK, INC., an Arizona corporation
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: CEO
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LENDERS: GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent and as Lender
By: /s/ Xxx Xxxxx
----------------------------------------------
Name: Xxx Xxxxx
Title: Senior Vice President
BANK OF AMERICA, N.A., successor in interest to
NATIONSBANK, N.A., as Revolver Agent and as Lender
By: /s/ Xxxxxx XxXxxxxx
----------------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Vice President
KEY CORPORATE CAPITAL, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Designated Signer
00
XXXXX XX Xxx Xxxx )
) ss:
COUNTY OF New York )
The foregoing instrument was acknowledged before me this 23
day of October, 2000 by Xxxxxx Xxxxx, who personally appeared before me, being
an officer of each of HI-RISE RECYCLING SYSTEMS, INC., a Florida corporation,
IDC ACQUISITION SUB, INC., a New York corporation, XXXXXXXXX COMPANY, INC., an
Ohio corporation, RECYCLTECH ENTERPRISES INC., an Ontario corporation, HESCO
SALES, INC., a Florida corporation, UNITED TRUCK AND BODY CORPORATION, a Florida
corporation, HESCO EXPORT CORPORATION, a Florida corporation, BPI ACQUISITION
CORP., a South Carolina corporation, and DII ACQUISITION CORP., a Connecticut
corporation, on behalf of each such corporation, and he acknowledged that he
signed and delivered the foregoing instrument as his own free will and voluntary
act for the purposes therein set forth. The above-named individual has produced
the following identification which is current or has been issued within the past
five years and bears a serial or other identifying number:
[ ] the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
[X] a driver's license or non-driver's ID issued by Florida or
any other U.S. state;
[ ] a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
[ ] a U.S. military ID; or
[ ] a Canadian or Mexican driver's license issued by an official
agency.
/s/ Xxxxxxxx Xxxx
Print Name: Xxxxxxxx Xxxx
---------------------------------------
NOTARY PUBLIC - State of New York
Commission Number: 914883112
--------------------------------
My Commission expires: March 9, 2002
(Notarial Seal)
16
STATE OF Connecticut )
) ss: ###-##-####
COUNTY OF Farfield )
The foregoing instrument was acknowledged before me this 20
day of October, 2000 by Xxx Xxxxx, who personally appeared before me, being the
Senior Vice President of GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, on behalf of said corporation, and he acknowledged that he signed
and delivered the foregoing instrument as his own free will and voluntary act
for the purposes therein set forth. The above-named individual has produced the
following identification which is current or has been issued within the past
five years and bears a serial or other identifying number:
[ ] the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
[X] a driver's license or non-driver's ID issued by Florida or
any other U.S. state;
[ ] a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
[ ] a U.S. military ID; or
[ ] a Canadian or Mexican driver's license issued by an official
agency.
/s/ Xxxxx X. Felis
--------------------------------------------------
Print Name: Xxxxx X. Felis
NOTARY PUBLIC - State of CT
Commission Number:________________________________
My Commission expires: 2/28/05
(Notarial Seal)
17
STATE OF Florida )
) ss:
COUNTY OF Hillsborough )
The foregoing instrument was acknowledged before me this 19th day of October,
2000 by Xxxxxx X. XxXxxxxx, who personally appeared before me, being the Vice
President of BANK OF AMERICA, a national banking association, on behalf of said
association, and he acknowledged that he signed and delivered the foregoing
instrument as his own free will and voluntary act for the purposes therein set
forth. The above-named individual has produced the following identification
which is current or has been issued within the past five years and bears a
serial or other identifying number:
[X] the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
[ ] a driver's license or non-driver's ID issued by Florida or
any other U.S. state;
[ ] a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
[ ] a U.S. military ID; or
[ ] a Canadian or Mexican driver's license issued by an official
agency.
/s/ Xxxx X. Xxxxxx
--------------------------------------------------
Print Name: Xxxx X. Xxxxxx
NOTARY PUBLIC - State of Florida
Commission Number: OC 667563
My Commission expires:
(Notarial Seal)
18
STATE OF Ohio )
) ss:
COUNTY OF _______)
The foregoing instrument was acknowledged before me this 19 day of October, 2000
by Xxxxx Xxxxxxxxx, who personally appeared before me, being the designated
signer of KEY CORPORATE CAPITAL INC., on behalf of said corporation, and he
acknowledged that he signed and delivered the foregoing instrument as his own
free will and voluntary act for the purposes therein set forth. The above-named
individual has produced the following identification which is current or has
been issued within the past five years and bears a serial or other identifying
number:
[ ] the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
[X] a driver's license or non-driver's ID issued by Florida or
any other U.S. state;
[ ] a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
[ ] a U.S. military ID; or
[ ] a Canadian or Mexican driver's license issued by an official
agency.
/s/ Xxxxxxx Xxxx
--------------------------------------------
Print Name: Xxxxxxx Xxxx
NOTARY PUBLIC - State of Ohio
Commission Number: N/A
My Commission expires: 7-15-2004
(Notarial Seal)
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SCHEDULE 1
CURRENT OUTSTANDING BALANCES
Revolving Notes (Revolver A) including $17,969,422.83
Swing Line Notes (Revolver A)
Revolving Notes (Revolver B) including $7,248,298.95
Swing Line Notes (Revolver B)
Term Notes A $4,333,333.35
Term Notes B $9,000,000.00
Acquisition Loan Notes $14,372,005.70
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SCHEDULE 2
POTENTIAL DEFAULTS
CREDIT PARTIES DISCLOSURE SCHEDULE
Dated as of October 19, 2000
In connection with the Third Amendment to Credit Agreement and
Composite Amendment Agreement, dated as of October 19, 2000 (the "Third
Amendment"), by and among the Credit Parties, the Lenders and the Agents,
attached hereto are certain sections of the disclosure schedule (the "Disclosure
Schedule") to the Third Amendment prepared by the Credit Parties. Capitalized
terms not otherwise defined herein but defined in the Third Amendment shall have
the meaning set forth in the Third Amendment.
Any fact or item stated in any section of the Disclosure Schedule shall
be deemed to be disclosed on any other section or sections of the Disclosure
Schedule, notwithstanding the omission of a reference or cross-reference
thereto.
The inclusion of any information in the Disclosure Schedule shall not
be deemed an admission or acknowledgment, in and of itself, that such
information is required to be listed in the Disclosure Schedule or that any such
items are material to the Credit Parties.
The headings of the sections of the Disclosure Schedule are inserted
for convenience only and shall not be deemed to constitute a part thereof or a
part of the Third Amendment.
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Schedule 2
Representations and Warranties and Litigation
The representations and warranties contained in Sections 3.13 and 3.17 of the
Credit Agreement are qualified by the following exceptions:
XxXxxx Environmental Matters
In February 1999, Hi-Rise acquired all of the outstanding capital stock of
XxXxxx. XxXxxx had been operating four paint spray booths to paint its products
since 1985. Two Notices of Violation were issued by the Connecticut Department
of Environmental Protection (the "DEP"), one for construction of the booths and
one for their operation. In addition, a third Notice of Violation was issued by
the DEP for XxXxxx'x failure to have submitted an application permit under Title
V of the Clean Air Act.
On or about July 31, 2000, the Commissioner of Environmental Protection for the
State of Connecticut (the "Plaintiff") brought an action in Superior Court,
Judicial District of Hartford, State of Connecticut, against XxXxxx alleging
that XxXxxx violated several provisions of Connecticut law by its failure to
obtain the permits relating to its construction, installation and operation in
1986 and 1994 of those paint spray booths used in its manufacturing processes.
The Plaintiff is seeking civil penalties not to exceed $25,000 per day for each
day of violation on or after October 1, 1990 and civil penalties not to exceed
$1,000 per day for each day of violation prior to October 1, 1990. The Credit
Parties believe that they are entitled to be indemnified for substantially all
liability for this action by the former shareholders of XxXxxx pursuant to the
terms and conditions of the Stock Purchase Agreement dated as of February 23,
1999, by and among Hi-Rise Recycling Systems, Inc., DII Acquisition Corp.,
XxXxxx, Ecological Technologies and the shareholders of XxXxxx.
XxXxxx has submitted applications for the necessary permits.
The representations and warranties set forth in Section 3.5 are qualified by the
following exceptions:
The Pending Defaults and the environmental matters described above could have a
Material Adverse Effect. The Credit Parties have been experiencing cash flows
shortages which could have a Material Adverse Effect.
Covenants
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The Credit Parties may be in breach of certain covenants set forth in Sections
5.8 and 6.11 of the Credit Agreement due to the XxXxxx Environmental Matters
referenced above.
In addition, the Credit Parties may be in breach of the following covenants:
Section 5.2 - Payment of Obligations
Hi-Rise files its income tax returns on a consolidated basis that
includes the other Credit Parties. Hi-Rise has not made any payments
with respect to its outstanding consolidated income tax liability
incurred for the fiscal year ended December 31, 1999 because it
anticipates that it will receive a refund for fiscal year ending
December 31, 2000 due to losses incurred during that fiscal year.
Hi-Rise intends to accrue penalties and interest up until the date on
which the refund is paid to it and allow a portion of that refund to be
used to pay the outstanding income tax liability and the accompanying
penalties and interest.
The Credit Parties owe payment for lawful claims for labor, materials,
supplies and services which have been provided by certain vendors of
the Credit Parties and are past due.
Section 5.6 - Supplemental Disclosure
The Credit Parties have not supplemented each Disclosure Schedule to
the Credit Agreement to disclose matters which, if existing or
occurring at the date of the Credit Agreement, would have been required
to be set forth or described in such Disclosure Schedule to the Credit
Agreement or which was necessary to correct any information in such
Disclosure Schedule or representation to the Credit Agreement.
Section 5.9 - Landlords' Agreements, Mortgage Agreements and Bailee
Letters
The Credit Parties have not yet obtained landlord agreements with
respect to certain parcels of land which are leased by the Credit
Parties which would contain a waiver or subordination of all Liens or
claims that the landlord may assert against the Inventory or Collateral
at that location.
Section 6.10 - Financial Covenants
The Credit Parties are not in compliance with any of the financial
covenants.
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