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EXHIBIT 10.1
FOURTH AMENDMENT AND JOINDER TO CREDIT AGREEMENT
This Fourth Amendment and Joinder to Credit Agreement ("Amendment")
dated as of March 31, 1997 by and among Xxx X. Xxxxxx, Inc. ("Weston"); the
Subsidiaries of Weston listed on the signature pages hereto (Weston and such
Subsidiaries are sometimes referred to individually as a "Borrower" and
collectively as the "Borrowers"); CoreStates Bank, N.A. ("CoreStates"), First
Union National Bank, successor by merger to First Fidelity Bank, N.A. ("First
Union") and PNC Bank, National Association ("PNC") (CoreStates, First Union and
PNC are each referred to individually as a "Bank" and collectively as the
"Banks"); and CoreStates Bank, N.A., as agent for the Banks hereunder (the
"Agent").
BACKGROUND
A. Borrowers, Banks and Agent are currently parties to a
certain Credit Agreement dated March 18, 1994, as amended from time to time
("Credit Agreement") whereby Banks established a credit facility under which
loans and letters of credit were made available from time to time for the
benefit of Borrowers. All capitalized terms used herein without further
definition shall have the meanings ascribed thereto in the Credit Agreement.
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B. Pursuant to the terms of the Credit Agreement, the Commitments of
the Banks expire on March 30, 1997 with all Loans to be repaid by March 18, 1998
(unless sooner due pursuant to the terms of the Credit Agreement).
C. Borrowers have asked Banks to amend the Credit Agreement to, among
other things, extend the Commitment Termination Date and reduce the Total
Commitments of the Banks, which the Banks have agreed to do on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, intending to be legally bound, the parties promise and
agree as follows:
Section 1. Status of Current Facility. Borrowers and Banks
acknowledge and agree that as of the date hereof there are no outstanding Loans
and the aggregate outstanding face amount of all Letters of Credit is
$7,538,791.53.
Section 2. Joinder of Additional Borrowers. Weston has created two
new subsidiaries, Weston of New Jersey, Inc. and Weston Interactive, Inc. ("New
Subsidiaries"). Pursuant to Section 5.22 of the Credit Agreement, each of the
New Subsidiaries hereby joins in and becomes a Borrower under the
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Credit Agreement and assumes and adopts the liabilities and obligations of a
Borrower thereunder with respect to the credit facility established pursuant
thereto, all Loans thereunder and all other obligations and liabilities related
thereto (including, without limitation, liabilities and obligations related to
Letters of Credit). All references to Borrower or Borrowers contained in the
Credit Agreement and each agreement, document or instrument related thereto are
hereby deemed to include New Subsidiaries as Borrowers and New Subsidiaries
agree to comply with all of the terms and conditions thereof as if they were
original signatories thereto. Each New Subsidiary hereby becomes jointly and
severally liable, along with all of the other Borrowers, for all existing and
future obligations and liabilities of Borrowers to Banks and/or Agent under the
terms of the Credit Agreement and any agreement, document or instrument related
thereto.
Section 3. Amendments.
3.1 The Credit Agreement is amended by deleting the chart
appearing in Section 2.01 thereof and replacing such chart with the following:
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Banks Amount Commitment Percentage
----- ------ ---------------------
CoreStates $15,000,000 60%
First Union $ 5,000,000 20%
PNC $ 5,000,000 20%
----------- ---
TOTAL $25,000,000 100%
3.2 The Credit Agreement is amended by deleting the
definition of "Commitment Termination Date" contained in Section 1.01 thereof
and replacing such definition in its entirety with the following:
"Commitment Termination Date" means the earlier of (A) March
27, 1998 or (B) the date on which the Commitments are fully
terminated pursuant to Section 2.05(C) or Section 6.02(A)
hereof.
3.3 The Credit Agreement is amended by deleting the
definition of "Maturity Date" contained in Section 1.01 thereof and replacing
such definition in its entirety with the following:
"Maturity Date" means the earlier of (A) March 27, 1998 or (B)
the date on which the Commitments are fully terminated
pursuant to Section 2.05(C) or the obligations of the
Borrowers hereunder are accelerated pursuant to Section
6.02(A) hereof.
3.4 The Credit Agreement is amended by deleting the
definition of "Margin" contained in Section 1.01 thereof and replacing such
definition in its entirety with the following:
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"Margin" means (A) in the case of each Base Rate Loan, 0%; (B)
in the case of each LIBOR Loan, 1%; provided, however, that in
each such case, upon notice from the Agent to the Borrowers
of the existence of an Event of Default and until full payment
of the Borrower's obligations hereunder (or until such Event
of Default is cured or waived to the satisfaction of Banks),
each of the foregoing margins shall be the sum of such Margin
plus 2%.
3.5 The Credit Agreement is amended by deleting the
definition of "Total Commitments" contained in Section 1.01 thereof and
replacing such definition in its entirety with the following:
"Total Commitments" means $25,000,000.00.
3.6 The Credit Agreement is amended by deleting
subsection 2.02(A) thereof and replacing such subsection in its entirety with
the following:
(A) Each Line Advance made as a LIBOR Loan shall be in an
aggregate amount of $2,000,000.00 and multiples of $500,000.00
in excess thereof. Each Line Advance made as a Base Rate Loan
shall be in an aggregate amount of $1,000,000.00 and multiples
of $250,000.00 in excess thereof. Within the limits of the
Commitments, the Borrowers may borrow, repay and reborrow
under this Section 2.02 until the Commitment Termination Date,
provided, however, that at no time shall the aggregate
outstanding Line Advances exceed $10,000,000 provided,
further, however, that such limit shall not restrict or impair
the right and obligation of the Banks to make Line Advances
pursuant to Section 2.15 below.
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3.7 The Credit Agreement is amended by deleting the
percentage "1/4%" in the fourth line of Section 2.04 thereof and replacing such
percentage with the percentage "3/8%".
3.8 The Credit Agreement is amended by adding the
following sentence to the end of subsection 2.07(B):
No LIBOR Loan shall have a LIBOR Interest Period which extends
beyond the Maturity Date.
3.9 The Credit Agreement is amended by deleting Section 2.16
thereof and replacing such Section in its entirety with the following:
SECTION 2.16. Letter of Credit Fees. In addition to the
customary fees of the Issuing Bank (for its own account) for
the opening, amendment, transfer, maintenance and cancellation
of Letters of Credit (a schedule of which will be furnished to
the Borrowers from time to time), the Borrowers will pay to
the Agent, in respect of each Letter of Credit, a fee
calculated at the annual rate of 1 1/4% (1 3/4% after the
Commitment Termination Date), of which 1% (1 1/2% after the
Commitment Termination Date) is to be distributed among the
Banks in accordance with their respective Commitment
Percentages and 1/4% is to be remitted to the Issuing Bank for
its sole account, on the face amount of such Letter of Credit
from the date it is opened until its stated expiry date or the
day on which it is paid in full, payable quarterly in arrears
on the day such Letter of Credit is opened and on the first
Business Day of each January, April, July, and October on
which it is outstanding.
3.10 The Credit Agreement is amended by deleting the
phrase "If any Event of Default or event that would with the
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passage of time or the giving of notice or both, be such an Event of Default
shall then exist or arise therefrom," beginning in the first line of Section
5.13 thereof.
3.11 The Credit Agreement is amended by deleting Section
5.17 thereof and replacing such section in its entirety with the following:
Section 5.17. Net Worth. Weston will not permit its Net
Worth, to be calculated at the end of each fiscal quarter
commencing with the fiscal quarter ending March 31, 1997, to
be less than the following amounts during the following
periods:
Period Minimum Net Worth
------ -----------------
March 31, 1997 - June 29, 1997 $64,000,000
June 30, 1997 - September 29, 1997 $65,000,000
September 30, 1997 - December 30, 1997 $67,000,000
December 31, 1997 and thereafter $66,000,000
3.12 The Credit Agreement is amended by deleting Section
5.18 thereof and replacing such section in its entirety with the following:
Section 5.18. Adjusted Leverage Ratio. Weston will not permit
the ratio of (A) Total Liabilities plus Contingent Liabilities
(including Borrowers' reimbursement obligations for Letters of
Credit, which for purposes of this covenant shall be
calculated on the stated amount of Letters of Credit that have
not been drawn upon plus any unpaid reimbursement obligations
for Letters of Credit that have been drawn upon) to (B)
Tangible Net Worth, to be calculated at the end of each fiscal
quarter, to be greater than 1.75 to 1.0 as of and from
December 31, 1996 and at all times thereafter.
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3.13 The Credit Agreement is amended by deleting Section
5.20 thereof and replacing such section in its entirety with the following:
SECTION 5.20. Cash, Cash Equivalents and Marketable
Securities. Weston and its Subsidiaries will not permit the
sum of its cash, Cash Equivalents and Marketable Securities to
be less than $10,000,000 at any time. Cash, Cash Equivalents,
and Marketable Securities held by Cardinal Indemnity shall be
excluded from this calculation. This covenant is to be tested
on the last day of each month commencing March 31, 1997.
3.14 The Credit Agreement is amended by deleting Section
5.21 thereof in its entirety and replacing such section in its entirety with
the following:
SECTION 5.21. Change of Control. Neither Weston nor any of
its Subsidiaries shall permit or suffer a Change of Control.
3.15 The Credit Agreement is amended by adding a new
Section 5.25 as follows:
SECTION 5.25. Sale of Environmental Metrics Division. If
any of the following three events should occur: 1) the
Environmental Metrics Division of the Borrower is not sold on
or before July 31, 1997 pursuant to the Asset Acquisition
Agreement dated March 7, 1997 by and between Xxx X. Xxxxxx,
Inc. and Recra Environmental, Inc. (the "Acquisition
Agreement"), 2) Weston and Recra Environmental, Inc., cease
moving in good faith toward a final closing of the Acquisition
Agreement at any time prior to July 31, 1997, or 3) the
pre-tax loss attributable to the Environmental Metrics
Division on a contribution level without any allocation of
overhead or general and administrative expenses exceeds
$1,750,000 since January 1, 1997; then the Borrower
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must provide to Agent, within 10 Business Days of any of the
such events specified above, a written plan for the
disposition of the Environmental Metrics Division. Such plan
must be acceptable to Banks as to the proposed disposition, be
it through a sale, liquidation, continued operation, or
otherwise, and the timing of such disposition. If such a plan
is not delivered to Agent within the time frame established
above or is so delivered but is not acceptable to Banks as
required by the immediately preceding sentence, such failure
shall constitute an immediate Event of Default (as defined
herein) which shall entitle Agent and/or Banks to exercise any
and all rights and remedies they are entitled to exercise
hereunder upon the occurrence of an Event of Default.
3.16 The Credit Agreement is amended by adding a new
Section 5.26 as follows:
SECTION 5.26. Debt. No Borrower shall create, incur, assume
or suffer to exist any indebtedness of any kind or nature,
except: (1) debt under this Agreement or the Restated Line
Notes; (2) debt of Borrowers disclosed in Borrower's financial
statements most recently delivered to Agent and Banks prior to
March 30, 1997; (3) trade indebtedness arising in the ordinary
course of Borrower's business; and (4) indebtedness created to
finance the acquisition of property hereafter acquired by any
Borrower and secured by purchase money liens permitted
pursuant to Section 5.05(A)(5) hereof provided the aggregate
amount of all such indebtedness incurred during the period
from March 30, 1997 through the Maturity Date shall not exceed
$2,000,000.00.
3.17 The Credit Agreement is amended by adding the
following definitions to Section 1.01 thereof in their appropriate alphabetical
order:
"Cash Equivalents" means as to any Person, (a) commercial
paper maturing in one (1) year or less from the date of
issuance rated either A-1 by Standard & Poor's Corporation
("S&P"), P-1 by Xxxxx'x Investors Service, Inc. ("Moody's") or
other similar rating by a nationally recognized credit rating
agency of similar
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standing; (b) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America, or any agency or
instrumentality thereof, maturing in twelve (12) months or
less from the date of acquisition thereof; (c) certificates of
deposit maturing within ninety (90) days from the date of
origin issued by, or money market funds held by, a Federal
Reserve Bank or a commercial bank with capital, surplus and
undivided profits of not less than Two Hundred Fifty Million
Dollars ($250,000,000.00), (d) repurchase agreements secured
by direct obligations of the United States of America, or any
agency thereof, maturing in twelve (12) months or less and
having a market value at the time such repurchase agreement is
entered into at least equal to the amount of the repurchase
obligations thereunder, entered into with a Federal Reserve
Bank or a commercial bank with capital, surplus and undivided
profits of not less than Two Hundred and Fifty Million Dollars
($250,000,000.00), and (e) mutual funds having at least
seventy five percent (75%) of their investments in cash and/or
investments included in (a) (b) (c) and (d) above.
"Change of Control" means, (a) with respect to Weston, (i) if
any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), excluding Xxx X. Xxxxxx
and/or any member(s) of his immediate family, and/or any trust
under which Xxx X. Xxxxxx and/or any member(s) of his
immediate family hold the legal and equitable interests, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall also
be deemed to have "beneficial ownership" of all securities
that such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 20% of the total voting
power of the issued and outstanding voting stock of Weston
normally entitled to vote in the election of directors of
Weston or acquires the power, directly or indirectly, to
direct the management or policies of Weston, or (ii) if during
any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors
(together with any new directors whose election by the Board
of Directors or whose nomination for election by the
stockholders of
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Weston was approved by a vote of a majority of the directors
then still in office who were either directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in
office, or (iii) a change in control of Weston of a nature
that would be required to be reported in response to Item 6
(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, as enacted and enforced on the date hereof,
whether or not Weston is subject to such reporting
requirement, and (b) with respect to any other Borrower, if at
any time Weston ceases to own one-hundred (100%) percent of
the outstanding capital stock of such Borrower.
"Marketable Securities" means all securities that would, in
accordance with GAAP, be classified as marketable securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, together with all rules and regulations promulgated
in connection therewith.
3.18 Notwithstanding anything to the contrary contained in
the Credit Agreement, the Banks and Agent agree that the Credit Agreement shall
not, without the written consent of all Banks, be amended in a manner which
would (nor shall any waiver or consent be granted to) permit Borrowers to, at
any time, have outstanding Line Advances in excess of the minimum amount of
cash, Cash Equivalents and Marketable Securities then required pursuant to the
Credit Agreement.
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Section 4. Notes. The Borrowers shall, contemporaneously
herewith, jointly and severally execute and deliver to each Bank a restated
promissory note (each, a "Restated Line Note"), in form and substance
satisfactory to Banks, payable to the order of each Bank in a principal amount
equal to the amount of such Bank's Commitment. The Restated Line Notes shall
evidence the unconditional obligation of Borrowers to repay the Line Advances.
The Restated Line Notes shall amend and replace (but not extinguish the
obligations evidenced by or cause a novation of) those certain Line Notes
executed by Borrowers in favor of Banks, each dated March 18, 1994. All
references to the Notes or the Line Notes contained in the Credit Agreement or
any of the other Loan Documents shall hereinafter be deemed to refer to the
Restated Line Notes.
Section 5. Amendment Fee. In consideration of the amendments
set forth herein, Borrowers shall pay to Agent, for the ratable benefit of each
Bank according to each Bank's respective Commitment Percentage, a fully earned,
non-refundable amendment fee of $37,500 ("Amendment Fee"), due and payable
contemporaneously with the execution hereof.
Section 6. Miscellaneous.
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6.1 Each Borrower represents and warrants to the Banks
and Agent that it has taken all necessary corporate action to authorize the
execution, delivery and performance of this Amendment and the Restated Line
Notes. This Amendment and the Restated Line Notes are, or when executed by the
Borrowers and delivered to the Agent will be, fully executed and constitute
valid and legally binding obligations of the Borrowers, enforceable against
each Borrower in accordance with their respective terms. Each Borrower hereby
ratifies, confirms and restates each of the representations and warranties of
the Borrowers set forth in Article IV of the Credit Agreement as being true and
correct on the date hereof except for those contained in Section 4.04 thereof.
6.2 As a condition to the effectiveness of this
Amendment, the Borrowers shall cause to be delivered to Agent, (for the benefit
of Banks) the following (all to be in form and substance satisfactory to Agent
and its counsel);
(a) this Amendment, fully executed by each of the
Borrowers, Banks and Agent;
(b) the Restated Line Notes, each fully executed by
the Borrowers;
(c) a certificate from the secretary of each Borrower
certifying true and correct copies of the applicable
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Borrower's (i) corporate resolutions authorizing the execution, delivery and
performance of this Amendment and the Restated Line Notes, (ii) Articles of
Incorporation and (iii) Bylaws;
(d) Good Standing Certificates for each Borrower
issued by the Secretary of State of the state where each such Borrower was
incorporated;
(e) Incumbency Certificates for each Borrower;
(f) an opinion of counsel from counsel to each of the
Borrowers; and
(g) payment of the Amendment Fee in good cleared
funds.
6.3 This Amendment may be executed in any number of
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.
6.4 This Amendment and the documents, instruments and
agreements executed and delivered pursuant hereto constitute the entire
agreement among the parties relating to the specific subject matter contained
in this Amendment.
6.5 This Amendment shall amend and is incorporated into
the Credit Agreement. In the event of any express inconsistency between the
terms hereof and the terms of the
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Credit Agreement, the terms hereof shall control. Except as expressly amended
by this Amendment, all of the terms and conditions of the Credit Agreement
remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Fourth Amendment and
Joinder to Credit Agreement to be executed by their respective duly authorized
officers as of the date first above written.
XXX X. XXXXXX, INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
XXX X. XXXXXX OF NEW YORK, INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
(SIGNATURES CONTINUED ON NEXT PAGE)
(SIGNATURES CONTINUED FROM PREVIOUS PAGE)
XXX X. XXXXXX (DELAWARE), INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
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XXX X. XXXXXX (IPR), INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
TRANS-THERMAL SYSTEMS, INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
XXX X. XXXXXX OF MISSOURI, INC.
(f/k/a Xxx X. Xxxxxx of Idaho, Inc.)
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
WESTON (A BUSINESS TRUST)
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
(SIGNATURES CONTINUED ON NEXT PAGE)
(SIGNATURES CONTINUED FROM PREVIOUS PAGE)
WESTON ENVIRONMENTAL METRICS, INC.
(f/k/a Weston-Gulf Coast, Inc.)
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
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WESTON INTERNATIONAL HOLDINGS, INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
WESTON OF NEW JERSEY, INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
WESTON INTERACTIVE, INC.
(A Delaware corporation)
Attest:___________________ By:_______________________________
Name:_____________________________
Title:____________________________
WESTON INTERNATIONAL INC.
Attest:___________________ By:_______________________________
Name:_____________________________
Title:_____________________________
(SIGNATURES CONTINUED ON NEXT PAGE)
(SIGNATURES CONTINUED FROM PREVIOUS PAGE)
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PNC BANK NATIONAL ASSOCIATION
By:_______________________________
Name:_____________________________
Title:____________________________
FIRST UNION NATIONAL BANK
By:_______________________________
Name:_____________________________
Title:____________________________
CORESTATES BANK, N.A.,
(individually and as Agent)
By:_______________________________
Name:_____________________________
Title:____________________________
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