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EXHIBIT 10.1
FOURTH AMENDMENT AND WAIVER
TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (the
"Agreement") is being executed and delivered as of August 14, 2001, by and among
EarthCare Company, a Delaware corporation (the "Borrower"), the Borrower's
Subsidiaries named as signatories hereto, Xx. Xxxxxxx X. Xxxx ("Xx. Xxxx"), and
Xx. Xxxxxx X. Xxxxxxxxx, Xx. ("Xx. Xxxxxxxxx" and, together with Mr. Cash and
such Subsidiary signatories, collectively, the "Guarantors"), the financial
institutions from time to time party to such Credit Agreement referred to and
defined below (collectively, the "Banks"), and Bank of America, N.A., as
representative of the Banks (in such capacity, the "Administrative Agent").
Undefined capitalized terms used herein shall have the meanings ascribed to such
terms in such Credit Agreement referred to below.
WITNESSETH:
WHEREAS, the Borrower, the Banks, the Administrative Agent
have entered into that certain Amended and Restated Credit Agreement dated as of
February 15, 2000 (as heretofore amended pursuant to amendment agreements dated
as of April 14, 2000, October 31, 2000 and April 16, 2001, the "Credit
Agreement"), pursuant to which, among other things, the Banks have agreed to
provide, subject to the terms and conditions contained therein, certain loans to
the Borrower;
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of the Guarantors have executed and delivered in favor of the
Administrative Agent and the Banks certain Loan Documents pursuant to which such
Guarantors have guaranteed the Borrower's Obligations under the Credit Agreement
and the Borrower and such Guarantors have granted liens and security interests
in certain of their properties as security for their respective obligations
under the Loan Documents;
WHEREAS, certain Events of Default have occurred as a result
of (collectively, the "Existing Defaults"): (i) the Borrower's failure to comply
with its minimum Adjusted EBITDA covenant set forth in Section 10.6.7 of the
Credit Agreement with respect to each of the periods ending as of the last day
of the months January 2001 through May 2001, (ii) the Borrower's failure to
comply with each of the financial covenants set forth in Sections 10.6.1 through
10.6.5 with respect to the Computation Period ended June 30, 2001, (iii) the
Borrower's failure to complete sales of the EarthLiquids Subsidiaries or the
EarthAmerica Subsidiaries in accordance with the requirements of Section 12.1.12
of the Credit Agreement, (iv) the Borrower's failure to pay the amendment fees
due on June 30, 2001 pursuant to Section 5.7 of the Third Amendment, Waiver and
Consent dated as of April 16, 2001 to the Credit Agreement (hereinafter, the
"Third Amendment"), (v) the Borrower's failure cause Xx. Xxxxxxxxx to provide
certain lien perfection documentation to the Administrative Agreement pursuant
to Section 5.8 of the Third Amendment, (vi) the Borrower's breach of
representations and warranties set forth in Sections 9.15(a) and 9.15(c) of the
Credit Agreement, and compliance
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with Section 10.4 of the Credit Agreement, with respect to the matters described
in Exhibit A hereto, (vii) the Borrower's failure, prior to the effectiveness of
this Agreement, to timely comply with the requirements of Sections 10.1.7 and
10.13 of the Credit Agreement with respect to certain Subsidiaries of the
Borrower, or the requirements of Section 5.6 of the Second Amendment dated as of
February 15, 2000 to the Credit Agreement with respect to certain parcels of
real property, and (viii) the failure, prior to the effectiveness of this
Agreement, by Xx. Xxxxxxxxx and Mr. Cash to comply with the requirement to
deliver to the Administrative Agent collateral security for their obligations
under the Individual Guaranty and that certain Additional Guaranty dated as of
October 31, 2000 executed by Xx. Xxxxxxxxx in favor of the Administrative Agent
and the Banks (as heretofore amended, the "Additional Guaranty") or any security
documentation with respect thereto; and
WHEREAS, the Borrower and the Guarantors have requested that
the Banks waive, and subject to the terms and conditions of this Agreement the
Banks have agreed to waive, the Existing Defaults.
NOW, THEREFORE, in consideration of the foregoing premises,
the terms and conditions stated herein and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Guarantors, the Banks and the Administrative Agent hereby agree as follows:
1. Amendment to Credit Agreement. Subject to the satisfaction
of each of the conditions set forth in Paragraph 3 of this Agreement, the Credit
Agreement is hereby amended as follows (section and schedule references used
herein shall refer to sections and schedules of the Credit Agreement):
(a) Section 1.1 is amended to add the following new
definitions in their respective alphabetical locations:
"Adjusted EBITDA" means EBITDA calculated without
including any financial results from ERMFI.
"EarthLiquids Payment Date" means the earlier of (i)
September 30, 2001 and (ii) the consummation of the sale or other
disposition of the EarthLiquids Subsidiaries.
(b) Section 1.1 is further amended to delete the definition of
"Floating Rate Margin" in its entirety and to replace such definition with the
following definition:
"Floating Rate Margin" means 3.00% per annum at all
times from and after July 31, 2001.
(c) Section 2.2 is amended to add the following new subsection
to the end of such section:
2.2.4 Elimination of Eurodollar Option.
Notwithstanding anything in this section or Agreement to the contrary,
from and after the April 16, 2001, the
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Company shall have no right to borrow or continue, or to convert Loans
into, Eurodollar Rate Loans.
(d) Section 4.2 is amended to delete in its entirety the first
sentence of such section and to replace such sentence with the following
sentence:
Accrued interest on each Floating Rate Loan shall be payable in arrears
on the last Business Day of each calendar month and at maturity;
provided, however, that the payment of a portion of such interest
accrued with respect to each Floating Rate Loan during the period
commencing July 31, 2001 and ending on the EarthLiquids Payment Date in
an amount calculated at the rate of 1.50% per annum on the daily
outstanding principal balance of such Floating Rate Loan during such
period shall be deferred during such period and become due and payable
in full on the EarthLiquids Payment Date, with the remaining portion of
such accrued interest with respect to such Floating Rate Loan payable
in arrears on the last Business Date of each calendar month ending
during such period.
(e) Section 5 is amended to add the following new subsection
to the end of such section:
5.4 Amendment Fees. The Company agrees to pay, on the
EarthLiquids Payment Date, an amendment fee in the amount of $400,000
to Bank of America and an amendment fee in the amount of $400,000 to
Fleet National Bank. The Company shall have no further obligation to
pay the amendment fees otherwise due and payable to such Banks pursuant
to Section 5.5 of the Second Amendment dated as of October 31, 2000 to
this Agreement.
(f) Section 6.2(b)(i) is deleted in its entirety and replaced
with the following provision:
On each date on which the Commitment Amount is reduced pursuant to
Section 6.1.3, the Company shall prepay the Loans in an amount equal to
100% of the Net Cash Proceeds received by the Company or any Subsidiary
from the Asset Sale or issuance of equity or Debt giving rise to such
Commitment Amount reduction. The foregoing provisions shall be
applicable notwithstanding the provisions of Section 5.5 of the Third
Amendment dated as of April 16, 2001 to this Agreement, the latter of
which provisions shall be of no further force or effect.
(g) Section 10.6.7 is amended to be deleted in its entirety
and to be replaced with the following:
10.6.7 Minimum EBITDA. Not permit Adjusted EBITDA for
any of the following calendar months to be less than the corresponding
amounts set forth below opposite such months:
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Calendar Month Minimum Amount
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June 2001 $350,000
July 2001 $350,000
August 2001 and each
calendar month thereafter $400,000;
provided, however, that, following the sale or other disposition of
all, or each sale of any material part, of the EarthAmerica
Subsidiaries, the foregoing minimum required amounts shall be reduced
to amounts determined by Required Lenders, in their sole determination,
as indicated by written notification thereof delivered to the Company
by the Required Banks. Such determination shall be based upon the
Required Lenders' estimate, as determined solely by such Lenders, of
the portion of the minimum amounts of Adjusted EBITDA set forth above
which were attributable to the Subsidiaries or portions thereof subject
to such sale or disposition as of the date such minimum amounts were
initially established pursuant to the Fourth Amendment and Waiver to
this Agreement.
(h) Section 10.6 is further amended to add the following new
subsection to the end of such section:
10.6.7 Suspension of Financial Covenants.
Notwithstanding the foregoing, the covenants set forth in Sections
10.6.1 through 10.6.5 will not be applicable until the Computation
Period ended December 31, 2001, except that such covenants shall
continue to apply for purposes of (a) the definition of "Release Date"
(other than the covenant contained in Section 10.6.3) and (b) Section
10.11(c)(4).
(i) Section 10.11 is amended to delete the phrase "or sell,
transfer, convey or lease all or any substantial part of its assets" set forth
therein and to replace such phrase with the following phrase:
or sell, transfer, convey or lease all or any of its property (other
than the sale of its inventory in the ordinary course of business)
(j) Section 10.11 is further amended to delete in its entirety
clause (d) thereof and to replace such clause with the reference:
"[intentionally omitted]."
(k) Section 10.13 is amended to add the following provisions
to the end of such section:
Without limiting the foregoing, (a) on or before September 15, 2001,
the Company shall have provided to the Administrative Agent schedules
describing the information described on Exhibit B to the Fourth
Amendment and Waiver dated as of August 14, 2001 with respect to this
Agreement (in each case in form and scope acceptable to the
Administrative Agent in its reasonable discretion), accompanied by a
certificate by an executive officer of the Company as to the accuracy
and completeness in all material respects of such information as of a
date no earlier than such Fourth Amendment and (b) as soon as
practicable after its delivery of the information described in the
immediately preceding clause (a), but in any event within fifteen (15)
days following the Administrative Agent's request therefor, the Company
shall execute, deliver and provide,
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or cause to be executed, delivered and provided (whether by a
Subsidiary, Guarantor or otherwise), all documentation and instruments
requested by the Administrative Agent with respect to the Loan
Documents (including, without limitation, the Individual Guaranty or
Additional Guaranty), and take such actions or cause such actions to be
taken, in each case pursuant to the foregoing provisions of this
section as a consequence of the information delivered to the
Administrative Agent pursuant to the immediately preceding clause (a)
hereof or otherwise requested by the Administrative Agent with respect
to its counsel's legal review of the Loan Documents.
(l) Section 12.1.12 is deleted in its entirety and replaced
with the following provision:
12.1.12 Sale of Certain Business Units. The Company
shall fail to consummate, pursuant to terms, conditions and definitive
documentation acceptable to the Required Lenders: (i) the sale of the
EarthLiquids Subsidiaries on or before September 30, 2001, (ii) the
sale of the portable toilet business on or before October 15, 2001,
(iii) the sale of
EarthCare Company of New York or its operating assets
and liabilities on or before October 31, 2001, (iv) the sale of all the
assets and liabilities comprising the bulk hauling line of business of
Reifsneider Transportation, Inc. on or before October 31, 2001, (v) the
sale of the common stock or the operating assets and liabilities of the
EarthAmerica restaurant grease trap, septic, confined space and
ancillary lines of business on or before October 31, 2001, unless the
sale described in the immediately following clause shall have occurred
on or before such date pursuant to the provisions of such clause, or
(vi) the sale of ERMFI on or before October 31, 2001, unless the sale
described in the immediately preceding clause shall have occurred on or
before such date pursuant to the provisions of such clause.
(m) Schedule 1.1 is amended to delete each reference therein
to "the Floating Rate Margin" and each corresponding percentage with respect to
such term in the table contained in such schedule.
2. Waiver. Subject to the satisfaction of each of the
conditions set forth in Paragraph 3 of this Agreement, the Required Banks hereby
waive (a) each of the Existing Defaults and (b) any failure, after the
effectiveness of this Agreement, by Xx. Xxxxxxxxx or Xx. Xxxx to comply with the
requirements to deliver to the Administrative Agent collateral security for
their obligations under the Individual Guaranty and the Additional Guaranty in
addition to that theretofore so delivered by Xx. Xxxxxxxxx and Mr. Cash;
provided, however, that, in the event there shall have occurred any Event of
Default, other than the Existing Defaults and other than any other Events of
Default which shall have been waived in writing prior to the date hereof, such
requirements shall thereupon once again become immediately effective pursuant to
the terms of the Individual Guaranty and Additional Guaranty and the other Loan
Documents to which Xx. Xxxxxxxxx or Xx. Xxxx is a party (including, without
limitation, this Agreement) and such collateral shall be thereupon immediately
provided to the Administrative Agent by Xx. Xxxxxxxxx and Mr. Cash pursuant to
documentation acceptable to the Administrative Agent.
3. Conditions Precedent to Effectiveness of Amendment and
Waiver. The provisions of Paragraphs 1 and 2 of this Agreement shall become
effective as of the date
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hereof upon the Administrative Agent's receipt of each of the following
(provided, however, that the amendment to the definition of "Floating Rate
Margin" set forth in Paragraph 1 hereof shall be retroactively effective as of
July 31, 2001) originally-executed (or facsimilies of originally-executed)
counterparts of this Agreement executed and delivered by duly authorized
officers of the Company, each Guarantor and each of the Banks.
4. Representations, Warranties and Covenants.
(a) The Borrower hereby represents and warrants that this
Agreement, and the Credit Agreement as amended by this Agreement, constitute the
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms. Each Guarantor hereby represents and
warrants that each Loan Document to which it is a party (as amended,
supplemented, reaffirmed, restated or otherwise modified) constitutes the legal,
valid and binding obligations of such Guarantor enforceable against such
Guarantor in accordance with its terms.
(b) Each of the Borrower and the Guarantors hereby represents
and warrants that its execution, delivery and performance of this Agreement and
other Loan Documents to which it is a party have been duly authorized by all
proper organization action, do not violate any provision of its organization
documents (if applicable), will not violate any law, regulation, court order or
writ applicable to it, and will not require the approval or consent of any
governmental agency, or of any other third party under the terms of any contract
or agreement to which the Borrower or any of the Borrower's Subsidiaries is
bound (which has not been previously obtained).
(c) The Borrower hereby represents and warrants that, after
giving effect to the provisions of this Agreement, (i) no Default or Event of
Default has occurred and is continuing or will have occurred and be continuing
and (ii) all of the representations and warranties of the Borrower contained in
the Credit Agreement and in each other Loan Document (other than representations
and warranties which, in accordance with their express terms, are made only as
of an earlier specified date) are, and will be, true and correct as of the date
of the Borrower's execution and delivery hereof or thereof in all material
respects as though made on and as of such date.
5. Reaffirmation, Ratification and Acknowledgment;
Reservation. (a) The Borrower and each Guarantor hereby (i) ratifies and
reaffirms all of its payment and performance obligations, contingent or
otherwise, and each grant of security interests and liens in favor of the
Administrative Agent, under each Loan Document (as amended, supplemented or
otherwise modified by, among other things, this Agreement) to which it is a
party, (ii) agrees and acknowledges that such ratification and reaffirmation is
not a condition to the continued effectiveness of such Loan Documents and (iii)
agrees that neither such ratification and reaffirmation, nor the Administrative
Agent's, or any Bank's solicitation of such ratification and reaffirmation,
constitutes a course of dealing giving rise to any obligation or condition
requiring a similar or any other ratification or reaffirmation from the Borrower
or such Guarantors with respect to any subsequent modifications to the Credit
Agreement or the other Loan Documents. As modified hereby, the Credit Agreement
is in all respects ratified and confirmed, and the
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Credit Agreement as so modified by this Agreement shall be read, taken and so
construed as one and the same instrument. Each of the Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed. Except as
expressly set forth in this Agreement, neither the execution, delivery nor
effectiveness of this Agreement shall operate as a waiver of any right, power or
remedy of the Administrative Agent or the Banks, or of any Default or Event of
Default, under any of the Loan Documents, all of which rights, powers and
remedies, with respect to any such Default or Event of Default or otherwise, are
hereby expressly reserved by the Administrative Agent and the Lenders. This
Agreement shall constitute a Loan Document for purposes of the Credit Agreement.
(b) The Borrower, the Guarantors, the Banks and the
Administrative Agent hereby agree to and acknowledge each of the following with
respect to the Individual Guaranty and the Additional Guaranty, notwithstanding
anything in such Loan Documents, any other Loan Documents, or this Agreement, to
the contrary (with all other terms of such documents being hereby reaffirmed and
ratified):
(i) the maximum liability (exclusive of interest, costs and
expenses) of Messrs. Xxxxxxxxx and Cash pursuant to the Individual
Guaranty, as provided in the third paragraph thereof, is $20,000,000,
which liability is borne jointly and severally by such Guarantors;
(ii) it is agreed that the "Maximum Principal Liability
Amount" of Xx. Xxxxxxxxx under and as defined in the fifth paragraph of
the Additional Guaranty, shall deemed to be currently $30,000,000
(subject to further adjustment with respect to asset sales consummated
after the date hereof, subject to the terms of the Additional
Guaranty);
(iii) subject to Paragraph 2 of this Agreement, the aggregate
minimum value of collateral required to be maintained by Messrs. Cash
and Xxxxxxxxx pursuant to the Individual Guaranty is $10,000,000 and
the Banks' security interest in such collateral shall be perfected;
(iv) subject to Paragraph 2 of this Agreement, the aggregate
minimum value of collateral required to be maintained by Xx. Xxxxxxxxx
pursuant to the Additional Guaranty is $11,400,000 and the Banks'
security interest in such collateral shall be perfected;
(v) all collateral granted by Mr. Cash shall be allocated to
the collateral required as security for the Individual Guaranty, the
first $11,400,000 of collateral granted by Xx. Xxxxxxxxx shall be
allocated to the collateral required as security for the Additional
Guaranty, and all other collateral granted by Xx. Xxxxxxxxx shall be
allocated to the collateral required as security for the Individual
Guaranty;
(vi) Mr. Cash shall continue to maintain, in the Xxxxxxx Xxxxx
brokerage account he pledged to the Administrative Agent pursuant to
that certain Security Agreement dated as of November 30, 2000,
marketable securities having an aggregate value in excess of $9,500,000
as of the last day of each month; and
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(vii) Xx. Xxxxxxxxx shall continue to maintain, and cause to
be maintained, in the Xxxxxxx Xxxxxx Xxxxxx brokerage accounts pledged
to the Administrative Agent by Xx. Xxxxxxxxx, Xx. Xxxxxxx X. Xxxxxxxxx
and Xxxxxxxxx Property Company, Ltd., pursuant to those certain
Security Agreements dated as of February, 2001, marketable securities
having an aggregate value in excess of $4,000,000 as of the last day of
each month (subject to Paragraph 2 of this Agreement), and agrees that,
notwithstanding anything in such Security Agreements to the contrary,
until such Security Agreements shall have been terminated, no such
collateral (or proceeds, income, interest or dividends) shall be
withdrawn or transferred from such account without the prior written
consent of the Administrative Agreement.
6. Release and Indemnification. The Borrower and each of the
Guarantors hereby acknowledges and confirms that (i) it does not have any
grounds, and hereby agrees not to challenge (or to allege or to pursue any
matter, cause or claim arising under or with respect to), in any case based upon
acts or omissions of the Administrative Agent or any of the Banks occurring
prior to the date hereof or facts otherwise known to it as of the date hereof,
the effectiveness, genuiness, validity, collectibility or enforceability of the
Credit Agreement or any of the other Loan Documents, the obligations of the
Borrower or any Guarantor under the Loan Documents, the Liens securing such
obligations, or any of the terms or conditions of any Loan Document (it being
understood that such acknowledgement and confirmation does not preclude the
Borrower or the Guarantors from challenging the Administrative Agent's or any
Bank's interpretation of any term or provision of the Credit Agreement or other
Loan Document) and (ii) it does not possess (and hereby forever waives, remises,
releases, discharges and holds harmless the Banks, the Administrative Agent and
their respective affiliates, stockholders, directors, officers, employees,
attorneys, agents and representatives and each of their respective heirs,
executors, administrators, successors and assigns (collectively, the
"Indemnified Parties") from and against, and agrees not to allege or pursue) any
action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand,
defense, offset, opposition, demand and other right of action whatsoever,
whether in law, equity or otherwise (which it, all those claiming by, through or
under it, or its successors or assigns, have or may have) against the
Indemnified Parties, or any of them, by reason of, any matter, cause or thing
whatsoever, with respect to events or omissions occurring or arising on or prior
to the date hereof and relating to the Credit Agreement or any of the other Loan
Documents (including, without limitation, with respect to the payment,
performance, validity or enforceability of the obligations of the Borrower or
any Guarantor under the Loan Documents, the Liens securing such obligations or
any or all of the terms or conditions of any Loan Document) or any transaction
relating thereto; provided, however, that neither the Borrower nor any Guarantor
hereby releases or holds harmless any Indemnified Party for actions or omissions
by any such Indemnified Party constituting, or losses or expenses directly
resulting from, the gross negligence or willful misconduct of such Indemnified
Party.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws and decisions of the State of
Illinois
(but without giving effect to any other conflicts of law provisions).
8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same agreement among the parties.
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9. Section Titles. The section titles contained in this
Agreement are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
10. Agent's Expense. The Company hereby agrees to reimburse
the Agent for all reasonable out-of-pocket expenses, including, without
limitation, attorneys' and paralegals fees, it has heretofore or hereafter
incurred or incurs in connection with the preparation, negotiation and execution
of this Agreement or any document, instrument, agreement delivered pursuant to
this Agreement, in each case on or before the earlier of the "EarthLiquids
Payment Date" (as proposed to be defined in Paragraph 1 hereof) or the
occurrence of any Event of Default, other than the Existing Defaults and other
than any other Events of Default which shall have been waived in writing prior
to the date hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
EARTHCARE COMPANY, as Borrower
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BANK OF AMERICA, N.A., as
Administrative Agent
By:
--------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as a Bank
By:
--------------------------------
Name:
Title:
FLEET NATIONAL BANK, as a Bank
By:
--------------------------------
Name:
Title:
XXXXXXX X. XXXX, as a Guarantor,
----------------------
XXXXXX X. XXXXXXXXX, XX., as a
Guarantor
-----------------------
Signature Page to Amendment Xx.0
00
Xxxxxx, Xxxxxxxxxxxx and Consented to as of this 14th day of August, 2001:
ALL COUNTY RESOURCE MANAGEMENT CORP.
BONE-DRY ENTERPRISES, INC.
BREHMS CESSPOOL SERVICE INC.
EARTHAMERICA COMPANY
EARTHAMERICA DISTRIBUTORS, INC.
EARTHCARE COMPANY OF PENNSYLVANIA
EARTHCARE COMPANY OF NEW YORK
EARTHCARE COMPANY OF TEXAS
EARTHLIQUIDS COMPANY
EC ACQUISITIONS, INC.
INTERNATIONAL ENVIRONMENTAL SERVICES, INC.
INTERNATIONAL PETROLEUM CORPORATION
INTERNATIONAL PETROLEUM CORP. OF DELAWARE
INTERNATIONAL PETROLEUM CORP. OF GEORGIA
INTERNATIONAL PETROLEUM CORP. OF LA.
INTERNATIONAL PETROLEUM CORPORATION OF LAFAYETTE
INTERNATIONAL PETROLEUM CORP. OF MARYLAND
INTERNATIONAL PETROLEUM CORP. OF PA.
LIQUID WASTE CONTROL SYSTEMS, INC.
MAGNUM ENVIRONMENTAL SERVICES, INC.
MAGNUM PROPERTY DEVELOPMENT CORPORATION
REIFSNEIDER TRANSPORTATION, INC.
SUB-SURFACE LIQUID INJECTION COMPANY, INC.
MAGNUM EAST COAST PROPERTIES, LTD.
MAGNUM NORTHEAST PROPERTIES, LTD.
MAGNUM WEST COAST PROPERTIES, LTD.
MAGNUM WORLD ENTERPRISES, INC.]
each as a Guarantor,
By:
-------------------------------
Name:
as authorized representative
Signature Page to Amendment No.4
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EXHIBIT A
TO
FOURTH AMENDMENT AND WAIVER
New Orleans Environmental Matters
The New Orleans plant of EarthCare's EarthLiquids division is currently
conducting an internal audit to assess whether the New Orleans plant personnel
complied with environmental policies and procedures prescribed by EarthCare and
its EarthLiquids division. As of August 14, 2001, EarthCare is not able to
estimate the probability that it will incur any costs associated with any
environmental matters that may be discovered as part of this internal audit. In
addition, although EarthCare has estimated a range of costs associated with
certain corrective actions, EarthCare is not able to currently estimate the
actual costs that may be incurred.
As of August 14, 2001, EarthCare has determined that the former general
manager of the New Orleans plant, Xxxxxxx Xxxx, who is also the former President
of International Petroleum Corporation of Louisiana, Inc., did not comply with
the environmental policies and procedures prescribed by EarthCare and its
EarthLiquids division. Specifically, he directed New Orleans plant employees to
offload used oil and oily waste water from tanker trailers to storage tanks at
the New Orleans plant before a sample of the used oil and oily waste water was
tested and analyzed.
As of August 14, 2001, EarthCare has also determined that the chemical
testing equipment used at the New Orleans plant was not properly calibrated or
functioning and may not have provided accurate test results for used oil and
oily waste water samples. EarthCare has corrected this deficiency through a
recalibration of the machines and, if needed, replacement of the machines or
parts thereto.
As of August 14, 2001, EarthCare has notified the Louisiana Department
of Environmental Quality (LDEQ) of its internal audit. EarthCare plans to update
LDEQ on the results of its findings on or about August 16, 2001."
Exhibits
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EXHIBIT B
TO
FOURTH AMENDMENT AND WAIVER
Due Diligence Request
The Borrower shall have provided to the Administrative Agent
schedules describing the following information with respect to the
Borrower and its Subsidiaries, accompanied by a certificate by an
executive officer as to the accuracy and completeness in all material
respects of such schedules as of a date no earlier than the August 14,
2001 (in each case in form and scope acceptable to the Administrative
Agent in its reasonable discretion):
(i) the legal names, forms of legal organization, and
jurisdictions of organization of each Subsidiary;
(ii) the number of authorized and outstanding units
of equity interests of each Subsidiary (including, without
limitation, all options, warrants and convertible interests
with respect thereto), and the names of each owner of such
units and number of units owned by each such owner;
(iii) the address of each location of inventory and
equipment (other than mobile goods) of the Borrower and each
Subsidiary, on an entity-by-entity basis, including, without
limitation, with respect to goods held by consignees, bailees
and other third parties, except in each case to the extent
that the book value of all inventory and equipment at any
single such location is less than $25,000 and the aggregate
book value of all inventory and equipment located at all such
de minimus locations is less than $250,000;
(iv) a description of all mobile goods owned by the
Borrower and each Subsidiary, on an entity-by-entity basis,
together with registration numbers thereof, if any, and
identifying the state of each of such registrations, except in
each case to the extent that the book value of any such item
is less than $25,000 and the aggregate book value of all such
de minimus items is less than $250,000;
(v) a description of all United States federally
registered (and applications therefor) patents, trademarks,
service marks and copyrights owned or licensed by the Borrower
and each Subsidiary, on an entity-by-entity basis, together
with registration numbers and dates of such registrations (or
applications);
(vi) the address of each location of real property
owned or leased by the Borrower and each Subsidiary, on an
entity-by-entity basis (and indicating as to whether each such
property is owned in fee simple or leased), together with the
names and addresses of each lessor and sublessor with respect
to each such leased location and the names and addresses of
each mortgagee with respect to each such owned location;
Exhibits
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(vii) a listing of all deposit accounts and lockboxes
owned by the Borrower and each Subsidiary, on an
entity-by-entity basis, together with a brief description of
the type of account or lockbox (e.g. concentration,
disbursement or payroll), the name and address of the
financial institution at which each such deposit account or
lockbox is located or maintained and the account numbers
thereof; and
(viii) a listing of all promissory notes and other
instruments evidencing Debt or other obligations owing to the
Borrower and each Subsidiary, on an entity-by-entity basis,
together with a brief description of the instrument, the
amount outstanding with respect thereto, the name and address
of the payor thereunder, and the basic terms thereof.
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Exhibits
