FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

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                                                                    Exhibit 10.1

 

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                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

                           DATED AS OF DECEMBER 21, 2004

 

                                      AMONG

 

                            WCA WASTE SYSTEMS, INC.,

 

                                  AS BORROWER,

 

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,

                             AS ADMINISTRATIVE AGENT,

 

                                 COMERICA BANK,

                              AS SYNDICATION AGENT,

 

                                       AND

 

                            THE LENDERS PARTY HERETO

 

                             REVOLVING CREDIT FACILITY

       (WITH SWING LINE FACILITY AND DIRECT PAY LETTER OF CREDIT FACILITY)

 

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                               TABLE OF CONTENTS

 

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ARTICLE I           Definitions and Accounting Matters....................      1

   Section 1.01     Terms Defined Above...................................      1

   Section 1.02     Certain Defined Terms.................................      1

   Section 1.03     Accounting Terms and Determinations...................     21

 

ARTICLE II          Commitments...........................................     22

   Section 2.01     Loans and Letters of Credit...........................     22

   Section 2.02     Borrowings, Continuations and Conversions,

                   Letters of Credit.....................................     25

   Section 2.03     Changes of Aggregate Revolving Credit Commitments.....     27

   Section 2.04     Increase in Aggregate Revolving Credit Commitments....     27

   Section 2.05     Fees..................................................     30

   Section 2.06     Several Obligations...................................     31

   Section 2.07     Notes.................................................     31

   Section 2.08     Prepayments...........................................     32

   Section 2.09     Assumption of Risks...................................     33

   Section 2.10     Obligation to Reimburse and to Prepay.................     34

   Section 2.11     Lending Offices.......................................     35

 

ARTICLE III         Payments of Principal and Interest....................     36

   Section 3.01     Repayment of Loans....................................     36

   Section 3.02     Interest..............................................     36

 

ARTICLE IV          Payments; Pro Rata Treatment; Computations; Etc.......     37

   Section 4.01     Payments..............................................     37

   Section 4.02     Pro Rata Treatment....................................     37

   Section 4.03     Computations..........................................     38

   Section 4.04     Non-receipt of Funds by the Administrative Agent......     38

   Section 4.05     Set-off, Sharing of Payments, Etc.....................     38

   Section 4.06     Taxes.................................................     39

 

ARTICLE V           Capital Adequacy......................................     42

   Section 5.01     Additional Costs......................................      42

   Section 5.02     Limitation on LIBOR Loans.............................     44

   Section 5.03     Illegality............................................     44

   Section 5.04     Base Rate Loans Pursuant to Sections 5.01,

                   5.02 and 5.03.........................................     44

   Section 5.05     Compensation..........................................     45

   Section 5.06     Time Limit; Etc.......................................     45

   Section 5.07     Replacement Lenders...................................     46

 

ARTICLE VI          Conditions Precedent..................................     47

   Section 6.01     Initial Funding.......................................     47

   Section 6.02     Initial and Subsequent Loans and Letters of Credit....     48

   Section 6.03     Conditions Precedent for the Benefit of Lenders.......     49

   Section 6.04     No Waiver.............................................     49

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ARTICLE VII         Representations and Warranties........................     49

   Section 7.01     Corporate Existence...................................     49

   Section 7.02     Financial Condition...................................     50

   Section 7.03     Litigation............................................     50

   Section 7.04     No Breach.............................................     50

   Section 7.05     Authority.............................................     51

   Section 7.06     Approvals.............................................     51

   Section 7.07     Use of Loans..........................................     51

   Section 7.08     ERISA.................................................     51

   Section 7.09     Taxes.................................................     52

   Section 7.10     Titles, etc...........................................     53

   Section 7.11     No Material Misstatements.............................     53

   Section 7.12     Investment Company Act................................     53

   Section 7.13     Public Utility Holding Company Act....................     53

   Section 7.14     Subsidiaries..........................................     54

   Section 7.15     Location of Business and Offices......................     54

   Section 7.16     Defaults..............................................     54

   Section 7.17     Environmental Matters.................................     54

   Section 7.18     Compliance with the Law...............................     55

   Section 7.19     Insurance.............................................     56

   Section 7.20     Restriction on Liens..................................     56

   Section 7.21     Material Agreements...................................     56

 

ARTICLE VIII        Affirmative Covenants.................................     57

   Section 8.01     Reporting Requirements................................     57

   Section 8.02     Litigation............................................     59

   Section 8.03     Maintenance, Etc......................................     59

   Section 8.04     Environmental Matters.................................     60

   Section 8.05     Further Assurances....................................     61

   Section 8.06     Performance of Obligations............................     61

   Section 8.07     ERISA Information and Compliance......................     61

   Section 8.08     Subsidiary Guarantors.................................     62

 

ARTICLE IX          Negative Covenants....................................     62

   Section 9.01     Debt..................................................     62

   Section 9.02     Liens.................................................     63

   Section 9.03     Investments, Loans and Advances.......................     64

   Section 9.04     Dividends, Distributions and Redemptions; Etc.........     64

   Section 9.05     Sales and Leasebacks..................................     64

   Section 9.06     Nature of Business....................................     65

   Section 9.07     Limitation on Leases..................................     65

   Section 9.08     Mergers, Etc..........................................     65

   Section 9.09     Proceeds of Notes; Letters of Credit..................     65

   Section 9.10     ERISA Compliance......................................     65

   Section 9.11     Sale or Discount of Receivables.......................     66

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   Section 9.12     Leverage Ratio........................................     66

   Section 9.13     Net Worth.............................................     67

   Section 9.14     Senior Funded Debt Leverage Ratio.....................     67

   Section 9.15     Adjusted EBIT Debt Service Ratio......................     67

   Section 9.16     Sale of Properties....................................     67

   Section 9.17     Environmental Matters.................................     67

   Section 9.18     Transactions with Affiliates..........................     68

   Section 9.19     Subsidiaries..........................................     68

   Section 9.20     Negative Pledge Agreements............................     68

   Section 9.21     Subordinated Debt.....................................     68

 

ARTICLE X           Events of Default; Remedies...........................     69

   Section 10.01    Events of Default.....................................     69

   Section 10.02    Remedies..............................................     71

 

ARTICLE XI          The Administrative Agent..............................     71

   Section 11.01    Appointment, Powers and Immunities....................     71

   Section 11.02    Reliance by Administrative Agent......................     72

   Section 11.03    Defaults..............................................     72

   Section 11.04    Rights as a Lender....................................     72

   Section 11.05    Indemnification.......................................     73

   Section 11.06    Non-Reliance on Administrative Agent and

                   other Lenders.........................................     73

   Section 11.07    Action by Administrative Agent........................     74

   Section 11.08    Resignation or Removal of Administrative Agent........     74

   Section 11.09    Issuing Bank as Agent.................................     74

   Section 11.10    Collateral and Guaranty Matters.......................     75

   Section 11.11    Other Agents; Arrangers and Managers..................     75

 

ARTICLE XII         Security..............................................     75

 

ARTICLE XIII        Miscellaneous.........................................     76

   Section 13.01    Waiver................................................     76

   Section 13.02    Notices...............................................     76

   Section 13.03    Payment of Expenses, Indemnities, etc.................     76

   Section 13.04    Amendments, Etc.......................................     79

   Section 13.05    Successors and Assigns................................     79

   Section 13.06    Assignments and Participations........................     79

   Section 13.07    Invalidity............................................     81

   Section 13.08    Counterparts..........................................     81

   Section 13.09    References; Use of Word "Including"...................     81

   Section 13.10    Survival..............................................     81

   Section 13.11    Captions..............................................     81

   Section 13.12    No Oral Agreements....................................     81

   Section 13.13    Governing Law; Submission to Jurisdiction.............     82

   Section 13.14    Interest..............................................     83

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   Section 13.15    Confidentiality; Section 20 Subsidiaries..............     84

   Section 13.16    Exculpation Provisions................................     85

   Section 13.17    Arbitration...........................................     85

   Section 13.18    USA Patriot Act Notice................................     87

   Section 13.19    Amendment and Restatement; Release....................     87

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ANNEX:

I         -    List of Percentage Shares and Maximum Revolving Credit

              Amounts

 

SCHEDULES:

1.2       -    Existing LCs

7.02      -    Financial Condition

7.03      -    Litigation

7.10      -    Titles, Etc.

7.14      -    Subsidiaries

7.17      -    Environmental Matters

7.19      -    Insurance

7.21      -    Material Agreements

9.01      -    Debt

9.02      -    Liens

9.03      -    Investments, Loans and Advances

 

EXHIBITS:

A-1       -    Form of Revolving Credit Note

A-2       -    Form of Swing Line Note

B         -    Form of Borrowing, Continuation and Conversion Request

C         -    Form of Compliance Certificate

D         -    Form of Assignment Agreement

E         -    Transfer Stations and Hauling Sites

F         -    Security Instruments

G         -    Form of Commitment and Acceptance

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     THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 21,

2004, is among WCA WASTE SYSTEMS, INC., a Delaware corporation (the "Borrower");

each of the lenders that is a party hereto or which becomes a party hereto as

provided in Section 13.06 (individually, together with its successors and

assigns, a "Lender" and, collectively, the "Lenders"); COMERICA BANK, as

syndication agent hereunder (in such capacity, together with its successors in

such capacity, the "Syndication Agent"); and WELLS FARGO BANK, NATIONAL

ASSOCIATION, a national banking association (in its individual capacity, "Wells

Fargo"), as agent hereunder (in such capacity, together with its successors in

such capacity, the "Administrative Agent").

 

                                    RECITALS

 

     A. The Borrower, the Administrative Agent and certain banks and other

financial institutions have previously entered into that certain Third Amended

and Restated Credit Agreement dated as of June 23, 2004 (as amended and

supplemented, the "Existing Credit Agreement").

 

      B. The Borrower has requested and the Administrative Agent and the Lenders

have agreed to restructure the existing credit facilities and to amend and

modify the Existing Credit Agreement upon the terms and conditions hereinafter

set forth.

 

     C. In consideration of the mutual covenants and agreements herein contained

and of the loans, extensions of credit and commitments hereinafter referred to,

the parties hereto agree as follows:

 

                                    ARTICLE I

 

                        DEFINITIONS AND ACCOUNTING MATTERS

 

     Section 1.01. Terms Defined Above. As used in this Agreement, the terms

"Administrative Agent," "Borrower," "Lender," "Lenders," "Syndication Agent" and

"Wells Fargo" shall have the meanings indicated above.

 

      Section 1.02. Certain Defined Terms. As used herein, the following terms

shall have the following meanings (all terms defined in this Article I or in

other provisions of this Agreement in the singular to have equivalent meanings

when used in the plural and vice versa):

 

     "2004 Reorganization" means (a) Waste Corporation of America, Inc., WCA

Merger Corporation, WCA Holdings Corporation and WCA Waste Corporation, a

Delaware corporation ("WCA Corp."), entered into that certain Reorganization

Agreement dated May 10, 2004, pursuant to which, among other things, Waste

Corporation of America, Inc. merged into WCA Merger Corporation with Waste

Corporation of America, Inc. as the surviving entity, (b) Waste Corporation of

America, Inc. was converted from a Delaware corporation to Waste Corporation of

America LLC, a Delaware limited liability company, (c) Waste Corporation of

America LLC distributed all of the voting stock of WCA Holdings Corporation to

WCA Corp., and (d) WCA Corp. merged into WCA Merger Corporation II with WCA

Corp. as the surviving entity.

 

     "AAA" is defined in Section 13.17(b).

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     "Acquired Business" is defined in the definition of Pro Forma Adjusted

EBITDA.

 

     "Acquired Subsidiary" is defined in the definition of Pro Forma Adjusted

EBITDA.

 

     "Act" is defined in Section 13.18.

 

     "Additional Costs" is defined in Section 5.01(a).

 

     "Additional Volume" means the waste collected by an Acquired Subsidiary or

Acquired Business that (a) prior to the consummation of the acquisition of such

Acquired Subsidiary or Acquired Business, was not being delivered to a landfill

or transfer station owned or operated by the Borrower or any Consolidated

Subsidiary, and (b) subsequent to the consummation of the acquisition of such

Acquired Subsidiary or Acquired Business, is delivered to a landfill or transfer

station owned or operated by the Borrower or any Consolidated Subsidiary.

 

     "Adjusted EBIT" means, for any period, the sum of (a) EBIT for such period,

plus (b) non-cash charges for accretion on closure and post-closure obligations,

plus (c) non-cash charges associated with the disposal contract between Waste

Management, Inc. and the Borrower, plus (d) non-cash charges (or minus non-cash

benefits, if applicable) reflecting the adoption of SFAS No. 123 (and all

amendments thereto), plus (e) cash compensation charges in an aggregate amount

not to exceed $5,000,000 and non-cash compensation charges, all with respect to

stock options outstanding and shares issued by Waste Corporation in connection

with the extinguishment of options and warrants as part of the 2004

Reorganization, plus (f) non-cash expense (or minus non-cash income, if

applicable) associated with FAS 133 treatment of any interest rate Hedging

Agreements, plus (g) non-cash losses on asset sales in an aggregate amount not

to exceed $500,000.

 

     "Adjusted EBIT Debt Service Ratio" means, with respect to the Borrower and

its Consolidated Subsidiaries, the ratio of (i) Adjusted EBIT for the four

fiscal quarters ending on such date to (ii) cash interest payments, plus (y) the

current portion of capitalized leases for the following four fiscal quarters,

plus (z) the current portion of principal payments of Debt, excluding payments

under the Revolving Credit Notes, required to be paid for the following four

fiscal quarters.

 

     "Affected Loans" is defined in Section 5.04.

 

     "Affiliate" of any Person means (a) any Person directly or indirectly

controlled by, controlling or under common control with such first Person, (b)

any director or executive officer of such first Person or of any Person referred

to in clause (a) above and (c) if any Person in clause (a) above is an

individual, any member of the immediate family (including parents, spouse and

children) of such individual and any trust whose principal beneficiary is such

individual or one or more members of such immediate family and any Person who is

controlled by any such member or trust. For purposes of this definition, any

Person which owns directly or indirectly 10% or more of the securities having

ordinary voting power for the election of directors or other governing body of a

corporation or 10% or more of the partnership or other ownership interests of

any other Person (other than as a limited partner of such other Person) will be

deemed to "control" (including, with its correlative meanings, "controlled by"

and "under common control with") such corporation or other Person.

 

 

                                       -2-

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     "Aggregate Revolving Credit Commitments" at any time equals the sum of the

Revolving Credit Commitments of the Lenders, as the same may be reduced pursuant

to Section 2.03(b) or Section 10.02(b) or increased or reduced pursuant to

Section 2.04. The Aggregate Revolving Credit Commitments on the Closing Date

shall be $160,000,000.00.

 

     "Agreement" means this Fourth Amended and Restated Credit Agreement, as the

same may from time to time be amended, restated, supplemented or modified.

 

     "Applicable Lending Office" means, for each Lender and for each Type of

Loan, the lending office of such Lender (or an Affiliate of such Lender)

designated for such Type of Loan on the signature pages hereof or such other

offices of such Lender (or of an Affiliate of such Lender) as such Lender may

from time to time specify to the Administrative Agent and the Borrower as the

office by which its Loans of such Type are to be made and maintained.

 

     "Applicable Margin" means, on any day, the applicable per annum percentage

set forth at the appropriate intersection in the table shown below, based on the

Leverage Ratio on the most recent Determination Date:

 

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                      LEVERAGE RATIO                           BASE RATE LOAN    LIBOR LOAN

                      --------------                            --------------    ----------

<S>                                                            <C>               <C>

Greater than or equal to 4.00:1.00                                  2.00%           3.00%

Less than 4.00:1.00, but greater than or equal to 3.50:1.00         1.75%           2.75%

Less than 3.50:1.00, but greater than or equal to 2.75:1.00         1.25%           2.25%

Less than 2.75:1.00, but greater than or equal to 2.00:1.00         1.00%           2.00%

Less than 2.00:1.00                                                  0.75%           1.75%

</TABLE>

 

The Applicable Margin shall be established as of the last day of each fiscal

quarter of the Borrower (each, a "Determination Date") beginning with the fiscal

quarter ending December 31, 2004. Any change in the Applicable Margin following

each Determination Date shall be determined based upon the information and

computations set forth in the financial statements and Compliance Certificate

furnished to the Administrative Agent pursuant to Section 8.01, subject to

review and approval of such computations by the Administrative Agent. Each

change in the Applicable Margin shall be effective as of the first day of the

calendar month following each Determination Date (including, without limitation,

in respect of LIBOR Loans then outstanding notwithstanding that such change

occurs during an Interest Period), and shall remain in effect until the date

that is the first day of the calendar month following the next Determination

Date for which a change in the Applicable Margin occurs; provided, however; if

the Borrower shall fail to deliver any required financial statements or

Compliance Certificate within the time period required by Section 8.01, the

Applicable Margin shall be the highest percentage amount stated for each Type of

Loan as set forth in the above table for the period beginning on the relevant

Determination Date and ending on the date that the appropriate financial

statements and Compliance Certificate are so delivered. Notwithstanding the

foregoing, during the period beginning on the Closing Date and ending on

December 31, 2004, the Applicable Margin shall be 1.25% per annum for Base Rate

Loans and 2.25% per annum for LIBOR Loans.

 

 

                                       -3-

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     "Approved Fund" means any Fund that is administered or managed by (a) a

Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an

entity that administers or manages a Lender.

 

     "Assignment" is defined in Section 13.06(b).

 

     "Base Rate" means, with respect to any Base Rate Loan, for any day, the

higher of (a) the Federal Funds Rate for any such day plus 1/2 of 1% or (b) the

Prime Rate for such day. Each change in any interest rate provided for herein

based upon the Base Rate resulting from a change in the Base Rate shall take

effect at the time of such change in the Base Rate.

 

     "Base Rate Loans" means Loans that bear interest at rates based upon the

Base Rate.

 

     "Bonds" means the Issuer's $25,000,000 Gulf Coast Waste Disposal Authority

Environmental Facilities Revenue Bonds (Waste Corporation of Texas, L.P.

Project) Series 2002.

 

     "Business Day" means any day other than a day on which commercial banks are

authorized or required to close in the State of Texas and, where such term is

used in the definition of "Quarterly Date" or if such day relates to a borrowing

or continuation of, a payment or prepayment of principal of or interest on, or a

conversion of or into, or the Interest Period for, a LIBOR Loan or a notice by

the Borrower with respect to any such borrowing or continuation, payment,

prepayment, conversion or Interest Period, any day which is also a day on which

dealings in Dollar deposits are carried out in the London interbank market.

 

     "Capital Expenditures" means, without duplication, any expenditures for any

purchase or other acquisition of any asset which would be classified as a fixed

or capital asset on a consolidated balance sheet of the Borrower and its

Subsidiaries prepared in accordance with GAAP, excluding (i) Qualified

Acquisition Expenditures and (ii) Expansion Expenditures.

 

     "Change of Control" means, with respect to any Person, an event or series

of events by which:

 

          (a) with respect to WCA Corp., any "person" or "group" (as such terms

     are used in Sections 13(d) and 14(d) of the Securities Exchange Act of

     1934, but excluding any employee benefit plan of such person or its

     subsidiaries, and any person or entity acting in its capacity as trustee,

     agent or other fiduciary or administrator of any such plan) becomes the

     "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the

     Securities Exchange Act of 1934, except that a person or group shall be

     deemed to have "beneficial ownership" of all securities that such person or

     group has the right to acquire (such right, an "option right"), whether

     such right is exercisable immediately or only after the passage of time),

     directly or indirectly, of 35% or more of the equity securities of WCA

     Corp. entitled to vote for members of the board of directors or equivalent

     governing body of WCA Corp. on a fully-diluted basis (and taking into

     account all such securities that such person or group has the right to

     acquire pursuant to any option right); or

 

          (b) with respect to WCA Corp., during any period of 12 consecutive

     months, a majority of the members of the board of directors or other

     equivalent governing body of

 

 

                                       -4-

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     WCA Corp. cease to be composed of individuals (i) who were members of that

     board or equivalent governing body on the first day of such period, (ii)

     whose election or nomination to that board or equivalent governing body was

     approved by individuals referred to in clause (i) above constituting at the

     time of such election or nomination at least a majority of that board or

     equivalent governing body or (iii) whose election or nomination to that

     board or other equivalent governing body was approved by individuals

     referred to in clauses (i) and (ii) above constituting at the time of such

     election or nomination at least a majority of that board or equivalent

     governing body (excluding, in the case of both clause (ii) and clause

     (iii), any individual whose initial nomination for, or assumption of office

     as, a member of that board or equivalent governing body occurs as a result

     of an actual or threatened solicitation of proxies or consents for the

     election or removal of one or more directors by any person or group other

     than a solicitation for the election of one or more directors by or on

     behalf of the board of directors); or

 

          (c) the Borrower shall fail beneficially to own, directly or

      indirectly, 100% of the outstanding shares of voting capital stock or other

     equity interests of any of the Guarantors on a fully-diluted basis except

     as permitted in Section 9.16; or

 

          (d) the Parent shall fail beneficially to own, directly or indirectly,

     100% of the outstanding shares of voting capital stock of the Borrower on a

     fully-diluted basis; or

 

          (e) WCA Corp. shall fail to own, directly or indirectly, 100% of the

     outstanding shares of voting capital stock of the Parent on a fully-diluted

     basis.

 

     "Closing Date" means the date of this Agreement.

 

     "Closure/Post-Closure Letters of Credit" means letters of credit, surety

bonds or other instruments of similar character, the purpose of which is to

provide financial assurance to the various state agencies for closure and

post-closure obligations for the landfills and transfer stations owned or

operated by the Borrower and its Subsidiaries. For purposes of this definition,

"Financial assurance," "closure" and "post-closure" shall have the meanings set

forth in the administrative code or other comparable regulations of each state

in which such landfill and transfer station is located.

 

     "Code" means the Internal Revenue Code of 1986, as amended from time to

time and any successor statute.

 

     "Commitment" means for any Lender, its Revolving Credit Commitment, Swing

Line Commitment (with respect to the Swing Line Lender only) and/or its Direct

Pay Letter of Credit Commitment (with respect to the Issuing Bank only), as

applicable.

 

     "Commitment and Acceptance" is defined in Section 2.04(a).

 

     "Compliance Certificate" means a certificate substantially in the form of

Exhibit C as executed by a Responsible Officer.

 

     "Consolidated Net Income" means with respect to the Borrower and its

Consolidated Subsidiaries, for any period, the aggregate of the net income (or

loss) of the Borrower and its

 

 

                                       -5-

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Consolidated Subsidiaries from operations after allowances for taxes for such

period, determined on a consolidated basis in accordance with GAAP; provided

that there shall be excluded from such net income (to the extent otherwise

included therein) the following: (a) the net income of any Person in which the

Borrower or any Consolidated Subsidiary has an interest (which interest does not

cause the net income of such other Person to be consolidated with the net income

of the Borrower and its Consolidated Subsidiaries in accordance with GAAP),

except to the extent of the amount of dividends or distributions actually paid

in such period by such other Person to the Borrower or to a Consolidated

Subsidiary, as the case may be; (b) the net income (but not loss) of any

Consolidated Subsidiary to the extent that the declaration or payment of

dividends or similar distributions or transfers or loans by that Consolidated

Subsidiary is not at the time permitted by operation of the terms of its charter

or any agreement, instrument or Governmental Requirement applicable to such

Consolidated Subsidiary, or is otherwise restricted or prohibited in each case

determined in accordance with GAAP; (c) the net income (or loss) of any Person

acquired in a pooling-of-interests transaction for any period prior to the date

of such transaction; (d) any extraordinary gains or losses, including gains or

losses attributable to Property sales not in the ordinary course of business;

and (e) the cumulative effect of a change in accounting principles and any gains

or losses attributable to write-ups or write downs of assets.

 

     "Consolidated Subsidiaries" means each Subsidiary of a Person (whether now

existing or hereafter created or acquired) the financial statements of which

shall be (or should have been) consolidated with the financial statements of

such Person in accordance with GAAP. Unless otherwise expressly stated, each

reference to the term "Consolidated Subsidiary" shall mean a Subsidiary

consolidated with the Borrower.

 

     "Debt" means, for any Person the sum of the following (without

duplication): (a) all obligations of such Person for borrowed money or evidenced

by bonds, debentures, notes or other similar instruments (including principal,

interest, fees and charges, in each case accrued but unpaid); (b) all

obligations of such Person (whether contingent or otherwise) in respect of

bankers' acceptances, letters of credit, surety or other bonds and similar

instruments; (c) all obligations of such Person to pay, in accordance with GAAP,

the deferred purchase price of Property or services (other than for borrowed

money), including securities repurchase agreements; (d) all obligations under

leases which shall have been, or should have been, in accordance with GAAP,

recorded as capital leases in respect of which such Person is liable (whether

contingent or otherwise); (e) all monetary obligations under (i) a so-called

synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for

the use or possession of property creating obligations that do not appear in the

balance sheet of such Person but which, upon the insolvency or bankruptcy of

such Person, would be characterized as the indebtedness of such Person (without

regard to accounting treatment); (f) all Debt (as described in the other clauses

of this definition) and other obligations of others secured by a Lien on any

asset of such Person, whether or not such Debt is assumed by such Person; (g)

all Debt (as described in the other clauses of this definition) and other

obligations of others guaranteed by such Person or in which such Person

otherwise assures a creditor against loss of the debtor or obligations of

others; (h) all obligations or undertakings of such Person to maintain or cause

to be maintained the financial position or covenants of others or to purchase

the Debt or Property of others; (i) obligations to deliver goods or services in

consideration of advance payments, excluding prevails of customer accounts in

the ordinary course of business as customary in the business of the Borrower and

its Subsidiaries; (j) obligations to pay for goods or services whether or not

such goods or services

 

 

                                       -6-

<PAGE>

are actually received or utilized by such Person; (k) any obligation to

purchase, redeem, retire or otherwise acquire for value any shares of capital

stock of such Person, any warrants, options or other rights to acquire any such

shares or any other rights measured by the value of such shares, warrants,

options or other rights; (l) any Debt of a Special Entity for which such Person

is liable either by agreement or because of a Governmental Requirement; (m) all

obligations of such Person under Hedging Agreements; and (n) all obligations of

such Person under Equipment Leases. For the avoidance of doubt, the obligations

under the Installment Sale Agreement and the Reimbursement Agreement shall be

included as one obligation for purposes of determining Debt hereunder.

 

     "Default" means an Event of Default or an event which with notice or lapse

of time or both would become an Event of Default.

 

     "Desired WFB Commitment Level" is defined in Section 2.03(b).

 

     "Determination Date" is defined in the definition of Applicable Margin.

 

     "Direct Pay Letter of Credit" means that certain letter of credit issued

pursuant to the Reimbursement Agreement.

 

     "Direct Pay Letter of Credit Commitment" means, for the Issuing Bank, its

obligations to issue the Direct Pay Letter of Credit in an initial face amount

not to exceed $25,308,219.18, as the same may be reduced and/or reinstated

pursuant to the Reimbursement Agreement. As of the Closing Date, the amount

available for drawing under the Direct Pay Letter of Credit is $22,808,219.18.

 

     "Direct Pay Letter of Credit Exposure" at any time means the undrawn amount

of the Direct Pay Letter of Credit, plus the amount drawn under the Direct Pay

Letter of Credit and not yet reimbursed (including by borrowing hereunder).

 

     "Dispute" is defined in Section 13.17(a).

 

     "Dollars" and "$" means lawful money of the United States of America.

 

     "EBIT" means, for any period, the sum of Consolidated Net Income for such

period, plus the following expenses or charges to the extent deducted from

Consolidated Net Income in such period: interest and taxes.

 

     "EBITDA" means, for any period, the sum of Consolidated Net Income for such

period plus the following expenses or charges to the extent deducted from

Consolidated Net Income in such period: interest, taxes, depreciation and

amortization.

 

     "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)

an Approved Fund; and (d) any other Person (other than a natural person)

approved by the Administrative Agent, the Issuing Bank and the Swing Line

Lender; provided that notwithstanding the foregoing, "Eligible Assignee" shall

not include the Borrower or any of the Borrower's Affiliates or Subsidiaries.

 

 

                                       -7-

<PAGE>

     "Environmental Laws" means any and all Governmental Requirements pertaining

to health or the environment in effect in any and all jurisdictions in which the

Borrower or any Subsidiary is conducting or at any time has conducted business,

or where any Property of the Borrower or any Subsidiary is located, including

without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as

amended, the Comprehensive Environmental, Response, Compensation, and Liability

Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as

amended, the Occupational Safety and Health Act of 1970, as amended, the

Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe

Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,

the Superfund Amendments and Reauthorization Act of 1986, as amended, the

Hazardous Materials Transportation Act, as amended, and other environmental

conservation or protection laws. The term "oil" shall have the meaning specified

in OPA, the terms "hazardous substance" and "release" (or "threatened release")

have the meanings specified in CERCLA, and the terms "solid waste" and

"disposal" (or "disposed") have the meanings specified in RCRA; provided,

however, that (a) in the event either OPA, CERCLA or RCRA is amended so as to

broaden the meaning of any term defined thereby, such broader meaning shall

apply subsequent to the effective date of such amendment and (b) to the extent

the laws of the state in which any Property of the Borrower or any Subsidiary is

located establish a meaning for "oil," "hazardous substance," "release," "solid

waste" or "disposal" which is broader than that specified in either OPA, CERCLA

or RCRA, such broader meaning shall apply.

 

     "EPA" means the United States Environmental Protection Agency and any

successor Governmental Authority.

 

     "Equipment Leases" means operating leases for equipment or vehicles having

a term longer than 120 days and an aggregate value of more than $250,000.

 

     "ERISA" means the Employee Retirement Income Security Act of 1974, as

amended from time to time and any successor statute.

 

     "ERISA Affiliate" means each trade or business (whether or not

incorporated) which together with the Borrower or any Subsidiary would be deemed

to be a "single employer" within the meaning of Section 4001(b)(1) of ERISA or

subsections (b) or (c) of Section 414 of the Code.

 

     "ERISA Event" means (a) a "Reportable Event" described in Section 4043 of

ERISA and the regulations issued thereunder, unless the 30-day notice

requirement with respect to such event has been waived by the PBGC, (b) the

withdrawal of the Borrower or any ERISA Affiliate from a Plan during a plan year

in which it was a "substantial employer" as defined in Section 4001(a)(2) of

ERISA and immediately after such withdrawal the Plan has nonforfeitable benefits

which are not fully funded, (c) the filing of a notice of intent to terminate a

Plan or the treatment of a Plan amendment as a termination under Section 4041 of

ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC or (e)

any other event or condition which might constitute grounds under Section 4042

of ERISA for the termination of, or the appointment of a trustee to administer,

any Plan.

 

     "Event of Default" is defined in Section 10.01.

 

 

                                       -8-

<PAGE>

     "Excepted Liens" means: (a) Liens for taxes, assessments or other

governmental charges or levies not yet due or which are being contested in good

faith by appropriate action and for which adequate reserves have been

maintained; (b) Liens in connection with workmen's compensation, unemployment

insurance or other social security, old age pension or public liability

obligations not yet due or which are being contested in good faith by

appropriate action and for which adequate reserves have been maintained in

accordance with GAAP; (c) operators', vendors', carriers', warehousemen's,

repairmen's, mechanics', workmen's, materialmen's, construction or other like

Liens arising by operation of law in the ordinary course of business or

statutory landlord's liens, each of which is in respect of obligations that have

not been outstanding more than 90 days or which are being contested in good

faith by appropriate proceedings and for which adequate reserves have been

maintained in accordance with GAAP; (d) any Liens reserved in (i) that certain

Royalty Agreement dated May 2, 1996 between Central Missouri Landfill, Inc. and

Len Howard for royalty obligations and (ii) leases for rent and for compliance

with the terms of such leases, to the extent that any such Lien referred to in

this clause (d) does not materially impair the use of the Property covered by

such Lien for the purposes for which such Property is held by the Borrower or

any Subsidiary or materially impair the value of such Property subject thereto;

(e) encumbrances (other than to secure the payment of borrowed money or the

deferred purchase price of Property or services), easements, restrictions,

servitudes, permits, conditions, covenants, exceptions or reservations in any

rights of way or other Property of the Borrower or any Subsidiary for the

purpose of roads, pipelines, transmission lines, transportation lines,

distribution lines for the removal of gas, oil, coal or other minerals or

timber, and other like purposes, or for the joint or common use of real estate,

rights of way, facilities and equipment, and defects, irregularities, zoning

restrictions and deficiencies in title of any rights of way or other Property

which in the aggregate do not materially impair the use of such rights of way or

other Property for the purposes of which such rights of way and other Property

are held by the Borrower or any Subsidiary or materially impair the value of

such Property subject thereto; (f) deposits of cash or securities to secure the

performance of bids, trade contracts, leases, permits, surety bonds, appeal

bonds, statutory obligations and other obligations of a like nature incurred in

the ordinary course of business; (g) Liens permitted by the Security

Instruments; (h) reservations, covenants, conditions, restrictions and other

Liens that arise or are imposed in connection with host community fee agreements

of a type customary in Borrower's or any Subsidiary's business; (i) Liens

securing judgments for the payment of money not constituting an Event of Default

or securing appeal or other surety bonds related to such judgments, and (j)

Liens created or deemed to be created in connection with the transactions

contemplated by the Installment Sale Agreement.

 

     "Existing Credit Agreement" is defined in the Recitals.

 

     "Existing LCs" means those letters of credit described on Schedule 1.2

issued pursuant to the Existing Credit Agreement.

 

     "Expansion Expenditure" means an expenditure made in connection with or in

furtherance of building a new transfer station, starting a new hauling company,

opening an inactive landfill, new municipal contracts that require additional

equipment or other property, or other growth and productivity capital

expenditures included within the Borrower's business plan so long as (a) the

Leverage Ratio is less than 3.00 to 1.00 at the end of each fiscal quarter prior

to such expenditure and immediately after giving effect thereto and (b) after

giving effect to such

 

 

                                       -9-

<PAGE>

expenditure, the Aggregate Revolving Credit Commitments shall exceed the sum of

the outstanding aggregate principal amount of the Revolving Credit Loans and

Swing Line Loans, plus the LC Exposure, plus the Direct Pay Letter of Credit

Exposure by an amount not less than $10,000,000; provided that, in the event

clause (a) above has not been satisfied and so long as (i) no Default exists or

would exist as a result of such expenditure, (ii) the requirement in clause (b)

above has been satisfied, and (iii) such expenditure does not exceed $20,000,000

when added to all other Expansion Expenditures made during the Borrower's then

current fiscal year, then such expenditure shall be deemed an Expansion

Expenditure; and "Expansion Expenditures" shall mean all such expenditures.

 

     "Federal Funds Rate" means, for any day, the rate per annum (rounded

upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average

of the rates on overnight federal funds transactions with a member of the

Federal Reserve System arranged by federal funds brokers on such day, as

published by the Federal Reserve Bank of New York on the Business Day next

succeeding such day, provided that (a) if the date for which such rate is to be

determined is not a Business Day, the Federal Funds Rate for such day shall be

such rate on such transactions on the next preceding Business Day as so

published on the next succeeding Business Day, and (b) if such rate is not so

published for any day, the Federal Funds Rate for such day shall be the average

rate charged to the Administrative Agent on such day on such transactions as

determined by the Administrative Agent.

 

     "Fee Letter" means that certain letter agreement from Wells Fargo to the

Borrower dated December 16, 2004 concerning certain fees in connection with this

Agreement and any agreements or instruments executed in connection therewith, as

the same may be amended or replaced from time to time.

 

     "Financial Statements" means the financial statement or statements of the

Borrower and its Consolidated Subsidiaries described or referred to in the first

sentence of Section 7.02.

 

     "Form W-8BEN Certification" is defined in Section 4.06(e)(i).

 

     "Form W-8ECI Certification" is defined in Section 4.06(e)(i).

 

     "Fund" means any Person (other than a natural person) that is (or will be)

engaged in making, purchasing, holding or otherwise investing in commercial

loans and similar extensions of credit in the ordinary course of its business.

 

     "Funded Debt" means, collectively, without duplication, whether classified

as Debt, an investment or otherwise on the Borrower's consolidated balance

sheet, (a) all Debt described in clauses (a), (b), (d) and (e) of the definition

of "Debt", but excluding Closure/Post Closure Letters of Credit, and (b) all

guaranties and other surety obligations of the Funded Debt of others; provided,

however, that, all obligations in respect of surety bonds and similar

instruments of the nature and for the purposes described in Schedule 7.02, item

1 are not included as Funded Debt, and without duplication, Funded Debt shall be

reduced by the amount of restricted cash maintained in any sinking fund or

similar deposit associated with any tax exempt bond financing incurred, assumed,

acquired or otherwise obtained by the Borrower or any Guarantor.

 

 

                                       -10-

<PAGE>

     "GAAP" means generally accepted accounting principles in the United States

of America in effect from time to time.

 

     "Governmental Authority" includes the country, the state, county, city and

political subdivisions in which any Person or such Person's Property is located

or which exercises valid jurisdiction over any such Person or such Person's

Property, and any court, agency, department, commission, board, bureau or

instrumentality of any of them including monetary authorities which exercises

valid jurisdiction over any such Person or such Person's Property. Unless

otherwise specified, all references to Governmental Authority herein shall mean

a Governmental Authority having jurisdiction over, where applicable, the

Borrower, its Subsidiaries or any of their Property or the Administrative Agent,

any Lender or any Applicable Lending Office.

 

     "Governmental Requirement" means any law, statute, code, ordinance, order,

determination, rule, regulation, judgment, decree, injunction, franchise,

permit, certificate, license, authorization or other directive or requirement

(whether or not having the force of law), including, without limitation,

Environmental Laws, energy regulations and occupational, safety and health

standards or controls, of any Governmental Authority.

 

     "Guarantor" means the Parent and each of the Subsidiaries of the Borrower

now or hereafter in existence.

 

     "Guaranty Agreement" means an agreement or agreements executed by the

Guarantors in form and substance satisfactory to the Administrative Agent

guarantying, unconditionally, payment of the Obligations, as the same has been

or may be amended, restated, modified or supplemented from time to time.

 

     "Hauling Site" means those hauling sites listed on Exhibit E.

 

     "Hedging Agreements" means any forward contract, futures contract, swap,

cap, floor, collar, option or other financing agreement or arrangement, the

value of which is dependent upon interest rates, currency exchange rates,

commodities or other indices.

 

     "Highest Lawful Rate" means, with respect to each Lender, the maximum

nonusurious interest rate, if any, that at any time or from time to time may be

contracted for, taken, reserved, charged or received on the Notes or on other

Obligations under laws applicable to such Lender, or to its Loans or other

extensions of credit hereunder, which are presently in effect or, to the extent

allowed by law, under such applicable laws which may hereafter be in effect and

which allow a higher maximum nonusurious interest rate than applicable laws now

allow.

 

     "Increase Date" is defined in Section 2.04(b).

 

     "Increased Use" means, with respect to an Acquired Business or Acquired

Subsidiary, for the applicable period of determination, waste disposed of in its

landfill in excess of Internalized Waste.

 

     "Increasing Lenders" is defined in Section 2.04(a).

 

     "Indemnified Parties" is defined in Section 13.03(a)(ii).

 

 

                                      -11-

<PAGE>

     "Indemnity Matters" means any and all actions, suits, proceedings

(including any investigations, litigation or inquiries), claims, demands and

causes of action made or threatened against a Person and, in connection

therewith, all losses, liabilities, damages (including, without limitation,

consequential damages) or reasonable costs and expenses of any kind or nature

whatsoever incurred by such Person whether caused by the sole or concurrent

negligence of such Person seeking indemnification.

 

     "Initial Funding" means the funding of the initial Loans or issuance of the

initial Letters of Credit upon satisfaction of the conditions set forth in

Sections 6.01 and 6.02.

 

     "Installment Sale Agreement" means that certain Installment Sale Agreement

dated as of August 1, 2002, by and between the Issuer and Waste Corporation

Texas, as the same may be amended, restated, supplemented or modified from time

to time.

 

     "Interest Period" means, with respect to any LIBOR Loan, the period

commencing on the date such LIBOR Loan is made and ending on the numerically

corresponding day in the first, second, third or sixth calendar month

thereafter, as the Borrower may select as provided in Section 2.02 (or such

longer period as may be requested by the Borrower and agreed to by the Majority

Lenders), except that each Interest Period which commences on the last Business

Day of a calendar month (or on any day for which there is no numerically

corresponding day in the appropriate subsequent calendar month) shall end on the

last Business Day of the appropriate subsequent calendar month.

 

     Notwithstanding the foregoing: (a) no Interest Period may end after the

Termination Date; (b) no Interest Period for any LIBOR Loan may end after the

due date of any installment, if any, provided for in Section 3.02 to the extent

that such LIBOR Loan would need to be prepaid prior to the end of such Interest

Period in order for such installment to be paid when due; (c) each Interest

Period which would otherwise end on a day which is not a Business Day shall end

on the next succeeding Business Day (or, if such next succeeding Business Day

falls in the next succeeding calendar month, on the next preceding Business

Day); and (d) no Interest Period shall have a duration of less than one month

and, if the Interest Period for any LIBOR Loans would otherwise be for a shorter

period, such Loans shall not be available hereunder.

 

     "Internalized Waste" means waste collected by the Borrower or an Affiliate

that is disposed of in a landfill (or other form of final disposal) owned or

operated by an Acquired Business or Acquired Subsidiary before consummation of

the Acquisition by the Borrower or a Subsidiary.

 

     "Issuer" means the Gulf Coast Waste Disposal Authority.

 

     "Issuing Bank" means Wells Fargo or any other Lender or Affiliate of a

Lender agreed to between the Borrower and the Administrative Agent to issue

Letters of Credit and the Direct Pay Letter of Credit.

 

     "LC Commitment" at any time means $30,000,000.

 

     "LC Exposure" at any time means the difference between (a) the aggregate

undrawn face amount of all outstanding and uncancelled Letters of Credit plus

the aggregate of all amounts

 

 

                                      -12-

<PAGE>

drawn under all Letters of Credit and not yet reimbursed (including by

borrowings hereunder), minus (b) the aggregate amount of all cash securing

outstanding Letters of Credit pursuant to Section 2.10(b).

 

     "Lender Party" and "Lender Parties" is defined in Section 13.14.

 

     "Lender Termination Date" is defined in Section 5.07(c).

 

     "Letter of Credit Agreements" means the written agreements with the Issuing

Bank, as issuing lender for any Letter of Credit, executed in connection with

the issuance by the Issuing Bank of the Letters of Credit, such agreements to be

on the Issuing Bank's customary form for letters of credit of comparable amount

and purpose as from time to time in effect or as otherwise agreed to by the

Borrower and the Issuing Bank.

 

     "Letters of Credit" means the Existing LCs and the letters of credit issued

pursuant to Section 2.01(d) and all reimbursement obligations pertaining to any

such letters of credit but excluding the Direct Pay Letter of Credit, and

"Letter of Credit" means any one of the Letters of Credit and the reimbursement

obligations pertaining thereto.

 

     "Leverage Ratio" means, for the Borrower and its Consolidated Subsidiaries,

calculated as of the end of each fiscal quarter the ratio of (a) Funded Debt at

the end of such fiscal quarter to (b) Pro Forma Adjusted EBITDA for the

immediately preceding four fiscal quarters.

 

     "LIBOR" means for any Interest Period with respect to any LIBOR Loan:

 

     (a) the rate per annum equal to the rate determined by the Administrative

Agent to be the offered rate that appears on the page of the Telerate screen (or

any successor thereto) that displays an average British Bankers Association

Interest Settlement Rate for deposits in Dollars (for delivery on the first day

of such Interest Period) with a term equivalent to such Interest Period,

determined as of approximately 11:00 a.m. (London time) two Business Days prior

to the first day of such Interest Period, or

 

     (b) if the rate referenced in the preceding clause (a) does not appear on

such page or service or such page or service shall cease to be available, the

rate per annum equal to the rate determined by the Administrative Agent to be

the offered rate on such other page or other service that displays an average

British Bankers Association Interest Settlement Rate for deposits in Dollars

(for delivery on the first day of such Interest Period) with a term equivalent

to such Interest Period, determined as of approximately 11:00 a.m. (London time)

two Business Days prior to the first day of such Interest Period, or

 

     (c) if the rates referenced in the preceding clauses (a) and (b) are not

available, the rate per annum (rounded upwards, if necessary, to the nearest

1/16 of 1%) offered to the Administrative Agent at approximately 11:00 a.m.

London time (or as soon thereafter as practicable) two Business Days prior to

the first day of the Interest Period for such Loan by leading banks in the

London interbank market for Dollar deposits having a term comparable to such

Interest Period and in an amount comparable to the principal amount of the LIBOR

Loan to be made by the Lenders for such Interest Period.

 

 

                                      -13-

<PAGE>

     "LIBOR Loans" means Loans the interest rates on which are determined on the

basis of rates referred to in the definition of "LIBOR Rate".

 

     "LIBOR Rate" means, with respect to any LIBOR Loan, a rate per annum

(rounded upwards, if necessary, to the nearest 1/16 of 1%) determined by the

Administrative Agent to be equal to the quotient of (a) LIBOR for such Loan for

the Interest Period for such Loan divided by (b) one minus the Reserve

Requirement for such Loan for such Interest Period.

 

     "Lien" means any interest in Property securing an obligation owed to, or a

claim by, a Person other than the owner of the Property, whether such interest

is based on the common law, statute or contract, and whether such obligation or

claim is fixed or contingent, and including but not limited to the lien or

security interest arising from a mortgage, encumbrance, pledge, security

agreement, conditional sale or trust receipt or a lease, consignment or bailment

for security purposes. The term "Lien" shall include reservations, exceptions,

encroachments, easements, rights of way, covenants, conditions, restrictions,

leases and other title exceptions and encumbrances affecting Property. For the

purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to be

the owner of any Property which it has acquired or holds subject to a

conditional sale agreement, or leases under a financing lease or other

arrangement pursuant to which title to the Property has been retained by or

vested in some other Person in a transaction intended to create a financing.

 

     "Loan Documents" means this Agreement, the Notes, the Direct Pay Letter of

Credit, the Reimbursement Agreement, all Letters of Credit, all Letter of Credit

Agreements, the Security Instruments and any other documents executed by the

Borrower or any of its Subsidiaries that are referred to therein as "Loan

Documents" under this Agreement.

 

     "Loans" means the loans as provided for by Sections 2.01(a) and (c).

"Loans" shall include Revolving Credit Loans and Swing Line Loans.

 

     "Majority Lenders" means, at any time while no Loans are outstanding, three

or more Lenders having more than fifty percent (50%) of the Aggregate Revolving

Credit Commitments and, at any time while Loans are outstanding, two or more

Lenders holding more than fifty percent (50%) of the aggregate principal amount

of the outstanding Loans (without regard to any sale by a Lender of a

participation in any Loan under Section 13.06(c)), unused Aggregate Revolving

Credit Commitments at such time.

 

     "Material Adverse Effect" means any set of circumstances or events that (a)

has or could reasonably be expected to have any material and adverse effect

whatsoever upon, or result in or reasonably be expected to result in a material

adverse change in, (A) the assets, liabilities, financial condition, business,

operations or affairs of the Borrower and its Subsidiaries taken as a whole

different from those reflected in the Financial Statements or from the facts

represented or warranted in any Loan Document, or (B) the ability of the

Borrower and its Subsidiaries taken as a whole to carry out their business as at

the Closing Date or as proposed as of the Closing Date to be conducted or meet

their obligations under the Loan Documents on a timely basis, (b) impairs

materially or could be reasonably expected to impair materially the ability of

the Borrower and its Subsidiaries to duly and punctually pay and perform their

obligations under the Loan Documents or (c) impairs materially or could

reasonably be expected to impair materially the

 

 

                                      -14-

<PAGE>

ability of the Administrative Agent or any of the Lenders, to the extent

permitted, to enforce its legal remedies pursuant to the Loan Documents.

 

     "Multiemployer Plan" means a Plan defined as such in Section 4001(a)(3) of

ERISA to which the Borrower or any ERISA Affiliate is making or accruing an

obligation to make contributions, or has within the preceding six calendar years

made or accrued an obligation to make contributions.

 

     "Net Worth" means, as at any date, the sum of the following for the

Borrower and its Consolidated Subsidiaries determined (without duplication) in

accordance with GAAP:

 

     (a) the amount of preferred stock and common stock at par plus the amount

of surplus of the Borrower, plus

 

     (b) the retained earnings (or, in the case of retained earnings deficit,

minus the amount of such deficit), minus

 

     (c) the cost of treasury shares.

 

     "New Lenders" means (a) an Affiliate of a Lender; (b) an Approved Fund; and

(c) any other Person (other than a natural person) approved by the

Administrative Agent, the Issuing Bank, the Swing Line Lender and the Borrower

(such approval not to be unreasonably withheld) that, immediately prior to its

issuance of a Revolving Credit Commitment pursuant to Section 2.04 was not a

Lender hereunder.

 

     "New Lending Office" is defined in Section 4.06(e)(iii).

 

     "Non-Core Asset" means real Property of the Borrower or any Guarantor which

is not used to (a) generate or produce any revenue, (b) generate or produce

revenue in excess of a de minimus amount or (c) generate revenue other than from

a source or sources that are not a part of the waste collection, transfer and

disposal business.

 

     "Non-U. S. Lender" is defined in Section 4.06(e).

 

     "Notes" means the Notes provided for by Section 2.07, together with any and

all renewals, extensions for any period, increases, rearrangements,

substitutions or modifications thereof. The "Notes" include the Revolving Credit

Notes and the Swing Line Note.

 

     "Notice of Termination" is defined in Section 5.07(a).

 

     "Obligations" means all indebtedness, obligations and liabilities of the

Borrower to any of the Lenders, any of their Affiliates, or the Administrative

Agent, individually or collectively, existing on the date of this Agreement or

arising thereafter, direct or indirect, joint or several, absolute or

contingent, matured or unmatured, liquidated or unliquidated, secured or

unsecured, arising or incurred under any Hedging Agreement with any Lender or

any Affiliate of any Lender, in connection with the deposit and/or cash

management products and services provided by Wells Fargo or its Affiliates

related to any deposit or other accounts of the Borrower or any of its

Subsidiaries, under this Agreement or any of the other Loan Documents or in

respect of any

 

 

                                       -15-

<PAGE>

of the Loans made or reimbursement obligations incurred or any of the Notes, the

Direct Pay Letter of Credit, the Reimbursement Agreement, Letters of Credit or

other instruments at any time evidencing any thereof, including interest

accruing subsequent to the filing of a petition or other action concerning

bankruptcy or other similar proceedings, and all renewals, extensions,

increases, refinancings and replacements for the foregoing.

 

     "Other Taxes" is defined in Section 4.06(b).

 

      "Parent" means WCA Holdings Corporation, a Delaware corporation.

 

     "PBGC" means the Pension Benefit Guaranty Corporation or any entity

succeeding to any or all of its functions.

 

     "Percentage Share" means the percentage of the Aggregate Revolving Credit

Commitments to be provided by a Lender under this Agreement as indicated on

Annex I hereto, as modified from time to time to reflect any assignments

permitted by Section 13.06(b).

 

     "Person" means any individual, corporation, company, voluntary association,

partnership, joint venture, trust, unincorporated organization or government or

any agency, instrumentality or political subdivision thereof, or any other form

of entity.

 

     "Plan" means any employee pension benefit plan, as defined in Section 3(2)

of ERISA, which (a) is currently or hereafter sponsored, maintained or

contributed to by the Borrower, an ERISA Affiliate or (b) was at any time during

the preceding six calendar years sponsored, maintained or contributed to, by the

Borrower or an ERISA Affiliate with respect to which the Borrower, or an ERISA

Affiliate could have liability under Title IV of ERISA in the event such plan

has been or were to be terminated.

 

     "Post-Default Rate" means, in respect of any principal of any Loan or any

other amount payable by the Borrower under this Agreement or any other Loan

Document, a rate per annum during the period commencing on the date of

occurrence of an Event of Default until such amount is paid in full or all

Events of Default are cured or waived equal to 2% per annum above the Base Rate

as in effect from time to time plus the Applicable Margin (if any), but in no

event to exceed the Highest Lawful Rate; provided, however, for a LIBOR Loan,

the "Post-Default Rate" for such principal shall be, for the period commencing

on the date of occurrence of an Event of Default and ending on the earlier to

occur of the last day of the Interest Period therefor or the date all Events of

Default are cured or waived, 2% per annum above the interest rate for such Loan

as provided in Section 3.02(a)(ii), but in no event to exceed the Highest Lawful

Rate.

 

     "Prime Rate" means the rate of interest from time to time announced

publicly by Wells Fargo, in San Francisco, California, as its prime rate. Such

rate is set by Wells Fargo as a general reference rate of interest, taking into

account such factors as Wells Fargo may deem appropriate, it being understood

that many of Wells Fargo's commercial or other loans are priced in relation to

such rate, that it is not necessarily the lowest or best rate actually charged

to any customer and that Wells Fargo may make various commercial or other loans

at rates of interest having no relationship to such rate. In addition, such rate

is evidenced by the recording thereof after its announcement in such internal

publication or publications as Wells Fargo may designate, and each change in the

Prime Rate will be effective on the day the change is announced within

 

 

                                      -16-

<PAGE>

Wells Fargo; provided however, such rate shall be a rate of interest generally

applied by Wells Fargo to other loan transactions to the extent such

transactions include rates based in whole or in part on the Prime Rate.

 

     "Principal Office" means the principal office of the Administrative Agent,

presently located at 1445 Ross Avenue, Suite 300, Dallas, Texas 75202.

 

     "Pro Forma Adjusted EBITDA" means, for any period, the sum of (a) EBITDA

for such period, plus (b) non-cash charges for accretion on closure and

post-closure obligations, plus (c) non-cash charges associated with the disposal

contract between Waste Management, Inc. and the Borrower, plus (d) non-cash

charges (or minus non-cash benefits, if applicable) reflecting the adoption of

SFAS No. 123 (and all amendments thereto), plus (e) cash compensation charges in

an aggregate amount not to exceed $5,000,000 and non-cash compensation charges,

all with respect to stock options outstanding and shares issued by Waste

Corporation in connection with the extinguishment of options and warrants as

part of the 2004 Reorganization, plus (f) the EBITDA for such period of any

assets or businesses to be acquired by the Borrower or any of its Consolidated

Subsidiaries (the "Acquired Business") or a Consolidated Subsidiary to be

acquired or formed since the beginning of such period (the "Acquired

Subsidiary") so long as (i) the acquisition of the Acquired Business or the

Acquired Subsidiary satisfies the criteria of a Qualified Acquisition

Expenditure, (ii) the Borrower, the Acquired Subsidiary and the other

Subsidiaries have complied with requirements of Section 8.08, (iii) the

Administrative Agent (1) shall have received the audited annual consolidated and

consolidating financial statements for such Acquired Business or Acquired

Subsidiary for the fiscal year most recently ended, accompanied by the related

opinion of independent public accountants acceptable to the Administrative

Agent, which financial statements and opinion must satisfy the criteria set

forth in Section 8.01(a), or (2) if audited annual financial statements of the

Acquired Business or the Acquired Subsidiary are unavailable, shall have

received such financial statements and other information (including the amount

of EBITDA to be used in determining Pro Forma Adjusted EBITDA, plus, for the

purpose of computing Pro-forma Adjusted EBITDA, the effect of Additional Volume

and/or Increased Use, as applicable, and itemized direct cost savings that will

be achieved as a result of, or in connection with, the Acquisition) requested by

the Administrative Agent, in form and substance satisfactory to the

Administrative Agent, and (iv) the Administrative Agent has received unaudited

consolidated and consolidating financial statements (or other financial

information) of the Acquired Business or the Acquired Subsidiary for the fiscal

quarter most recently ended and for the portion of the fiscal year then ended,

all calculations and reports under this clause (f) to be in form and substance

reasonably satisfactory to the Administrative Agent, plus (g) non-cash expense

(or minus non-cash income, if applicable) associated with FAS 133 treatment of

any interest rate Hedging Agreements, plus (h) non-cash losses on asset sales in

an aggregate amount not to exceed $500,000.

 

     "Property" means any interest in any kind of property or asset, whether

real, personal or mixed, or tangible or intangible.

 

     "Qualified Acquisition Expenditure" means collectively, (a) on or before

January 17, 2005, an expenditure by the Borrower or one of its Subsidiaries made

in connection with or in furtherance of the acquisition of a Person engaged in a

similar line of business as the Borrower and its Subsidiaries, and (b) after

January 17, 2005, an expenditure by the Borrower or one of its

 

 

                                       -17-

<PAGE>

Subsidiaires made in connection with or in furtherance of the acquisition of a

Person engaged in a similar line of business as the Borrower and its

Subsidiaries, so long as (i) the Leverage Ratio is less than 3.00 to 1.00 at the

end of each fiscal quarter prior to such expenditure and immediately after

giving effect thereto and (ii) after giving effect to such expenditure, the

Aggregate Revolving Credit Commitments shall exceed the sum of the outstanding

principal amount of the Revolving Credit Loans and Swing Line Loans, plus the LC

Exposure, plus the Direct Pay Letter of Credit Exposure by an amount not less

than $10,000,000; provided that, in the event clause (i) above has not been

satisfied and so long as (1) no Default exists or would exist as a result of

such expenditure, (2) the requirement in clause (ii) above has been satisfied,

and (3) such expenditure does not exceed $15,000,000, then such expenditure

shall be deemed a Qualified Acquisition Expenditure; and "Qualified Acquisitions

Expenditures" shall mean all such expenditures.

 

     "Quarterly Dates" means the last day of each March, June, September and

December, in each year, the first of which shall be December 31, 2004; provided,

however, that if any such day is not a Business Day, such Quarterly Date shall

be the next succeeding Business Day.

 

     "Regulation D" means Regulation D of the Board of Governors of the Federal

Reserve System (or any successor), as the same may be amended or supplemented

from time to time.

 

     "Regulatory Change" means, with respect to any Lender, any change after the

Closing Date in any Governmental Requirement (including Regulation D) or the

adoption or making after such date of any interpretations, directives or

requests applying to a class of lenders (including such Lender or its Applicable

Lending Office) of or under any Governmental Requirement (whether or not having

the force of law) by any Governmental Authority charged with the interpretation

or administration thereof.

 

      "Reimbursement Agreement" means that certain Reimbursement Agreement dated

as of August 30, 2002 among the Borrower, Waste Corporation Texas and the

Issuing Bank, as the same may be amended, restated, supplemented or modified

from time to time.

 

     "Related Documents" is defined in the Reimbursement Agreement.

 

     "Released Parties" is defined in Section 13.19.

 

     "Replacement Lenders" is defined in Section 5.07(b).

 

     "Required Payment" is defined in Section 4.04.

 

     "Reserve Requirement" means, for any Interest Period for any LIBOR Loan,

the average maximum rate at which reserves (including any marginal, supplemental

or emergency reserves) are required to be maintained during such Interest Period

under Regulation D by member banks of the Federal Reserve System in New York

City with deposits exceeding one billion Dollars against "Eurocurrency

liabilities" (as such term is used in Regulation D). Without limiting the effect

of the foregoing, the Reserve Requirement shall reflect any other reserves

required to be maintained by such member banks by reason of any Regulatory

Change against (a) any category of liabilities which includes deposits by

reference to which LIBOR is to be determined as

 

 

                                      -18-

<PAGE>

provided in the definition of "LIBOR" or (b) any category of extensions of

credit or other assets which include a LIBOR Loan.

 

     "Responsible Officer" means, as to any Person, the Chief Executive Officer,

the President or any Vice President of such Person and, with respect to

financial matters, the term "Responsible Officer" shall include the Chief

Financial Officer or, with respect to the Borrower, the Controller of such

Person. Unless otherwise specified, all references to a Responsible Officer

herein shall mean a Responsible Officer of the Borrower.

 

     "Revolving Credit Commitment" means, for any Lender, its obligation to make

Revolving Credit Loans and participate in the issuance of Letters of Credit and

the Direct Pay Letter of Credit as set forth opposite such Lender's name on

Annex I under the caption "Revolving Credit Commitment" (as the same may be

reduced pursuant to Section 2.03(b) pro rata to each Lender based on its

Percentage Share), as modified from time to time to reflect any assignments

permitted by Section 13.06(b).

 

     "Revolving Credit Loans" means Loans made pursuant to Section 2.01(a).

 

     "Revolving Credit Notes" means the promissory note or notes (whether one or

more) of the Borrower described in Section 2.07 and being in the form of Exhibit

A-1.

 

     "SEC" means the Securities and Exchange Commission or any successor

Governmental Authority.

 

     "Section 20 Subsidiary" means a Subsidiary of the bank holding company

controlling any Lender, which Subsidiary has been granted authority by the

Federal Reserve Board to underwrite and deal in certain securities which may not

be underwritten or dealt in by member banks of the Federal Reserve System under

Section 16 of the Banking Act of 1933 (12 U.S.C. ss.24, Seventh), as amended.

 

      "Secured Parties" means the Administrative Agent, the Lenders, each Issuing

Bank and each Affiliate of a Lender that is a party to a Hedge Agreement.

 

     "Security Instruments" means the agreements or instruments described or

referred to in Exhibit F attached hereto and any and all other agreements or

instruments now or hereafter executed and delivered by the Borrower or any other

Person (other than participation or similar agreements between any Lender and

any other lender or creditor with respect to any Obligations pursuant to this

Agreement) in connection with, or as security for the payment or performance of,

the Notes, this Agreement, Hedge Agreements or reimbursement obligations under

the Letters of Credit or the Direct Pay Letter of Credit, as such agreements may

be amended, supplemented or restated from time to time.

 

     "Senior Funded Debt" means all Funded Debt other than Subordinated Debt.

 

     "Senior Funded Debt Leverage Ratio" means, for the Borrower and its

Consolidated Subsidiaries, calculated as of the end of each fiscal quarter, the

ratio of (a) Senior Funded Debt as of the end of such fiscal quarter to (b) Pro

Forma Adjusted EBITDA for the immediately preceding four fiscal quarters.

 

 

                                      -19-

<PAGE>

      "Settlement" means the making or receiving of payments, in immediately

available funds, by the Lenders to or from the Administrative Agent in

accordance with Section 2.01(c) hereof to the extent necessary to cause each

such Lender's actual share of the outstanding amount of Swing Line Loans to be

equal to such Lender's Percentage Share of the outstanding Swing Line Loans, in

any case when, prior to such action, the actual share is not so equal.

 

     "Settlement Amount" is defined in Section 2.01(c)(ii).

 

     "Settlement Date" is defined in Section 2.01(c)(ii).

 

     "Settling Lender" is defined in Section 2.01(c)(ii).

 

     "Special Entity" means, with respect to any Person, any joint venture,

limited liability company or partnership, general or limited partnership or any

other type of partnership or company (other than a corporation) in which such

Person or one or more of its other Subsidiaries is a member, owner, partner or

joint venturer and owns, directly or indirectly, at least a majority of the

equity of such entity or controls such entity, but excluding any tax

partnerships that are not classified as partnerships under state law. For

purposes of this definition, any Person which owns directly or indirectly an

equity investment in another Person which allows the first Person to manage or

elect managers who manage the normal activities of such second Person will be

deemed to "control" such second Person (e.g. a sole general partner controls a

limited partnership).

 

     "Subordinated Debt" means any Debt of the Borrower expressly subordinated

to the Obligations, on terms specifically including, without limitation, that

payments on such Debt shall be prohibited if a Default exists or would result

from such payment, and other terms and conditions and pursuant to documentation,

all in form and substance reasonably satisfactory to the Agent and the Majority

Lenders.

 

     "Subsidiary" means (a) any corporation of which at least a majority of the

outstanding shares of stock having by the terms thereof ordinary voting power to

elect a majority of the board of directors of such corporation (irrespective of

whether or not at the time stock of any other class or classes of such

corporation shall have or might have voting power by reason of the happening of

any contingency) is at the time directly or indirectly owned or controlled by

another Person or one or more of such Person's Subsidiaries or by such Person

and one or more of its Subsidiaries and (b) any Special Entity. Unless otherwise

expressly stated herein, each reference to the term "Subsidiary" shall mean a

Subsidiary of the Borrower.

 

     "Swing Line Commitment" means, for the Swing Line Lender, its obligation to

make Swing Line Loans up to $10,000,000.

 

     "Swing Line Facility" means the facility pursuant to Section 2.01(c).

 

     "Swing Line Lender" means Wells Fargo or such other Lender as the

Administrative Agent, the Borrower and such Lender shall agree.

 

     "Swing Line Loans" means the Loans made pursuant to Section 2.01(c).

 

 

                                       -20-

<PAGE>

     "Swing Line Note" means the promissory note or notes (whether one or more)

of the Borrower described in Section 2.07 and being in the form of Exhibit A-2.

 

     "Taxes" is defined in Section 4.06(a).

 

     "Terminated Lender" is defined in Section 5.07(a).

 

     "Termination Date" means the earlier to occur of (a) December 21, 2009, and

(b) the date that the Commitments are sooner terminated pursuant to Sections

2.03(b) or 10.02 and the Notes are prepaid in full pursuant to Section 2.08.

 

     "Transfer" is defined in Section 9.16.

 

     "Transfer Stations" means those transfer stations listed on Exhibit E.

 

     "Type" means, with respect to any Loan, a Base Rate Loan or a LIBOR Loan.

 

     "Waste Corporation" means Waste Corporation of America LLC, a Delaware

limited liability company.

 

     "Waste Corporation Texas" means Waste Corporation of Texas, L.P., a

Delaware limited partnership.

 

     "WCA Corp." means WCA Waste Corporation, a Delaware corporation.

 

     "Welfare Plan" means any employee welfare benefit plan, as defined in

Section 3(1) of ERISA, which (a) is currently or hereafter sponsored maintained

or contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (b)

was at any time during the preceding six calendar years sponsored, maintained or

contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.

 

     Section 1.03 Accounting Terms and Determinations. Unless otherwise

specified herein, all accounting terms used herein shall be interpreted, all

determinations with respect to accounting matters hereunder shall be made, and

all financial statements and certificates and reports as to financial matters

required to be furnished to the Administrative Agent or the Lenders hereunder

shall be prepared, in accordance with GAAP, applied on a basis consistent with

the audited financial statements of the Borrower referred to in Section 7.02

(except for changes concurred with by the Borrower's independent public

accountants). If at any time any change in GAAP would affect the computation of

any financial ratio or requirement set forth in any Loan Document, and either

the Borrower or the Majority Lenders shall so request, the Administrative Agent,

the Lenders and the Borrower shall negotiate in good faith to amend such ratio

or requirement to preserve the original intent thereof in light of such change

in GAAP (subject to the approval of the Majority Lenders); provided that, until

so amended, (a) such ratio or requirement shall continue to be computed in

accordance with GAAP prior to such change therein and (b) the Borrower shall

provide to the Administrative Agent and the Lenders financial statements and

other documents required under this Agreement or as reasonably requested

hereunder setting forth a reconciliation between calculations of such ratio or

requirement made before and after giving effect to such change in GAAP.

 

 

                                      -21-

<PAGE>

                                   ARTICLE II

 

                                    COMMITMENTS

 

     Section 2.01 Loans and Letters of Credit.

 

          (a) Revolving Credit Loans. Each Lender severally agrees, on the terms

and conditions of this Agreement, to make loans to the Borrower during the

period from and including (i) the Closing Date or (ii) such later date that such

Lender becomes a party to this Agreement as provided in Section 13.06(b), to and

up to, but excluding, the Termination Date in an aggregate principal amount at

any one time outstanding up to, but not exceeding, the amount of such Lender's

Revolving Credit Commitment as then in effect; provided, however, that the

aggregate principal amount of all such Revolving Credit Loans by all Lenders

hereunder at any one time outstanding together with the LC Exposure, the Direct

Pay Letter of Credit Exposure and the outstanding Swing Line Loans shall not

exceed the Aggregate Revolving Credit Commitments. Subject to the terms of this

Agreement, during the period from the Closing Date to and up to, but excluding,

the Termination Date, the Borrower may borrow, repay and reborrow the amount

described in this Section 2.01(a).

 

          (b) Direct Pay Letter of Credit. The Issuing Bank, subject to the

terms and conditions of the Existing Credit Agreement, issued the Direct Pay

Letter of Credit in a face amount not to exceed the Direct Pay Letter of Credit

Commitment for the account of the Borrower or Waste Corporation Texas as

described in the Reimbursement Agreement; provided, however, that the aggregate

principal amount of all such Revolving Credit Loans by all Lenders hereunder at

any one time outstanding together with the LC Exposure, the Direct Pay Letter of

Credit Exposure and the outstanding Swing Line Loans shall not exceed the

Aggregate Revolving Credit Commitments. In the event of any conflict between any

provision of the Reimbursement Agreement and this Agreement or the Existing

Credit Agreement, the Borrower, the Issuing Bank, the Administrative Agent and

the Lenders hereby agree that the provisions of the Reimbursement Agreement

shall govern. The Issuing Bank sent to the Borrower and each Lender, immediately

upon issuance of the Direct Pay Letter of Credit, a true and complete copy of

the Direct Pay Letter of Credit, and will send immediately upon issuance of any

amendment of the Direct Pay Letter of Credit, a true and correct copy of such

amendment. The Lenders participate in the Direct Pay Letter of Credit according

to their respective Percentage Shares pursuant to Section 2.10.

 

          (c) Swing Line Loans.

 

                (i) Solely for ease of administration of the Revolving Credit

Loans, the Swing Line Lender may, upon receipt of a notice required under

Section 2.02(c) on the proposed date of funding, but shall not be required to,

fund Base Rate Loans made in accordance with the provisions of this Agreement,

bearing interest as set forth in Section 3.02(a)(i). The Swing Line Lender may,

in its sole discretion and without conferring with the Lenders, make Swing Line

Loans to the Borrower by entry of credits to the Borrower's operating account(s)

with the Swing Line Lender to cover checks which the Borrower has drawn or made

against such account and shall notify the Administrative Agent of any overdrafts

being advanced as Swing Line Loans. The Borrower hereby requests and authorizes

the Swing Line Lender to make from

 

 

                                      -22-

<PAGE>

time to time such Swing Line Loans by means of appropriate entries of such

credits sufficient to cover checks then presented. The Borrower acknowledges and

agrees that the making of such Swing Line Loans shall be subject in all respects

to the provisions of this Agreement as if they were Swing Line Loans covered by

a request under Section 2.02(c), including, without limitation, the limitations

set forth in this Section 2.01 and the requirements that the applicable

provisions of Section 6.01 (in the case of Swing Line Loans made on the Closing

Date) and Section 6.02 be satisfied. All actions taken by the Swing Line Lender

pursuant to the provisions of this Section 2.01(c) shall be conclusive and

binding on the Borrower absent manifest error or such Swing Line Lender's gross

negligence or willful misconduct. The Swing Line Loans shall be evidenced by the

Swing Line Note; provided that the outstanding aggregate amount of Swing Line

Loans advanced by the Swing Line Lender hereunder shall not exceed the Swing

Line Commitment at any time. Each Lender shall remain severally and

unconditionally liable to fund its pro rata share (based upon each Lender's

Percentage Share) of such Swing Line Loans on each Settlement Date and, in the

event the Swing Line Lender chooses not to fund all Base Rate Loans requested on

any date, to fund its Percentage Share of the Base Rate Loans requested, subject

to satisfaction of the provisions hereof relating to the making of Base Rate

Loans. Prior to each Settlement, all payments or repayments of the principal of,

and interest on, Swing Line Loans shall be credited to the account of the Swing

Line Lender. The Borrower shall have the right, at its election, to prepay the

outstanding amount of the Swing Line Loans, as a whole or in part, at any time

without penalty or premium.

 

               (ii) The Lenders shall effect Settlements on (A) the Business Day

immediately following any day which the Swing Line Lender gives written notice

to the Administrative Agent to effect a Settlement, (B) the Business Day

immediately following the Swing Line Lender's or the Administrative Agent's

becoming aware of the existence of any Default, (C) the Termination Date, (D)

any date on which the Borrower wishes to convert a Swing Line Loan into a

Revolving Credit Loan, and (E) in any event, on the first Business Day of each

calendar quarter for the immediately preceding calendar quarter (each such date,

a "Settlement Date"). One Business Day prior to each such Settlement Date, the

Administrative Agent shall give notice by facsimile or telecopier to the Lenders

of (1) the respective outstanding amount of Revolving Credit Loans made by each

Lender as at the close of the prior Business Day, and (2) the amount that any

Lender, as applicable (a "Settling Lender"), shall pay to effect a settlement (a

"Settlement Amount"). A statement of the Administrative Agent submitted to the

Lenders with respect to any amounts owing hereunder shall be PRIMA FACIE

evidence of the amount due and owing. Each Settling Lender shall, not later than

11:00 a.m. (Central Time) on each Settlement Date, effect a wire transfer of

immediately available funds to the Administrative Agent, for the benefit of the

Swing Line Lender, at the Administrative Agent's Principal Office in the amount

of such Lender's Settlement Amount. All funds advanced by any Lender as a

Settling Lender pursuant to this Section 2.01(c) shall for all purposes be

treated as a Base Rate Loan by that Lender (in place of the Swing Loan Lender)

to the Borrower and all such funds so advanced shall be treated as a payment in

full of such amount by the Borrower under its Swing Line Note.

 

               (iii) Subject to the Settling Lender's receipt of the notice

required pursuant to Section 2.01(c)(ii), the Administrative Agent may (unless

notified to the contrary by any Settling Lender by 11:00 a.m. (Central Time) one

Business Day prior to the Settlement Date) assume that each Settling Lender has

made available (or will make available by the time

 

 

                                      -23-

<PAGE>

specified in Section 2.01(c)(ii)) to the Administrative Agent its Settlement

Amount, and the Administrative Agent may (but shall not be required to), in

reliance upon such assumption, effect Settlements. If the Settlement Amount of

such Settling Lender is made available to the Administrative Agent on a date

after such Settlement Date, such Settling Lender shall pay the Administrative

Agent, for the benefit of the Swing Line Lender, on demand an amount equal to

the product of (A) the average, computed for the period referred to in clause

(C) below, of the weighted average annual interest rate paid by the

Administrative Agent for federal funds acquired by the Administrative Agent

during each day included in such period times (B) such Settlement Amount times

(C) a fraction, the numerator of which is the number of days that elapse from

and including such Settlement Date to but not including the date on which such

Settlement Amount shall become immediately available to the Administrative

Agent, and the denominator of which is 360. Upon payment of such amount such

Settling Lender shall be deemed to have delivered its Settlement Amount on the

Settlement Date and shall become entitled to interest payable by the Borrower

with respect to such Settling Lender's Settlement Amount as if such share were

delivered on the Settlement Date. If such Settlement Amount is not in fact made

available to the Administrative Agent by such Settling Lender within three

Business Days of such Settlement Date, the Administrative Agent shall be

entitled to recover such amount from the Borrower, with any unpaid interest

thereon at the Base Rate.

 

               (iv) After any Settlement Date, any payment by the Borrower of

Swing Line Loans hereunder shall be allocated pro rata among the Lenders, in

accordance with such Lender's Percentage Share.

 

               (v) If, prior to the making of a Revolving Credit Loan pursuant

to clause (ii) of this Section 2.01(c), a Default has occurred and is

continuing, each Lender shall, on the date such Revolving Credit Loan was to

have been made, purchase an undivided participating interest in the outstanding

Swing Line Loans in an amount equal to its Percentage Share of such Swing Line

Loans. Each Lender will immediately transfer to the Administrative Agent, for

the benefit of the Swing Line Lender, in immediately available funds, the amount

of its participation and upon receipt thereof the Administrative Agent will

deliver to such Lender a Swing Line participation certificate dated the date of

receipt of such funds and in such amount.

 

               (vi) Whenever, at any time after the Administrative Agent has

received from any Lender such Lender's participating interest in the Swing Line

Loans pursuant to clause (v) above, the Administrative Agent receives any

payment on account thereof, the Administrative Agent will distribute to such

Lender its participating interest in such amount (appropriately adjusted, in the

case of interest payments, to reflect the period of time during which such

Lender's participating interest was outstanding and funded) in like funds as

received; provided, however, that in the event that such payment received by the

Administrative Agent is required to be returned, such Lender will return to the

Administrative Agent any portion thereof previously distributed by the

Administrative Agent to it in like funds as such payment is required to be

returned by the Administrative Agent.

 

               (vii) Each Lender's obligation to purchase participating

interests pursuant to clause (v) above shall be absolute and unconditional and

shall not be affected by any circumstance, including, without limitation, (A)

any set-off, counterclaim, recoupment, defense or other right which such Lender

may have against the Administrative Agent, the Borrower or

 

 

                                      -24-

<PAGE>

any other Person for any reason whatsoever; (B) the occurrence or continuance of

a Default; (C) any adverse change in the condition (financial or otherwise) of

the Borrower or any other Person; (D) any breach of this Agreement by the

Borrower or any other Lender or the Administrative Agent; or (E) any other

circumstance, happening or event whatsoever, whether or not similar to any of

the foregoing.

 

          (d) Letters of Credit. During the period from and including the

Closing Date to, but excluding, the date 30 days prior to the Termination Date,

the Issuing Bank, as issuing bank for the Lenders, agrees to extend credit for

the account of the Borrower or any Guarantor (other than the Parent) at any time

and from time to time by issuing, renewing, extending or reissuing Letters of

Credit; provided however, the LC Exposure at any one time outstanding shall not

exceed the lesser of (i) the LC Commitment or (ii) the Aggregate Revolving

Credit Commitments, as then in effect, minus the aggregate principal amount of

all Revolving Credit Loans, Swing Line Loans, the Direct Pay Letter of Credit

Exposure and the LC Exposure then outstanding. The Lenders shall participate in

such Letters of Credit according to their respective Percentage Shares. Each of

the Letters of Credit shall (i) be issued by the Issuing Bank, (ii) contain such

terms and provisions as are reasonably required by the Issuing Bank, (iii) be

for the account of the Borrower or any Guarantor (other than the Parent) and

(iv) expire not later than five Business Days prior to the Termination Date.

 

          (e) Limitation on Types of Loans. Subject to the other terms and

provisions of this Agreement, at the option of the Borrower, the Loans may be

Base Rate Loans or LIBOR Loans; provided that, without the prior written consent

of the Majority Lenders, no more than 10 LIBOR Loans may be outstanding at any

time.

 

     Section 2.02 Borrowings, Continuations and Conversions, Letters of Credit.

 

          (a) Borrowings. The Borrower shall give the Administrative Agent

(which shall promptly notify the Lenders) advance notice as hereinafter provided

of each borrowing hereunder, which shall specify (i) the aggregate amount of

such borrowing, (ii) the Type and (iii) the date (which shall be a Business Day)

of the Loans to be borrowed, and (iv) (in the case of LIBOR Loans) the duration

of the Interest Period therefor.

 

          (b) Minimum Amounts. All Base Rate Loan borrowings shall be in amounts

of at least $500,000 or the remaining balance of the Aggregate Revolving Credit

Commitments, if less, or any whole multiple of $100,000 in excess thereof, and

all LIBOR Loans shall be in amounts of at least $1,000,000 or any whole multiple

of $500,000 in excess thereof.

 

          (c) Notices. All borrowings (except for borrowings automatically

funded under Section 2.10(d)), continuations and conversions shall require

advance written notice to the Administrative Agent (which shall promptly notify

the Lenders) in the form of Exhibit B (or telephonic notice promptly confirmed

by such a written notice), which in each case shall be irrevocable, from the

Borrower to be received by the Administrative Agent (i) not later than 11:00

a.m. (Central time) on the date of each Swing Line Loan and (ii) with respect to

all Loans other than Swing Line Loans, not later than 11:00 a.m. (Central time)

at least one Business Day prior to the date of each Base Rate Loan borrowing and

three Business Days prior to the date of each LIBOR Loan borrowing, continuation

or conversion. Without in any way limiting the

 

 

                                      -25-

<PAGE>

Borrower's obligation to confirm in writing any telephonic notice, the

Administrative Agent may act without liability upon the basis of telephonic

notice believed by the Administrative Agent in good faith to be from the

Borrower prior to receipt of written confirmation. In each such case, the

Borrower hereby waives the right to dispute the Administrative Agent's record of

the terms of such telephonic notice except in the case of gross negligence or

willful misconduct by the Administrative Agent.

 

          (d) Continuation Options. Subject to the provisions made in this

Section 2.02(d), the Borrower may elect to continue all or any part of any LIBOR

Loan beyond the expiration of the then current Interest Period relating thereto

by giving advance notice as provided in Section 2.02(c) to the Administrative

Agent (which shall promptly notify the Lenders) of such election, specifying the

amount of such Loan to be continued and the Interest Period therefor. In the

absence of such a timely and proper election, the Borrower shall be deemed to

have elected to convert such LIBOR Loan to a Base Rate Loan pursuant to Section

2.02(e). All or any part of any LIBOR Loan may be continued as provided herein,

provided that (i) any continuation of any such Loan shall be (as to each Loan as

continued for an applicable Interest Period) in amounts of at least $1,000,000

or any whole multiple of $500,000 in excess thereof and (ii) no Default shall

have occurred and be continuing. If a Default shall have occurred and be

continuing, each LIBOR Loan shall be converted to a Base Rate Loan on the last

day of the Interest Period applicable thereto.

 

          (e) Conversion Options. The Borrower may elect to convert all or any

part of any LIBOR Loan on the last day of the then current Interest Period

relating thereto to a Base Rate Loan by giving advance notice to the

Administrative Agent (which shall promptly notify the Lenders) of such election.

Subject to the provisions made in this Section 2.02(e), the Borrower may elect

to convert all or any part of any Base Rate Loan at any time and from time to

time to a LIBOR Loan by giving advance notice as provided in Section 2.02(c) to

the Administrative Agent (which shall promptly notify the Lenders) of such

election. All or any part of any outstanding Loan may be converted as provided

herein, provided that (i) any conversion of all or any part of any Base Rate

Loan into a LIBOR Loan shall be (as to each such Loan into which there is a

conversion for an applicable Interest Period) in amounts of at least $1,000,000

or any whole multiple of $500,000 in excess thereof and (ii) no Default shall

have occurred and be continuing. If a Default shall have occurred and be

continuing, no Base Rate Loan may be converted into a LIBOR Loan.

 

          (f) Advances. Not later than 11:00 a.m. (Central time) on the date

specified for each borrowing hereunder, each Lender shall make available the

amount of the Loan to be made by it on such date to the Administrative Agent, to

an account which the Administrative Agent shall specify, in immediately

available funds, for the account of the Borrower. The amounts so received by the

Administrative Agent shall, subject to the terms and conditions of this

Agreement, be made available to the Borrower by depositing the same, in

immediately available funds, in an account of the Borrower, designated by the

Borrower and maintained at the Principal Office.

 

          (g) Letters of Credit. The Borrower shall give the Issuing Bank (which

shall promptly notify the Lenders of such request and their Percentage Share of

such Letter of Credit) advance notice to be received by the Issuing Bank not

later than 11:00 a.m. (Central time) not

 

 

                                      -26-

<PAGE>

less than three Business Days prior thereto of each request for the issuance,

and at least the earlier of (A) 30 Business Days prior to the date of the

renewal or extension, of a Letter of Credit hereunder or (B) 30 calendar days

prior to the last date upon which the Issuing Bank is required to give notice of

cancellation or non-renewal of such Letter of Credit thereunder, which request

shall specify (i) the amount of such Letter of Credit, (ii) the date (which

shall be a Business Day) such Letter of Credit is to be issued, renewed or

extended, (iii) the duration thereof, (iv) the name and address of the

beneficiary thereof and (v) such other information as the Administrative Agent

may reasonably request, all of which shall be reasonably satisfactory to the

Administrative Agent. Subject to the terms and conditions of this Agreement, on

the date specified for the issuance, renewal or extension of a Letter of Credit,

the Administrative Agent shall issue, renew or extend such Letter of Credit to

the beneficiary thereof.

 

     In conjunction with the issuance of each Letter of Credit, the Borrower

shall execute a Letter of Credit Agreement. In the event of any conflict between

any provision of a Letter of Credit Agreement and this Agreement, the Borrower,

the Issuing Bank, the Administrative Agent and the Lenders hereby agree that the

provisions of this Agreement shall govern.

 

     The Issuing Bank will send to the Borrower and each Lender, immediately

upon issuance of any Letter of Credit, or an amendment thereto, a true and

complete copy of such Letter of Credit, or such amendment thereto.

 

     Section 2.03 Changes of Aggregate Revolving Credit Commitments.

 

          (a) The Aggregate Revolving Credit Commitments shall be automatically

adjusted as a result of any reductions pursuant to Section 2.03(b) or 2.08.

 

          (b) The Borrower shall have the right to terminate or to reduce the

amount of the Aggregate Revolving Credit Commitments at any time, or from time

to time, upon not less than three Business Days' prior notice to the

Administrative Agent (which shall promptly notify the Lenders) of each such

termination or reduction, which notice shall specify the effective date thereof

and the amount of any such reduction (which shall not be less than $1,000,000 or

any whole multiple of $1,000,000 in excess thereof) and shall be irrevocable and

effective only upon receipt by the Administrative Agent. In the event the

Borrower terminates or reduces the Aggregate Revolving Credit Commitments

pursuant to this Section 2.03(b), any such termination or reduction shall be

applied first to Wells Fargo's Revolving Credit Commitment until Wells Fargo's

Revolving Credit Commitment is $50,000,000 ("Desired WFB Commitment Level"), and

then, the remainder, if any, shall be applied to the Commitment of each Lender

(including Wells Fargo), pro rata according to the amounts of its respective

Commitment.

 

          (c) The Aggregate Revolving Credit Commitments once terminated or

reduced may not be reinstated.

 

     Section 2.04 Increase in Aggregate Revolving Credit Commitments.

 

          (a) So long as (i) no Default has occurred and is continuing, (ii) the

Borrower has terminated or reduced the Aggregate Revolving Credit Commitments

pursuant to Section 2.03(b) such that Wells Fargo's Revolving Credit Commitment

equals the Desired WFB Commitment Level, and (iii) the Borrower has not

otherwise terminated or reduced in part any

 

 

                                      -27-

<PAGE>

unused portion of the Aggregate Revolving Credit Commitments at any time

pursuant to Section 2.03, the Borrower may by notice to the Administrative

Agent, request a one-time increase in the amount of the Aggregate Revolving

Credit Commitments within the limitations hereafter described, which notices

shall set forth the amount of such increase. In accordance with Section 2.04(d),

the amount of the Aggregate Revolving Credit Commitments may be so increased

either by having one or more New Lenders that have been approved by the Borrower

become Lenders and/or by having any one or more of the then existing Lenders (at

their respective election in their sole discretion) increase the amount of their

Revolving Credit Commitments ("Increasing Lenders"), provided that (i) the

Revolving Credit Commitment of any New Lender shall not be less than $5,000,000

and the sum of the Revolving Credit Commitments of the New Lenders and the

increases in the Revolving Credit Commitments of the Increasing Lenders shall be

in an aggregate amount of not less than $5,000,000 (and, if in excess thereof,

in integral multiples of $1,000,000); (ii) the aggregate amount of all the

increases in the Revolving Credit Commitments pursuant to this Section 2.04

shall not exceed Forty Million Dollars ($40,000,000); (iii) the Borrower, each

New Lender and/or each Increasing Lender shall have executed and delivered to

the Administrative Agent a commitment and acceptance (the "Commitment and

Acceptance") substantially in the form of Exhibit G hereto, and the

Administrative Agent shall have accepted and executed the same, (iv) the

Borrower shall have executed and delivered to the Administrative Agent a

Revolving Credit Note or Revolving Credit Notes payable to the order of each New

Lender and/or each Increasing Lender, each such Revolving Credit Note to be in

the amount of such New Lender's Revolving Credit Commitment or such Increasing

Lender's Revolving Credit Commitment (as applicable); (v) if requested by the

Administrative Agent, the Borrower shall have delivered to the Administrative

Agent opinions of counsel (substantially similar to the forms of opinions

provided for in Section 6.01(f), modified to apply to the increase in the

Revolving Credit Commitments and each new Revolving Credit Note and Commitment

and Acceptance executed and delivered in connection therewith); (vi) the

Guarantors shall have consented in writing to the new Revolving Credit

Commitments or increases in Revolving Credit Commitments (as applicable) and

shall have agreed that their Guaranty Agreement continues in full force and

effect, and (vii) the Borrower, each New Lender and/or each Increasing Lender

shall otherwise have executed and delivered such other instruments and documents

as the Administrative Agent shall have reasonably requested in connection with

such new Revolving Credit Commitment or increase in the Revolving Credit

Commitment (as applicable). The form and substance of the documents required

under clauses (iii) through (vii) above shall be reasonably acceptable to the

Administrative Agent. The Administrative Agent shall provide written notice to

all of the Lenders hereunder of the admission of any New Lender or the increase

in the Revolving Credit Commitment of any Increasing Lender hereunder and shall

furnish to each of the Lenders copies of the documents required under clause

(iii), (v), (vi) and (vii) above.

 

          (b) Upon the effective date of any increase in the Aggregate Revolving

Credit Commitments pursuant to the provisions hereof (such date hereinafter

referred to as the "Increase Date"), which Increase Date shall be mutually

agreed upon by the Borrower, each New Lender, each Increasing Lender and the

Administrative Agent, each New Lender and/or Increasing Lender shall make a

payment to the Administrative Agent in an amount sufficient, upon the

application of such payments by all New Lenders and Increasing Lenders to the

reduction of the outstanding Revolving Credit Loans held by the Lenders

(including the Increasing Lenders) to cause the principal amount outstanding

under the Revolving Credit Loans made by each Lender

 

 

                                      -28-

<PAGE>

to be equal to each Lender's Percentage Share of the Aggregate Revolving Credit

Commitments as so increased. The Borrower hereby irrevocably authorizes each New

Lender and/or each Increasing Lender to fund to the Administrative Agent the

payment required to be made pursuant to the immediately preceding sentence for

application to the reduction of the outstanding Revolving Credit Loans held by

the other Lenders, and each such payment shall constitute a Revolving Credit

Loan hereunder. If, as a result of the repayment of the Revolving Credit Loans

provided for in this Section 2.04(b), any payment of a LIBOR Loan occurs on a

day which is not the last day of the applicable Interest Period, the Borrower

will pay to the Administrative Agent for the benefit of any of the Lenders

(including any Increasing Lender to the extent of LIBOR Loans held by such

Increasing Lender prior to such Increase Date) holding a LIBOR Loan any loss or

cost incurred by such Lender resulting therefrom in accordance with Section

5.05. Upon the Increase Date, all Revolving Credit Loans outstanding hereunder

(including any Revolving Credit Loans made by the New Lenders and/or Increasing

Lenders on the Increase Date) shall be Base Rate Loans, subject to the

Borrower's right to convert the same to LIBOR Loans on or after such date in

accordance with the provisions of Section 2.02.

 

          (c) Upon the Increase Date and the making of the Revolving Credit

Loans by the New Lenders and/or Increasing Lenders in accordance with the

provisions of Section 2.04(b), each New Lender and/or each Increasing Lender

shall also be deemed to have irrevocably and unconditionally purchased and

received without recourse or warranty, from the Lenders immediately prior to the

Increase Date, an undivided interest and participation in any Letter of Credit

and Swing Line Loan, as applicable, then outstanding, ratably, such that each

Lender (including each New Lender) holds a participation interest in each such

Letter of Credit and Swing Line Loan, as applicable, in proportion to such

Lender's Percentage Share.

 

          (d) Upon the notice by the Borrower to the Administrative Agent

pursuant to Section 2.04(a) hereof, each of the then existing Lenders shall have

the right (at such Lender's election) to increase its Revolving Credit

Commitment by an amount equal to such Lender's Percentage Share of the proposed

increase in the Aggregate Revolving Credit Commitments. If less than all of the

proposed increase in Aggregate Revolving Credit Commitments is elected by the

existing Lenders, then any of the then existing Lenders shall have the right to

increase its Revolving Credit Commitment in an amount greater than such Lender's

Percentage Share of the proposed increase in the Aggregate Revolving Credit

Commitments with the Administrative Agent's approval. If the entire amount of

the proposed increase in Aggregate Revolving Credit Commitments is still not

obtained, the Borrower may with the Administrative Agent's cooperation add New

Lenders, such New Lenders to be reasonably acceptable to the Administrative

Agent, with new Revolving Credit Commitments which when added to the increase in

Revolving Credit Commitments of the Increasing Lenders, shall equal the

requested increase in the Aggregate Revolving Credit Commitments. In the event

the sum of each New Lender's Revolving Credit Commitment and the increase in

each Increasing Lender's Revolving Credit Commitment is less than the requested

increase in the Aggregate Revolving Credit Commitments, the Borrower may elect

to accept the increase in the Aggregate Revolving Credit Commitments to be equal

to such lesser amount. Notwithstanding anything to the contrary, Administrative

Agent shall not be liable for any failure to obtain Increasing Lenders or New

Lenders hereunder or any failure to increase the Aggregate Revolving Credit

Commitments by the amount so requested by the Borrower pursuant to Section

2.04(a).

 

 

                                      -29-

<PAGE>

          (e) Nothing contained herein shall constitute, or otherwise be deemed

to be a commitment or agreement on the part of any Lender to increase its

Revolving Credit Commitment hereunder at any time. No Lender (except only for

itself) shall have the right to decline Borrower's request pursuant to Section

2.04(a) for an increase in the Aggregate Revolving Credit Commitments.

 

     Section 2.05 Fees.

 

          (a) Commitment Fee. The Borrower shall pay to the Administrative Agent

for the account of each Lender a commitment fee on the daily average unused

amount of the Aggregate Revolving Credit Commitments for the period from and

including the Closing Date up to, but excluding, the earlier of the date the

Aggregate Revolving Credit Commitments are terminated or the Termination Date at

a rate per annum equal to the applicable per annum percentage set forth at the

appropriate intersection in the table shown below, based on the Leverage Ratio

on the most recent Determination Date:

 

<TABLE>

<CAPTION>

                                                             COMMITMENT FEE

                       LEVERAGE RATIO                            PERCENTAGE

                      --------------                          --------------

<S>                                                           <C>

Greater than or equal to 4.00:1.00                                 0.500%

Less than 4.00:1.00 but greater than or equal to 3.50:1.00        0.375%

Less than 3.50:1.00 but greater than or equal to 2:00:1.00        0.300%

Less than 2.00:1.00                                               0.250%

</TABLE>

 

The commitment fee percentage shall be established as of each Determination Date

beginning with the fiscal quarter ending December 31, 2004. Any change in the

commitment fee percentage following each Determination Date shall be determined

based upon the information and computations set forth in the financial

statements and Compliance Certificate furnished to the Administrative Agent

pursuant to Section 8.01, subject to review and approval of such computations by

the Administrative Agent. Each change in the commitment fee percentage shall be

effective as of the first day of the calendar month following each Determination

Date and shall remain in effect until the date that is the first day of the

calendar month following the next Determination Date for which a change in the

commitment fee percentage occurs; provided, however; if the Borrower shall fail

to deliver any required financial statements or Compliance Certificate within

the time period required by Section 8.01, the commitment fee percentage shall be

the highest percentage amount set forth in the above table for the period

beginning on the relevant Determination Date and ending on the date that the

appropriate financial statements and Compliance Certificate are so delivered.

Notwithstanding the foregoing, during the period beginning on the Closing Date

and ending on December 31, 2004, the commitment fee percentage shall be 0.375%.

Accrued commitment fees shall be payable quarterly in arrears on each Quarterly

Date and on the earlier of the date the Aggregate Revolving Credit Commitments

are terminated or the Termination Date. For purposes of computing the commitment

fees payable hereunder, outstanding Swing Line Loans shall be disregarded.

 

 

                                      -30-

<PAGE>

          (b) Letter of Credit and Direct Pay Letter of Credit Fees.

 

               (i) The Borrower agrees to pay the Administrative Agent, for the

account of each Lender, commissions for issuing the Letters of Credit on the

daily average outstanding of the maximum liability of the Issuing Bank existing

from time to time under such Letter of Credit (calculated separately for each

Letter of Credit) at the rate per annum equal to the Applicable Margin in effect

from time to time for LIBOR Loans, provided that each Letter of Credit shall

bear a minimum commission of $500. Each Letter of Credit shall be deemed to be

outstanding up to the full undrawn face amount of the Letter of Credit until the

Issuing Bank has received the canceled Letter of Credit or a written

cancellation of the Letter of Credit from the beneficiary of such Letter of

Credit in form and substance acceptable to the Issuing Bank, or for any

reductions in the amount of the Letter of Credit (other than from a drawing),

written notification from the beneficiary of such Letter of Credit. Such

commissions are payable quarterly in arrears on each Quarterly Date and upon

cancellation or expiration of each such Letter of Credit.

 

               (ii) In addition to the foregoing, the Borrower shall pay to the

Issuing Bank, for its own account, fronting, amendment, transfer, negotiating

and other fees in accordance with the Issuing Bank's then current fee policy

generally applicable to letters of credit of the same or similar type issued by

the Issuing Bank.

 

               (iii) In addition to the foregoing, the Borrower shall pay to the

Issuing Bank certain fees more specifically described in the Reimbursement

Agreement.

 

          (c) The Borrower shall pay such other fees as are set forth in the Fee

Letter in the manner and on the dates specified therein to the extent not paid

prior to the Closing Date.

 

     Section 2.06 Several Obligations. The failure of any Lender to make any

Loan to be made by it or to provide funds for disbursements or reimbursements

under Letters of Credit on the date specified therefor shall not relieve any

other Lender of its obligation to make its Loan or provide funds on such date,

but no Lender shall be responsible for the failure of any other Lender to make a

Loan to be made by such other Lender or to provide funds to be provided by such

other Lender.

 

     Section 2.07 Notes. The Revolving Credit Loans (other than Swing Line

Loans) made by each Lender shall be evidenced by a single promissory note of the

Borrower in substantially the form of Exhibit A-1, dated (i) the Closing Date or

(ii) the effective date of an Assignment pursuant to Section 13.06(b), payable

to the order of such Lender in a principal amount equal to its Revolving Credit

Commitment as originally in effect and otherwise duly completed and such

substitute Notes as required by Section 13.06(b). The Swing Line Loans made by

the Swing Line Lender resulting from the advances under Section 2.01(c) shall be

evidenced by a promissory note of the Borrower in substantially the form of

Exhibit A-2, dated the Closing Date and payable to the Swing Line Lender in a

principal amount equal to the Swing Line Commitment. The date, amount, Type,

interest rate and Interest Period of each Loan made by each Lender, and all

payments made on account of the principal thereof, shall be recorded by such

Lender on its books for its Notes, and, prior to any transfer may be endorsed by

such Lender on the schedule attached to such Notes or any continuation thereof

or on any separate

 

 

                                      -31-

<PAGE>

record maintained by such Lender. Failure to make any such notation or to attach

a schedule shall not affect any Lender's or the Borrower's rights or obligations

in respect of such Loans or affect the validity of such transfer by any Lender

of its Notes.

 

     Section 2.08 Prepayments.

 

          (a) Voluntary Prepayments. The Borrower may prepay the Base Rate Loans

upon not less than one Business Day's prior notice to the Administrative Agent

(which shall promptly notify the Lenders), which notice shall specify the

prepayment date (which shall be a Business Day) and the amount of the prepayment

(which shall be at least $500,000 or any whole multiple of $500,000 or, if less,

the remaining aggregate principal balance outstanding on the Notes) and shall be

irrevocable and effective only upon receipt by the Administrative Agent,

provided that interest on the principal prepaid, accrued to the prepayment date,

shall be paid on the prepayment date. The Borrower may prepay LIBOR Loans on the

same conditions as for Base Rate Loans (except that prior notice to the

Administrative Agent shall be not less than three Business Days for LIBOR Loans)

and in addition such prepayments of LIBOR Loans shall be subject to the terms of

Section 5.05.

 

          (b) Mandatory Prepayments.

 

               (i) Revolving Credit Commitment Reductions. If, after giving

effect to any termination or reduction of the Aggregate Revolving Credit

Commitments pursuant to Section 2.03(b) or 2.03(c), the outstanding aggregate

principal amount of the Revolving Credit Loans and Swing Line Loans, plus the LC

Exposure, plus the Direct Pay Letter of Credit Exposure exceeds the Aggregate

Revolving Credit Commitments, the Borrower shall (i) prepay the Revolving Credit

Loans and Swing Line Loans on the date of such termination or reduction in an

aggregate principal amount equal to the excess, together with interest on the

principal amount paid accrued to the date of such prepayment and (ii) if any

excess remains after prepaying all of the Revolving Credit Loans and Swing Line

Loans because of LC Exposure and/or Direct Pay Letter of Credit Exposure, pay to

the Administrative Agent on behalf of the Lenders an amount equal to the excess

to be held as cash collateral as provided in Section 2.10(b) hereof.

 

               (ii) Upon Transfers and Issuances of Equity. The Borrower shall,

and shall cause any Subsidiary to, apply an amount equal to 100% of the net cash

proceeds received from any (A) Transfers of the type referred to in Section

9.16(iii) to the extent that during any consecutive 12-month period such net

cash proceeds exceed $2,500,000, based on the net book value of the Property

sold or the net proceeds received and (B) issuance by WCA Corp. or its

Subsidiaries of debt or equity securities to first, promptly prepay the

Revolving Credit Loans, and second, promptly provide cash collateral or, at the

Borrower's election so long as no Default has occurred and is continuing, effect

optional redemption of the Bonds in an amount not less than the Direct Pay

Letter of Credit Exposure as provided in the Reimbursement Agreement. Upon the

occurrence of any event requiring a mandatory prepayment to the Revolving Credit

Loans pursuant to this Section 2.08(b)(ii) other than the issuance by WCA Corp.

of equity securities in connection with an initial public offering consummated

on or about the Closing Date, the Aggregate Revolving Credit Commitments shall

automatically reduce by an amount equal to such net cash proceeds received in

connection with the transactions described in

 

 

                                      -32-

<PAGE>

clauses (A) and (B) above. Notwithstanding the foregoing, the Borrower may elect

to provide cash collateral in lieu of the prepayment required pursuant to this

clause (ii) to the extent any LIBOR Loans are outstanding until termination of

the applicable Interest Period so long as (A) the pledge of cash collateral does

not affect the tax-exempt nature of the Bonds or result in the Bonds being

characterized as so called "arbitrage bonds," and (B) no Default has occurred

and is continuing.

 

               (iii) Generally. Prepayments permitted or required under this

Section 2.08 shall be without premium or penalty, except as required under

Section 5.05 for prepayment of LIBOR Loans. Any prepayments on the Revolving

Credit Loans may be reborrowed subject to the then effective Aggregate Revolving

Credit Commitments. Any voluntary prepayments shall be applied to the Loans as

specified by Borrower.

 

               (iv) Transfers of Non-Core Assets. The Borrower shall, and shall

cause any Guarantor or Subsidiary to, apply an amount equal to 100% of the net

cash proceeds received from any Transfers of the type referred to in Section

9.16(iv) to first, promptly prepay the Revolving Credit Loans and second,

promptly provide cash collateral. Notwithstanding the foregoing, the Borrower

may elect to provide cash collateral in lieu of the prepayment required pursuant

to this clause (vi) to the extent any LIBOR Loans are outstanding until

termination of the applicable Interest Period so long as no Default has occurred

and is continuing.

 

     Section 2.09 Assumption of Risks. The Borrower assumes all risks of the

acts or omissions of any beneficiary of any Letter of Credit or the Direct Pay

Letter of Credit or any transferee thereof with respect to its use of such

Letter of Credit or the Direct Pay Letter of Credit. Neither the Issuing Bank

(except in the case of gross negligence or willful misconduct on the part of the

Issuing Bank or any of its employees), nor any Lender shall be responsible for

the validity, sufficiency (except for the sufficiency on their face) or

genuineness of certificates or other documents or any endorsements thereon, even

if such certificates or other documents should in fact prove to be invalid,

insufficient, fraudulent or forged; for errors, omissions, interruptions or

delays in transmissions or delivery of any messages by mail, telex, or

otherwise, whether or not they be in code; for errors in translation or for

errors in interpretation of technical terms; the validity or sufficiency (except

for the sufficiency on their face) of any instrument transferring or assigning

or purporting to transfer or assign any Letter of Credit or the Direct Pay

Letter of Credit or the rights or benefits thereunder or proceeds thereof, in

whole or in part, which may prove to be invalid or ineffective for any reason;

the failure of any beneficiary or any transferee of any Letter of Credit or the

Direct Pay Letter of Credit to comply fully with the underlying conditions

required in order to draw upon any Letter of Credit or the Direct Pay Letter of

Credit; or for any other consequences arising from causes beyond the Issuing

Bank's control or the control of the Issuing Bank's correspondents. In addition,

neither the Issuing Bank, the Administrative Agent nor any Lender shall be

responsible for any error, neglect, or default of any of the Issuing Bank's

correspondents; and none of the above shall affect, impair or prevent the

vesting of any of the Issuing Bank's, the Administrative Agent's or any Lender's

rights or powers hereunder or under the Letter of Credit Agreements or this

Agreement, all of which rights shall be cumulative. The Issuing Bank and its

correspondents may accept certificates or other documents that appear on their

face to comply with the terms of the applicable Letter of Credit or the Direct

Pay Letter of Credit, without responsibility for further investigation of any

matter contained therein regardless of any notice or information to the

 

 

                                       -33-

<PAGE>

contrary. In furtherance and not in limitation of the foregoing provisions, the

Borrower agrees that any action, inaction or omission taken or not taken by the

Issuing Bank or by any correspondent for the Issuing Bank in good faith in

connection with any Letter of Credit, the Direct Pay Letter of Credit, or any

related drafts, certificates, documents or instruments, shall be binding on the

Borrower and shall not put the Issuing Bank or its correspondents under any

resulting liability to the Borrower in the absence of gross negligence or

willful misconduct on the part of any such Person.

 

     Section 2.10 Obligation to Reimburse and to Prepay.

 

          (a) If a disbursement by the Issuing Bank is made under any Letter of

Credit, the Borrower shall pay to the Administrative Agent within two Business

Days after notice of any such disbursement is received by the Borrower, the

amount of each such disbursement made by the Issuing Bank under the Letter of

Credit (if such payment is not sooner effected as may be required under this

Section 2.10 or under other provisions of the Letter of Credit), together with

interest on the amount disbursed from and including the date of disbursement

until payment in full of such disbursed amount at a varying rate per annum equal

to (i) the then applicable interest rate for Base Rate Loans (but in no event to

exceed the Highest Lawful Rate) through the second Business Day after notice of

such disbursement is received by the Borrower and (ii) thereafter, the

Post-Default Rate for Base Rate Loans (but in no event to exceed the Highest

Lawful Rate) for the period from and including the third Business Day following

the date of such disbursement to and including the date of repayment in full of

such disbursed amount. Subject to Section 13.14, the obligations of the Borrower

or Waste Corporation Texas, if applicable, under this Agreement with respect to

each Letter of Credit and the Direct Pay Letter of Credit shall be absolute,

unconditional and irrevocable and shall be paid or performed strictly in

accordance with the terms of this Agreement under all circumstances whatsoever,

including, without limitation, but only to the fullest extent permitted by

applicable law, the following circumstances: (i) any lack of validity or

enforceability of this Agreement, any Letter of Credit, the Direct Pay Letter of

Credit or any of the Security Instruments; (ii) any amendment or waiver of

(including any default), or any consent to departure from this Agreement (except

to the extent permitted by any amendment or waiver), any Letter of Credit, the

Direct Pay Letter of Credit or any of the Security Instruments; (iii) the

existence of any claim, set-off, defense or other rights which the Borrower or

any Guarantor, if applicable, may have at any time against the beneficiary of

any Letter of Credit or the Direct Pay Letter of Credit or any transferee of any

Letter of Credit or the Direct Pay Letter of Credit (or any Persons for whom any

such beneficiary or any such transferee may be acting), the Issuing Bank, the

Administrative Agent, any Lender or any other Person, whether in connection with

this Agreement, any Letter of Credit, the Direct Pay Letter of Credit, the

Security Instruments, the transactions contemplated hereby or any unrelated

transaction; (iv) any statement, certificate, draft, notice or any other

document presented under any Letter of Credit or the Direct Pay Letter of Credit

proves to have been forged, fraudulent, insufficient (so long as it is not

insufficient on its face) or invalid in any respect or any statement therein

proves to have been untrue or inaccurate in any respect whatsoever; (v) payment

by the Issuing Bank under any Letter of Credit or the Direct Pay Letter of

Credit against presentation of a draft or certificate which appears on its face

to comply, but does not comply, with the terms of such Letter of Credit or the

Direct Pay Letter of Credit; and (vi) any other circumstance or happening

whatsoever, whether or not similar to any of the foregoing. Notwithstanding

anything in this Agreement to the contrary, the Borrower will not be liable for

payment or performance

 

 

                                      -34-

<PAGE>

that results from the gross negligence or willful misconduct of the Issuing

Bank, except to the extent the Borrower or any Subsidiary actually recovers (net

of costs and expenses) any proceeds (net of any expenses incurred for such

recovery) for itself or the Issuing Bank of any payment made by the Issuing Bank

in connection with such gross negligence or willful misconduct.

 

          (b) In the event of the occurrence of any Event of Default, a payment

or prepayment pursuant to Section 2.08(b) or the maturity of the Notes, whether

by acceleration or otherwise, an amount equal to the LC Exposure (or the excess

in the case of Section 2.08(b)), shall be deemed to be forthwith due and owing

by the Borrower to the Administrative Agent as of the date of any such

occurrence; and the Borrower's obligation to pay such amount shall be absolute

and unconditional, without regard to whether any beneficiary of any such Letter

of Credit has attempted to draw down all or a portion of such amount under the

terms of a Letter of Credit, and, to the fullest extent permitted by applicable

law, shall not be subject to any defense or be affected by a right of set-off,

counterclaim or recoupment which the Borrower may now or hereafter have against

any such beneficiary, the Issuing Bank, the Administrative Agent, the Lenders or

any other Person for any reason whatsoever. Such payments shall be held by the

Administrative Agent on behalf of the Issuing Bank and the Lenders as cash

collateral securing the LC Exposure in an account or accounts at the Principal

Office; and the Borrower hereby grants to and by its deposit with the

Administrative Agent grants to the Administrative Agent a security interest in

such cash collateral. In the event of any such payment by the Borrower of

amounts contingently owing under outstanding Letters of Credit and in the event

that thereafter drafts or other demands for payment complying with the terms of

such Letters of Credit are not made prior to the respective expiration dates

thereof, the Administrative Agent agrees, if no Event of Default has occurred

and is continuing or if no other amounts are outstanding under this Agreement,

the Notes or the Security Instruments, to remit to the Borrower amounts for

which the contingent obligations evidenced by the Letters of Credit have ceased.

 

          (c) Each Lender severally and unconditionally agrees that it shall

promptly reimburse the Issuing Bank an amount equal to such Lender's Percentage

Share of any disbursement made by the Issuing Bank (i) under any Letter of

Credit that is not reimbursed according to this Section 2.10 or (ii) under the

Direct Pay Letter of Credit that is not reimbursed according to the

Reimbursement Agreement.

 

          (d) Notwithstanding anything to the contrary contained herein, subject

to availability under the Swing Line Commitment, to the extent the Borrower has

not reimbursed the Issuing Bank for any drawn upon Letter of Credit within two

Business Days after notice of such disbursement has been received by the

Borrower, the amount of such Letter of Credit reimbursement obligation shall

automatically be funded by the Swing Line Lender as a Swing Line Loan hereunder

and used by the Swing Line Lender to pay such Letter of Credit reimbursement

obligation. To the extent the funding of such Letter of Credit reimbursement

obligation as a Swing Line Loan would cause the aggregate amount of all Swing

Line Loans outstanding to exceed the Swing Line Commitment or the Swing Line

Lender does not desire to make a Swing Line Loan for such purpose, such Letter

of Credit reimbursement obligation shall not be funded as a Swing Line Loan, but

instead shall be funded as a Revolving Credit Loan.

 

     Section 2.11 Lending Offices. The Loans of each Type made by each Lender

shall be made and maintained at such Lender's Applicable Lending Office for

Loans of such Type.

 

 

                                       -35-

<PAGE>

                                  ARTICLE III

 

                       PAYMENTS OF PRINCIPAL AND INTEREST

 

     Section 3.01 Repayment of Loans.

 

          (a) Revolving Credit Loans. On the Termination Date the Borrower shall

repay the outstanding principal amount of the Revolving Credit Notes.

 

          (b) Swing Line Loans. The principal amount of each advance of a Swing

Line Loan (together with all interest accrued thereon until the date of payment)

shall be repaid pursuant to the terms of Section 2.01(c).

 

          (c) Direct Pay Letter of Credit. The principal amount of the Direct

Pay Letter of Credit shall be reduced pursuant to the Reimbursement Agreement.

 

          (d) Generally. The Borrower will pay to the Administrative Agent, for

the account of each Lender, the principal payments required by this Section

3.01.

 

     Section 3.02 Interest.

 

          (a) Interest Rates. The Borrower will pay to the Administrative Agent,

for the account of each Lender, interest on the unpaid principal amount of each

Loan made by such Lender for the period commencing on the date such Loan is made

to, but excluding, the date such Loan shall be paid in full, at the following

rates per annum:

 

               (i) if such a Loan is a Base Rate Loan, the Base Rate (as in

effect from time to time) plus the Applicable Margin, but in no event to exceed

the Highest Lawful Rate; and

 

               (ii) if such a Loan is a LIBOR Loan, for each Interest Period

relating thereto, the LIBOR Rate for such Loan plus the Applicable Margin (as in

effect from time to time), but in no event to exceed the Highest Lawful Rate.

 

          (b) Post-Default Rate. Notwithstanding the foregoing, the Borrower

will pay to the Administrative Agent, for the account of each Lender interest at

the applicable Post-Default Rate on any principal of any Loan made by such

Lender, and (to the fullest extent permitted by law) on any other amounts due

and payable or that become due and payable by the Borrower hereunder, under any

Loan Document or under any Note held by such Lender to or for account of such

Lender, for the period commencing on the date of an Event of Default (or the

date any such other amount becomes due and payable) until the same is paid in

full or all Events of Default are cured or waived. If an Event of Default under

Section 10.01(a) occurs, the operation of this Section 3.02(b) shall be

automatic, but if the only Events of Default are Events of Default other than

under Section 10.01(a), the operation of this Section 3.02(b) shall require the

election of the Majority Lenders to accrue interest at the Post-Default Rate.

 

          (c) Due Dates. Accrued interest on Base Rate Loans shall be payable

monthly on the first day of each month commencing on January 1, 2005, and

accrued interest on

 

 

                                      -36-

<PAGE>

each LIBOR Loan shall be payable on the last day of the Interest Period therefor

and, if such Interest Period is longer than three months at three-month

intervals following the first day of such Interest Period, except that interest

payable at the Post-Default Rate shall be payable from time to time on demand

and interest on any LIBOR Loan that is converted into a Base Rate Loan (pursuant

to Section 5.04) shall be payable on the date of conversion (but only to the

extent so converted). Any accrued and unpaid interest on the Revolving Credit

Loans on the Termination Date shall be paid on such date. Accrued interest on

Swing Line Loans shall be paid pursuant to Section 3.01(b).

 

          (d) Determination of Rates. Promptly after the determination of any

interest rate provided for herein or any change therein, the Administrative

Agent shall notify the Lenders to which such interest is payable and the

Borrower thereof. Each determination by the Administrative Agent of an interest

rate or fee hereunder shall, except in cases of manifest error, be final,

conclusive and binding on the parties.

 

                                   ARTICLE IV

 

                PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

 

     Section 4.01 Payments. Except to the extent otherwise provided herein, all

payments of principal, interest and other amounts to be made by the Borrower or

Waste Corporation Texas, if applicable, under this Agreement, the Notes, the

Direct Pay Letter of Credit and the Letter of Credit Agreements shall be made in

Dollars, in immediately available funds, to the Administrative Agent at such

account as the Administrative Agent shall specify by notice to the Borrower from

time to time, not later than 11:00 a.m. (Central time) on the date on which such

payments shall become due (each such payment made after such time on such due

date to be deemed to have been made on the next succeeding Business Day). Such

payments shall be made without (to the fullest extent permitted by applicable

law) defense, set-off or counterclaim. Each payment received by the

Administrative Agent under this Agreement or any Note for account of a Lender

shall be paid promptly to such Lender in immediately available funds. Except as

otherwise provided in the definition of "Interest Period", if the due date of

any payment under this Agreement or any Note would otherwise fall on a day which

is not a Business Day such date shall be extended to the next succeeding

Business Day and interest shall be payable for any principal so extended for the

period of such extension. At the time of each payment to the Administrative

Agent of any principal of or interest on any borrowing, the Borrower shall

notify the Administrative Agent of the Loans to which such payment shall apply.

In the absence of such notice the Administrative Agent may specify the Loans to

which such payment shall apply, but to the extent possible such payment or

prepayment will be applied first to the Loans comprised of Base Rate Loans.

 

     Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided

herein each Lender agrees that: (i) each borrowing from the Lenders under

Section 2.01 and each continuation and conversion under Section 2.02 shall be

made from the Lenders pro rata in accordance with their Percentage Share, each

payment of commitment fee or other fees under Section 2.05(a) and Section

2.05(b)(i) shall be made for account of the Lenders pro rata in accordance with

their Percentage Share, and each termination or reduction of the amount of the

Aggregate Revolving Credit Commitments under Section 2.03(b) (subject to the

last sentence

 

 

                                      -37-

<PAGE>

thereof) shall be applied to the Commitment of each Lender, pro rata according

to the amounts of its respective Commitment; (ii) each payment of principal of

Loans by the Borrower shall be made for account of the Lenders pro rata in

accordance with the respective unpaid principal amount of the Loans held by the

Lenders; and (iii) each payment of interest on Loans by the Borrower shall be

made for account of the Lenders pro rata in accordance with the amounts of

interest due and payable to the respective Lenders; and (iv) each reimbursement

by the Borrower or Waste Corporation Texas, if applicable, of disbursements

under the Direct Pay Letter of Credit or Letters of Credit shall be made for

account of the Issuing Bank or, if funded by the Lenders, pro rata for the

account of the Lenders, in accordance with the amounts of reimbursement

obligations due and payable to each respective Lender.

 

     Section 4.03 Computations. Interest on all LIBOR Loans shall be computed on

the basis of a year of 360 days and actual days elapsed (including the first day

but excluding the last day) occurring in the period for which such interest is

payable, unless such calculation would exceed the Highest Lawful Rate, in which

case interest shall be calculated on the per annum basis of a year of 365 or 366

days, as the case may be. All computations of interest on Base Rate Loans and

fees shall be computed on the basis of a year of 365 or 366 days, as the case

may be, and actual days elapsed (including the first day but excluding the last

day).

 

     Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless the

Administrative Agent shall have been notified by a Lender or the Borrower prior

to the date on which such notifying party is scheduled to make payment to the

Administrative Agent (in the case of a Lender) of the proceeds of a Loan or a

payment under the Direct Pay Letter of Credit or a Letter of Credit to be made

by it hereunder or (in the case of the Borrower or Waste Corporation Texas) a

payment to the Administrative Agent for account of one or more of the Lenders

hereunder (such payment being herein called the "Required Payment"), which

notice shall be effective upon receipt, that it does not intend to make the

Required Payment to the Administrative Agent, the Administrative Agent may

assume that the Required Payment has been made and may, in reliance upon such

assumption (but shall not be required to), make the amount thereof available to

the intended recipient(s) on such date and, if such Lender or the Borrower or

Waste Corporation Texas (as the case may be) has not in fact made the Required

Payment to the Administrative Agent, the recipient(s) of such payment shall, on

demand, repay to the Administrative Agent the amount so made available together

with interest thereon in respect of each day during the period commencing on the

date such amount was so made available by the Administrative Agent until, but

excluding, the date the Administrative Agent recovers such amount at a rate per

annum which, for any Lender as recipient, will be equal to the Federal Funds

Rate, and for the Borrower or Waste Corporation Texas as recipient, will be

equal to the Base Rate plus the Applicable Margin.

 

     Section 4.05 Set-off, Sharing of Payments, Etc. (a) The Borrower agrees

that, in addition to (and without limitation of) any right of set-off, bankers'

lien or counterclaim a Lender may otherwise have, each Lender shall have the

right and be entitled (after consultation with the Administrative Agent), at its

option, to offset balances held by it or by any of such Lender's Affiliates for

account of the Borrower at any of its offices, in Dollars or in any other

currency, against any principal of or interest on any of such Lender's Loans, or

any other amount payable to such Lender hereunder, which is not paid when due

(regardless of whether such balances are then due to the Borrower), in which

case it shall promptly notify the Borrower and the

 

 

                                      -38-

<PAGE>

Administrative Agent thereof, provided that, to the extent permitted by law,

such Lender's failure to give such notice shall not affect the validity thereof.

 

          (b) If any Lender shall obtain payment of any principal of or interest

on any Loan made by it to the Borrower under this Agreement (or reimbursement by

the Borrower or Waste Corporation Texas as to any Letter of Credit or the Direct

Pay Letter of Credit) through the exercise of any right of set-off, banker's

lien or counterclaim or similar right or otherwise, and, as a result of such

payment, such Lender shall have received a greater percentage of the principal

or interest (or reimbursement) then due hereunder by the Borrower or Waste

Corporation Texas, if applicable, to such Lender than the percentage received by

any other Lenders, it shall promptly (i) notify the Administrative Agent and

each other Lender thereof and (ii) purchase from such other Lenders

participations in (or, if and to the extent specified by such Lender, direct

interests in) the Loans (or participations in Letters of Credit or the Direct

Pay Letter of Credit) made by such other Lenders (or in interest due thereon, as

the case may be) in such amounts, and make such other adjustments from time to

time as shall be equitable, to the end that all the Lenders shall share the

benefit of such excess payment (net of any expenses which may be incurred by

such Lender in obtaining or preserving such excess payment) pro rata in

accordance with the unpaid principal and/or interest on the Loans held by each

of the Lenders (or reimbursements of Letters of Credit or the Direct Pay Letter

of Credit). To such end all the Lenders shall make appropriate adjustments among

themselves (by the resale of participations sold or otherwise) if such payment

is rescinded or must otherwise be restored. The Borrower agrees that any Lender

so purchasing a participation (or direct interest) in the Loans made by other

Lenders (or in interest due thereon, as the case may be) may exercise all rights

of set-off, banker's lien, counterclaim or similar rights with respect to such

participation as fully as if such Lender were a direct holder of Loans (or

Letters of Credit or the Direct Pay Letter of Credit) in the amount of such

participation. Nothing contained herein shall require any Lender to exercise any

such right or shall affect the right of any Lender to exercise, and retain the

benefits of exercising, any such right with respect to any other indebtedness or

obligation of the Borrower. If under any applicable bankruptcy, insolvency or

other similar law, any Lender receives a secured claim in lieu of a set-off to

which this Section 4.05 applies, such Lender shall, to the extent practicable,

exercise its rights in respect of such secured claim in a manner consistent with

the rights of the Lenders entitled under this Section 4.05 to share the benefits

of any recovery on such secured claim.

 

     Section 4.06 Taxes.

 

          (a) Payments Free and Clear. Any and all payments by the Borrower or

any Guarantor hereunder shall be made, in accordance with Section 4.01, free and

clear of and without deduction for any and all present or future taxes, levies,

imposts, deductions, charges or withholdings, and all liabilities with respect

thereto, excluding, in the case of each