EXHIBIT 10.25
FOURTH AMENDMENT
TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Fourth Amendment") dated as of
June 24, 1997, is made and entered into by and between EMCON, a California
Corporation ("Borrower"), and UNION BANK OF CALIFORNIA, N.A. ("Bank"), successor
in interest to the Bank of California, N.A.
RECITALS:
A. Borrower and Bank are parties to that certain Credit Agreement dated
February 29, 1996 as amended from time (the "Agreement"), pursuant to which
Bank agreed to extend credit to Borrower.
B. Borrower is currently indebted to Bank under the Agreement in the
aggregate principal amount of $15,928,571 and Borrower has no defense,
offset or counterclaim against Bank or any other person or entity that
diminishes such indebtedness.
Now, therefore, in consideration of the above recitals and of the mutual
covenants and conditions contained herein, Borrower and Bank agree as follows:
AGREEMENT:
1. Defined Terms. Initially capitalized terms used herein which
are not otherwise defined shall have the meanings assigned thereto
in the Agreement.
2. Amendments to the Agreement.
(a) In ARTICLE 1 - DEFINITIONS, "Termination Date" is amended in its
entirety to read as follows:
""Terminate Date" means the earlier of (a) the date Bank may
terminate making Advances or extending credit pursuant to the
rights of Bank under Article 7; or (b) May 29, 1998 for the Line
of Credit; or (c) June 30, 2001 for the Term Loan."
(b) In ARTICLE 1 - DEFINITIONS, "Permitted Liens" is amended by adding
the following:
"(vii) Deed of Trust on that certain real property the common address
of which is 725 Friendship Drive, New Concord, Ohio".
"(viii) Liens created pursuant to that certain Security Agreement dated
as of April 4, 1996 among Organic Waste Technologies, Inc. ("OWT") and
its subsidiaries and Charter One Bank F.S.B. in support of that certain
$4,850,000 Equipment Term Loan of same date to OWT (the "OWT Equipment
Loan")."
(c) Section 2.1.1 (a) Advances is hereby amended by substituting in line
six the amount "$100,00.00" for the amount "$10,000.00".
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(d) Section 5.2 (b) Tangible Net Worth/Debt to Worth is hereby amended by
substituting the amount "Forty-One Million Dollars ($41,000,000)" for
the amount "Thirty Six Million Dollars ($36,000,000)".
(e) Section 5.4 (b) Year-End Financial Statements is hereby amended by
deleting in line four the words "and consolidating".
(f) Section 5.4 (e) Financial Projections is hereby amended in its entirety
to read as follows:
"As soon as available, but no later than December 31 of the prior year,
a complete copy of Borrower's annual, company-prepared projections for
the ensuing fiscal year, which shall include consolidating and
consolidated statements of income."
(g) Section 6.7 Loans/Investments is hereby amended by adding the
following:
"(j) The OWT Equipment Loan"
"(k) A mortgage on that certain real property the common address of
which is 725 Friendship Drive, New Concord, Ohio in a principle
amount not to exceed One Million Two Hundred Thousand Dollars
($1,200,000)."
(h) Section 6.8 Limitation on Capital Expenditures/Leases is amended in
its entirety to read as follows:
"Expend or be committed to expend, on a consolidated basis, Four
Million Dollars ($4,000,000) or more in the aggregate for the
acquisition of gross fixed assets or the lease or rental of gross
fixed assets under capital leases during the term of this
Agreement; provided, however, Borrower may obtain operating lease
lines to be used solely for the purpose of financing leachate
evaporation systems projects in an amount not to exceed an
aggregate of Five Million Dollars ($5,000,000) and so long as the
creation of such lease lines does not cause a violation of any
financial covenants set forth in Section 5.2 of this Agreement."
3. Effectiveness of the Fourth Amendment. This Fourth Amendment shall become
effective as of the date hereof when, and only when, Bank shall have
received all of the following, in form and substance satisfactory to Bank:
(a) The counterpart of this Fourth Amendment, duly executed by Borrower;
(b) The Promissory Note, duly executed by Borrower;
(c) Such other documents, instruments or agreements as Bank may reasonably
deem necessary.
(d) A non-refundable fee of Fifteen Thousand Dollars ($15,000) for the
Line of Credit.
4. Ratification. Except as specifically amended hereinabove, the
Agreement shall remain in full force and effect and is hereby ratified
and confirmed.
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5. Representations and Warranties. Borrower represents and warrants as
follows:
(a) Each of the representations and warranties contained in the Agreement,
as may be amended hereby, is hereby reaffirmed as of the date hereof, each
as if set forth herein;
(b) The execution, delivery and performance of the Fourth Amendment and
any other instruments or documents in connection herewith are within
Borrower's power, have been duly authorized, are legal, valid and binding
obligations of Borrower, and are not in conflict with the terms of any
charter, bylaw, or other organization papers of Borrower or with any law,
indenture, agreement or undertaking to which Borrower is a party or by
which Borrower is bound or affected;
(c) No event has occurred and is continuing or would result from this
Fourth Amendment which constitutes or would constitute an Event of Default
under the Agreement.
6. Governing Law. This Fourth Amendment and all other instruments or
documents in connection herewith shall be governed by and construed
according to the laws of the State of California.
7. Counterparts. This Fourth Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written.
UNION BANK OF CALIFORNIA, N.A. EMCON
By: /s/William C. Hinch By: \s\Eugene M. Herson
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Title: Vice President Title: CEO and President
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By: \s\R. Michael Momboisse
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Title: CFO and Vice President, Legal
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