FOURTH AMENDMENT, dated as of
------ ----------
September 23, 1997, to the Credit Agreement,
dated as of December 19, 1995 (as amended to
the date hereof, the "Credit Agreement"),
-----------------
among International Mill Service, Inc., a
Pennsylvania corporation (the "Borrower"),
--------
EnviroSource, Inc., a Delaware corporation
(the "Parent"), the several banks and other
------
financial institutions parties thereto (the
"Lenders"), NationsBank, N.A., as
-------
administrative agent for the Lenders (in
such capacity, the "Administrative Agent"),
---------------------
and Credit Lyonnais New York Branch, the New
York branch of a banking organization
organized under the laws of the Republic of
France, as syndication agent for the
Lenders.
PRELIMINARY STATEMENTS:
-----------------------
(1) The Borrower has requested that the Lenders agree to make various
changes in the Credit Agreement.
(2) The parties hereto have agreed, subject to the terms and conditions
hereof, to grant the requests of the Borrower and to amend the Credit Agreement
as provided herein.
(3) Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement (the Credit
Agreement, as amended by, and together with, this Fourth Amendment, and as
hereinafter amended, modified, extended or restated from time to time, being
called the "Amended Agreement").
-----------------
Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. AMENDMENTS TO SECTION 1.1. (a) Section 1.01 of the Credit
------------ -------------------------
Agreement is hereby amended by deleting the definitions of "Indenture" and
"Senior Notes" and substituting in lieu thereof the following:
""Indenture": collectively, the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
---------
the 1993 Indenture.
"Senior Notes": collectively, the 1993 Notes and the
------------
Series B 1997 Notes."
(b) Section 1.01 of the Credit Agreement is hereby amended by adding
the following definitions thereto in the appropriate alphabetical order:
""1997 Indenture": the Indenture dated as of
----------------
September 30, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company
of New York, as trustee, which indenture governs the terms of the
Series B 1997 Notes, and as further amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof and
thereof.
"1993 Indenture": the Indenture dated as of July
--------------
1, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New
York, as trustee, which indenture governs the terms of the 1993 Notes,
and as further amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"1993 Notes": the 9-3/4% Senior Notes due 2003
------------
issued by the Parent pursuant to the 1993 Indenture or
any refinancing thereof permitted hereunder.
"Series B 1997 Notes": the 9-3/4% Senior Notes
-------------------
due 2003 in an aggregate face amount of $50,000,000 issued by the
Parent pursuant to the 1997 Indenture, or any refinancing thereof
permitted hereunder."
(c) Schedule 1.1(b) to the Credit Agreement is hereby deleted in its
entirety and Annex A attached hereto and made a part hereof for all purposes is
substituted in lieu thereof.
SECTION 1.02. AMENDMENTS TO SECTION 2. (a) Section 2.6 of the Credit
------------- -----------------------
Agreement is hereby amended by adding the following paragraph to the end
thereof:
"(e) Notwithstanding anything in Section 2.6(a) to the
contrary, as soon as practical (but in no event later than one (1)
Business Day) after the issuance of the Series B 1997 Notes, the entire
amount of the Net After-Tax Cash Proceeds with respect to such
Prepayment Event shall be paid to the Administrative Agent and applied
to prepay the Loans together with the payment in full of all accrued
interest thereon to and including the date of such prepayment, together
with any additional amounts owing pursuant to Section 2.17. Upon the
earlier of (i) receipt by the Administrative Agent of such proceeds or
(ii) 5:00 P.M., Charlotte, North Carolina time on the first Business
Day following the issuance of the Series B 1997 Notes, the Revolving
Credit Commitments shall automatically be reduced to $50,000,000."
(b) Section 2 of the Credit Agreement is hereby amended by adding the
following section thereto:
"2.18 Increase in Commitments. (a) Subject to the conditions
------------------------
set forth in this Section 2.18 and provided no Default or Event of
Default shall have occurred and be continuing, the Revolving Credit
Commitments may be increased from time to time, upon the request of the
Borrower, if an existing Lender agrees to increase its Revolving Credit
Commitment or any other financial institution or bank (a "New Lender")
agrees to provide additional Revolving Credit Commitments. In no event
shall the aggregate principal amount of the Revolving Credit
Commitments exceed $65,000,000. Increases in the Revolving Credit
Commitments shall be in increments of $1,000,000 and the initial
minimum commitment of any New Lender shall not be less than $5,000,000.
(b) If any such additional Revolving Credit Commitments are
provided by a New Lender, then such New Lender shall execute a joinder
or other agreement, in form and substance reasonably satisfactory to
the Administrative Agent, wherein the New Lender agrees to be bound by
all the terms and conditions of the Credit Agreement, as amended,
applicable to Lenders and the New Lender shall thereafter be a "Lender"
for all purposes of the Credit Agreement, as amended. Neither the
Administrative Agent nor any of the existing Lenders shall have any
obligation to provide additional Revolving Credit Commitments or to
provide or identify any New Lender willing to provide additional
Revolving Credit Commitments.
(c) Prior to the effectiveness of the increase in or addition
to, as the case may be, the Revolving Credit Commitments, the Borrower
shall deliver to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, in its sole discretion, a
certificate of a Responsible Officer of the Parent stating that the
Borrower and the Parent are in pro forma compliance with all covenants
contained in Section 7.1 of the Credit Agreement, before and after
giving effect to the increase in or addition to, as the case may be,
the Revolving Credit Commitments."
SECTION 1.03. AMENDMENTS TO SECTION 6. Section 6.11 of the Credit
------- ----- -------------------------
Agreement is hereby amended by deleting the date "October 31, 1997" in the first
and third sentences thereof and substituting the date "November 30, 1997" in
lieu thereof.
SECTION 1.04. AMENDMENTS TO SECTION 7. (a) Section 7.1 of the Credit
------- ----- ------------------------
Agreement is hereby amended by deleting subclause (a) in its entirety and
substituting the following in lieu thereof:
"(a) Interest Coverage. Permit the ratio of (i) EBITDA for the
-----------------
Reference Period with respect to the last day of any fiscal quarter of
the Parent referred to below to (ii) Consolidated Interest Expense for
such Reference Period to be less than the ratio set forth below
opposite such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
Fiscal quarters from and including fourth quarter of fiscal 1995
through and including first quarter of fiscal 1996
2.35:1.00
Fiscal quarters from and including second quarter of fiscal 1996
through and including third quarter of fiscal 1996
2.25:1.00
Fiscal quarters from and including fourth quarter of fiscal 1996
through and including first quarter of fiscal 1997
1.95:1.00
Fiscal quarters from and including second quarter of fiscal 1997
through and including third quarter of fiscal 1997
1.75:1.00
Fiscal quarters from and including fourth quarter of fiscal 1997
through and including third quarter of fiscal 1998
1.85:1.00
Fiscal quarters from and including fourth quarter of fiscal 1998
through and including third quarter of fiscal 1999
2.05:1.00
Fiscal quarters from and including fourth quarter of fiscal 1999
through and including third quarter of fiscal 2000 2.25:1.00
Fourth quarter of fiscal 2000 and all fiscal quarters
thereafter 2.40:1.00"
(b) Section 7.1 of the Credit Agreement is hereby amended by
deleting subclause (c) in its entirety and substituting the following in lieu
thereof:
"(c) Debt Service Coverage. Permit the ratio of (i) EBITDA for
---------------------
the Reference Period with respect to the last day of any fiscal quarter
of the Parent referred to below, plus any income tax refunds received
----
by the Parent and its Subsidiaries during such Reference Period, plus
----
(without duplication) IU Cash Inflows received by the Parent and its
Subsidiaries during such Reference Period, less (without duplication)
----
IU Cash Outflows from the Parent and its Subsidiaries during such
Reference Period, less Cash Taxes for such Reference Period, less
---- ----
(without duplication) Landfill Permit Expenditures during such
Reference Period, less Closure Trust Fund Payments during such
----
Reference Period to (ii) Consolidated Interest Expense for such
Reference Period, plus scheduled principal payments under Indebtedness
----
of the Parent and its Subsidiaries for such Reference Period to be less
than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
third quarter of fiscal 1996 1.35:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1996 through and including
first quarter of fiscal 1997 1.40:1.00
Fiscal quarters from and including second
quarter of fiscal 1997 through and including
third quarter of fiscal 1998 1.05:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1998 through and including
first quarter of fiscal 1999 1.60:1.00
Second quarter of fiscal 1999 and all fiscal
quarters thereafter 2.00:1.00"
(c) Section 7.1 of the Credit Agreement is hereby amended by
deleting subclause (d) in its entirety and substituting the following
in lieu thereof:
"(d) Debt to EBITDA Ratio. Permit the ratio of (i)
------------------------
Consolidated Total Debt as of the last day of any fiscal quarter of the
Parent referred to below to (ii) EBITDA for the Reference Period with
respect to such day to be more than the ratio set forth below opposite
such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
Fiscal quarters from and including fourth
quarter of fiscal 1995 through and including
first quarter of fiscal 1996 4.75:1.00
Fiscal quarters from and including second
quarter of fiscal 1996 through and including
third quarter of fiscal 1996 5.00:1.00
Fourth quarter of fiscal 1996 5.50:1.00
First quarter of fiscal 1997 4.80:1.00
Fiscal quarters from and including second
quarter of fiscal 1997 through and including
fourth quarter of fiscal 1997 5.70:1.00
Fiscal quarters from and including first
quarter of fiscal 1998 through and including
third quarter of fiscal 1999 4.70:1.00
Fourth quarter of fiscal 1999 and all fiscal
quarters thereafter 4.50:1.00"
(d) Section 7.2 of the Credit Agreement is hereby amended by
adding to the end thereof the following subsection:
"(l) Indebtedness of the Parent evidenced by
the Series B 1997 Notes, in an aggregate principal
amount of up to $50,000,000."
SECTION 1.05. REPRESENTATIONS AND WARRANTIES. The Parent and the
------------ --------------------------------
Borrower hereby represent and warrant to each Lender that:
(a) The representations and warranties set forth in Section 4
of the Amended Agreement, and in each other Loan Document, are true and
correct in all material respects on and as of the date hereof and on
and as of the Fourth Amendment Effective Date (as defined in Section
1.06) with the same effect as if made on and as of the date hereof or
the Fourth Amendment Effective Date, as the case may be, except to the
extent such repre sentations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects on and as of
such earlier date).
(b) Each of the Loan Parties is in compliance with all the
terms and conditions of the Amended Agreement and the other Loan
Documents on its part to be observed or performed and no Default or
Event of Default has occurred or is continuing.
(c) The execution, delivery and performance by each of the
Borrower and the Parent of this Fourth Amendment have been duly
authorized by such party.
(d) This Fourth Amendment constitutes the legal, valid and
binding obligation of each of the Borrower and the Parent, enforceable
against it in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally.
(e) The execution, delivery and performance by each of the
Borrower and the Parent of this Fourth Amendment (i) do not conflict
with or violate (A) any provision of law, statute, rule or regulation,
or of the certificate of incorporation or by-laws of the Borrower or
the Parent, (B) any order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which the
Borrower or the Parent is a party or by which it or any of its property
may be bound and (ii) do not require any consents under, result in a
breach of or constitute (with notice or lapse of time or both) a
default under any such indenture, agreement or instrument.
SECTION 1.06. EFFECTIVENESS. This Fourth Amendment shall become
------------- -------------
effective only upon satisfaction of the following conditions precedent on or
prior to September 23, 1997 (the first date upon which each such condition has
been satisfied being herein called the "Fourth Amendment Effective Date"):
-------------------------------
(a) The Administrative Agent shall have received duly executed
counterparts of this Fourth Amendment which, when taken together, bear
the authorized signatures of the Borrower, the Parent and the Required
Lenders.
(b) (i) The representations and warranties set forth in
Section 1.05 shall be true and correct on and as of the Fourth
Amendment Effective Date, (ii) no Default or Event of Default has
occurred or is continuing and (iii) there shall not be any action
pending or any judgment, order or decree in effect which is likely to
restrain, prevent or impose materially adverse conditions upon
performance by any Loan Party of its obligations under the Loan
Documents.
(c) The Borrower shall have paid in full all fees and
reasonable expenses payable as of the Fourth Amendment Effective Date
in connection with the Amended Agreement and the other Loan Documents.
(d) The Administrative Agent shall have received from each of
the Guarantors duly executed Consents, in the form attached hereto as
Exhibit A, which bear the authorized signatures of such Guarantors.
---------
(e) The Administrative Agent shall have received an opinion of
counsel to the Borrower, the Parent and the other Loan Parties in form
and substance satisfactory to the Administrative Agent.
(f) The Administrative Agent shall have received such other
documents, legal opinions, instruments and certificates as it shall
reasonably request and such other documents, legal opinions,
instruments and certificates shall be satisfactory in form and
substance to the Administrative Agent and its counsel. All corporate
and other proceedings taken or to be taken in connection with this
Fourth Amendment and all documents incidental thereto, whether or not
referred to herein, shall be satisfactory in form and substance to the
Administrative Agent and its counsel.
SECTION 1.07. CONDITION SUBSEQUENT. This Fourth Amendment shall be null
------------ --------------------
and void and of no force and effect if the Series B 1997 Notes are not issued on
or before November 1, 1997 and all of the Net After-Tax Cash Proceeds from such
issuance, which amount shall not be less than $44,000,000, shall have been paid
to the Administrative Agent for application as set forth herein.
SECTION 1.08. APPLICABLE LAW. THIS FOURTH AMENDMENT SHALL BE
------------ --------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 1.09. EXPENSES. The Borrower shall pay all reasonable
------------- --------
out-of-pocket expenses incurred by the Agents in connection with the
preparation, negotiation, execution and delivery and the Agents' and the
Lenders' enforcement of this Fourth Amendment, including, but not limited to,
the reasonable fees and disbursements of counsel. The agreements set forth in
this Section 1.09 shall survive the termination of this Fourth Amendment and the
Amended Agreement.
SECTION 1.10. COUNTERPARTS. This Fourth Amendment may be executed in
------------ ------------
any number of counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one agreement.
SECTION 1.11. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a) On and
------------ ---------------------------------------------
after the Fourth Amendment Effective Date, each reference in the Amended
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Amended Agreement as amended by this Fourth Amendment.
(b) Each of the amendments provided herein shall apply and be
effective only with respect to the provisions of the Amended Agreement
specifically referred to by such amendment. Except as specifically
amended above, the Amended Agreement and the Revolving Credit Notes,
and all other Loan Documents, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.
(c) Except as specifically provided above, the execution,
delivery and effectiveness of this Fourth Amendment shall not operate
as a waiver of any right, power or remedy of any Lender, any Agent or
any Secured Party under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed by their duly authorized officers, all as of the
date first above written.
INTERNATIONAL MILL SERVICE, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Treasurer
ENVIROSOURCE, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
NATIONSBANK, N.A., as Administrative
Agent, as Issuing Lender, as Swingline
Lender and as a Lender
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH, as
Syndication Agent and as a Lender
By:/s/▇▇▇▇▇▇ ▇▇▇
-------------
Title: First Vice President
BANQUE PARIBAS, as a Lender
By:/s/Pierre-▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Title: General Manager
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Title: Assistant Vice President
EXHIBIT A
CONSENT
-------
Dated as of September 23, 1997
Each of the undersigned, as a Guarantor under one of the Guarantees,
dated as of December 19, 1995 (each, a "Guarantee") in favor of the Agent for
---------
the Lenders parties to the Credit Agreement referred to in the foregoing Fourth
Amendment, hereby consents to the Fourth Amendment and hereby confirms and
agrees that (i) the Guarantee to which such Guarantor is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that, upon the effectiveness of, and on and after the date
of, the Fourth Amendment, each reference in such Guarantee to the Loan Documents
or any thereof, "thereunder", "thereof" or words of like import shall mean and
be a reference to the Loan Documents or such Loan Document as amended prior to
the date of and by the Fourth Amendment and (ii) the Security Documents (as
defined in the Credit Agreement referred to in the foregoing Fourth Amendment)
to which such Guarantor is a party and all of the Collateral described therein
do, and shall continue to, secure the payment of all of the Obligations (as
defined therein).
ALEXANDER MILL SERVICES, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Vice President & Treasurer
▇. ▇▇▇▇▇▇ TERMINALS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
CONVERSION SYSTEMS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSOURCE MANAGEMENT SYSTEMS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSOURCE MANAGEMENT CORP.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Vice President & Treasurer
ENVIROSOURCE TECHNICAL SERVICES, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSAFE SERVICES OF IDAHO, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSAFE SERVICES OF NORTH AMERICA, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSAFE SERVICES OF OHIO, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSAFE SERVICES OF TEXAS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ENVIROSOURCE CORP.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Vice President & Treasurer
ENVIROSOURCE TREATMENT & DISPOSAL
SERVICES, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
ETDS, INC.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
FOX ▇▇▇▇ FARMS, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
IU INTERNATIONAL CORPORATION
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
IU NORTH AMERICA FINANCE, INC.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
IU NORTH AMERICA, INC.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
MARCUS HOOK PROCESSING, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
McGRAW CONSTRUCTION COMPANY, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
NEOAX INVESTMENT CORP.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
NOSROC CORP.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
SONCOR CORP.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President
WAYLITE CORPORATION
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Treasurer
Annex A
Revolving Credit Commitments
Lender Percentage Amount
------ ---------- ------
NationsBank, N.A. 45% $22,500,000
Credit Lyonnais New York Branch 45% $22,500,000
Banque Paribas 10% $ 5,000,000
