SIXTH AMENDMENT, dated as of March
26, 1999, 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 Sixth 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. The following definition is
hereby added to Section 1.1 in appropriate alphabetical order:
""ETI": Envirosource Technologies, Inc. a Delaware corporation"
SECTION 1.02. Amendments to Section 2.6. (a) Section 2.6(b) of the
Credit Agreement is hereby amended by adding the following proviso between the
phrase "then in effect" and the period at the end thereof:
"; provided, however, that if the sale of ETI described in
Section 2.6(c) has occurred and the Revolving Credit
Commitments and L/C Commitment have been reduced to
$20,000,000 in connection therewith as contemplated in Section
2.6(c) prior to January 3, 2000, then no reduction of the
Revolving Credit Commitments pursuant to this Section 2.6(b)
shall occur on January 3, 2000"
(b) Section 2.6(c) of the Credit Agreement is hereby amended by
deleting subclause (c) in its entirety and substituting the following in lieu
thereof:
"The Revolving Credit Commitments and L/C Commitment shall be
reduced to $20,000,000 upon the earlier of (i) the fifth
Business Day after the receipt of Net After Tax Cash Proceeds
with respect to a Prepayment Event consisting of a sale by IU
International of all or substantially all of the assets and/or
the common stock of ETI or (ii) March 31, 2000."
(c) Section 2.6 of the Credit Agreement is hereby amended by
adding the following subclause (f) thereto:
"(f) In the event that the dollar amount of any Letter of
Credit outstanding on March 26, 1999 shall be reduced in size,
whether by agreement, amendment, non-renewal after expiration
or termination, then the Revolving Credit Commitments and the
L/C Commitment shall automatically and permanently be reduced
by an amount equal to the net amount of such reduction."
SECTION 1.03. Amendments to Section 7. (a) Section 7.1(a) 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
fourth quarter of fiscal 1998 1.85:1.00
Fiscal quarters from and including first
quarter of fiscal 1999 through and including
third quarter of fiscal 1999 1.50:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1999 through and including
first quarter of fiscal 2000 1.65:1.00
Fiscal quarters from and including second
quarter of fiscal 2000 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(c) 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 1997 through and including
third quarter of fiscal 1998 1.05:1.00
Fourth quarter of fiscal 1998 1.45:1.00
Fiscal quarters from and including first
quarter of fiscal 1999 through and including
second quarter of fiscal 1999 1.25:1.00
Third quarter of fiscal 1999 1.30:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1999 through and including
first quarter of fiscal 2000 1.45:1.00
Second quarter of fiscal 2000 and all fiscal
quarters thereafter 2.00:1.00"
(c) Section 7.1(d) 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
Fourth quarter of fiscal 1997 5.75:1.00
First quarter of fiscal 1998 5.70:1.00
Second quarter of fiscal 1998 5.60:1.00
Third quarter of fiscal 1998 5.40:1.00
Fourth quarter of fiscal 1998 5.75:1.00
Fiscal quarters from and including first
quarter of fiscal 1999 through and including
second quarter of fiscal 1999 6.50:1.00
Third quarter of fiscal 1999 6.45:1.00
Fiscal quarters from and including fourth
quarter of fiscal 1999 through and including
first quarter of fiscal 2000 6.25:1.00
Second quarter of fiscal 2000 and all
fiscal quarters thereafter 4.50:1.00"
(d) Section 7.8 of the Credit Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
"7.8 Limitation on Capital Expenditures. Make during any
fiscal year during the term of this Agreement, or commit prior
to or during such fiscal year to make during such fiscal year,
any Capital Expenditure, including any expenditure in the
ordinary course of business, which exceeds, when added to all
other Capital Expenditures made during such fiscal year or
committed to be made during such fiscal year in the aggregate
for the Parent and all its Subsidiaries, $35,000,000 in fiscal
year 1995, $35,000,000 in fiscal year 1996, $40,000,000 in
fiscal years 1997 and 1998 and $30,000,000 in any fiscal year
thereafter; provided, that for fiscal year 2000 only, up to
$5,000,000 not so expended in fiscal year 1999 may be carried
over for expenditure in fiscal year 2000. It is understood
that any amount so carried over to fiscal year 2000 shall be
deemed to be the amount expended first in fiscal year 2000."
SECTION 1.04. 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 Credit 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 Sixth Amendment Effective Date (as defined in Section
1.05) with the same effect as if made on and as of the date hereof or
the Sixth Amendment Effective Date, as the case may be, except to the
extent such representations 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 Credit 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 Sixth Amendment have been duly
authorized by such party.
(d) This Sixth 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 Sixth 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 1.05. Effectiveness. This Sixth Amendment shall become
effective only upon satisfaction of the following conditions precedent (the
first date upon which each such condition has been satisfied being herein called
the "Sixth Amendment Effective Date"):
(a) The Administrative Agent shall have received duly executed
counterparts of this Sixth 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 1.04 shall be true and correct on and as of the Sixth 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 in connection with the Credit Agreement, the
Amendment Fee Letter Agreement, the Fee Letter Agreement and the other
Loan Documents including, without limitation, the fees and expenses set
forth in Sections 1.07 and 1.08 hereto.
(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
Sixth 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 1.06. APPLICABLE LAW. THIS SIXTH AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.07. 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 Sixth Amendment, including, but not limited to, the
reasonable fees and disbursements of counsel. The agreements set forth in this
Section 1.07 shall survive the termination of this Sixth Amendment and the
Amended Agreement.
SECTION 1.08. Fees. The Borrower shall pay (a) the Amendment Fee (as
defined in the Amendment to Credit Facility Fee Letter Agreement dated March 26,
1999 by the Borrower and the Parent to the Administrative Agent (the "Amendment
Fee Letter Agreement")) and (b) the Advisory Fee to NationsBanc Xxxxxxxxxx
Securities LLC ("NMS") (as defined in the Fee Letter Agreement dated March 26,
1999 by the Borrower and the Parent to NMS (the "Fee Letter Agreement")).
SECTION 1.09. Counterparts. This Sixth 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 1.10. Reference to and Effect on the Loan Documents. (a) On and
after the Sixth 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 Sixth Amendment.
(b) Each of the amendments provided herein shall apply and be
effective only with respect to the provisions of the Credit Agreement
specifically referred to by such amendment. Except as specifically
amended above, the Credit 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 Sixth 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 Sixth Amendment
to be duly executed by their duly authorized officers, all as of the date first
above written.
INTERNATIONAL MILL SERVICE, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President & Treasurer
ENVIROSOURCE, INC.
By: /s/ XXXXXXX X. XXXXX
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Title: Vice President & Treasurer
NATIONSBANK, N.A., as Administrative
Agent, as Issuing Lender, as Swingline Lender
and as a Lender
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH, as Syndication Agent
and as a Lender
By: /s/ XXXXXX XXX
------------------------------------
Title: Senior Vice President
PARIBAS, as a Lender
By: /s/ XXXXXXXXXXX X. XXXXXXX
------------------------------------
Title: Director
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Director
ROYAL BANK OF CANADA
By: /s/ XXXX X'XXXXXX
------------------------------------
Title: Manager
EXHIBIT A
CONSENT
Dated as of March 26, 1999
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 Sixth
Amendment, hereby consents to the Sixth 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 Sixth 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 Sixth Amendment and (ii) the Security Documents (as defined
in the Credit Agreement referred to in the foregoing Sixth 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).
IMS STEEL SERVICES, INC.
By:
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Title:
CONVERSION SYSTEMS, INC.
By:
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Title:
ENVIROSOURCE MANAGEMENT CORP.
By:
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Title:
ENVIROSAFE SERVICES OF IDAHO, INC.
By:
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Title:
ENVIROSAFE SERVICES OF NORTH AMERICA, INC.
By:
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Title:
ENVIROSAFE SERVICES OF OHIO, INC.
By:
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Title:
ENVIROSAFE SERVICES OF TEXAS, INC.
By:
------------------------------------
Title:
ENVIROSOURCE CORP.
By:
------------------------------------
Title:
ENVIROSOURCE TECHNOLOGIES, INC.
By:
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Title:
ETDS, INC.
By:
------------------------------------
Title:
IU INTERNATIONAL CORPORATION
By:
------------------------------------
Title:
IU NORTH AMERICA FINANCE, INC.
By:
------------------------------------
Title:
IU NORTH AMERICA, INC.
By:
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Title:
MARCUS HOOK PROCESSING, INC.
By:
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Title:
McGRAW CONSTRUCTION COMPANY, INC.
By:
------------------------------------
Title:
NEOAX INVESTMENT CORP.
By:
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Title:
NOSROC CORP.
By:
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Title:
SONCOR CORP.
By:
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Title:
IMS WAYLITE INC.
By:
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Title: