EXECUTION COPY
FIFTH AMENDMENT, dated as of March 5,
1998 to the Credit Agreement, dated as of
December 19, 1995 (as amended prior to the
date hereof, the "Credit Agreement"), among
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International Mill Service, Inc., a
Pennsylvania corporation (the "Borrower"),
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EnviroSource, Inc., a Delaware corporation
(the "Parent"), the several banks and other
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financial institutions parties thereto (the
"Lenders"), NationsBank, N.A., as
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administrative agent for the Lenders (in
such capacity, the "Administrative Agent"),
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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 Fifth Amendment, and as
hereinafter amended, modified, extended or restated from time to time, being
called the "Amended Agreement").
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Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
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Agreement is hereby amended by deleting the definition of "L/C Commitment" and
substituting in lieu thereof the following:
""L/C Commitment": $25,000,000."
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SECTION 1.02. AMENDMENTS TO SECTION 3. Section 3.1(b) of the Credit
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Agreement is hereby amended by deleting subparagraph (i) therefrom in its
entirety and substituting in lieu thereof the following:
"(i) be denominated in Dollars and shall be either (A) a
standby letter of credit issued to support obligations of the Parent or
any of its Subsidiaries, as the case may be, contingent or otherwise,
(I) to provide credit support for workers' compensation, other
insurance programs and other corporate purposes, including to support
Existing Letters of Credit or (II) for the account of the Parent or any
of its Subsidiaries and for the benefit of the regional administrator
of the United States Environmental Protection Agency or the state
agency responsible for, or having authority over, the waste management
facility operated by the Parent or any of its Subsidiaries to provide
assurance that funds will be available in the event of closure and/or
post-closure care of any waste management facility operated by the
Parent or any of its Subsidiaries (any such standby letter of credit
described in this clause (A), a "Standby Letter of Credit") or (B) a
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commercial letter of credit issued in respect of the purchase of goods
or services by the Parent or any of its Subsidiaries in the ordinary
course of business (a "Commercial Letter of Credit");"
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SECTION 1.03. AMENDMENTS TO SECTION 4. Section 4.16 is amended by
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deleting clause (c) therefrom and substituting in lieu thereof the following:
"(c) Letters of Credit will be used solely to support various
financial and other performance obligations of the Parent and its
Subsidiaries incurred in the ordinary course of business (including,
without limitation, to provide assurance that funds will be available
in the event of closure and/or post-closure care of any waste
management facility operated by the Parent or any such Subsidiary)."
SECTION 1.04. AMENDMENTS TO SECTION 7. (a) Section 7.1 of the Credit
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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
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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
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by the Parent and its Subsidiaries during such Reference Period, plus
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(without duplication) IU Cash Inflows received by the Parent and its
Subsidiaries during such Reference Period, less (without duplication)
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IU Cash Outflows from the Parent and its Subsidiaries during such
Reference Period, less Cash Taxes for such Reference Period, less
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(without duplication) Landfill Permit Expenditures during such
Reference Period, less Closure Trust Fund Payments during such
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Reference Period to (ii) Consolidated Interest Expense for such
Reference Period, plus scheduled principal payments under Indebtedness
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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
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Fiscal quarters from and including fourth
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 1.45:1.00
Second quarter of fiscal 1999 1.75:1.00
Third quarter of fiscal 1999 1.85:1.00
Fourth quarter of fiscal 1999 1.95:1.00
First quarter of fiscal 2000 and all fiscal
quarters thereafter 2.00:1.00"
(b) 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)
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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
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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
Fiscal quarters from and including fourth
quarter of fiscal 1998 through and including
second quarter of fiscal 1999 5.00:1.00
Fiscal quarters from and including third
quarter of fiscal 1999 through and including
fourth quarter of fiscal 1999 4.75:1.00
First quarter of fiscal 2000 and all fiscal
quarters thereafter 4.50:1.00"
SECTION 1.05. REPRESENTATIONS AND WARRANTIES. The Parent and the
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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 Fifth 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 Fifth 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 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 Fifth Amendment have been duly
authorized by such party.
(d) This Fifth 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 Fifth 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 Fifth Amendment shall become
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effective only upon satisfaction of the following conditions precedent on or
prior to March 5, 1998 (the first date upon which each such condition ha
been satisfied being herein called the "Fifth Amendment Effective Date"):
(a) The Administrative Agent shall have received duly executed
counterparts of this Fifth 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 Fifth 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 Fifth Amendment Effective Date in
connection with the Amended Agreement and the other Loan Documents and
shall have paid an amendment fee of $62,500, which amendment fee shall
be distributed to the Lenders pro rata in accordance with their
Revolving Credit Commitments.
(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.
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(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
Fifth 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. APPLICABLE LAW. THIS FIFTH AMENDMENT SHALL BE
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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 1.08. Expenses. The Borrower shall pay all reasonable
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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 Fifth Amendment, including, but not limited to, the
reasonable fees and disbursements of counsel. The agreements set forth in this
Section 1.08 shall survive the termination of this Fifth Amendment and the
Amended Agreement.
SECTION 1.09. Counterparts. This Fifth Amendment may be executed in
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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
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after the Fifth 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 Fifth 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 Fifth 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 Fifth 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
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Title: Vice President & Treasurer
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ENVIROSOURCE, INC.
By: /s/Xxxxxxx X. Xxxxx
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Title: Vice President & Treasurer
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NATIONSBANK, N.A., as Administrative
Agent, as Issuing Lender, as Swingline
Lender and as a Lender
By: /s/Xxxxxx X. Xxxx
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Title: Vice President
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CREDIT LYONNAIS NEW YORK BRANCH, as
Syndication Agent and as a Lender
By: /s/Xxxxxx Xxx
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Title: First Vice President
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BANQUE PARIBAS, as a Lender
By: /s/Xxxxxxxxxxx X. Xxxxxxx
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Title: Director
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By: /s/Xxxxxx X. Xxxxxx
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Title: Assistant Vice President
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ROYAL BANK OF CANADA, as a Lender
By: /s/Xxxxxx Xxxx
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Title: Senior Manager
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EXHIBIT A
CONSENT
Dated as of March __, 1998
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
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the Lenders parties to the Credit Agreement referred to in the foregoing Fifth
Amendment, hereby consents to the Fifth 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 Fifth 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 Fifth Amendment and (ii) the Security Documents (as defined
in the Credit Agreement referred to in the foregoing Fifth 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:
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CONVERSION SYSTEMS, INC.
By:
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Title:
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ENVIROSOURCE CONTRACT SERVICES,
INC.
By:
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Title:
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ENVIROSOURCE MANAGEMENT CORP.
By:
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Title:
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ENVIROSOURCE TECHNICAL SERVICES,
INC.
By:
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Title:
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ENVIROSAFE SERVICES OF IDAHO, INC.
By:
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Title:
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ENVIROSAFE SERVICES OF NORTH
AMERICA, INC.
By:
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Title:
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ENVIROSAFE SERVICES OF OHIO, INC.
By:
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Title:
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ENVIROSAFE SERVICES OF TEXAS, INC.
By:
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Title:
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ENVIROSOURCE CORP.
By:
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Title:
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ENVIROSOURCE TECHNOLOGIES, INC.
By:
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Title:
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ETDS, INC.
By:
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Title:
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FOX XXXX FARMS, INC.
By:
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Title:
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IU INTERNATIONAL CORPORATION
By:
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Title:
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IU NORTH AMERICA FINANCE, INC.
By:
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Title:
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IU NORTH AMERICA, INC.
By:
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Title:
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MARCUS HOOK PROCESSING, INC.
By:
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Title:
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McGRAW CONSTRUCTION COMPANY, INC.
By:
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Title:
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NEOAX INVESTMENT CORP.
By:
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Title:
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NOSROC CORP.
By:
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Title:
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SONCOR CORP.
By:
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Title:
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IMS WAYLITE, INC.
By:
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Title:
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