THIRD AMENDMENT AND LIMITED WAIVER
dated as of March 30, 2001 (this "Third
Amendment and Limited Waiver") to the
Amended and Restated Credit Agreement dated
as of May 26, 2000, (the "Credit Agreement")
among ISG Resources, Inc. (the "Borrower"),
Industrial Services Group, Inc. (the
"Parent"), the Lenders (as defined in the
Credit Agreement), Bank of America, N.A.
(formerly known as NationsBank, N.A.), as
Administrative Agent (in such capacity, the
"Administrative Agent") and Issuing Lender,
and Canadian Imperial Bank of Commerce, as
Documentation Agent (in such capacity, the
"Documentation Agent").
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, the First Amendment dated as of August 8, 2000
among the Borrower, the Parent, the Lenders, the Administrative Agent and the
Documentation Agent, the Second Amendment and Limited Waiver dated as of
November 13, 2000 among the Borrower, the Parent, the Lenders, the
Administrative Agent and the Documentation Agent, and this Third Amendment and
Limited Waiver, and as hereinafter amended, modified, supplemented, extended or
restated from time to time, being called the "Amended Credit Agreement").
The Borrower has requested the Lenders to, among other things, amend
and waive compliance with certain covenants contained in the Credit Agreement.
The parties hereto have agreed, subject to the terms and conditions
hereof, to amend the Credit Agreement as provided herein.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01 Amendments to Section 1.1.
(a) The definition of "Applicable ABR Margin" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
" "Applicable ABR Margin" shall mean
(a) with respect to any Tranche A Revolving Loan outstanding
on any day:
(i) 0.50%, if such day falls within a Level I Pricing
Period;
(ii) 0.75%, if such day falls within a Level II
Pricing Period;
(iii) 1.00%, if such day falls within a Level III
Pricing Period;
(iv) 1.25%, if such day falls within a Level IV
Pricing Period;
(v) 1.75%, if such day falls within a Level V Pricing
Period;
(vi) 2.25%, if such day falls within a Level VI
Pricing Period; and
(b) with respect to any Tranche B Revolving Loan outstanding
on any day:
(i) 0.50%, if such day falls within a Level I Pricing
Period;
(ii) 0.75%, if such day falls within a Level II
Pricing Period;
(iii) 1.00%, if such day falls within a Level III
Pricing Period; and
(iv) 1.25%, if such day falls within a Level IV
Pricing Period".
(b) The definition of "Applicable LIBOR Margin" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
"Applicable LIBOR Margin" shall mean,
(a) with respect to any Tranche A Revolving Loan outstanding
on any day:
(i) 1.75%, if such day falls within a Level I Pricing
Period;
(ii) 2.00%, if such day falls within a Level II
Pricing Period;
(iii) 2.25%, if such day falls within a Level III
Pricing Period;
(iv) 2.50%, if such day falls within a Level IV
Pricing Period;
(v) 3.00%, if such day falls within a Level V Pricing
Period;
(vi) 3.50%, if such day falls within a Level VI
Pricing Period; and
(b) with respect to any Tranche B Revolving Loan outstanding
on any day:
(i) 1.75%, if such day falls within a Level I Pricing
Period;
(ii) 2.00%, if such day falls within a Level II
Pricing Period;
(iii) 2.25%, if such day falls within a Level III
Pricing Period; and
(iv) 2.50%, if such day falls within a Level IV
Pricing Period".
(c) The definition of "Level V Pricing Period" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
" "Level V Pricing Period" shall mean, with respect to Tranche
A Revolving Loans and subject to Section 2.2(d)(iii), any period on or
after the Effective Date during which the Leverage Ratio is greater
than 5.00:1.00 but less than or equal to 5.50:1.00 and no Event of
Default has occurred and is continuing."
(d) The following definition is hereby added to Section 1.1 of the
Credit Agreement:
" "Level VI Pricing Period" shall mean, with respect to
Tranche A Revolving Loans, any period on or after March 1, 2001 which
is not a Level I Pricing Period, Level II Pricing Period, Level III
Pricing Period, Level IV Pricing Period or Level V Pricing Period;
provided, that any reference to Level VI Pricing Period which is
measured prior to March 1, 2001 shall be deemed a Level V Pricing
Period."
SECTION 1.02 Amendment to Section 2.2(d)(iii). Section 2.2(d)(iii) of
the Credit Agreement is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"(iii) Pricing Periods. Each Level I Pricing Period, Level II
Pricing Period, Level III Pricing Period, Level IV Pricing Period,
Level V Pricing Period or Level VI Pricing Period (each a "Pricing
Period") shall commence on (and include) the date that is the first day
of the third month following the end of each fiscal quarter of the
Borrower and shall terminate on the day before the beginning of the
next Pricing Period. Notwithstanding the foregoing, in the event the
Borrower has failed to deliver any Required Financial Information when
due in accordance with Section 6.1, a Level VI Pricing Period shall be
deemed to be in effect beginning as of the first day of the third month
following the end of the fiscal quarter for which any Required
Financial Information was not timely delivered and such Level VI
Pricing Period shall remain effective until a fiscal quarter in which
Borrower has delivered the Required Financial Information when due in
accordance with Section 6.1, and then the applicable Pricing Period as
determined pursuant hereto with reference to the Required Financial
Information shall become effective on the date determined in accordance
with the first sentence of this clause (iii) above.
Interest on Tranche A Revolving Loans shall be payable in arrears on
each applicable Interest Payment Date (and at such other times as may be
specified herein)."
SECTION 1.03 Amendment to Section 6.1(b).
(a) Section 6.01(b) of the Credit Agreement is hereby deleted
in its entirety and the following is substituted in lieu thereof:
"(b) Monthly and Weekly Financial Statements. (i) As soon as
available, and in any event within 45 days after the end of each month
in each fiscal year of the Parent, a consolidated and consolidating
balance sheet of the Parent and its Consolidated Subsidiaries as of the
end of such month, together with related consolidated and consolidating
statements of operations and retained earnings and of cash flows for
such month and the then elapsed portion of such fiscal year, setting
forth in comparative form consolidated and consolidating figures for
the corresponding period of the preceding fiscal year, all such
financial statements to be in reasonable form and detail and reasonably
acceptable to the Administrative Agent, and accompanied by a
certificate of the chief financial officer of the Parent to the effect
that such monthly financial statements have been prepared in accordance
with GAAP and fairly present in all material respects the consolidated
financial position and consolidated results of operations and cash
flows of the Parent and its Consolidated Subsidiaries in accordance
with GAAP consistently applied, subject to changes resulting from
normal year-end audit adjustments.
(ii) As soon as available, and in any event by 5:00 p.m. of
every Tuesday, a forecast of the Parent's and its Consolidated
Subsidiaries' cash receipts and cash disbursements for the ensuing
twelve calendar weeks (broken down week-by-week), such forecast to be
in reasonable detail, prepared by the Parent and in form satisfactory
to the Administrative Agent.
(b) Section 6.1(c) of the Credit Agreement is hereby amended
by replacing "6.1(b)" with "6.1(b)(i)" in the second line thereof.
SECTION 1.04 Amendment to Section 6. Section 6.14 is hereby added to
the Credit Agreement:
"Section 6.14. Discretionary Prepayments. On or prior to
September 30, 2001, the Borrower shall either (i) (a) prepay the Loans
in an amount less than $10,000,000 and (b) pay the Administrative Agent
for the account of each Lender a fee equal to $500,000 payable pro-rata
to each of the Lenders in proportion to each such Lender's Commitment,
(ii) (a) prepay the Loans in an amount greater than $10,000,000 but
less than $20,000,000 and (b) pay the Administrative Agent for the
account of each Lender a fee equal to $250,000 payable pro-rata to each
of the Lenders in proportion to each such Lender's Commitment or (iii)
prepay the Loans in an amount equal to or greater than $20,000,000;
provided that any payment made pursuant to this Section 6.14 shall be
applied (1) first pro rata to the Tranche A Revolving Loans (with a
corresponding reduction in the Tranche A Revolving Committed Amount)
and the Tranche B Revolving Loans (with a corresponding reduction in
the Tranche B Revolving Committed Amount), and (2) second to cash
collateralize LOC Obligations."
SECTION 1.05 Amendment to Section 7.6. Section 7.6 of the Credit
Agreement is hereby amended by adding the following at the end of such section
before the period:
"; provided that none of the Consolidated Parties will make
any Permitted Acquisition during fiscal year 2001".
SECTION 1.06 Amendment to Section 7.14. Section 7.14 of the Credit
Agreement is hereby deleted in its entirety and the following is inserted in
lieu thereof:
"7.14 Capital Expenditures. The Borrower will not permit
Consolidated Capital Expenditures for fiscal year 2001 of the Borrower
to be more than $7,500,000. The Borrower will not permit Consolidated
Capital Expenditures for any fiscal year of the Borrower thereafter to
be more than $9,000,000."
SECTION 1.07 Amendments to Section 7.19.
(a) Section 7.19(a) of the Credit Agreement is hereby deleted in its
entirety and the following is inserted in lieu thereof:
"(a) Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio, as of the last day of any fiscal quarter of
the Borrower, to be less than the ratio specified in the table set
forth below for such period:
From To and Including Interest Coverage Ratio
---- ---------------- -----------------------
January 1, 2001 March 31, 2001 1.15 to 1.00
April 1, 2001 June 30, 2001 1.30 to 1.00
July 1, 2001 September 30, 2001 1.40 to 1.00
October 1, 2001 December 31, 2001 1.85 to 1.00
January 1, 2002 March 31, 2002 1.90 to 1.00
April 1, 2002 June 30, 2002 1.90 to 1.00
July 1, 2002 Thereafter 2.00 to 1.00".
(b) Section 7.19(b) of the Credit Agreement is hereby deleted in its
entirety and the following is inserted in lieu thereof:
"(b) Leverage Ratio. The Borrower will not permit the Leverage
Ratio, as of the last day of any fiscal quarter of the Borrower, to be
greater than the ratio specified in the table set forth below for such
period:
From To and Including Leverage Ratio
---- ---------------- --------------
January 1, 2001 March 31, 2001 8.80 to 1.00
April 1, 2001 June 30, 2001 7.90 to 1.00
July 1, 2001 September 30, 2001 7.15 to 1.00
October 1, 2001 December 31, 2001 5.56 to 1.00
January 1, 2002 March 31, 2002 5.50 to 1.00
April 1, 2002 June 30, 2002 5.25 to 1.00
July 1, 2002 September 30, 2002 5.00 to 1.00
October 1, 2002 Thereafter 4.50 to 1.00".
(c) Section 7.19(d) of the Credit Agreement is hereby deleted in its
entirety and the following is inserted in lieu thereof:
"(d) Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA to be less than the amount set forth below as of
the last day of the fiscal quarter set forth opposite such amount:
March 31, 2001 $18,800,000
June 30, 2001 $21,000,000
September 30, 2001 $23,000,000
December 31, 2001 $29,700,000
March 31, 2002 $30,000,000
June 30, 2002 $31,000,000
September 30, 2002 $33,000,000
December 31, 2002 $33,000,000
March 31, 2003 $33,000,000
June 30, 2003 $33,000,000".
SECTION 1.08 Limited Waiver. The undersigned hereby, solely with
respect to the Interest Coverage Ratio, the Leverage Ratio and Minimum
Consolidated EBITDA of the Borrower as of the last day of the fiscal quarter
ended December 31, 2000, waive any Default or Event of Default arising from
non-compliance with Sections 7.19(a), 7.19(b) and 7.19(d) of the Amended Credit
Agreement for such period.
SECTION 1.09 Representations and Warranties. Each of the Borrower and
the Parent hereby represents and warrants to the Agents and the Lenders, as
follows:
(a) The Borrower and the Parent are in compliance with all the
terms and conditions of the Amended Credit Agreement on its part to be
observed or performed except for any non-compliance which is waived
pursuant to this Third Amendment and Limited Waiver. There exists no
Default or Event of Default.
(b) The execution, delivery and performance by each of the
Borrower and the Parent of this Third Amendment and Limited Waiver
dated as of the date hereof have been duly authorized by the Borrower
and the Parent.
(c) This Third Amendment and Limited Waiver dated as of the
date hereof constitutes the legal, valid and binding obligations of the
Borrower and the Parent enforceable against each in accordance with
their terms.
(d) The execution, delivery and performance by the Borrower
and the Parent of this Third Amendment and Limited Waiver (i) do not
conflict with or violate (A) any provision of law, statute, rule or
regulation, or of the constitutive documents 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 they or any of their
respective properties 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 1.10 Effectiveness. This Third Amendment and Limited Waiver
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 "Third Amendment and Limited Waiver Effective Date").
(a) The Administrative Agent shall have received duly executed
counterparts of this Third Amendment and Limited Waiver which, when
taken together, bear the authorized signatures of the Borrower, the
Parent and the Lenders.
(b) The Borrower, the Parent and the other Credit Parties
shall have obtained all governmental, shareholder and third party
consents and approvals necessary or, in the opinion of the
Administrative Agent, desirable in connection with the execution,
delivery and performance of this Third Amendment and Limited Waiver and
the other Credit Documents (including the exercise of remedies under
the Collateral Documents) without any action being taken by any
Governmental Authority that could restrain, prevent or impose any
material adverse condition on the Consolidated Parties taken as a whole
or such transactions or that could seek or threaten any of the
foregoing, and no law or regulation shall be applicable which in the
judgment of the Administrative Agent could have such effect.
(c) There shall not exist any order, decree, judgment, ruling
or injunction or any pending or threatened action, suit, investigation
or proceeding that purports to affect the transactions contemplated by
this Third Amendment and Limited Waiver, the Credit Facilities or the
other related financings or that could reasonably be expected to have a
Material Adverse Effect.
(d) None of the Borrower and the Subsidiaries shall be in
violation of any law, rule or regulation, or in default with respect to
any judgment, writ, injunction or decree of any Governmental Authority,
where such violation or default could reasonably be expected to result
in a Material Adverse Effect.
(e) The Administrative Agent shall be satisfied that the
representations and warranties set forth in Section 1.09 are true and
correct on and as of the Third Amendment and Limited Waiver Effective
Date.
(f) The Administrative Agent shall have received such other
documents, legal opinions, instruments and certificates relating to
this Third Amendment and Limited Waiver as they shall reasonably
request and such other documents, legal opinions, instruments and
certificates shall be satisfactory in form and substance to the
Administrative Agent and the Lenders. All corporate and other
proceedings taken or to be taken in connection with this Third
Amendment and Limited Waiver and all documents incidental thereto,
whether or not referred to herein, shall be satisfactory in form and
substance to the Administrative Agent and the Lenders.
(g) The Borrower shall have paid all fees and expenses
referred to in Section 1.11 of this Third Amendment and Limited Waiver.
SECTION 1.11 APPLICABLE LAW. THIS THIRD AMENDMENT AND LIMITED WAIVER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 1.12 Expenses. The Borrower shall pay (i) all fees and expenses
of counsel to the Administrative Agent outstanding as of the date hereof and all
reasonable out-of-pocket expenses incurred by the Administrative Agent and the
Lenders in connection with the preparation, negotiation, execution, delivery and
enforcement of this Third Amendment and Limited Waiver, (ii) an amendment fee
(the "Amendment Fee") payable to the Administrative Agent in the aggregate
amount of 10 basis points on the Commitment of each Lender as of the Third
Amendment and Limited Waiver Effective Date, payable to each of the Lenders
executing the Third Amendment and Limited Waiver prior to the Third Amendment
and Limited Waiver Effective Date (the "Approving Lenders") in proportion to
such Approving Lenders' Commitment over all Approving Lenders' Commitments. The
agreement set forth in this Section 1.12 shall survive the termination of this
Third Amendment and Limited Waiver and the Amended Credit Agreement.
SECTION 1.13 Counterparts. This Third Amendment and Limited Waiver 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. Delivery of an executed counterpart of a signature page to this Third
Amendment and Limited Waiver by telecopier shall be effective as delivery of a
manually executed counterpart of this Third Amendment and Limited Waiver.
SECTION 1.14 Credit Agreement. Except as expressly set forth herein,
the amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Administrative Agent or the Lenders under the Amended Credit Agreement, nor
shall they alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Amended Credit
Agreement. The amendments provided herein shall apply and be effective only with
respect to the provisions of the Amended Credit Agreement specifically referred
to by such amendments. Except as expressly amended herein, the Amended Credit
Agreement shall continue in full force and effect in accordance with the
provisions thereof. As used in the Credit Agreement, the terms "Agreement",
"herein", "hereinafter", "hereunder", "hereto" and words of similar import shall
mean, from and after the date hereof, the Amended Credit Agreement.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Borrower, the Parent and the Lenders have
caused this Third Amendment and Limited Waiver to be duly executed by their
respective authorized officers as of the day and year first above written.
BORROWER: ISG RESOURCES, INC.,
-------- a Utah corporation
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V.P. & General Counsel
PARENT: INDUSTRIAL SERVICES GROUP, INC.,
------ a Delaware corporation
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V.P. & General Counsel
LENDERS AND AGENTS BANK OF AMERICA, N. A.,
------------------ individually in its capacities as a Tranche A Lender,
as a Tranche B Lender, as Administrative Agent and
as Issuing Lender
By:
--------------------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, individually in its capacities as a Tranche
A Lender and as Documentation Agent
By:
--------------------------------------------------
Name:
Title:
ZIONS FIRST NATIONAL BANK,
individually in its capacities as a Tranche A Lender
and as a Tranche B Lender
By:
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
