Exhibit 10.8
EXECUTION COPY
FIRST AMENDMENT dated as of May 29, 1998 (this
"FIRST AMENDMENT") to the Credit Agreement dated as of
March 4, 1998 (as amended, modified or otherwise
supplemented through the date hereof, the "CREDIT
AGREEMENT"), among JTM Industries, Inc. (the
"BORROWER"), Industrial Services Group, Inc., the
Lenders (as defined in the Credit Agreement),
NationsBank, N.A., as Administrative Agent and Issuing
Lender, and Canadian Imperial Bank of Commerce, as
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, this First Amendment, 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
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. AMENDMENTS TO THE CREDIT AGREEMENT. Subject to satisfaction of
the conditions precedent set forth in Section 3 of this First Amendment, the
Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by adding
the following definitions thereto in alphabetical order:
""APPLICABLE ABR MARGIN" shall mean, with respect to any 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."
""APPLICABLE LIBOR MARGIN" shall mean, with respect to any 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."
""JUNIOR SUBORDINATED NOTE" shall mean, collectively, the Junior
Subordinated Promissory Note due 2005, dated October 14, 1997, issued
by the Parent in favor of Xxxxxxx in an original principal amount of
$17,500,000, and any Secondary Note (as defined in the Junior
Subordinated Note) issued pursuant to the terms and conditions of the
Junior Subordinated Note."
""LEVEL I PRICING PERIOD" shall mean, subject to Section 2.1(d)(iii),
any period on or after the Closing Date during which the Leverage
Ratio is less than or equal to 3.50:1.00 and no Event of Default has
occurred and is continuing."
""LEVEL II PRICING PERIOD" shall mean, subject to Section 2.1(d)(iii),
any period on or after the Closing Date during which the Leverage
Ratio is greater than 3.50:1.00 but less than or equal to 4.00:1.00
and no Event of Default has occurred and is continuing."
""LEVEL III PRICING PERIOD" shall mean, subject to Section
2.1(d)(iii), any period on or after the Closing Date during which the
Leverage Ratio is greater than 4.00:1.00 but less than or equal to
4.50:1.00 and no Event of Default has occurred and is continuing."
""LEVEL IV PRICING PERIOD" shall mean any period on or after the
Closing Date which is not a Level I Pricing Period, Level II Pricing
Period or Level III Pricing Period."
""POST CLOSING ACQUISITIONS" shall mean, collectively, the acquisition
by the Borrower of all of the capital stock of each of (i) Power Plant
Aggregates of Iowa, Inc., (ii) (A) Michigan Ash Sales Company, d.b.a.
U.S. Ash Company, (B) U.S. Stabilization, Inc. and (C) Flo Fil Co.,
Inc. and (iii) Fly Ash Products, Inc."
(b) The definition of "Adjusted Base Rate" contained in Section
1.1 of the Credit Agreement is hereby deleted therefrom in its entirety and
the following definition is substituted in lieu thereof:
"ADJUSTED BASE RATE" shall mean the Base Rate PLUS the Applicable ABR
Margin in effect from time to time.
(c) The definition of "Adjusted Eurodollar Rate" contained in
Section 1.1 of the Credit Agreement is hereby deleted therefrom in its
entirety and the following definition is hereby substituted in lieu
thereof:
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"ADJUSTED EURODOLLAR RATE" shall mean the Eurodollar Rate PLUS the
Applicable LIBOR Margin in effect from time to time.
(d) The definition of "Excluded Equity Issuance" contained in
Section 1.1 of the Credit Agreement is hereby deleted therefrom in its
entirety and the following definition is hereby substituted in lieu
thereof:
""EXCLUDED EQUITY ISSUANCE" shall mean (a) any issuance by any
Subsidiary of the Borrower of its Capital Stock to the Borrower or any
other Subsidiary of the Borrower, (b) any receipt by any Subsidiary of
the Borrower of a capital contribution from the Borrower or any other
Subsidiary of the Borrower, (c) any issuance by the Parent of ISG
Common Stock pursuant to the exercise of the Warrants and (d) the
issuance of common stock of the Parent, the aggregate value of which
does not exceed $10,000,000, such common stock being issued in
connection with the financing of a Permitted Acquisition."
(e) The definition of "Interest Coverage Ratio" contained in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and
the following definition is hereby substituted in lieu thereof:
""INTEREST COVERAGE RATIO" shall mean, as of any day, the ratio of (a)
Consolidated EBITDA for the period of four consecutive fiscal quarters
of the Borrower ending on, or most recently preceding, such last day
to (b)(i) from the date hereof to April 30, 1999, the product of (A)
365 and (B) a fraction, the numerator of which is Consolidated Cash
Interest Expense from May 1, 1998 to such day and the denominator of
which is the actual number of days from May 1, 1998 to such day and
(ii) thereafter, Consolidated Cash Interest Expense for the period of
four consecutive fiscal quarters of the Borrower ending on, or most
recently preceding, such last day."
(f) The definition of "Operative Document" contained in Section
1.1 of the Credit Agreement is hereby deleted therefrom in its entirety and
the following definition is hereby substituted in lieu thereof:
""OPERATIVE DOCUMENTS" shall mean the Credit Documents, the
Acquisition Agreement, the Stockholders Agreement, the Xxxxxxx Bridge
Agreement, the Senior Note Agreement, the Junior Subordinated Note,
the CVC Subscription Agreement, the Contribution and Assignment
Agreement, the Contribution and Subscription Agreement, the Deju
Subscription Agreement, the Registration Rights Agreement and the
Warrants."
(g) The definition of "Permitted Acquisition" contained in Section
1.1 of the Credit Agreement is hereby deleted therefrom in its entirety and
the following definition is hereby substituted in lieu thereof:
""PERMITTED ACQUISITION" shall mean, collectively, (i) the Post
Closing Acquisitions and (ii) an acquisition by the Borrower or any
Subsidiary of the
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Borrower of the Capital Stock or all or any substantial part (in
either case for which audited financial statements or other financial
information satisfactory to the Administrative Agent is available) of
the Property of another Person (including by merger or consolidation
or by incorporation of a new Subsidiary) for up to the fair market
value of the Capital Stock or Property acquired as determined by the
Board of Directors of the Borrower based upon their reasonable
business judgment; PROVIDED that (a) the Capital Stock or Property
acquired in such acquisition relates to a line of business similar to
the business of the Borrower or any of its Subsidiaries engaged in on
the Closing Date, (b) the representations and warranties made by the
Credit Parties in each Credit Document shall be true and correct in
all material respects at and as of the date of such acquisition (as if
made on such date after giving effect to such acquisition) except to
the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall
be true and correct in all material respects at and as of such earlier
date), (c) the Agent shall have received all items in respect of the
Capital Stock or Property acquired in such acquisition (and/or the
seller thereof) required to be delivered by the terms of Section 6.11
and/or Section 6.12, (d) in the case of an acquisition of the Capital
Stock of another Person, (i) except in the case of the incorporation
of a new Subsidiary, the board of directors (or other comparable
governing body) of such other Person shall have duly approved such
acquisition and (ii) the Capital Stock acquired shall constitute at
least 85% of the Total Voting Power and ownership interest of the
issuer thereof, (e) no Default or Event of Default shall have occurred
and be continuing immediately before or immediately after giving
effect to such acquisition and the Borrower shall have delivered to
the Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such acquisition on a Pro Forma Basis, the Borrower
shall be in compliance with all of the financial covenants set forth
in Section 7.19 as of the last day of the most recent period of four
consecutive fiscal quarters of the Borrower which precedes or ends on
the date of such acquisition and with respect to which the Agent has
received the Required Financial Information and (f) the liabilities
(determined in accordance with GAAP and in any event including
contingent obligations) acquired by the Borrower and its Subsidiaries
on a consolidated basis in such acquisition and the Indebtedness
issued by the Borrower and its Subsidiaries on a consolidated basis
from such acquisition shall not in the aggregate exceed 25% of the
purchase price paid for the related Capital Stock or assets."
(h) Clause (iii) of the definition of "Pro Forma Basis" contained
in Section 1.1 of the Credit Agreement is hereby deleted therefrom in its
entirety and the following definition is hereby substituted in lieu
thereof:
"(iii) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 7.4(d) and the
definition of "Permitted Acquisition" set forth in this Section 1.1,
(A) any Indebtedness incurred by the Borrower or any of its
Subsidiaries in connection with such transaction shall be deemed to
have been incurred as of the first day of the relevant four
fiscal-quarter period (B) if such Indebtedness has a floating or
formula rate, then the rate of
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interest for such Indebtedness for the applicable period for purposes of
the calculations contemplated by this definition shall be determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of such calculations and (C) income
statement items (whether positive or negative), including but not limited
to the income statement items listed on Schedule 1.1D hereto with respect
to the Acquisition and the Post Closing Acquisitions, attributable to the
Property acquired in such transaction or to the Investment comprising such
transaction, as applicable, shall be included as if such transaction had
occurred as of the first day of the relevant four fiscal-quarter period;
PROVIDED, HOWEVER, that extraordinary and non-recurring revenues and
expenses attributable to such Property or Investment, as the case may be,
shall be excluded from the income statement calculation for such four
fiscal-quarter period."
(i) The definition of "Regulation G, T, U or X" contained in
Section 1.1 of the Credit Agreement is hereby deleted therefrom in its
entirety and the following definition is hereby substituted in lieu
thereof:
""REGULATION T, U OR X" shall mean Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof."
(j) The definition of "Restricted Payment" contained in Section
1.1 of the Credit Agreement is hereby deleted therefrom in its entirety and
the following definition is hereby substituted in lieu thereof:
""RESTRICTED PAYMENT" shall mean (i) any dividend or other
distribution, direct or indirect, on account of any class of Capital
Stock of any Consolidated Party, now or hereafter outstanding, (ii)
any redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding,
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking
fund or similar payment with respect to the Xxxxxxx Bridge Note, (v)
any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking
fund or similar payment with respect to the Senior Note, (vi) any
payment or repayment of principal of, premium, if any, or interest on
(other than payment in kind interest), redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect
to the Junior Subordinated Note and (vii) any loan, advance, tax
sharing payment or indemnification payment to, or other investment in,
the Parent or any of its Affiliates (other than the Borrower and its
Subsidiaries)."
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(k) The definition of "Senior Note" contained in Section 1.1 of
the Credit Agreement is hereby deleted therefrom in its entirety and the
following definition is hereby substituted in lieu thereof:
""SENIOR NOTE" shall mean the 10% Senior Subordinated Notes due
April 15, 2008 issued by the Borrower pursuant to the Senior Note
Agreement (and shall include any substantially identical senior
subordinated notes of the Borrower in the same aggregate principal
amount issued after April 22, 1998 in exchange therefor pursuant to a
registered exchange offer or shelf registration statement in
accordance with the Senior Note Agreement)."
(l) The definition of "Senior Note Agreement" contained in Section
1.1 of the Credit Agreement is hereby deleted therefrom in its entirety and
the following definition is hereby substituted in lieu thereof:
""SENIOR NOTE AGREEMENT" shall mean the Indenture, dated as of April
22, 1998 pursuant to which the Senior Notes are issued, by and among
the Borrower, the Domestic Subsidiaries party thereto as guarantors,
and U.S. Bank, N.A., as trustee, as the same may be amended, modified,
restated or supplemented in accordance with the terms of this
Agreement as in effect from time to time."
(m) The definition of "Subordinated Note" contained in Section 1.1
of the Credit Agreement is hereby deleted therefrom in its entirety.
(n) Section 2.1(a) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
""(a) REVOLVING COMMITMENT. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrower such Lender's Revolving Commitment Percentage of revolving
credit loans requested by the Borrower in Dollars ("REVOLVING LOANS")
from time to time from the Closing Date until the Termination Date, or
such earlier date as the Revolving Commitments shall have been
terminated as provided herein for the purposes hereinafter set forth;
PROVIDED, HOWEVER, that the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS the aggregate amount of outstanding
LOC Obligations shall not at any time exceed THIRTY-FIVE MILLION
DOLLARS ($35,000,000) (as such aggregate maximum amount may be reduced
from time to time as provided in Section 3.4, the "REVOLVING COMMITTED
AMOUNT"); PROVIDED, FURTHER, with regard to each Lender individually,
that such Lender's outstanding Revolving Loans PLUS Participation
Interests in outstanding LOC Obligations shall not at any time exceed
such Lender's Revolving Commitment Percentage of the Revolving
Committed Amount. Revolving Loans may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof; PROVIDED, HOWEVER, that the Revolving Loans
outstanding at any time shall consist of no more than six (6) separate
Eurodollar Loans. For purposes hereof,
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Eurodollar Loans with different Interest Periods shall be considered
as separate Eurodollar Loans, even if they begin on the same date,
although borrowings of Eurodollar Loans may, in accordance with the
provisions hereof, be combined through extensions or conversions at
the end of existing Interest Periods to constitute a single new
Eurodollar Loan with the same Interest Period. Revolving Loans
hereunder may be repaid and reborrowed in accordance with the
provisions hereof."
(o) Section 2.1(d) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(d) INTEREST. Subject to the provisions of Section 3.1:
(i) BASE RATE LOANS. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate Loans, such
Base Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as Revolving
Loans shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate.
(iii) PRICING PERIODS. Each Level I Pricing Period, Level II
Pricing Period, Level III Pricing Period or Level IV 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
6.01, a Level IV 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 IV Pricing Period shall remain
effective until a fiscal quarter in which Borrower has delivered the
Required Financial Information when due in accordance with
Section 6.01, and then the applicable Pricing Period as determined
pursuant hereto with reference to the Required Financial Information
shall become effective on the date determined above.
Interest on Revolving Loans shall be payable in arrears on
each applicable Interest Payment Date (and at such other times as may
be specified herein)."
(p) Section 3.4(b)(i) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(i) On any date that any Revolving Loans are required to be
prepaid and/or LOC Obligations are required to be cash collateralized
pursuant to the terms of Section 3.3(b)(ii), (iii), (iv) (or would be
so required if any Revolving Loans, or
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LOC Obligations were outstanding), the Revolving Committed Amount shall be
automatically and permanently reduced by the total amount of such required
prepayments and cash collateral (and, in the event that the amount of any
payment referred to in Section 3.3(b)(ii), (iii) or (iv) which is allocable
to the Revolving Credit Facility Obligations exceeds the amount of all
outstanding Revolving Credit Facility Obligations, the Revolving Committed
Amount shall be further reduced by 100% of such excess)."
(q) Section 5.13(a) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"5.13 GOVERNMENTAL REGULATIONS, ETC. (a) No part of the Letters of
Credit or proceeds of the Loans will be used, directly or indirectly,
for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U, or for the purpose of purchasing or
carrying or trading in any securities. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to
in Regulation U. No indebtedness being reduced or retired out of the
proceeds of the Loans was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does
not constitute more than 25% of the value of the consolidated assets
of the Consolidated Parties. None of the transactions contemplated by
this Agreement (including the direct or indirect use of the proceeds
of the Loans) will violate or result in a violation of the Securities
Act of 1933, as amended, the Exchange Act or regulations issued
pursuant thereto, or Regulation T, U or X."
(r) Section 5.30(d) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(d) On the Closing Date, the Junior Subordinated Note shall
not have been amended or modified, nor any condition thereof waived by
the Parent in a manner adverse in any material respect to the rights
or interests of the Lenders."
(s) Section 6.12 of the Credit Agreement is hereby deleted
therefrom in its entirety.
(t) Section 7.1 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.1 INDEBTEDNESS. None of the Consolidated Parties will contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Agreement and the other
Credit Documents;
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(b) Indebtedness of the Borrower and its Subsidiaries in
existence on the Closing Date to the extent disclosed in SCHEDULE 7.1;
(c) purchase money Indebtedness (including Capital Leases)
incurred by the Borrower or any of its Subsidiaries after the Closing
Date to finance the purchase of fixed assets acquired after the
Closing Date; PROVIDED that (i) the total of all such Indebtedness for
the Borrower and its Subsidiaries taken together shall not exceed an
aggregate principal amount of $2,000,000 at any time outstanding; (ii)
such Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed; (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing or on terms or conditions more
favorable in any respect to the holders thereof than the terms and
conditions in effect at the time of such refinancing; and (iv) such
Indebtedness is issued and any Liens securing such Indebtedness are
created at the time of, or within 90 days after, the acquisition of
such assets and such Indebtedness is not secured by a Lien on any
other assets; PROVIDED, FURTHER, that the Borrower may incur
Indebtedness after the Closing Date to finance a Permitted
Acquisition; PROVIDED that (i) the total of all such Indebtedness for
the Borrower shall not exceed an aggregate principal amount of
$4,000,000 and (ii) such Indebtedness shall be unsecured.
(d) Indebtedness of the Borrower or any of its Subsidiaries
in respect of Interest Rate Protection Agreements, if any, entered
into in order to limit exposure to floating rate indebtedness of the
Borrower or any of its Subsidiaries and not for speculative purposes;
(e) intercompany Indebtedness of any Subsidiaries of the
Borrower arising out of loans and advances permitted under Section
7.6;
(f) Indebtedness arising under the Senior Note Agreement
and the Senior Notes (but not including any renewal, refinancing or
extension thereof);
(g) Indebtedness created pursuant to the Xxxxxxx Bridge
Agreement and evidenced by the Xxxxxxx Bridge Note (including any
renewal, refinancing or extension thereof, to the extent that any such
renewal, refinancing or extension of the Xxxxxxx Bridge Agreement or
the Xxxxxxx Bridge Note is (i) on the same terms and conditions as the
Xxxxxxx Bridge Agreement and the Xxxxxxx Bridge Note, and (ii) the
maturity date is satisfactory to the Administrative Agent, in its sole
discretion);
(h) Indebtedness created pursuant to and evidenced by the
Junior Subordinated Note (but not including any renewal, refinancing
or extension thereof); and
(i) in addition to the Indebtedness otherwise permitted by
this Section 7.1, other Indebtedness incurred after the Closing Date
by the Borrower; PROVIDED that (A) the loan documentation with respect
to such Indebtedness shall
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not contain covenants or default provisions relating to any
Consolidated Party that are more restrictive than the covenants and
default provisions contained in the Credit Documents, (B) no Default
or Event of Default shall have occurred and be continuing immediately
before or immediately after giving effect to such incurrence and the
Borrower shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to the incurrence of such Indebtedness and to the
concurrent retirement of any other Indebtedness of any Consolidated
Party, the Credit Parties shall be in compliance with all of the
financial covenants set forth in Section 7.19 and (C) the aggregate
principal amount of such Indebtedness shall not exceed $2,500,000 at
any time outstanding."
(u) Section 7.7 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.7 RESTRICTED PAYMENTS. None of the Consolidated Parties
will, directly or indirectly, declare, order, make or set apart any
sum for or pay any Restricted Payment, except (a) dividends payable
solely in common stock of such Person, (b) dividends or other
distributions payable to the Borrower or any Wholly Owned Subsidiary
of the Borrower, (c) repurchases of common stock of the Parent from
any employee of the Consolidated Parties (other than any such Person
which is a director, officer or employee of or holder of Capital Stock
of the Sponsor or any of its Affiliates) upon the termination of
employment of such Person, PROVIDED that the aggregate amount paid in
all such repurchases shall not exceed $500,000 in the aggregate from
and after the Closing Date, (d)(i) cash advances made or cash
dividends paid by the Borrower to the Parent which advances or
dividends are used solely to fund administrative and other
miscellaneous expenses incurred by the Parent in accordance with
Section 7.12(b) and (ii) cash dividends paid by the Borrower to the
Parent, PROVIDED that (A) the aggregate of all such cash dividends
paid after the date hereof is less than 50% of the Consolidated Net
Income (excluding any amounts paid as a dividend by any Wholly Owned
Subsidiary of the Borrower or the Borrower to the holders of its
Capital Stock and any amounts used by the Parent to repay the Xxxxxxx
Bridge Note) for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date hereof
to the end of the Borrower's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
cash dividend payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), (B) immediately prior
to and after giving effect to any such dividend, the Borrower shall be
in pro forma compliance with all of the covenants contained in this
Agreement, (C) immediately prior to and after giving pro forma effect
thereto as if such dividend had been made at the beginning of the
applicable four-quarter period, the Borrower shall have a Fixed Charge
Coverage Ratio (as defined in the Senior Note Agreement as in effect
on the date hereof) of at least 2.0 to 1.0 and (D) until the Junior
Subordinated Note shall have been indefeasibly paid in full, the
Parent will use such dividend payments received pursuant to this
subclause (d)(ii), if any, promptly upon receipt thereof, to pay the
principal and interest then due
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and payable on, and prepay the principal amount outstanding under, the
Junior Subordinated Note, (e) payments of accrued interest on the
Senior Notes and (f) tax sharing payments for taxes (including
estimated taxes) that are paid on a combined, consolidated, unitary or
similar basis, to the extent that such payments do not exceed the
amount that the payor would have paid to the relevant taxing authority
if the payor filed a separate tax return for the period in question."
(v) Section 7.8 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.8 PREPAYMENTS OF INDEBTEDNESS, ETC. None of the
Consolidated Parties will (a) after the issuance thereof, amend, waive
or modify (or permit the amendment, waiver or modification of) any of
the terms, agreements, covenants or conditions of or applicable to any
Indebtedness issued by such Consolidated Party if such amendment,
waiver or modification would add or change any terms, agreements,
covenants or conditions in a manner adverse to any Consolidated Party,
or shorten the final maturity or average life to maturity or require
any payment to be made sooner than originally scheduled or increase
the interest rate applicable thereto or change any subordination
provision thereof, or (b) directly or indirectly redeem, purchase,
prepay, retire, defease or otherwise acquire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness (other than Credit Obligations), or set
aside any funds for such purpose, whether such redemption, purchase,
prepayment, retirement or acquisition is made at the option of any
Consolidated Party or at the option of the holder thereof, and whether
or not any such redemption, purchase, prepayment, retirement or
acquisition is required under the term and conditions applicable to
such Indebtedness, including, without limitation, any Indebtedness
arising under the Senior Note Agreement and the Senior Notes or any
Indebtedness arising under the Junior Subordinated Note or (c)
release, cancel, compromise or forgive in whole or in part the
Indebtedness evidenced by the Intercompany Notes."
(w) Section 7.10 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. None of the
Consolidated Parties will (a) change its fiscal year or (b) amend,
modify or change its articles of incorporation (or corporate charter
or other similar organizational document) in any respect or amend,
modify or change its bylaws (or other similar document) in any manner
adverse in any respect to the rights or interests of the Lenders or
(c) enter into any amendment, modification or waiver that is adverse
in any respect to the Lenders to (i) any Material Contract as in
effect on the Closing Date, (ii) the Acquisition Agreement as in
effect on the Closing Date, (iii) the Stockholders Agreement as in
effect on the Closing Date, (iv) the CVC Subscription Agreement, the
Warrants, the Contribution and Assignment Agreement, the Contribution
and Subscription Agreement, the Deju Subscription Agreement, the
Registration Rights Agreement or any shareholders or similar
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agreement relating to Capital Stock or the Warrants, as the case may
be, of the Parent as in effect on the Closing Date, (v) the Xxxxxxx
Bridge Agreement as in effect on the Closing Date or any other
documents establishing and setting forth the rights and terms of the
Xxxxxxx Bridge Note as in effect on the Closing Date, (vi) the Senior
Note Agreement or any other documents establishing and setting forth
the rights and terms of the Senior Notes or (vii) the Junior
Subordinated Note or any other documents establishing and setting
forth the rights and terms of the Junior Subordinated Note. The
Credit Parties will cause the Consolidated Parties to promptly provide
the Lenders with copies of all proposed amendments to the foregoing
documents and instruments as in effect as of the Closing Date."
(x) Section 7.11 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.11 LIMITATION ON RESTRICTED ACTIONS. None of the
Consolidated Parties will, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any such Person to (a)
pay dividends or make any other distributions to any Credit Party on
its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any
Indebtedness or other obligation owed to any Credit Party, (c) make
loans or advances to any Credit Party, (d) sell, lease or transfer any
of its properties or assets to any Credit Party or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or
any renewals, refinancings, exchanges, refundings or extension
thereof, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for such encumbrances or restrictions existing
under or by reason of (i) this Agreement and the other Credit
Documents, (ii) the Senior Note Agreement and the Senior Notes, (iii)
the Junior Subordinated Note, (iv) applicable law, (v) any document or
instrument governing Indebtedness incurred pursuant to Section 7.1(c),
PROVIDED that any such restriction contained therein relates only to
the asset or assets constructed or acquired in connection therewith
(and any renewals, refinancings, exchanges, refundings or extensions
thereof, so long as the terms of such encumbrances or restrictions are
no more onerous than those with respect to such Indebtedness upon the
original incurrence thereof) or (vi) customary non-assignment
provisions in any lease governing a leasehold interest."
(y) Section 7.12(b) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(b) The Parent shall not (i) hold any assets other than the
Capital Stock of the Borrower, (ii) have any material liabilities
other than (A) liabilities under the Credit Documents and (B) tax
liabilities in the ordinary course of business or (iii) engage in any
business or activity other than (A) owning the common stock of the
Borrower (including purchasing additional shares of common stock after
the Closing Date) and activities incidental or related thereto or to
the maintenance of the corporate existence of the Parent or compliance
with applicable law, (B) acting as a Guarantor hereunder and pledging
its assets to the Administrative
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Agent, for the benefit of the Lenders, pursuant to the Collateral
Documents to which it is a party, (C) issuing the Xxxxxxx Bridge Note
pursuant to the Xxxxxxx Bridge Agreement, (D) issuing its own Capital
Stock (other than Disqualified Stock), (E) entering into the
Employment Agreements, the Deju Subscription Agreement, the
Contribution and Subscription Agreement, the Stockholders Agreement,
the Registration Rights Agreement, the CVC Subscription Agreement and
the Contribution and Assignment Agreement, (F) entering into the
Acquisition Agreement, (G) issuing the Senior Notes as permitted
pursuant to Section 6.01 and (H) issuing the Junior Subordinated
Note."
(z) Section 7.16 of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"7.16 OPERATING LEASE OBLIGATIONS. None of the Consolidated
Parties will enter into, assume or permit to exist any obligations for
the payment of rent under Operating Leases which in the aggregate for
the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis, exceed or would exceed $8,000,000 in any fiscal
year of the Borrower."
(aa) Sections 7.19(a) and (b) of the Credit Agreement are hereby
deleted therefrom in their entirety and the following is hereby substituted
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 until March 31, 2000, to be less than 1.75 to 1.00,
and thereafter, to be less than 1.90 to 1.00.
(b) LEVERAGE RATIO. The Borrower will not permit the
Leverage Ratio, as of the last day of any fiscal quarter of the
Borrower until March 31, 2000, to be greater than 6.0 to 1.00, and
thereafter, to be greater than 5.50 to 1.00."
(bb) Section 8.1(f) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(f) DEFAULTS UNDER OTHER AGREEMENTS. With respect to any
Indebtedness (other than Indebtedness outstanding under the Credit
Documents) in excess of $750,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall default in
any payment (beyond the applicable grace period with respect thereto,
if any) with respect to any such Indebtedness, (B) any Consolidated
Party shall default in the observance or performance of any other
term, covenant, condition or agreement relating to such Indebtedness
or contained in any instrument or agreement evidencing or securing
such Indebtedness or relating thereto, or any other event or condition
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or permit the holder or holders of
such Indebtedness (or any trustee or agent on behalf of such holders)
to cause (determined without regard to whether any notice or lapse of
time is required) any such Indebtedness (or any portion
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thereof) to become due prior to its stated maturity, (C) any such
Indebtedness (or any portion thereof) shall be declared due and
payable, or shall be required to be prepaid (other than by a regularly
scheduled required payment) prior to the stated maturity thereof or
(D) any Consolidated Party shall be required by the terms of such
Indebtedness to offer to prepay or repurchase such Indebtedness (or
any portion thereof) prior to the stated maturity thereof;"
(cc) Section 8.1(g) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(g) JUDGMENTS. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $500,000 or more in the aggregate (to the extent not paid
or fully covered by insurance provided by a carrier which has
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof, or any
action shall be legally taken by a judgment creditor to levy upon
assets or properties of any Consolidated Party to enforce any such
judgment;"
(dd) Section 8.1(h) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(h) ERISA. Any of the following events or conditions shall
occur: (i) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of any Consolidated Party or any ERISA Affiliate
in favor of the PBGC or a Plan; (ii) an ERISA Event shall occur with
respect to a Plan, which is, in the opinion of the Administrative
Agent or the Required Lenders, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the opinion of the Administrative Agent or the
Required Lenders, reasonably likely to result in (A) the termination
of such Plan for purposes of Title IV of ERISA or (B) any Consolidated
Party or any ERISA Affiliate incurring any liability in connection
with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency of (within the meaning of
Section 4245 of ERISA) such Plan; (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject any Consolidated Party or any ERISA Affiliate to any liability
under Section 406, 409, 502(i) or 502(1) of ERISA or Section 4975 of
the Code or under any agreement or other instrument pursuant to which
any Consolidated Party or any ERISA Affiliate has agreed or is
required to indemnify any Person against any such liability; or (v)
any other event or condition out of the ordinary course of business
shall occur or exist with respect to any Plan; and, in each case in
clauses (i) through (v) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be
expected to involve possible taxes, penalties and other liabilities
affecting the Consolidated Parties in
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an aggregate amount in excess of $750,000 or require payments by the
Consolidated Parties exceeding $250,000 in any fiscal year of the
Borrower;"
(ee) Section 8.1(j) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(j) ENVIRONMENTAL MATTERS. Either (i) any Consolidated
Party shall be liable, whether directly, indirectly through required
indemnification of any Person or otherwise, for the costs of
investigation and/or remediation of any Materials of Environmental
Concern originating from or affecting any property or properties,
whether or not owned, leased or operated by any Consolidated Party,
which liability, together with all other liabilities of the
Consolidated Parties arising out of Materials of Environmental Concern
could reasonably be expected to exceed $400,000 in the aggregate or
require payments by the Consolidated Parties exceeding $200,000 in any
fiscal year of the Borrower or (ii) any Federal, state, regional,
local or other environmental regulatory agency or authority shall
commence an investigation or take any other action that, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect;"
(ff) Section 8.1(n) of the Credit Agreement is hereby deleted
therefrom in its entirety and the following is hereby substituted in lieu
thereof:
"(n) JUNIOR SUBORDINATED NOTE. There shall occur and be
continuing under the Junior Subordinated Note any Event of Default (as
defined therein); or"
(gg) The Credit Agreement is hereby amended by adding Schedule 1.1D
thereto in the form of Annex A attached hereto.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Agents and the Lenders, as follows:
(a) The Borrower is in compliance with all the terms and
conditions of the Credit Agreement on its part to be observed or performed.
There exists no Default or Event of Default.
(b) The execution, delivery and performance by the Borrower of
this First Amendment have been duly authorized by the Borrower.
(c) This First Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with its
terms.
(d) The execution, delivery and performance by the Borrower of
this First Amendment (i) do not conflict with or violate (A) any provision
of law, statute, rule or regulation, or of the constitutive documents of
the Borrower, (B) any order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which the
Borrower 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
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(with notice or lapse of time or both) a default under any such indenture,
agreement or instrument.
SECTION 3. EFFECTIVENESS. This First 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 "FIRST
AMENDMENT EFFECTIVE DATE").
(a) The Administrative Agent shall have received duly executed
counterparts of this First Amendment which, when taken together, bear the
authorized signatures of the Borrower, the Parent and the Required Lenders.
(b) The Administrative Agent shall be satisfied that the
representations and warranties set forth in Section 2 are true and correct
on and as of the First Amendment Effective Date.
(c) There shall not be any action pending or any judgment, order
or decree in effect which, in the judgment of the Administrative Agent or
the Lenders, is likely to restrain, prevent or impose materially adverse
conditions upon performance by the Borrower of its obligations under the
Amended Credit Agreement.
(d) The Administrative Agent shall have received such other
documents, legal opinions, instruments and certificates relating to this
First Amendment 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 First
Amendment 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.
(e) The Borrower shall have paid all fees and expenses referred to
in Section 5 of this First Amendment.
SECTION 4. APPLICABLE LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. EXPENSES. The Borrower shall pay 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 First Amendment. The agreement set forth in this Section 5
shall survive the termination of this First Amendment and the Amended Credit
Agreement.
SECTION 6. COUNTERPARTS. This First 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. Delivery of an
executed counterpart of a signature page to this First Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this First
Amendment.
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SECTION 7. 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 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 Credit Agreement. The
amendments provided herein shall apply and be effective only with respect to the
provisions of the Credit Agreement specifically referred to by such amendments.
Except as expressly amended herein, the 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.
IN WITNESS WHEREOF, the Borrower, the Parent and the Lenders have caused
this First Amendment to be duly executed by their respective authorized officers
as of the day and year first above written.
BORROWER: JTM INDUSTRIES, INC.,
a Texas corporation
By: /s/ J.I. Everest, II
------------------------------------
Name: J.I. Everest, II
----------------------------------
Title: Treasurer and CEO
---------------------------------
PARENT: INDUSTRIAL SERVICES GROUP, INC.,
a Delaware corporation
By: /s/ J.I. Everest, II
------------------------------------
Name: J.I. Everest, II
----------------------------------
Title: Treasurer and CEO
---------------------------------
LENDERS: NATIONSBANK, N. A.,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: As Agent
---------------------------------
ANNEX A
SCHEDULE 1.1D
Pro Forma Adjustments
for
POST CLOSING ACQUISITIONS
Adjustments
(in thousands of dollars)
-------------------------
JTM $236
Pozzolanic $312
PPA $771
Fly Ash $211
US Ash $2,796
