EXHIBIT 10.18
AMENDMENT NUMBER THREE TO LOAN AGREEMENT
THIS AMENDMENT NUMBER THREE TO LOAN AGREEMENT (this "Amendment"), dated as
of November 19, 2001, is entered into by and among XXXXXX SERVICES CORPORATION,
a Delaware corporation ("Parent"), each of Parent's Subsidiaries identified on
the signature pages hereof (such Subsidiaries, together with Parent, each a
"Borrower" and collectively, jointly and severally, the "Borrowers"), each of
the lenders that is a signatory to this Amendment (together with its successors
and permitted assigns, individually, a "Lender" and, collectively, the
"Lenders"), and FOOTHILL CAPITAL CORPORATION, a California corporation, as the
arranger and administrative agent for the Lenders (in such capacity, together
with its successors, if any, in such capacity, "Agent" and together with the
Lenders, collectively, the "Lender Group"):
W I T N E S S E T H
WHEREAS, the Borrowers and the Lender Group are parties to that certain
Loan Agreement, dated as of March 31, 2000, as amended by those certain
Amendments Numbers One and Two to Loan Agreement dated as of March 28, 2001 and
May 18, 2001, respectively (as amended, restated, supplemented, or modified from
time to time, the "Loan Agreement");
WHEREAS, the Borrowers have requested that the Lender Group consent to the
amendment of the Loan Agreement to, among other changes, amend the financial
covenants; and
WHEREAS, subject to the satisfaction of the conditions set forth herein,
the Lender Group is willing to so consent to the amendment of the Loan
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Loan Agreement as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement, as amended
hereby.
2. AMENDMENTS TO LOAN AGREEMENT.
(a) The definition of "EBITDA" in Section 1.1 of the Loan Agreement is
hereby amended by deleting the word "and" at the end of clause (c) and by
inserting the words ", and (e) Special Charges" immediately before the period at
the end of such definition.
(b) Section 1.1 of the Loan Agreement is hereby amended by inserting the
following definition in its proper alphabetical location:
"Third Amendment" means that certain Amendment Number Three to Loan
Agreement, dated as of November 19, 2001, among the Borrowers and the
Lender Group.
"Third Amendment Closing Date" means the date, if ever, that all of
the conditions set forth in Section 3 of the Third Amendment shall be
satisfied.
"Third Amendment Fee" has the meaning set forth in Section 2.12(h).
"Special Charges" shall mean one-time charges in the third and fourth
quarters of 2001 not exceeding $25 million in the aggregate and relating to
reserves and provisions for bad debts, restructuring costs, and increased
insurance expenses and reserves.
(b) Section 2.12 of the Loan Agreement is hereby amended by deleting the
word "and" at the end of clause (f), by deleting the period at the end of
clause (g) and replacing it with the words ", and", and by adding the
following new clause (h):
"(h) THIRD AMENDMENT FEE. For the Pro Rata benefit of each Lender, in
connection with the execution and delivery of the Third Amendment, a fee of
$500,000 (the "Third Amendment Fee"), which shall be fully earned on the
Third Amendment Closing Date."
(c) Section 5.13 of the Loan Agreement is hereby amended by inserting after
"Schedule 5.13", "as amended" and inserting in the following parenthetical the
word "further" before the word "amended".
(d) Section 6.2 of the Loan Agreement is hereby amended by deleting the
first three rows of the table and inserting in lieu thereof the following:
Monthly (not later than the A detailed aging, by total, of the
15th calendar day of Accounts, together with a detailed
the following month) calculation of the non-Eligible Accounts.
(e) Section 6.2(h) of the Loan Agreement is hereby amended and restated in
its entirety as follows:
(h) such other reports as to the Collateral, or the financial
condition of an Obligor (including any report described above in this
Section 6.2) as Agent may request and on such frequency as Agent shall
require.
(f) Section 7.19(a) of the Loan Agreement hereby is amended by deleting the
table appearing in said Section and inserting the following table in lieu
thereof:
FISCAL QUARTER ENDING | MINIMUM EBITDA
--------------------- | --------------
|
for the 12 months ended | $36,000,000
September 30, 2001 |
|
for the 12 months ended | $70,200,000
December 31, 2001 |
|
for the 12 months ended | $86,200,000
March 31, 2002 |
2
FISCAL QUARTER ENDING | MINIMUM EBITDA
--------------------- | --------------
|
|
for the 12 months ended | $94,800,000
June 30, 2002 |
|
for the 12 months ended | $95,500,000
September 30, 2002 |
(g) Section 7.19(b) of the Loan Agreement hereby is amended by deleting the
table appearing in said Section and inserting the following table in lieu
thereof:
FISCAL QUARTER ENDING | MINIMUM INTEREST COVERAGE RATIO
--------------------- | -------------------------------
|
for the 12 months ended | 1.50: 1.00
September 30, 2001 |
|
for the 12 months ended | 2.21: 1.00
December 31, 2001 |
|
for the 12 months ended | 2.34: 1.00
March 31, 2002 |
|
for the 12 months ended | 2.47: 1.00
June 30, 2002 |
|
for the 12 months ended | 2.49: 1.00
September 30, 2002 |
(h) Schedule 5.13 to the Loan Agreement is hereby deleted in its entirety
and replaced with the schedule attached hereto and marked "Schedule 5.13."
(i) Schedule 7.6 to the Loan Agreement is hereby amended by adding a new
paragraph 6 as follows:
"6. PSC Industrial Outsourcing, Inc. ("PSIOI", as successor to
Allwaste, Inc.) posted a letter of credit, which is listed on Schedule E-1
hereto, to support Industrial Revenue Bonds issued by the County of
Maricopa, Arizona, to support a water treatment facility constructed by
Resource Recovery Techniques of Arizona, Inc. ("RRTA"). In the event that
RRTA defaults in its obligations under the bonds or fails to pay certain
fees to PSIOI, PSIOI has the right to foreclose on the facility and to
operate it or dispose of it. PSIOI's letter of credit is in the amount of
$3.6 million and its current additional risk under the agreement with RRTA
includes a receivable from RRTA of in excess of $400,000."
3
3. CONDITIONS PRECEDENT TO THIS AMENDMENT. The satisfaction of each of the
following shall constitute conditions precedent to the effectiveness of this
Amendment and each and every provision hereof:
(a) The representations and warranties in the Loan Agreement and the other
Loan Documents shall be true and correct in all respects on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) Agent shall have received the Third Amendment Fee, in full in cash or
by wire transfer of immediately available funds;
(c) Agent shall have received the reaffirmation and consent of each
Guarantor attached hereto as Exhibit A, duly executed and delivered by an
authorized official of each Guarantor;
(d) No Default or Event of Default shall have occurred and be continuing on
the date hereof or as of the date of the effectiveness of this Amendment, except
for any such Defaults or Events of Defaults that would exist but for the
effectiveness of the amendments to the Loan Agreement contemplated by this
Amendment; and
(e) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against any Obligor or the Lender Group.
3. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
4. ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and terms and
provisions hereof, constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior or contemporaneous
amendments relating to the subject matter hereof. Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement
and other Loan Documents shall remain unchanged and in full force and effect. To
the extent any terms or provisions of this Amendment conflict with those of the
Loan Agreement or other Loan Documents, the terms and provisions of this
Amendment shall control. This Amendment is a Loan Document.
5. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
4
6. MISCELLANEOUS.
(a) Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.
(b) Upon the effectiveness of this Amendment, each reference in the Loan
Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words
of like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.
[Signature page follows.]
5
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered as of the date first written above.
XXXXXX SERVICES CORPORATION,
a Delaware corporation
PSC BY-PRODUCTS SERVICES, INC.,
a Delaware corporation
PSC INDUSTRIAL OUTSOURCING, INC.,
a Delaware corporation
PSC METALS, INC.,
an Ohio corporation
XXXXXX INDUSTRIAL SERVICES (USA), INC.,
a Delaware corporation
REPUBLIC ENVIRONMENTAL RECYCLING
(NEW JERSEY), INC.,
a Delaware corporation
NORTHLAND ENVIRONMENTAL, INC.,
a Delaware corporation
SOLVENT RECOVERY CORPORATION,
a Missouri corporation
XXXXXX ENVIRONMENTAL SERVICES CORPORATION,
a Missouri corporation
COUSINS WASTE CONTROL CORPORATION,
an Ohio corporation
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC.
OF NEVADA,
a Nevada corporation
21ST CENTURY ENVIRONMENTAL MANAGEMENT, INC.
OF RHODE ISLAND,
a Rhode Island corporation
S-1
CHEMICAL POLLUTION CONTROL, INC.
OF NEW YORK - A 21ST CENTURY ENVIRONMENTAL
MANAGEMENT COMPANY,
a New York corporation
BURLINGTON ENVIRONMENTAL INC.,
a Washington corporation
REPUBLIC ENVIRONMENTAL SYSTEMS
(PENNSYLVANIA), INC.,
a Pennsylvania corporation
CHEMICAL POLLUTION CONTROL, INC.
OF FLORIDA - A 21ST CENTURY ENVIRONMENTAL
MANAGEMENT COMPANY,
a Florida corporation
RESOURCE RECOVERY CORPORATION,
a Washington corporation
REPUBLIC ENVIRONMENTAL SYSTEMS
(TRANSPORTATION GROUP), INC.,
a Pennsylvania corporation
CHEM-FREIGHT, INC.,
an Ohio corporation
NORTRU, INC.,
a Michigan corporation
CHEMICAL RECLAMATION SERVICES, INC.,
a Texas corporation
XXXXXX RECLAMATION SERVICES, HOUSTON, INC.,
a Texas corporation
THERMALKEM INC.,
a Delaware corporation
ALLWORTH, INC.,
an Alabama corporation
RHO-CHEM CORPORATION,
a California corporation
S-2
CYANOKEM INC.,
a Michigan corporation
INTERNATIONAL CATALYST, INC.,
a Nevada corporation
ALLWASTE TANK CLEANING, INC.,
a Georgia corporation
CAPPCO TUBULAR PRODUCTS USA, INC.,
a Georgia corporation
XXXXXX METALS (NEW YORK), INC.,
a New York corporation
TOTAL REFRACTORY SYSTEMS, INC.,
a Nevada corporation
XXXXXX SERVICES / NORTH CENTRAL, INC.,
an Iowa corporation
RMF GLOBAL, INC.,
an Ohio corporation
JESCO INDUSTRIAL SERVICE, INC.,
a Kentucky corporation
XXXXXX METALS (USA), INC.,
an Ohio corporation
XXXXXX METALS RECOVERY (USA) INC.,
an Arizona corporation
ACE/ALLWASTE ENVIRONMENTAL SERVICES
OF INDIANA, INC.,
an Illinois corporation
LUNTZ ACQUISITION (DELAWARE) CORPORATION,
a Delaware corporation
SERV-TECH EPC, INC.,
a Nevada corporation
PSC INDUSTRIAL SERVICES, INC.,
a Delaware corporation
S-3
XXXXXX SERVICES PHENCORP
INTERNATIONAL INC.,
a Delaware corporation
XXXXXX TRANSPORTATION AND
REMEDIATION, INC.,
a California corporation
DELTA MAINTENANCE, INC.,
a Louisiana corporation
XXXXXX SERVICES CECATUR HOLDINGS LLC,
a Delaware limited liability company
XXXXXX SERVICES CECATUR INC.,
a Delaware corporation
XXXXXX SERVICES (PHENCORP) LLC,
a Delaware Limited Liability Company
PSC RECOVERY SYSTEMS, INC.,
a Georgia corporation
REPUBLIC ENVIRONMENTAL SYSTEMS
(TECHNICAL SERVICES GROUP), INC.,
a New Jersey corporation
XXXXXX INDUSTRIAL SERVICES, INC.,
a Delaware corporation a successor in
interest to Xxxxxx Industrial Services
(USA), Inc.
RMF INDUSTRIAL CONTRACTING, INC.,
a Michigan corporation
BY:
----------------------------------------
Xxxxxx X. X'Xxxxx, Xx.
Vice President and Treasurer of each
of the above listed entities
S-4
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
and as a Lender
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
S-5
FOOTHILL INCOME TRUST L.P.,
a Delaware limited partnership, as a Lender
By: FIT GP, LLC, its general partner
By:
-----------------------------------
Its: Managing Member
FOOTHILL PARTNERS III, L.P.,
a Delaware limited partnership, as a Lender
By:
----------------------------------------
Its: Managing General Partner
S-6
ABLECO FINANCE LLC,
a Delaware limited liability company,
as a Lender
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
S-7
XXXXXXXXX LLC,
a New York limited liability company,
as a Lender
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
S-8
ARNOS CORPORATION,
a Nevada corporation, as a Lender
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
S-9
EXHIBIT A
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in that certain Loan Agreement by and among
XXXXXX SERVICES CORPORATION, a Delaware corporation ("Parent"), each of Parent's
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, each a "Borrower" and collectively, jointly and severally,
the "Borrowers"), each of the lenders that is a signatory to this Amendment
(together with its successors and permitted assigns, individually, "Lender" and,
collectively, "Lenders"), and FOOTHILL CAPITAL CORPORATION, a California
corporation, as the arranger and administrative agent for the Lenders (in such
capacity, together with its successors, if any, in such capacity, "Agent" and
together with the Lenders, collectively, the "Lender Group"), dated as of March
31, 2000, as amended by those certain Amendments Numbers One and Two to Loan
Agreement dated as of March 28, 2001 and May 18, 2001, respectively (as amended,
restated, supplemented or otherwise modified, the "Loan Agreement") or in
Amendment Number Three to Loan Agreement, dated as of November 19, 2001 (the
"Amendment"), among the Borrowers and Lender Group. The undersigned hereby (a)
represent and warrant to the Lender Group that the execution, delivery, and
performance of this Reaffirmation and Consent are within its powers, have been
duly authorized by all necessary action, and are not in contravention of any
law, rule, or regulation, or any order, judgment, decree, writ, injunction, or
award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected; (b) consents to the
transactions contemplated by the Amendment; (c) acknowledges and reaffirms its
obligations owing to the Lender Group under any Loan Documents to which it is a
party; and (d) agrees that each of the Loan Documents to which it is a party is
and shall remain in full force and effect. Although the undersigned has been
informed of the matters set forth herein and has acknowledged and agreed to
same, it understands that the Lender Group has no obligations to inform it of
such matters in the future or to seek its acknowledgment or agreement to future
amendments, and nothing herein shall create such a duty. Delivery of an executed
counterpart of this Reaffirmation and Consent by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this
Reaffirmation and Consent. Any party delivering an executed counterpart of this
Reaffirmation and Consent by telefacsimile also shall deliver an original
executed counterpart of this Reaffirmation and Consent but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Reaffirmation and Consent. This
Reaffirmation and Consent shall be governed by the laws of the State of New
York.
[signature page follows]
IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and
Consent to be executed as of the date of the Amendment.
XXXXXX SERVICES INC.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
XXXXXX ANALYTICAL SERVICES INC.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
XXXXXX INVESTMENT CORP.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
ST DELTA CANADA, INC.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
NORTRU, LTD.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
ALLIES STAFFING LTD.,
an Ontario corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
SERVTECH CANADA, INC.,
a Canadian corporation
By:
--------------------------------------------
Name: Xxxxxx X. X'Xxxxx, Xx.
Title: Vice President and Treasurer
ARC DUST PROCESSING (BARBADOS) LIMITED,
a Barbados corporation
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
XXXXXX INTERNATIONAL DEVELOPMENT INC.,
a Barbados corporation
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
