Amendment Number Three to Loan Agreement among Philip Services Corporation, Subsidiaries, and Foothill Capital Corporation
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This amendment, dated November 19, 2001, modifies the existing Loan Agreement between Philip Services Corporation, its subsidiaries, and Foothill Capital Corporation (as agent for the lenders). The amendment updates financial definitions, reporting requirements, and financial covenants, and introduces a $500,000 amendment fee. It also adds new provisions regarding collateral and obligations related to a water treatment facility. The changes are effective upon satisfaction of certain conditions, including payment of the fee and reaffirmation by guarantors. The agreement is governed by New York law.
EX-10.18 4 t29221ex10-18.txt AMENDMENT NO. THREE, DATED NOVEMBER 19, 2001 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 PHILIP 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:
(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:
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(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:
(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. PHILIP 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 PHILIP 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 PHILIP 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 PHILIP 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 PHILIP METALS (NEW YORK), INC., a New York corporation TOTAL REFRACTORY SYSTEMS, INC., a Nevada corporation PHILIP SERVICES / NORTH CENTRAL, INC., an Iowa corporation RMF GLOBAL, INC., an Ohio corporation JESCO INDUSTRIAL SERVICE, INC., a Kentucky corporation PHILIP METALS (USA), INC., an Ohio corporation PHILIP 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 PHILIP SERVICES PHENCORP INTERNATIONAL INC., a Delaware corporation PHILIP TRANSPORTATION AND REMEDIATION, INC., a California corporation DELTA MAINTENANCE, INC., a Louisiana corporation PHILIP SERVICES CECATUR HOLDINGS LLC, a Delaware limited liability company PHILIP SERVICES CECATUR INC., a Delaware corporation PHILIP 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 PHILIP INDUSTRIAL SERVICES, INC., a Delaware corporation a successor in interest to Philip Industrial Services (USA), Inc. RMF INDUSTRIAL CONTRACTING, INC., a Michigan corporation BY: ---------------------------------------- Thomas P. O'Neill, Jr. 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 MADELEINE 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 PHILIP 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. PHILIP SERVICES INC., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer PHILIP ANALYTICAL SERVICES INC., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer PHILIP INVESTMENT CORP., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer ST DELTA CANADA, INC., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer NORTRU, LTD., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer ALLIES STAFFING LTD., an Ontario corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer SERVTECH CANADA, INC., a Canadian corporation By: -------------------------------------------- Name: Thomas P. O'Neill, Jr. Title: Vice President and Treasurer ARC DUST PROCESSING (BARBADOS) LIMITED, a Barbados corporation By: -------------------------------------------- Name: Thomas J. Olsen Title: Director PHILIP INTERNATIONAL DEVELOPMENT INC., a Barbados corporation By: -------------------------------------------- Name: Thomas J. Olsen Title: Director
