Execution Copy
FORBEARANCE AGREEMENT
This Forbearance Agreement (this "Agreement") made as of this 28th
day of February, 2002 by and among (i) Perryville III Trust, a trust created
under the laws of the state of New York pursuant to a trust agreement dated as
of December 16, 1994 (the "Landlord"), (ii) BNY Midwest Trust Company, as
successor trustee to Xxxxxx Trust and Savings Bank, not in its individual
capacity but solely in its capacity as Owner Trustee of Perryville III Trust
(the "Owner Trustee"), (iii) Xxxxxx Xxxxxxx Realty Services, Inc., a Delaware
corporation ("FWRS"), (iv) Xxxxxx Xxxxxxx LLC, a Delaware limited liability
company (together with FWRS, the "Tenants" and each a "Tenant"), (v) Lombard US
Equipment Finance Corporation, a New York corporation (the "Owner Participant"),
(vi) National Westminster Bank Plc (the "Agent") and (vii) the banks listed on
Schedule I to that certain Construction Loan Agreement dated as of December 16,
1994, among the Landlord, as Borrower, the lenders party thereto and their
permitted successors and assigns (the "Lenders") and the Agent.
WHEREAS, the Tenants and the Landlord have entered into that certain
Master Lease, dated as of December 16, 1994 (as the same has been and may
hereafter be amended, modified or supplemented from time to time, the "Master
Lease");
WHEREAS, the Tenants have not made and have informed the Agent that
they will not make either the Expiration Payment or the payment of the Purchase
Price on the Expiration Date as required under Paragraph 28 of the Master Lease,
as a result of which the Agent, the Landlord and the Lenders are entitled to
immediately exercise their rights and remedies under and in accordance with the
Operative Documents (including, without limitation, the right to foreclose on
the Property);
WHEREAS, the Tenants have requested that the Agent, the Landlord,
the Lenders and the Owner Participant agree to forbear from exercising their
rights and remedies against the Tenants for a certain period of time subject to
the terms and conditions set forth herein;
WHEREAS, the Agent, the Landlord, the Required Lenders and the Owner
Participant are willing to agree to forbear from exercising their rights and
remedies against the Tenants for a certain period of time, but only on the terms
and conditions set forth herein; and
WHEREAS, the Agent, the Landlord, the Required Lenders and the Owner
Participant have agreed to amend the Master Lease pursuant to the terms and
conditions set forth herein;
NOW, THEREFORE, based on these premises, and in consideration of the
mutual promises, representations and warranties, covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Tenants, the Landlord, the
Agent, the Owner Participant and the Required Lenders signatory hereto hereby
agree as follows:
1. Definitions. The capitalized terms set forth herein, and not
otherwise defined herein shall have the meanings given to such terms in the
Master Lease.
2. Acknowledgment of Obligations.
(a) Each of the Tenants hereby acknowledges and agrees that, as of
the Expiration Date, the Tenants are unconditionally liable and indebted to the
Lenders and the Owner Participant under the Master Lease and the other Operative
Documents in the amount of $32,903,815.70, together with such interest thereon,
fees, expenses and other obligations that have accrued under the Operative
Documents (including, without limitation, the fees and expenses of counsel to
the Agent), all of which obligations are due and payable on the date hereof.
Each of the Tenants hereby acknowledges and agrees that no Tenant has any
defenses, counterclaims or rights of set-off with respect to the foregoing
obligations. Each of the Tenants hereby acknowledges and agrees that all of its
liabilities and obligations under this Agreement are secured by the Collateral
(as defined in the Fee Mortgage).
(b) Each of the Tenants hereby ratifies and confirms its
obligations under the Fee Mortgage and hereby acknowledges and agrees that the
Fee Mortgage remains in full force and effect.
3. Acknowledgment of Occurrence of Events of Default. Each of the
Tenants acknowledges and agrees that the Specified Events of Default have
occurred and are continuing under the Master Lease, the Loan Agreement, the Fee
Mortgage and the Lessor Mortgage and that, as a consequence, the Agent, the
Landlord, the Lenders and the Owner Participant have the right to immediately
exercise their rights and remedies under and in accordance with the Operative
Documents. Each of the Tenants acknowledges and agrees that the agreement to
forbear by the Agent, the Landlord, the Lenders and the Owner Participant
hereunder shall not be construed as a waiver or release of any of the Specified
Events of Default or any other events of default under the Operative Documents
which may exist on the date hereof or arise hereafter, and all rights and
remedies available to the Agent, the Landlord, the Lenders and the Owner
Participant under the Operative Documents, at law or in equity, are hereby
preserved. The term "Specified Events of Default" means any Event of Default
which is specified on Schedule A.
4. Forbearance. On the terms and conditions hereof (including, without
limitation, the conditions precedent set forth in Section 8 below) and
continuing to, but not including, the Forbearance Termination Date (as defined
below), the Agent, the Landlord, the Required Lenders and the Owner Participant
shall forbear from exercising their rights and remedies with respect to the
Specified Events of Default. The Forbearance Termination Date shall mean the
earlier of (a) 12:00 Noon (New York City time) April 15, 2002; (b) the date of
the termination of the waivers granted pursuant to that certain Amendment No. 1
and Waiver relating to the Second Amended and Restated Revolving Credit
Agreement dated as of May 25, 2001 (as amended, modified and supplemented from
time to time, the "Credit Agreement") among Xxxxxx Xxxxxxx LLC, Xxxxxx Xxxxxxx
USA Corporation, Xxxxxx Energy International, Xxxxxx Xxxxxxx Energy Corporation,
the guarantors signatory thereto, the lenders signatory thereto, Bank of
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America, N.A. as administrative agent, First Union National Bank, as syndication
agent, and ABN AMRO Bank N.V., as documentation agent, arranged by Banc of
America Securities LLC, as lead arranger and book manager, and ABN AMRO Bank
N.V., First Union Capital Markets, Greenwich Natwest Structured Finance Inc. and
Toronto Dominion Bank, as arrangers; (c) the occurrence of any default with
respect to any Indebtedness (as defined in the Credit Agreement) of any
Restricted Entity (as defined in the Credit Agreement) or the occurrence of any
event or condition which results in the acceleration of the maturity of any
Indebtedness of any Restricted Entity or enables the holder of such Indebtedness
or any person acting on such holder's behalf to accelerate the maturity thereof;
(d) the payment by the Tenants or any of their Subsidiaries of any principal of
Indebtedness of any Restricted Entity other than payment under the Master Lease;
(e) the occurrence of a breach by any Tenant of any covenant, term, condition or
other provision of this Agreement; and (f) the occurrence of any Event of
Default (other than the Specified Events of Default) under the Master Lease or
any of the other Operative Documents. Without limiting in any way the rights and
remedies of the Agent, the Landlord, the Lenders and the Owner Participant
hereunder, the provisions of Section 4 of this Agreement shall terminate on the
Forbearance Termination Date and all other terms and conditions contained herein
shall survive.
5. Amendments to the Master Lease. Paragraph 21(d)(i) of the Master
Lease is hereby amended by deleting the first sentence and the words "If,
notwithstanding the intention of the parties, a court of competent jurisdiction
determines that transaction represented by this Lease will be treated as a
financing transaction, then in such event" at the beginning of the second
sentence and inserting in lieu thereof the following:
"It is the intention of the parties that the
Tenant shall treat the Lease, for accounting purposes,
as an operating lease, and for all other purposes,
including federal, state and local income tax, and
commercial law and bankruptcy purposes,"
6. Agreements. (a)Rent. Pursuant to Paragraph 4(c) of the Master Lease,
on March 29, 2002 and on April 15, 2002, the Tenants shall make monthly rental
payments to the Landlord in an amount equal to $324,235.52 which constitutes
150% of the January 2002 rental payment.
(b) Election to Purchase. The Tenants jointly and severally agree
and hereby irrevocably elect, and the parties hereto hereby consent to such
election, notwithstanding the failure of the Tenants to give notice one hundred
eighty (180) days prior to the Expiration Date, to purchase, or cause a designee
to purchase, the Improvements for the Purchase Price.
(c) Penalty Fee. The Tenants shall pay on the Forbearance
Termination Date a fee to each of the Required Lenders and the Owner Participant
of 50 basis points of its outstanding Loans (as defined in the Construction Loan
Agreement) and Equity Investment Amount (as defined in the Participation
Agreement), respectively, in the event that the Tenants, or a designee of the
Tenants, have not purchased the Property for the Purchase Price on or prior to
the Forbearance Termination Date. The acceptance by the Required Lenders and the
Owner Participant of such fee shall not
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constitute a waiver of an Event of Default or the rights and remedies under the
Operative Documents, or at law or in equity or otherwise, that the Agent, the
Lenders, the Owner Participant or the Landlord may have.
7. Covenants of the Tenants. The Tenants jointly and severally hereby
agree that:
(a) they shall not and their Subsidiaries shall not incur any
Indebtedness which is, or procure the issuance of any letter of credit the
reimbursement obligation in respect of which would be, guaranteed by or
otherwise considered Indebtedness of any of the borrowers or the guarantors
under the Credit Agreement or any of their domestic Subsidiaries (collectively,
the "Restricted Entities"), other than Performance Letters of Credit (as defined
in the Credit Agreement) issued pursuant to the Credit Agreement; provided that
Parent may guarantee performance bonds or performance letters of credit of any
Subsidiary other than a Restricted Entity;
(b) they shall not and no Restricted Entity shall make any
Investment in any Special Purpose Subsidiary;
(c) they will not suffer there to be any reduction in the amount
of financing available to them and/or their Subsidiaries under, or any default
under or in connection with, or any other event or condition which would permit
a reduction in the amount of financing available under the Receivables Purchase
Agreement among Xxxxxx Xxxxxxx Funding Corporation, Xxxxxx Xxxxxxx Capital &
Finance Corporation, Market Street Funding Corporation and PNC Bank, National
Association dated as of September 25, 1998, as amended;
(d) they will cooperate with the Agent to resolve in a mutually
satisfactory manner the issues in connection with the Property not constituting
a separate lot for tax purposes from the Perryville Corporate Park;
(e) they will not and they will not permit any Subsidiary to,
assign, transfer, invest in or grant a security interest or Lien in or upon any
of their assets, cash or other property to any person, including without
limitation, the parties to the Credit Agreement;
(f) they will use their best efforts to refinance the Property and
will remain in occupancy on the Property until the Forbearance Termination Date;
(g) they will provide to the Agent copies of all offers and
proposals they or Xxxxxxx & Xxxxxxxxx receive in connection with the refinancing
of the Property and will allow the Agent to communicate directly with Xxxxxxx &
Wakefield regarding the refinancing of the Property; PROVIDED that the Agent
notifies the Tenants in advance of such communication and permits the Tenants to
participate in such communication; and
(h) they will provide reasonable access during normal business
hours to all of the Tenants' financial, operating and business information at
the Tenants'
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location, as the Agent may reasonably request for the purpose of monitoring the
Collateral and financial condition of the Tenants.
8. Conditions Precedent.
The effectiveness of Section 4 of this Agreement shall be subject to the
satisfaction of the following conditions precedent:
(a) Receipt by the Agent of this Agreement executed by the
Tenants, the Landlord, the Owner Trustee, the Agent, the Owner Participant and
the Required Lenders.
(b) Receipt by each of the Required Lenders and the Owner
Participant executing this Agreement of a fee of 50 basis points of its
outstanding Loans (as defined in the Construction Loan Agreement) and Equity
Investment Amount (as defined in the Participation Agreement), respectively.
(c) Receipt by the Agent of certificates of insurance or other
satisfactory assurances evidencing the Tenants' maintenance of insurance in
accordance with Paragraph 17 of the Master Lease.
(d) Receipt by the Agent of payment by the Tenants of all accrued
fees and expenses of Agent, its counsel and consultants.
9. Fees. The Tenants jointly and severally agree to pay and reimburse
the Agent, the Landlord, the Lenders, the Owner Trustee and the Owner
Participant and any of their advisors or consultants for fees and expenses,
including, without limitation, appraisal fees, title insurance charges and the
fees and disbursements of counsel, accountants, consultants or other advisors,
incurred in connection with (i) the Master Lease and the other Operative
Documents and any amendments, modifications or waivers thereto, including,
without limitation, the preparation, execution and delivery of this Agreement
and any instrument delivered in connection herewith, (ii) the enforcement of the
Landlord's, the Lenders' and the Owner Participant's rights under the Master
Lease and the other Operative Documents and (iii) the negotiation and
documentation of any potential refinancing or restructuring (whether or not such
refinancing or restructuring is consummated) of the Tenants. All such fees,
costs and expenses shall be payable on demand and shall be secured by the
Property to the extent such Property is secured by the Fee Mortgage.
10. Representations and Warranties. In order to induce the Agent, the
Landlord, the Required Lenders and the Owner Participant to enter into this
Agreement, each of the Tenants represents and warrants to the Agent, the
Landlord, the Required Lenders and the Owner Participant that:
(a) The Tenants jointly and severally represent and warrant that
subject in the case of Paragraph 32(h) to matters disclosed in writing to the
Lenders and Owner Participant prior to the effective date of this Agreement, the
representations and
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warranties of the Tenants set forth in Paragraph 32 of the Master Lease are true
and correct in all material respects.
(b) The Agent, the Lenders and the Owner Participant have a valid,
enforceable and fully perfected first priority security interest in the Property
subject to no Liens other than Permitted Encumbrances.
(c) Except as otherwise provided herein, no Event of Default
exists as of the date hereof, no Event of Default would result from the
execution, delivery or consummation of the transactions contemplated by this
Agreement and no default exists under any of the Tenants' financing documents or
material contracts or agreements.
11. Remedies. The Tenants specifically agree that, upon and at any time
after the Forbearance Termination Date, the Agent, the Lenders and the Owner
Participant may exercise or enforce any or all of their rights and remedies
under this Agreement, the Master Lease, the Operative Documents, and/or
applicable law against the Tenants.
12. Indemnification. The Tenants shall indemnify the Agent, the
Landlord, the Required Lenders and the Owner Participant and each of their
respective officers, directors, agents, employees, attorneys, accountants,
consultants, and controlling persons (each, an "Indemnitee"), and hold them
harmless, from and against any and all liabilities, obligations, losses, taxes,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by any Indemnitee in connection with or in any way relating to or
arising out of this Agreement, the Master Lease, the other Operative Documents
or the transaction contemplated hereby or thereby (including, without
limitation, reasonable fees, expenses and disbursements of counsel); provided
that no Tenant shall be liable to any Indemnitee for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the gross
negligence or willful misconduct of such Indemnitee (as finally determined by a
court of competent jurisdiction).
13. Miscellaneous Provisions.
13.1. Notices. Except as otherwise specified herein, all notices to
or upon the parties hereto shall be in writing (including teletransmissions),
shall be given or made to the party to which such notice is required or
permitted to be given or made under this Agreement at the address or telex or
telecopier number set forth in the Operative Documents or at such other address
or telex or telecopier number as any party hereto may hereafter specify to the
others in writing. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Agent shall not be
effective until received by the Agent.
13.2. No Waiver of Rights. No failure to exercise nor any delay in
exercising, on the part of the Agent, the Landlord, the Lenders or the Owner
Participant,
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any right, remedy, power or privilege under the Operative Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power, or privilege operate as a waiver of any further or
complete exercise thereof. No waiver shall be effective unless in writing. No
waiver or condonation of any breach on one occasion shall be deemed a waiver or
condonation on any other occasion.
13.3. Operative Documents. Except as modified or provided herein or
in any other instruments or documents executed in connection herewith, (a) all
terms and conditions of the Operative Documents shall remain in effect in
accordance with their original tenor; and (b) nothing contained herein shall
constitute a waiver by the Agent, the Landlord, the Lenders or the Owner
Participant of any of their rights and remedies, all of which rights and
remedies are expressly reserved and not waived. Except as otherwise provided
herein, each agreement, covenant, representation and warranty of each of the
Tenants hereunder shall be deemed to be in addition to, and not in substitution
for, the agreements, covenants, representations and warranties previously made
by such Tenant. It is further acknowledged and agreed by the Tenants that the
Expiration Date has not been amended by this Agreement.
13.4. Successors. This Agreement shall be binding upon and inure to
the benefit of each of the Tenants, the Agent, the Landlord, the Lenders and the
Owner Participant and their respective successors, heirs and assigns, except
that no Tenant may assign or transfer its rights or obligations hereunder
without the prior written consent of the Agent, the Landlord, the Lenders and
the Owner Participant.
13.5. Additional Documents. The Tenants shall execute such documents
and agreements as the Agent, the Landlord, the Required Lenders and the Owner
Participant may at any time and from time to time reasonably request in
connection with the transactions contemplated hereby.
13.6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ALL
RESPECTS IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
13.7. Submission to Jurisdiction; Waiver of Trial by Jury.
(a) For purposes of any action or proceeding involving this
Agreement, each of the Tenants hereby submits to the jurisdiction of all federal
and state courts located in the State of New York and consents that any order,
process, notice of motion or other application to or by any of said courts or a
judge thereof may be served within or without such court's jurisdiction by
registered mail or by personal service, provided a reasonable time for
appearance is allowed (but not less than the time otherwise afforded by any law
or rule), and hereby waives any right to contest the appropriateness of any
action brought within such jurisdiction based on lack of personal jurisdiction,
improper venue or forum non conveniens.
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(b) EACH OF THE TENANTS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
13.8. Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13.9. Descriptive Headings. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
13.10. Counterparts. This Agreement may be executed by one or more
of the parties on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal by their respective duly authorized officers as of the
date first written above.
PERRYVILLE III TRUST
By: BNY Midwest Trust Company, as
successor trustee to Xxxxxx Trust and
Savings Bank, not in its individual
capacity but solely in its capacity as
Owner Trustee of Perryville III Trust
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
BNY MIDWEST TRUST COMPANY, as successor
trustee to Xxxxxx Trust and Savings
Bank, not in its individual capacity but
solely in its capacity as Owner Trustee
of Perryville III Trust
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
XXXXXX XXXXXXX REALTY SERVICES, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
XXXXXX XXXXXXX LLC, a Delaware limited
liability company
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP & Treasurer
Signature Page to Forbearance Agreement
AGENT, LENDERS, AND OWNER PARTICIPANT:
NATIONAL WESTMINSTER BANK Plc, as Agent
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice-President
NATIONAL WESTMINSTER BANK Plc, as Lender
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice-President
BANK OF MONTREAL, as Lender
By:
--------------------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as Lender
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
FIRST UNION NATIONAL BANK, as Lender
SUCCESSOR IN INTEREST TO FIRST FIDELITY BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxxxx Jersey
-------------------------------------
Name: Xxxxxxxxxxx Jersey
Title: Senior Vice-President
Signature Page to Forbearance Agreement
LOMBARD US EQUIPMENT FINANCE CORPORATION
By: /s/ Xxxxxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Assistant Secretary
SCHEDULE A
(Specified Events of Default)
1. The Event of Default under Paragraph 20(a)(i) of the Master Lease for
failure to pay the Purchase Price or Expiration Payment on the date such
payment is due.
2. The Event of Default arising from the failure of the Tenants to comply
with the financial covenants contained in Paragraph B.1.(a) of Exhibit C
to the Master Lease and Paragraph B.1.(b) of Exhibit C to the Master
Lease.
3. The Events of Default arising under Section II(A)(1) of the Fee Mortgage
for (i) the Tenants' default in the performance of its obligations under
the Master Lease, (ii) the occurrence of a Default under the Loan
Agreement and (iii) the occurrence of an Event of Default under the Master
Lease.
4. The Event of Default arising under Section II(A)(2) of the Lessor Mortgage
for the occurrence of a Default or an Event of Default under the Loan
Documents (as defined in the Lessor Mortgage).
