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EXECUTION COPY
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT"), dated as of
December 2, 1996, is among XXXXXX GROUP INTERNATIONAL, INC., a Delaware
corporation, as the Borrower, THE XXXXXX GROUP INC., a corporation organized
under the laws of the Province of British Columbia, Canada, as a Guarantor, THE
LENDERS NAMED HEREIN, as the initial Lenders, XXXXXXX, XXXXX & CO., as the
Documentation Agent, and BANK OF MONTREAL, as the L/C Issuer and the Swing Line
Lender and as the Agent for the Lenders.
The parties hereto are parties to a Credit Agreement dated as of May 15,
1996 (the "CREDIT AGREEMENT"), and now wish to amend the Credit Agreement as set
forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein, terms defined in the Credit Agreement are
used herein as defined in the Credit Agreement.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Section 2.1 AMENDMENTS TO CERTAIN DEFINITIONS. The definitions of
"Applicable Commitment Fee Rate", "Applicable Letter of Credit Fee Rate" and
"Applicable Margin" in Section 1.1 of the Credit Agreement are amended and
restated in their entireties to read as follows:
"APPLICABLE COMMITMENT FEE RATE" means a per annum rate determined
from time to time by reference to (A) during the period from January 1,
1997 through and including September 30, 1997, SCHEDULE 2 or SCHEDULE 2A
hereto, whichever rate is higher, and (B) at all other times, SCHEDULE 2
hereto. Any change in the Applicable Commitment Fee Rate resulting from a
change in TLGI's debt ratings will take effect as of the date of the debt
ratings change. Any change in the Applicable Commitment Fee Rate resulting
from a change in the ratio of Consolidated Indebtedness to Adjusted EBITDA
will take effect as provided in SECTION 2.31.
"APPLICABLE LETTER OF CREDIT FEE RATE" means a per annum rate
determined from time to time by reference to (A) during the period from
January 1, 1997 through and including September 30, 1997, SCHEDULE 2 or
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SCHEDULE 2A attached hereto, whichever rate is higher, and (B) at all other
times, SCHEDULE 2 hereto. Any change in the Applicable Letter of Credit
Fee Rate resulting from a change in TLGI's debt ratings will take effect as
of the date of the debt ratings change. Any change in the Applicable
Letter of Credit Fee Rate resulting from a change in the ratio of
Consolidated Indebtedness to Adjusted EBITDA will take effect as provided
in SECTION 2.31.
"APPLICABLE MARGIN" means a per annum rate determined from time to
time by reference to (A) during the period from January 1, 1997 through and
including September 30, 1997, SCHEDULE 2 or SCHEDULE 2A attached hereto,
whichever rate is higher, and (B) at all other times, SCHEDULE 2. Any
change in the Applicable Margin resulting from a change in TLGI's debt
ratings will take effect as of the date of the debt ratings change. Any
change in the Applicable Margin resulting from a change in the ratio of
Consolidated Indebtedness to Adjusted EBITDA will take effect as provided
in SECTION 2.31.
Section 2.2 AMENDMENTS TO ARTICLE II. Article II of the Credit Agreement
is amended to add the following new Sections 2.29, 2.30, and 2.31 at the end
thereof:
"2.29 AMENDMENT FEE. On the Amendment Effective Date (as defined in
the First Amendment hereto, dated as of December 2, 1996) the Borrower
agrees to pay an amendment fee to each Lender which executes and delivers
(including by facsimile transmission) such First Amendment to the Agent
prior to 5:00 p.m. New York time on November 26, 1996 (or such later date
as the Borrower and the Agent may agree). The amendment fee payable to
each such Lender shall be equal to 0.15% of such Lender's Commitment on the
Amendment Effective Date."
"2.30 QUARTERLY EXCESS LEVERAGE FEE. The "CERTIFICATE REQUIREMENT
DATE" applicable to any of the first three calendar quarters of 1997 shall
be (1) in the case of the first calendar quarter of 1997, the 120th day
after the last day of the immediately preceding calendar quarter, and (2)
in the case of each of the second and third calendar quarters of 1997, the
60th day after the last day of the immediately preceding calendar quarter.
On the Certificate Requirement Date which is applicable to each of the
first three calendar quarters of 1997, the Borrower shall pay to the Agent
for the account of the Lenders, pro-rata according to their respective
Commitments on such Certificate Requirement Date, a quarterly excess
leverage fee (the "QUARTERLY EXCESS LEVERAGE FEE"). The Quarterly Excess
Leverage Fee payable on any Certificate Requirement Date shall be the
amount specified in SCHEDULE 2A for Xxxxx X, Xxxxx X, Xxxxx X xx Xxxxx X
(as applicable pursuant to SCHEDULE 2A) which is shown in the Chief
Financial Officer's certificate delivered pursuant to SECTION 2.31(a) in
respect of the calendar quarter to which such Certificate Requirement Date
applies (or, if no such certificate is delivered, the amount specified for
Level D). The Agent shall promptly distribute such Quarterly Excess
Leverage Fee to the Lenders ratably according to their respective
Commitments on such Certificate Requirement
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Date. The Borrower's obligations under this SECTION 2.30 shall survive any
termination of this Agreement. Payment of such Quarterly Excess Leverage
Fee shall not relieve the Borrower or TLGI from any Default under
SECTION 7.23."
"2.31 RECONCILIATION OF INTEREST AND FEES.
"(a) During each of the first, second and third calendar quarters of
1997, the Borrower will provisionally accrue commitment fees, letter of
credit fees under SECTION 2.21.5(a) and interest hereunder (and will pay
such accrued commitment fees, letter of credit fees and interest) based on
the Applicable Commitment Fee Rate, Applicable Letter of Credit Fee Rate
and Applicable Margin, respectively, which are specified on SCHEDULE 2A for
Level B described therein, in the case of the first and second calendar
quarter of 1997, and Level A described therein, in the case of the third
calendar quarter of 1997.
(b) No later than the Certificate Requirement Date which is
applicable to each of the first, second and third calendar quarters of
1997, the Borrower will deliver to the Agent (i) a calculation, certified
as true and correct by the Chief Financial Officer, of the ratio of
Consolidated Indebtedness for the period of four consecutive fiscal
quarters of TLGI which ended on the last day of the most recently ended
fiscal quarter of TLGI to Adjusted EBITDA for such period of four
consecutive fiscal quarters, and (ii) a certificate of the Chief Financial
Officer as to which of Xxxxx X, Xxxxx X, Xxxxx X xx Xxxxx X (as set forth
in SCHEDULE 2A) is applicable for the purpose of computing the Applicable
Commitment Fee Rate, Applicable Letter of Credit Fee Rate and the
Applicable Margin for the calendar quarter to which such Certificate
Requirement Date is applicable. If the Borrower fails to timely deliver
either such certified calculation or such certificate, Level D shall apply
for such fiscal quarter.
(c) Within 5 Business Days after the later of (A) the end of each of
the first, second and third calendar quarters of 1997, and (B) the receipt
by the Agent of the calculation and Chief Financial Officer's certificate
required by PARAGRAPH (b) for such calendar quarter (or if such calculation
or certificate are not timely delivered, the Certificate Requirement Date
applicable to such calendar quarter), the Agent will calculate the
difference between (i) the amount of commitment fees, letter of credit fees
under SECTION 2.21.5(a) and interest which would have accrued hereunder
during such quarter if the Applicable Commitment Fee Rate, Applicable
Letter of Credit Fee Rate and Applicable Margin had been based on the Level
under SCHEDULE 2A set forth in such Chief Financial Officer's Certificate
(or otherwise deemed to apply) and (ii) the amount of such commitment fees,
letter of credit fees and interest which provisionally accrued during such
quarter pursuant to PARAGRAPH (a). If any amount of such commitment fees,
letter of credit fees or interest calculated pursuant to CLAUSE (i) is
greater than the corresponding amount calculated pursuant to CLAUSE (ii),
the Borrower will pay such excess to the Agent on demand, for the ratable
account of the Lenders according to the daily amounts during such quarter
of their
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respective unused Commitments (in the case of commitment fees), or their
respective Revolving Loans, Swing Line Loans or participation in
Reimbursement Obligations (in the case of interest) or their respective
participation in Letters of Credit (in the case of letter of credit fees
payable under SECTION 2.21.5(a)). If any amount of commitment fees, letter
of credit fees or interest calculated pursuant to CLAUSE (i) is less than
the corresponding amount calculated pursuant to CLAUSE (ii), the Agent will
notify the Borrower thereof and the Borrower may reduce succeeding payments
of commitment fees, letter of credit fees under SECTION 2.21.5(a) or
corresponding types of interest, as the case may be, by amounts equal to
the absolute value of the deficiency in such commitment fees, letter of
credit fees or interest. Any such reductions shall be allocated ratably to
the Lenders as set forth in the previous sentence.
(d) Notwithstanding anything above in this SECTION 2.31, during such
times as the Applicable Commitment Fee Rate, Applicable Letter of Credit
Fee Rate and Applicable Margin shall be determined in accordance with
SCHEDULE 2, as provided in the definitions of such terms, commitment fees,
letter of credit fees and interest shall accrue and be payable in
accordance with SCHEDULE 2 and the provisions of this Agreement other than
this SECTION 2.31, but the Borrower will remain obligated to make the
payments (and may make the reductions) required by PARAGRAPH (c) above with
respect to all periods when the Applicable Commitment Fee Rate, Applicable
Letter of Credit Fee Rate and Applicable Margin are determined pursuant to
SCHEDULE 2A.
(e) The Borrower's obligations under this SECTION 2.31 shall survive
termination of this Agreement, but neither the Agent nor any Lender will be
required to make any refund to the Borrower if this Agreement terminates
before the Borrower has fully recaptured any excess interest or letter of
credit fees through reductions of interest or letter of credit fees as
provided in PARAGRAPH (c)."
Section 2.3 AMENDMENT TO SECTION 7.11. Clause (g) and the final paragraph
of Section 7.11 of the Credit Agreement are amended to read in full as follows:
"(g) subject to the final paragraph of this SECTION 7.11, additional
Indebtedness issued or incurred by TLGI or the Borrower, provided that
after giving effect thereto and to the application of the proceeds thereof,
Consolidated Indebtedness would not exceed (1) 62% of Consolidated
Capitalization at any time through and including June 30, 1997, and (2) 60%
of Consolidated Capitalization at any time after June 30, 1997.
Notwithstanding the foregoing, but subject to the last two sentences of
this paragraph, any Indebtedness otherwise permitted under any of the foregoing
SECTIONS 7.11(e), (f) and (g) shall not be permitted unless at the time of the
incurrence of such Indebtedness, and after giving PRO FORMA effect thereto, the
Borrower and TLGI will be in compliance with Section 4.07 of the Indenture dated
as of March 20, 1996, among
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the Borrower, TLGI and Fleet National Bank of Connecticut, as Trustee, relating
to the Borrower's $500,000,000 Senior Guaranteed Notes, as such Indenture may be
amended, modified, supplemented or waived from time to time. (The acquisition
by TLGI or any of its Subsidiaries of a new Subsidiary which is obligated in
respect of any Indebtedness shall be deemed for purposes of this Section to be
the incurrence of such Indebtedness by such new Subsidiary on the date it
becomes a Subsidiary of TLGI.) During any period of time that (i) the ratings
assigned to the senior unsecured and unenhanced (other than, if applicable,
pursuant to the Collateral Trust Agreement) long-term Indebtedness of TLGI by
each of Standard & Poor's and Xxxxx'x (collectively, the "RATING AGENCIES") are
no less than BBB- and Baa3, respectively (the "INVESTMENT GRADE RATINGS"), and
(ii) no Default or Unmatured Default has occurred and is continuing, the
restriction contained in the first sentence of this paragraph shall not be
applicable. If one or both Rating Agencies withdraws its rating or downgrades
its Investment Grade Rating, then thereafter the restriction contained in the
first sentence of this paragraph shall be applicable on a prospective basis
until both of the Rating Agencies thereafter assign Investment Grade Ratings to
the senior unsecured and unenhanced (other than, if applicable, pursuant to the
Collateral Trust Agreement) long-term Indebtedness of TLGI."
The foregoing amendment to Section 7.11 of the Credit Agreement shall be
retroactive to the date of the Credit Agreement, and any Default or Unmatured
Default under such Section 7.11 which would not have occurred if such amendment
had been in effect on such date is hereby waived.
Section 2.4 AMENDMENT TO SECTION 7.21. Section 7.21 of the Credit
Agreement is amended to read in full as follows:
"7.21 MAXIMUM CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED
CAPITALIZATION. TLGI will not permit the ratio of Consolidated
Indebtedness to Consolidated Capitalization (x) at any time through and
including June 30, 1997 to exceed 0.62 to 1.00 and (y) at any time after
June 30, 1997 to exceed 0.60 to 1.00."
Section 2.5 AMENDMENT TO SECTION 7.23. Section 7.23 of the Credit
Agreement is amended to read in full as follows:
"7.23 MAXIMUM CONSOLIDATED INDEBTEDNESS TO ADJUSTED EBITDA. TLGI
will not permit the ratio of Consolidated Indebtedness for the most
recently ended period of four consecutive fiscal quarters of TLGI to
Adjusted EBITDA for such period of four consecutive fiscal quarters (x) to
be greater than 6.00 to 1.00 at any time through and including June 30,
1997 or (y) to be greater than 5.00 to 1.00 at any time after June 30,
1997."
Section 2.6 AMENDMENT TO SCHEDULE 2. Schedule 2 of the Credit Agreement
is amended to add the following Note (3) thereto after Note (2):
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"(3) References to the TLGI's long term senior unsecured and
unenhanced debt shall mean such long term senior debt of TLGI which is
unsecured and unenhanced other than, if applicable, pursuant to the
Collateral Trust Agreement."
Section 2.7 ADDITION OF SCHEDULE 2A. SCHEDULE 2A of this Amendment is
added to the Credit Agreement as Schedule 2A thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby certifies
that the following statements, after giving effect to the amendments and waivers
contemplated herein, are true and correct as of the date hereof: (a) each of the
representations and warranties contained in the Credit Agreement is true and
correct in all material respects; and (b) no Unmatured Default or Default has
occurred and is continuing,
ARTICLE IV
EFFECTIVENESS
Section 4.1 EFFECTIVENESS. The amendments set forth in ARTICLE II above
shall become effective on the date (the "AMENDMENT EFFECTIVE DATE") that the
Agent notifies the Borrower, TLGI and the Lenders that the Agent has received
each of the following documents, each in form and substance satisfactory to the
Agent:
(a) Counterparts of this Amendment executed by the Borrower, TLGI,
the Required Lenders and the Agent.
(b) copies, certified by the Secretary, Assistant Secretary or other
appropriate officer or director of each of TLGI and the Borrower of its
board of directors' resolutions authorizing the execution and performance
of this Amendment; and
(c) supplementary incumbency certificates, if applicable, executed by
the Secretary or Assistant Secretary or other appropriate officer or
director of each of TLGI and the Borrower, which shall identify by name and
title and bear the signature of any officer of TLGI or the Borrower who was
not shown on the incumbency certificates which were delivered in connection
with the closing of the Credit Agreement and who executes this Amendment,
upon which certificate the Agent, the Lenders and the L/C Issuer shall be
entitled to rely until informed of any change in writing by TLGI or the
Borrower, as applicable.
ARTICLE V
GENERAL PROVISIONS
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Section 5.1 CONTINUING EFFECTIVENESS, ETC. As herein amended, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the Amendment Effective Date, all references
in the Credit Agreement or any other Loan Document to the "Credit Agreement"
shall refer to the Credit Agreement as amended hereby. This Amendment shall for
all purposes be deemed to be a Loan Document under the Credit Agreement.
Section 5.2 COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Amendment shall become effective on the Amendment
Effective Date.
Section 5.3 EXPENSES. Without limiting its obligations under Section 10.7
of the Credit Agreement, the Borrower agrees to pay the reasonable costs and
expenses of the Agent (including, without limitation, reasonable fees and
disbursements of counsel to the Agent) in connection with the preparation,
execution and delivery of this Amendment.
Section 5.4 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
the parties to the Credit Agreement and their respective successors and assigns.
Section 5.5 HEADINGS. Section headings in this Amendment are for
convenience of reference only and shall not govern the interpretation of any of
the provisions of this Amendment.
Section 5.6 SEVERABILITY OF PROVISIONS. Any provision in this Amendment
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and to
this end the provisions of this Amendment are declared to be severable.
Section 5.7 CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
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IN WITNESS WHEREOF, the Borrower, TLGI, the Lenders, the L/C Issuer and the
Agent have executed this Agreement as of the date first above written.
XXXXXX GROUP INTERNATIONAL, INC.
By:
Print Name: Xxxxxx X. Xxxxx
Title: Vice President, Finance
THE XXXXXX GROUP INC.
By:
Print Name: Xxxxxx X. Xxxxx
Title: Vice President, Finance
BANK OF MONTREAL, as Agent, L/C Issuer,
Lender and Swing Line Lender
By:
Print Name:
Title:
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LENDERS
ALLIED IRISH BANKS, p.l.c.
CAYMAN ISLANDS BRANCH
By:
Print Name:
Title:
By:
Print Name:
Title:
BANK BRUSSELS XXXXXXX,
NEW YORK BRANCH
By:
Print Name:
Title:
By:
Print Name:
Title:
BANK OF IRELAND - GRAND CAYMAN BRANCH
By:
Print Name:
Title:
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XXX XXXX XX XXX XXXX
By:
Print Name:
Title:
THE BANK OF TOKYO - MITSUBISHI, LTD.
By:
Print Name:
Title:
BANK POLSKA KASA OPIEKI, S.A.,
NEW YORK BRANCH
By:
Print Name:
Title:
BAYERISCHE VEREINSBANK AG
By:
Print Name:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Print Name:
Title:
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THE CHUO TRUST & BANKING CO., LTD,
NEW YORK AGENCY
By:
Print Name:
Title:
CIBC INC.
By:
Print Name: ____________________________
Title:____________________________
COMERICA BANK
By:
Print Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A. "RABOBANK NEDERLAND",
NEW YORK BRANCH
By:
Print Name:
Title:
CORESTATES BANK, N.A.
By:
Print Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
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By:
Print Name:
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH
By:
Print Name:
Title:
By:
Print Name:
Title:
THE FUJI BANK, LIMITED
By:
Print Name:
Title:
GIROCREDIT BANK A.G. DER SPARKASSEN
By:
Print Name:
Title:
HIBERNIA NATIONAL BANK
By:
Print Name:
Title:
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KREDIETBANK N.V.
GRAND CAYMAN BRANCH
By:
Print Name:
Title:
MELLON BANK, N.A.
By:
Print Name:
Title:
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By:
Print Name:
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION, CHICAGO BRANCH
By:
Print Name:
Title:
PEARL STREET L.P.
By:
Print Name:
Title:
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PT BANK NEGARA INDONESIA (PERSERO)
By:
Print Name:
Title:
ROYAL BANK OF CANADA
By:
Print Name:
Title:
THE SAKURA BANK, LIMITED
NEW YORK BRANCH
By:
Print Name:
Title:
THE SANWA BANK, LIMITED,
ATLANTA AGENCY
By:
Print Name:
Title:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
Print Name:
Title:
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U.S. BANK OF WASHINGTON, N.A.
By:
Print Name:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By:
Print Name:
Title:
XXXXX FARGO BANK, N.A.
By:
Print Name:
Title:
THE YASUDA TRUST AND BANKING
COMPANY LIMITED
NEW YORK BRANCH
By:
Print Name:
Title:
