FIRST AMENDMENT TO DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
FIRST AMENDMENT, dated as of July 16, 1999 (the "FIRST AMENDMENT"), to
the DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of June 1, 1999, among
XXXXXX GROUP INTERNATIONAL, INC., a Delaware corporation (the "COMPANY"), a
debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code, each
of the Company's Subsidiaries listed on the signature pages thereto, each a
debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code
(collectively and together with the Company, the "BORROWERS"), THE XXXXXX
GROUP INC., a corporation organized under the laws of the Province of British
Columbia, Canada ("TLGI"), FIRST UNION NATIONAL BANK ("FIRST UNION"), each of
the other financial institutions party thereto (together with First Union,
the "LENDERS") and FIRST UNION NATIONAL BANK, as Administrative Agent for the
Lenders (in such capacity, the "AGENT"):
W I T N E S S E T H:
WHEREAS, the Borrowers, TLGI, the Lenders and the Agent are parties to
that certain Debtor-In-Possession Credit Agreement, dated as of June 1, 1999
(as the same may be further amended, modified or supplemented from time to
time, the "CREDIT AGREEMENT"); and
WHEREAS, the Borrowers, TLGI, the Lenders and the Agent have agreed to
certain modifications to the Credit Agreement; and
WHEREAS, from and after the Effective Date (as hereinafter defined) of
this First Amendment, the Credit Agreement shall be amended, subject to and
upon the terms and conditions set forth herein, to reflect such
modifications, as follows:
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. As used herein, all terms that are defined in the Credit Agreement
shall have the same meanings herein.
2. The first Recital of the Credit Agreement is hereby amended by
(i) deleting the phrase "Case Nos. 99-1244 (PJW) through 99-2114 (PJW)" and
(ii) inserting in lieu thereof the phrase "Case No. 99-1244 (PJW), but
excluding any Chapter 11 cases filed in error and subsequently dismissed,".
3. The definition of the term "Commitment Termination Date" set
forth in Section 1.1 of the Credit Agreement is hereby amended by deleting
the word "and" appearing immediately after the word "Cases" in clause (ii)
thereof and inserting in lieu thereof the word "or".
4. The definition of the term "Consolidated Operating Cash Flow"
appearing in Section 1.1 of the Credit Agreement is hereby amended by
deleting the word "Operating" appearing in the first line thereof and
inserting in lieu thereof the word "Free".
5. The definition of the term "Existing Credit Agreements"
appearing in Section 1.1 of the Credit Agreement is hereby amended by (i)
deleting the amount "$500,000,000" appearing in clauses (vi) and (vii)
thereof and inserting in lieu thereof, in each case, the amount
"$350,000,000", (ii) deleting the amount "CDN$500,000,000" appearing in
clause (viii) thereof and inserting in lieu thereof the amount
"CDN$200,000,000", (iii) deleting the amount "450,000,000" appearing in
clause (ix) thereof and inserting in lieu thereof the amount "$400,000,000",
and (iv) deleting the text of clauses (x) and (xi) thereof and, in each case,
inserting in lieu thereof the phrase "INTENTIONALLY OMITTED".
6. The definition of the term "Funeral Home Gross Margin"
appearing in Section 1.1 of the Credit Agreement is hereby amended by (i)
deleting the text of clause (iii) thereof and inserting in lieu thereof the
following clause: "any amount included in clause (ii) of this definition that
constitutes Synthetic Lease Rentals during such period attributable to assets
utilized in the funeral home operations of TLGI and its Subsidiaries."
7. The definition of the term "Net Asset Sale Proceeds" appearing
in Section 1.1 of the Credit Agreement is hereby amended by (i) deleting the
word "and" immediately before the symbol "(ii)" and inserting a comma in lieu
thereof and (ii) inserting the following clause at the end thereof: "(iii)
any bona fide, reasonable fees payable to the Debtors' financial advisors
with respect to such Asset Sale."
8. The definition of the term "Non-Cemetery Operating Cash Flow"
is hereby amended in its entirety to read as follows:
"NON-CEMETERY OPERATING CASH FLOW" means, for
any period, an amount equal to (i) the sum of (a)
the Funeral Home Gross Margin for such period, PLUS
(b) the sum of (ii) all cash dividends received
during such period from Insurance Companies, (iii)
any amount included in clause (ii) of the definition
of Funeral Home Gross Margin that is classified in
the consolidated statement of cash flows of TLGI and
its Subsidiaries for such period as depreciation or
amortization in accordance with GAAP, and (iv) any
other non-cash charges of TLGI and its Subsidiaries
for such period that are included in clause (ii) or
the definition of Funeral Home Gross Margin, MINUS
(v) the sum, without duplication, of the amounts for
such period of (a)
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the amount separately classified in the consolidated
income statement of TLGI and its Subsidiaries for
such period as "general and administrative" expenses
(excluding therefrom restructuring costs associated
with the Chapter 11 Cases and the Canadian Cases) on
a basis consistent with prior periods and in
accordance with GAAP, (b) Consolidated Capital
Expenditures (net of any proceeds of any related
financings with respect to such expenditures) of TLGI
and its Subsidiaries, excluding Consolidated Capital
Expenditures in respect of cemetery operations (net
of any proceeds of any related financings with
respect to such expenditures), and (c) any amount
(other than Consolidated Capital Expenditures)
attributable to the operation of Funeral Home
Properties that is capitalized on the consolidated
balance sheet of TLGI and its Subsidiaries in
conformity with GAAP during such period.
Notwithstanding anything to the contrary contained
herein, no amounts included in Cemetery Operating
Cash Flow shall be included in the calculation of
Non-Cemetery Operating Cash Flow.
9. The definition of the term "Overhead Allocation Agreement"
appearing in Section 1.1 of the Credit Agreement is hereby amended deleting
the date "June 1, 1999" appearing in the second line thereof and inserting in
lieu thereof the date "May 31, 1999".
10. Section 1.1 of the Credit Agreement is hereby amended by
inserting the following new definition in appropriate alphabetical order:
"MINORITY LENDERS" has the meaning assigned to that
term in SECTION 13.6.
11. Section 2.6 of the Credit Agreement is hereby amended by adding
the following sentence at the end thereof: "Notwithstanding anything herein
to the contrary, from the date of the entry of the Final Borrowing Order
through and including the date on which the Agent has completed the
syndication of this facility, all Advances shall be Floating Rate Advances."
12. Section 7.2 of the Credit Agreement is hereby amended by
deleting the words "in such Sections" appearing in clause (i) thereof and
inserting in lieu thereof the words "on Schedule 1.1(b)".
13. INTENTIONALLY OMITTED
14. Section 7.21 of the Credit Agreement is hereby amended by
deleting the chart appearing therein and inserting the following chart in
lieu thereof:
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DATE MINIMUM CEMETERY MINIMUM CEMETERY
OPERATING CASH FLOW OPERATING CASH FLOW
(FOR CURRENT FISCAL (FOR PRIOR ONE, TWO,
QUARTER) THREE OR FOUR FISCAL
QUARTER PERIOD, AS
APPLICABLE)
-----------------------------------------------------------------------------
June 30, 1999 ($10,000,000) ($10,000,000)
-----------------------------------------------------------------------------
September 30, 1999 ($11,000,000) ($21,000,000)
-----------------------------------------------------------------------------
December 31, 1999 ($8,000,000) ($29,000,000)
-----------------------------------------------------------------------------
March 31, 2000 $2,000,000 ($27,000,000)
-----------------------------------------------------------------------------
June 30, 2000 $4,000,000 ($13,000,000)
-----------------------------------------------------------------------------
September 30, 2000 $3,000,000 $1,000,000
-----------------------------------------------------------------------------
December 31, 2000 $5,000,000 $14,000,000
-----------------------------------------------------------------------------
March 31, 2001 $5,000,000 $17,000,000
-----------------------------------------------------------------------------
15. Section 7.22 of the Credit Agreement is hereby amended by deleting
the chart appearing therein and inserting the following chart in lieu thereof:
-----------------------------------------------------------------------------
DATE MINIMUM NON-CEMETERY MINIMUM NON-CEMETERY
OPERATING CASH FLOW OPERATING CASH FLOW
(FOR CURRENT FISCAL (FOR PRIOR ONE, TWO,
QUARTER) THREE OR FOUR FISCAL
QUARTER PERIOD, AS
APPLICABLE)
-----------------------------------------------------------------------------
June 30, 1999 $15,000,000 $15,000,000
-----------------------------------------------------------------------------
September 30, 1999 $10,000,000 $25,000,000
-----------------------------------------------------------------------------
December 31, 1999 $13,000,000 $38,000,000
-----------------------------------------------------------------------------
March 31, 2000 $27,500,000 $65,500,000
-----------------------------------------------------------------------------
June 30, 2000 $23,000,000 $73,500,000
-----------------------------------------------------------------------------
September 30, 2000 $15,500,000 $79,000,000
-----------------------------------------------------------------------------
December 31, 2000 $20,000,000 $86,000,000
-----------------------------------------------------------------------------
March 31, 2001 $30,000,000 $88,500,000
-----------------------------------------------------------------------------
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16. Section 7.23 of the Credit Agreement is hereby amended by (i)
deleting the word "Operating" appearing in the Section heading, and the
second and fifth lines thereof and inserting in lieu thereof the word "Free"
and (ii) deleting the chart appearing therein and inserting the following
chart in lieu thereof:
-------------------------------------------------------------------------------
DATE MINIMUM CONSOLIDATED MINIMUM CONSOLIDATED
OPERATING CASH FLOW OPERATING CASH FLOW (FOR
(FOR CURRENT FISCAL PRIOR ONE, TWO, THREE OR
QUARTER) FOUR FISCAL
QUARTER PERIOD, AS
APPLICABLE)
-------------------------------------------------------------------------------
September 30, 1999 ($5,000,000) ($5,000,000)
-------------------------------------------------------------------------------
December 31, 1999 $5,000,000 0
-------------------------------------------------------------------------------
March 31, 2000 $20,000,000 $20,000,000
-------------------------------------------------------------------------------
June 30, 2000 $20,000,000 $40,000,000
-------------------------------------------------------------------------------
September 30, 2000 $10,000,000 $55,000,000
-------------------------------------------------------------------------------
December 31, 2000 $20,000,000 $70,000,000
-------------------------------------------------------------------------------
March 31, 2001 $26,000,000 $76,000,000
-------------------------------------------------------------------------------
17. Section 7.24 of the Credit Agreement is hereby amended by deleting
the chart appearing therein and inserting the following chart in lieu thereof:
-------------------------------------------------------------------------------
DATE MINIMUM FUNERAL HOME GROSS MARGIN
-------------------------------------------------------------------------------
June 30, 1999 $45,000,000
-------------------------------------------------------------------------------
July 31, 1999 $42,500,000
-------------------------------------------------------------------------------
August 31, 1999 $40,000,000
-------------------------------------------------------------------------------
September 30, 1999 $38,500,000
-------------------------------------------------------------------------------
October 31, 1999 $39,000,000
-------------------------------------------------------------------------------
November 30, 1999 $40,000,000
-------------------------------------------------------------------------------
December 31, 1999 $42,500,000
-------------------------------------------------------------------------------
January 31, 2000 $49,000,000
-------------------------------------------------------------------------------
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February 28, 2000 $52,500,000
-------------------------------------------------------------------------------
March 31, 2000 $56,500,000
-------------------------------------------------------------------------------
April 30, 2000 $53,000,000
-------------------------------------------------------------------------------
May 31, 2000 $51,500,000
-------------------------------------------------------------------------------
June 30, 2000 $47,500,000
-------------------------------------------------------------------------------
July 31, 2000 $45,000,000
-------------------------------------------------------------------------------
August 31, 2000 $43,000,000
-------------------------------------------------------------------------------
September 30, 2000 $42,000,000
-------------------------------------------------------------------------------
October 31, 2000 $44,000,000
-------------------------------------------------------------------------------
November 30, 2000 $45,000,000
-------------------------------------------------------------------------------
December 31, 2000 $47,500,000
-------------------------------------------------------------------------------
January 31, 2001 $52,000,000
-------------------------------------------------------------------------------
February 28, 2001 $54,500,000
-------------------------------------------------------------------------------
March 31, 2001 $58,500,000
-------------------------------------------------------------------------------
April 30, 2001 $54,500,000
-------------------------------------------------------------------------------
May 31, 2001 $53,000,000
-------------------------------------------------------------------------------
18. Section 7.25 of the Credit Agreement is hereby amended by (i)
deleting the text of clauses (i) and (ii) thereof (exclusive of the proviso
contained therein) and inserting in lieu thereof the following: "(i) in the
case of the fiscal quarters ending on June 30, 1999 and September 30, 1999,
90.0%, (ii) in the case of the fiscal quarter ending on December 31, 1999 and
March 31, 2000, 92.5% and (iii) thereafter, 95% of the Funeral Home Revenue
for the 3-month period ending on the last day of the corresponding fiscal
quarter in the immediately preceding year;".
19. Section 13.3.2 of the Credit Agreement is hereby amended by (i)
deleting the word "upon" appearing in the first sentence thereof and
inserting in lieu thereof the phrase "such assignments shall become effective
on the date (which shall be a Business Day) which is five Business Days
following the" and (ii) deleting the phrase "such assignment shall become
effective on the date for effectiveness specified in such Notice of
Assignment."
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20. Section 13.3 of the Credit Agreement is hereby amended by
adding the following section at the end thereof:
"13.3.3. MINORITY BANKS. Notwithstanding anything to
the contrary, in the event that the Borrowers request that
this Agreement be modified or amended in a manner which
would require the unanimous consent of all of the Lenders
and such modification or amendment is agreed to by the
Supermajority Lenders, then with the consent of the
Borrowers and the Supermajority Lenders, the Borrowers and
the Supermajority Lenders shall be permitted to amend the
Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment
requested by the Borrowers (such Lender or Lenders,
collectively the "MINORITY LENDERS") to provide for (w) the
termination of the Commitment of each of the Minority
Lenders, (x) the addition to this Agreement of one or more
other financial institutions (each of which shall be a
Participant), or an increase in the Commitment of one or
more of the Supermajority Lenders, so that the Aggregate
Commitment after giving effect to such amendment shall be
in the same amount as the Aggregate Commitment immediately
before giving effect to such amendment, (y) if any
Revolving Loans are outstanding at the time of such
amendment, the making of such additional Revolving Loans by
such new financial institutions or Supermajority Lenders or
Lenders, as the case may be, as may be necessary to repay
in full the outstanding Revolving Loans of the Minority
Lenders immediately before giving effect to such amendment
and (z) such other modifications to this Agreement as may
be appropriate."
21. The Credit Agreement is hereby amended by deleting each of
Schedule A, Schedule 1.1(a), Schedule 1.1(b) and Schedule 6.8 and replacing
each such Schedule in its entirety with Schedule A, Schedule 1.1(a), Schedule
1.1(b) and Schedule 6.8 attached hereto.
22. Exhibit D to the Credit Agreement is hereby amended by deleting
the first sentence of Section three thereof after the words "shall be"
appearing in the second line thereof and inserting in lieu thereof "the date
(which shall be a Business Day) (the "Assignment Effective Date") which is
five Business Days after the delivery to the Agent of a Notice of Assignment
and payment to the Agent of a $3,500 fee for processing such assignment."
23. Exhibit E to the Credit Agreement is hereby amended by (i)
deleting the words "later of the date specified in Item 5 of Schedule I or
two Business Days (or such shorter period as agreed to by the Agent) after"
and (ii) inserting in lieu thereof the following phrase "the date (which
shall be a Business Day) which is five Business Days following the date on
which".
24. This First Amendment shall not become effective until the date
(the "EFFECTIVE DATE") on which this First Amendment shall have been executed
by the Borrowers, the
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Required Lenders and the Agent, and the Agent shall have received evidence
satisfactory to it of such execution.
25. Except to the extent hereby amended, the Credit Agreement and
each of the Loan Documents remain in full force and effect and are hereby
ratified and affirmed.
26. Each Borrower agrees that its obligations set forth in Section
10.7 of the Credit Agreement shall extend to the preparation, execution and
delivery of this First Amendment, including the reasonable fees and
disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP counsel to the Agent.
27. This First Amendment shall be limited precisely as written and
shall not be deemed (a) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any
of the instruments or agreements referred to therein or (b) to prejudice any
right or rights which the Agent or the Lenders may now have or have in the
future under or in connection with the Credit Agreement or any of the
instruments or agreements referred to therein. Whenever the Credit Agreement
is referred to in the Credit Agreement or any of the instruments, agreements
or other documents or papers executed or delivered in connection therewith,
such reference shall be deemed to mean the Credit Agreement as modified by
this First Amendment.
28. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but one and the
same instrument.
29. This First Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the day and the year first above written.
XXXXXX GROUP INTERNATIONAL, INC.,
as Borrower
By: _______________________________________
Name:
Title:
EACH OF THE ENTITIES LISTED ON SCHEDULE A
ANNEXED HERETO, as Borrowers
By: _______________________________________
Name:
Title:
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THE XXXXXX GROUP, INC.
By:___________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By:___________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
