U.S. $200,000,000
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of June 1, 1999
Among
XXXXXX GROUP INTERNATIONAL, INC.
and
THE SUBSIDIARIES OF XXXXXX GROUP INTERNATIONAL, INC.
NAMED HEREIN,
each as debtor and debtor-in-possession, as joint and several Borrowers,
THE XXXXXX GROUP, INC.,
THE LENDERS NAMED HEREIN,
as the Lenders,
and
FIRST UNION NATIONAL BANK,
as L/C Issuer and Administrative Agent
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions and Rules of Construction; Adjustment
to Financial Covenants . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE II
THE CREDITS
2.1 The Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . .23
2.2 Repayment of the Revolving Loans . . . . . . . . . . . . . . . . . .24
2.3 Ratable Revolving Loans; Types of Advances . . . . . . . . . . . . .24
2.4 Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . .25
2.5 Optional Prepayments of Revolving Loans. . . . . . . . . . . . . . .25
2.6 Method of Selecting Types and Interest Periods for New Advances. . .25
2.7 Conversion and Continuation of Outstanding Advances. . . . . . . . .26
2.8 Payment of Interest on Revolving Loans and Advances. . . . . . . . .26
2.9 Changes in Interest Rate, Etc. . . . . . . . . . . . . . . . . . . .27
2.10 Fees, Mandatory Repayments and Voluntary and Mandatory Reductions
in Aggregate Commitment. . . . . . . . . . . . . . . . . . . . . .27
2.11 Rates Applicable After Default . . . . . . . . . . . . . . . . . . .29
2.12 Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . .30
2.13 Evidence of Debt; Telephonic Notices.. . . . . . . . . . . . . . . .30
2.14 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. . . . . . . . . . . . . . . . . . . . . . .31
2.15 Lending Installations. . . . . . . . . . . . . . . . . . . . . . . .31
2.16 Non-Receipt of Funds by the Agent. . . . . . . . . . . . . . . . . .31
2.17 Withholding Tax Exemption; Gross Up. . . . . . . . . . . . . . . . .31
2.18 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
2.19 Letter of Credit Facility. . . . . . . . . . . . . . . . . . . . . .33
2.20 Superpriority and Secured Nature of Obligations. . . . . . . . . . .38
2.21 Joint and Several Liability; Payment Indemnifications. . . . . . . .38
2.22 Security Interest in Cash Collateral Account.. . . . . . . . . . . .39
2.23 No Discharge; Survival of Claims . . . . . . . . . . . . . . . . . .39
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ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . .39
3.2 Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . .40
3.3 Availability of Types of Advances. . . . . . . . . . . . . . . . . .41
3.4 Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . .41
3.5 Mitigation; Lender Statements; Survival of Indemnity . . . . . . . .41
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Closing Date Advances and Letters of Credit. . . . . . . . . . . . .42
4.2 Each Advance and Letter of Credit. . . . . . . . . . . . . . . . . .44
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Existence and Standing . . . . . . . . . . . . . . . . . . . . . . .46
6.2 Authorization and Validity . . . . . . . . . . . . . . . . . . . . .46
6.3 No Conflict, Government Consent. . . . . . . . . . . . . . . . . . .46
6.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .47
6.5 Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . .47
6.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
6.7 Litigation and Contingent Liabilities. . . . . . . . . . . . . . . .47
6.8 Subsidiaries; Pledge of Stock. . . . . . . . . . . . . . . . . . . .48
6.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
6.10 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . .48
6.11 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
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6.12 Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . .49
6.13 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . .49
6.14 Ownership of Properties. . . . . . . . . . . . . . . . . . . . . . .49
6.15 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . .49
6.16 Public Utility Holding Company Act . . . . . . . . . . . . . . . . .49
6.17 Post-Retirement Benefits . . . . . . . . . . . . . . . . . . . . . .50
6.18 Negative Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . .50
6.19 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . .50
6.20 Chapter 11 Cases and Canadian Cases. . . . . . . . . . . . . . . . .50
6.21 Cash Management System . . . . . . . . . . . . . . . . . . . . . . .50
6.22 Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE VII
COVENANTS
7.1 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . .51
7.2 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . .54
7.3 Notices of Default, Litigation, Etc. . . . . . . . . . . . . . . . .55
7.4 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . .55
7.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
7.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
7.7 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . .56
7.8 Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . .56
7.9 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
7.10 Cash Management System . . . . . . . . . . . . . . . . . . . . . . .57
7.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . .57
7.12 Distributions and Payments to TLGI and Canadian Subsidiaries . . . .59
7.13 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
7.14 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
7.15 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .60
7.16 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
7.17 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
7.18 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
7.19 Negative Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . .62
7.20 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
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7.21 Minimum Cemetery Operating Cash Flow . . . . . . . . . . . . . . . .63
7.22 Minimum Non-Cemetery Operating Cash Flow . . . . . . . . . . . . . .64
7.23 Minimum Consolidated Operating Cash Flow . . . . . . . . . . . . . .64
7.24 Minimum Funeral Home Gross Margin. . . . . . . . . . . . . . . . . .65
7.25 Minimum Funeral Home Revenue Performance . . . . . . . . . . . . . .66
7.26 Ownership of Company . . . . . . . . . . . . . . . . . . . . . . . .66
7.27 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
7.28 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
7.29 Synthetic Leases . . . . . . . . . . . . . . . . . . . . . . . . . .67
7.30 Deliveries Regarding Additional Borrowers. . . . . . . . . . . . . .67
7.31 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . .68
7.32 Chapter 11 Claims. . . . . . . . . . . . . . . . . . . . . . . . . .68
7.33 Limitation on Repayments . . . . . . . . . . . . . . . . . . . . . .68
7.34 Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
7.35 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
7.36 Post Closing Deliveries. . . . . . . . . . . . . . . . . . . . . . .69
ARTICLE VIII
DEFAULTS
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
9.3 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . .76
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations. . . . . . . . . . . . . . . . . . . . .76
10.2 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . .76
10.3 Stamp Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
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10.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
10.5 Entire Agreement, Independence of Covenants. . . . . . . . . . . . .77
10.6 Several Obligations; Benefits of this Agreement. . . . . . . . . . .77
10.7 Expenses, Indemnification. . . . . . . . . . . . . . . . . . . . . .77
10.8 Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . .79
10.9 Accounting; Currency Conversions . . . . . . . . . . . . . . . . . .80
10.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . . .80
10.11 Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . . .80
10.12 CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . .80
10.13 CONSENT TO JURISDICTION. . . . . . . . . . . . . . . . . . . . . . .80
10.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . .81
10.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . .81
10.16 Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . .81
10.17 Canadian Interest Antidotes. . . . . . . . . . . . . . . . . . . . .82
10.18 Parties Including Trustees; U.S. Court Proceedings . . . . . . . . .82
10.19 Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . .83
ARTICLE XI
THE AGENT
11.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
11.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
11.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . .83
11.4 No Responsibility for Revolving Loans, Recitals, Etc . . . . . . . .83
11.5 Action on Instructions of Lenders. . . . . . . . . . . . . . . . . .83
11.6 Employment of Agents and Counsel . . . . . . . . . . . . . . . . . .84
11.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . .84
11.8 Agent's Reimbursement and Indemnification. . . . . . . . . . . . . .84
11.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . .84
11.10 Lenders' Credit Decisions. . . . . . . . . . . . . . . . . . . . . .85
11.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .85
11.12 Agent's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
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ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
12.2 Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . .86
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . .86
13.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . .87
13.3 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
13.4 Dissemination of Information . . . . . . . . . . . . . . . . . . . .89
13.5 Tax Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . .89
ARTICLE XIV
NOTICES
14.1 Giving Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . .89
14.2 Change of Address. . . . . . . . . . . . . . . . . . . . . . . . . .90
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SCHEDULE 1.1(a) - Insurance Companies
SCHEDULE 1.1(b) - Closing Date Payments
SCHEDULE 2.1 - Lenders' Commitments
SCHEDULE 6.7 - Litigation
SCHEDULE 6.8 - Subsidiaries
SCHEDULE 6.14 - Real Property Assets
SCHEDULE 6.19 - Terms of Transfer Restrictions
SCHEDULE 6.21 - Cash Management Arrangements
SCHEDULE 7.30 - Post-Closing Borrower Subsidiaries
SCHEDULE 7.36 - Post-Closing Deliveries
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Required Opinions
EXHIBIT C - Form of Compliance Certificate
EXHIBIT D - Form of Assignment Agreement
EXHIBIT E - Form of Notice of Assignment
EXHIBIT F - Form of Revolving Loan Borrowing Notice
EXHIBIT G - Form of Prepayment Notice
EXHIBIT H - Form of Joinder Agreement
EXHIBIT I - Form of Conversion/Continuation Notice
EXHIBIT J - Form of Interim Borrowing Order
EXHIBIT K - Form of Approved Sale Certificate
EXHIBIT L - Form of Security Agreement
EXHIBIT M - Form of Mortgage
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
THIS DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of June 1,
1999, is entered into by and among XXXXXX GROUP INTERNATIONAL, INC., a
Delaware corporation, as debtor and debtor-in-possession ("COMPANY"), EACH OF
COMPANY'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF, each as debtor
and debtor-in-possession (Company and each such Subsidiary are each
individually referred to herein as a "BORROWER" and, collectively, on a joint
and several basis, as the "BORROWERS"), THE XXXXXX GROUP INC., a corporation
organized under the laws of the Province of British Columbia, Canada, THE
LENDERS NAMED HEREIN, as the initial Lenders, and FIRST UNION NATIONAL BANK,
as the L/C Issuer and as the Administrative Agent for the Lenders.
W I T N E S S E T H:
WHEREAS, on June 1, 1999 (the "PETITION DATE"), each Borrower
filed a voluntary petition for relief under the Bankruptcy Code (such term
and other capitalized terms used in these Recitals without definition have
the meanings set forth in SECTION 1.1 of this Agreement) with the United
States Bankruptcy Court for the District of Delaware (together with any other
court having jurisdiction of the Chapter 11 Cases from time to time, the
"U.S. COURT") (such proceedings being jointly administered under Case Nos.
99-1244 (PJW) through 99-2114 (PJW) are hereinafter referred to as the
"CHAPTER 11 CASES");
WHEREAS each Borrower continues to operate its businesses and
manage its properties as a debtor-in-possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, on the Petition Date the Initial CCAA Order was made
by the Superior Court of Justice (Ontario) (together with any other court
having jurisdiction of the Canadian Cases from time to time, the "CANADIAN
COURT") in respect of TLGI and the Canadian Subsidiaries under the CCAA (such
proceedings under Court File No. 99-CL-3384 being hereinafter referred to as
the "CANADIAN CASES");
WHEREAS, the Borrowers have requested Lenders to provide a
revolving credit facility in the maximum amount of $200,000,000 on a
post-petition basis on the terms and conditions set forth herein; and
WHEREAS, Lenders are willing to provide such financing only if
all of the Obligations hereunder and under the other Loan Documents (a)
constitute allowed superpriority administrative expense claims in the Chapter
11 Cases as set forth herein, and (b) are secured by a first priority Lien on
all of the Borrowers' unencumbered real, personal and mixed property, and a
junior Lien on all of Borrowers' property which is subject to valid,
perfected and nonvoidable liens on the Petition Date;
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
1.1 CERTAIN DEFINED TERMS. As used in this Agreement the
following terms shall have the following meanings, such meanings being
equally applicable to both the singular and plural forms of the terms defined:
"ADVANCE" means a borrowing consisting of simultaneous
Revolving Loans of the same Type made to the Borrowers by each of the Lenders
pursuant to SECTION 2.1 for, in the case of Eurodollar Advances, the same
Interest Period.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the controlling
Person owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or
otherwise.
"AGENT" means First Union in its capacity as Administrative
Agent for the Lenders pursuant to ARTICLE XI, and not in its capacity as the
L/C Issuer or a Lender, and any successor Agent appointed pursuant to ARTICLE
XI.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments
of all the Lenders, as reduced from time to time pursuant to the terms hereof.
"AGREEMENT" means this Debtor-In-Possession Credit Agreement,
as it from time to time may be amended, restated, supplemented or otherwise
modified in accordance with the terms hereof.
"AGREEMENT ACCOUNTING PRINCIPLES" means GAAP as in effect from
time to time, applied in a manner consistent with that used in preparing the
financial statements referred to in SECTION 6.4.
"ALTERNATE BASE RATE" means, for any day, a floating rate of
interest per annum equal to the higher of (a) the Base Rate for such day and
(b) the sum of the Federal Funds Effective Rate for such day plus 0.50% per
annum. Changes in the rate of interest on that portion of any Revolving
Loans maintained as Floating Rate Advances (and in the rate of interest on
any other Obligations from time to time bearing interest at a rate determined
by reference to the Alternate Base Rate) will take effect simultaneously with
each change in the Alternate Base Rate.
"APPLICABLE LAW" means all applicable provisions of
constitutions, statutes, laws, rules, treaties, regulations and orders of all
Governmental Authorities and all applicable orders, rules and decrees of
courts and arbitrators.
"APPROVED SALE" means any sale of Property pledged to the Agent
under the terms of the Collateral Documents (i) which is expressly permitted
by the terms of SECTION 7.15 and with respect to which the Borrowers shall
have delivered to the Agent prior to
2
consummation of such sale a certificate from an Authorized Officer in the
form of EXHIBIT K hereto certifying that both immediately before and after
giving effect to such sale, no Default or Unmatured Default shall have
occurred and be continuing, or (ii) which is otherwise approved by the
Required Lenders.
"ARTICLE" means a numbered article of this Agreement, unless
another document is specifically referenced.
"ASSET SALE" means the sale by any Borrower or any of their
respective Subsidiaries to any Person other than any of the Borrowers or any
of their wholly-owned Subsidiaries of (i) any of the stock of any Subsidiary
of such Borrower, (ii) substantially all of the assets of any division or
line of business of Borrower or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of such Borrower or any of its
Subsidiaries outside of the ordinary course of business; PROVIDED, HOWEVER,
that "Asset Sales" shall not include sales of any such assets to the extent
that the aggregate value of such assets sold in any single transaction or
related series of transactions is equal to $2,000,000 or less; PROVIDED
FURTHER, HOWEVER, that the aggregate value of assets sold but excluded from
the definition of Asset Sales pursuant to the immediately preceding proviso
shall not exceed $10,000,000 in any twelve-month period.
"AUTHORIZED OFFICER" means (a) with respect to TLGI, any of the
President, Executive Vice President, Senior Vice President and CFO or Vice
President and Treasurer of TLGI, or any Person designated by any two of the
foregoing, acting singly and (b) with respect to the Borrowers, any of the
President, Executive Vice President, Senior Vice President and CFO or Vice
President, Finance of the Company, or any Person designated by any two of the
foregoing, acting singly.
"BCCA PLAN" means any plan or plans of arrangement or
reorganization of TLGI under the Companies Act (British Columbia).
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the floating rate per annum
then most recently announced by First Union in Charlotte, North Carolina as
the reference rate of interest it will use to determine rates of interest for
loans in Dollars in the United States and referred to by it as its "prime
lending rate". The Base Rate is not necessarily intended to be the lowest
rate of interest determined by First Union in connection with extensions of
credit.
"BORROWER CONCENTRATION ACCOUNT" has the meaning assigned to
that term in SECTION 7.10(a).
"BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement; PROVIDED, that Borrowers shall also mean and
include any Subsidiary of the Company that shall from time to time become
party hereto as a borrower by executing instruments reasonably satisfactory
to the Agent assuming the obligations of a Borrower under this Agreement in
accordance with SECTION 7.30. Notwithstanding any provision to the contrary
herein, the Borrowers shall not include any Insurance Company.
3
"BUSINESS DAY" means (a) with respect to any borrowing, payment
or rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday or other day on which banks are authorized or required to be closed)
on which banks generally are open in Charlotte, New York and London for the
conduct of substantially all of their commercial lending activities and (b)
for all other purposes, a day (other than a Saturday or Sunday or other day
on which banks are authorized or required to be closed) on which banks
generally are open in Charlotte and New York for the conduct of substantially
all of their commercial lending activities.
"CANADIAN COURT" has the meaning set forth in the recitals to
this Agreement.
"CANADIAN GAAP" means, at any time, generally accepted
accounting principles in Canada at such time.
"CANADIAN PLAN" means a pension plan provided by TLGI or any
Canadian Subsidiary.
"CANADIAN SUBSIDIARIES" means any or all of the Subsidiaries of
TLGI incorporated or otherwise organized under the laws of Canada or any
province of Canada.
"CAPITALIZED LEASE" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CASH BALANCES" means, as at any time of determination with
respect to a Person, the sum of the Dollar amount of all money, currency and
credit balances carried in Deposit Accounts of such Person PLUS the Dollar
value of all Investments of the type described in SECTIONS 7.18(d) through
7.18(i) which would be carried as assets on the balance sheet of such Person
and its Subsidiaries.
"CCAA" means the Companies' Creditors Arrangement Act (Canada),
as now and hereafter in effect, or any successor statute or statutes.
"CCAA ORDERS" means the Initial CCAA Order and any other orders
made by the Canadian Court in the Canadian Cases.
"CCAA PLAN" means a plan of compromise or arrangement, as from
time to time amended and or supplemented, filed by TLGI and the Canadian
Subsidiaries under the CCAA.
"CDN$" means the lawful money of Canada.
"CEMETERY GROSS MARGIN" means, for any period, an amount equal
to (i) Cemetery Revenue for such period MINUS (ii) the amount indicated on
the consolidated income statement of TLGI and its Subsidiaries for such
period as cemetery costs and expenses PLUS (iii) the sum of the amounts for
such period of (a) any amount included in clause (ii) of this definition that
is classified in the consolidated statement of cash flows of TLGI and its
Subsidiaries for such
4
period as depreciation or amortization in accordance with GAAP, including,
for greater certainty, amounts classified as amortization that result from
sales of individual cemetery plots by TLGI and its Subsidiaries in the course
of their normal business operations, and (b) any other non-cash charges of
TLGI and its Subsidiaries for such period that are included in clause (ii) of
this definition.
"CEMETERY OPERATING CASH FLOW" means, for any period, an
amount equal to (i) the sum of the amounts for such period of (a) Cemetery
Gross Margin PLUS (b) the Cemetery Working Capital Adjustment, MINUS (ii)
Consolidated Capital Expenditures in respect of cemetery operations (net of
any proceeds of any related financings with respect to such expenditures) for
such period.
"CEMETERY PROPERTIES" means all Property used or intended for
use in connection with the business of TLGI or any of its Subsidiaries of
being an owner or provider of cemeteries and cemetery services, and shall
include, without limitation, those Facilities owned by any of the Borrowers
and described on the schedule delivered to the Lenders pursuant to SECTION
7.36(a).
"CEMETERY REVENUE" means, for any period, the consolidated
gross revenues of TLGI and its Subsidiaries for such period to the extent
attributable to the operations of Cemetery Properties, determined on a
consolidated basis in accordance with GAAP.
"CEMETERY WORKING CAPITAL ADJUSTMENT" means, for any period, an
amount equal to (i) the sum of the amounts for such period of (a) the
decrease in the consolidated short-term and long-term installment contract
accounts receivable (net of the related cancellation and unearned interest
reserves) of TLGI and its Subsidiaries during such period PLUS (b) the
decrease in the consolidated accounts receivable from cemetery merchandise
trusts of TLGI and its Subsidiaries during the period, MINUS (ii) the
decrease in the consolidated cemetery long-term liabilities of TLGI and its
Subsidiaries during such period. For greater certainty, (x) the balance sheet
items described in clauses (i)(a), (i)(b) and (ii) shall be calculated in
accordance with GAAP and on a basis consistent with the notes to the annual
consolidated financial statements of TLGI and its Subsidiaries in prior
periods, and (y) if any of the balance sheet items described in clause
(i)(a), (i)(b) or (ii) increased during such period, the "decrease" in such
item as described in the applicable clause shall be a negative number.
"CHANGE OF CONTROL" means an event which shall be deemed to
have occurred if (a) the Company shall at any time cease to be a Wholly-Owned
Subsidiary of TLGI, or (b) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
shall either (x) acquire beneficial ownership of more than 50% of any
outstanding class of common stock of TLGI having ordinary voting power in the
election of directors of TLGI or (y) obtain the power (whether or not
exercised) to elect a majority of TLGI's directors, or (c) during any period
of 12 consecutive calendar months, individuals (i) who were directors of TLGI
on the first day of such period, or (ii) whose election or nomination for
election to the board of directors of TLGI was recommended or approved by at
least a majority of the directors then still in office who were directors of
TLGI on the first day of such period, or whose election or nomination for
election was so approved, shall cease to constitute a majority of the board
of directors of TLGI.
5
"CHAPTER 11 CASES" means the Chapter 11 Cases as defined in the
recital clauses of this Agreement.
"CHIEF FINANCIAL OFFICER" means, at any time, the Person who
reports to the board of directors of TLGI on the financial affairs of TLGI
and its Subsidiaries.
"CLOSING DATE" means the date on which the conditions set forth
in SECTION 4.1 are satisfied or waived in accordance with the terms of this
Agreement.
"CLOSING DATE PAYMENTS" means all payments to be made by the
Borrowers on or about the Closing Date for the purposes, of the character and
in the amounts as are set forth on SCHEDULE 1.1(b) annexed hereto, the
aggregate amount of which shall not exceed the amount set forth in such
SCHEDULE.
"CODE" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"COLLATERAL" means, collectively, all property of the estate of
each Borrower under Section 541(a) of the Bankruptcy Code, including all of
the real, personal and mixed property (including capital stock) in which
Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Mortgages and any other security agreements, pledge agreements, assignments,
financing statements or other agreements, documents, instruments or
certificates delivered by any Credit Party pursuant to this Agreement, any
other Loan Document or an applicable order of the U.S. Court or the Canadian
Court in order to grant to the Agent, on behalf of Lenders, a Lien on any
real, personal or mixed property of such Credit Party as security for the
Obligations.
"COLLATERAL TRUST AGREEMENT" means that certain Collateral
Trust Agreement, dated as of May 15, 1996 and executed by TLGI, the Company
and its Subsidiaries named therein, and Bankers Trust Company, as collateral
agent, as such Collateral Trust Agreement may be amended or modified and is
in effect from time to time.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services
by TLGI, any Borrower or any Subsidiary in the ordinary course of business of
TLGI, such Borrower or such Subsidiary.
"COMMITMENT" means, relative to any Lender, the obligation of
such Lender to make Revolving Loans and to purchase participations in Letters
of Credit not exceeding the amount set forth opposite such Lender's name on
SCHEDULE 2.1 hereto or as set forth in any Notice of Assignment relating to
any assignment that has become effective pursuant to SECTION 13.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.
"COMMITMENT TERMINATION DATE" means the earliest of (i) Stated
Maturity Date, and (ii) the first effective date of any plan of
reorganization in the Chapter 11 Cases and the implementation of a CCAA Plan
in the Canadian Cases, as specified in such plan or plans,
6
(iii) the date of termination in whole of the Commitments pursuant to SECTION
9.1, (iv) the date that is fifteen (15) days after the Petition Date, if
neither the Interim Borrowing Order nor the Final Borrowing Order has been
entered by the U.S. Court by such date; (v) the date that is thirty-five (35)
days after the Petition Date if the Final Borrowing Order has not been
entered by the U.S. Court by such date; and (vi) the date of any sale,
transfer or other disposition of all or substantially all of the assets or
stock of the Borrowers and their Subsidiaries, taken as a whole.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate executed by the
Chief Financial Officer in the form of EXHIBIT C annexed hereto.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capitalized Lease Obligations which is capitalized on the consolidated
balance sheet of TLGI and its Subsidiaries) of TLGI and its Subsidiaries
during that period that, in conformity with GAAP, are included in
"construction of new facilities" or "purchase of property and equipment" or
comparable items reflected in the consolidated statement of cash flows of
TLGI and its Subsidiaries PLUS (ii) to the extent not covered by clause (i)
of this definition, the aggregate of all expenditures by TLGI and its
Subsidiaries during that period (a) to purchase or develop computer software
or systems (but only to the extent such expenditures are capitalized on the
consolidated balance sheet of TLGI and its Subsidiaries in conformity with
GAAP), (b) to acquire (by purchase or otherwise) the business, property or
fixed assets of any Person, or the stock or other evidence of beneficial
ownership of any Person that, as a result of such acquisition, becomes a
Subsidiary of TLGI or any of its Subsidiaries, or (c) to purchase, develop or
construct land or other real property or improvements for use in connection
with the cemetery operations of TLGI and its Subsidiaries.
"CONSOLIDATED INDEBTEDNESS" means, at any time of
determination, without duplication, all Indebtedness of TLGI, Company and the
Subsidiaries of TLGI at such time determined on a consolidated basis in
accordance with GAAP (to the extent GAAP is applicable thereto).
"CONSOLIDATED INTEREST CHARGES" means, for any period, on a
consolidated basis, all interest (including the interest component of
Capitalized Lease Obligations and Synthetic Lease Obligations), and all
amortization of debt discount and expense on all Indebtedness of TLGI and its
Subsidiaries for such period.
"CONSOLIDATED OPERATING CASH FLOW" means, for any period, (i)
the sum of (a) Cemetery Operating Cash Flow for such period plus (b)
Non-Cemetery Operating Cash Flow for such period, minus (ii) the sum of (a)
all income or similar taxes paid in cash by TLGI or any of its Subsidiaries
during such period plus (b) Consolidated Interest Charges to the extent paid
in cash during such period.
"CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to
7
purchase or provide funds for the payment of, or otherwise becomes or is
contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial
condition of any other Person, or otherwise assures any creditor of such
other Person against loss, including, without limitation, any comfort letter,
operating agreement, take-or-pay contract or reimbursement obligation arising
pursuant to a letter of credit (including any Letter of Credit).
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrowers or any of their
Subsidiaries, are treated as a single employer under Section 414 of the Code.
"CONVERSION/CONTINUATION NOTICE" has the meaning specified in
SECTION 2.7.
"CREDIT PARTY" means each of TLGI and the Borrowers and any
other Person (other than the Agent or any Lender) from time to time executing
a Loan Document, and "CREDIT PARTIES" means all such Persons, collectively.
"DEFAULT" means an event described in ARTICLE VIII.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DISTRIBUTION" in respect of any corporation shall mean (a)
dividends or other distributions on capital stock of the corporation (except
dividends or other distributions payable solely in shares of capital stock),
and (b) the redemption, retirement or acquisition of such stock or of
warrants, rights or other options to purchase such stock (except when solely
in exchange for such stock).
"DOLLARS" and "$" mean the lawful money of the United States.
"ENVIRONMENTAL CLAIM" means any investigation or any written
notice, notice of violation, claim, action, suit, proceeding, demand,
abatement order or other order or directive (conditional or otherwise), by
any Governmental Authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law,
(ii) in connection with any Hazardous Materials or any actual or alleged
Hazardous Materials Activity, or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
guidelines, judgments, Governmental Authorizations, or any other requirements
of governmental authorities relating to (i) environmental matters, including
those relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to the business of TLGI or any of its Subsidiaries or any Facility
in a particular state, province or territory, including the Comprehensive
Environmental
8
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.),
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 ET SEQ.),
the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.),
the Federal Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.), the
Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 ET SEQ.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), the Occupational Safety and
Health Act (29 U.S.C. Section 651 ET SEQ.), the Oil Pollution Act (33 U.S.C.
Section 2701 ET SEQ.), the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. Section 11001 ET SEQ.), and the Canadian Environmental Protection
Act, the Environmental Protection Act (Ontario), the Ontario Water Resources
Act (Ontario), the Occupational Health and Safety Act (Ontario) and
comparable federal and provincial legislation in Canada, Ontario and other
provinces and territories of Canada, each as amended or supplemented, any
analogous present or future U.S. or Canadian federal, provincial, state or
local statutes or laws, and any regulations promulgated pursuant to any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
"EURODOLLAR ADVANCE" means an Advance that bears interest at a
Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar
Advance for the relevant Interest Period, (a) the per annum rate for deposits
in Dollars for a period corresponding to the duration of the relevant
Interest Period, which appears on Dow Xxxxx Page 3750 at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period and (b) if such rate does not appear on Dow Xxxxx Page 3750 on such
day, the per annum rate at which deposits in Dollars are offered by First
Union to first-class banks in the London interbank market at approximately
11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of First Union's relevant
Eurodollar Loan and having a maturity approximately equal to such Interest
Period. The reference to Dow Xxxxx Page 3750 in this definition shall be
construed to be a reference to the relevant page or any other page that may
replace such page on the Dow Xxxxx service or any other service that may be
nominated by the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association Interest Settlement
Rates for deposits in Dollars.
"EURODOLLAR LOAN" means a Revolving Loan which bears interest
at a Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance
for the relevant Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one
minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus (b) 2.75% per annum. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EXCHANGE RATE" means, on any date when an amount expressed in
a currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable L/C Issuer in the
New York foreign exchange market for the purchase by such L/C Issuer (by
cable transfer) of such currency in exchange for Dollars at 12:00 noon
9
(New York time) one Business Day prior to such date, expressed as a number of
units of such currency per one Dollar.
"EXISTING CREDIT AGREEMENTS" means, collectively, (i) the
Second Amended and Restated Credit Agreement dated as of March 27, 1998 among
Company, TLGI, the lenders party thereto, Bank of Montreal, as administrative
agent and syndication agent, (ii) the $121,300,000 1994 MEIP Credit
Agreement, dated as of June 14, 1994 among TLGI, the Company, LMIC, as agent
for TLGI and the Company, the lenders party thereto, and Wachovia Bank of
Georgia, N.A., as agent for the lenders, (iii) the Note Agreement dated for
reference September 1, 1993 among Company, TLGI and the noteholders party
thereto relating to the $60,000,000 9.62% Senior Guaranteed Notes, Series D
due September 11, 2003, and such notes, (iv) the Note Agreement dated for
reference February 1, 1994 among Company, TLGI and the noteholders party
thereto relating to the $50,000,000 6.49% Senior Guaranteed Notes, Series E
due February 25, 2004, and such notes, (v) the Indenture dated as of
September 30, 1997 among Company, TLGI and State Street Bank and Trust
Company relating to $300,000,000 of Senior Guaranteed Notes, and such notes,
(vi) the Indenture dated as of March 20, 1996 among Company, TLGI and Fleet
National Bank of Connecticut relating to the $500,000,000 Senior Guaranteed
Notes, Series 1 and Series 2, and such notes, (vii) the Indenture dated as of
October 1, 1996 among Company, TLGI and Fleet National Bank relating to the
$500,000,000 Senior Guaranteed Notes, Series 3 and Series 4, and such notes,
(viii) the Indenture dated as of September 26, 1997 among TLGI, the Company
and The Trust Company of Bank of Montreal, as trustee, relating to the
CDN$500,000,000 Senior Guaranteed Notes, Series 5, and such notes, (ix) the
Indenture dated as of May 28, 1998 among Company, TLGI and State Street Bank
and Trust Company relating to the $450,000,000 Senior Guaranteed Notes,
Series 6 and Series 7, and such notes, (x) the Indenture dated as of
September 30, 1997 among Company, TLGI and State Street Bank and Trust
Company relating to the $300,000,000 Senior Guaranteed Notes, and such notes,
(xi) the Note Agreement dated for reference November 15, 1997 among Company
and TLGI relating to the $41,800,000 promissory note due February 2, 2016,
and such note, (xii) all agreements, documents and instruments pursuant to
which any interest in collateral is granted or purported to be granted,
created, evidenced or perfected pursuant to any of the foregoing, including
without limitation, all deeds of trust, mortgages, security agreements,
pledge agreements, assignments, licenses, landlord consents and releases,
financing statements, fixture filings, registrations or similar documents and
(xii) all ancillary agreements as to which any holder of any of the
obligations evidenced by any of the foregoing is a party or a beneficiary and
all other agreements, instruments, documents and certificates including
promissory notes, consents, assignments, contracts, and notices delivered in
connection with any of the foregoing or the transactions contemplated
thereby, in each case as any of the foregoing may be in effect as of the
Closing Date and as the same may be amended, supplemented or otherwise
modified from time to time to the extent permitted hereunder.
"EXISTING REVOLVER AGREEMENT" means the Existing Credit
Agreement described in clause (i) of the definition thereof.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by TLGI or any of its Subsidiaries
or any of their respective predecessors.
10
"FAIR VALUE" means the value of the relevant asset determined
in an arm's-length transaction conducted in good faith between an informed
and willing buyer, under no compulsion to buy, and an informed and willing
seller, under no compulsion to sell.
"FAIRWAY RECEIVABLES FACILITY" means the receivables financing
facility entered into among Neweol (Delaware), L.L.C. Fairway Finance
Corporation and certain Subsidiaries of TLGI on September 29, 1998, as
amended to the date hereof and as it may be further amended, supplemented or
otherwise modified to the extent permitted hereunder.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such day (or,
if such day is not a Business Day, for the immediately preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
at approximately 10:00 A.M. (New York City time) on such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent in its sole discretion.
"FEE LETTER" has the meaning assigned to that term in SECTION
2.10(a).
"FINAL BORROWING ORDER" means an order of the U.S. Court
entered in the Chapter 11 Cases after a final hearing under Bankruptcy Rule
4001(c)(2) substantially in the form of the Interim Borrowing Order with any
modifications thereto to reflect the final approval of the U.S. Court of the
entire amount of the Aggregate Commitment, the Agreement and all other Loan
Documents, approved by the Agent in its sole discretion, as the same may be
amended, supplemented or otherwise modified from time to time with the
express written consent or joinder of Required Lenders.
"FINAL ORDER" means an order, judgment or other decree of the
U.S. Court or any other court or judicial body with proper jurisdiction, as
the case may be, which is in full force and effect and which has not been
reversed, stayed, modified or amended and as to which (i) any right to appeal
or seek certiorari, review or rehearing has been waived or (ii) the time to
appeal or seek certiorari, review or rehearing has expired and as to which no
appeal or petition for certiorari, review or rehearing is pending.
"FINANCIAL UNDERTAKING" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with
respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (b) any liability under any sale and leaseback transactions
which do not create a liability on the consolidated balance sheet of such
Person and its Subsidiaries, (c) obligations arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated
balance sheet of such Person and its Subsidiaries, or (d) net liabilities
under any agreements, devices or arrangements designed to protect at least
one of the parties thereto from the fluctuations of interest rates, exchange
rates or forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to, interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options.
11
"FIRST DAY ORDERS" means those orders entered by the U.S. Court
as a result of motions and applications filed by the Borrowers with the U.S.
Court on the Petition Date.
"FIRST UNION" means First Union National Bank in its individual
capacity, and its successors.
"FLOATING RATE" means, for any day, a rate per annum equal to
the sum of (a) the Alternate Base Rate for such day, changing when and as the
Alternate Base Rate changes, PLUS (b) 1.25%.
"FLOATING RATE ADVANCE" means an Advance which bears interest
at the Floating Rate.
"FLOATING RATE LOAN" means a Revolving Loan which bears
interest at the Floating Rate.
"FUNERAL HOME GROSS MARGIN" means, for any period, an amount
equal to (i) Funeral Home Revenue for such period MINUS (ii) the amount
indicated on the consolidated income statement of TLGI and its Subsidiaries
for such period as funeral home costs and expenses PLUS (iii) the sum of the
amounts for such period of (a) 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, (b) any amount included in clause (ii) of this definition
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 (c) any other non-cash charges of TLGI and its
Subsidiaries for such period that are included in clause (ii) of this
definition. Notwithstanding anything to the contrary contained herein, no
amounts included in Cemetery Gross Margin shall be included in the
calculation of Funeral Home Gross Margin.
"FUNERAL HOME PROPERTIES" means all Property used or intended
for use in connection with the business of TLGI or any of its Subsidiaries of
being a provider of (i) funeral home services or (ii) combined funeral home
and cemetery services, and shall include, without limitation, those
Facilities owned by any of the Borrowers and described on the schedule
delivered to the Lenders pursuant to SECTION 7.36(b).
"FUNERAL HOME REVENUE" means, for any period, the consolidated
gross revenues of TLGI and its Subsidiaries for such period to the extent
attributable to the operations of Funeral Home Properties, determined on a
consolidated basis in accordance with GAAP. Notwithstanding anything to the
contrary contained herein, no amounts included in Cemetery Revenue shall be
included in the calculation of Funeral Home Revenue.
"GAAP" means Canadian GAAP until such time as TLGI and its
Subsidiaries shall prepare their books of record and account in accordance
with U.S. GAAP, at which time and at all times thereafter, "GAAP" shall mean
U.S. GAAP.
"GOVERNMENTAL ACTS" has the meaning specified in SECTION
2.19.6(a).
12
"GOVERNMENTAL AUTHORITY" means any country or nation, any
political subdivision of such country or nation, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government of any country or nation or political subdivision
thereof.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression
intended to define, list or classify substances by reason of properties
harmful to health, safety or the indoor or outdoor environment (including
harmful properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws)
or otherwise regulated under Environmental Laws; (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration, development
or production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi) any
asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard
to the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"INDEBTEDNESS" of a Person means, without duplication, such
Person's (a) obligations for borrowed money, (b) obligations representing the
deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person's business payable on terms
customary in the trade), including amounts payable by such Person in respect
of covenants not to compete, but only to the extent required by GAAP to be
reflected on the balance sheet of TLGI as liabilities, (c) obligations,
whether or not assumed, secured by Liens on or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person,
(d) obligations which are evidenced by notes, acceptances, or other
instruments (but exclusive of notes, bills and checks presented in the
ordinary course of business by such Person to banks for collection or
deposit), (e) Capitalized Lease Obligations, (f) Synthetic Lease Obligations,
(g) Securitization Obligations (but only to the extent of the maximum
recourse liability of such Person (or one or more of its Affiliates) under
the documentation for the related securitization transaction giving rise to
such Securitization Obligations for losses or defaults which are attributable
to the obligors of the receivables included in such securitization
transaction), (h) Financial Undertakings, (i) Contingent Obligations and (j)
obligations under or in connection with letters of credit (including, with
13
respect to TLGI or the Borrowers, any Letter of Credit); but excluding, in
any event, with reference to TLGI, the Borrowers and the other Subsidiaries,
all obligations of TLGI, the Borrowers and the other Subsidiaries of the
character referred to in this definition to the extent owing to TLGI, the
Borrowers or any other Subsidiary.
"INITIAL CCAA ORDER" means the order made by the Canadian Court
under the CCAA in the Canadian Cases declaring that TLGI and the Canadian
Subsidiaries are companies to which the CCAA applies, authorizing TLGI and
the Canadian Subsidiaries to file a plan or plans of compromise or
arrangement under the CCAA, staying all proceedings taken or that might be
taken in respect of TLGI and the Canadian Subsidiaries except as expressly
provided therein, and granting certain other ancillary relief.
"INSURANCE COMPANY" means any Subsidiary of Xxxxxx Life
Insurance Group, Inc. which is primarily engaged in the business of providing
insurance and related products, which Insurance Companies as of the date
hereof consist of those Subsidiaries set forth on SCHEDULE 1.1(a) hereto.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance,
a period of one, two or three months commencing on a Business Day selected by
the Borrowers pursuant to this Agreement. Such Interest Period shall end on
(but exclude) the day which corresponds numerically to such date one, two or
three months thereafter, unless there is no such numerically corresponding
day in such next, second or third succeeding month, in which case such
Interest Period shall end on the last Business Day of such next, second or
third succeeding month. If a Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, unless said next succeeding Business Day falls in a
new calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day.
"INTERIM BORROWING ORDER" means an order of the U.S. Court
entered in the Chapter 11 Cases after a hearing under Bankruptcy Rule
4001(c)(2) in the form attached hereto as EXHIBIT J with any modifications
thereto approved by the Agent in its sole discretion, as the same may be
amended, supplemented or otherwise modified from time to time with the
express written consent or joinder of Required Lenders.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade), deposit account or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, the
stock, partnership interests, notes, debentures or other securities of any
other Person made by such Person.
"L/C COMMITMENT AMOUNT" means $50,000,000.
"L/C DRAFT" means a draft drawn on the L/C Issuer pursuant to
any of the Letters of Credit.
"L/C INTEREST" has the meaning specified in SECTION 2.19.2.
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"L/C ISSUER" means First Union; PROVIDED, HOWEVER, that the
Borrowers and First Union may mutually agree with another Lender that with
respect to a particular Letter of Credit, such other Lender shall issue such
Letter of Credit, and in such event such Lender shall be the L/C Issuer
hereunder with respect to such Letter of Credit, and First Union shall be the
L/C Issuer with respect to all Letters of Credit other than Letters of Credit
issued by another Lender pursuant to this proviso.
"L/C OBLIGATIONS" means an amount equal to the sum (without
duplication) of (i) the aggregate of the amount then available for drawing
under each of the Letters of Credit, (ii) the face amounts of all outstanding
L/C Drafts corresponding to the Letters of Credit, which L/C Drafts have been
accepted by the L/C Issuer but not yet paid, (iii) the aggregate outstanding
amount of Reimbursement Obligations at such time and (iv) the aggregate face
amount of all Letters of Credit requested by the Borrowers but not yet issued
(unless such request has been denied).
"LENDERS" means the lending institutions listed on the
signature pages of this Agreement and any other lending institutions which
may become party hereto pursuant to the terms hereof, and their respective
successors and assigns permitted in accordance with the terms hereof.
"LENDING INSTALLATION" means, with respect to a Lender, any
office, branch, subsidiary or affiliate of such Lender.
"LETTER OF CREDIT" means any Standby Letter of Credit or
Commercial Letter of Credit issued pursuant to SECTION 2.19 hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, security interest, charge, assignment, deposit arrangement,
encumbrance or other security agreement or arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LMIC" means Xxxxxx Management Investment Corporation, a
Delaware corporation and a Wholly-Owned Subsidiary of Company.
"LOAN DOCUMENTS" means this Agreement, the Letters of Credit,
the Collateral Documents, and the promissory notes (if any) issued pursuant
to SECTION 13.1.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, Property, financial condition, results of operations, or
prospects of TLGI, the Borrowers and the other Subsidiaries taken as a whole,
(b) the ability of the Credit Parties, taken as a whole, to perform their
obligations under the Loan Documents, or (c) the validity or enforceability
of any of the Loan Documents or the rights or remedies of the Agent, the L/C
Issuer or the Lenders thereunder.
"MATERIAL CONTRACT" means any contract or arrangement to which
TLGI or any Borrower or any Subsidiary is a party (other than the Loan
Documents) for which breach,
15
nonperformance, cancellation or failure to renew could reasonably be expected
to have a Material Adverse Effect.
"MATERIAL JUDGMENT EVENT" means the entry of a judgment, award
or other order as to post-Petition Date liability or debt (whether or not
such judgment, award or other order is bonded, stayed, contested or
appealable) against any of TLGI, any Borrower or any of their respective
Subsidiaries at any time when the amount of such judgment, award or order,
when added to the aggregate amount of all other judgments, awards and orders
as to post-Petition Date liabilities or debts which at such time shall have
been entered against any of TLGI, any Borrower or any of their respective
Subsidiaries without having been finally satisfied in full or vacated, is in
excess of $5,000,000.
"MINORITY INTERESTS" means any shares of stock of any class of
a Subsidiary (other than directors' qualifying shares as required by law or
shares of stock having no right to vote or receive dividends) that are not
owned by TLGI and/or one or more of its Subsidiaries. Minority Interests
shall be valued by valuing Minority Interests constituting preferred stock at
the voluntary or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests constituting common
stock at the book value of capital and surplus applicable thereto adjusted,
if necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"MIPS" means the 9.45% Cumulative Monthly Income Preferred
Securities, Series A, issued by Xxxxxx Group Capital, L.P., and the related
Series A Junior Subordinated Debentures issued by the Company and purchased
by Xxxxxx Group Capital, L.P. with the proceeds of the sale of the 9.45%
Cumulative Monthly Income Preferred Securities, Series A.
"MONITOR" means the monitor appointed under the Initial CCAA
Order.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Credit Party in substantially the form of EXHIBIT M annexed hereto
such form as may be approved by the Agent in its sole discretion, in each
case with such changes thereto to conform with local laws or customary local
practices, including without limitation such changes to convert EXHIBIT M
into a deed of trust or a deed to secure debt as may be required by local law
or local customary practice, as such security instrument or amendment may be
amended, supplemented or otherwise modified from time to time, and
"MORTGAGES" means all such instruments, collectively.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which any
Borrower or any member of the Controlled Group is a party to which more than
one employer is obligated to make contributions.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, cash payments (including any cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only
as and when so received) received from such Asset Sale, net of any bona fide
direct costs incurred in connection with such Asset Sale, including (i)
income taxes reasonably estimated to be actually payable within two years of
the date of such
16
Asset Sale as a result of any gain recognized in connection with such Asset
Sale and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that
is secured by a Lien on the stock or assets in question and that is required
to be repaid under the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS"' means any cash payments
or proceeds received by any Borrower or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of any
Borrower or any of its Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by any
Borrower or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of any Borrower or such Subsidiary in respect
thereof.
"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) all cash dividends received during such period from
Insurance Companies, MINUS (ii) the sum, without duplication, of the amounts
for such period of (a) 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, and (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).
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.
"NOTICE OF ASSIGNMENT" has the meaning specified in SECTION
13.3.2.
"OBLIGATIONS" means all obligations of every nature of the
Borrowers arising or existing under the Loan Documents, including, without
limitation, the L/C Obligations and any liability of the Borrowers on any
claim, whether or not the right to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed or contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether or
not such claim is discharged, stayed or otherwise affected by any bankruptcy,
insolvency, reorganization or other similar proceeding. Without limiting the
generality of the foregoing, the Obligations of the Borrowers under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by the Borrowers under any Loan Document and (b) the
obligation to reimburse any amount in respect of any of the foregoing that
the Agent or any Lender, in its sole discretion, may elect to pay or advance
on behalf of the Borrowers.
"OVERHEAD ALLOCATION AGREEMENT" means the Management Services
Agreement dated June 1, 1999 setting forth the methodology for allocating
general and administrative expenses and restructuring costs associated with
the Chapter 11 Cases and the Canadian Cases
17
between the Borrowers and their Subsidiaries, on one hand, and TLGI and the
Canadian Subsidiaries, on the other hand, as approved by the Canadian Court,
as such agreement may be amended, supplemented or otherwise modified from
time to time with the consent of the Agent.
"PARTICIPANT" has the meaning specified in SECTION 13.2.1.
"PAYMENT OFFICE" means the principal office of the Agent in
Charlotte, North Carolina, located on the date hereof at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such other office of the Agent as
the Agent may from time to time designate by written notice to the Borrowers
and the Lenders. All payments to be made to the Agent at the Payment Office
shall be made by wire transfer to First Union National Bank, ABA #
000-000-000 for credit to Account No.2070482789126, Attention: Xxxxxx X.
Xxxxxxx, in the name of First Union, with references to Special
Situations/The Xxxxxx Group, Inc. and the type of payment being made, or to
such other account as the Agent may from time to time designate by written
notice to the Borrowers and the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED CANADIAN CCAA LIEN" means a Lien on all of TLGI's
and/or any Canadian Subsidiary's property to secure reimbursement claims in
respect of any statutory liabilities which may be imposed on any director or
officer of any one of TLGI or any Canadian Subsidiary by reason of TLGI's or
such Canadian Subsidiary's failure to pay (i) any statutory deemed trust
amounts in favor of the Crown in right of Canada or of any province thereof
which are required to be deducted from employees' wages, including, without
limitation, amounts in respect of employment insurance, Canada Pension Plan,
Quebec Pension Plan and income taxes, (ii) amounts accruing and payable by
TLGI and the Canadian Subsidiaries in respect of employment insurance, Canada
Pension Plan, Quebec Pension Plan, workers compensation, employer health
taxes and similar obligations of any jurisdiction with respect to employees,
(iii) all goods and services or other applicable sales taxes payable by TLGI
and the Canadian Subsidiaries or their customers in connection with the sale
of goods and services by TLGI and the Canadian Subsidiaries to such
customers, (iv) any amount payable to the Crown in right of Canada or of any
province thereof or any political subdivision thereof or any other taxation
authority in respect of municipal realty, municipal business or other taxes,
assessments or levies of any nature or kind which are entitled at law to be
paid in priority to claims of secured creditors and which are attributable to
or in respect of the carrying on of the business by TLGI and the Canadian
Subsidiaries, and (v) any payment required to be deposited into, or otherwise
held in, trust pursuant to applicable laws, rules or regulations or pursuant
to established policies of TLGI and the Canadian Subsidiaries in connection
with or resulting from the sale by TLGI and the Canadian Subsidiaries of
cemetery or funeral services; provided that such Lien shall secure an amount
no greater than $10,000,000.
"PERSON" means any natural person, corporation, limited
liability company, firm, joint venture, partnership, association, enterprise,
trust or other entity or organization, or any government or political
subdivision or any agency, department or instrumentality thereof.
"PETITION DATE" means the Petition Date as defined in the
recitals to this Agreement.
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"PLAN" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 4412 of the Code as to which the Borrower or any member of the
Controlled Group may have any liability.
"PREPAYMENT NOTICE" has the meaning specified in SECTION 2.5.
"PREPETITION INDEBTEDNESS" means Indebtedness of any Borrower
outstanding on the Petition Date, including Indebtedness under the Existing
Credit Agreements.
"PROPERTY" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or other
assets owned, leased or operated by such Person.
"PURCHASERS" has the meaning specified in SECTION 13.3.1.
"REGISTER" has the meaning specified in SECTION 13.3.2.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"REGULATION T", "REGULATION U" and "REGULATION X" mean,
respectively, Regulations T, U and X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or
other regulation or official interpretation of said Board of Governors
relating to the subject matter thereof.
"REIMBURSEMENT OBLIGATION" has the meaning specified in SECTION
2.19.3.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the movement of any Hazardous Materials through the air, soil,
surface water or groundwater.
"RELEVANT TAX" has the meaning specified in SECTION 2.17(b).
"RENTAL" of a Person means the aggregate fixed amounts payable
by such Person under any lease of Property having an original term (including
any required renewals or any renewals at the option of the lessor or lessee)
of one year or more, regardless of whether such lease is characterized as an
operating lease or a Synthetic Lease.
"REPORTABLE EVENT" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event; PROVIDED, HOWEVER,
that a failure to meet the minimum funding standard of Section 412 of the
Code and of Section 302 of
19
ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders in the aggregate having at
least 66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, Lenders in the aggregate holding at least 66 2/3% of the
aggregate unpaid principal amount of the outstanding Advances and the L/C
Obligations.
"REQUISITE COLLATERAL INFORMATION" has the meaning specified in
SECTION 7.36.
"RESERVE REQUIREMENT" means, with respect to a Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurodollar liabilities.
"REVOLVING LOAN" means a loan by a Lender to the Borrowers as
part of an Advance.
"REVOLVING LOAN BORROWING DATE" means a date on which an
Advance is made hereunder.
"REVOLVING LOAN BORROWING NOTICE" has the meaning specified in
SECTION 2.6.
"SECTION" means a numbered section of this Agreement, unless
another document is specifically referenced.
"SECURITIZATION OBLIGATIONS" of a Person means the outstanding
purchaser's investment or outstanding capital or other principal equivalent
that purchasers or other investors are entitled to receive in respect of any
securitization or other sale or asset-backed financing of receivables of such
Person or its Affiliates effected by such Person.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by the Borrowers and the Agent on the Closing Date and executed and
delivered by any additional Borrower from time to time thereafter in
accordance with SECTION 7.30, substantially in the form of EXHIBIT L annexed
hereto, as such Security Agreement may be amended, supplemented or otherwise
modified from time to time.
"SINGLE EMPLOYER PLAN" means a Plan maintained by any Borrower
or any member of the Controlled Group for employees of any Borrower or any
member of the Controlled Group.
"SPECIFIED REMITTANCE TIME" means (a) if the relevant Payment
Office is located in Charlotte, 1:00 P.M. (Charlotte time) and (b) if the
relevant Payment Office is located elsewhere, such time as the Agent shall
specify after consultation with the Borrowers and the Lenders.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
20
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of TLGI, the Borrowers or any of their Subsidiaries,
(ii) the obligations of third party insurers of TLGI, the Borrowers or any of
their Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, (iii) obligations to cash management service
providers, (iv) performance, payment, deposit or surety obligations of TLGI,
the Borrowers or any of their Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice in
the industry, or (v) any other obligations of TLGI, the Borrowers or any of
their Subsidiaries ordinarily or customarily supported by standby letters of
credit; PROVIDED that Standby Letters of Credit may not be issued for the
purpose of supporting (a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy
Code) or (c) any Indebtedness (whether of principal, interest or otherwise)
on account of amounts owing by TLGI or any of its Subsidiaries to any of
their creditors as of the Petition Date.
"STATED AMOUNT" means, when used with reference to a Letter of
Credit, (x) at the time of issuance, the face amount thereof, and (y) at any
time thereafter, the aggregate amount available to be drawn under such Letter
of Credit at such time.
"STATED MATURITY DATE" means June 1, 2001.
"SUBSIDIARY" of a Person means (a) any corporation more than
50% of the outstanding securities having ordinary voting power of which, or
more than 50% of the economic benefits associated with all outstanding
securities of which, shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, or (b) any partnership,
association, limited liability company, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which, or more than 50% of the economic benefits associated with all
outstanding ownership interests of which, shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of TLGI.
"SUPERMAJORITY LENDERS" means Lenders in the aggregate having
at least 80% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, Lenders in the aggregate holding at least 80% of the
aggregate unpaid principal amount of the outstanding Advances and the L/C
Obligations.
"SYNTHETIC LEASE" of a Person means any lease of Property by
such Person as lessee which under GAAP would or may be treated as a true
operating lease but which under tax law or commercial law is treated as
secured Indebtedness of such Person and not as a true lease.
"SYNTHETIC LEASE OBLIGATIONS" of a Person means the aggregate
funded amount under all Synthetic Leases to which such Person is party as
lessee.
"SYNTHETIC LEASE RENTALS" of a Person means the aggregate fixed
amounts payable by such Person under a Synthetic Lease of Property having an
original term (including any required renewals or any renewals at the option
of the lessor or lessee) of one year or more.
21
"TAXING JURISDICTION" has the meaning specified in SECTION
2.17(b).
"TLGI" means The Xxxxxx Group Inc., a corporation incorporated
under the laws of the Province of British Columbia, Canada.
"TLGI LINES OF BUSINESS" means the lines of business conducted
as of the date of this Agreement by TLGI or any Borrower or any of their
Subsidiaries and shall include the making by TLGI, any Borrower or any of
their Subsidiaries, from time to time, of equity and debt investments in, or
to, Persons which are engaged primarily in any one or more of the funeral,
funeral home, cemetery and funeral-related insurance businesses.
"TOTAL UTILIZATION OF COMMITMENTS"' means, as at any date of
determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose
of reimbursing the L/C Issuer for any amount drawn under any Letter of Credit
but not yet so applied) PLUS (ii) the aggregate amount of all issued and
outstanding Letters of Credit.
"TRANSFEREE" has the meaning specified in SECTION 13.4.
"TYPE" means, (a) with respect to any Revolving Loan, its
nature as a Floating Rate Loan or Eurodollar Loan, and (b) with respect to
any Advance, its nature as a Floating Rate Advance or Eurodollar Advance.
"UNFUNDED LIABILITIES" means the amount (if any) by which the
present value of all vested nonforfeitable benefits under all Single Employer
Plans exceeds the Fair Value of all Plan assets allocable to such benefits,
all determined as of the then most recent valuation date for such Plans.
"UNITED STATES" and "U.S." mean the United States of America.
"UNMATURED DEFAULT" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"U.S. COURT" has the meaning set forth in the recitals to this
Agreement.
"U.S. GAAP" means, at any time, generally accepted accounting
principles in the United States at such time.
"U.S. SUBSIDIARIES" means any or all of the Subsidiaries of
TLGI incorporated or otherwise organized under the laws of the U.S. or any
state of the U.S.
"WEST TEXAS GROUP" means, collectively, Directors Succession
Planning, Inc.; Directors Cemetery (Texas), Inc.; Del Rio Memorial Park,
Inc.; Panola County Restland Memorial Park, Inc.; DSP General Partner, Inc.;
Xxxxx-Xxxxxxxxxxx Funeral Home, Inc.; Xxxxxx Funeral Home, Inc.; Del Rio
Funeral Home, Inc.; Xxxxxx X. Xxxxx Funeral Directors, Inc.; Xxxxxx-Xxxxxxx
Funeral Homes, Inc.; Xxxx Funeral Home, Inc.; Xxxxxxxx Funeral Home, Inc.;
Memorial Park Cemetery of Tyler, Texas; Paradise Chapel of Roses Mortuary,
Inc.; Xxxxx Pool Funeral Home, Inc.; Tembico-Xxxxxx, Inc.; Tyler Memorial
Funeral Home and Chapel, Inc.; Xxxxxxxx Funeral Home, Inc.; Central Texas
Funeral Services, Inc.; Xxxxxxx X. Xxxxx, Inc.;
22
Xxxxx-Xxxxx Funeral Home, Inc.; Xxxx County Funeral Services, L.C.; Xxxxx X.
Xxxxxxx, Inc.; Lemons Funeral Home, Inc.; Xxxxxxx County Funeral Services,
L.C.; Directors Succession Planing II, Inc.; and Directors (Texas), L.P.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (a) any Subsidiary
all of the outstanding voting securities of which shall at the time be owned
or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (b) any partnership,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time
be so owned or controlled.
1.2 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION;
ADJUSTMENT TO FINANCIAL COVENANTS.
(a) Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
(b) The use herein of the word "include" or "including",
when following any general statement, term or matter, shall not be construed
to limit such statement, term or matter to the specific items or matters set
forth immediately following such word or to similar items or matters, whether
or not nonlimiting language (such as "without limitation" or "but not limited
to" or words of similar import) is used with reference thereto, but rather
shall be deemed to refer to all other items or matters that fall within the
broadest possible scope of such general statement, term or matter.
(c) In the event that the Borrowers sell assets after the
Closing Date with a value in excess of $50,000,000 in the aggregate, the
Borrowers, the Agent and the Lenders agree to negotiate in good faith, at the
request of the Borrowers, to amend any or all of the covenants set forth in
SECTIONS 7.21, 7.22, 7.23, 7.24 and 7.31, together with this SECTION 1.2(c),
so that the performance standards effectively imposed by such covenants, as
so amended, after giving pro forma effect to such asset sales, are
substantially identical to the performance standards imposed by such
covenants as in effect on the date hereof; PROVIDED that no such amendment
shall be effective without the consent of the Borrowers and the Required
Lenders.
ARTICLE II
THE CREDITS
2.1 THE REVOLVING LOANS. From and including the Closing
Date and prior to the Commitment Termination Date, each Lender severally
agrees, on the terms and conditions set forth in this Agreement (including,
without limitation, the terms and conditions of SECTION 2.10 and SECTION 9.1
relating to the reduction, suspension or termination of the Aggregate
Commitment), to make Revolving Loans in Dollars to the Borrowers (who shall
borrow on a joint and several basis) from time to time in an aggregate
amount, together with such Lender's L/C Interest, not to exceed at any one
time outstanding the amount of such Lender's Commitment; PROVIDED, HOWEVER,
that the Aggregate Commitment shall be deemed used for purposes of
determining the availability of Revolving Loans (but not for purposes of
determining each Lender's commitment fee pursuant to SECTION 2.10, which
commitment fee
23
shall be determined for each Lender as described in SECTION 2.10) from time
to time to the extent of the aggregate L/C Obligations then outstanding, and
such deemed use of the Aggregate Commitment shall be applied to the Lenders
ratably according to their respective Commitments. Subject to the terms of
this Agreement (including, without limitation, the terms and conditions of
SECTION 2.10 and SECTION 9.1 relating to the reduction, suspension or
termination of the Aggregate Commitment), the Borrowers may borrow, repay and
reborrow Revolving Loans at any time prior to the Commitment Termination
Date. Unless earlier terminated in accordance with the terms and conditions
of this Agreement, the Commitments of the Lenders to lend hereunder shall
expire on the Commitment Termination Date. Anything contained in this
Agreement to the contrary notwithstanding, the Revolving Loans and the
Commitments shall be subject to the following limitations in the amounts and
during the periods indicated: (a) in no event shall the Total Utilization of
Commitments at any time outstanding exceed the least of (i) pending the entry
of a Final Borrowing Order, $60,000,000, (ii) until (x) the first delivery to
the Agent after the Closing Date of the financial statements and Compliance
Certificate required to be delivered pursuant to SECTIONS 7.1(b) and 7.1(e)
demonstrating compliance with the relevant covenants in ARTICLE VII and (y)
the delivery to the Agent of the Requisite Collateral Information, the sum of
(a) $80,000,000 PLUS (b) any Advances made hereunder which are applied, on or
after the entry of the Final Borrowing Order, to finance the repayment by
Neweol (Delaware), L.L.C. of the Fairway Receivables Facility in accordance
with SECTION 7.16, and thereafter, the Aggregate Commitment, and (iii) the
amount permitted to be outstanding hereunder pursuant to the Interim
Borrowing Order or Final Borrowing Order, as applicable; and (b) excluding
all Advances hereunder to make Closing Date Payments and the effect of any
mandatory prepayments under SECTION 2.10(b)(i) or (ii), the aggregate
principal amount of Revolving Loans outstanding on any date of determination
shall not exceed by more than $15,000,000 the highest aggregate principal
amount of Revolving Loans outstanding as of any date after the Closing Date
which is less than 30 days prior to such date of determination. The
Borrowers agree, jointly and severally, to immediately prepay the Loans in
the amounts and at the times as may be necessary to comply with the
immediately preceding sentence.
2.2 REPAYMENT OF THE REVOLVING LOANS. Any outstanding
Revolving Loans shall be paid in full by the Borrowers on the Commitment
Termination Date; PROVIDED, HOWEVER, that nothing in this SECTION 2.2 shall
be construed as limiting or modifying the joint and several obligations of
the Borrowers to repay any or all of the outstanding Revolving Loans at any
earlier time in accordance with the terms of this Agreement.
2.3 RATABLE REVOLVING LOANS; TYPES OF ADVANCES. Each
Advance hereunder shall consist of Revolving Loans made from the several
Lenders ratably in proportion to the ratio that their respective Commitments
bear to the Aggregate Commitment. Any Advance may be a Floating Rate Advance
or a Eurodollar Advance, as the Borrowers shall select in accordance with
SECTIONS 2.6 and 2.7.
2.4 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be
in an amount not less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof PROVIDED, HOWEVER, that any Advance may be in the amount of
the unused Aggregate Commitment.
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2.5 OPTIONAL PREPAYMENTS OF REVOLVING LOANS. Subject to
SECTION 3.4 and the requirements of SECTION 2.4, the Borrowers may (following
notice given to the Agent by the Borrowers, in the form attached hereto as
EXHIBIT G (a "PREPAYMENT NOTICE") by not later than 11:00 A.M. (Charlotte
time) on the date of the proposed prepayment), such notice specifying the
aggregate principal amount of and the proposed date of the prepayment (and if
such notice is given the Borrowers shall, prepay the outstanding principal
amounts of the Floating Rate Loans comprising part of the same Advance in
whole or ratably in part, together with accrued interest to but excluding the
date of such prepayment on the principal amount prepaid and (b) if the
Advance to be prepaid is a Eurodollar Advance and following a Prepayment
Notice given to the Agent by the Borrowers by not later than 11:00 A.M.
(Charlotte time), on the third Business Day preceding the date of the
proposed prepayment, such notice specifying the Advance to be prepaid and the
proposed date of the prepayment, and if such notice is given, the Borrowers
shall prepay the outstanding principal amounts of the Eurodollar Loans
comprising a Eurodollar Advance in whole (and not in part), together with
accrued interest to but excluding the date of such prepayment on the
principal amount prepaid; PROVIDED, HOWEVER, that a Eurodollar Advance may
only be prepaid on the expiration of the Interest Period applicable thereto.
In the case of a Floating Rate Advance, each partial prepayment shall be in
an aggregate principal amount not less than $5,000,000.
2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES. The Borrowers shall select the Type of each Advance and, in the
case of a Eurodollar Advance, the Interest Period applicable to such Advance
from time to time. The Borrowers shall give the Agent irrevocable notice, in
the form attached hereto as EXHIBIT F (a "REVOLVING LOAN BORROWING NOTICE"),
not later than 11:00 A.M. (Charlotte time) (i) on the Revolving Loan
Borrowing Date for each Floating Rate Advance and (ii) at least three
Business Days before the Revolving Loan Borrowing Date for each Eurodollar
Advance specifying:
(a) the Revolving Loan Borrowing Date, which shall be a
Business Day, of such Advance;
(b) the aggregate amount of such Advance;
(c) the Type of such Advance; and
(d) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than the Specified Remittance Time on each Revolving Loan Borrowing
Date, each Lender shall make available its Revolving Loan or Revolving Loans
to the Agent in immediately available funds at the relevant Payment Office.
To the extent that the Agent has received funds from the Lenders as specified
in the preceding sentence, the Agent will make such funds available to the
Borrowers at the relevant Payment Office as promptly as reasonably
practicable (but in any event within two hours) following the Specified
Remittance Time, it being understood that if the relevant Payment Office is
located in Charlotte, the Agent will make the applicable funds available to
the Borrowers by depositing such funds to such account as the Borrowers shall
from time to time designate in a notice delivered to the Agent executed by an
Authorized Officer.
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2.7 CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES.
Floating Rate Advances shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances or
prepaid pursuant to SECTION 2.5 or SECTION 2.10. Each Eurodollar Advance
shall continue as a Eurodollar Advance until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless the Borrowers
shall have given the Agent a Conversion/Continuation Notice requesting that,
at the end of such Interest Period, such Eurodollar Advance either continue
as a Eurodollar Advance of such Type for the same or another Interest Period
or be converted into an Advance of another Type. Subject to the terms of
SECTION 2.6, the Borrowers may elect from time to time to convert all or any
part of an Advance of any Type into the other Type of Advance; provided that
any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrowers shall give
the Agent irrevocable notice in the form of EXHIBIT I hereto (a
"CONVERSION/CONTINUATION NOTICE") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 11:00 A.M. (Charlotte
time) (i) in the case of a conversion into a Floating Rate Advance on the
date of such conversion and (ii) in the case of a conversion into or
continuation of a Eurodollar Advance, at least three Business Days before the
date of such conversion or continuation specifying:
(a) the requested date, which shall be a Business Day, of
such conversion or continuation;
(b) the aggregate amount and Type of the Advance which is to
be converted or continued; and
(c) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of a
conversion into or continuation of a Eurodollar Advance, the duration
of the Interest Period applicable thereto.
Anything contained herein to the contrary notwithstanding, no more than five
Eurodollar Advances shall be outstanding at any time.
2.8 PAYMENT OF INTEREST ON REVOLVING LOANS AND ADVANCES.
Interest accrued on each Floating Rate Advance shall be payable on the last
Business Day of each calendar month for the month then ending, the Commitment
Termination Date, the date of the reduction to zero of the Aggregate
Commitment pursuant to SECTION 2.10, the date of any repayment of such
Floating Rate Advance, and the date of the acceleration of the Obligations
pursuant to SECTION 9.1. Interest accrued on each Eurodollar Advance shall
be payable on the last day of its applicable Interest Period, on any date on
which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest on Floating Rate Advances shall be
calculated for actual days elapsed on the basis of a 365/366-day year.
Interest on Eurodollar Advances shall be calculated for actual days elapsed
on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if
payment is received prior to 1:00 P.M. (Charlotte time) at the place of
payment. If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment shall be made
on the next succeeding Business Day and, in the case
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of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.9 CHANGES IN INTEREST RATE, ETC. Subject to SECTION 2.11,
each Floating Rate Advance shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made
or is converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to SECTION 2.7 to but excluding the date it becomes due or is
converted into a Eurodollar Advance pursuant to SECTION 2.7, at a rate per
annum equal to the Floating Rate for such day. Changes in the rate of
interest on each Advance maintained as a Floating Rate Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each
Eurodollar Advance shall bear interest from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Advance. No Interest Period may end after the Commitment
Termination Date.
2.10 FEES, MANDATORY REPAYMENTS AND VOLUNTARY AND MANDATORY
REDUCTIONS IN AGGREGATE COMMITMENT.
(a) FEES. The Borrowers agree, jointly and severally, to pay
to the Agent for the account of each Lender a commitment fee of 0.50%
per annum on the daily unused portion of such Lender's Commitment from
the Closing Date to but excluding the earlier of the Commitment
Termination Date and the date of the reduction to zero of the
Aggregate Commitment pursuant to this SECTION 2.10. Such commitment
fees shall be payable on the last Business Day of each calendar month
for the calendar month then ending, and on the earlier of the
Commitment Termination Date and the date of the reduction to zero of
the Aggregate Commitment pursuant to this SECTION 2.10. Commitment
fees shall be calculated for actual days elapsed on the basis of a
360-day year. All fees shall be paid on the dates due in immediately
available funds to the Agent for the respective accounts of the Agent
and the Lenders as provided herein and in the letter agreement dated
May 31, 1999 among the Agent and the Company (the "FEE LETTER").
(b) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF
AGGREGATE COMMITMENT. The Revolving Loans shall be prepaid and/or the
Aggregate Commitment shall be permanently reduced in the amounts and
under the circumstances set forth below, all such prepayments and/or
reductions to be applied as set forth below.
(i) PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE
PROCEEDS. No later than the fifth Business Day following the
date of receipt by any Borrower or any of its Subsidiaries of
any Net Asset Sale Proceeds in respect of any Asset Sale of
Cemetery Properties, the Borrowers shall prepay the Revolving
Loans in the amount of such Net Asset Sale Proceeds, and the
Aggregate Commitment shall be reduced by 50% of the amount of
such prepayment; PROVIDED, HOWEVER, that no further reduction
in the Aggregate Commitment shall occur pursuant to this
sentence if the aggregate amount of all such reductions to the
Aggregate Commitment occurring after the Closing Date would
exceed $100,000,000. No later than the fifth Business Day
following the date of receipt by any Borrower or
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any of its Subsidiaries of any Net Asset Sale Proceeds in
respect of any Asset Sale of Funeral Home Properties, the
Borrowers shall prepay the Revolving Loans in the amount of
such Net Asset Sale Proceeds and, in the event that such sold
Funeral Home Properties, either individually or in the
aggregate together with all Funeral Home Properties sold in
Asset Sales after the Closing Date, accounted for (x)
annualized revenues in excess of 5% of Funeral Home Revenue
for the year ending December 31, 1998, determined on the basis
of the audited consolidated financial statements of TLGI and
its Subsidiaries for such year or (y) annualized gross margin
in excess of 5% of the consolidated gross margin of TLGI and
its Subsidiaries from funeral home operations for the year
ending December 31, 1998, determined on the basis of the
audited consolidated financial statements of TLGI and its
Subsidiaries for such year, the Aggregate Commitment shall be
reduced by 50% of the aggregate Net Asset Sale Proceeds from
such Asset Sale.
(ii) PREPAYMENTS FROM NET INSURANCE/CONDEMNATION
PROCEEDS. No later than the fifth Business Day following the
date of receipt by the Agent or by any Borrower or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds, the
Borrowers shall prepay the Revolving Loans in an aggregate
amount equal to the amount of such Net Insurance/Condemnation
Proceeds. Upon and after such prepayment, the Borrowers may add
the amount of such Net Insurance/Condemnation Proceeds to the
aggregate amount of Consolidated Capital Expenditures permitted
(x) in the quarter during which such Net Insurance/Condemnation
Proceeds are received or (y) in the two immediately succeeding
quarters, at the Borrowers' election, by delivering a written
notice from an Authorized Officer to the Agent setting forth
the amount of such Net Insurance/Condemnation Proceeds and
specifying the portion thereof to be applied to the applicable
quarters or quarters.
(iii) PREPAYMENTS FROM CASH BALANCES. The Borrowers shall
from time to time, and in any event not later than the second
Business Day of each week, prepay outstanding Revolving Loans
in an amount equal to the excess of (x) the amount of the Cash
Balances of the Borrowers outstanding in the Borrower
Concentration Account over (y) $15,000,000.
(iv) CALCULATIONS OF NET PROCEEDS AMOUNTS; ADDITIONAL
PREPAYMENTS AND REDUCTIONS BASED ON SUBSEQUENT CALCULATIONS.
Concurrently with any prepayment of the Loans and/or reduction
of the Aggregate Commitments pursuant to SECTIONS
2.10(b)(i)-(iii), the Borrowers shall deliver to the Agent a
certificate of an Authorized Officer demonstrating the
calculation of the amount (the "NET PROCEEDS AMOUNT") of the
applicable Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, the applicable Net Tax or
Pension Proceeds, or the applicable Cash Balance, as the case
may be, that gave rise to such prepayment and/or reduction. In
the event that the Borrowers shall subsequently determine that
the actual Net Proceeds Amount was greater than the amount set
forth in such certificate, the Borrowers shall promptly make an
additional prepayment of the Loans (and/or, if applicable, the
Aggregate Commitment shall be permanently reduced) in an amount
equal to the amount of such excess, and
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the Borrowers shall concurrently therewith deliver to the Agent a
certificate of an Authorized Officer demonstrating the derivation
of the additional Net Proceeds Amount resulting in such excess.
(c) PREPAYMENTS DUE TO REDUCTIONS OR RESTRICTIONS OF
AGGREGATE COMMITMENT. The Borrowers shall from time to time prepay the
Revolving Loans to the extent necessary (1) so that the Total Utilization
of Commitments shall not at any time exceed the Aggregate Commitment then
in effect and (2) to give effect to the other limitations set forth in
the penultimate sentence of SECTION 2.1.
(d) ALLOCATION OF PREPAYMENTS AND REDUCTIONS. Any
amounts required to be applied as repayments of Revolving Loans under
SECTION 2.10(b)(i) shall be applied to repay outstanding Revolving Loans
to the full extent thereof, and any amounts required to be applied to
reduce the Aggregate Commitment under SECTION 2.10(b)(i) shall be applied
to reduce the Aggregate Commitment to the full extent thereof. Any
amounts required to be prepaid under SECTION 2.10(b)(ii) or 2.10(b)(iii)
shall be applied to repay outstanding Revolving Loans to the full extent
thereof without permanently reducing the Aggregate Commitment. Any
reduction in the Aggregate Commitment and any prepayment of the Revolving
Loans shall be allocated ratably among the Lenders according to their
respective Commitments; it being understood that each Borrower shall be
liable pursuant to SECTION 3.4 to indemnify each Lender against any loss
or liability which that Lender incurs as a consequence of any prepayment
under this SECTION 2.10. If, following any such prepayment of Advances,
the amount of any such mandatory prepayment which also results in a
reduction of the Aggregate Commitment still exceeds the unused Aggregate
Commitment on the date of such mandatory reduction, the Borrowers shall
cash collateralize the outstanding L/C Obligations as contemplated in
SECTION 2.19.4 in an amount sufficient to eliminate such excess.
(e) VOLUNTARY REDUCTIONS OF AGGREGATE COMMITMENT. The
Borrowers may permanently reduce the Aggregate Commitment in whole, or in
part ratably among the Lenders in integral multiples of $10,000,000, upon
at least three Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction; PROVIDED, HOWEVER, the
amount of the Aggregate Commitment may not be reduced below the sum of
the aggregate principal amount of the outstanding Advances and the
aggregate outstanding L/C Obligations.
2.11 RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything
to the contrary contained in SECTION 2.6 or 2.7, during the continuance of a
Default or Unmatured Default no Advance may be made as, converted into or
continued as a Eurodollar Advance. During the continuance of a Default
pursuant to SECTION 8.2, (a) each Eurodollar Advance shall bear interest
until paid in full or converted to a Floating Rate Advance at the Eurodollar
Rate then applicable to such Advance plus 2.0% per annum, and (b) each
Floating Rate Advance shall bear interest until paid in full at a rate per
annum equal to the Floating Rate plus 2.0% per annum.
2.12 METHOD OF PAYMENT. Without limiting the operation of the
first sentence of SECTION 2.19.3(b), and without limiting the scope of SECTION
2.17(b), all payments of the Obligations hereunder shall be made, without
setoff, deduction, or counterclaim, in Dollars in
29
immediately available funds to the Agent at the Payment Office, by the
Specified Remittance Time on the date when due and shall be remitted by the
Agent to the Lenders according to their respective interests therein. Each
payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds that
the Agent received at such Lender's address specified pursuant to ARTICLE XIV
or at any Lending Installation specified in a notice received by the Agent
from such Lender. The Agent is hereby authorized, but is not obligated, to
charge the accounts of the Borrowers maintained with First Union into which
proceeds of Advances are remitted pursuant to SECTION 2.6 for each payment of
interest and fees as it becomes due hereunder, for each payment of principal,
in accordance with the applicable Prepayment Notice or when otherwise due and
payable in accordance with the terms hereof, and for each payment of
Obligations (including Reimbursement Obligations) when due and payable in
accordance with the terms hereof.
2.13 EVIDENCE OF DEBT; TELEPHONIC NOTICES. (a) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the Obligations of the Borrowers to the appropriate Lending
Installation of such Lender resulting from each Revolving Loan made by such
Lending Installation of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lending Installation of
such Lender from time to time under this Agreement.
(b) The Agent shall maintain a Register at the request of the
Borrowers pursuant to SECTION 13.3.2, and a subaccount for each Lender, in
which Register and subaccounts (taken together) shall be recorded (i) the
amount of each Revolving Loan made hereunder, whether such Revolving Loan is,
as applicable, a Eurodollar Loan or a Floating Rate Loan, and the Interest
Period applicable to any Eurodollar Loan, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to
each Lender hereunder, and (iii) the amount of any sum received by the Agent
hereunder from the Borrowers and each Lender's share thereof.
(c) The entries made in the Register, accounts and subaccounts
maintained pursuant to PARAGRAPHS (a) and (b) of this SECTION 2.13 shall, to
the extent permitted by applicable law, be PRIMA FACIE evidence of the
existence and amounts of the Obligations of the Borrowers therein recorded;
PROVIDED, that the failure of any Lender or the Agent to maintain such
account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Borrowers to
repay the Revolving Loans (and all other amounts owing with respect thereto)
in accordance with the terms of this Agreement.
(d) The Borrowers hereby authorize the Lenders and the Agent
to extend, convert or continue Advances and effect selections of Types of
Advances based on telephonic notices made by any person or persons the Agent
in good faith believes to be acting on behalf of the Borrowers, PROVIDED that
the proceeds of such Advances shall only be credited to such account as the
Borrowers shall from time to time designate in a notice delivered to the
Agent executed by an Authorized Officer. The Borrowers agree to deliver
promptly to the Agent a written confirmation of each telephonic notice signed
by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, the
records of the Agent of the relevant telephonic notice shall govern absent
manifest error.
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2.14 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Revolving Loan Borrowing Notice, Conversion/Continuation Notice and
prepayment notice received by it hereunder. The Agent will notify the
Borrowers and each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give the
Borrowers and each Lender prompt notice of each change in the Alternate Base
Rate.
2.15 LENDING INSTALLATIONS. Each Lender may book its
Revolving Loans and its L/C Interest at any one or more Lending Installations
selected by such Lender and may change any such Lending Installation from
time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Revolving Loans and the L/C Interests shall be deemed
held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written or telex notice to the Agent and the Borrowers,
designate a Lending Installation through which Revolving Loans will be made
by it and through which L/C Interests will be held by it and for whose
account Revolving Loan payments and L/C Obligation payments are to be made.
2.16 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrowers
or a Lender, as the case may be, notifies the Agent prior to the date on
which it is scheduled to make payment to the Agent of (a) in the case of a
Lender, the proceeds of a Revolving Loan or (b) in the case of the Borrowers,
a payment of principal, interest or fees to the Agent for the account of the
Lenders, that it does not intend to make such payment, the Agent may assume
that such payment has been made. The Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Lender or the Borrowers, as the case
may be, has not in fact made such payment to the Agent, the recipient of such
payment shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to
(a) in the case of payment by a Lender, the Federal Funds Effective Rate for
such day or (b) in the case of payment by the Borrowers, the interest rate
applicable to the relevant Revolving Loan.
2.17 WITHHOLDING TAX EXEMPTION; GROSS UP. (a) At least five
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated
under the laws of the United States of America, or a state thereof, agrees
that it will deliver to the Company and the Agent two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes. Each Lender which so delivers a Form 1001 or 4224 further
undertakes to deliver to the Borrowers and the Agent two additional copies of
such form (or any successor form or related form as may from time to time be
required under applicable law) on or before the date that such form expires
(currently, three successive calendar years for Form 1001 and one calendar
year for Form 4224) or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrowers or the Agent, in each case certifying that such
Lender is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless
31
an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender advises the Borrowers and the Agent that
it is not capable of receiving payments without any deduction or withholding
of United States federal income tax.
(b) All payments made by the Borrowers under or in connection
with this Agreement shall be made in full, without set-off or counterclaim,
and free of and without deduction or withholding for or on account of any
present or future tax, duty, assessment, impost, levy or other similar
charge, or any penalties, fines or interest thereon (a "RELEVANT TAX")
imposed upon TLGI, any Borrower, the Agent, any Lender or the L/C Issuer by
the government of Canada (or any Governmental Authority thereof), the
government of the United States of America (or any Governmental Authority
thereto, or by the government of any other country or jurisdiction (or any
Governmental Authority thereof) from or through which payments hereunder are
actually made (each a "TAXING JURISDICTION"). The Borrowers, for the benefit
of the Agent, the Lenders and the L/C Issuer, agree that in the event any
payments made by the Borrowers hereunder or in connection herewith are
subject to any deduction or withholding for or on account of any Relevant
Tax, the Borrowers, jointly and severally, will pay to the Agent, such Lender
or the L/C Issuer such additional amounts as may be necessary in order that
the net amounts paid to the Agent, such Lender or the L/C Issuer pursuant to
the terms of this Agreement after imposition of any such Relevant Tax
(including deductions or withholdings applicable to additional amounts paid
under this SECTION 2.17(b)) shall be not less than the amounts specified in
this Agreement to be then due and payable, except that no such additional
amounts shall be payable hereunder to the Agent, any Lender or the L/C Issuer
that is liable for such Relevant Tax in respect of the relevant payment
solely by reason of such recipient (a) having a permanent establishment in
the Taxing Jurisdiction, (b) being organized under the laws of the Taxing
Jurisdiction or any political subdivision thereof, (c) being resident in the
Taxing Jurisdiction by virtue of its domicile or place of management being in
the Taxing Jurisdiction, or (d) having failed to comply with the terms and
conditions of SECTION 2.17(a) applicable to it. If the Agent, any Lender or
the L/C Issuer pays any amount in respect of a Relevant Tax, the Borrowers
shall, jointly and severally, indemnify the Agent, the Lender or the L/C
Issuer, as the case may be, for such payment within 15 days of demand
therefor by the Agent, such Lender or the L/C Issuer (in the case of such
Lender or the L/C Issuer, made through the Agent).
2.18 TERMINATION. All unpaid Obligations shall be paid in
full by the Borrowers on the Commitment Termination Date; PROVIDED, HOWEVER,
that nothing in this SECTION 2.18 shall be construed as limiting or modifying
the joint and several obligations of the Borrowers to repay any or all of the
outstanding Obligations at any earlier time in accordance with the terms of
this Agreement.
2.19 LETTER OF CREDIT FACILITY.
2.19.1 LETTERS OF CREDIT. Upon receipt of duly executed
applications therefor, and such other documents, instruments and agreements
as the L/C Issuer may reasonably require, and subject to the provisions of
ARTICLE IV, the L/C Issuer shall issue Standby Letters of Credit and
Commercial Letters of Credit for account of the Borrowers, on terms as are
satisfactory to the
32
L/C Issuer; PROVIDED, HOWEVER, that no Letter of Credit will be issued for
the account of the Borrowers by the L/C Issuer if on the date of issuance,
before or after taking such Letter of Credit into account (i) the amount of
the Advances and the L/C Obligations at such time would exceed the Aggregate
Commitment or (ii) the aggregate outstanding amount of the L/C Obligations
would exceed the L/C Commitment Amount; PROVIDED, FURTHER, that no Letter of
Credit shall be issued unless it has an expiration date that is (1) in the
case of a Standby Letter of Credit, no more than one year after the date of
issuance of such Letter of Credit (provided that a Standby Letter of Credit,
subject to the immediately following, may provide for an annual renewal if
such renewal is consented to by the L/C Issuer at the time of issuance and
the conditions precedent to the issuance of such Standby Letter of Credit are
met at the time of such renewal), (2) in the case of a Standby Letter of
Credit, no later than the date which is five Business Days immediately
preceding the Stated Maturity Date, (3) in the case of a Commercial Letter of
Credit, no more than 180 days from the date of issuance of such Commercial
Letter of Credit, and (4) in the case of a Commercial Letter of Credit, no
later than the date which is 10 days immediately preceding the Stated
Maturity Date; and PROVIDED, FURTHER, that no Letter of Credit shall be
issued in CDN$ or for use in support of an obligation of TLGI or a Canadian
Subsidiary unless (x) TLGI or such Canadian Subsidiary, as the case may be,
shall have entered into an agreement to reimburse the applicable L/C Issuer
and the Lenders for obligations arising with respect to drawings under such
Letter of Credit, (y) the reimbursement obligation of TLGI or such Canadian
Subsidiary, as applicable, under such agreement shall be approved by the
Canadian Court, and (z) the reimbursement obligation of TLGI or such Canadian
Subsidiary, as applicable, under such agreement shall be a priority claim in
the Canadian Cases.
2.19.2 LETTER OF CREDIT PARTICIPATION. Immediately upon
issuance of each Letter of Credit by the L/C Issuer hereunder, each Lender
shall be deemed to have automatically, irrevocably and unconditionally
purchased and received from the L/C Issuer an undivided interest and
participation in and to such Letter of Credit, the obligations of the
Borrowers in respect thereof, and the liability of the L/C Issuer thereunder
(collectively, an "L/C INTEREST") in an amount equal to the amount available
for drawing under such Letter of Credit (which amount, in the case of a
Letter of Credit which is denominated in a currency other than Dollars, shall
be calculated by reference to the applicable Exchange Rate) multiplied by a
fraction having as its numerator, such Lender's Commitment, and as its
denominator, the Aggregate Commitment. The L/C Issuer will notify each
Lender promptly upon presentation to it of an L/C Draft or upon any other
draw under any Letter of Credit. On the Business Day on which the L/C Issuer
makes payment of any L/C Draft or, in the case of any other draw on the
Letter of Credit, on demand of the L/C Issuer (provided that the Borrowers
have not prior thereto made payment therefor and no Floating Rate Advance has
been made pursuant to SECTION 2.19.3 with respect thereto), each Lender shall
make payment to the Agent, for credit to the L/C Issuer, in immediately
available funds in an amount equal to such Lender's ratable share (determined
in accordance with the fraction described above) of the amount of such
payment or draw (which amount, in the case of a drawing under a Letter of
Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate). Provided that each
Letter of Credit is issued by the L/C Issuer in accordance with the terms of
this Agreement, the obligation of each Lender to reimburse the L/C Issuer
under this SECTION 2.19.2 shall be unconditional, continuing, irrevocable and
absolute and shall not be affected or impaired by, among other things, the
occurrence of the Commitment Termination Date or the reduction, suspension or
termination (except pursuant to SECTION 2.18) of the Aggregate Commitment or
such Lender's Commitment
33
in accordance with the terms of this Agreement. In the event that any Lender
fails to make payment to the Agent of any amount due to the L/C Issuer under
this SECTION 2.19.2, the Agent shall be entitled to receive for the benefit
of the L/C Issuer, and the L/C Issuer shall be entitled to receive, retain
and apply against such obligation the principal and interest and other
amounts otherwise payable to such Lender hereunder (whether in respect of
Revolving Loans, Letters of Credit or otherwise) until the Agent receives
such payment from such Lender or such obligation is otherwise fully
satisfied; PROVIDED, HOWEVER, that nothing contained in this sentence shall
relieve such Lender of its obligation to reimburse the L/C Issuer for such
amount in accordance with this SECTION 2.19.2.
2.19.3 REIMBURSEMENT OBLIGATION. (a) The Borrowers agree
unconditionally, irrevocably and absolutely to pay immediately to the Agent,
for the account of the L/C Issuer and the Lenders, the amount of each L/C
Draft or other demand which may be drawn under or pursuant to a Letter of
Credit (such obligation of the Borrowers to pay the Agent (for the account of
the L/C Issuer and the Lenders) being hereinafter referred to as a
"REIMBURSEMENT OBLIGATION" with respect to a Letter of Credit or L/C Draft)
(which amount, in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by
reference to the applicable Exchange Rate). The obligations of the Borrowers
under this Agreement and otherwise in respect of Letters of Credit and L/C
Drafts shall be absolute, unconditional and irrevocable and shall be
performed strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit, this Agreement or any Loan Document;
(ii) any amendment or waiver of or any consent to departure
from this Agreement or any other Loan Document;
(iii) the existence of any claim, set-off, defense or other
right which any Borrower may have at any time against the L/C Issuer,
the Agent, any Lender, any beneficiary of any Letter of Credit (or any
Person for whom any such beneficiary may be acting), or any other
Person, whether in connection with this Agreement, any other Loan
Document or any unrelated transactions;
(iv) any statement in any certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any such statement being
untrue or inaccurate in any respect whatsoever;
(v) payment by the L/C Issuer under any Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit (provided that the L/C Issuer
was not grossly negligent in connection therewith); or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
(b) If the Borrowers at any time fail to repay a Reimbursement
Obligation pursuant to this SECTION 2.19.3, the Borrowers shall be deemed to
have elected to borrow a
34
Floating Rate Advance from the Lenders, as of the date of the L/C Draft or
other demand giving rise to the Reimbursement Obligation, equal in amount to
the amount of the unpaid Reimbursement Obligation, the proceeds of which
Advance shall be used to repay such Reimbursement Obligation; PROVIDED,
HOWEVER, that such Floating Rate Advance shall be deemed to have been
borrowed only to the extent that (x) both immediately before and after giving
effect thereto, no Default or Unmatured Default under SECTION 8.6 shall have
occurred and be continuing, and (y) the Commitment Termination Date (or the
date of any earlier termination of the Aggregate Commitment pursuant to this
Agreement) shall not have occurred prior thereto. For each Reimbursement
Obligation for which a Floating Rate Advance is not deemed to have been
borrowed by the Borrowers, each Lender shall be deemed to have automatically
purchased and received from the L/C Issuer an undivided interest and
participation in and to such Reimbursement Obligation in an amount equal to
such Reimbursement Obligation multiplied by a fraction having as its
numerator, such Lender's Commitment, and as its denominator, the Aggregate
Commitment. If, for any reason, the Borrowers fail to repay a Reimbursement
Obligation on the day such Reimbursement Obligation arises, either directly
or through a Floating Rate Advance, then such Reimbursement Obligation shall
bear interest from and after such day, until paid in full, at the interest
rate applicable to Floating Rate Advances (including, during the continuance
of a Default or Unmatured Default, at the rates determined pursuant to
SECTION 2.11).
2.19.4 CASH COLLATERAL. Notwithstanding anything to the
contrary herein or in any application for any Letter of Credit, (a) after the
occurrence and during the continuance of a Default or (b) to the extent
necessary in connection with any mandatory reduction of the Aggregate
Commitment pursuant to SECTION 2.10(b), the Borrowers shall, upon the demand
of the Required Lenders or the Agent at the request of the Required Lenders,
or if earlier, at the time of the applicable mandatory reduction of the
Aggregate Commitment pursuant to SECTION 2.10, deliver to the Agent for the
benefit of the L/C Issuer and the Lenders, cash collateral in an amount equal
to the aggregate outstanding L/C Obligations, or in connection with a deposit
made pursuant to the foregoing such lesser amount of the outstanding L/C
Obligations as shall satisfy the requirements of SECTION 2.10. Any such
collateral shall be held by the Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Agent for the benefit of the L/C Issuer
and the Lenders as collateral security for the Borrowers' obligations in
respect of this Agreement and the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the L/C Issuer for drawings or payments
under or pursuant to the Letters of Credit or L/C Drafts, or if no such
reimbursement is required, such amounts shall be applied ratably to the
payment of any other unpaid costs, fees, expenses and other Obligations
related to the Letters of Credit, any L/C Drafts and such cash collateral
account as the Agent shall determine. If no Default shall be continuing,
amounts remaining in any cash collateral account established pursuant to
CLAUSE (a) of this SECTION 2.19.4 which are not to be applied to reimburse
the L/C Issuer or the Lenders for amounts actually paid or to be paid by the
L/C Issuer or the Lenders in respect of the Letters of Credit or L/C Drafts,
shall be returned to the Borrowers (after deduction of the Agent's expenses
incurred in connection with such cash collateral account) except to the
extent such amounts (or portions thereof) are necessary to satisfy the cash
collateral requirements of CLAUSE (b) of this SECTION 2.19.4. In addition,
if the conditions giving rise to a deposit of cash collateral pursuant to
CLAUSE (b) of this SECTION 2.19.4 cease to exist, any amounts remaining in
any cash collateral account established pursuant to such CLAUSE (b) which are
not to be applied to reimburse the L/C
35
Issuer or the Lenders for amounts actually paid or to be paid by the L/C
Issuer or the Lenders in respect of the Letters of Credit or L/C Drafts,
shall be returned to the Borrowers (after deduction of the Agent's expenses
incurred in connection with such cash collateral account) except to the
extent such amounts (or portions thereof) are necessary to satisfy the cash
collateral requirements of CLAUSE (a) of this SECTION 2.19.4. Investment
earnings (net of investment losses and any unpaid costs, fees, expenses and
other Obligations related to the Letters of Credit, any L/C Drafts and such
cash collateral account) on amounts on deposit in the cash collateral account
(which investments shall be limited to interest bearing deposit accounts with
the Agent) shall be for the account of the Borrowers, and, except at such
time as a Default shall have occurred and be continuing, the Agent shall
remit any such accrued earnings to the Borrowers no less frequently than
quarterly.
2.19.5 LETTER OF CREDIT FEES. The Borrowers agree to pay (a)
to the Agent for the ratable benefit of the Lenders, a letter of credit fee
equal to 2.75% per annum on the daily sum of (x) the aggregate outstanding
amount of L/C Obligations less (y) the aggregate outstanding amount of
Reimbursement Obligations, such fee to be paid in arrears on the last
Business Day of each calendar month for the month then ending, and on the
Commitment Termination Date, and such fee to be calculated for actual days
elapsed on the basis of a 360-day year, and (b) to the Agent for the benefit
of the L/C Issuer, as issuing bank, with respect to any Letter of Credit, a
fronting fee, payable on the date of issuance of such Letter of Credit, equal
to 0.25% of the maximum amount available to be drawn under such Letter of
Credit, together with all customary fees and other issuance, amendment,
negotiation, presentment and payment expenses and related charges in
connection with the issuance, amendment, negotiation, presentation and
payment of L/C Drafts, and the like customarily charged by the L/C Issuer
with respect to standby letters of credit, payable at the time of invoice of
such amounts by the L/C Issuer. Any amount described in this SECTION 2.19.5
which is denominated in a currency other than Dollars shall be valued based
on the applicable Exchange Rate for such currency as of the applicable date
of determination.
2.19.6 INDEMNIFICATION, EXONERATION. (a) In addition to
amounts payable as elsewhere provided in this Agreement, the Borrowers hereby
agree, jointly and severally, to protect, indemnify, pay and save harmless
the L/C Issuer, each Lender and the Agent from and against any and all
liabilities and costs which the L/C Issuer, any Lender or the Agent may incur
or be subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit other than, in the case of the L/C Issuer, as a result
of its gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, or (ii) the failure of the L/C
Issuer to honor a drawing under any Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure
or de facto governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
(b) As among the Borrowers, the L/C Issuer, the Lenders and
the Agent, the Borrowers, jointly and severally, assume all risks of the acts
and omissions of, or misuse of a Letter of Credit by, the beneficiary of any
Letter of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the letter of credit application and any letter
of credit reimbursement agreement submitted or executed by the Borrowers in
connection with any Letter of Credit (except to the extent otherwise provided
in PARAGRAPH (e) of this SECTION 2.19.6), the L/C Issuer, the Lenders and the
Agent shall not be responsible (in the absence of gross negligence or willful
misconduct in connection therewith): (i) for the form, validity, sufficiency,
36
accuracy, genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of any
Letter of Credit to comply duly with conditions required in order to draw
upon any Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telecopy; telex or other similar form of teletransmission or
otherwise; (v) for errors in interpretation of technical trade terms; (vi)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under any Letter of Credit;
and (viii) for any consequences arising from causes beyond the control of the
L/C Issuer, the Lenders and the Agent including, without limitation, any
Governmental Acts. None of the above shall affect, impair or prevent the
vesting of any rights or powers of the L/C Issuer under this SECTION 2.19.6.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
L/C Issuer under or in connection with a Letter of Credit issued on behalf of
the Borrowers or any related certificates shall not, in the absence of gross
negligence or willful misconduct, as determined by the final judgment of a
court of competent jurisdiction, put the L/C Issuer, any Lender or the Agent
under any resulting liability to the Borrowers or relieve the Borrowers, or
any of them, of any of their obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement
of any Borrower hereunder, the agreements and obligations of the Borrowers
contained in this SECTION 2.19.6 shall survive the payment in full of
principal, interest and all other amounts hereunder, the termination of the
Letters of Credit and the termination of this Agreement.
(e) Notwithstanding anything therein to the contrary, in the
event any of the provisions of any letter of credit application or letter of
credit reimbursement agreement submitted or executed by the Borrowers in
connection with any Letter of Credit conflict with the provisions of this
Agreement, the terms of this Agreement shall govern.
2.19.7 LETTER OF CREDIT CANCELLATION. For all purposes
hereunder, including (without limitation) SECTION 2.19.5, a Letter of Credit
shall be deemed outstanding until the earlier to occur of (i) the occurrence
of the date expressly designated therein as the expiration date for such
Letter of Credit and (ii) the physical receipt by the L/C Issuer of such
Letter of Credit marked "canceled" accompanied by evidence from the
beneficiary thereof satisfactory to the L/C Issuer to such effect.
2.20 SUPERPRIORITY AND SECURED NATURE OF OBLIGATIONS.
Upon entry of the Interim Borrowing Order:
37
(a) pursuant to Section 364(c)(1) of the Bankruptcy Code, all
Obligations under the Loan Documents shall at all times constitute allowed
administrative expense claims in the Chapter 11 Cases having priority over
all administrative expenses of the kind specified or ordered pursuant to any
provision of the Bankruptcy Code, including, but not limited to, Sections
105, 326, 328, 503(b), 506(c), 507(a), 516(c), 517(a), 507(b) and 726 of the
Bankruptcy Code, which claims (and the Liens granted to secure such claims)
shall be subordinate only to a carve-out (the "CARVE-OUT") for (x) the
payment of professional fees and disbursements allowed by order of the
Bankruptcy Court and incurred by the Borrowers (excluding fees and
disbursements of "ordinary course" professionals as approved by the U.S.
Court), any official committee of unsecured creditors appointed in the
Chapter 11 Cases, any disbursements of any member of such committee and any
Chapter 7 trustee appointed for the Credit Parties in an aggregate amount not
to exceed $10,000,000 and (y) fees payable to the U.S. Trustee pursuant to 28
U.S.C. Section 1930(a)(6) and any fees payable to the clerk of the U.S.
Court; and PROVIDED further, that no part of the Carve-Out may be used to pay
professional fees and expenses incurred (i) to object to or contest, in any
manner, or raise any defenses to, or investigate, the validity, perfection,
priority or enforceability of the obligations under the Existing Revolver
Agreement (the "PREPETITION OBLIGATIONS") or the Liens on the collateral
securing the Prepetition Obligations or (ii) to investigate or assert any
claims or causes of action against the Agent, the Lenders or the
administrative agent or the lenders under such Existing Revolver Agreement.
The Lenders agree that the Borrowers shall be permitted to pay compensation
and reimbursement of expenses allowed and payable under 11 U.S.C. Sections
330 and 331, as the same may be due and payable, PROVIDED that the aggregate
of any such payments made on or after the occurrence and during the
continuance of a Default shall not exceed the Carve-Out, and PROVIDED FURTHER
that appropriate applications for U.S. Court approval are made therefor,
subject to objection by the Agent or the Lenders, if any, and U.S. Court
approval;
(b) pursuant to Section 364(c)(2) of the Bankruptcy Code, all
Obligations under the Loan Documents shall at all times be secured by duly
perfected valid, enforceable and nonvoidable first priority Liens on all
unencumbered Collateral; and
(c) pursuant to Section 364(c)(3) of the Bankruptcy Code, all
Obligations under the Loan Documents shall be secured by duly perfected
valid, enforceable and nonvoidable junior Liens on all Collateral that is
subject only to valid, perfected and nonvoidable Liens in existence as of
the Petition Date.
Following the Commitment Termination Date, amounts in the cash
collateral account described in SECTION 2.19.4 shall not be subject to the
Carve-Out.
2.21 JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.
(a) All Obligations of the Borrowers under the Loan Documents
shall be the joint and several Obligations of each Borrower. The Obligations
of and the Liens granted by any such Borrower under the Loan Documents shall
not be impaired or released by any action or inaction on the part of Agent or
any Lender with respect to any other Credit Party, including any action or
inaction which would otherwise release a surety.
38
(b) In order to provide for just and equitable contribution
between the Borrowers if any payment is made by any Borrower (a "FUNDING
BORROWER") in discharging any of the Obligations, that Funding Borrower shall
be entitled to a contribution from the other Borrowers for all payments,
damages and expenses incurred by that Funding Borrower in discharging the
Obligations, in the manner and to the extent required to allocate liabilities
in an equitable manner among the Borrowers on the basis of the relative
benefits received by the Borrowers. If and to the extent that a Funding
Borrower makes any payment to any Lender or any other Person in respect of
the Obligations, any claim which said Funding Borrower may have against the
other Borrowers by reason thereof shall be subject and subordinate to the
prior cash payment in full of the Obligations. The parties hereto
acknowledge that the right to contribution hereunder shall constitute an
asset of the party to which such contribution is owing. Notwithstanding any
of the foregoing to the contrary, such contribution arrangements shall not
limit in any manner the joint and several nature of the Obligations, limit,
release or otherwise impair any rights of Agent or any Lender under the Loan
Documents, or alter, limit or impair the obligation of each Borrower, which
is absolute and unconditional, to repay the Obligations. The obligation of
any Borrower to make any contribution to another Borrower under this SECTION
2.21 shall be deemed a superpriority administration expense obligation of
such Borrower arising under Section 503(b) of the Bankruptcy Code and shall
be junior in priority only to the Obligations of such Borrower under the Loan
Documents.
2.22 SECURITY INTEREST IN CASH COLLATERAL ACCOUNT. Pursuant
to Section 364(c)(2) of the Bankruptcy Code, the Borrowers hereby assign and
pledge to the Agent, for its benefit and for the ratable benefit of the
Lenders, and hereby grant to the Agent, for its benefit and for the ratable
benefit of the Lenders, a first priority security interest, senior to all
other Liens, if any, in all of the Borrowers' right, title and interest in
and to the cash collateral account described in SECTION 2.19.4 and any direct
investment of the funds contained therein.
2.23 NO DISCHARGE; SURVIVAL OF CLAIMS. Each Borrower agrees
that (i) its obligations hereunder shall not be discharged by the entry of an
order confirming a plan of reorganization (and each Borrower, pursuant to
Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge)
and (ii) the superpriority claim granted to the Agent and the Lenders
pursuant to the Final Borrowing Order and described in SECTION 2.20 and the
Liens granted to the Agent pursuant to the Final Borrowing Order and
described in SECTIONS 2.20 and 2.22 shall not be affected in any manner by
the entry of an order confirming a plan of reorganization.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 YIELD PROTECTION. If any change in law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender or the L/C Issuer therewith,
(a) subjects any Lender or the L/C Issuer or any applicable
Lending Installation to any tax, duty, charge or withholding on or
from payments due from any Borrower or TLGI or any other Person
obligated hereunder to any Lender or the L/C Issuer (excluding
taxation of the overall net income of any Lender or the L/C Issuer or
39
any applicable Lending Installation or other taxes in lieu of such
taxes imposed by the United States or any jurisdiction in which such
Lender or the L/C Issuer has its principal office or applicable
Lending Installation or is engaged in business), or changes the basis
of taxation of payments to any Lender or the L/C Issuer in respect of
its Revolving Loan, L/C Interests, L/C Obligations or other amounts
due it hereunder; or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with, or for the account of, or credit
extended by, any Lender or the L/C Issuer or any applicable Lending
Installation, (other than reserves and assessments taken into account
in determining the interest rate applicable to Eurodollar Advances); or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or the L/C Issuer or any applicable
Lending Installation of making, funding or maintaining loans or
issuing or participating in letters of credit or reduces any amount
receivable by any Lender or the L/C Issuer or any applicable Lending
Installation in connection with loans or letters of credit, or
requires any Lender or the L/C Issuer or any applicable Lending
Installation to make any payment calculated by reference to the amount
of loans or letters of credit held, or interest received by it, by an
amount deemed material by such Lender or the L/C Issuer, as the case
may be;
then, within 15 days of demand by such Lender or the L/C Issuer, the
Borrowers shall pay such Lender or the L/C Issuer that portion of such
increased expense incurred or reduction in an amount received which such
Lender or the L/C Issuer determines is attributable to making, funding and
maintaining its Revolving Loans, L/C Interests, the Letters of Credit, the
L/C Obligations and its Commitment (and in the case of the L/C Issuer, its
commitment to issue Letters of Credit).
3.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender or
the L/C Issuer determines that the amount of capital required or expected to
be maintained by such Lender or the L/C Issuer, any Lending Installation of
such Lender or any corporation controlling such Lender or the L/C Issuer is
increased as a result of a Change (as defined below in this SECTION 3.2),
then, within 15 days of demand by such Lender or the L/C Issuer, the
Borrowers shall pay such Lender or the L/C Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the L/C Issuer determines is
attributable to this Agreement, its Revolving Loans, L/C Interests, the
Letters of Credit, the L/C Obligations or its obligation to make Revolving
Loans (or in the case of the L/C Issuer, its commitment to issue Letters of
Credit) or participate in Letters of Credit hereunder or to issue Letters of
Credit (after taking into account such Lender's or the L/C Issuer's or such
controlling corporation's policies as to capital adequacy). "CHANGE" means
(a) any change after the date of this Agreement in the Risk-Based Capital
Guidelines (as defined below in this SECTION 3.2) or (b) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation or directive (whether or not having the
force of law) after the date of this Agreement which affects the amount of
capital required or expected to be maintained by any Lender or the L/C Issuer
or any Lending Installation or any corporation controlling any Lender or the
L/C Issuer. "RISK-BASED CAPITAL GUIDELINES" means (a) the risk-based capital
guidelines in effect in the United States on the date
40
of this Agreement, including transition rules, and (b) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this
Agreement.
3.3 AVAILABILITY OF TYPES OF ADVANCES. If any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, or if the Required Lenders determine
that (a) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (b) the interest rate applicable to a
Eurodollar Advance does not accurately reflect the cost of making or
maintaining such Advance, then the Agent shall suspend the availability of
the affected Eurodollar Advance and require any Eurodollar Advances to be
prepaid or converted into a Floating Rate Advance.
3.4 FUNDING INDEMNIFICATION. If (i) any payment of a
Eurodollar Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise (including, without limitation, as a result of a mandatory
prepayment of a Eurodollar Advance pursuant to SECTION 2.10(b) or (ii) as a
result of an assignment of a Lender's Commitment and its outstanding
Revolving Loans and L/C Interest by operation of SECTION 3.5, a Eurodollar
Advance made by the assigning Lender is assigned on a date which is not the
last day of the applicable Interest Period, or (iii) a Eurodollar Advance is
not made, continued or converted on the date specified by the Borrowers for
any reason other than default by the Lenders, or (iv) an optional prepayment,
notice of which has been given in accordance with SECTION 2.5, is not made on
the date specified therefor in such notice, the Borrowers will, jointly and
severally, indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Advance, or in liquidating or terminating prior to scheduled maturity any
foreign exchange contracts, currency swaps or other similar hedging
arrangements entered into in connection with the Eurodollar Advance.
3.5 MITIGATION; LENDER STATEMENTS; SURVIVAL OF INDEMNITY.
(a) To the extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Loans to reduce
any liability of the Borrowers to such Lender under SECTIONS 3.1 and 3.2 or
to avoid the unavailability of a Type of Advance under SECTION 3.3, so long
as such designation is rate disadvantageous to such Lender. If the
obligation of the Lenders to make Eurodollar Advances has been suspended
pursuant to SECTION 3.3, as a consequence of a determination by any Lender
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law or any Lender has demanded compensation
under SECTION 3.1 or 3.2, the Borrowers may elect (i) subject to SECTION 3.4,
to prepay any outstanding Advances to the extent necessary to mitigate its
liability under SECTION 3.1 or 3.2, (ii) to terminate the applicable Lender's
Commitment hereunder or (iii) to require the applicable Lender to assign its
outstanding Revolving Loans, L/C Interests and Commitment hereunder to
another financial institution designated by the Borrowers and reasonably
acceptable to the Agent; PROVIDED, HOWEVER, that the Borrowers may make the
elections described in the foregoing CLAUSES (i) and (ii) only at such times
as no Default or Unmatured Default shall have occurred
41
and be continuing. The obligation of a Lender to assign its rights and
obligations hereunder or terminate its Commitment hereunder as contemplated
by this SECTION 3.5(a) is subject to the requirements that (x) all amounts
owing to that Lender under the Loan Documents (including, without limitation,
pursuant to SECTION 3.4 are paid in full upon the completion of such
assignment or prior to such termination and (y) any assignment is effected in
accordance with the terms of SECTION 13.3 and on terms otherwise satisfactory
to that Lender.
(b) Each Lender or the L/C Issuer, as the case may be, shall
deliver a written statement of such Person as to the amount due, if any,
under SECTION 3.1, 3.2 or 3.4. Such written statement shall set forth in
reasonable detail the calculations upon which such Person determined such
amount and shall be final, conclusive and binding on the Borrowers in the
absence of manifest error. Determination of amounts payable under such
Sections in connection with a Eurodollar Loan shall be calculated as though
each Lender funded such Eurodollar Loan through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the interest rate applicable to such Eurodollar Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement shall be payable on demand after receipt
by the Borrowers of the written statement. The obligations of the Borrowers
under SECTIONS 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
The effectiveness of this Agreement is subject to the
satisfaction of the conditions precedent set forth below in SECTION 4.1.
4.1 CLOSING DATE ADVANCES AND LETTERS OF CREDIT. The
Lenders shall be obligated (subject to SECTION 4.2) to make Advances and
purchase participations in the Letters of Credit hereunder on the Closing
Date, and the L/C Issuer shall be obligated (subject to SECTION 4.2) to issue
Letters of Credit hereunder on the Closing Date, only after (x) the Agent,
the Agent's counsel, O'Melveny & Xxxxx LLP (counsel to the lenders party to
the Existing Revolver Agreement) Ernst & Young, financial advisor to the
administrative agent under the Existing Revolver Agreement, and Xxxxx, Xxxxx
& Xxxxx, counsel to the administrative agent under the Existing Revolver
Agreement, shall have been paid in full for all fees, costs and expenses
payable by the Borrowers under SECTION 10.7 of this Agreement and the other
Loan Documents to the extent then invoiced, and (y) the Agent shall have
received from the Borrowers, with sufficient copies for the Agent and each of
the Lenders, each of the following items in form and substance satisfactory
to the Agent:
(a) copies of the articles of incorporation or comparable
constitutive documents of each of TLGI and each Borrower, together with all
amendments, certified by the appropriate governmental officer in the relevant
jurisdiction of organization as of a recent date prior to the Closing Date,
and certified by the Secretary, Assistant Secretary or other appropriate
officer or director of it as of the Closing Date, and, to the extent
applicable, a certificate of good standing for TLGI and each Borrower, in
each case certified by the appropriate governmental officer in the relevant
jurisdiction of organization as of a recent date prior to the Closing Date;
42
(b) copies of the by-laws (or any comparable constitutive
laws, rules or regulations) of each of TLGI and each Borrower as in effect on
the Closing Date certified by the Secretary, Assistant Secretary or other
appropriate officer or director of it;
(c) copies, certified as of the Closing Date by the Secretary,
Assistant Secretary or other appropriate officer or director of each of TLGI
and each Borrower, of its board of directors' resolutions (and resolutions of
other bodies, if any are deemed necessary by counsel for any Lender)
authorizing the execution and performance of the relevant Loan Documents;
(d) incumbency certificates, dated as of the Closing Date,
executed by the Secretary or Assistant Secretary or other appropriate officer
or director of each of TLGI and each Borrower, which shall identify by name
and title and bear the signature of the officers of TLGI and each Borrower
authorized to sign the relevant Loan Documents and to make borrowings and
apply for Letters of Credit hereunder, as applicable, upon which certificates
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 Borrowers, as applicable;
(e) copies of the Interim Borrowing Order, which shall have
been entered by the U.S. Court;
(f) copies of the Initial CCAA Order, which shall have been
entered by the Canadian Court;
(g) a certificate, signed by the Chief Financial Officer,
stating that on the date hereof and the Closing Date no Default or Unmatured
Default has occurred and is continuing;
(h) an opinion of Xxxxx, Day, Xxxxxx & Xxxxx, United States
counsel to the Borrowers, and an opinion of British Columbia counsel to TLGI
satisfactory to the Agent, regarding the matters set forth on EXHIBIT B and
such other matters as the Agent shall reasonably request;
(i) this Agreement, the Notes and the Collateral Documents,
duly executed by the applicable Credit Parties; and
(j) such other documents as the Agent, its counsel or
O'Melveny & Xxxxx LLP may reasonably request.
The following shall be additional conditions to the obligations
of Lenders to make Advances, issue Letters of Credit and purchase
participations therein on the Closing Date:
(1) FIRST DAY ORDERS. All First Day Orders and all
initial orders entered by the Canadian Court shall be in form and
substance satisfactory to Lenders. Without limiting the foregoing,
the U.S. Court and Canadian Court shall have entered orders and
arrangements satisfactory to the Lenders to protect access to and/or
to provide possession of, and to provide recognition of the Lenders'
interest in, books and records of TLGI and the Canadian Subsidiaries
during pendency of the Chapter 11 Cases.
43
(2) CCAA ORDERS. The CCAA Orders made by the Canadian
Court shall, to the extent that they prescribe the duties and powers
of the Monitor or create any Liens, shall be in form and substance
satisfactory to the Lenders and shall be in accordance with the terms
of this Agreement and the Collateral Documents.
(3) CASH MANAGEMENT. The Borrowers shall have entered
into the cash management arrangements described in SECTION 6.21 and
SECTION 7.10.
(4) OVERHEAD. The Borrowers shall have entered into an
Overhead Allocation Agreement and shall have delivered to the Agent
and the Lenders a schedule satisfactory to the Agent and the Lenders
estimating, through the Stated Maturity Date, general and
administrative expenses and restructuring costs and expenses relating
to the Chapter 11 cases and the Canadian Cases.
(5) NO MATERIAL ADVERSE EFFECT. Since December 31, 1998,
no Material Adverse Effect (in the sole and reasonable opinion of the
Agent) shall have occurred, other than the commencement of the Chapter
11 Cases and the Canadian Cases.
Notwithstanding anything herein to the contrary, it is understood and agreed
that the documents and items set forth on SCHEDULE 7.36 annexed hereto shall
be delivered after the Closing Date in accordance with SECTION 7.36. Each
Lender, by delivering its signature page to this Agreement and funding its
initial Loans, if any, on the Closing Date, shall be deemed to have
acknowledged receipt of, and consented to and approved (as long as
substantially in the form delivered to the Lenders, including any changed
pages thereto delivered to the Lenders), each Loan Document and each other
document required to be approved or consented to by the Required Lenders or
the Lenders, as applicable, under this SECTION 4.1.
4.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall
not be required to make any Advance or purchase participations in any Letter
of Credit, and L/C Issuer shall not be required to issue any Letter of Credit
hereunder, unless on the applicable Revolving Loan Borrowing Date or date for
issuance of such Letter of Credit (as applicable):
(a) there exists no Default or Unmatured Default;
(b) the representations and warranties contained in ARTICLE
VI, the Collateral Documents are true and correct as of such Revolving Loan
Borrowing Date or date for issuance of such Letter of Credit (as applicable)
except to the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date;
(c) after giving effect to such Advance or the issuance of
such Letter of Credit, (i) the Total Utilization of Commitments shall not
exceed the least of (A) pending the entry of a Final Borrowing Order,
$60,000,000, (B) until (x) the first delivery to the Agent after the Closing
Date of the financial statements and Compliance Certificate required to be
delivered pursuant to SECTIONS 7.1(b) and 7.1(e) demonstrating compliance
with the relevant covenants in ARTICLE VII, and (y) the delivery to the Agent
of the Requisite Collateral Information, the sum of (a) $80,000,000 PLUS (b)
any Advances made hereunder which are applied, on or after the entry of the
Final Borrowing Order, to finance the repayment by Neweol (Delaware), L.L.C.
of the
44
Fairway Receivables Facility in accordance with SECTION 7.16, and thereafter,
the Aggregate Commitment, and (C) the amount permitted to be outstanding
hereunder pursuant to the Interim Borrowing Order or Final Borrowing Order,
as applicable; and (b) excluding all Advances hereunder to make Closing Date
Payments and the effect of any mandatory prepayments under SECTION 2.10(b)(i)
or (ii), the aggregate principal amount of Revolving Loans outstanding after
giving effect to such Advance or issuance shall not exceed by more than
$15,000,000 the aggregate principal amount of Revolving Loans outstanding as
of any date after the Closing Date which is less than 30 days prior to the
date of such Advance or issuance;
(d) no order, judgment or decree of any court (including,
without limitation, the U.S. Court or the Canadian Court), arbitrator or
governmental authority shall purport to enjoin or restrain such Lender from
making the Advance to be made by it on that date;
(e) the making of the Advance requested on such date shall not
violate any law including, without limitation, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(f) there shall not be pending or, to the Borrowers'
knowledge, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrowers or any
property of the Borrowers that has not been disclosed by the Borrowers in
writing pursuant to SECTION 6.7 or SECTION 7.1(h) prior to the making of the
last preceding Advances (or, in the case of the initial Advances, prior to
the execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
event, in the opinion of the Agent or of the Required Lenders, would
reasonably be expected to have a Material Adverse Effect; and no injunction
or other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by this Agreement or the
making of Advances hereunder.
Each Revolving Loan Borrowing Notice with respect to an Advance
and application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 4.2(a), (b), (c), (d) and (e) have been satisfied.
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each of TLGI and, with respect to itself and its Subsidiaries,
each Borrower represents and warrants to the Lenders and the L/C Issuer that:
45
6.1 EXISTENCE AND STANDING. Each of TLGI, each Borrower and
the other Subsidiaries is a corporation, limited partnership or limited
liability company duly incorporated or formed, as the case may be, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, and, subject to compliance
with any applicable provisions of the Bankruptcy Code, has all requisite
authority to conduct its business in each jurisdiction wherein such
qualification is required, except to the extent that, in the case of any
Subsidiary other than any Borrower, the failure to be in good standing or
authorized to conduct business in any jurisdiction could not, when taken
together with all similar failures by such Subsidiary and each other
Subsidiary, reasonably be expected to have a Material Adverse Effect. Each
of TLGI and each Borrower is in compliance with its constitutive documents
and all applicable orders of the U.S. Court and the Canadian Court.
6.2 AUTHORIZATION AND VALIDITY. Each Credit Party has the
corporate, limited partnership or limited liability company power and
authority and legal right to execute and deliver the Loan Documents to which
it is party and to perform its obligations thereunder. The execution and
delivery by each Credit Party of the Loan Documents to which it is party and
the performance of its obligations thereunder have been duly authorized by
proper corporate, limited partnership or limited liability company
proceedings and have been or by the Closing Date will be duly authorized by
the U.S. Court and the Canadian Court, and each Loan Document to which each
Credit Party constitutes the legal, valid and binding obligation of such
Credit Party, enforceable against such Credit Party, in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity, regardless of whether the application of such
principles is considered in a proceeding in equity or at law.
6.3 NO CONFLICT, GOVERNMENT CONSENT. Neither the execution
and delivery by each Credit Party of the Loan Documents to which it is party,
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof, will violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on TLGI, any Borrower or
any Subsidiary or TLGI's, any Borrower's or any Subsidiary's articles of
incorporation or by-laws or comparable constitutive documents, any applicable
order of the U.S. Court or the Canadian Court or the provisions of any
indenture, instrument or agreement to which TLGI, any Borrower or any
Subsidiary is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of TLGI, any
Borrower or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents, except for consents, approvals,
authorizations and filings or applicable orders of the U.S. Court and the
Canadian Court which have already been duly obtained and made and which
remain valid and in full force and effect.
6.4 FINANCIAL STATEMENTS. Each of (a) the December 31,
1998, consolidated financial statements of TLGI and its Subsidiaries and (b)
the December 31, 1998, consolidated financial statements of the Borrowers and
their Subsidiaries, heretofore delivered to the Lenders,
46
were prepared in accordance with GAAP in effect on the date such statements
were prepared and fairly present the consolidated financial condition and
operations of TLGI and its Subsidiaries and of the Borrowers and its
Subsidiaries, respectively, at the date thereof and the consolidated results
of their respective operations for the period then ended.
6.5 MATERIAL ADVERSE CHANGE. Since December 31, 1998, there
has been no change in the business, Property, prospects, financial condition
or results of operations of TLGI and its Subsidiaries (taken as a whole) or
of the Borrowers and their Subsidiaries (taken as a whole) which could
reasonably be expected to have a Material Adverse Effect, other than the
commencement of the Chapter 11 Cases and the Canadian Cases.
6.6 TAXES. All income tax returns required to be filed by
TLGI, any Borrower or any Subsidiary in any jurisdiction have, in fact, been
filed, all such tax returns have been prepared in accordance with applicable
laws and all taxes, assessments, fees and other governmental charges upon
TLGI, any Borrower or any Subsidiary or upon any of their respective
properties, income or franchises which are shown on such returns have been
paid. For all taxable years ending on or before December 31, 1988, the
United States Federal income tax liability of TLGI, each Borrower and the
other Subsidiaries has been satisfied and either the period of limitations on
assessment of additional United States Federal income tax has expired or
TLGI, such Borrower or the applicable other Subsidiary has entered into an
agreement with the United States Internal Revenue Service closing
conclusively the total tax liability for the taxable year. None of TLGI, the
Borrowers and the other Subsidiaries knows of any proposed additional tax
assessment against it or any of them for which adequate provision has not
been made on its or their accounts, and no material controversy in respect of
additional income or other taxes due or claimed to be due to any Governmental
Authority is pending or to the knowledge of TLGI, any Borrower or the other
Subsidiaries threatened, other than audits by governmental taxing authorities
occurring in the ordinary course of business. The charges, accruals and
reserves on the books of TLGI, each Borrower and the other Subsidiaries in
respect of any taxes or other governmental charges are adequate.
6.7 LITIGATION AND CONTINGENT LIABILITIES. Except as set
forth on SCHEDULE 6.7 hereto (but only to the extent described thereon),
there is no litigation, arbitration, governmental investigation, proceeding
or inquiry pending or, to the knowledge of any of their officers, threatened
against or affecting TLGI, any Borrower or any other Subsidiary which could
have a Material Adverse Effect, or for which there is a reasonable likelihood
that TLGI, any Borrower or any other Subsidiary would make a payment, whether
in settlement or otherwise, in excess of $1,000,000. Other than any
liability incident to such litigation, arbitration or proceedings, none of
TLGI, the Borrowers or any other Subsidiary has any material contingent
liabilities not provided for or disclosed in the financial statements
referred to in SECTION 6.4.
6.8 SUBSIDIARIES; PLEDGE OF STOCK. SCHEDULE 6.8 hereto,
together with the most recent update, if any, delivered pursuant to SECTION
7.1(k), contains an accurate list of all of the Subsidiaries (except for
inactive Subsidiaries with immaterial assets and liabilities) of each of TLGI
and each Borrower, setting forth their respective jurisdictions of
incorporation and the percentage of their respective capital stock owned by
TLGI, the Borrowers or other Subsidiaries. All of the issued and outstanding
shares of capital stock of the Subsidiaries of TLGI and each Borrower listed
on SCHEDULE 6.8 hereto, together with the most recent update, if any,
delivered
47
pursuant to SECTION 7.1(k) have been duly authorized and issued and are fully
paid and non-assessable and have been duly and validly pledged under the
Collateral Documents and delivered to Bankers Trust Company, as collateral
agent under, and pursuant to the terms of, the Collateral Trust Agreement.
All Subsidiaries of each Borrower (other than the Insurance Companies and (to
the extent permitted not to so execute such documents) those Subsidiaries
specifically identified as not being Borrowers on SCHEDULE 6.8) have executed
and delivered this Agreement and each other Loan Document to which any
Borrower is a party as a "Borrower" hereunder and thereunder, and each U.S.
Subsidiary of TLGI which is party to the Collateral Trust Agreement is a
Borrower hereunder.
6.9 ERISA. The Unfunded Liabilities of all Single Employer
Plans do not in the aggregate exceed $1,000,000. Neither TLGI, the Borrowers
nor any other member of the Controlled Group has incurred, or is reasonably
expected to incur, any withdrawal liability to Multiemployer Plans in excess
of $1,000,000 in the aggregate. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event
has occurred with respect to any Plan, none of TLGI, the Borrowers nor any
other member of the Controlled Group has withdrawn from any Plan or initiated
steps to do so, and no steps have been taken to reorganize or terminate any
Plan. No contribution failure has occurred with respect to any Single
Employer Plan sufficient to give rise to a lien under section 302(f) of
ERISA. Each Canadian Plan is registered under, and is in compliance with,
the Income Tax Act (Canada), applicable provincial pensions legislation and
all other applicable requirements of law and regulations and all reports,
returns and filings required to be made thereunder have been made. The
Canadian Plans have been at all times administered in accordance with their
terms and the provisions of all applicable requirements of law and
regulations. There are no unfunded liabilities under the Canadian Plans and,
without limiting the generality of the foregoing, there is no going concern
unfunded actuarial liability, past service unfunded actuarial liability or
solvency deficiency. Neither TLGI nor any Subsidiary has received any
payment of surplus from any of the Canadian Plans, other than payments
received after January 1, 1988 with the approval of all necessary pension
regulatory and taxation authorities.
6.10 ACCURACY OF INFORMATION. No written information,
exhibit or report prepared and furnished by TLGI, any Borrower or any other
Subsidiary to the Agent, any Lender or the L/C Issuer in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
6.11 REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of TLGI, the Borrowers and other
Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder or under any other Loan Document. None of the
execution, delivery and performance of this Agreement and the other Loan
Documents by the Borrowers will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
6.12 MATERIAL AGREEMENTS. None of TLGI, the Borrowers or any
Subsidiary is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to have a
Material Adverse Effect.
48
6.13 COMPLIANCE WITH LAWS. TLGI, each Borrower and the other
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any Governmental
Authority having jurisdiction over the conduct of their respective businesses
or the ownership of their respective Property the failure with which to
comply could have a Material Adverse Effect. None of TLGI, the Borrowers or
any Subsidiary has received any notice to the effect that, or is otherwise
aware that, its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release, which noncompliance or remedial
action could reasonably be expected to have a Material Adverse Effect, and no
event or condition has occurred or is occurring with respect to TLGI, the
Borrowers or any Subsidiaries relating to any Environmental Law, any Release
or any Hazardous Materials Activity which, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect.
6.14 OWNERSHIP OF PROPERTIES. Except as set forth on
SCHEDULE 6.14 hereto, on the date of this Agreement, each of TLGI, each
Borrower and each other Subsidiary has good title, free of all Liens other
than those permitted by SECTION 7.20, to all of the Property and assets
reflected as owned by it in the financial statements delivered from time to
time pursuant hereto. As of the Closing Date, SCHEDULE 6.14 annexed hereto
contains a true, accurate and complete list of (i) all fee properties of the
Borrowers and their Subsidiaries and (ii) all leasehold interests of any
Borrower or Subsidiary of any Borrower as lessee under any lease of real
property, and indicates which of the properties set forth on such Schedule
are subject to existing perfected Liens under a written security instrument
(whether designated as a deed of trust or a mortgage or by any similar
title). The aggregate principal amount of Indebtedness secured by Liens
under written security agreements or instruments encumbering real property
assets listed in SCHEDULE 6.14 does not exceed $100,000,000.
6.15 INVESTMENT COMPANY ACT. None of TLGI, the Borrowers or
any other Subsidiary is an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
6.16 PUBLIC UTILITY HOLDING COMPANY ACT. None of TLGI, the
Borrowers or any other Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or is subject to
regulation under any other U.S. or Canadian federal, provincial or state
statute or regulation (other than the Bankruptcy Code and the CCAA) which in
any case limits its ability to incur Indebtedness or which may otherwise
render all or any portion of the Obligations unenforceable.
6.17 POST-RETIREMENT BENEFITS. The present value of the
expected cost of post-retirement medical and insurance benefits payable by
TLGI, the Borrowers and the other Subsidiaries to their employees and former
employees, as estimated by TLGI in accordance with procedures and assumptions
specified by the Required Lenders, or in the absence of such specification,
deemed prudent and reasonable by TLGI, does not exceed $1,000,000.
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6.18 NEGATIVE PLEDGE. None of TLGI, the Borrowers nor any
Subsidiary of TLGI or any Borrower is party to any postpetition contract or
other arrangement under the terms of which TLGI, such Borrower or any such
Subsidiary is restricted from (i) performing its respective obligations under
the Collateral Documents or any other Loan Document to which it is a party or
(ii) providing a guaranty to the Agent, the Lenders or the L/C Issuer.
6.19 RESTRICTIONS ON TRANSFER. There are no restrictions on
any Borrower which prohibit or otherwise restrict the transfer of cash or
other assets from one to another, other than prohibitions or restrictions
existing under or by reason of (i) this Agreement and the other Loan
Documents, (ii) applicable law (including the Bankruptcy Code and any
applicable order of the U.S. Court), (iii) customary non-assignment
provisions entered into in the ordinary course of business and consistent
with past practices, and (iv) any documents or instruments governing the
terms of any Indebtedness or other obligations secured by Liens permitted by
SECTION 7.20 (each of which documents or instruments is set forth on, and
each of which documents and instruments is described on, SCHEDULE 6.19
annexed hereto); provided that (x) such prohibitions or restrictions set
forth in CLAUSES (iii) or (iv) only apply to the extent enforceable under the
Bankruptcy Code and the applicable orders of the U.S. Court.
6.20 CHAPTER 11 CASES AND CANADIAN CASES. The Chapter 11
Cases were commenced on the Petition Date in accordance with Applicable Law
and all notice thereof as required by Applicable Law has been given. The
Canadian Cases were commenced on the Petition Date in accordance with
Applicable Law.
6.21 CASH MANAGEMENT SYSTEM. The summary of the Borrowers'
cash management system attached hereto as SCHEDULE 6.21 is accurate and
complete in all material respects as of the Closing Date and does not omit to
state any material fact necessary to make the statements set forth therein
not misleading. No Borrower nor any of its Subsidiaries owns any Deposit
Account which is not described in SCHEDULE 6.21 or otherwise permitted
pursuant to SECTION 7.10. There has been no change to the cash management
system (other than as permitted by SECTION 7.10) since the Closing Date
except such changes as have been disclosed to the Agent in writing and
approved by the Agent.
6.22 YEAR 2000. The cost to TLGI and its Subsidiaries of any
reprogramming required to permit the proper functioning, in and following the
year 2000, of (a) the computer systems of TLGI and its Subsidiaries and (b)
equipment containing embedded microchips (including systems and equipment
supplied by others) and the testing of all such systems and equipment, as so
reprogrammed, and of the reasonably foreseeable consequences of Year 2000
Problems to TLGI and its Subsidiaries (including reprogramming errors) could
not reasonably be expected to result in a Material Adverse Effect. TLGI and
its Subsidiaries have adopted and are successfully implementing a plan of
correction which TLGI and the Borrowers reasonably believe will result in a
substantial elimination of Year 2000 Problems before any processing failure
of the systems or equipment described in clauses (a) and (b) of the preceding
sentence due to such problems which could reasonably be expected to have a
Material Adverse Effect, and in the event that the aforementioned plan of
correction is not timely implemented, TLGI and its Subsidiaries are
developing a contingency plan which the Borrowers reasonably believe will
address such processing failures due to Year 2000 Problems prior to such
problems resulting in a Material Adverse Effect. As used in this SECTION,
"YEAR 2000 PROBLEMS" means limitations in
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the capacity or readiness to handle date information, for 1999 or years
beginning January 1, 2000, of any of the hardware, firmware or software
systems associated with information processing and delivery, operations or
services (e.g., security and alarms, elevators, communications, and HVAC)
operated by TLGI and its Subsidiaries.
ARTICLE VII
COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing, TLGI and each Borrower shall perform, and
cause to be performed, the following:
7.1 REPORTING REQUIREMENTS. TLGI and the Borrowers will
maintain, and cause each other Subsidiary to maintain, a system of accounting
established and administered in accordance with GAAP (subject, in the case of
TLGI, to the review and reporting of the Monitor in accordance with the CCAA
Orders), and will furnish or cause to be furnished to the Lenders:
(a) as soon as available and in any event not later than the
10th and the 25th day of each month after the Closing Date, a report in form
and substance reasonably satisfactory to the Agent that contains the
following information and calculations with regard to the most recently ended
semi-monthly period: (i) cash flow statements reflecting on a business unit
basis aggregate cash receipts and disbursements for TLGI, the Borrowers and
their Subsidiaries; (ii) a comparison of the cash flows described in clause
(i) to the Borrowers' most recent three month semi-monthly forecasts prepared
and delivered on a monthly basis pursuant to SECTION 7.1(b), and (iii) an
update on all material changes in the status of TLGI, the Borrowers and their
Subsidiaries;
(b) as soon as possible and in any event within 30 days after
the end of each calendar month, a report in form and substance reasonably
satisfactory to the Agent that contains the following information and
calculations: (i) monthly income statement, operating statements and other
internally generated analyses prepared on a monthly basis, (ii) management
discussion and analysis of operating results, (iii) three month semi-monthly
cash flow forecast, reflecting on a business unit basis cash receipts and
disbursements for TLGI, the Borrowers and their Subsidiaries, (iv) a variance
analysis between the most recent applicable prior forecast delivered pursuant
to clause (iii) and actual cash receipts and disbursements for the most
recently ended calendar-month period, including management discussion and
analysis of significant variances, (v) an update on all covenant calculations
as of the most recent date applicable for such calculations under this
Agreement, to the extent required hereunder to be calculated at the end of
the period for which the information pursuant to this clause (b) is being
provided, together with a report on all payment and expenditure limitations
in this Agreement (whether or not such limitations are measured for a time
period ending on or about the applicable time period), and (vi) a certificate
of an Authorized Officer (together with supporting statements and
calculations) certifying and evidencing that the Borrowers have complied with
SECTION 2.10(b)(iv);
(c) (i) as soon as available and in any event within 105 days
after the close of each of TLGI's fiscal years, (x) together with an
unqualified (except qualifications relating to changes in accounting
principles or practices reflecting changes in GAAP and required or
51
approved by TLGI's independent chartered accountants or independent public
accountants and qualifications as may relate to the financial circumstances
of TLGI and its Subsidiaries related to the Chapter 11 Cases and the Canadian
Cases) audit report certified by independent chartered accountants or
independent public accountants, acceptable to the Lenders, consolidated
financial statements of TLGI prepared in accordance with Agreement Accounting
Principles on a consolidated basis for itself and its Subsidiaries, including
balance sheets as of the end of such period, related statements of profit and
loss, retained earnings and changes in financial position, accompanied by a
review engagement report of said accountants in accordance with the standards
of Section 8600 of the CICA Handbook stating that, in connection with the
foregoing, they have obtained no knowledge of any failure of TLGI or its
Subsidiaries to comply with the requirements specified in each of SECTIONS
7.12 through 7.25 and 7.31, or if, in the opinion of such accountants, TLGI
or any of its Subsidiaries has failed to comply with the requirements
specified in any such Section, stating the nature and status of such failure,
and (y) consolidating financial statements of TLGI certified by the Chief
Financial Officer that separately present TLGI's Canadian operations, United
States operations and other material financial operations prepared in
accordance with Agreement Accounting Principles, including balance sheets as
of the end of such period, and related statements of profit and loss,
retained earnings and changes in financial position; and (ii) within 180 days
after the close of each of TLGI's fiscal years, the management letter
prepared by the applicable accountants in connection with the financial
statements for such fiscal year delivered pursuant to the foregoing CLAUSE
(i)(x);
(d) as soon as available and in any event within 50 days after
the close of each of the first three quarterly periods of each of TLGI's
fiscal years, for TLGI and its Subsidiaries, consolidated unaudited balance
sheets as at the close of such period and consolidated statements of profit
and loss, retained earnings and changes in financial position for the period
from the beginning of such fiscal year to the end of such period, all
certified by the Chief Financial Officer;
(e) together with the financial statements required pursuant
to the foregoing CLAUSES (b), (c) and (d), a compliance certificate in
substantially the form of EXHIBIT C hereto signed by the Chief Financial
Officer showing in reasonable detail the calculations necessary to determine
compliance with this Agreement, stating that no Default or Unmatured Default
exists or if any Default or Unmatured Default exists, stating the nature and
status thereof, and otherwise providing the information required thereby;
(f) within 270 days after the close of each fiscal year of
TLGI, a statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA;
(g) as soon as possible and in any event within ten days after
TLGI or any Borrower knows that any Reportable Event has occurred with
respect to any Plan or that a withdrawal has occurred from any Multiemployer
Plan, the occurrence of either of which may reasonably be expected to give
rise to a Material Adverse Effect, or that a contribution failure has
occurred with respect to any Single Employer Plan sufficient to give rise to
a lien under section 302(f) of ERISA, a statement, signed by the Chief
Financial Officer, describing said Reportable Event or contribution failure
and the action which TLGI and the Borrowers propose to take with respect
thereto;
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(h) as soon as possible and in any event within 30 days after
receipt by TLGI or any of its Subsidiaries, a copy of (i) any notice or claim
to the effect that TLGI or any of its Subsidiaries is or may reasonably be
expected to be liable for $1,000,000 or more of potential liability (when
aggregated with other similar potential liability) to any Person as a result
of a Release by TLGI, any of its Subsidiaries or any other Person and (ii)
any notice alleging any violation of any Environmental Laws by TLGI or any of
its Subsidiaries, which violation could reasonably be expected to give rise
to a Material Adverse Effect;
(i) promptly upon the furnishing thereof to the shareholders
of TLGI, copies of all financial statements, reports and proxy statements so
furnished, and promptly upon the furnishing thereof to any official committee
of unsecured creditors or any similar committee which shall be constituted
under the Collateral Trust Agreement or in respect of any other Prepetition
Indebtedness, copies of any reports, financial statements, notices or other
information so furnished;
(j) promptly upon their becoming available, one copy of each
financial statement, report, notice or proxy statement sent by TLGI or any
Borrower to stockholders generally (excluding those statements, reports and
notices sent by any Borrower to TLGI which are not sent to TLGI solely in its
capacity as a stockholder) and of each regular report and any registration
statement or prospectus filed by TLGI, any Borrower or any other Subsidiary
with the Ontario Securities Commission, the Toronto Stock Exchange, the
British Columbia Securities Commission, the United States Securities and
Exchange Commission or any successor agency to any of the foregoing or any
other Canadian or United States federal or state or provincial securities
exchange or securities trading system or with any United States or Canadian
national stock exchange and one copy of each periodic report filed by TLGI
with any Canadian regulatory authority, in all cases without duplication;
PROVIDED, HOWEVER, that neither TLGI nor any of the Borrowers shall be
obligated to provide to the Lenders routine reports which are required to be
provided to any of the above-listed entities concerning the management of
employee benefit plans, including, without limitation, stock purchases or the
exercise of stock options made under any such employee benefit plan;
(k) together with the financial statements delivered pursuant
to SECTION 7.1(c), a current list of all of the Subsidiaries of each of TLGI
and each Borrower, setting forth their respective jurisdictions of
incorporation and the percentage of their respective capital stock owned by
TLGI, each Borrower and the other Subsidiaries;
(l) promptly after the same is available, all pleadings,
motions, applications, judicial information, financial information and other
documents filed by or on behalf of TLGI or by or on behalf of any Canadian
Subsidiary or by the Monitor or by or on behalf of any Borrower with the U.S.
Court or the United States Trustee in the Chapter 11 Cases or with the
Canadian Court or distributed by or on behalf of TLGI or any of its
Subsidiaries to any official committee appointed in the Chapter 11 Cases or
any committee of creditors constituted in Canadian Cases under the CCAA
Orders and without limiting the generality of the foregoing, the Borrowers
and TLGI shall promptly deliver to, and discuss with, Agent and its counsel
any and all information and developments in connection with any proposed
Asset Sale, including, without limitation, any letters of intent, commitment
letters or engagement letters received by TLGI or any of its Subsidiaries and
any other event or condition which is reasonably likely to
53
have a material effect on TLGI or any of its Subsidiaries or the Chapter 11
Cases or the Canadian Cases, including, without limitation, the progress of
any disclosure statement or any proposed Chapter 11 plan of reorganization,
any proposed CCAA Plan and any proposed BCCA Plan;
(m) no later than 90 days after the Closing Date, a business
plan in scope and detail satisfactory to the Agent;
(n) promptly upon becoming aware thereof, notice of (i) the
effectiveness after the Closing Date of any law, governmental rule,
regulation or order binding on TLGI or any of its Subsidiaries, or any change
or modification therein or in the interpretation, administration or
application thereof, or (ii) the cancellation, termination, rescission,
revocation, suspension, impairment, or denial of renewal or other material
modification of any license, authorization or permit of TLGI or any of its
Subsidiaries, or (iii) the renewal, on terms different from the terms of the
license, authorization or permit so renewed, of any license, authorization or
permit of TLGI or any of its Subsidiaries, which in any case described in
clause (i), (ii) and/or (iii), individually or in the aggregate, could
reasonably be expected to materially adversely affect the economic or
commercial value or usefulness of the Borrower's licenses, permits and
authorizations in any State of the United States or province of Canada or
materially impede the transfer of cash generated through operations of any
Borrower from one State of the United States or province of Canada to another
such State or province through the cash management system described on
SCHEDULE 6.21; and
(o) promptly, such other information (including non-financial
information) as the Agent or any Lender may from time to time reasonably
request.
7.2 USE OF PROCEEDS. The Borrowers will use the proceeds of
the Advances (i) on or about the Closing Date, to finance the Closing Date
Payments, in amounts not to exceed the amounts set forth in such Sections,
and (ii) on and after the Closing Date, (x) to make an Investment in Neweol
(Delaware), L.L.C. not earlier than the entry of a Final Borrowing Order to
repay in full all outstanding Indebtedness of Neweol (Delaware), L.L.C. with
respect to the Fairway Receivables Facility to the extent permitted under,
and in accordance with, SECTION 7.16 and (y) for the Borrowers' general
corporate and working capital purposes (including, without limitation, the
payment of fees and expenses payable under SECTION 10.7) which shall include
the making of payments pursuant to the Overhead Allocation Agreement to TLGI
for the payment of general and administrative expenses and restructuring
costs associated with the Chapter 11 Cases and the Canadian Cases. It is
understood and agreed that TLGI and the Borrowers shall not permit the
proceeds of Advances to be advanced, loaned, contributed or otherwise
forwarded to any Person that is not a Borrower, except as set forth in this
SECTION 7.2. No Borrower will, nor will it permit any of its Subsidiaries
to, use any of the proceeds of the Advances to purchase or carry any "margin
stock" (as defined in Regulation U).
7.3 NOTICES OF DEFAULT, LITIGATION, ETC. TLGI and the
Borrowers will give notice in writing to the Lenders of the occurrence of (a)
any Default or Unmatured Default, (b) any payment, or any group of payments
(whether or not related), whether in settlement or otherwise, in excess of
$500,000, which at any time are expected to be made at or after such time by
TLGI, any Borrower or any Subsidiary in connection with any litigation,
arbitrations, governmental investigations, proceedings or inquiries, whether
individually or in the aggregate
54
(it being understood that TLGI and the Borrowers, in lieu of separately
identifying each such expected payment, may group such payments to the extent
deemed necessary to protect confidentiality), (c) any development, financial
or otherwise, which could reasonably be expected to have a Material Adverse
Effect, and (d) any change in the practices and procedures of TLGI and any
Borrower in effect on the date of this Agreement regarding acquisitions and
litigation (which practices and procedures have been described prior to the
date of this Agreement by representatives of TLGI and any Borrower to the
Agent and the Lenders) which notice, in each of the foregoing cases, shall be
given promptly and in any event within five Business Days after TLGI, any
Borrower or the relevant Subsidiary becomes aware of the Default, Unmatured
Default, payment, development, determination or change. Together with the
financial statements delivered pursuant to SECTIONS 7.1(b), (c) and (d), TLGI
and the Borrowers shall provide to the Agent (with sufficient copies for each
Lender) a report, prepared as of the last day of each calendar quarter, (x)
for all litigation, arbitrations, governmental investigations and proceedings
pending or, to the knowledge of any Authorized Officer, threatened against or
affecting TLGI, any Borrower or any other Subsidiary for which the claim or
matter involves an amount in excess of $500,000, briefly summarizing the
matter (including whether resolution of the matter could come before a jury),
identifying the relief sought and the amount of the claim, and specifying
whether the claim is covered by insurance and (y) identifying in reasonable
detail each payment in excess of $250,000 made during such calendar quarter,
or expected to be made thereafter, in settlement of, or otherwise in
satisfaction of, any litigation, arbitrations, governmental investigations,
proceedings or inquiries. TLGI and the Borrowers agree to discuss with the
Agent and the Lenders, upon the request of the Agent or any Lender, the
status of any litigation, arbitrations, governmental investigations,
proceedings and inquiries and any settlements thereof.
7.4 CONDUCT OF BUSINESS. TLGI and each Borrower will, and
will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of
enterprise as it is conducted on the date of this Agreement and to do all
things necessary to remain duly incorporated, validly existing and in good
standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction
in which its business requires it to be so authorized. Nothing in this
SECTION 7.4 shall prohibit any merger, amalgamation, or consolidation which
is permitted by SECTION 7.14. TLGI and each Borrower shall also pay their
respective post-Petition Date accounts payable in accordance with ordinary
trade terms.
7.5 TAXES. Except as prohibited by the Interim Borrowing
Order, the Final Borrowing Order, this Agreement, the Bankruptcy Code, the
CCAA Orders or any other applicable order of the U.S. Court or Canadian
Court, TLGI and each Borrower will, and will cause each respective Subsidiary
of it to, pay when due all post-Petition Date taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside
in accordance with GAAP.
7.6 INSURANCE. TLGI and each Borrower will, and will cause
each respective Subsidiary of it to, maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is customary in the industries in which TLGI, such
Borrower and such Subsidiaries are engaged and which is consistent with
55
sound business practice; PROVIDED, HOWEVER, that, in any event, TLGI and each
Borrower will maintain, and cause each respective Subsidiary of it to
maintain, at all times insurance which, in the aggregate, is not materially
less comprehensive in scope and policy amount than the insurance maintained
by them collectively as of the date hereof. TLGI and each Borrower will
furnish to any Lender upon request from time to time full information as to
the insurance carried.
7.7 COMPLIANCE WITH LAWS. TLGI and each Borrower will, and
will cause each respective Subsidiary of it to, comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it or its Properties may be subject.
Without limiting the foregoing, TLGI and each Borrower shall promptly take,
and shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of applicable
Environmental Laws by TLGI, the Borrowers or their Subsidiaries that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and (ii) make an appropriate response to any Environmental
Claim against TLGI, the Borrowers or any of their Subsidiaries and discharge
any obligations it may have to any Person thereunder where failure to do so
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
7.8 MAINTENANCE OF PROPERTIES. TLGI and each Borrower will,
and will cause each respective Subsidiary of it to, do all things necessary
to maintain, preserve, protect and keep its Property in good repair, working
order and condition, ordinary wear and tear excepted, and make all necessary
and proper repairs, renewals and replacements so that its business carried on
in connection therewith may be properly conducted at all times.
7.9 INSPECTION. TLGI and each Borrower will, and will cause
each respective Subsidiary of it to, permit the Agent and any or each Lender,
by its respective representatives and agents, to inspect any of the Property,
corporate books and financial records of TLGI, such Borrower and each such
Subsidiary, to examine and make copies of the books of accounts and other
financial records of TLGI, such Borrower and each such Subsidiary, and to
discuss the affairs, finances and accounts of TLGI, such Borrower and each
such Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent or such Lender
may designate. Without limiting the foregoing, each of TLGI and each
Borrower agrees that upon reasonable notice and during business hours, (a) it
will provide access for informational purposes to senior management of TLGI
and the Borrowers to the Agent and the Lenders, and (b) it will provide
access to the Agent and its agents and representatives for the purposes of
reviewing and assessing the nature and value of the Collateral.
7.10 CASH MANAGEMENT SYSTEM. (a) The Borrowers have
established a concentration account (the "BORROWER CONCENTRATION ACCOUNT") at
The First National Bank of Chicago which receives all transfers and payments
from the cash management system described in SCHEDULE 6.21. The Borrowers
shall maintain the Borrower Concentration Account and cash management system
as described in SCHEDULE 6.21; PROVIDED that each Borrower may open and close
Deposit Accounts and make other changes to such cash management system in the
ordinary course of business upon prior written notice to the Agent and as
long as (i) no Default or Unmatured Default has occurred and is continuing or
would result therefrom and (ii) such changes, either individually or in the
aggregate, are not adverse to either the Agent or any Lender (in its capacity
as a Lender) or impair any rights of the Agent under the Collateral Documents;
56
and PROVIDED FURTHER, that as soon as possible and in any event no more than
30 days after the Closing Date, the Borrowers shall have entered into a
blocked account agreement in form and substance reasonably satisfactory to
the Agent with respect to the Borrower Concentration Account. Anything
herein to the contrary notwithstanding, such cash management system shall
provide (x) that amounts at any time held in Deposit Accounts (other than the
Concentration Account) of the Borrowers and their Subsidiaries shall only be
in respect of requirements of the applicable depository institutions or
requirements of regulatory practice, and (y) that Cash Balances held in the
Borrower Concentration Account shall be paid automatically to the Agent, on a
weekly basis, in accordance with, and to the extent required by, SECTION
2.10(b)(iii). In the event that the Borrowers are prohibited in any State by
regulatory requirements from transferring amounts held in Deposit Accounts
(other than the Concentration Account) of the Borrowers and their
Subsidiaries to the Concentration Account, the Borrowers will promptly (a)
establish and maintain additional concentration accounts and disbursement
accounts (each being a "STATE CONCENTRATION ACCOUNT" or a "STATE DISBURSEMENT
ACCOUNT", as the case may be) in such State with the Agent, a Lender or other
financial institution acceptable to the Agent, (b) enter into arrangements to
transfer on a weekly or other basis acceptable to the Agent all amounts held
in Deposit Accounts (other than concentration accounts) in such State to such
State Concentration Accounts, and (c) enter into arrangements satisfactory to
the Agent so that disbursements in such State will be made only from such
State Disbursement Accounts.
(b) TLGI and each Canadian Subsidiary shall maintain the cash
management system as described in SCHEDULE 6.21; PROVIDED that TLGI and each
Canadian Subsidiary may open and close Deposit Accounts and make other
changes to such cash management system in the ordinary course of business
upon prior written notice to the Agent and as long as (i) no Default or
Unmatured Default has occurred and is continuing or would result therefrom
and (ii) such changes, either individually or in the aggregate, are not
adverse to either the Agent or any Lender (in its capacity as a Lender).
7.11 FURTHER ASSURANCES.
(a) ASSURANCES. Without expense or cost to Agent or Lenders,
TLGI and each Borrower shall, and shall cause each Subsidiary of it to, from
time to time hereafter execute, acknowledge, file, record, do and deliver all
and any further acts, deeds, conveyances, mortgages, deeds of trust, deeds to
secure debt, security agreements, hypothecations, pledges, charges, assignments,
financing statements and continuations thereof, notices of assignment,
transfers, certificates, assurances and other instruments, including, without
limitation, Mortgages, as Agent may from time to time reasonably request in
order to carry out more effectively the purposes of this Agreement, the other
Loan Documents, the Interim Borrowing Order or the Final Borrowing Order,
including to subject any Collateral, intended to now or hereafter be covered, to
the Liens created by the Collateral Documents, to perfect and maintain such
Liens, and to assure, convey, assign, transfer and confirm unto the Agent the
property and rights thereby conveyed and assigned or intended to now or
hereafter be conveyed or assigned or that any Credit Party may be or may
hereafter become bound to convey or to assign to Agent or for carrying out the
intention of or facilitating the performance of the terms of this Agreement, any
other Loan Documents, the Interim Borrowing Order or the Final Borrowing Order,
registering or recording this Agreement or any other Loan Document. Without
limiting the generality of the foregoing, (i) each Credit Party shall take or
cause to be taken all such actions
57
that may be necessary or, in the reasonable opinion of the Agent, desirable
in order to create in favor of the Agent, for the benefit of Lenders, (x) a
valid and (upon such filing and recording) perfected first priority security
interest in the entire real, personal and mixed property Collateral which is
otherwise unencumbered as of the Closing Date, and (y) a valid and (upon such
filing and recording) perfected subordinated security interest in the entire
real, personal and mixed property Collateral which is subject to valid,
perfected and nonvoidable liens on the Petition Date, including a subordinate
pledge of all of the capital stock of each of Company's Subsidiaries, and
(ii) the Borrowers shall deliver to the Agent, promptly upon receipt thereof,
all instruments received by the Credit Parties after the Closing Date and
take all actions and execute all documents necessary or reasonably requested
by the Agent to perfect the Agent's Liens in any such instrument or any other
Investment acquired by any Credit Party. Notwithstanding the foregoing, to
the extent that Applicable Law prohibited the pledge or the delivery of any
stock or instrument to the collateral agent under the Collateral Trust
Agreement, the Borrowers shall not be obligated to pledge or deliver, as
applicable, such stock or instrument to the Agent hereunder so long as the
Borrowers can provide, within a reasonable time after the Closing Date,
evidence reasonably satisfactory to the Agent that such prohibitions continue
to be in full force and effect.
(b) FILING AND RECORDING OBLIGATIONS. Each Borrower shall
jointly and severally pay all filing, registration and recording fees and all
expenses incident to the execution and acknowledgement of any Mortgage or
other Loan Document, including any instrument of further assurance described
in SECTION 7.11(a), and shall pay all mortgage recording taxes, transfer
taxes, general intangibles taxes and governmental stamp and other taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution, delivery, filing, recording or registration of any Mortgage or
other Loan Document, including any instrument of further assurance described
in SECTION 7.11(a), or by reason of its interest in, or measured by amounts
payable under, the Notes, the Mortgages or any other Loan Document, including
any instrument of further assurance described in SECTION 7.11(a), (excluding
income, franchise and doing business taxes), and shall pay all stamp taxes
and other taxes required to be paid on the Notes or any other Loan Document;
PROVIDED, however, that such Borrower may contest in good faith and through
appropriate proceedings, any such taxes, duties, imposts, assessments and
charges; PROVIDED further, however, that such Borrower shall pay all such
taxes, duties, imposts and charges when due to the appropriate taxing
authority during the pendency of any such proceedings if required to do so to
stay enforcement thereof. If any Borrower fails to make any of the payments
described in the preceding sentence within 10 days after notice thereof from
the Agent (or such shorter period as is necessary to protect the loss of or
diminution in value of any Collateral by reason of tax foreclosure or
otherwise, as determined by the Agent) accompanied by documentation verifying
the nature and amount of such payments, the Agent may (but shall not be
obligated to) pay the amount due and the Borrowers shall jointly and
severally reimburse all amounts in accordance with the terms hereof. Anything
herein to the contrary notwithstanding, if the Agent, in its reasonable
discretion, shall determine to file any such financing statements, notices of
lien, mortgages or similar instruments, or to otherwise confirm perfection of
such liens, the Borrowers shall cooperate with and assist in such process.
(c) COSTS OF DEFENDING AND UPHOLDING THE LIEN. The Agent may,
upon at least five days' prior notice to the Borrowers, (i) appear in and
defend any action or proceeding, in the name and on behalf of the Agent,
Lenders or any Borrower, in which the Agent or any Lender is named or which
the Agent in its sole discretion determines is reasonably likely to
58
materially adversely affect any Property subject to a Mortgage, any other
Collateral, any Mortgage, the Lien thereof or any other Loan Document and
(ii) institute any action or proceeding which Agent reasonably determines
should be instituted to protect the interest or rights of the Agent and
Lenders in any such Property or other Collateral or under this Agreement or
any other Loan Document. The Borrowers, jointly and severally, agree that
all reasonable costs and expenses expended or otherwise incurred pursuant to
this Section (including reasonable attorneys' fees and disbursements) by the
Agent shall be paid pursuant to SECTION 10.7 hereof.
(d) CASH MANAGEMENT SYSTEM. The Borrowers shall take all such
action as may reasonably be requested by the Agent to maintain and preserve
the cash management account arrangements in form and substance acceptable to
the Agent. Without limiting the foregoing, (i) the Borrowers agree that they
shall, during the 45-day period following the Closing Date, review, in
consultation with the Agent, the cash management arrangements with respect to
the West Texas Group and implement such modifications thereto as the Agent
may reasonably request, and (ii) the Borrowers agree that they shall, during
the 90-day period following the Closing Date, review, in consultation with
the Agent, the cash management arrangements with respect to all other
non-Borrower Subsidiaries of the Borrowers and implement such modifications
thereto as the Agent may reasonably request.
7.12 DISTRIBUTIONS AND PAYMENTS TO TLGI AND CANADIAN
SUBSIDIARIES. No Borrower will, nor will any Borrower permit any Subsidiary
to, declare or make or incur any liability to make any Distribution, or any
payment to TLGI or any Canadian Subsidiary, except that (a) the Borrowers and
their Subsidiaries may make Distributions to other Borrowers, and (b) the
Company may make payments and Distributions to TLGI to pay (or reimburse TLGI
for the payment of) general and administrative expenses and restructuring
costs associated with the Chapter 11 Cases and the Canadian Cases in
accordance with the Overhead Allocation Agreement. TLGI will not, nor will
TLGI permit any Canadian Subsidiary to, declare or make or incur any
liability to make any Distribution, except that TLGI and such Canadian
Subsidiaries may make Distributions to any Borrower and other Canadian
Subsidiaries and TLGI.
7.13 INDEBTEDNESS. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, issue any equity, or to create, incur or
suffer to exist any Indebtedness, except:
(a) the Borrowers may become and remain liable with respect to
the Obligations under the Loan Documents;
(b) each Borrower may become and remain liable with respect to
Capitalized Lease Obligations in respect of equipment used in the ordinary
course of the funeral home and cemetery business of the Borrowers and their
Subsidiaries;
(c) each Borrower may remain liable with respect to
Prepetition Indebtedness without giving effect to any extensions, renewals,
refinancings, supplemental borrowings or other incurrences thereof: and
(d) The Borrowers may become and remain liable with respect to
Indebtedness incurred in connection with the rejection of leases and
executory contracts in the Chapter 11 Cases; PROVIDED, that the obligation of
any Borrower in respect of such Indebtedness
59
shall be determined by a Final Order of the U.S. Court entered at the time of
such rejection to be a general, unsecured, non-priority claim.
7.14 MERGER. Neither TLGI nor any Borrower will, nor will
they permit any Subsidiary to, merge, amalgamate or consolidate with or into
any other Person, except that a Subsidiary (other than any Borrower) may
merge with any Borrower or a Wholly-Owned Subsidiary may merge, amalgamate or
consolidate with any other Borrower and a Subsidiary of any Borrower, subject
to the further condition that if such Borrower is a party to any such
permitted merger, such Borrower shall be the surviving corporation.
7.15 SALE OF ASSETS. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, lease, sell or otherwise dispose of its
Property to any other Person, except for (a) sales of inventory and
individual cemetery plots in the ordinary course of business, (b) other sales
by the Borrowers and their Subsidiaries of assets not constituting Asset
Sales, and (c) Asset Sales of assets of the Borrowers and their Subsidiaries
made with the express prior written consent of the Required Lenders. All Net
Asset Sale Proceeds of any Asset Sales permitted under this Section shall be
applied to make payments to the extent required under SECTION 2.10.
7.16 PREPAYMENTS. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, either directly or indirectly,
voluntarily redeem, retire or otherwise pay prior to its scheduled maturity,
or accelerate the maturity of, Indebtedness of TLGI, any Borrower or any such
Subsidiary, except that no earlier than the date on which the Final Borrowing
Order is entered by the U.S. Court, Neweol (Delaware), L.L.C. shall (subject
to approval of the U.S. Court) repay in full all Indebtedness outstanding
under the Fairway Receivables Facility (the aggregate principal amount of
which Indebtedness shall not exceed $50,000,000) on terms acceptable to the
Agent; PROVIDED that in connection with any such prepayment, all commitments
to lend or make other extensions of credit thereunder, and all further
obligations of the Borrowers and their Subsidiaries shall terminate all Liens
securing Indebtedness or other obligations of TLGI, the Borrowers and their
Subsidiaries under such facility shall be released, and Neweol (Delaware),
L.L.C. shall concurrently therewith become a Borrower hereunder pursuant to
SECTION 7.30.
7.17 AFFILIATES. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary course
of business and pursuant to the reasonable requirements of TLGI's such
Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to TLGI, such Borrower or such Subsidiary than TLGI, such
Borrower or such Subsidiary would obtain in a comparable arm's-length
transaction; PROVIDED, HOWEVER, that the foregoing terms of this SECTION 7.17
shall not apply to (i) transactions between or among the Borrowers and their
Wholly-Owned Subsidiaries and payments made in accordance with the Overhead
Allocation Agreement.
7.18 INVESTMENTS. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, make or suffer to exist any Investments,
or commitments therefor, except:
(a) Investments in existence as of the close of business on
the Closing Date;
60
(b) Investments by any Borrower or any Subsidiary in and to
any Subsidiary which is a Borrower, including any Investment in a corporation
which, after giving effect to such Investment, will become a Borrower, to the
extent such Investment is not prohibited under SECTION 7.27;
(c) Investments in property or assets to be used in the
ordinary course of business of TLGI and the Borrowers and the other
Subsidiaries conducted as described in SECTION 7.4 of this Agreement;
(d) Investments in commercial paper maturing in 90 days or
less from the date of issuance which, at the time of acquisition by TLGI or
any Borrower or any other Subsidiary, is accorded one of the two highest
commercial paper ratings by Standard & Poor's or Xxxxx'x or any other United
States nationally recognized credit rating agency of similar standing;
(e) Investments in direct obligations of the United States,
any agency or instrumentality of the United States, the federal government of
Canada or any agency or instrumentality of the federal government of Canada,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States or Canada, as the case may be, in either case
maturing in three months or less from the date of acquisition thereof;
(f) Investments in direct obligations of any Province of
Canada or any municipality within a Province of Canada or any State or
municipality within the United States maturing in one year or less from the
date of acquisition thereof which, in any such case, at the time of
acquisition by TLGI or any Borrower or any other Subsidiary, is accorded one
of the two highest long-term debt ratings by Standard & Poor's or Xxxxx'x or
any other United States nationally recognized credit rating agency of similar
standing;
(g) Investments in certificates of deposit or bankers'
acceptances with a maturity of 90 days or less issued by a bank or trust
company organized under the laws of the United States or any State thereof,
Canada or any Province thereof, Japan or any member of the European Union,
having capital, surplus and undivided profits aggregating at least
$100,000,000 and having a short-term unsecured debt rating of at least "P-I"
by Xxxxx'x or "A-1" by Standard & Poor's;
(h) Investments in money market and auction rate preferred
stock issued by Persons organized under the laws of the United States of
America or any State thereof or of Canada or any Province thereof rated "A"
or better by Standard & Poor's or "A" or better by Xxxxx'x, or an equivalent
rating by any other United States nationally recognized credit rating agency
of similar standing;
(i) Investments in mutual funds investing in assets described
in CLAUSE (d), (e), (f) or (g) above which in any such case would be
classified as a current asset in accordance with U.S. GAAP and which are
managed by a fund manager of recognized United States or Canadian national
standing and having share capital of at least $100,000,000 or having at
least $250,000,000 under management;
(j) Investments of funds received by TLGI or any Borrower or
any other Subsidiary in the ordinary course of business, which funds are
required to be held in trust for the
61
benefit of others by TLGI, such Borrower or such Subsidiary, as the case may
be, and which funds do not constitute assets or liabilities of TLGI or any
Borrower or any other Subsidiary;
(k) Investments of funds by any Subsidiary which is engaged in
the insurance business which are invested and managed by such Subsidiary in
the ordinary course of its regulated insurance business and insurance
operations;
(l) Investments consisting of amounts contributed by the
Borrowers to Neweol (Delaware), L.L.C., no earlier than the date on which the
Final Borrowing Order is entered by the U.S. Court, to the extent required to
repay in full all Indebtedness outstanding under the Fairway Receivables
Facility in accordance with, and subject to the conditions contained in,
SECTION 7.16; and
(m) Investments consisting of acquisitions (whether by
purchase of assets or stock or by merger or consolidation) permitted under
SECTION 7.27; PROVIDED that (a) at the time of consummation of such
acquisition, no Default or Unmatured Default shall have occurred and be
continuing, (b) after giving effect to any such acquisition and the financing
thereof, TLGI and the Borrowers shall be in pro forma compliance with all
covenants contained herein, and (c) any Person acquired in such acquisition
shall become, upon consummation of such acquisition, a Borrower.
7.19 NEGATIVE PLEDGE. Neither TLGI nor any Borrower will,
nor will they permit any Subsidiary to, enter into any agreement or other
arrangement under the terms of which TLGI, any Borrower or any Subsidiary
would be restricted from (i) performing its obligations under the Collateral
Documents or any other Loan Document to which it is a party or (ii) providing
a guaranty to the Agent, the Lenders or the L/C Issuer.
7.20 LIENS. Neither TLGI nor any Borrower will, nor will
they permit any Subsidiary to, create, incur or suffer to exist any Lien in,
of or on the Property of TLGI, such Borrower or such Subsidiary, as
applicable, or apply to the U.S. Court or Canadian Court for the authority to
do any of the foregoing, except:
(a) Liens granted to the Agent for the benefit of the Lenders
and the L/C Issuer pursuant to the Loan Documents or authorized by the
Interim Borrowing Order or the Final Borrowing Order;
(b) Liens in existence as of the Petition Date;
(c) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith
and by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(d) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary course
of business which secure payment of obligations not more than 60 days past
due or which are being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on its books;
62
(e) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions or other social
security or retirement benefits, or similar legislation (except ERISA); and
(f) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the same or interfere with the use thereof in the
business of TLGI, any Borrower or any other Subsidiary.
7.21 MINIMUM CEMETERY OPERATING CASH FLOW. The Borrowers
shall not permit Cemetery Operating Cash Flow for the one-fiscal quarter
period or for the four-fiscal quarter period (or, in the case of any fiscal
quarter ending prior to March 31, 2000, the one-, two- or three- fiscal
quarter period from April 1, 1999 to the end of the fiscal quarter for which
Cemetery Operating Cash Flow is being calculated)) ending, in each case, as
of a date set forth below to be less than the correlative amount indicated:
-----------------------------------------------------------------------------
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 ($15,000,000) ($15,000,000)
-----------------------------------------------------------------------------
September 30, 1999 ($10,000,000) ($25,000,000)
-----------------------------------------------------------------------------
December 31, 1999 ($5,000,000) ($30,000,000)
-----------------------------------------------------------------------------
March 31, 2000 0 ($30,000,000)
-----------------------------------------------------------------------------
June 30, 2000 $5,000,000 ($10,000,000)
-----------------------------------------------------------------------------
September 30, 2000 $5,000,000 $5,000,000
-----------------------------------------------------------------------------
December 31, 2000 $5,000,000 $15,000,000
-----------------------------------------------------------------------------
March 31, 2001 $5,000,000 $20,000,000
-----------------------------------------------------------------------------
7.22 MINIMUM NON-CEMETERY OPERATING CASH FLOW. The Borrowers
shall not permit Non-Cemetery Operating Cash Flow for the one-fiscal quarter
period or for the four-fiscal quarter period (or, in the case of any fiscal
quarter ending prior to March 31, 2000, the one-, two- or three-fiscal
quarter period from April 1, 1999 to the end of the fiscal quarter for which
Non-Cemetery Operating Cash Flow is being calculated)) ending, in each case,
as of a date set forth below to be less than the correlative amount indicated:
63
-------------------------------------------------------------------------------
DATE MINIMUM NON-CEMETERY MINIMUM NON-CEMETERY
OPERATING CASH FLOW OPERATING CASH FLOW (FOR
(FOR CURRENT FISCAL PRIOR ONE-, TWO-, THREE-
QUARTER) OR FOUR-FISCAL QUARTER
PERIOD AS APPLICABLE)
-------------------------------------------------------------------------------
June 30, 1999 $10,000,000 $10,000,000
-------------------------------------------------------------------------------
September 30, 1999 $10,000,000 $20,000,000
-------------------------------------------------------------------------------
December 31, 1999 $20,000,000 $40,000,000
-------------------------------------------------------------------------------
March 31, 2000 $30,000,000 $70,000,000
-------------------------------------------------------------------------------
June 30, 2000 $20,000,000 $80,000,000
-------------------------------------------------------------------------------
September 30, 2000 $20,000,000 $90,000,000
-------------------------------------------------------------------------------
December 31, 2000 $30,000,000 $100,000,000
-------------------------------------------------------------------------------
March 31, 2001 $30,000,000 $100,000,000
-------------------------------------------------------------------------------
7.23 MINIMUM CONSOLIDATED OPERATING CASH FLOW. The Borrowers
shall not permit Consolidated Operating Cash Flow for the one-fiscal quarter
period or for the four-fiscal quarter period (or, in the case of any fiscal
quarter ending prior to June 30, 2000, the one-, two- or three- fiscal
quarter period from July 1, 1999 to the end of the fiscal quarter for which
Consolidated Operating Cash Flow is being calculated)) ending, in each case,
as of a date set forth below to be less than the correlative amount indicated:
64
----------------------------------------------------------------------------
DATE MINIMUM CONSOLIDATED MINIMUM CONSOLIDATED
OPERATING CASH FLOW OPERATING CASH FLOW
(FOR CURRENT FISCAL (FOR PRIOR ONE-, TWO-,
QUARTER) THREE- OR FOUR-
FISCAL QUARTER
PERIOD, AS
APPLICABLE)
----------------------------------------------------------------------------
September 30, 1999 ($10,000,000) ($10,000,000)
----------------------------------------------------------------------------
December 31, 1999 $10,000,000 0
----------------------------------------------------------------------------
March 31, 2000 $20,000,000 $20,000,000
----------------------------------------------------------------------------
June 30, 2000 $15,000,000 $35,000,000
----------------------------------------------------------------------------
September 30, 2000 $15,000,000 $60,000,000
----------------------------------------------------------------------------
December 31, 2000 $20,000,000 $70,000,000
----------------------------------------------------------------------------
March 31, 2001 $20,000,000 $70,000,000
----------------------------------------------------------------------------
7.24 MINIMUM FUNERAL HOME GROSS MARGIN. The Borrowers shall
not permit Funeral Home Gross Margin for the 3-month period ending as of a
date set forth below to be less than the correlative amount indicated:
Caption>
-----------------------------------------------------------
DATE MINIMUM FUNERAL HOME GROSS MARGIN
-----------------------------------------------------------
June 30, 1999 $45,000,000
-----------------------------------------------------------
July 31, 1999 $43,333,333
-----------------------------------------------------------
August 31, 1999 $41,666,667
-----------------------------------------------------------
September 30, 1999 $40,000,000
-----------------------------------------------------------
October 31, 1999 $43,333,333
-----------------------------------------------------------
November 30, 1999 $46,666,667
-----------------------------------------------------------
December 31, 1999 $50,000,000
-----------------------------------------------------------
January 31, 2000 $53,333,333
-----------------------------------------------------------
February 28, 2000 $56,666,667
-----------------------------------------------------------
65
-----------------------------------------------------------
March 31, 2000 $60,000,000
-----------------------------------------------------------
April 30, 2000 $56,666,667
-----------------------------------------------------------
May 31, 2000 $53,333,333
-----------------------------------------------------------
June 30, 2000 $50,000,000
-----------------------------------------------------------
July 31, 2000 $48,333,333
-----------------------------------------------------------
August 31, 2000 $46,666,667
-----------------------------------------------------------
September 30, 2000 $45,000,000
-----------------------------------------------------------
October 30, 2000 $50,000,000
-----------------------------------------------------------
November 30, 2000 $55,000,000
-----------------------------------------------------------
December 31, 2000 $50,000,000
-----------------------------------------------------------
January 31, 2001 $55,000,000
-----------------------------------------------------------
February 28, 2001 $55,000,000
-----------------------------------------------------------
March 31, 2001 $60,000,000
-----------------------------------------------------------
April 30, 2001 $55,000,000
-----------------------------------------------------------
May 31, 2001 $50,000,000
-----------------------------------------------------------
7.25 MINIMUM FUNERAL HOME REVENUE PERFORMANCE. The Borrowers
shall not permit Funeral Home Revenue for the 3-month period ending as of the
last day of any fiscal quarter to be less than (i) in the case of the fiscal
quarters ending on June 30, 1999 and September 30, 1999, 92.5% and (ii)
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; PROVIDED, that for purposes of the foregoing calculations, Funeral Home
Revenue for such 3-month period ending in the current year and Funeral Home
Revenue for such three-month period in the preceding year shall only include
the portion of such Funeral Home Revenue which is attributable to funeral
home locations that are Funeral Home Properties of any of the Borrowers
during both of such periods.
7.26 OWNERSHIP OF COMPANY. TLGI will at all times maintain
the Company as a Wholly-Owned Subsidiary of TLGI.
7.27 ACQUISITIONS. Neither TLGI nor any Borrower will, nor
will they permit any Subsidiary to, make any Acquisition of any Person
without the prior written consent of the
66
Required Lenders, except for (a) acquisitions or equity repurchases made in
order to buy out holders of Minority Interests in Subsidiaries in connection
with bona fide anticipated asset sales relating to the stock or assets of
such Subsidiaries and (b) other acquisitions, PROVIDED that the consideration
paid in connection with any such acquisition referred to in clause (a) or (b)
shall be in an aggregate amount not to exceed $2,000,000 for each such
acquisition individually or $10,000,000 in the aggregate during any
twelve-month period.
7.28 SUBSIDIARIES. The Borrowers will not permit any of their
respective Subsidiaries at any time after the Closing Date to issue any
preferred stock of any type or nature or agree by contract or otherwise to any
restriction on the right and ability of such Subsidiary to declare and pay
dividends and make other distributions to its shareholders (other than the
restrictions set forth in this Agreement and the other Loan Documents). TLGI
and the Borrowers will not permit any Indebtedness owed by them to any
Subsidiaries arising after the Closing Date to be secured pursuant to the
Collateral Trust Agreement.
7.29 SYNTHETIC LEASES. Neither TLGI nor any Borrower will,
nor will they permit any Subsidiary of it to, be an obligor in respect of any
post-Petition Date Synthetic Lease.
7.30 DELIVERIES REGARDING ADDITIONAL BORROWERS. Not later than
30 days after the Closing Date, the Borrowers will use reasonable efforts to
cause each Subsidiary listed on SCHEDULE 7.30 annexed hereto to execute and
deliver to the Agent, and in the event that any Person becomes a U.S. Subsidiary
after the date hereof or any Investment is made in Neweol (Delaware), L.L.C. to
repay Indebtedness outstanding under the Fairway Receivables Facility, the
Borrowers will promptly notify the Agent of that fact and cause such Subsidiary
or Neweol (Delaware), L.L.C., as the case may be, to execute and deliver to the
Agent, (x) a joinder agreement substantially in the form of EXHIBIT H annexed
hereto pursuant to which such Person shall agree to be bound by this Agreement
as a Borrower and to assume and perform its obligations as a borrower hereunder
as if were a Borrower hereunder on the date hereof, and (y) a counterpart of the
Security Agreement, and to take all such further actions and execute all such
further documents and instruments as may be necessary or, in the opinion of the
Agent, desirable to create in favor of the Agent, for the benefit of Lenders, a
valid and perfected Lien on all of the real, personal and mixed property assets
of such Subsidiary described in the applicable forms of Collateral Documents.
TLGI and the Borrowers shall deliver to the Agent a copy (each document
identified below to be dated and/or certified as of a date reasonably acceptable
to the Agent not more than 30 days prior to the date of delivery thereof to the
Agent), with respect to each such Borrower, of such Borrower's (i) articles of
incorporation or comparable constitutive documents, together with all material
amendments, and, to the extent applicable, a certificate of good standing, in
each case certified by the appropriate governmental officer in the relevant
jurisdiction of organization, (ii) by-laws or comparable constitutive laws,
rules or regulations certified by the Secretary, Assistant Secretary or other
appropriate officer or director of it, and (iii) board of directors'
resolutions, certified by the Secretary, Assistant Secretary or other
appropriate officer or director of such Borrower (and resolutions of other
bodies, if any are deemed necessary by counsel for the Agent) authorizing the
execution and performance by such Borrower of this Agreement and the Collateral
Documents.
67
The actions described in this SECTION 7.30 must be completed with
respect to any Borrower which is a U.S. Subsidiary formed or acquired after the
Closing Date no later than 30 days after any such Person becomes a Subsidiary.
7.31 CAPITAL EXPENDITURES. Neither TLGI nor any Borrower will,
nor will they permit any Subsidiary to, make or incur any liability to make, in
any four-fiscal quarter period (or, in the case of any four-fiscal quarter
period ending prior to June 30, 2000, the one-, two- or three-fiscal quarter
period from July 1, 1999 to the end of the fiscal quarter for which Consolidated
Capital Expenditures is being calculated) ending on a date set forth below,
Consolidated Capital Expenditures in an aggregate amount in excess of the
corresponding amount set forth below opposite such date: PROVIDED, that the
amount set forth below opposite any date may be increased from time to time in
accordance with SECTION 2.10(b)(ii):
--------------------------------------------------------------------------------
DATE MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES
--------------------------------------------------------------------------------
September 30, 1999 $16,000,000
--------------------------------------------------------------------------------
December 31, 1999 $31,900,000
--------------------------------------------------------------------------------
March 31, 2000 $49,900,000
--------------------------------------------------------------------------------
June 30, 2000 $67,900,000
--------------------------------------------------------------------------------
September 30, 2000 $69,900,000
--------------------------------------------------------------------------------
December 31, 2000 $72,000,000
--------------------------------------------------------------------------------
March 31, 2001 $72,000,000
--------------------------------------------------------------------------------
7.32 CHAPTER 11 CLAIMS. Without limiting the provisions of
SECTION 7.20 hereof, no Borrower shall incur, create, assume, suffer or permit
any claim or Lien or encumbrance against it or any of its property or assets in
any Chapter 11 Case (other than the claims specifically referred to in
SECTION 2.20 and the Final Borrowing Order but only to the extent therein
described) to be PARI PASSU with or senior to the claims of the Agent and
Lenders against any Borrower in respect of the Obligations hereunder, or apply
to the U.S. Courts for authority to do so, except to the extent permitted
herein.
7.33 LIMITATION ON REPAYMENTS. The Borrowers shall not (i) make
any payment or prepayment on or redemption or acquisition for value (including,
without limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due) of any
Prepetition Indebtedness or other pre-Petition Date obligations of such Person,
except for, without duplication, (x) repayments of vendor notes and non-compete
obligations not to exceed $100,000 in the aggregate in any month, and
(y) Closing Date Payments, (ii) pay any interest on any Prepetition Indebtedness
of such Person (whether in cash, in kind securities or otherwise), or (iii) make
any payment or create or permit any Lien
68
pursuant to Section 361 of the Bankruptcy Code (or pursuant to any other
provision of the Bankruptcy Code authorizing adequate protection); PROVIDED
that, without duplication, (a) the Borrowers may pay Prepetition Indebtedness
arising in connection with the assumption of contracts or leases in the
Chapter 11 Cases, (b) the Borrowers may make payments permitted under SECTION
2.20, (c) the Borrowers may make payments for administrative expenses that
are allowed and payable under Sections 330 and 331 of the Bankruptcy Code
(subject to the limitations of the Carve-Out), (d) the Borrowers may pay any
post-Petition Date expense incurred in the ordinary course of business,
including all post-Petition Date Indebtedness incurred in the ordinary course
of business or approved by order of the U.S. Court, and usual and customary
employee salaries and benefits, and (e) the Borrowers may make payments to
such other claimants and in such amounts as permitted by the First Day Orders
and as contemplated in SCHEDULE 1.1(b) or as may otherwise be consented to by
the Required Lenders and approved by the U.S. Court.
7.34 PROTOCOL. TLGI and the Borrowers shall cause to be put in
place with the U.S. Court and the Canadian Court, no later than 60 days after
the Closing Date, a protocol satisfactory to the Required Lenders regarding the
Chapter 11 Cases and the Canadian Cases.
7.35 AGREEMENTS. TLGI and the Borrowers shall not assume,
reject, cancel, terminate, breach or modify (whether pursuant to Section 365 of
the Bankruptcy Code or the CCAA Orders or any other Applicable Law), (i) any
Material Contract or (ii) any other agreement, contract, instrument or other
document to which it is a party which assumption, rejection, cancellation,
termination, breach or modification could reasonably be expected to result in a
Material Adverse Effect.
7.36 POST CLOSING DELIVERIES. The Borrowers shall deliver to the
Agent as soon as possible and in any event within 30 days after the Closing
Date, (a) a schedule setting forth Cemetery Properties as of the Closing Date;
(b) a schedule setting forth Funeral Home Properties as of the Closing Date; (c)
a schedule setting forth all Liens on property or assets of the Borrowers in
existence as of the Petition Date; and (d) a schedule listing all leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each real property
asset of any Borrower, regardless of whether such Borrower is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease, sublease or assignment. The Borrowers hereby also agree to (i) deliver
to the Agent as soon as possible and in any event no later than 10 Business Days
after the Closing Date, (A) a schedule listing each real property asset of the
Borrowers for which personal property Lien and judgement Lien searches and title
reports were ordered on or prior to the Closing Date by the Borrowers and (B)
all appraisals of real property assets of the Borrowers which are readily
available and a schedule of those real property assets for which appraisals are
retained in the records of the Borrowers, (ii) order, (x) as soon as possible
and in any event no later than 30 days after the Closing Date, personal property
Lien and judgement Lien searches, and (y) as soon as possible and in any event
no later than 45 days after the Closing Date, title reports, in each case for
each real property asset of the Borrowers for which such items have not been
ordered on or prior to the Closing Date, and to deliver to the Agent no later
than such applicable date a list of such ordered items, and (iii) deliver to the
Agent a copy of each such title report, personal property Lien search, judgement
Lien search promptly after it is received by the Borrowers or retrieved from
their records. Upon receipt of 45% of the title reports and 66-2/3%
69
of the personal property Lien and judgment Lien searches identified on all
schedules received pursuant to clauses (i) and (ii) of the preceding
sentence, the results of which shall be reasonably satisfactory to the Agent,
the Agent shall be deemed to have received "REQUISITE COLLATERAL
INFORMATION". TLGI and the Borrowers shall also cause each document,
certificate or other item set forth on SCHEDULE 7.36 annexed hereto to be
delivered within the time period specified on such SCHEDULE 7.36 and in form
and substance reasonably satisfactory to the Agent.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
8.1 Any representation or warranty made or deemed made by or on
behalf of any Credit Party to the Lenders or the Agent under or in connection
with this Agreement, any Revolving Loan, any Letter of Credit, the Collateral
Documents, any other Loan Document or any certificate or information delivered
in connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made or deemed made.
8.2 Nonpayment of principal of any Revolving Loan when due, or
nonpayment of interest upon any Revolving Loan or of any commitment fee or other
obligations (including, without limitation, Reimbursement Obligations) under any
of the Loan Documents within three Business Days after the same becomes due.
8.3 The breach by TLGI, any Borrower or any Subsidiaries of any
of the terms or provisions of SECTION 7.2, SECTION 7.3(a), SECTIONS 7.12 through
7.29, or SECTIONS 7.31 through 7.36; PROVIDED, HOWEVER, any failure to provide
notice of any Unmatured Default pursuant to SECTION 7.3(a) shall not give rise
to a Default under this SECTION 8.3 if such Unmatured Default may be cured
pursuant to the terms of this Agreement and is in fact cured prior to maturing
into a Default.
8.4 The breach by TLGI, any Borrower or any of their
Subsidiaries (other than a breach which constitutes a Default under SECTION 8.1,
8.2 or 8.3) of any of the terms or provisions of this Agreement or any other
Loan Document which is not remedied within the earlier to occur of (x) 30 days
after written notice of such breach from the Agent or any Lender or (y) 30 days
after any Executive Officer first has knowledge thereof.
8.5 Failure of TLGI, any Borrower or any of their Subsidiaries
to pay any Indebtedness (other than Indebtedness referred to in SECTION 8.2 and
any Indebtedness incurred prior to the Petition Date) equal to or exceeding
$5,000,000 in the aggregate for TLGI, such Borrower and such Subsidiaries when
due; or the default by TLGI, any Borrower or any Subsidiaries in the performance
of any term, provision or condition contained in any agreement under which any
Indebtedness (other than Indebtedness referred to in SECTION 8.2 and any
Indebtedness incurred prior to the Petition Date) equal to or exceeding
$5,000,000 in the aggregate for TLGI, such Borrower and such Subsidiaries was
created or is governed, or any other event shall occur or condition exist the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any Indebtedness (other than Indebtedness referred to in SECTION
8.2 and any
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Indebtedness incurred prior to the Petition Date) of TLGI, any Borrower or
any Subsidiaries of either equal to or exceeding $5,000,000 in the aggregate
for all such Persons shall be declared to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof, or TLGI, any Borrower or any Subsidiary of either shall not
pay, or shall admit in writing its inability to pay, its debts incurred
postpetition generally as they become due.
8.6 With respect to the Chapter 11 Cases, (i) the entry of an
order authorizing any Borrower in any of the Chapter 11 Cases to obtain
additional financing under Section 364(c) or (d) of the Bankruptcy Code, or
authorizing any Person to recover from any portions of the Collateral any costs
or expenses of preserving or disposing of such Collateral under Section 506(c)
of the Bankruptcy Code, or (except as provided in the Final Borrowing Order)
authorizing the use of cash collateral without the Agent's prior written consent
under Section 363(c) of the Bankruptcy Code; (ii) the appointment of an interim
or permanent trustee in any of the Chapter 11 Cases or the appointment of an
examiner in any of the Chapter 11 Cases with expanded powers to operate or
manage the financial affairs, the business, or reorganization of any Borrower;
(iii) the dismissal of any of the Chapter 11 Cases, or the conversion of any of
the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, unless
the Borrower or Borrowers subject to such dismissal or conversion are, in the
judgment of the Agent, immaterial either individually or in the aggregate; (iv)
the entry of an order granting relief from or modifying the automatic stay of
Section 362 of the Bankruptcy Code (a) to allow any creditor to execute upon or
enforce a Lien on any material portion of the Collateral or on any other
property or assets of any Borrower material to the property and assets of the
Borrowers, taken as a whole, or (b) with respect to any Lien of, or the granting
of any Lien on any material portion of the Collateral or any other material
property or assets of any of the Borrowers, in each case in the Agent's
reasonable judgement, either individually or taken as a whole, to, any State or
local environmental or regulatory agency or authority; (v) other than as
approved by the Agent, the entry of an order amending, supplementing, staying,
vacating or otherwise modifying any of the Interim Borrowing Order, the Final
Borrowing Order or this Agreement or any other Loan Document or any of the
Agent's or the Lenders' rights, benefits, privileges or remedies under the
Interim Borrowing Order, the Final Borrowing Order, this Agreement or any other
Loan Document; (vi) the entry of an order reconsolidating or combining any
Borrower with any other Person (other than a Borrower); (vii) an order shall be
entered approving, or there shall arise, any other administrative expense claim
(other than those specifically referred to in SECTION 2.20) having any priority
over, or being PARI PASSU with the administrative expense priority of the
Obligations in respect of any of the Chapter 11 Cases; (viii) filing by any of
the Credit Parties of, or support by any of them for, any motion or proceeding
which could reasonably be expected to result in any impairment of the Lenders'
rights under this Agreement (a "MATERIAL ADVERSE ACTION"); or (ix) a final
judgment or other judicial determination not subject to further review in any
Material Adverse Action by any other party in interest which results in any
impairment of the Lenders' rights under this Agreement.
8.7 With respect to the Canadian Cases (i) the making of an
order authorizing TLGI or any Canadian Subsidiary in the Canadian Cases to
obtain financing without the Required Lenders' prior written consent; (ii) the
making of an order by the Canadian Court granting relief from or modifying the
stay of proceedings under the CCAA Orders (a) to allow any creditor to execute
upon or enforce a Lien on any material property or assets of TLGI and the
Canadian Subsidiaries, taken as a whole, or to appoint a receiver and manager,
receiver, trustee, administrator or liquidator of or in respect of a material
portion of the property or assets of TLGI and
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the Canadian Subsidiaries, taken as a whole, or the issuance of any receiving
order or orders in respect of TLGI or any Canadian Subsidiary or (b) to allow
any party other than TLGI or a Canadian Subsidiary to reject, cancel,
terminate, breach, modify or accelerate any obligations of TLGI or a Canadian
Subsidiary under (1) any Prepetition Indebtedness, (2) any Material Contract,
or (3) any other agreement, contract, instrument or other document to which
TLGI or any Canadian Subsidiary is a party, which rejection, cancellation,
termination, breach, modification or acceleration could reasonably be
expected to result in a Material Adverse Effect, or (c) with respect to any
Lien of any federal or provincial environmental or regulatory agency or
authority (whether or not such Lien is preserved or created under the CCAA);
(iii) the failure of TLGI and the Canadian Subsidiaries to obtain an order
extending the stay of proceedings under the CCAA Orders during the pendency
of the Chapter 11 Cases; (iv) the making of an order in the Canadian Cases
amending, supplementing, staying, vacating or otherwise modifying the CCAA
Orders, this Agreement or any other Loan Document, or any of the Agent's or
any Lender's rights, benefits, privileges, remedies or priorities under the
CCAA Orders, this Agreement or any other Loan Document; (v) the making of any
order creating a Lien on any material assets or property of TLGI and the
Canadian Subsidiaries, in the reasonable judgment of the Agent, either
individually taken as a whole, other than the Permitted Canadian CCAA Liens;
(vi) an order is made modifying or terminating the CCAA Orders in a way not
approved in writing by the Required Lenders; or (vii) the removal of or
change of the Monitor or a change in the duties and responsibilities of the
Monitor shall occur which is not approved in writing by the Required Lenders.
8.8 TLGI, any Borrower or any of their Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or order (as to
post-Petition Date liability or debt) for the payment of money in excess of
$5,000,000, unless such judgment or order has been stayed on appeal or otherwise
is being appropriately contested in good faith and against which appropriate
reserves have been established in accordance with GAAP (provided that, in any
event, execution of such judgment or order has been effectively stayed and no
execution thereof has commenced and is continuing).
8.9 The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $5,000,000 or any Reportable Event, the occurrence of
which may reasonably be expected to give rise to a Material Adverse Effect,
shall occur in connection with any Plan, or a contribution failure sufficient to
give rise to a lien under section 302(f) of ERISA shall occur with respect to
any Single Employer Plan.
8.10 TLGI or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
TLGI or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $5,000,000 or requires
payments exceeding $1,000,000 per annum.
8.11 TLGI or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in
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reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of TLGI and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years
of each such Multiemployer Plan immediately preceding the plan year in which
the reorganization or termination occurs by an amount exceeding $1,000,000.
8.12 TLGI, any Borrower or any of their Subsidiaries shall be
the subject of any proceeding or investigation pertaining to a Release by TLGI,
any Borrower or any such Subsidiary or any other Person, or any violation of any
Environmental Law, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
8.13 Any Change of Control shall occur.
8.14 Any Collateral Document shall fail to remain in full force
or effect, or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or any pledgor
thereunder shall fail to perform its obligations under or otherwise comply with
any of the terms or provisions of any Collateral Document, or any pledgor
thereunder shall deny that it has any further liability under any Collateral
Document, or shall give notice to such effect, or any portion of the shares of
stock pledged, or security interests granted, pursuant to any Collateral
Document shall cease (after the time permitted for perfection hereunder shall
have expired) to be validly perfected in favor of the Agent for the benefit of
the Lenders, or (except as otherwise provided in the Collateral Documents and
except to the extent such pledged shares represent Minority Interests) such
pledged shares shall fail to represent 100% of the outstanding shares of stock
of the Subsidiaries whose shares of stock are subject to the Collateral
Documents.
8.15 A Material Judgment Event shall have occurred and 90 days
shall have passed without one or more of the judgments, awards or other orders
giving rise to such Material Judgment Event having been vacated such that on
such 90th day the aggregate amount of all judgments, awards and orders as to
post-Petition Date liability or debt entered against any of TLGI, any Borrower
or any of their respective Subsidiaries which shall have been outstanding for at
least 90 days without having been finally satisfied in full or vacated shall be
in excess of $1,000,000.
8.16 (i) Any law, governmental rule, regulation or order binding
on TLGI or any Borrower, or any change or modification therein or in the
interpretation, administration or application thereof, shall become effective
after the date hereof, or (ii) any license, authorization or permit of TLGI or
any Borrower shall be cancelled, terminated, rescinded, revoked, suspended,
impaired, otherwise finally denied renewal or otherwise modified in any material
respect, or (iii) any license, authorization or permit of TLGI or any Borrower
shall be renewed on terms different from the terms of the license, authorization
or permit so renewed, and the occurrence of any such event or events described
in clauses (i), (ii) and/or (iii), individually or in the aggregate,
(a) adversely affects the economic or commercial value or usefulness of the
Borrower's licenses, permits and authorizations in any State of the United
States or province of Canada in a manner which could reasonably be expected to
have a Material Adverse Effect, or
73
(b) impedes the transfer of cash (other than cash required to be placed in
trust pursuant to regulatory requirements materially consistent with those in
effect on the Closing Date) generated through operations of any Borrower from
one State of the United States or province of Canada to another such State or
province through the cash management system described on SCHEDULE 6.21 in a
manner which could reasonably be expected to have a Material Adverse Effect,
or (c) could otherwise reasonably be expected to have a Material Adverse
Effect.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1 ACCELERATION. If any Default occurs the Agent may, and
upon written request of the Required Lenders shall (notwithstanding the
provisions of Section 362 of the Bankruptcy Code and without application or
motion to, or order from, the U.S. Court or the Canadian Court), (a) terminate
or suspend the obligations of the Lenders to make Revolving Loans and purchase
participations in Letters of Credit hereunder, whereupon the obligation of the
L/C Issuer to issue Letters of Credit hereunder shall also terminate or be
suspended, or (b) declare the Obligations to be due and payable, whereupon the
Obligations (including an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to drawn under such Letter of Credit)) shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which TLGI and each Borrower hereby expressly waive, or (c) take the action
described in both the preceding CLAUSE (a) and the preceding CLAUSE (b).
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Revolving
Loans hereunder as a result of any Default (other than any Default as described
in SECTION 8.6 with respect to TLGI, any Borrower or any other Subsidiary) and
before any judgment or decree for the payment of the Obligations due shall have
been obtained or entered, the Required Lenders (in their sole discretion) shall
so direct, the Agent shall, by notice to TLGI and the Borrowers, rescind and
annul such acceleration and/or termination.
Further upon the occurrence and during the continuance of any
Default, the Agent may (i) exercise all rights and remedies of the Agent set
forth in any of the Collateral Documents, in addition to all rights and remedies
allowed by, the United States and of any state thereof or Canada and any
province thereof, including but not limited to the UCC, and (ii) revoke the
Borrowers' rights to use cash collateral in which the Agent has an interest;
PROVIDED that, any other provision of this Agreement or any other Loan Document
to the contrary notwithstanding, with respect to the foregoing, the Agent shall
give the Borrowers and counsel to any official committees in respect of the
Chapter 11 Cases and the office of the United States Trustee five days prior
written notice (which notice shall be delivered by facsimile or overnight
courier) of the exercise of its rights and remedies with respect to the
Collateral and file a copy of such notice with the clerk of the U.S. Court.
Neither the Agent nor the Lenders shall have any obligation of any kind to make
a motion or application to the U.S. Court or the Canadian Court to exercise
their rights and remedies set forth or referred to in this Agreement or in the
other Loan Documents. The enumeration of the foregoing rights and remedies is
not intended to be
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exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies in the Loan Documents, the Interim
Borrowing Order or the Final Borrowing Order, all of which shall be
cumulative and not alternative.
TLGI and the Borrowers waive, (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and
guaranties or other property at any time held by the Agent or the Lenders on
which the Borrowers may in any way be liable and hereby ratify and confirm
whatever the Agent and the Lenders may lawfully do in this regard, (ii)
subject to the notice provisions of the preceding paragraph, all rights to
notice and hearing prior to the Agent's taking possession or control of, or
to the Agent or the Lenders reply, attachment or levy upon, the Collateral,
or any bond or security which might be required by any court prior to
allowing the Agent or the Lenders to exercise any of their remedies, and
(iii) the benefit of all valuation, appraisal and exemption laws. The
Borrowers acknowledge they have been advised by counsel of their choice with
respect to the effect of the foregoing waivers and this Agreement, the other
Loan Documents and the transactions evidenced by this Agreement and the other
Loan Documents.
9.2 AMENDMENTS. Subject to the provisions of this ARTICLE
IX, the Required Lenders (or the Agent with the consent in writing of the
Required Lenders), TLGI and the Borrowers may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders, TLGI
or the Borrowers hereunder or waiving any Default hereunder; PROVIDED,
HOWEVER, that no such supplemental agreement shall, without the consent of
Supermajority Lenders, reduce the amount of, waive, or extend the payment or
reduction date for any mandatory repayment of Revolving Loans required by
SECTION 2.10(b)(i) or mandatory reduction of the Aggregate Commitment
required by SECTION 2.10(b)(i); and PROVIDED FURTHER, HOWEVER, that no such
supplemental agreement shall, without the consent of each Lender affected
thereby:
(a) extend the Commitment of any Lender, extend the
maturity of any Revolving Loan, extend the final maturity of any
Reimbursement Obligation beyond the Commitment Termination Date, extend the
expiry date of any Standby Letter of Credit beyond the date which is five
Business Days immediately preceding the Commitment Termination Date, extend
the expiry date of any Commercial Letter of Credit beyond the date which is
10 days immediately preceding the Commitment Termination Date, or forgive all
or any portion of the principal amount of any Revolving Loan or Reimbursement
Obligation or any interest or fees, or reduce the rate or extend the time of
payment of interest or fees on any Revolving Loan, Reimbursement Obligation,
Commitment or Letter of Credit;
(b) reduce the percentage specified in the definition of
Required Lenders;
(c) increase the amount of the Commitment of any Lender
hereunder, or permit TLGI or any Borrower to assign its rights under this
Agreement;
(d) amend this SECTION 9.2 or SECTION 13.1(a);
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(e) release a Borrower other than in connection with an
Approved Sale or as set forth in the Loan Documents; or
(f) release all or substantially all of the Collateral
other than in connection with an Approved Sale or as set forth in the Loan
Documents.
No amendment of any provision of this Agreement relating in any way to the
Agent shall be effective without the written consent of the Agent. No
amendment of any provision of this Agreement relating in any way to the L/C
Issuer or any or all of the Letters of Credit shall be effective without the
written consent of the L/C Issuer and the Agent. The Agent may waive payment
of the fee required under SECTION 13.3.2 without obtaining the consent of any
other party to this Agreement.
9.3 PRESERVATION OF RIGHTS. No delay or omission of the
Lenders or any of them or the Agent or the L/C Issuer to exercise any right
under the Loan Documents shall impair such right or be construed to be a
waiver of any Default or an acquiescence therein, and the making of a
Revolving Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrowers to satisfy the
conditions precedent to such Revolving Loan or Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of
the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by (or with the consent of) the Lenders
required pursuant to SECTION 9.2, and then only to the extent specifically
set forth in such writing. All remedies contained in the Loan Documents or
afforded by law shall be cumulative and all shall be available to the Agent,
the Lenders and the L/C Issuer until the Obligations have been paid in full.
ARTICLE X
GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and
warranties of TLGI and the Borrowers contained in this Agreement shall
survive the occurrence of the effectiveness of this Agreement and the making
of the Revolving Loans and the issuance of the Letters of Credit herein
contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrowers and the L/C Issuer shall not be obligated to
issue any Letter of Credit in violation of any limitation or prohibition
provided by any applicable statute or regulation.
10.3 STAMP DUTIES. The Borrowers shall pay and forthwith on
demand indemnify each of the Agent, each Lender and the L/C Issuer against
any liability it incurs in respect of any stamp, registration and similar tax
which is or becomes payable in connection with the entry into, performance or
enforcement of any Loan Document.
10.4 HEADINGS. Section headings in the Loan Documents are
for convenience of reference only and shall not govern the interpretation of
any of the provisions of the Loan Documents.
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10.5 ENTIRE AGREEMENT, INDEPENDENCE OF COVENANTS. The Loan
Documents (together with the Fee Letter) embody the entire agreement and
understanding among TLGI, the Borrowers, the Agent, the Lenders and the L/C
Issuer and supersede all prior agreements and understandings among TLGI, the
Borrowers, the Agent, the Lenders and the L/C Issuer relating to the subject
matter thereof. Except as otherwise expressly provided herein, no provision
of this Agreement shall be construed as waiving, negating or otherwise
qualifying any restriction, limitation or other condition imposed by any
other provision of this Agreement.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties
to this Agreement and their respective successors and assigns.
10.7 EXPENSES, INDEMNIFICATION. Whether or not the
transactions contemplated hereby shall be consummated, the Borrowers jointly
and severally agree to pay promptly (i) all the actual and reasonable costs
and expenses of the Agent, including the reasonable fees, expenses and
disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to the Agent, Ernst &
Young, O'Melveny & Xxxxx LLP and Xxxxx, Xxxxx & Xxxxx in connection with the
negotiation, preparation and execution of the Loan Documents; (ii) all the
costs of furnishing all opinions by counsel for the Borrowers (including any
opinions requested by the Agent as to any legal matters arising hereunder)
and of each Borrower's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental and insurance requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to the Agent (including allocated costs
of internal counsel) and the reasonable fees of a financial advisor providing
services and advice to the Agent in connection with the administration of the
Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby and any other documents or
matters requested by the Borrowers; (iv) all the actual costs and reasonable
expenses of creating and perfecting Liens in favor of the Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of
counsel to the Agent and of counsel providing any opinions that the Agent may
reasonably request in respect of the Collateral Documents or the Liens
created pursuant thereto; (v) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants,
advisors and agents employed or retained by the Agent and its counsel) of
obtaining and reviewing information regarding the Collateral; (vi) all the
actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any consultants, advisors and agents employed or
retained by the Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by the Agent in connection with the syndication
of the Commitments; and (viii) after the occurrence and during the
continuance of a Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by the Agent and
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Lenders in enforcing any Obligations of or in collecting any payments due
from any Borrower hereunder or under the other Loan Documents by reason of
such Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral). Without limiting the
generality of the foregoing, if, at any time or times, regardless of the
existence of a Default, the Agent or any Lender shall incur reasonable
expenses itself or employ counsel or other professional advisors, including,
but not limited to, environmental, financial and management consultants, for
advice or other representation or shall incur legal, appraisal, accounting,
consulting or other reasonable costs and expenses in connection with actions
or claims asserted against the Agent or such Lender in respect of:
(i) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by the Agent, any Lender, any Borrower or
any other Person) in any way relating to the Collateral, any of the
Loan Documents, or any other agreements to be executed or delivered in
connection therewith or herewith, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case or proceeding commenced by or
against any Borrower or any other Person that may be obligated to the
Agent or any Lender by virtue of the Loan Documents, under the
Bankruptcy Code, or any other applicable Federal, state, or foreign
bankruptcy or other similar law;
(ii) any attempt to enforce any rights or remedies of the
Agent or any Lender against any Borrower, or any other Person that may
be obligated to the Agent or any Lender by virtue of being a party to
any of the Loan Documents;
(iii) any attempt to appraise, inspect, verify, protect,
collect, sell, liquidate or otherwise dispose of the Collateral,
including without limitation, obtaining and reviewing any reports
provided for under SECTION 4.1; or
(iv) any Chapter 11 Case and any Canadian Case (including,
without limitation, the on-going monitoring by the Agent of any
Chapter 11 Case and any Canadian Case, including attendance by the
Agent and its counsel at hearings or other proceedings and the
on-going review of documents filed with a U.S. Court or a Canadian
Court in respect thereof) and the Agent's and the Lenders' interests
with respect to any Borrower (including, without limitation, the
on-going review of any Borrower's business, assets, operations,
prospects or financial condition as the Agent shall deem necessary),
the Collateral or the Obligations (but only to the extent relating to
the Loan Documents and the Obligations);
then, and in any such event, the reasonable fees and expenses incurred by the
Agent and such attorneys and other professional advisors and consultants
arising from such services, including those of any appellate proceedings, and
all reasonable expenses, costs, charges and other fees incurred by such
counsel or other professionals in any way or respect arising in connection
with or relating to any of the events or actions described in this SECTION
10.7 shall be payable, on demand and presentation of a reasonably detailed
invoice, by the Borrowers to the Agent and shall be additional Obligations
secured under the Collateral Documents and the other Loan Documents. Any fees
and expenses payable pursuant to this SECTION 10.7 shall be paid without the
necessity of any court approval or application by the Agent or any Lender,
unless otherwise
78
ordered by the U.S. Court. In addition to the payment of expenses pursuant
to this SECTION 10.7, whether or not the transactions contemplated hereby
shall be consummated, the Borrowers jointly and severally agree to defend
(subject to Indemnitees' selection of counsel), indemnify, pay and hold
harmless Agents and Lenders, and the officers, partners, directors, trustees,
employees, agents and affiliates of any of Agents and Lenders (collectively
called the "INDEMNITEES"), from and against any and all Indemnified
Liabilities (as hereinafter defined); PROVIDED that no Borrower shall have
any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise solely from the
gross negligence or willful misconduct of that Indemnitee as determined by a
final, non-appealable judgment of a court of competent jurisdiction. As used
herein, "INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or xxxxx any
Hazardous Materials Activity), expenses and disbursements of any kind or
nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto,
and any fees or expenses incurred by Indemnitees in enforcing this
indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
(including the Lenders' agreement to make the Loans hereunder or the use or
intended use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof, or any enforcement of
any of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral)), or (ii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or
practice of TLGI, the Borrowers or any Subsidiaries. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
SECTION 10.7 may be unenforceable in whole or in part because they are
violative of any law or public policy, the Borrowers shall, jointly and
severally, contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them. The
obligations of the Borrowers under this SECTION 10.7 shall survive payment of
the Obligations and the termination of this Agreement.
Notwithstanding anything herein to the contrary, the
reimbursement and indemnity provisions of this SECTION 10.7 shall not apply
to any obligations, claims or liabilities arising in connection with any
Prepetition Indebtedness.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing
documents and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may retain one and furnish one to
each of the Lenders.
10.9 ACCOUNTING; CURRENCY CONVERSIONS. Except as provided to
the contrary herein, all accounting terms used herein shall be interpreted
and all accounting determinations
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hereunder shall be made in accordance with Agreement Accounting Principles;
PROVIDED, HOWEVER, that (a) to the extent that any change in GAAP shall alter
the result of any financial covenant or test or any other accounting
determination to be computed or made hereunder, TLGI and the Borrowers agree
that such covenant, test or other determination shall continue to be computed
or made on the basis of Agreement Accounting Principles as in effect prior to
such change in GAAP, unless the Required Lenders shall otherwise consent and
(b) the MIPS shall be deemed to constitute capital stock of TLGI for purposes
of this Agreement. To the extent that for purposes of computing any
financial covenant or test or making any other accounting determination
hereunder, any amount denominated in one currency must be converted into
another currency, such conversion shall be made in a manner that accords with
the currency conversion policies and procedures used in preparing the
financial statements of TLGI, the Borrowers and the other Subsidiaries on the
basis of which the relevant computations or determinations are or will be
made, unless the Required Lenders shall have specified an alternative basis
for making such conversions.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document 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 all Loan Documents are
declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the
Borrowers, on the one hand, and the Lenders, the L/C Issuer and the Agent, on
the other hand, shall be solely that of borrower and lender, and the
relationship between TLGI and the Subsidiaries (other than the Borrowers), on
the one hand, and the Lenders, the L/C Issuer and the Agent, on the other
hand, shall be construed accordingly. None of the Agent, the L/C Issuer or
any Lender shall have any fiduciary responsibilities to TLGI, the Borrowers
or any other Subsidiary. None of the Agent, the L/C Issuer or any Lender
undertakes any responsibility to TLGI, the Borrowers or any other Subsidiary
to review or inform TLGI, the Borrowers or any other Subsidiary of any matter
in connection with any phase of the business or operations of TLGI, the
Borrowers or any other Subsidiary.
10.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.13 CONSENT TO JURISDICTION. SUBJECT TO THE JURISDICTION OF
THE U.S. COURT, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATIONS THEREUNDER,
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX
XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
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(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO SUCH CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH ARTICLE XIV;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH CREDIT PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT;
(V) AGREES THAT THE LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
SUCH CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 10.13
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1402 OR OTHERWISE.
10.14 WAIVER OF JURY TRIAL. TLGI, EACH BORROWER, THE AGENT,
THE L/C ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
10.15 CONFIDENTIALITY. Each of the Agent, each Lender and the
L/C Issuer agrees to hold any confidential information identified in making
as such which it may receive from TLGI, the Borrowers or any other Subsidiary
pursuant to this Agreement in confidence, except for disclosure (a) to other
Lenders, the L/C Issuer and the Agent and their respective Affiliates, (b) to
legal counsel, accountants and other professional advisors to the Agent, the
L/C Issuer or that Lender or to a Transferee, (c) to regulatory officials and
examiners, (d) to any Person as requested pursuant to or as required by law,
regulation or legal process, (e) to any Person in connection with any legal
proceeding to which the Agent, the L/C Issuer or that Lender is a party and
(f) permitted by SECTION 13.4.
10.16 JUDGMENT CURRENCY. If the Agent, the L/C Issuer or any
Lender receives an amount in respect of the Borrowers' or TLGI's liability
under the Loan Documents or if that liability is converted into a claim,
proof, judgment or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable under
the relevant Loan Document, (a) TLGI and the Borrowers, as applicable, shall
indemnify the Agent, the L/C Issuer or such Lender, as applicable, as an
independent obligation against any loss, cost, expense
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or liability arising out of or as a result of the conversion; (b) if the
amount received by the Agent, the L/C Issuer or such Lender, as applicable,
when converted into the contractual currency at a market rate on the date of
receipt by the Agent, the L/C Issuer or such Lender in the usual course of
its business, is less than the amount owed in the contractual currency, the
Borrowers or TLGI, as applicable, shall forthwith on demand pay to the Agent,
the L/C Issuer or such Lender, as applicable, an amount in the contractual
currency equal to the deficit; and (c) TLGI or the Borrowers, as applicable,
shall pay to the Agent, the L/C Issuer or such Lender, as applicable, on
demand any exchange costs and taxes payable in connection with any such
conversion. Each of the Borrowers and TLGI waives any right it may have in
any jurisdiction to the extent permitted by law to pay any amount under the
Loan Documents in a currency other than that in which it is expressed to be
payable.
10.17 CANADIAN INTEREST ANTIDOTES. (a) Notwithstanding any
other provision of this Agreement, if and to the extent that the laws of Canada
are applicable to interest payable under this Agreement, no interest on the
credit advanced will be payable in excess of that permitted by the laws of
Canada. If the effective annual rate of interest, calculated in accordance with
generally accepted actuarial practices and principles, would exceed 60% (or such
other rate as the Parliament of Canada may determine from time to time as the
criminal rate) on the credit advanced, then: (i) the amount of any charges for
the use of money, expenses, fees, bonuses, commissions or other charges payable
in connection therewith will be reduced to the extent necessary to eliminate
such excess; (ii) any remaining excess that has been paid will be credited
towards repayment of the principal amount; and (iii) any overpayment that may
remain after such crediting will be returned forthwith on demand. In this
paragraph the terms "interest," "criminal rate" and "credit advanced" have the
meaning ascribed to them in Section 347 of the Criminal Code (Canada).
(b) If and to the extent that the laws of Canada are
applicable to interest payable under this Agreement, for the purpose of the
Interest Act (Canada) the yearly rate of interest to which interest
calculated on the basis of a 360- or 365-day year is equivalent is the rate
of interest determined as herein provided multiplied by the number of days in
such year and divided by 360 or 365, as the case may be.
10.18 PARTIES INCLUDING TRUSTEES; U.S. COURT PROCEEDINGS. This
Agreement and the other Loan Documents shall be binding upon, and inure to the
benefit of, the successors of the Agent and each Lender, and the assigns,
transferees and endorsees of the Agent and each Lender. The security interests
and Liens created in this Agreement, the Collateral Documents and the other Loan
Documents shall be and remain valid and perfected, and the claims of the Agent
and the Lenders hereunder valid and enforceable in accordance with the terms
hereof, notwithstanding the discharge of any Borrower pursuant to 11 U.S.C.
Section 1141, the conversion of any Chapter 11 Case or any other bankruptcy
case of any Credit Party to a case under Chapter 7 of the Bankruptcy Code, the
dismissal of any Chapter 11 Case or any subsequent Chapter 7 case or the release
of any Collateral from the property of any Credit Party. The security interests
and Liens created in this Agreement, the Collateral Documents and the other Loan
Documents shall be and remain valid and perfected without the necessity that the
Agent file financing statements or otherwise perfect its security interests or
Liens under applicable law. This Agreement, the claims of Agent and the Lenders
hereunder, and all security interests or Liens created hereby or pursuant hereto
or by or pursuant to the Collateral Documents or any other Loan Document shall
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at all times be binding upon the Credit Parties, the estates of the Credit
Parties and any trustee appointed in any Chapter 11 Case or any Chapter 7
case, or any other successor in interest to the Borrowers. This Agreement
shall not be subject to Section 365 of the Bankruptcy Code.
10.19 COUNTERPARTS; EFFECTIVENESS. This Agreement 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 Agreement shall become
effective on the Effective Date.
ARTICLE XI
THE AGENT
11.1 APPOINTMENT. First Union is hereby appointed Agent
hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the agent of such Lender. The Agent
agrees to act as such upon the express conditions contained in this ARTICLE XI.
The Agent shall not have a fiduciary relationship in respect of TLGI, any
Borrower, any other Subsidiary or any Lender by reason of this Agreement.
11.2 POWERS. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to any or all of TLGI,
any Borrower, any other Subsidiary, the Lenders or the L/C Issuer for any action
taken or omitted to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith except for its or their own
gross negligence or willful misconduct.
11.4 NO RESPONSIBILITY FOR REVOLVING LOANS, RECITALS, ETC.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any extension of credit hereunder; (b) the performance or observance
of any of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in ARTICLE IV, except receipt of items required to be delivered to the
Agent; or (d) the validity, effectiveness or genuineness of any Loan Document or
any other instrument or writing furnished in connection therewith. The Agent
shall have no duty to disclose to the Lenders or the L/C Issuer information that
is not required to be furnished by TLGI or the Borrowers to the Agent at such
time, but is voluntarily furnished by TLGI or the Borrowers to the Agent (either
in its capacity as Agent or in its individual capacity).
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders or, in the case of any act
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or failure to act calculated to give rise to any of the events or
circumstances described in CLAUSES (A) through (F) of SECTION 9.2, each
affected Lender, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Revolving Loans and participations in Reimbursement Obligations and Letters
of Credit. The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first
be indemnified to its satisfaction by the Lenders PRO RATA against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents and attorneys-in-fact and shall not be answerable to
the Lenders or the L/C Issuer, except as to money or securities received by it
or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder and under any other Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be
entitled to rely upon any record, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons and,
with respect to legal matters, upon the opinion of counsel selected by the
Agent, which counsel may be employees of the Agent.
11.8 AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (a) for any amounts not reimbursed by the Borrowers for
which the Agent is entitled to reimbursement by the Borrowers under the Loan
Documents, (b) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents to the extent not otherwise reimbursed by
the Borrowers and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, PROVIDED that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent. The obligations of the Lenders under this SECTION 11.8
shall survive payment of the Obligations and termination of this Agreement.
11.9 RIGHTS AS A LENDER. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under any other
Loan Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with TLGI, any Borrower or any
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other Subsidiary in which TLGI, any Borrower or any such other Subsidiary is
not restricted hereby from engaging with any other Person.
11.10 LENDERS' CREDIT DECISIONS. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements prepared by TLGI and the Borrowers and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Lenders, the L/C Issuer and the Borrowers,
such resignation to be effective upon the appointment of a successor Agent or,
if no successor Agent has been appointed, 45 days after the resigning Agent
gives notice of its intention to resign. The Agent shall so resign if at any
time it ceases to be a Lender. Upon any such resignation the Required Lenders
shall have the right to appoint, on behalf of the Lenders, a successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders
within 30 days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Lenders, a
successor Agent. If the Agent has resigned and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and the
Borrowers shall make all payments in respect of the Obligations to the
applicable Lender (except for payments required to be made directly to the L/C
Issuer) and for all other purposes shall deal directly with the Lenders and the
L/C Issuer. No successor Agent shall be deemed to be appointed hereunder until
such successor Agent has accepted the appointment. Any such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent. Upon the effectiveness of the resignation of the Agent, the resigning
Agent shall be discharged from its duties and obligations hereunder and under
the Loan Documents. After the effectiveness of the resignation of an Agent, the
provisions of this ARTICLE XI shall continue in effect for the benefit of such
Agent in respect of any actions taken or omitted to be taken by it while it was
acting as the Agent hereunder and under the other Loan Documents.
11.12 AGENT'S FEE. The Borrowers agree to pay to the Agent, for
its own account, the fees agreed to by the Borrowers and the Agent pursuant to
the Fee Letter, or as otherwise agreed from time to time.
ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any
rights of the Lenders and the L/C Issuer under applicable law and
notwithstanding the provisions of Section 362 of the Bankruptcy Code and without
application of motion to, or order from the U.S. Court, if any
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Default occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender or the L/C Issuer to or
for the credit or account of TLGI or any Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender or the L/C Issuer,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. Lenders hereby agree among themselves
that if any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due
and owing to that Lender hereunder or under the other Loan Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify the Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; PROVIDED that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender pursuant to an order of the U.S. Court or the
Canadian Court or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. Each Borrower
expressly consents to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by such
Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of TLGI, the
Borrowers, the Agent, the L/C Issuer and the Lenders and their respective
successors and assigns, except that (a) neither TLGI nor any Borrower shall have
the right to assign its rights or obligations under the Loan Documents and (b)
any assignment by any Lender must be made in compliance with SECTION 13.3.
Notwithstanding CLAUSE (B) of the preceding sentence, any Lender may at any
time, without the consent of TLGI, the Borrowers, the Agent or the L/C Issuer,
assign all or any portion of its rights under this Agreement to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment to a Federal Reserve
Bank shall release the transferor Lender from its obligations hereunder. In
order to facilitate such assignment, the Borrowers hereby agree that, upon
request of any Lender at any time and from time to time after the Borrowers have
made their initial borrowing hereunder, the Borrowers shall provide to such
Lender, at the Borrowers'
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own expense, a promissory note, substantially in the form of EXHIBIT A
hereto, evidencing the Revolving Loans owing to such Lender. The Agent may
treat the payee of any Revolving Loan as the owner thereof for all purposes
hereof unless and until such payee complies with SECTION 13.3 in the case of
an assignment thereof or, in the case of any other transfer, a written notice
of the transfer is filed with the Agent. Any assignee or transferee of a
Revolving Loans, a participation in a Letter of Credit or a participation in
a Reimbursement Obligation agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents, and any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Revolving Loan, participation in a
Letter of Credit or participation in a Reimbursement Obligation, shall be
conclusive and binding on any subsequent holder, transferee or assignee of
such Revolving Loan, participation in a Letter of Credit or participation in
a Reimbursement Obligation.
13.2 PARTICIPATIONS.
13.2.1. PERMITTED PARTICIPATIONS; EFFECT. Any Lender may,
in the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other entities (each such
bank or other entity being referred to herein as a "PARTICIPANT")
participating interests in any Revolving Loan owing to such Lender, or
L/C Interest held by such Lender, the Commitment of such Lender or any
other interest of such Lender under the Loan Documents; PROVIDED,
HOWEVER, that no Lender shall grant a participating interest to any
entity which is engaged in any business which is competitive in any
material respect with the business of TLGI, any Borrower or any of the
Subsidiaries of TLGI. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such
Revolving Loan or L/C Interest for all purposes under the Loan Documents,
all amounts payable by the Borrowers under this Agreement shall be
determined as if such Lender had not sold such participating interests
and TLGI, the Borrowers, the L/C Issuer and the Agent shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents. The
participation agreement effecting the sale of any participating interest
shall contain a representation by the Participant to the effect that none
of the consideration used to make the purchase of the participating
interest in the Commitment, Revolving Loans and the L/C Interests under
such participation agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Participant in and under the Loan
Documents will not be "plan assets" under ERISA.
13.2.2 VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Revolving Loan,
L/C Interest or Commitment in which such Participant has an interest
which forgives principal, interest or fees or reduces the interest rate
or fees payable with respect to any such
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Revolving Loan, L/C Interest or Commitment, or postpones any date
fixed for any regularly scheduled payment of principal of, or interest
or fees on, any such Revolving Loan, L/C Interest or Commitment.
13.2.3 SETOFF. Each Lender's right to exercise its right of
setoff provided in SECTION 12.1 shall not be reduced or impaired by any
grant by such Lender of a participating interest to a Participant.
13.3 ASSIGNMENTS.
13.3.1 PERMITTED ASSIGNMENTS Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("PURCHASERS") all or any
part of its Commitment and outstanding Revolving Loans, and L/C
Interests, together with its rights and obligations under the Loan
Documents with respect thereto; PROVIDED, HOWEVER, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all
of the assigning Lender's rights and obligations so assigned; (ii) the
amount of the Commitment of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of such assignment)
may be in the amount of such Lender's entire Commitment but otherwise
shall not be less than $5,000,000 or an integral multiple of $ 1,000,000
in excess of that amount; and (iii) notwithstanding the CLAUSE (II), if
the assignment is made to a Lender or an Affiliate of the assigning
Lender, the amount of the Commitment assigned shall not be less than
$1,000,000. Such assignment shall be substantially in the form of
EXHIBIT D hereto or in such other form as may be agreed to by the parties
thereto. The consent of the Company, the L/C Issuer and the Agent shall
be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender; PROVIDED, HOWEVER, that if a Default has
occurred and is continuing, the consent of the Company shall not be
required. Such consents shall not be unreasonably withheld.
13.3.2 EFFECT; EFFECTIVE DATE OF ASSIGNMENTS. Solely with respect
to assignments under SECTION 13.3.1, upon (a) delivery to the Agent of a
notice of assignment, substantially in the form attached to EXHIBIT E
hereto (a "NOTICE OF ASSIGNMENT"), together with any consents required by
SECTION 13.1, and (b) payment of a $3,500 fee to the Agent for processing
such assignment, such assignment shall become effective on the date for
effectiveness specified in such Notice of Assignment. If any such
assignment is made as contemplated by the terms of SECTION 3.5 at the
request of the Borrowers, or is otherwise made at the request of the
Borrowers, the $3,500 fee shall be paid by the Borrowers. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the
Commitment, Revolving Loans and L/C Interest under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the date such
assignment becomes effective, such Purchaser shall for all purposes be a
Lender party to this Agreement and any other Loan
88
Document executed by or on behalf of the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto and thereto,
and the transferor Lender shall be released with respect to the
percentage of the Aggregate Commitment, Revolving Loans and L/C
Interest assigned to such Purchaser without any further consent or
action by TLGI, the Borrowers, the Lenders, the L/C Issuer or the
Agent being required. Upon the consummation of any assignment to a
Purchaser pursuant to this SECTION 13.3.2, the transferor Lender, the
Agent and the Borrowers shall make appropriate notations in their
respective records to reflect the principal amounts of the Commitments
of the transferor Lender and the Purchaser, as adjusted pursuant to
such assignment. In connection with the foregoing, the Agent shall
maintain at its address referred to in SECTION 14.1 a copy of each
Notice of Assignment delivered to it and a register (the "REGISTER")
for the recordation of the names and addresses of the Lenders and the
Commitments of such Lenders, the principal amount of each Type of
Revolving Loan owing to each such Lender from time to time. The
entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and TLGI, the Borrowers, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as the
owner of the Revolving Loans recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by TLGI,
the Borrowers, or any Lender at any reasonable time and from time to
time upon reasonable prior notice. The Agent shall give prompt
written notice to the Borrowers of the making of any entry in the
Register or any change in any such entry.
13.4 DISSEMINATION OF INFORMATION. Each of TLGI and each
Borrower authorizes each Lender to disclose to any Participant or Purchaser or
any other Person acquiring an interest in the Loan Documents by operation of law
(each a "TRANSFEREE") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of TLGI and any
Borrower and the other Subsidiaries; provided that each Transferee and
prospective Transferee agrees to be bound by SECTION 10.15.
13.5 TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 2.17.
ARTICLE XIV
NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by
SECTION 2.13(D) with respect to Revolving Loans, all notices and other
communications provided to any party hereto under this Agreement or any other
Loan Document shall be in writing or by telex or by facsimile and addressed or
delivered to such party at its address set forth below its signature hereto or
at such other address as may be designated by such party in a notice to the
other parties; PROVIDED that notice to the Company which specifies that it is a
notice to the Borrowers shall constitute notice to the Borrowers hereunder. Any
notice, if mailed and properly addressed with postage
89
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrowers, TLGI, the Agent, the L/C
Issuer and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
90
IN WITNESS WHEREOF, the Borrowers, 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: /s/ XXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Assistant Secretary
Each of the entities listed on
SCHEDULE A annexed hereto
By: /s/ XXXXX X. XXXXXXX
------------------------------------
on behalf of each of the entities
listed on SCHEDULE A annexed hereto
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Assistant Secretary
Address for each of the Borrowers:
Xxxxxx Group International, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President, Finance
Facsimile No.: (000) 000-0000
with a copy to:
The Xxxxxx Group Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President, Finance
Facsimile No.: (000) 000-0000
S-1
THE XXXXXX GROUP INC.
By: /s/ XXXX XXXXXX
-----------------------------------
Name: Xxxx Xxxxxx
Title: Chief Financial Officer
Address:
The Xxxxxx Group Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President, Finance
Facsimile No.: (000) 000-0000
S-2
FIRST UNION NATIONAL BANK, as Lender,
L/C Issuer and Administrative Agent
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Address:
First Union National Bank
000 X. Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
S-3
EXHIBIT A
FORM OF REVOLVING NOTE
Due June 1, 2001
XXXXXX GROUP INTERNATIONAL, INC., a Delaware corporation (the
"COMPANY"), as debtor and debtor-in-possession, and EACH OF THE COMPANY'S
SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF, each as debtor and
debtor-in-possession (Company and each such Subsidiary are each individually
referred to herein as a "BORROWER" and collectively, on a joint and several
basis, as "BORROWERS"), jointly and severally promise to pay to _____________
(the "LENDER") or its registered assigns the aggregate unpaid principal
amount of all Revolving Loans made by the Lender to the Borrowers pursuant to
Article II of the Debtor-In-Possession Credit Agreement hereinafter referred
to (as the same may be further amended or modified, the "AGREEMENT";
capitalized terms used herein and not otherwise defined herein are used with
the meanings attributed to them in the Agreement), in immediately available
funds in Dollars on the dates and at the offices of First Union National
Bank, as Administrative Agent, specified in the Agreement, together with
interest on the unpaid principal amount hereof at the rates determined in
accordance with the Agreement. The Borrowers shall pay the principal of and
accrued and unpaid interest on the Revolving Loans in full on the Facility
Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Revolving Loan and the date and amount
of each principal payment hereunder.
This Revolving Note is one of the "Revolving Notes" issued pursuant to
SECTION 13.1 of, and is entitled to the benefits of, the Debtor-In-Possession
Credit Agreement, dated as of June 1, 1999, among the Borrowers, The Xxxxxx
Group Inc., First Union National Bank, as L/C Issuer and Administrative
Agent, and the lenders parties thereto, including the Lender, to which
Agreement, as it may be amended from time to time, reference is hereby made
for a statement of the terms and conditions governing this Revolving Note,
including the terms and conditions under which this Revolving Note may be
prepaid or its maturity date accelerated. The Agreement, among other things,
provides for the making of "Revolving Loans" by the Lender to the Borrowers
from time to time in an aggregate amount not to exceed at any time
outstanding the Lender's Commitment.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of a Default, the unpaid balance of the principal
amount of this Revolving Note, together with all accrued and unpaid interest
thereon, may become, or may
A-1
be declared to be, due and payable in the manner, upon the conditions and
with the effect provided in the Agreement.
The terms of this Revolving Note are subject to amendment only in the
manner provided in the Agreement.
This Revolving Note is subject to restrictions on transfer or assignment
as provided in SECTIONS 13.1 and 13.3 of the Agreement.
No reference herein to the Agreement and no provision of this Revolving
Note or the Credit Agreement shall alter or impair the obligations of the
Borrowers, which are absolute and unconditional and joint and several, to pay
the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Borrowers, jointly and severally, promise to pay all costs and
expenses, including reasonable attorneys' fees, all as provided in SECTION
10.7 of the Agreement, incurred in the collection and enforcement of this
Note. The Borrowers and any endorsers of this Revolving Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice
of every kind and, to the full extent permitted by law, the right to plead
any statute of limitations as a defense to any demand hereunder.
[Remainder of page left intentionally blank]
A-2
XXXXXX GROUP INTERNATIONAL, INC.
By: ________________________________
Name:
Title:
EACH OF THE ENTITIES LISTED ON
SCHEDULE A ANNEXED HERETO
By: ________________________________
on behalf of each of the
entities listed on SCHEDULE A
annexed hereto in the capacity
set forth on such Schedule
Name:
A-3
Schedule of Revolving Loans and Payments of Principal to Revolving Note
of Xxxxxx Group International, Inc. and certain of its Subsidiaries,
Dated June 1, 1999
Principal Amount Maturity of Principal
Date of Revolving Loan Interest Period Amount Paid Unpaid Balance
---- ----------------- --------------- ----------- --------------
A-4
EXHIBIT B
REQUIRED OPINIONS
Forms of opinions of Xxxxx, Day, Xxxxxx & Xxxxx (U.S. Federal, New York
and Delaware corporate counsel) and Xxxxxxx & DuMoulin (Canada Federal and
British Columbia counsel) are attached as Attachments 1 and 2.
B-1
June 1, 1999
First Union National Bank, as Agent
The Lenders Party from time to time to
the Credit Agreement Referenced Below
Re: Debtor-in-Possession Credit Agreement dated as of June 1, 1999 (the
"CREDIT AGREEMENT"; capitalized terms used herein without definition
shall have the meanings assigned to those terms in the Credit Agreement)
among Xxxxxx Group International, Inc., a Delaware corporation, as
debtor and debtor-in-possession ("COMPANY"), each of Company's
Subsidiaries party thereto, each a debtor and debtor-in-possession
(Company and each Subsidiary are each individually referred to herein as
a "BORROWER" and, collectively on a joint and several basis, as
"BORROWERS"), The Xxxxxx Group Inc., the Lenders listed therein, and
First Union National Bank, as Agent.
Law Addressed: Federal, New York, Delaware [and any other jurisdiction where
any Credit Party is organized].
OPINIONS:
1. Company is a corporation duly incorporated and validly existing and
in good standing under the laws of the State of Delaware. Company has all
requisite corporate power and authority to own and operate its properties and
to carry on its business as now conducted. Company is duly qualified to do
business as a foreign corporation, and is in good standing, under the laws of
each jurisdiction where the ownership or operation of its properties and
assets or the conduct of its business requires such qualification, except in
jurisdictions where the failure to be so qualified would not have a Material
Adverse Effect.
2. Company has all requisite corporate power and authority to execute,
deliver and perform the Loan Documents, and to carry out the transactions
contemplated thereby. Company has the power and authority to issue the Notes
and to carry out the transactions contemplated thereby.
3. The execution, delivery and performance of each of the Loan
Documents, the issuance, delivery and performance of the Notes and the
consummation of the transactions contemplated thereby has been duly
authorized by all necessary corporate action on the part of Company. Each of
the Loan Documents has been duly executed and delivered by Company party
thereto and is the legally valid and binding obligation of Company party
thereto, enforceable against Company in accordance with its terms.
B-2
4. The execution, delivery and performance by Company of the Loan
Documents, the issuance, delivery and performance of the Notes and any other
transaction contemplated by the Loan Documents do not and will not (i)
violate any provision of federal or state law applicable to Company, the
Certificate of Incorporation, Bylaws and other organizational documents, as
applicable, of Company or any order, judgment or decree of any court or other
agency of government binding on Company, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company, or (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets
of Company (except as required under the Credit Agreement and Collateral
Documents).
5. It is not necessary in connection with the execution and delivery
of the Notes to register the Notes under the Securities Act of 1933, as
amended, or to qualify an indenture in respect thereof under the Trust
Indenture Act of 1939, as amended.
6. The extensions of credit and the application of the proceeds
thereof, as provided in the Credit Agreement, do not violate Regulations T, U
or X of the Board of Governors of the Federal Reserve System.
7. The execution, delivery and performance by each Credit Party of the
Loan Documents, the issuance, delivery and payment of the Notes and any other
transaction contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action
to, with or by, any U.S. or Canadian federal or state governmental authority
or regulatory body, EXCEPT for the execution and entry by the U.S. Court of
the Interim Borrowing Order and the Final Borrowing Order.
8. No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company
Act of 1940.
9. There is no action, suit, proceeding, governmental arbitration or
governmental investigation (whether or not purportedly on behalf of any
Credit Party) at law or in equity or before or by any U.S. or Canadian
federal or state department, commission, board, bureau, agency or
instrumentality pending or threatened against or affecting any Credit Party
or any of its property.
10. The execution and delivery of the Collateral Documents and the
execution and entry by the U.S. Court of the Interim Borrowing Order are
sufficient to create valid, enforceable and perfected first priority security
interests in favor of the Agent on behalf of Lenders in the Collateral as
security for the payment of the Obligations.
11. The Interim Borrowing Order was entered on the docket of the Clerk
of
B-3
the U.S. Court for the Chapter 11 Cases (the "DOCKET") on _______, 1999. We
have reviewed the Docket as it existed as of _______, 1999 at ___ [A.M.][P.M.]
Based solely upon our review of the Docket as of such date and time, the
Interim Borrowing Order is in full force and effect in accordance with its
terms, no motion to amend, reargue, stay, vacate or rescind the same has been
filed with the U.S. Court, and no order amending, staying, granting
reargument, vacating or rescinding the same has been entered by the U.S.
Court.
B-4
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
To: The Lenders Party To The
Debtor-In-Possession Credit Agreement
Described Below
This Compliance Certificate is furnished pursuant to that certain
Debtor-In-Possession Credit Agreement dated as of June 1, 1999 (as futher
amended, modified, renewed or extended from time to time the "AGREEMENT")
among the Borrowers, The Xxxxxx Group Inc., the Lenders party thereto and
First Union National Bank, as L/C Issuer and Administrative Agent for the
Lenders. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am a duly authorized officer of [TLGI][the Borrowers] and the Chief
Financial Officer;
2. I have reviewed the terms of the Agreement and I have made, or have to
be made under my supervision, a detailed review of the transactions and
conditions of the Borrowers and of their Subsidiaires during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of
the date of this Certificate, except as set forth below; [and]
4. Schedule I attached hereto sets forth financial data and computations
evidencing [Borrowers'] compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and
correct[;and][.]
5. [Schedule II attached hereto sets forth a description of all matters
described in SECTION 7.3 of the Agreement (including, without
limitation, clauses (a), (b), (c) and (d) thereof) which have been
disclosed, or which should have been disclosed, pursuant to the terms of
SECTION 7.3 of the Agreement during the period from the date of the last
Compliance Certificate delivered to the Lenders through the date hereof
(which description may consist of copies of notices previously given to
the Lenders to the extent applicable).]
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrowers have taken, are
taking, or propose to take with respect to each such condition or event:
________________________________________________________________________________
________________________________________________________________________________
C-1
The foregoing certifications, together with the computations set forth on
Schedule I hereto[, the disclosures set forth on Schedule II hereto] and the
financial statements delivered with this Certificate in support hereof, are
made and delivered this __________ day of ____________, [1999][200_].
By: _________________________________
On behalf of Xxxxxx Group
International, Inc. and each of
the Borrowers listed on
SCHEDULE A annexed hereto
Name:
Authorized Officer
C-2
SAMPLE SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ___________, [1999][200_] with
Provisions of _______ and _______ of
the Agreement
C-3
SAMPLE SCHEDULE II TO COMPLIANCE CERTIFICATE
Description of Matters Disclosable Pursuant
to the Provisions of SECTION 7.3 of
the Agreement
C-4
EXHIBIT D
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") between
_________ (the "ASSIGNOR") and _________ (the "ASSIGNEE") is dated as of
_________, [1999][200__]. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a
Debtor-In-Possession Credit Agreement (which, as it may be further amended,
modified, renewed or extended from time to time is herein called the "CREDIT
AGREEMENT") described in Item I of Schedule I attached hereto ("SCHEDULE I").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement such that after giving effect to such assignment the
Assignee shall have purchased pursuant to this Assignment Agreement the
percentage interest specified in Item 3 of Schedule I of all outstanding
rights and obligations under the Credit Agreement relating to the facilities
listed in Item 3 of Schedule I and the other Loan Documents. The Commitment
(or, if the applicable Commitment has been terminated, the aggregate
Revolving Loans and L/C Interest) purchased by the Assignee hereunder is set
forth in Items 3 and 4 of Schedule I.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "ASSIGNMENT EFFECTIVE DATE") shall be the later of the date specified in
Item 5 of Schedule I or two Business Days (or such shorter period agreed to
by the Agent) after a Notice of Assignment substantially in the form of
Exhibit E to the Credit Agreement has been delivered to the Agent. Such
Notice of Assignment must include any consents required to be delivered to
the Agent by SECTION 13.3.1 of the Credit Agreement. In no event will the
Assignment Effective Date occur if the payments required to be made by the
Assignee to the Assignor on the Assignment Effective Date under SECTIONS 4
and 5 hereof are not made on the proposed Assignment Effective Date. The
Assignor will notify the Assignee of the proposed Assignment Effective Date
no later than the Business Day prior to the proposed Assignment Effective
Date. As of the Assignment Effective Date, (a) the Assignee shall have the
rights and obligations of a Lender under the Loan Documents with respect to
the rights and obligations assigned to the Assignee hereunder and (b) the
Assignor shall relinquish its rights and be released from its corresponding
obligations under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Assignment Effective Date,
the Assignee shall be entitled to receive from the Agent all payments of
principal, interest and fees with respect to the interest assigned hereby.
The Assignee shall advance funds directly to the Agent with respect to all
Revolving Loans and, to the extent applicable, and L/C Interest, made on or
after the Assignment Effective Date with respect to the interest assigned
hereby. In consideration for the sale and assignment of Revolving Loans and,
to the extent applicable, the L/C Interest hereunder, the Assignee shall pay
the Assignor, on the Assignment Effective Date,
D-1
an amount equal to the principal amount of the portion of all Revolving Loans
assigned to the Assignee hereunder plus, if applicable (and without
duplication), the amount which corresponds to the liability of the L/C Issuer
in respect of outstanding Letters of Credit represented by the L/C Interest
assigned to the Assignee hereunder. The Assignee will also promptly remit to
the Assignor any amounts of interest on Revolving Loans, Reimbursement
Obligations and fees received from the Agent which relate to the portion of
the Revolving Loans, and, to the extent applicable, the L/C Interest assigned
to the Assignee hereunder for periods prior to the Assignment Effective Date,
and not previously paid by the Assignee to the Assignor.* In the event that
either party hereto receives any payment to which the other party hereto is
entitled under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee agrees to pay __% of the
recordation fee required to be paid to the Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (a) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Document, including
without limitation documents granting the Assignor and the other Lenders a
security interest in assets of the Borrowers or any guarantor, (b) any
representation, warranty or statement made in or in connection with any of
the Loan Documents, (c) the financial condition or creditworthiness of the
Borrowers or any guarantor, (d) the performance of or compliance with any of
the terms or provisions of any of the Loan Documents, (e) inspecting any of
the Property, books or records of the Borrowers, (f) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Obligations or (g) any
mistake, error of judgment or action taken or omitted to be taken in
connection with the Revolving Loans, Letters of Credit or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (a) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (b) agrees that it will,
independently and without reliance upon the Agent, the L/C Issuer, the
Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, (c)
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
----------
* Each Assignor may insert its standard payment provisions in lieu of the
foregoing payment terms.
D-2
incidental thereto, (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender, (e) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
Schedule I[,][and] (e) confirms that none of the funds, monies, assets or
other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under
ERISA [and (f) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any
United States federal income taxes].**
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Assignment Effective Date, the
Assignee shall have the right pursuant to SECTION 13.3.1 of the Credit
Agreement to assign the rights which are assigned to the Assignee hereunder
to any Person, provided that (a) any such subsequent assignment does not
violate any of the terms and conditions of the Loan Documents or any law,
rule, regulation, order, writ, judgment, injunction or decree and that any
consent required under the terms of the Loan Documents has been obtained and
(b) unless the prior written consent of the Assignor is obtained, the
Assignee is not thereby released from its obligations to the Assignor
hereunder, if any remain unsatisfied, including, without limitation, its
obligations under SECTION 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Assignment Effective Date, the percentage interest specified in Item 3 of
Schedule I shall remain the same, but the dollar amount purchased shall be
recalculated based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law of the State of New York.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the addresses set forth in the attachment to Schedule I.
----------
** To be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
D-3
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first written
above.
[NAME OF ASSIGNOR]
By: __________________________________
Name:
Title:
[Address] ____________________________
______________________________________
[NAME OF ASSIGNEE]
By: __________________________________
Name:
Title:
[Address] ____________________________
______________________________________
D-4
SCHEDULE I
TO ASSIGNMENT AGREEMENT
1. Description and Date of Debtor-In-Possession Credit Agreement:
Debtor-In-Possession Credit Agreement, dated as of June 1, 1999, among
Xxxxxx Group International, Inc., ("COMPANY"), each of Company's
Subsidiaries listed on the signature pages thereof, The Xxxxxx Group
Inc., the various lenders parties thereto as Lenders and First Union
National Bank, as L/C Issuer and Administrative Agent for the Lenders.
2. Date of Assignment Agreement: ______________, [1999][200__]
3. Assignee's Percentage of Aggregate
Commitment (as of Date of Item 2 above)*: _________ %**
4. Assignee's Commitment Amount Purchased Hereunder:
a. Assignee's Revolving Loan Amount* $________
b. Amount of Assigned Share of L/C Obligations $________
5. Proposed Assignment Effective Date: ______________, [1999][200__]
Accepted and Agreed:
[NAME OF ASSIGNOR]
By: __________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By: __________________________________
Name:
Title:
----------
* If the Commitment has been terminated, insert outstanding Revolving Loans
in 4(a) below in place of Commitment.
** Percentage taken to 10 decimal places.
D-5
ATTACHMENT TO SCHEDULE I TO ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
D-6
EXHIBIT E
FORM OF NOTICE OF ASSIGNMENT
__________, [1999][200_]
To: Xxxxxx Group International, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
First Union National Bank, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
From: [NAME OF ASSIGNOR] (the "ASSIGNOR")
[NAME OF ASSIGNEE] (the "ASSIGNEE")
1. We refer to the Debtor-In-Possession Credit Agreement (as it may be
further amended, modified, renewed or extended from time to time, the "CREDIT
AGREEMENT") described in Item I of Schedule I attached hereto ("SCHEDULE I").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "NOTICE") is given and delivered to
the Company and the Agent pursuant to SECTION 13.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of _______, [1999][200_] (the "ASSIGNMENT"), pursuant to
which, among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor, the percentage interest specified in Item 3 of
Schedule I of all outstandings, rights and obligations under the Credit
Agreement relating to the facilities listed in Item 4 of Schedule I. The
"ASSIGNMENT EFFECTIVE DATE" of the Assignment shall be the 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 this Notice of Assignment and any
consents and fees required by SECTIONS 13.3.1 and 13.3.2 of the Credit
Agreement have been delivered to the Agent, provided that the Assignment
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Company and the
Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Agent before the date specified in Item 5 of
Schedule I to determine if the Assignment Agreement will become effective on
such date pursuant to SECTION 3 hereof, and will confer
E-1
with the Agent to determine the Assignment Effective Date pursuant to SECTION 3
hereof if it occurs thereafter. The Assignor shall notify the Agent if the
Assignment Agreement does not become effective on any proposed Assignment
Effective Date as a result of the failure to satisfy the conditions precedent
agreed to by the Assignor and the Assignee. At the request of the Agent, the
Assignor will give the Agent written confirmation of the satisfaction of the
conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before
the Assignment Effective Date the processing fee of $3,500 required by
SECTION 13.3.2 of the Credit Agreement (except to the extent otherwise
provided in SECTION 13.3.2).
6. If Revolving Loans are outstanding on the Assignment Effective
Date, the Assignor and the Assignee request and direct that the Agent make
appropriate notations in the Register or its other records reflecting the
Assignment of such Revolving Loans and, if applicable, the related Commitment.
7. The Assignee advises the Agent that its notice and payment
instructions are set forth in the attachment to Schedule I.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
[Remainder of page left intentionally blank]
E-2
9. The Assignee authorizes the Agent to act as its agent under the
Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Agent has no duty to supply information with respect to
the Borrowers, any guarantor or the Loan Documents to the Assignee until the
Assignee becomes a party to the Credit Agreement.*
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: _________________________________ By: _________________________________
Name: Name:
Title: Title:
ACKNOWLEDGED [AND CONSENTED TO] BY ACKNOWLEDGED [AND CONSENTED TO] BY
FIRST UNION NATIONAL BANK, AS AGENT XXXXXX GROUP INTERNATIONAL, INC.
By: _________________________________ By: _________________________________
Name: Name:
Title: Title:
(Attach photocopy of Schedule I to Assignment Agreement as Schedule I hereto)
----------
* This paragraph may be eliminated if the assignee is a party to the
Credit Agreement prior to the Assignment Effective Date.
E-3
SCHEDULE I
TO NOTICE OF ASSIGNMENT
1. Description and Date of Debtor-In-Possession Credit Agreement:
Debtor-In-Possession Credit Agreement, dated as of June 1, 1999, among
Xxxxxx Group International, Inc. ("COMPANY"), each of Company's
Subsidiaries listed on the signature pages thereof, The Xxxxxx Group
Inc., the various lenders parties thereto as Lenders and First Union
National Bank, as L/C Issuer and Administrative Agent for the Lenders.
2. Date of Assignment Agreement: __________, [1999][200_]
3. Assignee's Percentage of Aggregate Commitment
(As of Date of Item 2 above)*: __________%**
4. Assignee's Commitment Amount Purchased Hereunder:
a. Assignee's Revolving Loan Amount: __________
b. Amount of Assigned Share of L/C Obligations: $__________
5. Proposed Assignment Effective Date: __________, [1999][200_]
Accepted and Agreed:
[NAME OF ASSIGNOR]
By: ____________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By: ____________________________________
Name:
Title:
----------
* If the Commitment has been terminated, insert outstanding Revolving
Loans in 4(a) below in place of Commitment.
** Percentage taken to 10 decimal places.
E-4
ATTACHMENT TO SCHEDULE I TO NOTICE OF ASSIGNMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
E-5
EXHIBIT F
FORM OF REVOLVING LOAN BORROWING NOTICE
[Date]
First Union National Bank, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [___________________]
Ladies and Gentlemen:
Xxxxxx Group International, Inc. ("COMPANY") and each of the undersigned
Subsidiaries of Company (Company and each such Subsidiary are each
individually referred to herein as a "BORROWER" and collectively, as the
"BORROWERS"), refer to the Debtor-In-Possession Credit Agreement, dated as of
June 1, 1999 (as amended or modified, the "CREDIT AGREEMENT", the terms
defined therein being used herein as therein defined), among the Borrowers,
The Xxxxxx Group Inc., certain Lenders party thereto and First Union National
Bank, as L/C Issuer and Administrative Agent for said Lenders (in its
capacity as Administrative Agent, the "AGENT"). The Borrowers hereby give you
notice, irrevocably, pursuant to SECTION 2.6 of the Credit Agreement that the
Borrowers hereby request an Advance under the Credit Agreement, and in that
connection sets forth below the information relating to such Advance (the
"PROPOSED ADVANCE") as required by SECTION 2.6 of the Credit Agreement:
a. The Revolving Loan Borrowing Date for the Proposed Advance is
______________, [1999][200_].
b. The aggregate amount of the Proposed Advance is $_________.
c. The Proposed Advance is to be [a Floating Rate Advance]
[Eurodollar Advance].
d. [The Interest Period for the Proposed Advance is __________
months.]*
The Borrowers hereby certify that the following statements are true on
the date hereof, and will be true on the date of the Proposed Advance:
A. No Default or Unmatured Default has occurred and is continuing
or would result from the Proposed Advance or from the application of the
proceeds therefrom;
B. the representations and warranties contained in Article VI of
the Credit Agreement and in the Guaranties and the Collateral Documents
are true
----------
* To be included if the Proposed Advance is to be a Fixed Rate Advance.
F-1
and correct except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which cash such
representation or warranty was true and correct on and as of such
earlier date;
C. after giving effect to such Advance, (i) the Total Utilization
of Commitments shall not exceed the least of (A) pending the entry of a
Final Borrowing Order, $60,000,000, (B) until (x) the first delivery to
the Agent after the Closing Date of the financial statements and
Compliance Certificate required to be delivered pursuant to SECTIONS
7.1(b) and 7.1(e) demonstrating compliance with the relevant covenants
in ARTICLE VII, and (y) the delivery to the Agent of the Requisite
Collateral Information, the sum of (a) $80,000,000 plus (b) any Advances
made hereunder which are applied, on or after the entry of the Final
Borrowing Order, to finance the repayment by Neweol (Delaware), L.L.C.
of the Fairway Receivables Facility in accordance with SECTION 7.16, and
thereafter, the Aggregate Commitment, and (C) the amount permitted to be
outstanding under the Credit Agreement pursuant to the Interim Borrowing
Order or Final Borrowing Order, as applicable; and (b) excluding all
Advances under the Credit Agreement to make Closing Date Payments and
the effect of any mandatory prepayments under SECTION 2.10(b)(i) and
(ii), the aggregate principal amount of Revolving Loans outstanding
after giving effect to such Advance shall not exceed by more than
$15,000,000 the aggregate principal amount of Revolving Loans
outstanding as of any date after the Closing Date which is less than 30
days prior to the date of such Advance;
D. no order, judgment or decree of any court (including, without
limitation, the U.S. Court or the Canadian Court), arbitrator or
governmental authority purports to enjoin or restrain the Lender from
making the Advance to be made by it on the Revolving Loan Borrowing Date
for the Proposed Advance;
E. the making of the Advance does not violate any law including,
without limitation, Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
F. there is not pending or, to the Borrowers' knowledge,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Borrowers or any property of the
Borrowers that has not been disclosed by the Borrowers in writing
pursuant to SECTION 6.7 or SECTION 7.1(h) [prior to the making of the
last preceding Advances][in the case of the initial Advances, prior to the
execution of the Credit Agreement], and there has occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
event, in the opinion of the Agent or of the Required Lenders, would
reasonable be expected to have a Material Adverse Effect; and no
injunction or other restraining order has been issued and no hearing to
cause an injunction or other restraining order to be issued is pending
or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or
F-2
obtain relief as a result of, the transactions contemplated by the
Credit Agreement or the making of Advances thereunder.
F-3
Very truly yours,
By: ________________________________
On behalf of Xxxxxx Group
International, Inc. and each of
the Borrowers listed on
SCHEDULE A annexed hereto
Name:
Authorized Officer
F-4
EXHIBIT G
FORM OF PREPAYMENT NOTICE
[Date]
First Union National Bank, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [ ]
Ladies and Gentlemen:
Xxxxxx Group International, Inc. ("COMPANY") and each of the undersigned
Subsidiaries of Company (Company and each such Subsidiary are each
individually referred to herein as a "BORROWER" and collectively, as the
"BORROWERS"), refer to the Debtor-In-Possession Credit Agreement, dated as of
June 1, 1999 (as amended or modified, the "CREDIT AGREEMENT", the terms
defined therein being used herein as therein defined), among the Borrowers,
The Xxxxxx Group Inc., certain Lenders party thereto and First Union National
Bank, as L/C Issuer and Administrative Agent for said Lenders (in its
capacity as Administrative Agent, the "AGENT"). The Borrowers hereby give you
notice, irrevocably, pursuant to SECTION 2.5 of the Credit Agreement, that
the Borrowers hereby elected to*:
a. prepay a Floating Rate Advance in aggregate principal amount of
$__________ on __________, [1999][200_][.][;and]
b. prepay a Eurodollar Advance in aggregate principal amount of
$__________ and with a current Interest Period ending on __________,
[1999][200_].
Very truly yours,
By: ________________________________________
On behalf of Xxxxxx Group International,
Inc. and each of the Borrowers listed
on SCHEDULE A annexed hereto
Name:
Authorized Officer
----------
* Include one or more of the following, as applicable.
G-1
EXHIBIT H
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of ______________, [1999][200__], is by
______________ ("NEW BORROWER") and Administrative Agent as defined below.
INTRODUCTION
Pursuant to Section 7.30 of that certain Debtor-In-Possession Credit
Agreement dated as of June 1, 1999 (as it has heretofore been and as it
hereafter may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among Xxxxxx Group International, Inc., a
Delaware corporation, as debtor and debtor-in-possession ("COMPANY"), each of
the Company's Subsidiaries listed on the signature pages thereof, each as
debtor and debtor-in-possession (Company and each such Subsidiary are each
individually referred to herein as a "BORROWER" and collectively, the
"BORROWERS"), The Xxxxxx Group Inc., the lenders signatory thereto (the
"LENDERS") and First Union National Bank, as the L/C Issuer and as
Administrative Agent for the Lenders (in its capacity as Administrative
Agent, the "AGENT"); the New Borrower must execute and deliver this Joinder
Agreement whereby the New Borrower becomes obligated as a borrower under the
Credit Agreement.
AGREEMENT
NOW THEREFORE, as an inducement to the Lenders to provide credit
accommodations to the New Borrower and as a further inducement to the Lenders
to continue to provide credit accommodations to the Borrowers, the New
Borrower hereby covenants and agrees as follows:
1. All capitalized terms used herein shall have the meanings assigned
to them in the Credit Agreement unless expressly defined herein to the
contrary.
2. The New Borrower hereby confirms that it has received a copy of, and
is fully familiar with, the Credit Agreement and each of the Loan Documents.
3. The New Borrower hereby enters into this Joinder Agreement in order
to comply with Section 7.30 of the Credit Agreement and does so in
consideration of the advances to be made from time to time under the Credit
Agreement to the New Borrower.
H-1
4. As and from the date hereof, the New Borrower shall be considered,
and deemed to be, for all purposes of the Credit Agreement with respect to
Advances made to the New Borrower, a Borrower under the Credit Agreement as
fully as though the New Borrower had executed and delivered the Credit
Agreement as one of "the Borrowers" thereunder at the time originally
executed and delivered and hereby ratifies and confirms its obligations under
the Credit Agreement, all in accordance with the terms thereof.
5. The New Borrower hereby covenants and agrees with and in favor of
the parties hereto and each of the Lenders that as of the date indicated
above, it (i) shall be deemed to be a borrower under the Credit Agreement to
the same extent and with the same effect as though it were a party thereto
and one of the Borrowers therein, (ii) covenants and agrees to observe and
perform at all times from and after the date hereof all of the obligations
contained in the Credit Agreement on the part of the Borrowers to be observed
and performed with respect to any Advances or other uses of the Credit as a
borrower under the terms of the Credit Agreement, and (iii) confirms for
itself all of the representations and warranties of the Borrowers under the
Credit Agreement MUTATIS MUTANDIS with respect to the execution, delivery and
performance of this Joinder Agreement (and the Credit Agreement as modified
hereby) by it and the enforceability of its obligations under the Credit
Agreement as modified by this Joinder Agreement. Each reference in the Credit
Agreement to the "Borrowers" shall be a reference to the New Borrower and to
the Borrowers.
6. Any notice which may or is required to be given to the New Borrower
pursuant to the Credit Agreement shall be given in accordance with the terms
thereof and shall be addressed to:
[INSERT NOTICE ADDRESS OF NEW BORROWER]
_______________________________________
_______________________________________
_______________________________________
7. Nothing herein contained shall in any manner be construed to
constitute novation of, or to impair, cancel or extinguish the Credit
Agreement or the obligations of the Borrowers as borrowers thereunder, and
this Joinder Agreement is made under express reserve of all of the terms and
conditions in the Credit Agreement and the other Loan Documents and all
rights in favor of the Agent and the Lenders thereunder.
8. This Joinder Agreement shall be governed by, and construed in
accordance with, the internal laws of the state of New York (including
Section 5.1401 of the General Obligations Law of the State of New York),
without regard to conflicts of laws principles, and shall be binding upon the
Borrowers and the New Borrower and their successors and permitted assigns and
shall be for the benefit of the Lenders and the Agents and their successors
and assigns.
H-2
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Joinder Agreement as of the date first written above.
[NAME OF NEW BORROWER]
By: ______________________________
Name:
Title:
H-3
Accepted by FIRST UNION NATIONAL BANK,
as Agent for itself and each of the Lenders
By: ______________________________
Name:
Title:
H-4
EXHIBIT I
FORM OF CONVERSION/CONTINUATION NOTICE
[Date]
First Union National Bank, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [__________]
Ladies and Gentlemen:
Xxxxxx Group International, Inc. ("COMPANY") and each of the undersigned
Subsidiaries of Company (Company and each such Subsidiary are each
individually referred to herein as a "BORROWER" and collectively, as the
"BORROWERS"), refer to the Debtor-In-Possession Credit Agreement, dated as of
June 1, 1999 (as amended or modified, the "CREDIT AGREEMENT", the terms
defined therein being used herein as therein defined), among the Borrowers,
The Xxxxxx Group Inc., certain Lenders party thereto and First Union National
Bank, as L/C Issuer and Administrative Agent for said Lenders (in its
capacity as Administrative Agent, the "AGENT"). The Borrowers hereby give you
notice, irrevocably, pursuant to SECTION 2.7 of the Credit Agreement, that
the Borrowers hereby elect to:*
a. convert a Floating Rate Advance in aggregate principal amount
of $ __________ to a Eurodollar Advance on __________, [1999[200_]. The
initial Interest Period for such Eurodollar Advance is requested to be
__________ month[s][.][; and]
b. convert a Eurodollar Advance in aggregate principal amount of
$__________ and with a current Interest Period ending __________, [1999]
[200_], to a Floating Rate Advance on __________, [1999][200_][.][; and]
c. continue a Eurodollar Advance in aggregate principal amount of
$__________ and with a current Interest Period ending __________, [1999]
[200_], as a Eurodollar Advance. The succeeding Interest Period is
requested to be __ month[s].
[Remainder of page left intentionally blank]
----------
* Include one or more of the following, as applicable.
I-1
Very truly yours,
By: ________________________________________
On behalf of Xxxxxx Group International,
Inc. and each of the Borrowers listed
on SCHEDULE A annexed hereto
Name:
Authorized Officer
I-2
EXHIBIT J
FORM OF INTERIM BORROWING ORDER
[TO FOLLOW]
J-1
EXHIBIT K
FORM OF APPROVED SALE CERTIFICATE
To: The Lenders Party To The
Debtor-In-Possession Credit Agreement
Described Below
This Approved Sale Certificate is furnished pursuant to that
certain Debtor-In-Possession Credit Agreement dated as of June 1, 1999 (as
amended, modified, renewed or extended from time to time, the "CREDIT
AGREEMENT") among the Borrowers, The Xxxxxx Group Inc., the Lenders party
thereto and First Union National Bank, as L/C Issuer and Administrative Agent
for the Lenders. Unless otherwise defined herein, capitalized terms used in
this Approved Sale Certificate have the meanings ascribed thereto in the
Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am a duly authorized officer of [TLGI][the Borrowers];
2. I have reviewed the terms of the Credit Agreement and I am
familiar with the proposed sale of Property described on Schedule I attached
hereto (the "PROPOSED SALE");
3. The Proposed Sale is expressly permitted by the terms of the
Credit Agreement; and
4. I have no knowledge of the existence of any condition or event
which constitutes a Default or Unmatured Default as of the date hereof and
consummation of the Proposed Sale will not give rise to a Default or
Unmatured Default.
The foregoing certifications are made and delivered this ________
day of ________________, [1999][200_].
By: ________________________________
On behalf of Xxxxxx Group
International, Inc. and each of
the Borrowers listed on
SCHEDULE A annexed hereto
Name:
Authorized Officer
K-1
SAMPLE SCHEDULE I TO APPROVED SALE CERTIFICATE
DESCRIPTION OF PROPERTY AND PROPOSED SALE
K-2
EXHIBIT L
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT") is dated as of June 1,
1999 and entered into by and among XXXXXX GROUP INTERNATIONAL, INC., a
Delaware corporation, as debtor and debtor-in-possession ("COMPANY"), each of
THE UNDERSIGNED DIRECT AND INDIRECT U.S. SUBSIDIARIES of Company listed on
the signature pages hereof, each as debtor and debtor-in-possession (Company
and each such Subsidiary being a "BORROWER" and collectively, "BORROWERS"),
and each ADDITIONAL GRANTOR that may become a party hereto after the date
hereof in accordance with Section 22 hereof (each of the Borrowers and each
Additional Grantor being a "GRANTOR" and collectively, the "GRANTORS") and
FIRST UNION NATIONAL BANK, as agent for and representative of (in such
capacity herein called "SECURED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Pursuant to the Debtor-In-Possession Credit Agreement dated as
of the date hereof (said Debtor-In-Possession Credit Agreement, as amended to
the date hereof, and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among the Borrowers, The Xxxxxx Group
Inc., the financial institutions listed therein as Lenders, First Union
National Bank, as the L/C Issuer and as Administrative Agent (in its capacity
as Administrative Agent, "AGENT"), Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to the Borrowers.
B. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantors listed on the
signature pages hereof shall have granted the security interests and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Revolving Loans and other extensions of credit under
the Credit Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each Grantor hereby
agrees with Secured Party as follows:
1. GRANT OF SECURITY.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which such Grantor
L-3
now has or hereafter acquires an interest and wherever the same may be
located (the "COLLATERAL"):
(a) all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions being
the "EQUIPMENT");
(b) all inventory in all of its forms, including but not limited
to (i) all goods held by such Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in such Grantor's
business, (iii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind, and (iv) all goods which are
returned to or repossessed by such Grantor and all accessions thereto and
products thereof (collectively the "INVENTORY") and all negotiable and
non-negotiable documents of title (including without limitation warehouse
receipts, dock receipts and bills of lading) issued by any Person covering
any Inventory (any such negotiable document of title being a "NEGOTIABLE
DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any kind
owned by or owing to such Grantor and all rights in, to and under all
security agreements, leases and other contracts securing or otherwise
relating to any such accounts, contracts rights, chattel paper, documents,
instruments, general intangibles or other obligations (any and all such
accounts, contract rights, chattel paper, documents, instruments, general
intangibles and other obligations being the "ACCOUNTS", and any and all such
security agreements, leases and other contracts being the "RELATED
CONTRACTS");
(d) all deposit accounts ("DEPOSIT ACCOUNTS") including the
restricted deposit account established and maintained by Secured Party
pursuant to Section 12 (the "COLLATERAL ACCOUNT"), together with (i) all
amounts on deposit from time to time in such deposit accounts and (ii) all
interest, cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of the foregoing;
(e) the "SECURITIES COLLATERAL", which term means:
(i) the shares of stock, partnership interests, interests in
joint ventures, limited liability company interests and all other equity
interests in any Person that is, or becomes, a direct Subsidiary of such
Grantor or which is a joint venture of such Grantor, including all
securities convertible into, and rights, warrants, options and other
rights to purchase or otherwise acquire, any of the foregoing now or
hereafter owned by such Grantor, including those owned on the date
hereof and described on SCHEDULE 1(e)(i), and the certificates or other
instruments representing any of the foregoing and any interest of such
Grantor in the entries on the books of any securities intermediary
pertaining thereto (the "PLEDGED SHARES"), and all dividends,
distributions, returns of capital, cash, warrants, option, rights,
instruments, rights to vote or manage the business of such Person
pursuant to organizational documents governing the rights and
obligations of the stockholders, partners, members or other owners
thereof and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
L-4
exchange for any or all of such Pledged Shares; PROVIDED, that if the
issuer of any of such Pledged Shares is a controlled foreign corporation
(used hereinafter as such term is defined in Section 975(a) or a
successor provision of the Internal Revenue Code), the Pledged Shares
shall not include any shares of stock of such issuer in excess of the
number of shares of such issuer possessing up to but not exceeding 65%
of the voting power of all classes of capital stock entitled to vote of
such issuer, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such Pledged Shares; PROVIDED, however, to the extent that Applicable
Law prohibited the pledge or the delivery of any stock or instrument to
the Bankers Trust Company, as Collateral Agent under the Collateral
Trust Agreement, Grantors shall not be obligated to pledge or deliver,
as applicable, such stock or instrument to the Agent hereunder so long
as Grantors can provide, within a reasonable time after the Closing
Date, evidence reasonably satisfactory to the Agent that such
prohibitions continue to be in full force and effect;
(ii) the indebtedness from time to time owed to such Grantor by any
obligor that is, or becomes, a direct or indirect Subsidiary or such
Grantor, including, but not limited to, the indebtedness evidenced by
instruments described on SCHEDULE 1(e)(ii) and issued by the obligors
named therein (the "PLEDGED DEBT"), and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Debt; and
(iii) all other investment property as that term is defined in the
Uniform Commercial Code of any relevant jurisdiction (the "UCC"), of
such Grantor;
(f) the "INTELLECTUAL PROPERTY COLLATERAL", which term means:
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all trademarks, service
marks, designs, logos, indicia, tradenames, trade dress, corporate
names, company names, business names, fictitious business names, trade
styles and/or other source and/or business identifiers and applications
pertaining thereto, owned by such Grantor, or hereafter adopted and
used, in its business (including, without limitation, the trademarks
specifically identified in SCHEDULE 1(f)(i) when such Schedule is
provided as required by this Agreement and as the same may be amended
pursuant hereto from time to time thereafter) (collectively, the
"TRADEMARKS"), all registrations that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the
registrations and applications specifically identified in SCHEDULE
1(f)(i), when such Schedule is provided as required by this Agreement
and as the same may be amended pursuant hereto from time to time) (the
"TRADEMARK REGISTRATIONS"), all common law and other rights in and to
the Trademarks in the United States and any state thereof and in foreign
countries (the "TRADEMARK RIGHTS"), and all goodwill of such Grantor's
business symbolized by the Trademarks and associated therewith (the
"ASSOCIATED GOODWILL");
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(ii) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all patents and patent
applications and rights and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future
may be, owned or held by such Grantor and all patents and patent
applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications listed in
SCHEDULE 1(f)(ii) when such Schedule is provided as required by this
Agreement and as the same may be amended pursuant hereto from time to
time thereafter), all rights corresponding thereto (including, without
limitation, the right, exercisable only upon the occurrence and during
the continuation of a Default, to xxx for past, present and future
infringements in the name of such Grantor or in the name of Secured
Party or Lenders), and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof (all of the
foregoing being collectively referred to as the "PATENTS"); it being
understood that the rights and interests included in the Intellectual
Property Collateral hereby shall include, without limitation, all rights
and interests pursuant to licensing or other contracts in favor of such
Grantor pertaining to patent applications and patents presently or in
the future owned or used by third parties but, in the case of third
parties which are not Affiliates of such Grantor, only to the extent
permitted by such licensing or other contracts and, if not so permitted,
only with the consent of such third parties; and
(iii) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) under copyright in various published
and unpublished works of authorship including, without limitation,
computer programs, computer data bases, other computer software,
layouts, trade dress, drawings, designs, writings, and formulas owned by
Grantor (including, without limitation, the works listed on SCHEDULE
1(f)(iii) when such Schedule is provided as required by this Agreement
and as the same may be amended pursuant hereto from time to time
thereafter) (collectively, the "COPYRIGHTS"), all copyright
registrations issued to such Grantor and applications for copyright
registration that have been or may hereafter by issued or applied for
thereon by Grantor in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations
listed on SCHEDULE 1(f)(iii), when such Schedule is provided as required
by this Agreement and as the same may be amended pursuant hereto from
time to time) (collectively, the "COPYRIGHT REGISTRATIONS"), all common
law and other rights in and to the Copyrights in the United States and
any state thereof and in foreign countries including all copyright
licenses (but with respect to such copyright licenses, only to the
extent permitted by such licensing arrangements) (the "COPYRIGHT
RIGHTS"), including, without limitation, each of the Copyrights, rights,
titles and interests in and to the Copyrights, all derivative works and
other works protectable by copyright, which are presently, or in the
future may be, owned, created (as a work for hire for the benefit of such
Grantor), authored (as a work for hire for the benefit of such Grantor),
or acquired by such Grantor, in whole or in part, and all Copyright
Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and
extensions thereof, throughout the world, including all proceeds thereof
(such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits), the right to renew and extend such
Copyright Registrations and
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Copyright Rights and to register works protectable by copyright and the
right to xxx for past, present and future infringements of the
Copyrights and Copyright Rights;
(g) all information used or useful or arising from the business
including all goodwill, trade secrets, trade secret rights, know-how,
customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas, and all other proprietary
information;
(h) the agreements listed in SCHEDULE 1(h), as each such agreement
may be amended, restated, supplemented or otherwise modified from time to
time (said agreements, as so amended, restated, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED AGREEMENT"
and collectively as the "ASSIGNED AGREEMENTS"), including, without
limitation, (i) all rights of such Grantor to receive moneys due or to become
due under or pursuant to the Assigned Agreements, (ii) all rights of such
Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Assigned Agreements, (iii) all claims of such Grantor for
damages arising out of any breach of or default under the Assigned
Agreements, and (iv) all rights of such Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder;
(i) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation tax
refunds, rights to payment or performance, CHOSES IN ACTION and judgments
taken on any rights or claims included in the Collateral);
(j) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products thereof;
(k) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at
any time evidence or contain information relating to any of the Collateral or
are otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(l) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is
receivable or received when Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.
2. SECURITY FOR OBLIGATIONS
(a) This Agreement secures, and the Collateral assigned by each
Grantor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment
of amounts that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all Secured
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Obligations of such Grantor. "SECURED OBLIGATIONS" means all obligations and
liabilities of every nature of Grantors now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Loan
Documents, together with all extensions or renewals thereof, whether for
principal, interest, reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated,
whether or not jointly owned with others, and whether or not from time to
time decreased or extinguished and later increased, created or incurred, and
all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Grantors now or
hereafter existing under this Agreement.
3. GRANTORS REMAIN LIABLE.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not
been executed, (b) the exercise by Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral, and (c)
Secured Party shall not have any obligation or liability under any contracts,
licenses, and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
4. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by the
Credit Agreement and for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of any
Lien other than Liens expressly permitted under the Credit Agreement. Except
as expressly permitted by the Credit Agreement and such as may have been
filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) LOCATIONS OF EQUIPMENT AND INVENTORY. All of the Equipment
and Inventory is, as of the date hereof, or in the case of an Additional
Grantor, as of the date of the applicable counterpart entered into pursuant
to Section 22 (each, a "COUNTERPART"), located at the places specified in
SCHEDULE 4(b) (as such Schedule may be amended or supplemented from time to
time), except for Inventory which, in the ordinary course of business, is in
transit either (i) from a supplier to a Grantor, (ii) between the locations
specified in SCHEDULE 4(b), or (iii) to customers of a Grantor.
(c) NEGOTIABLE DOCUMENTS OF TITLE. No Negotiable Documents of
Title are outstanding with respect to any of the Inventory.
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(d) OFFICE LOCATIONS. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that evidence
Accounts are, as of the date hereof, and have been for the four month period
preceding the date hereof, or, in the case of an Additional Grantor, the date
of the applicable Counterpart, located at the locations set forth on SCHEDULE
4(d) (as such Schedule may be amended or supplemented from time to time);
(e) NAMES. No Grantor (or predecessor by merger or otherwise of
such Grantor) has, within the four month period preceding the date hereof,
or, in the case of an Additional Grantor, the date of the applicable
Counterpart, had a different name from the name of such Grantor listed on the
signature pages hereof or on the Counterpart, as applicable, except the names
listed in SCHEDULE 4(e) (as such Schedule may be amended or supplemented from
time to time) annexed hereto.
(f) SECURITIES COLLATERAL. (i) All of the Pledged Shares
described on SCHEDULE 1(e)(i) have been duly authorized and validly issued
and are fully paid and non-assessable; (ii) all of the instruments evidencing
Pledged Debt described on SCHEDULE 1(e)(ii) has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default; (iii) except as set
forth on SCHEDULE 1(e)(i), the Pledged Shares constitute all of the issued
and outstanding shares of stock or other equity interests of each issuer
thereof owned by a Grantor (subject to the proviso to Section 1(e)(i) with
respect to shares of a foreign controlled corporation), and there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Shares; (iv)
SCHEDULE 1(e)(i) sets forth all of the Pledged Shares owned by each Grantor
on the date hereof; and (v) SCHEDULE 1(e)(ii) sets forth all of the
instruments evidencing Pledged Debt in existence on the date hereof.
(g) INTELLECTUAL PROPERTY COLLATERAL.
(i) a true and complete list of all Trademark Registrations
and Trademark applications owned, held (whether pursuant to a license or
otherwise) or used by such Grantor, in whole or in part, is, as of the
date delivered, set forth in SCHEDULE 1(f)(i), which shall be delivered to
Secured Party as soon as practicable following the delivery of this
Agreement, but in any event within 45 days after delivery of this
Agreement.
(ii) a true and complete list of all Patents owned, held
(whether pursuant to a license or otherwise) or used by such Grantor, in
whole or in part, is, as of the date delivered, set forth in SCHEDULE
1(f)(ii), which shall be delivered to Secured Party as soon as practicable
following the delivery of this Agreement, but in any event within 45 days
after delivery of this Agreement;
(iii) a true and complete list of all Copyright Registrations
and applications for Copyright Registrations held (whether pursuant to a
license or otherwise) by such Grantor, in whole or in part, is, as of the
date delivered, set forth in SCHEDULE 1(f)(iii), which shall be delivered
to Secured Party as soon as practicable following the
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delivery of this Agreement, but in any event within 45 days after
delivery of this Agreement; and
(iv) such Grantor is not aware of any pending or threatened
claim by any third party that any of the Intellectual Property Collateral
owned, held or used by such Grantor is invalid or unenforceable.
(h) PERFECTION. The security interests in the Collateral granted
to Secured Party for the ratable benefit of the Lenders hereunder constitute
valid security interests in the Collateral, securing the payment of the
Secured Obligations. Upon the entry of the Interim Borrowing Order or the
Final Borrowing Order, the security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders will constitute
perfected security interests therein prior to all other Liens (except for
nonvoidable valid and perfected Liens in existence on the Petition Date).
5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor will at the reasonable request of
the Secured Party: (i) xxxx conspicuously each item of chattel paper included
in the Accounts, each Related Contract and, at the request of Secured Party,
each of its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) deliver and pledge to
Secured Party hereunder all promissory notes and other instruments (including
checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Security
Party, (iii) execute and file UCC financing statements naming each Grantor as
"debtor", naming Secured Party as "secured party" and describing the
Collateral in the filing offices with respect to such Grantor in each
jurisdiction which Secured Party reasonably deems necessary or desirable to
perfect and preserve the security interests granted or purported to be
granted hereby and such other financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in order to perfect
and preserve the security interests granted or purported to be granted
hereby, (iv) furnish to Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (v) in the case of Equipment that is
covered by a certificate of title, file with the registrar of motor vehicles
or other appropriate authority in the applicable jurisdiction of an
application requesting the notation of the security interest created
hereunder on such certificate of title and, promptly after the acquisition by
such Grantor of any item of Equipment that is covered by a certificate of title
under a statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of perfection
thereof, execute and file with the registrar of motor vehicles or other
appropriate authority in such jurisdiction an application or other
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document requesting the notation or other indication of the security interest
created hereunder on such certificate of title, (vi) within 30 days after the
end of each calendar quarter, deliver to Secured Party copies of all such
applications or other documents filed during such calendar quarter and copies
of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby, (vii) at any reasonable time, exhibit the Collateral to and
allow inspection of the Collateral by Secured Party, or persons designated by
Secured Party, (viii) appear in and defend any action or proceeding that may
affect such Grantor's title to or Secured Party's security interest in all or
any part of the Collateral, and (ix) use commercially reasonable efforts to
obtain any necessary consents of third parties to the assignment and
perfection of a security interest to Secured Party with respect to any
Collateral. Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be
sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(b) SECURITIES COLLATERAL. Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that it will, at the reasonable
request of Secured Party, in the case of the Securities Collateral consisting
of certified securities or evidenced by instruments, deliver the certificates
representing such certificated securities and deliver such instruments to
Secured Party, in each case duly endorsed or accompanied by duly executed
instruments of assignment or transfer in blank; PROVIDED that any such
certificates shall not be required to be delivered pursuant to this Section
5(b) if such certificate is in the possession of Bankers Trust Company in
its capacity as Collateral Agent under the Collateral Trust Agreement. Each
Grantor further agrees that it will, upon obtaining any additional shares of
stock or other securities or instruments required to be pledged hereunder,
promptly (and in any event within five Business Days) deliver to Secured
Party a Pledge Supplement, duly executed by such Grantor, in substantially
the form of Exhibit I (a "PLEDGE SUPPLEMENT"), in respect of the additional
Pledged Shares or instruments evidencing Pledged Debt to be pledged pursuant
to this Agreement. Upon each delivery of a Pledge Supplement to Secured
Party, the representations and warranties contained in clauses (i)-(iv) of
Section 4(g) hereof shall be deemed to have been made by such Grantor as to
the Securities Collateral described in such Pledge Supplement as of the date
thereof. Each Grantor hereby authorizes Secured Party to attach each Pledge
Supplement to this Agreement and agrees that all Pledged Shares or
instruments evidencing Pledged Debt of such Grantor listed on any Pledge
Supplement shall for all purposes hereunder be considered Collateral of such
Grantor, PROVIDED, the failure of any Grantor to execute a Pledge Supplement
with respect to any additional Pledged Shares or instruments evidencing
Pledged Debt pledged pursuant to this Agreement shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights
and remedies of Secured Party hereunder with respect thereto.
(c) INTELLECTUAL PROPERTY COLLATERAL. Without limiting the
generality of the foregoing Section 5(a), each Grantor agrees that it will,
at the reasonable request of Secured Party, in the case of the Intellectual
Property Collateral, if any, in addition to filing UCC financing statements,
file a Grant of Trademark Security Interest, in a form acceptable to Secured
Party, and a Grant of Patent Security Interest, in a form acceptable to
Secured Party, with the
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Xxxxxx Xxxxxx Patent and Trademark Office and file a Grant of Copyright
Security Interest, in a form reasonably acceptable to Secured Party, with the
United States Copyright Office (each such Grant of Trademark Security
Interest, Grant of Patent Security Interest and Grant of Copyright Security
Interest being referred to herein as a "GRANT"). Each Grantor agrees that if
any Grantor shall hereafter obtain rights to any new Intellectual Property
Collateral or become entitled to the benefit of (i) any patent application or
patent or any reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any Patent or (ii)
any Copyright Registration, application for Copyright Registration or
renewals or extension of any Copyright, then in any such case, the provisions
of this Agreement shall automatically apply thereto. Each Grantor shall
promptly notify Secured Party in writing of any of the foregoing rights
acquired by such Grantor after the date hereof and of (i) any Trademark
Registrations issued or application for a Trademark Registration or
application for a Patent made, and (ii) any Copyright Registrations issued or
applications for Copyright Registration made, in any such case, after the
date hereof. Promptly after the filing of an application for any (1)
Trademark Registration; (2) Patent; and (3) Copyright Registration, each
Grantor shall execute and deliver to Secured Party and record in all places
where a Grant is recorded an IP Supplement, substantially in the form of
EXHIBIT II (an "IP SUPPLEMENT"), pursuant to which such Grantor shall grant
to Secured Party a security interest to the extent of its interest in such
Intellectual Property Collateral; PROVIDED, if, in the reasonable judgment of
such Grantor, after due inquiry, granting such interest would result in the
grant of a Trademark Registration or Copyright Registration in the name of
Secured Party, such Grantor shall give written notice to Secured Party as
soon as reasonably practicable and the filing shall instead be undertaken as
soon as practicable but in no case later than immediately following the grant
of the applicable Trademark Registration or Copyright Registration, as the
case may be. Upon delivery to Secured Party of an IP Supplement, SCHEDULES
1(f)(i), 1(f)(ii), and 1(f)(iii) hereto and SCHEDULE A to each Grant, as and
if applicable, shall be deemed modified to include reference to any right,
title or interest in any existing Intellectual Property Collateral or any
Intellectual Property Collateral included on SCHEDULE A to such IP
Supplement. Each Grantor hereby authorizes Secured Party to modify this
Agreement without the signature or consent of any Grantor by attaching
SCHEDULES 1(f)(i), 1(f)(ii), and 1(f)(iii), as applicable, that have been
modified to include such Intellectual Property Collateral or to delete any
reference to any right, title or interest in any Intellectual Property
Collateral in which any Grantor no longer has or claims any right, title or
interest; PROVIDED, the failure of any Grantor to execute an IP Supplement
with respect to any additional Intellectual Property Collateral pledged
pursuant to this Agreement shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of
Secured Party hereunder with respect thereto.
6. CERTAIN COVENANTS OF GRANTORS.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name, identity
or corporate structure within 15 days of such change;
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(c) give Secured Party 30 days' prior written notice of any change in
such Grantor's chief place of business, chief executive office or residence
or the office where such Grantor keeps its records regarding the Accounts and
all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes; and
(e) except as prohibited or excused by the Bankruptcy Code, the Interim
Borrowing Order, the Final Borrowing Order, or any other applicable order of
the U.S. Court or expressly permitted by the Credit Agreement, pay promptly
when due all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including claims for labor, services,
materials and supplies) against, the Collateral, except to the extent the
validity thereof is being contested in good faith; PROVIDED that such Grantor
shall in any event pay such taxes, assessments, charges, levies or claims not
later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor
or any of the Collateral as a result of the result of the failure to make
such payment.
7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the
places therefor specified on SCHEDULE 4(b) or, upon 15 days' prior written
notice to Secured Party, at such other places in jurisdictions where all
action that may be necessary or desirable, or that Secured Party may request,
in order to perfect and protect any security interest granted or purported
to be granted hereby, or to enable Secured Party to exercise and enforce its
rights and remedies hereunder, with respect to such Equipment and Inventory
shall have been taken;
(b) cause the Equipment owned by such Grantor to be maintained and
preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with such Grantor's past
practices, and shall forthwith make or cause to be made all repairs,
replacements and other improvements in connection therewith that are
necessary or desirable to such end. Each Grantor shall promptly furnish to
Secured Party a statement respecting any material loss or damage to any of
the Equipment owned by such Grantor;
(c) keep correct and accurate records of Inventory owned by such
Grantor;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, upon the occurrence of a Default, instruct
such agent or processor to hold all such Inventory for the account of Secured
Party and subject to the instructions of Secured Party;
(e) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party; and
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(f) Each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
8. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED CONTRACTS.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on Schedule 4(d), upon
15 days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Secured
Party to exercise and enforce its rights and remedies hereunder, with respect
to such Accounts and Related Contracts shall have been taken. Each Grantor
will hold and preserve such records and chattel paper and will permit
representatives of Secured Party at any time during normal business hours to
inspect and make abstracts from such records and chattel paper, and each
Grantor agrees to render to Secured Party, at Grantor's cost and expense,
such clerical and other assistance as may be reasonably requested with
regard thereto. Upon the occurrence of any Default, promptly upon the request
of Secured Party, each Grantor shall deliver to Secured Party complete and
correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the date
on which each Account of such Grantor arose, maintain (i) complete records of
such Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each Grantor
shall continue to collect, at its own expense, all amounts due or to become
due to such Grantor under the Accounts and Related Contracts. In connection
with such collections, each Grantor may take (and, upon the occurrence and
during the continuance of a Default at Secured Party's direction, shall take)
such action as such Grantor or Secured Party may deem necessary or advisable
to enforce collection of amounts due or to become due under the Accounts;
PROVIDED, however, that Secured Party shall have the rights consistent with
the terms of the Credit Agreement, the Interim Borrowing Order and the Final
Borrowing Order, at any time, upon the occurrence and during the continuation
of a Default or an Unmatured Default and upon written notice to such Grantor
of its intention to do so, to notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due or
to become due to such Grantor thereunder directly to Secured Party, to notify
each Person maintaining a lockbox or similar arrangement to which account
debtors or obligors under any Accounts have been directed to make payment to
remit all accounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to Secured Party and, upon such notification and at the expense of
Grantors, to enforce collection of any such Accounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After the occurrence and during the
continuation of any Default or Unmatured Default and consistent with the
terms of the Credit Agreement, the Interim Borrowing Order and the Final
Borrowing Order, (i) all amounts and proceeds (including checks
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and other instruments) received by such Grantor in respect of the Accounts
and the Related Contracts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same
form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
9. SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL.
(a) DELIVERY. Each Grantor agrees that all certificates or instruments
representing or evidencing the Securities Collateral shall, at the reasonable
request of the Secured Party, be delivered to and held by or on behalf of
Secured Party pursuant hereto and shall be in suitable form for transfer by
delivery or, as applicable, shall be accompanied by such Grantor's
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Secured Party;
PROVIDED that any such certificates or instruments shall not be required to be
delivered pursuant to this Section 9(a) if such certificate or instrument is
in the possession of Bankers Trust Company in its capacity as Collateral
Agent under the Collateral Trust Agreement. Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Securities Collateral for certificates or instruments of smaller
or larger denominations.
(b) COVENANTS. Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Shares to
merge or consolidate unless all the outstanding capital stock or other equity
interests of the surviving or resulting Person is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other constituent
corporation; PROVIDED, if the surviving or resulting Person upon any such
merger or consolidation involving an issuer of Pledged Shares which is a
controlled foreign corporation is a controlled foreign corporation, then such
Grantor shall only be required to pledge outstanding capital stock of such
surviving or resulting Person possessing up to but not exceeding 65% of the
voting power of all classes of capital stock of such issuer entitled to vote;
(ii) cause each issuer of Pledged Shares not to issue any stock, other equity
interests or other securities in addition to or in substitution for the
Pledged Shares issued by such issuer, except to such Grantor; (iii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock, other equity interests or other
securities of each issuer of Pledged Shares; (iv) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all shares of stock or other equity interests of any Person that, after the
date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of such Grantor; PROVIDED, notwithstanding anything contained in
this clause (iv) to the contrary, such Grantor shall only be required to
pledge the outstanding capital stock of a controlled foreign corporation
possessing up to but not exceeding 65% of the voting power of all classes of
capital stock of such controlled foreign corporation entitled to vote; (v)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of additional indebtedness from time to time owed to such
Grantor by any obligor on the Pledged Debt; (vi) pledge hereunder, immediately
upon their issuance, any and all instruments or other evidences of indebtedness
from time to time owed to such Grantor by any
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Person that after the date of this Agreement becomes, as a result of any
occurrence, a direct or indirect Subsidiary of such Grantor; (vii) promptly
notify Secured Party of any event of which such Grantor becomes aware causing
loss or depreciation in the value of the Securities Collateral; (viii)
promptly deliver to Secured Party all written notices received by it with
respect to the Securities Collateral; and (ix), at the request of Secured
Party, promptly execute and deliver to Secured Party an agreement providing
for the control, as that term is defined in the UCC, by Secured Party of all
securities entitlements and securities accounts of such Grantor subject to
the rights of the Collateral Agent under the Collateral Trust Agreement.
(c) VOTING AND DISTRIBUTIONS; IRREVOCABLE PROXY. So long as no Default
shall have occurred and be continuing, (i) each Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement or the Credit Agreement; PROVIDED, no
Grantor shall exercise or refrain from exercising any such right if Secured
Party shall have notified such Grantor that, in Secured Party's judgment,
such action would have a material adverse effect on the value of the
Securities Collateral or any part thereof; and PROVIDED FURTHER, such Grantor
shall give Secured Party at least five Business Days' prior written notice of
the manner in which it intends to exercise, or the reasons for refraining
from exercising, any such right (it being understood, however, that neither
(A) the voting by such Grantor of any Pledged Shares for or such Grantor's
consent to the election of directors or other members of a governing body of
an issuer of Pledged Shares at a regularly scheduled annual or other meeting
of stockholders or holders of equity interests or with respect to incidental
matters at any such meeting, nor (B) Grantor's consent to or approval of any
action otherwise permitted under this Agreement and the Credit Agreement
shall be deemed inconsistent with the terms of this Agreement or the Credit
Agreement within the meaning of this Section, and no notice of any such
voting or consent need be given to Secured Party); (ii) each Grantor shall be
entitled to receive and retain, and to utilize free and clear of the lien of
this Agreement, any and all dividends, other distributions and interest paid
in respect of the Securities Collateral; PROVIDED, any and all (A) dividends,
distributions and interest paid or payable other than in cash in respect of,
and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Securities Collateral, (B)
dividends and other distributions paid or payable in cash in respect of any
Securities Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any Securities
Collateral, shall be, and shall forthwith be delivered to Secured Party to
hold as, Securities Collateral and shall, if received by such Grantor, be
received in trust for the benefit of Secured Party, be segregated from the
other property or funds of such Grantor and be forthwith delivered to Secured
Party as Securities Collateral in the same form as so received (with all
necessary endorsements) unless the dividend or distribution is permitted
under the Credit Agreement without the requirement that such dividend or
distribution be paid to Secured Party; and (iii) Secured Party shall promptly
execute and deliver (or cause to be executed and delivered) to such Grantor
all such proxies, dividend payment orders and other instruments as Grantor
may from time to time reasonably request for the purpose of enabling Grantor
to exercise the voting and other consensual rights which it is entitled to
exercise pursuant to clause (i) above and to receive the dividends,
distributions, principal or interest payments which it is authorized to
receive and retain pursuant to clause (ii) above.
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Upon the occurrence and during the continuation of a Default, (x) upon
written notice from Secured Party to any Grantor, all rights of such Grantor
to exercise the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant hereto shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon have the
sole right to exercise such voting and other consensual rights; (y) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and
retain pursuant hereto shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right to
receive and hold as Securities Collateral such dividends, other distributions
and interest payments; and (z) all dividends, principal, interest payments
and other distributions which are received by Grantor contrary to the
provisions of clause (ii) of the immediately preceding paragraph or clause
(y) above shall be received in trust for the benefit of Secured Party, shall
be segregated from other funds of Grantor and shall forthwith be paid over to
Secured Party as Securities Collateral in the same form as so received (with
any necessary endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or
cause to be executed and delivered) to Secured Party all such proxies,
dividend payment orders and other instruments as Secured Party may from time
to time reasonably request, and (II) without limiting the effect of clause
(I) above, each Grantor hereby grants to Secured Party an IRREVOCABLE PROXY
to vote the Pledged Shares and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Shares would be
entitled (including giving or withholding written consents of shareholders or
other holders of equity interests, calling special meetings of shareholders
or other holders of equity interests and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any
action (including any transfer of any Pledged Shares on the record books of
the issuer thereof) by any other Person (including the issuer of the Pledged
Shares or any officer or agent thereof), upon the occurrence and during the
continuance of a Default and which proxy shall only terminate upon the
payment in full of the Secured Obligations.
10. SPECIAL COVENANTS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
(a) Each Grantor shall, at the reasonable request of the Secured
Party:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
(ii) use best efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that
could or might in any way impair or prevent the creation of a security
interest in, or the assignment of, such Grantor's rights and interests
in any property included within the definitions of any Intellectual
Property Collateral acquired under such contracts;
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(iii) take any and all reasonable steps to protect the secrecy
of all trade secrets relating to the products and services sold or
delivered under or in connection with the Intellectual Property
Collateral, including, without limitation, where appropriate entering
into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its use
of any of the Intellectual Property Collateral;
(v) use a commercially appropriate standard of quality
(which may be consistent with such Grantor's past practices) in the
manufacture, sale and delivery of products and services sold or
delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured
Party's reasonable request statements and schedules further identifying
and describing any Intellectual Property Collateral and such other
reports in connection with such Collateral, all in reasonable detail.
(b) Except as otherwise provided in this Section 10, each Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, at Secured Party's reasonable direction, shall take) such action as
such Grantor or Secured Party may deem reasonably necessary or advisable to
enforce collection of such amounts; PROVIDED, Secured Party shall have the
right at any time, upon the occurrence and during the continuation of a
Default and upon written notice to such Grantor of its intention to do so, to
notify the obligors with respect to any such amounts of the existence of the
security interest created hereby and to direct such obligors to make payment
of all such amounts directly to Secured Party, and, upon such notification
and at the expense of such Grantor, to enforce collection of any such amounts
and to adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as such Grantor might have done. After
receipt by any Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence and during the continuation of any Default,
(i) all amounts and proceeds (including checks and other instruments)
received by each Grantor in respect of amounts due to such Grantor in respect
of the Intellectual Property Collateral or any portion thereof shall be
received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over
or delivered to Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and applied as provided
by Section 18, and (ii) such Grantor shall not adjust, settle or compromise
the amount or payment of any such amount or release wholly or party any
obligor with respect thereto or allow any credit or discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make,
unless and until such Grantor, in its commercially reasonable judgment,
decides otherwise, (i) any application relating to any of the Intellectual
Property Collateral owned, held or used by such Grantor and identified on
SCHEDULES 1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as
of the date of this Agreement, (ii) any Copyright Registration on any
existing or future unregistered but copyrightable works (except
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for works of nominal commercial value or with respect to which such Grantor
has determined in the exercise of its commercially reasonable judgment that
it shall not seek registration), (iii) application on any future patentable
but unpatented innovation or invention comprising Intellectual Property
Collateral, and (iv) any Trademark opposition and cancellation proceedings,
renew Trademark Registration and Copyright Registrations and do any and all
acts which are necessary or desirable to preserve and maintain all rights in
all Intellectual Property Collateral. Any expenses incurred in connection
therewith shall be borne solely by Grantors. Subject to the foregoing, each
Grantor shall give Secured Party prior written notice of any abandonment of
any Intellectual Property Collateral or any pending patent application or any
Patent.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its
own benefit and at its own expense, such suits, proceedings or other actions
for infringement, unfair competition, dilution, misappropriation or other
damage, or reexamination or reissue proceedings as are necessary to protect
the Intellectual Property Collateral. Secured Party shall provide, at such
Grantor's expense, all reasonable and necessary cooperation in connection
with any such suit, proceeding or action including, without limitation,
joining as a necessary party. Each Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the institution of, or of any
adverse determination in, any proceeding (whether in the United States Patent
and Trademark Office, the United States Copyright Office or any federal,
state, local or foreign court) or regarding such Grantor's ownership, right
to use, or interest in any Intellectual Property Collateral. Each Grantor
shall provide to Secured Party any information with respect thereto requested
by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of a Default, hereby assigns,
transfers and conveys to Secured Party the nonexclusive right and license to
use all trademarks, tradenames, copyrights, patents or technical processes
(including, without limitation, the Intellectual Property Collateral) owned
or used by such Grantor that relate to the Collateral and any other
collateral granted by such Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary
to enable Secured Party to realize on the Collateral in accordance with this
Agreement and to enable any transferee or assignee of the Collateral to enjoy
the benefits of the Collateral. This right shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license shall be granted free of charge, without requirement
that any monetary payment whatsoever be made to such Grantor. In addition,
each Grantor hereby grants to Secured Party and its employees,
representatives and agents the right to visit such Grantor's and any of its
Affiliate's or subcontractor's plants, facilities and other places of
business that are utilized in connection with the manufacture, production,
inspection, storage or sale of products and services sold or delivered under
any of the Intellectual Property Collateral (or which were so utilized during
the prior six month period), and to inspect the quality control and all other
records relating thereto upon reasonable advance written notice to such
Grantor and at reasonable dates and times and as often as may be reasonably
requested. If and to the extent that any Grantor is permitted to license the
Intellectual Property Collateral, Secured Party shall promptly enter into a
non-disturbance agreement or other similar arrangement, at such Grantor's
request and expense,
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with such Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to Secured
Party pursuant to which (i) Secured Party shall agree not to disturb or
interfere with such licensee's rights under its license agreement with such
Grantor so long as such licensee is not in default thereunder, and (ii) such
licensee shall acknowledge and agree that the Intellectual Property
Collateral licensed to it is subject to the security interest created in
favor of Secured Party and the other terms of this Agreement.
11. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and
observe all terms and provisions of the Assigned Agreements to be
performed or observed by it, maintain the Assigned Agreements in full
force and effect, enforce the Assigned Agreements in accordance with
their terms, and take all such action to such end as may be from time to
time requested by Secured Party; and
(ii) upon the reasonable requested of Secured Party, furnish to
Secured Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or pursuant
to the Assigned Agreements, and from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon request of Secured
Party make to the parties to such Assigned Agreements such demands and
requests for information and reports or for action as such Grantor is
entitled to make under the Assigned Agreements.
(b) Upon the occurrence and during the continuance of a Default, no
Grantor shall:
(i) cancel or terminate any of the Assigned Agreements or consent
to or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned Agreements;
(iv) consent to or permit or accept any prepayment of amounts to
become due under or in connection with the Assigned Agreements, except
as expressly provided therein; or
(v) take any other action in connection with the Assigned
Agreements that could reasonably be expected to materially impair the
value of the interest or rights of such Grantor thereunder or that could
reasonably be expected to materially impair the interest or rights of
Secured Party.
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12. COLLATERAL ACCOUNT.
Secured Party is hereby authorized to establish and maintain at its
office of One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx, 00000 as a blocked account in the name of Company and under the
sole dominion and control of Secured Party, a restricted deposit account
designated as "Xxxxxx Group International Collateral Account". All amounts
at any time held in the Collateral Account shall be beneficially owned by
Grantors but shall be held in the name of Secured Party hereunder, for the
benefit of Lenders, as collateral security for the Secured Obligations upon
the terms and conditions set forth herein. Grantors shall have no right to
withdraw, transfer or, except as expressly set forth herein, otherwise
receive any funds deposited in the Collateral Account. Anything contained
herein to the contrary notwithstanding, the Collateral Account shall be
subject to such applicable laws, and such applicable regulations of the Board
of Governors of the Federal Reserve System and of any other appropriate
banking or governmental authority, as may now or hereafter be in effect. All
deposits of funds in the Collateral Account shall be made by wire transfer
(or, if applicable, by intra-bank transfer from another account of a Grantor)
of immediately available funds, in each case addressed in accordance with
instructions of Secured Party. Each Grantor shall, promptly after initiating
a transfer of funds to the Collateral Account, give notice to the Secured
Party by a telefacsimile of the date, amount and method of delivery of such
deposit. Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit
in the Collateral Account pending application thereof as elsewhere provided
in this Agreement. To the extent permitted under Regulation Q of the Board of
Governors of the Federal Reserve System, any cash held in the Collateral
Account shall bear interest at the standard rate paid by Secured Party to its
customers for deposits of like amounts and terms. Subject to Secured Party's
rights hereunder, any interest earned on deposits of cash in the Collateral
Account shall be deposited directly in, and held in the Collateral Account.
13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor, Secured Party or otherwise, from time to
time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish
the purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of a Default, to
obtain and adjust insurance required to be maintained by such Grantor or paid
to Secured Party pursuant to Section 7;
(b) upon the occurrence and during the continuance of a Default, to ask
for, demand, collect, xxx for, recover, compound, receive and give acquittance
and receipts for moneys due and become due under or in respect of any of the
Collateral;
(c) upon the occurrence and during the continuance of a Default, to
receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clauses (a) and (b) above;
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(d) upon the occurrence and during the continuance of a Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect
to any of the Collateral;
(e) upon the occurrence and during the continuance of a Default, to
pay or discharge taxes or Liens (other than Liens permitted under this
Agreement or the Credit Agreement) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Secured Party in its sole
discretion, any such payments made by Secured Party to become obligations of
such Grantor or Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of a Default, to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuance of a Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantors' expense, at any time or from time time,
all acts and things that Secured Party deems necessary to protect, preserve
or realize upon the Collateral and Secured Party's security interest therein
in order to effect the intent of this Agreement, as fully and effectively as
such Grantor might do.
14. SECURED PARTY MAY PERFORM.
If any Grantor fails to perform any agreement contained herein, Secured
Party may, after prior written notice to such Grantor and a reasonable
opportunity to cure, itself perform, or cause performance of, such agreement,
and the expenses of Secured Party incurred in connection therewith shall be
jointly and severally payable by Grantors under Section 19(b).
15. STANDARD OF CARE.
(a) The powers conferred on Security Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. Except for the exercise of reasonable care in
the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
(b) Secured Party shall not be liable to any Grantor (i) for any loss
or damage sustained by it, or (ii) for any loss, damage, depreciation or
other diminution in the value of any of the Collateral that may occur as a
result of, in connection with or that is in any way related to (1) any
exercise by Secured Party or of any right or remedy under this Agreement or
(2) any other act of or failure to act by Secured Party, except to the extent
that the same shall be
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determined by a final judgment of a court of competent jurisdiction that is
final and not subject to review on appeal to be the result of acts or
omissions on the part of Secured Party constituting gross negligence or
willful misconduct.
(c) NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST SECURED PARTY OR ANY
LENDER OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, PARTNERS,
EMPLOYEES, AGENTS, ATTORNEYS, MANAGERS, ADVISORS AND THEIR AFFILIATES FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR
DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED
TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH;
AND EACH GRANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY SUCH
CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
16. REMEDIES.
(a) GENERALLY. If any Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the UCC,
and also may (i) require each Grantor to, and each Grantor hereby agrees that
it will at its expense and upon request of Secured Party forthwith, assemble
all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at at place to be designated by Secured Party
that is reasonably convenient to both parties, (ii) enter onto the property
where any Collateral is located and take possession thereof with or without
judicial process, (iii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of such Grantor's equipment for the purpose of completing any
work in process, taking any actions described in the preceding clause (iii)
and collecting any Secured Obligation, (v) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Secured Party's offices or elsewhere,
for cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as Secured Party may deem
commercially reasonable, (vi) exercise dominion and control over and refuse
to permit further withdrawals from any Deposit Account maintained with
Secured Party or any Lender constituting a part of the Collateral and (vii)
without notice to any Grantor, transfer to or to register in the name of
Secured Party or any of its nominees any of all of the Securities Collateral.
Secured Party or any Lender may be the purchaser or any or all of the
Collateral at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender in its individual capacity
unless Required Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale,
to use and apply any of the Secured Obligations as a credit on account of the
purchase price for any Collateral payable by
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Secured Party at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days's notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and any such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such private sale was less than the price which might have been
obtained at a public sale, even if the Secured Party accepts the first offer
received and does not offer such Collateral to more that one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, Grantors shall be jointly and severally
liable for the deficiency and the fees of the attorneys employed by Secured
Party to collect such deficiency. Each Grantor further agrees that a breach
of any of the covenants contained in this Section will cause irreparable
injury to Security Party, that Secured Party has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against such
Grantor, and each Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities. Notwithstanding
anything herein to the contrary, Secured Party shall give Grantors, counsel
to any official committees in respect of the Chapter 11 Cases and the office
of the U.S. Trustee, five business days prior written notice (which notice
shall be delivered by facsimile or overnight courier) of the exercise of its
rights and remedies with respect to the Collateral and file a copy of such
notice with the clerk of the U.S. Court [Grantors hereby waive any right to
oppose the exercise of such remedies (except for any opposition based upon
allegations of Secured Party's bad faith).] Neither Secured Party not Lenders
shall have any obligation of any kind to make a motion or application to, or
otherwise commence an adversary proceeding in, the U.S. Court to exercise
their rights or remedies set forth or referred to herein.
(b) SECURITIES COLLATERAL.
(i) Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws,
Secured Party may be compelled, with respect to any sale of all or any
part of the Securities Collateral conducted without prior registration
or qualification of such Securities Collateral under the Securities Act
and/or such state securities laws, to limit purchasers to those who
will agree, among other things, to acquire the Securities Collateral for
their own account, for investment and not with a view to the distribution
or resale thereof. Each Grantor acknowledges that any such private sales
may be at prices and one terms less favorable that those obtainable
through a public sale without such restrictions (including a public
offering made pursuant to a registration statement under the Securities
Act) and, notwithstanding such circumstances and the registration
rights granted to Secured Party
L-24
by such Grantor pursuant hereto, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so
register it. If Secured Party determines to exercise its right to sell
any or all of the Securities Collateral, upon written request, each
Grantor shall and shall cause each issuer of any Pledged Shares to be
sold hereunder from time to time to flourish to Secured Party all such
information as Secured Party may request in order to determine the
number of shares and other instruments included in the Securities
Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the Securities
and Exchange Commission thereunder, as the same are from time to time in
effect.
(ii) If Secured Party shall determine to exercise its right to sell
all or any of the Securities Collateral pursuant to this Section,
Company and each Grantor which is a first-tier Subsidiary agrees that,
upon request of Secured Party (which request may be made by Secured
Party in its sold discretion), Grantor will, at its own expense (A)
execute and deliver, and cause each issuer of the Securities Collateral
contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause
to be done all such other acts and things, as may be necessary or, in
the opinion of Secured Party, advisable to register such Securities
Collateral under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of Secured Party, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto; (B) use its best efforts to
qualify the Securities Collateral under all applicable state securities
or "Blue Sky" laws and to obtain all necessary governmental approvals
for the sale of the Securities Collateral, as requested by Secured
Party; (C) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act; (D) do
or cause to be done all such other acts and things as may be necessary
to make such sale of the Securities Collateral or any part thereof valid
and binding and in compliance with applicable law; and (E) bear all
costs and expenses, including reasonable attorneys' fees, of carrying
out its obligations under this Section.
(iii) Without limiting the generality of Section 10.7 of the Credit
Agreement, in the event of any public sale described herein, each
Grantor agrees to indemnify and hold harmless Secured Party, in each
Lender and each of their respective directors, officers, employees and
agents from and against any loss, fee, cost, expense, damage, liability
or claim, joint or several, to which any such Persons may become subject
or for which any of them may be liable, under the Securities Act or
otherwise, insofar as such losses, fees, costs, expenses, damages,
liabilities or claims (or any litigation commenced or threatened in
respect thereof) arise out of or are based upon an
L-25
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, registration statement,
prospectus or other such document published or filed in connection with
such public sale, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Secured Party and
such other Persons for any legal or other expenses reasonably incurred
by Secured Party and such other Persons in connection with any
litigation, of any nature whatsoever, commenced or threatened in respect
thereof (including any and all fees, costs and expenses whatsoever
reasonably incurred by Secured Party and such other Persons and counsel
for Secured Party and such other Persons in investigating, preparing
for, defending against or providing evidence, producing documents or
taking any other action in respect of, any such commenced or threatened
litigation or any claims asserted). This indemnity shall be in addition
to any liability which any Grantor may otherwise have and shall extend
upon the same terms and conditions to each Person, if any, that controls
Secured Party or such Persons within the meaning of the Securities Act.
(c) COLLATERAL AMOUNT. If a Default has occurred and is continuing
and, in accordance with Section 2.19.4 of the Credit Agreement, upon demand
of the Required Lenders or the Secured Party at the request of the Required
Lenders, the Borrowers are required to pay to Secured Party an amount (the
"AGGREGATE AVAILABLE AMOUNT") equal to the aggregate outstanding L/C
Obligations under the Credit Agreement, the Borrowers shall deliver funds in
such an amount for deposit in the Collateral Account. In accordance with
Section 2.10(d) of the Credit Agreement, Secured Party shall from time to
time deposit into the Collateral Account any excess of any mandatory
prepayment required to be deposited therein pursuant to such Section. If for
any reason the aggregate amount delivered by the Borrowers for deposit in the
Collateral Account as aforesaid is less than the Aggregate Available Amount,
the aggregate amount so delivered by the Borrowers shall be apportioned among
all outstanding Letters of Credit for purposes of this Section in accordance
with the ratio of the maximum amount available for drawing under each such
Letter of Credit (as to such Letter of Credit, the "MAXIMUM AVAILABLE
AMOUNT") to the Aggregate Available Amount. Upon any drawing under any
outstanding Letter of Credit in respect of which the Borrowers have deposited
in the Collateral Account any amounts described above, Secured Party shall
apply such amounts to reimburse the L/C Issuer for the amount of such
drawing. In the event of cancellation or expiration of any Letter of Credit
in respect of which the Borrowers have deposited in the Collateral Account
any amounts described above, or in the event of any reduction in the Maximum
Available Amount under such Letter of Credit, Secured Party shall apply the
amount then on deposit in the Collateral Account in respect of such Letter of
Credit (less, in the case of such a reduction, the Maximum Available Amount
under such Letter of Credit immediately after such reduction) first, to the
payment of any amounts payable to Secured Party pursuant to Section 18
hereof, second, to the extent of any excess, to the cash collateralization
pursuant to the terms of this Agreement of any outstanding Letters of Credit
in respect of which the Borrowers have failed to pay all or a portion of the
amounts described above (such cash collateralization to be apportioned among
all such Letters of Credit in the manner described above), third, to the
extent of any further excess, to the payment of any other outstanding Secured
Obligations in such order as Secured Party shall elect, and fourth, to the
extent of any further excess, to the payment to whomsoever shall be lawfully
entitled to receive such funds.
L-26
17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
(a) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of a Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the
name of any Grantor, Secured Party or otherwise, to enforce any Intellectual
Property Collateral, in which event each Grantor shall, at the request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
Section 10.7 of the Credit Agreement and Section 19 hereof, as applicable, in
connection with the exercise of its rights under this Section, and, to the
extent that Secured Party shall elect not to bring suit to enforce any
Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property
Collateral by others and for that purpose agrees to use its commercially
reasonable judgement in maintaining any action, suit or proceeding against
any Person so infringing reasonably necessary to prevent such infringement;
(ii) upon written demand from Secured Party, each Grantor shall execute and
deliver to Secured Party an assignment or assignments of the Intellectual
Property Collateral and such other documents as are necessary or appropriate
to carry out the intent and purposes of this Agreement; (iii) each Grantor
agrees that such an assignment and/or recording shall be applied to reduce
the Secured Obligations outstanding only to the extent that Secured Party
(or any Lender) receives cash proceeds in respect of the sale of, or other
realization upon, the Intellectual Property Collateral; and (iv) within five
Business Days after written notice from Secured Party, each Grantor shall
make available to Secured Party, to the extent within such Grantor's power
and authority, such personnel in such Grantor's employ on the date of such
Default as Secured Party may reasonably designate, by name, title or job
responsibility, to permit such Grantor to continue, directly or indirectly,
to produce, advertise and sell the products and services sold or delivered by
such Grantor under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, such persons to be available to perform
their prior functions on Secured Party's behalf and to be compensated by
Secured Party at such Grantor's expense on a per diem, pro-rata basis
consistent with the salary and benefit structure applicable to each as of the
date of such Default.
(b) If (i) a Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii)
no other Default shall have occurred and be continuing, (iii) an assignment
to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv)
the Secured Obligations shall not have become immediately due and payable,
upon the written request of any Grantor, Secured Party shall promptly execute
and deliver to such Grantor such assignments as may be necessary to reassign
to such Grantor any such rights, title and interests as may have been
assigned to Secured Party as aforesaid, subject to any disposition thereof,
that may have been made by Secured Party; PROVIDED, after giving effect to
such reassignment, Secured Party's security interest granted pursuant
hereto, as well as all other rights and remedies of Secured Party granted
hereunder, shall continue to be in full force and effect; and PROVIDED
FURTHER, the rights, title and interests so reassigned shall be free and
clear of all Liens other than Liens (if any) encumbering such rights, title
and interest at the time of their assignment to Secured Party and Liens
expressly permitted under the Credit Agreement.
L-27
18. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be
applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party
hereunder for the account of Grantors, and to the payment of all costs
and expenses paid or incurred by Secured Party in connection with the
exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) and, as to obligations arising
under the Credit Agreement, as provided in the Credit Agreement, and
THIRD: To the Payment to or upon the order of the Grantors, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
19. INDEMNITY AND EXPENSES.
(a) Grantors jointly and severally agree to indemnify Secured
Party and each Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including without
limitation enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's or such Lender's
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
that Secured Party may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Secured Party
hereunder, or (iv) the failure by any Grantor to perform or observe any of
the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall survive
the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents.
20. CONTINUING SECURITY INTEREST: TRANSFER OF REVOLVING LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the
L-28
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, (b) be binding upon Grantors
and their respective successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
Sections 13.1, 13.2 and 13.3 of the Credit Agreement, any Lender may assign
or otherwise transfer any Revolving Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise. Upon the payment in
full of all Secured Obligations and the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the applicable Grantors or to such other
Person as a court of competent jurisdiction (including, without limitation,
the U.S. Court) may direct. Upon any such termination Secured Party will, at
Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination. In addition, upon the
proposed sale, transfer or other disposition of any Collateral by a Grantor
in accordance with the Credit Agreement for which such Grantor desires to
obtain a security interest release from Secured Party, such Grantor shall
deliver a certificate of an Authorized Officer (x) stating that the
Collateral subject to such disposition is being sold, transferred or
otherwise disposed of in compliance with the terms of the Credit Agreement
and (y) specifying the Collateral being sold, transferred or otherwise
disposed of in the proposed transaction. Upon the receipt of such certificate,
Secured Party shall, at Grantor's expense, so long as Secured Party has no
reason to believe that the certificate delivered by such Grantor with respect
to such sale is not true and correct, execute and deliver such releases of
its security interest in such Collateral which is to be sold, transferred or
disposed of, as may be reasonably requested by such Grantor.
21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including without limitation the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to Section 11.11 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; and appointment
of a successor Agent pursuant to Section 11.11 of the Credit Agreement shall
also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Agent under Section
11.11 of the Credit Agreement by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Secured Party under this Agreement, and
the retiring Secured Party under this Agreement shall promptly (i) transfer
to such successor Secured Party all sums, securities and other items of
Collateral held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such amendments to financing
statements, and take other actions,
L-29
as may be necessary or appropriate in connection with the assignment to such
successor Secured party of the security interests created hereunder,
whereupon such retiring Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Secured Party, the provisions of this Agreement shall insure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
22. ADDITIONAL GRANTORS.
From time to time subsequent to the date hereof, additional Borrowers
under the Credit Agreement may become parties hereto as additional Grantors
(each such Borrower being an "ADDITIONAL GRANTOR"), by executing a
Counterpart substantially in the form of EXHIBIT III annexed hereto. Upon
delivery of any such Counterpart to Secured Party, notice of which is hereby
waived by Grantors, each such Additional Grantor shall be a Grantor and shall
be as fully a party hereto as if such Additional Grantor were an original
signatory hereto. Each Grantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the additional or release of
any other Grantor hereunder, nor by any election of Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a
party hereto regardless of whether any other Person becomes or fails to
become or ceases to be a Grantor hereunder.
23. AMENDMENTS: ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and
signed by Secured Party and, in the case of any such amendment or
modification, by Grantors; PROVIDED this Agreement may be modified by the
execution of a Counterpart by an Additional Grantor in accordance with
Section 22 and Grantors hereby waive any requirement of notice of or consent
to any such amendment. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
24. NOTICES.
All notices and other communication provided to any party hereto under
this Agreement shall be in writing or by telex or by facsimile and addressed
or delivered to such party at its address set forth in the Credit Agreement,
on the signature pages hereof or at such other address as may be designated
by such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes).
25. FAILURE OR INDULGENCE NOT WAIVER: REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power,
L-30
right or privilege preclude any other or further exercise thereof or of any
other power, right or privilege. All right and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
26. SEVERABILITY.
Any provision in this Agreement 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 Agreement are declared to be severable.
27. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
28. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial
Code in the State of New York are used herein as therein defined. The rules
of construction set forth in Section 1.2 of the Credit Agreement shall be
applicable to this Agreement MUTATIS MUTANDIS.
29. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blak]
L-31
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
XXXXXX GROUP INTERNATIONAL, INC.,
as a Grantor
By: ____________________________________
Name:
Title:
EACH OF THE ENTITIES LISTED ON SCHEDULE A
ANNEXED HERETO, AS GRANTORS
By: ____________________________________
on behalf of each of the entities
listed on SCHEDULE A annexed hereto
Name:
Title:
L-32
SCHEDULE A
NAME OF EACH U.S. SUBSIDIARY
----------------------------
L-33
FIRST UNION NATIONAL BANK,
as Secured Party
By: ________________________
Name:
Title:
L-34
SCHEDULE 1(e)(i) TO
SECURITY AGREEMENT
---------------------------------------------------------------------------------------
Class Percentage of
of Stock Par Number of Outstanding
Stock Issuer Stock Certificate Nos. Value Shares Shares Pledged
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
1(e)(i)-1
SCHEDULE 1(e)(ii) TO
SECURITY AGREEMENT
--------------------------------------------------------------------------------------
Amount of
Debt Issuer Indebtedness
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
1(e)(ii)-1
SCHEDULE 1(f)(i) TO
SECURITY AGREEMENT
U.S. TRADEMARKS:
----------------
TRADEMARK REGISTRATION REGISTRATION
REGISTERED OWNER: DESCRIPTION NUMBER DATE
----------------- ----------- ------------ ------------
FOREIGN TRADEMARKS:
-------------------
TRADEMARK REGISTRATION REGISTRATION
REGISTERED OWNER DESCRIPTION NUMBER DATE
----------------- ----------- ------------ ------------
1(f)(i)-1
SCHEDULE 1(f)(ii) TO
SECURITY AGREEMENT
U.S. PATENTS ISSUED:
--------------------
PATENT NO. ISSUE DATE INVENTION INVENTOR
---------- ---------- --------- --------
U.S. PATENTS PENDING:
---------------------
APPLICANT'S DATE APPLICATION
NAME FILED NUMBER INVENTION INVENTOR
----------- ----- ----------- --------- --------
FOREIGN PATENTS ISSUED:
-----------------------
PATENT NO. ISSUE DATE INVENTION INVENTOR
---------- ---------- --------- --------
1(f)(ii)-1
FOREIGN PATENTS PENDING:
------------------------
APPLICANT'S DATE APPLICATION
NAME FILED NUMBER INVENTION INVENTOR
----------- ----- ----------- --------- --------
1(f)(ii)-2
SCHEDULE 1(f)(iii) TO
SECURITY AGREEMENT
U.S. COPYRIGHTS:
----------------
TITLE REGISTRATION NO. DATE OF ISSUE REGISTERED OWNER
----- ---------------- ------------- ----------------
FOREIGN COPYRIGHT REGISTRATIONS:
--------------------------------
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
----------------------------------------------------
TITLE REFERENCE NO. DATE OF APPLICATION COPYRIGHT CLAIMANT
----- ------------- ------------------- ------------------
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
-------------------------------------------------------
COUNTRY TITLE REGISTRATION NO. DATE OF ISSUE
------- ----- ---------------- -------------
1(f)(iii)-1
SCHEDULE 1(h) TO
SECURITY AGREEMENT
ASSIGNED AGREEMENTS
-------------------
[None.]
1(h)-1
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT AND INVENTORY
------------------------------------
NAME OF GRANTOR LOCATIONS OF EQUIPMENT AND INVENTORY
--------------- ------------------------------------
4(b)-1
SCHEDULE 4(d)
TO
SECURITY AGREEMENT
OFFICE LOCATIONS
----------------
NAME OF GRANTOR OFFICE LOCATIONS
--------------- ----------------
4(d)-1
SCHEDULE 4(e)
TO
SECURITY AGREEMENT
OTHER NAMES
-----------
NAME OF GRANTOR OTHER NAMES
--------------- -----------
4(e)-1
EXHIBIT I TO
SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This Pledge Supplement, dated ________________, [1999][200_] is
delivered pursuant to the Security Agreement, dated June 1, 1999 between
____________________, ("GRANTOR"), the other Grantors named therein, and
First Union National Bank, as Secured Party (as it may be from time to time
amended, modified or supplemented, the "SECURITY AGREEMENT"). Capitalized
terms used herein not otherwise defined herein shall have the meanings
ascribed thereto in the Security Agreement.
Grantor hereby agrees that the [Pledged Shares] [instruments evidencing
Pledged Debt] listed on the schedule attached hereto shall be deemed to be part
of the [Pledged Shares] [Pledged Debt] and shall become part of the Securities
Collateral and shall secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Amendment to be duly
executed and delivered by its duly authorized officer as of __________, [1999]
[200_].
[GRANTOR]
By: _______________________
Name:
Title:
EXH I-1
EXHIBIT II TO
SECURITY AGREEMENT
IP SUPPLEMENT
This IP SUPPLEMENT, dated __________________, [1999][200_] is delivered
pursuant to and supplements (i) the Security Agreement, dated as of June 1,
1999 (as it may be from time to time amended, modified or supplemented, the
"SECURITY AGREEMENT"), among Xxxxxx Group International, Inc.,
[Insert Name of Grantor], the other Grantors named therein, and First Union
National Bank, as Secured Party, and (ii) the [Grant of Trademark Security
Interest] [Grant of Patent Security Interest] [Grant of Copyright Security
Interest] dated as of ____________, [1999][200_] (the "GRANT") executed by
Grantor. Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Grant.
[Grantor] grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to the [Trademark Collateral]
[Patent Collateral] [Copyright Collateral] listed on Schedule A attached
hereto. All such [Trademark Collateral] [Patent Collateral]
[Copyright Collateral] shall be deemed to be part of the
[Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall
be hereafter subject to each of the terms and conditions of the Security
Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ___________,
[1999][200_].
[GRANTOR]
By: _______________________
Name:
Title:
EXH II-1
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated __________________, [1999][200_],
is delivered pursuant to Section 22 of the Security Agreement referred to
below. The undersigned hereby agrees that this Counterpart may be attached to
the Security Agreement, dated as of June 1, 1999 (as it may be from time to
time amended, modified or supplemented, the "SECURITY AGREEMENT"; capitalized
terms used herein not otherwise defined herein shall have the meanings
ascribed therein), among Xxxxxx Group International, Inc., the other Grantors
named therein, and First Union National Bank, as Secured Party. The
undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Security Agreement in accordance with Section 22 thereof
and agrees to be bound by all of the terms of the Security Agreement. Without
limiting the generality of the foregoing, the undersigned hereby:
(i) authorizes the Secured Party to add the information set forth
on the Schedules to this Agreement to the correlative Schedules attached
to the Security Agreement(1);
(ii) agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part
of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the
undersigned as of the date hereof.
[NAME OF ADDITIONAL GRANTOR]
By: _______________________
Name:
Title:
________________
(1) The Schedules to the Counterpart should include copies of all Schedules
that identify collateral to be granted by the Additional Grantor.
EXH III-1
EXHIBIT M
[FORM OF MORTGAGE]
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([STATE])
BY AND FROM
[NAME], "MORTGAGOR"
TO
FIRST UNION NATIONAL BANK,
IN ITS CAPACITY AS ADMINISTRATIVE AGENT, "MORTGAGEE"
DATED AS OF_________________
THE MAXIMUM PRINCIPAL INDEBTEDNESS WHICH IS SECURED BY OR WHICH BY
ANY CONTINGENCY MAY BE SECURED BY THIS MORTGAGE IS [DOLLARS](2)
LOCATION:
MUNICIPALITY:
COUNTY:
STATE:
THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
O'MELVENY & XXXXX LLP
000 XXXX 00XX XXXXXX
XXXXX-XXXXXX XXXXX
XXX XXXX, XXX XXXX 00000-0000
ATTENTION: XXXXXX XX XXXXXX, ESQ.
FILE #514,765-001
-------------------
(2)Insert the foregoing only if the Mortgage is capped at a principal amount
lower than the aggregate facility amount.
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MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([STATE])
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES
AND FIXTURE FILING ([STATE]) (this "MORTGAGE") is dated as of ______________
by and from [MORTGAGOR], a ______________, ______________ ("MORTGAGOR"),
whose address is ______________ to FIRST UNION, as administrative agent (in
such capacity, "AGENT") for the lenders party to the Credit Agreement
(defined below) (such lenders, together with their respective successors and
assigns, collectively, the "LENDERS"), having an address at One First Union
Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, 00000 (Agent,
together with its successors and assigns, "MORTGAGEE").
ANY PROVISION TO THE CONTRARY NOTWITHSTANDING, THE MAXIMUM PRINCIPAL
INDEBTEDNESS WHICH IS SECURED BY OR WHICH BY ANY CONTINGENCY MAY BE SECURED
BY THIS MORTGAGE IS [DOLLARS] (THE "SECURED AMOUNT").(3)
ARTICLE 1
DEFINITIONS
1.1. DEFINITIONS. All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in that
certain Debtor-In-Possession Credit Agreement, dated as of June 1, 1999 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT") by and among XXXXXX GROUP INTERNATIONAL, INC., a Delaware
corporation, as debtor and debtor-in-possession, EACH OF COMPANY'S
SUBSIDIARIES LISTED ON THE SIGNATURE PAGES THEREOF, THE XXXXXX GROUP INC., a
corporation organized under the laws of the Province of British Columbia,
Canada, as a Guarantor, THE LENDERS NAMED THEREIN, as the initial Lenders,
and FIRST UNION NATIONAL BANK, as the L/C Issuer and as the Administrative
Agent for the Lenders. As used herein, the following terms shall have the
following meanings:
(a) "INDEBTEDNESS": (1) All indebtedness of Mortgagor to Mortgagee
and the Lenders, including, without limitation, the sum of all(4) (a)
principal, interest and other amounts evidenced or secured by the Loan
Documents, and (b) principal, interest and other amounts which may hereafter
be loaned by Mortgagee or any of the Lenders under or in connection with the
Credit Agreement or any of the other Loan Documents, whether evidenced by a
promissory note or other instrument which, by its terms, is secured hereby,
and (2) all other indebtedness, obligations and liabilities now or hereafter
existing of any kind of Mortgagor(5) to Mortgagee or any of the Lenders under
documents which recite that they are intended to be secured by this
Mortgage. The Credit Agreement contains a revolving credit facility which
permits Mortgagor(6)
-------------------
(3)Insert the foregoing only if the Mortgage is capped at a principal amount
lower than the aggregate facility amount.
(4)If the Mortgagor is a Guarantor under the Credit Agreement, substitute the
foregoing phrase with "(1) All indebtedness of Borrower to Mortgagee the full
and prompt payment of which has been guaranteed by Mortgagor, including,
without limitation, the sum of all".
(5)If the Mortgagor is a Guarantor under the Credit Agreement, insert "or
Borrower".
(6)If the Mortgagor is a Guarantor under the Credit Agreement, replace
"Mortgagor" with "Borrower".
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to borrow certain principal amounts, repay all or a portion of such principal
amounts, and reborrow the amounts previously paid to the Lenders, all upon
satisfaction of certain conditions stated in the Credit Agreement. This
Mortgage secures all advances and re-advances under the revolving credit
feature of the Credit Agreement".(7)
(b) "MORTGAGED PROPERTY": All of Mortgagor's interest in (1) the
fee interest(8) in the real property described in EXHIBIT A attached hereto and
incorporated herein by this reference, together with any greater estate
therein as hereafter may be acquired by Mortgagor (the "LAND"), (2) all
improvements now owned or hereafter acquired by Mortgagor, now or at any time
situated, placed or constructed upon the Land (the "IMPROVEMENTS"; the Land
and Improvements are collectively referred to as the "PREMISES"), (3) all
materials, supplies, equipment, apparatus and other items of personal
property now owned or hereafter acquired by Mortgagor and now or hereafter
attached to, installed in or used in connection with any of the Improvements
or the Land, and all of Mortgagor's rights, if any, in water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the "FIXTURES"), (4) all
right, title and interest of Mortgagor, if any, in and to all goods,
accounts, general intangibles, instruments, documents, chattel paper and all
other personal property of any kind or character, including such items of
personal property as defined in the UCC (defined below), now owned or
hereafter acquired by Mortgagor and now or hereafter affixed to, placed upon,
used in connection with, arising from or otherwise related to the Premises
(the "PERSONALTY"), (5) all reserves, escrows or impounds required under the
Credit Agreement and all deposit accounts maintained by Mortgagor with
respect to the Mortgaged Property (the "DEPOSIT ACCOUNTS"), (6) all leases,
licenses, concessions, occupancy agreements or other agreements (written or
oral, now or at any time in effect) which grant to any Person a possessory
interest in, or the right to use, all or any part of the Mortgaged Property,
together with all related security and other deposits (the "LEASES"), (7) all
of the rents, revenues, royalties, income, proceeds, profits, security and
other types of deposits, and other benefits paid or payable by parties to the
Leases for using, leasing, licensing, possessing, operating from, residing in,
selling or otherwise enjoying the Mortgaged Property (the "RENTS"), (8) all
other agreements, such as construction contracts, architects' agreements,
engineers' contracts, utility contracts, maintenance agreements, management
agreements, service contracts, listing agreements, guaranties, warranties,
permits, licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership
of the Mortgaged Property (the "PROPERTY AGREEMENTS"), (9) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages
and appurtenances appertaining to the foregoing, (10) all property tax refunds
(the "TAX REFUNDS") received in connection with the Premises, (11) all
accessions, replacements and substitutions for any of the foregoing and all
proceeds thereof (the "PROCEEDS"), (12) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Mortgagor (the "INSURANCE"), and (13)
all of Mortgagor's right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to the Land,
Improvements, Fixtures or Personalty (the "CONDEMNATION AWARDS"). As used in
this Mortgage, the term "Mortgaged
-------------------
(7)If the Mortgage is capped at a principal amount lower than the aggregate
facility amount, replace the foregoing sentence with the following: "Subject
to the provisions of Section 2.2 hereof, this Mortgage secures all advances
and re-advances under the revolving credit feature of the Credit Agreement."
(8)If the Mortgage is a leasehold mortgage, replace "fee interest" with
"leasehold interest".
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Property" shall mean all or, where the context permit or requires, any
portion of the above or any interest therein.
(c) "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor (including,
without limitation, the obligation to repay the Indebtedness)(9) under the
Credit Agreement and the other Loan Documents.
(d) (10)"SUBJECT LEASE" That certain [TITLE OF LEASE] dated [DATE],
pursuant to which Mortgagor leases all or a portion of the Land from [LESSOR],
a memorandum of which was recorded with the County Clerk of [COUNTY], in
[BOOK/LIBOR/REEL] [BOOK/LIBOR/REEL NO.], Page [PAGE].
(e) "UCC": The Uniform Commercial Code of New York or, if the
creation, perfection and enforcement of any security interest herein granted
is governed by the laws of a state other than New York, then, as to the
matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE II
GRANT(11)
2.1. GRANT. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations,
Mortgagor MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS, to
Mortgagee the Mortgaged Property, subject, however, to the Permitted
Encumbrances, TO HAVE AND TO HOLD the Mortgaged Property to Mortgagee, and
Mortgagor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee.
2.2 (12)TREATMENT OF BORROWINGS AND REPAYMENTS. Pursuant to the
Credit Agreement, the amount of the Indebtedness may increase and decrease
from time to time as the Lenders advance, Mortgagor(13) repays, and the Lenders
readvance sums on account of the Loans, all as more fully described in the
Credit Agreement. For purposes of this Mortgage, so long as the balance of
the Indebtedness equals or exceeds the Secured Amount, the amount of the
Indebtedness secured by this Mortgage shall at all times equal only the
Secured Amount. Such Secured Amount represents only a portion of the first
sums advanced by the Lenders with respect to the Loans.
2.3 (14)REDUCTION OF SECURED AMOUNT. The Secured Amount shall be
reduced only by the last and final sums that Mortgagor(15) repays with respect
to the Indebtedness and shall
-------------------
(9)If the Mortgagor is a Guarantor under the Credit Agreement, delete the
foregoing parenthetical from the definition of "Obligations".
(10)Insert the definition of "Subject Lease" only if the Mortgage is a
leasehold mortgage.
(11)If the Mortgage is capped at a principal amount lower than the aggregate
facility amount, insert the following: "REVOLVING LOAN".
(12)Insert this Section 2.2 only if the Mortgage is capped at a principal
amount lower than the aggregate facility amount.
(13)If the Mortgagor is a Guarantor under the Credit Agreement, replace
"Mortgagor" with "Borrower".
(14)Insert this Section 2.3 only if the Mortgage is capped at a principal
amount lower than the aggregate facility amount.
M-4
not be reduced by any intervening repayments of the Indebtedness. So long as
the balance of the Indebtedness exceeds the Secured Amount, any payments and
repayments of the Indebtedness shall not be deemed to be applied against, or
to reduce, the portion of the Indebtedness secured by this Mortgage. Such
payments shall instead be deemed to reduce only such portions of the
Indebtedness as are secured by other collateral located outside of the State
of [STATE].
ARTICLE III
WARRANTIES, REPRESENTATIONS AND COVENANTS
Mortgagor warrants, represents and covenants to Mortgagee as follows:
3.1. TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT.
Mortgagor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the permitted encumbrances shown on SCHEDULE I attached
hereto (the "PERMITTED ENCUMBRANCES"). This Mortgage creates a valid,
enforceable [first priority] lien and security interests against the
Mortgaged Property.
3.2. FIRST LIEN STATUS. Mortgagor shall preserve and protect the
first lien and security interest status of this Mortgage and the other Loan
Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its expense, (a) give Mortgagee a detailed written notice of
such lien or security interest (including origin, amount and other terms),
and (b) pay the underlying claim in full or take such other action so as to
cause it to be released or contest the same in compliance with the
requirements of the Credit Agreement (including the requirement of providing
a bond or other security satisfactory to Mortgagee).
3.3. PAYMENT AND PERFORMANCE. Mortgagor shall pay the Indebtedness
when due under the Loan Documents and shall perform the Obligations in full
when they are required to be performed.
3.4. REPLACEMENT OF FIXTURES AND PERSONALTY. Mortgagor shall not,
without the prior written consent of Mortgagee, permit any of the Fixtures or
Personalty to be removed at any time from the Land or Improvements, unless
the removed item is removed temporarily for maintenance and repair or, if
removed permanently, is obsolete and is replaced by an article of equal or
better suitability and value, owned by Mortgagor subject to the liens and
security interests of this Mortgage and the other Loan Documents, and free
and clear of any other lien or security interest except the Permitted
Encumbrances and except as may be permitted under the Credit Agreement or
first approved in writing in Mortgagee.
3.5. INSPECTION. Mortgagor shall permit Mortgagee and the Lenders,
and their respective agents, representatives and employees, upon reasonable
prior notice to Mortgagor, to inspect the Mortgaged Property and all books
and records of Mortgagor located thereon, and to conduct, upon notice to and
in consultation with Mortgagor, such environmental and engineering studies as
Mortgagee or the Lenders may require, provided that such inspections and
studies shall not materially interfere with the use and operation of the
Mortgaged Property.
-------------------
(15)If the Mortgagor is a Guarantor under the Credit Agreement, replace
"Mortgagor" with "Borrower".
M-5
3.6. OTHER COVENANTS. All of the covenants(16) in the Credit Agreement are
incorporated herein by reference and, together with covenants in this ARTICLE
3, shall be covenants running with the land.
3.7. CONDEMNATION AWARDS AND INSURANCE PROCEEDS.
(a) CONDEMNATION AWARDS. Mortgagor assigns all awards and compensation
to which it is entitled for any condemnation or other taking, or any purchase
in lieu thereof, to Mortgagee and authorizes Mortgagee to collect and receive
such awards and compensation and to give proper receipts and acquittances
therefor, subject to the terms of the Credit Agreement.
(b) INSURANCE PROCEEDS. Mortgagor assigns to Mortgagee all proceeds of
any insurance policies insuring against loss or damage to the Mortgaged
Property. Mortgagor authorizes Mortgagee to collect and receive such proceeds
and authorizes and directs the issuer of each of such insurance policies to
make payment for all such losses directly to Mortgagee, instead of to
Mortgagor and Mortgagee jointly, subject to the terms of the Credit Agreement.
ARTICLE IV
LEASEHOLD MORTGAGE PROVISIONS(17)
4.1. REPRESENTATIONS; WARRANTIES; COVENANTS. Mortgagor hereby represents,
warrants and covenants, with respect to the Subject Lease, that:
(a) (1) Such Subject Lease is unmodified and in full force and effect,
(2) all rent and other charges therein have been paid to the extent they are
payable to the date hereof, (3) Mortgagor enjoys the quiet and peaceful
possession of the property demised thereby, (4) to the best of its knowledge,
Mortgagor is not in default under any of the terms thereof and there are no
circumstances which, with the passage of time or the giving of notice or
both, would constitute an event of default thereunder, (5) to the best of
Mortgagor's knowledge, the lessor thereunder is not in default under any of
the terms or provisions thereof on the part of the lessor to be observed or
performed;
(b) Mortgagor shall promptly pay, when due and payable, the rent and
other charges payable pursuant to such Subject Lease, and will timely perform
and observe all of the other terms, covenants and conditions required to be
performed and observed by Mortgagor as lessee under such Subject Lease;
(c) Mortgagor shall notify Mortgagee in writing of any default notice
received by Mortgagor wherein the lessor alleges the Mortgagor is in default
in the performance or observance of any terms, covenants or conditions on the
part of Mortgagor to be performed or observed under such Subject Lease within
three (3) days after Mortgagor receives such notice or otherwise becomes
aware of such default;
--------------------
(16)If the Mortgagor is a Guarantor under the Credit Agreement, insert the
following "of Borrower (and, if a party thereto, Mortgagor)".
(17)Insert this Article 4 only if the Mortgage is a leasehold mortgage.
M-6
(d) Mortgagor shall, immediately upon receipt thereof, deliver a copy
of each notice given to Mortgagor by the lessor pursuant to such Subject
Lease and promptly notify Mortgagee in writing of any default by the lessor
in the performance or observance of any of the items, covenants or conditions
on the part of the lessor to be performed or observed thereunder;
(e) Unless required under the terms of such Subject Lease, Mortgagor
shall not, without the prior written consent of Mortgagee (which may be
granted or withheld in Mortgagee's sole and absolute discretion) terminate,
modify or surrender such Subject Lease, and any such attempted termination,
modification or surrender without Mortgagee's written consent shall be void;
and
(f) Mortgagor shall, within twenty (20) days after written request from
Mortgagee, use its commercially reasonable efforts to obtain from the lessor
and deliver to Mortgagee a certificate setting forth the name of the tenant
thereunder and stating that such Subject Lease is in full force and effect,
is unmodified or, if the Subject Lease has been modified, the date of each
modification (together with copies of each such modification), that no notice
of termination thereon has been served on Mortgagor, stating that the lessor
knows of no default or event which with notice or lapse of time (or both)
would become a default is existing under the Subject Lease, stating the date
to which rent has been paid, and specifying the nature of any defaults, if
any, and containing such other statements and representations as may be
reasonably requested by Mortgagee.
4.2. NO MERGER. So long as any of the Indebtedness or the Obligations
remain unpaid or unperformed and to the extent permitted by applicable law,
the fee title to and the leasehold estate in the premises subject to each
Subject Lease shall not merge but shall always be kept separate and distinct
notwithstanding the union of such estates in the lessor or Mortgagor, or in a
third party, by purchase or otherwise. If Mortgagor acquires the fee title or
any other estate, title or interest in the property demised by the Subject
Lease, or any part thereof, the lien of this Mortgage shall attach to, cover
and be a lien upon such acquired estate, title or interest and the same
shall thereupon be and become a part of the Mortgaged Property with the same
force and effect as if specifically encumbered herein to the extent permitted
by applicable law. Mortgagor agrees to execute all instruments and documents
that Mortgagee may reasonably require to ratify, confirm and further evidence
the lien of this Mortgage on the acquired estate, title or interest.
Furthermore, Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact to execute and deliver, following an Default, all such
instruments and documents in the name and on behalf of Mortgagor. This power,
being coupled with an interest, shall be irrevocable as long as any portion
of the Indebtedness remains unpaid.
4.3. MORTGAGEE AS LESSEE. If the Subject Lease shall be terminated prior
to the natural expiration of its term due to default by Mortgagor or any
tenant thereunder, and if, pursuant to the provisions of such Subject Lease,
Mortgagee or its designee shall acquire from the lessor a new lease of the
premises subject to the Subject Lease, Mortgagor shall have no right, title
or interest in or to such new lease or the leasehold estate created thereby,
or renewal privileges therein contained.
4.4. NO ASSIGNMENT. Notwithstanding anything to the contrary contained
herein, this Mortgage shall not constitute an assignment of any Subject Lease
within the meaning of any provision thereof prohibiting its assignment and
Mortgagee shall have no liability or obligation
M-7
thereunder by reason of its acceptance of this Mortgage. Mortgagee shall be
liable for the obligations of the tenant arising out of any Subject Lease for
only that period of time for which Mortgagee is in possession of the premises
demised thereunder or has acquired, by foreclosure or otherwise, and is
holding all of Mortgagor's right, title and interest therein.
ARTICLE V
DEFAULT AND FORECLOSURE
5.1. REMEDIES. If a Default exists, Mortgagee may, at Mortgagee's
election, exercise any or all of the following rights, remedies and recourses:
(a) ACCELERATION. Declare the Indebtedness to be immediately due and
payable, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable.
(b) ENTRY ON MORTGAGED PROPERTY. To the extent permitted by applicable
law, enter the Mortgaged Property and take exclusive possession thereof and
of all books, records and accounts relating thereto or located thereon. If
Mortgagor remains in possession of the Mortgaged Property after a Default and
without Mortgagee's prior written consent, Mortgagee may invoke any legal
remedies to dispossess Mortgagor.
(c) OPERATION OF MORTGAGED PROPERTY. To the extent permitted by
applicable law, hold, lease, develop, manage, operate or otherwise use the
Mortgaged Property upon such terms and conditions as Mortgagee may deem
reasonable under the circumstances (making such repairs, alternations,
additions and improvements and taking other actions, from time to time, as
Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions of SECTION 5.7.
(d) FORECLOSURE AND SALE. Institute proceedings for the complete
foreclosure of this Mortgage, either by judicial action or by power of sale,
in which case the Mortgaged Property may be sold for cash or credit in one or
more parcels. With respect to any notices required or permitted under the
UCC, Mortgagor agrees that five (5) days' prior written notice shall be
deemed or commercially reasonable. At any such sale by virtue of any judicial
proceedings, power of sale, or any other legal right, remedy or recourse, the
title to and right of possession of any such property shall pass to the
purchaser thereof, and to the fullest extent permitted by law, Mortgagor
shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either
at law or in equity, in and to the property sold and such sale shall be a
perpetual bar both at law and in equity against Mortgagor, and against all
other Persons claiming or to claim the property sold or any part thereof, by,
through or under Mortgagor. Mortgagee or any of the Lenders may be a
purchaser at such sale. If Mortgagee is the highest bidder, Mortgagee may
credit the portion of the purchase price that would be distributed to
Mortgagee against the Indebtedness in lieu of paying cash. In the event this
Mortgage is foreclosed by judicial action and if permitted by applicable law,
appraisement of the Mortgaged Property is waived.
M-8
(e) RECEIVER. Make application to a court of competent jurisdiction
for, and obtain from such court as a matter of strict right and without
notice to Mortgagor or regard to the adequacy of the Mortgaged Property for
the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such appointment.
Any such receiver shall have all the usual powers and duties of receivers in
similar cases, including the full power to rent, maintain and otherwise
operate the Mortgaged Property upon such terms as may be approved by the
court, and shall apply such Rents in accordance with the provisions of
SECTION 5.7.
(f) OTHER. (1) Upon the occurrence and during the continuance of any
Default, Mortgagee may, at its election, exercise all rights and remedies of
Mortgagee set forth in any of the Loan Documents, in addition to all rights
and remedies available at law or in equity, PROVIDED that, any other
provision of this Mortgage or any other Loan Document to the contrary
notwithstanding, with respect to the foregoing, Mortgagee shall give Credit
Parties, and counsel to any official committees in respect of the Chapter 11
Cases and the office of the United States Trustee five Business Days prior
written notice (which notice shall be delivered by facsimile or overnight
courier) of the exercise of its rights and remedies with respect to the
Mortgaged Property and file a copy of such notice with the clerk of the U.S.
Court. Neither Mortgagee nor Lenders shall have any obligation of any kind to
make a motion or application to the U.S. Court to exercise their rights and
remedies set forth or referred to in this Mortgage or in the other Loan
Documents. The enumeration of the foregoing rights and remedies is not
intended to be exhaustive and the exercise of any right or remedy shall not
preclude the exercise of any other rights or remedies, all of which shall be
cumulative and not alternative. (2) Mortgagor waives, (i) presentment, demand
and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties or other property at any time held by Mortgagee or
Lenders on which Mortgagor may in any way be liable and hereby ratifies and
confirms whatever Mortgagee and Lenders may lawfully do in this regard, (ii)
subject to the notice provisions of subsection (1) above, all rights to
notice and hearing prior to Mortgagee's taking possession or control of, or
to Mortgagee or Lenders attachment or levy upon, the Mortgaged Property, or
any bond or security which might be required by any court prior to allowing
Mortgagee or Lenders to exercise any of their remedies, and (iii) the benefit
of all valuation, appraisal and exemption laws. Mortgagor acknowledges it has
been advised by counsel of its choice with respect to the effect of the
foregoing waivers and this Mortgage, the other Loan Documents and the
transactions evidenced by this Mortgage and the other Loan Documents.
5.2. SEPARATE SALES. To the extent permitted by applicable law, the
Mortgaged Property may be sold in one or more parcels and in such manner and
order as Mortgagee in its sole discretion may elect; the right of sale
arising out of any Default shall not be exhausted by any one or more sales.
5.3. REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE. Mortgagee and the
Lenders shall have all rights, remedies and recourses granted in the Loan
Documents and available at law or equity (including the UCC), which rights
(a) shall be cumulated and concurrent, (b) to the extent permitted by
applicable law, may be pursued separately,
M-9
successively or concurrently against Mortgagor or others obligated under the
Loan Documents, or against the Mortgaged Property, or against any one or more
of them, at the sole discretion of Mortgagee or the Lenders, (c) may be
exercised as often as occasion therefor shall arise, and the exercise or
failure to exercise any of them shall not be construed as a waiver or release
thereof or of any other right, remedy or recourse, and (d) are intended to
be, and shall be, nonexclusive. No action by Mortgage or the Lenders in the
enforcement of any rights, remedies or recourses under the Loan Documents or
otherwise at law or equity shall be deemed to cure any Default.
5.4. RELEASE OF AND RESORT TO COLLATERAL. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security
interest created in or evidenced by the Loan Documents or their status as a
first and prior lien and security interest in and to the Mortgaged Property.
For payment of the Indebtedness, Mortgagee may resort to any other security
in such order and manner as Mortgagee may elect.
5.5. WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To the
fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or
sale on execution or providing for any stay of execution, exemption from
civil process, redemption or extension of time for payment, (b) all notices
of any Default or of Mortgagee's election to exercise or the actual exercise
of any right, remedy or recourse provided for under the Loan Documents, and
(c) any right to a marshalling of assets or a sale in inverse order of
alienation.
5.6. DISCONTINUANCE OF PROCEEDINGS. If Mortgagee or the Lenders shall
have proceeded to invoke any right, remedy or recourse permitted under the
Loan Documents and shall thereafter elect to discontinue or abandon it for
any reason, Mortgagee or the Lenders shall have the unqualified right to do
so and, in such an event, Mortgagor, Mortgagee and the Lenders shall be
restored to their former positions with respect to the Indebtedness, the
Obligations, the Loan Documents, the Mortgaged Property and otherwise, and
the rights, remedies, recourses and powers of Mortgagee and the Lenders shall
continue as if the right, remedy or recourse had never been invoked, but no
such discontinuance or abandonment shall waive any Default which may then
exist or the right of Mortgagee or the Lenders thereafter to exercise any
right, remedy or recourse under the Loan Documents for such Default.
5.7. APPLICATION OF PROCEEDS. The proceeds of any sale of, and the Rents
and other amounts generated by the holding, leasing, management, operation or
other use of the Mortgaged Property, shall be applied by Mortgagee (or the
receiver, if one is appointed) in the following order unless otherwise
required by applicable law:
(a) to the payment of the costs and expenses of taking possession of
the Mortgaged Property and of holding, using, leasing, repairing, improving
and selling the same, including, without limitation (1) receiver's fees and
expenses, including the repayment of the amounts evidenced by any receiver's
certificates, (2) court costs, (3) attorneys' and accountants' fees and
expenses, and (4) costs of advertisement;
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(b) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Mortgagee in its sole
discretion may determine; and
(c) the balance, if any, to the payment to or upon the order of
the Mortgagor, or to whosoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct.
5.8. OCCUPANCY AFTER FORECLOSURE. Any sale of the Mortgaged
Property or any part thereof with SECTION 5.1(d) will divest all right, title
and interest of Mortgagor in and to the property sold. Subject to applicable
law, any purchaser at a foreclosure sale will receive immediate possession of
the property purchased. If Mortgagor retains possession of such property or
any part thereof subsequent to such sale, Mortgagor will be considered a
tenant at sufferance of the purchaser, and will, if Mortgagor remains in
possession after demand to remove, be subject to eviction and removal,
forcible or otherwise, with or, to the extent permitted by applicable law,
without process of law.
5.9. ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF ENFORCEMENT.
(a) If any Default exists, Mortgagee and each of the Lenders
shall have the right, but not the obligation, to cure such Default in the
name and on behalf of Mortgagor. All sums advanced and expenses incurred at
any time by Mortgagee or any Lender under this SECTION 5.9, or otherwise
under this Mortgage or any of the other Loan Documents or applicable law,
shall bear interest from the date that such sum is advanced or expense
incurred, to and including the date of reimbursement, computed at the rate or
rates at which interest is then computed on the Indebtedness, and all such
sums, together with interest thereon, shall be secured by this Mortgage.
(b) Mortgagor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and
enforcement of this Mortgage and the other Loan Documents, or the
enforcement, compromise or settlement of the Indebtedness or any claim under
this Mortgage and the other Loan Documents, and for the curing thereof, or
for defending or asserting the rights and claims of Mortgagee in respect
thereof, by litigation or otherwise.
5.10. NO MORTGAGEE IN POSSESSION. Neither the enforcement of any
of the remedies under this ARTICLE 5, the assignment of the Rents and Leases
under ARTICLE 6, the security interests under ARTICLE 7, nor any other
remedies afforded to Mortgagee under the Loan Documents, at law or in equity
shall cause Mortgagee or any Lender to be deemed or construed to be a
mortgagee in possession of the Mortgaged Property, to obligate Mortgagee or
any Lender to lease the Mortgaged Property or attempt to do so, or to take
any action, incur any expense, or perform or discharge any obligation, duty
or liability whatsoever under any of the Leases or otherwise.
ARTICLE VI
ASSIGNMENT OF RENTS AND LEASES
6.1. ASSIGNMENT. In furtherance of and in addition to the
assignment made by Mortgagor in SECTION 2.1 of this Mortgage, Mortgagor
hereby absolutely and unconditionally
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assigns, sells, transfers and conveys to Mortgagee all of its right, title
and interest in and to all Leases, whether now existing or hereafter entered
into, and all of its right, title and interest in and to all Rents. This
assignment is an absolute assignment and not an assignment for additional
security only. So long as no Default shall have occurred and be continuing,
Mortgagor shall have a revocable license from Mortgagee to exercise all
rights extended to the landlord under the Leases, including the right to
receive and collect all Rents and to hold the Rents in trust for use in the
payment and performance of the Obligations and to otherwise use the same. The
foregoing license is granted subject to the conditional limitation that no
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of a Default, whether or not legal proceedings have
commenced, and without regard to waste, adequacy of security for the
Obligations or solvency of Mortgagor, the license herein granted shall
automatically expire and terminate, without notice by Mortgagee (any such
notice being hereby expressly waived by Mortgagor).
6.2. PERFECTION UPON RECORDATION. Mortgagor acknowledges that
Mortgagee has taken all actions necessary to obtain, and that upon
recordation of this Mortgage Mortgagee shall have, to the extent permitted
under applicable law, a valid and fully perfected, first priority, present
assignment of the Rents arising out of the Leases and all security for such
Leases. Mortgagor acknowledges and agrees that upon recordation of this
Mortgage Mortgagee's interest in the Rents shall be deemed to be fully
perfected, "xxxxxx" and enforced as to Mortgagor and all third parties,
including, without limitation, any subsequently appointed trustee in any case
under Title 11 of the United States Code (the "BANKRUPTCY CODE"), without the
necessity of commencing a foreclosure action with respect to this Mortgage,
making formal demand for the Rents, obtaining the appointment of a receiver
or taking any other affirmative action.
6.3. NO MERGER OF ESTATES. So long as part of the Indebtedness and
the Obligations secured hereby remain unpaid and undischarged, and to the
extent permitted by applicable law, the fee and leasehold estates to the
Mortgaged Property shall not merge, but shall remain separate and distinct,
notwithstanding the union of such estates either in Mortgagor, Mortgagee, any
tenant or any third party by purchase or otherwise.
ARTICLE VII
SECURITY AGREEMENT
7.1. SECURITY INTEREST. This Mortgage constitutes a "security
agreement" on personal property within the meaning of the UCC and other
applicable law and with respect to the Personalty, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards. To this end, Mortgagor grants to Mortgagee a first and
prior security interest in the Personalty, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance, Condemnation
Awards and all other Mortgaged Property which is personal property to secure
the payment of the Indebtedness and performance of the Obligations, and
agrees that Mortgagee shall have all the rights and remedies of a secured
party under the UCC with respect to such property. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the
Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements,
Tax Refunds, Proceeds, Insurance and Condemnation Awards sent to Mortgagor
at least five (5) days prior to any action under the UCC shall constitute
reasonable notice to Mortgagor.
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7.2. FINANCING STATEMENTS. Mortgagor shall execute and deliver to
Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements and such further assurances as Mortgagee may, from time to time,
reasonably consider necessary to create, perfect and preserve Mortgagee's
security interest hereunder and Mortgagee may cause such statements and
assurances to be recorded and filed, at such times and places as may be
required or permitted by law to so create, perfect and preserve such security
interest. Mortgagor's chief executive office is in the State of [STATE] at
the address set forth in the first paragraph of this Mortgage.
7.3. FIXTURE FILING. This Mortgage shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the
security interest herein granted may be obtained at the addresses of Debtor
(Mortgagor) and Secured Party (Mortgagee) as set forth in the first paragraph
of this Mortgage.
ARTICLE VIII
[INTENTIONALLY OMITTED]
ARTICLE IX
MISCELLANEOUS
9.1. NOTICES. Any notice required or permitted to be given under
this Mortgage shall be given in accordance with Section 14.1 of the Credit
Agreement.
9.2. COVENANTS RUNNING WITH THE LAND. All Obligations contained in
this Mortgage are intended by Mortgagor and Mortgagee to be, and shall be
construed as, covenants running with the Mortgaged Property. As used herein,
"Mortgagor" shall refer to the party named in the first paragraph of this
Mortgage and to any subsequent owner of all or any portion of the Mortgaged
Property. All Persons who may have or acquire an interest in the Mortgaged
Property shall be deemed to have notice of, and be bound by, the terms of the
Credit Agreement and the other Loan Documents; however, no such party shall
be entitled to any rights thereunder without the prior written consent of
Mortgagee.
9.3. ATTORNEY-IN-FACT. Mortgagor hereby irrevocably appoints
Mortgagee and its successors and assigns, as its attorney-in-fact, which
agency is coupled with an interest and with full power of substitution, (a)
to execute and/or record any notices of completion, cessation of labor or any
other notices that Mortgagee deems appropriate to protect Mortgagee's
interest, if Mortgagor shall fail to do so within ten (10) days after written
request by Mortgagee, (b) upon the issuance of a deed pursuant to the
foreclosure of this Mortgage or the delivery of a deed in lieu of
foreclosure, to execute all instruments of assignment, conveyance or further
assurance with respect to the Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards in favor
of the grantee of any such deed and as may be necessary or desirable for such
purpose, (c) to prepare, execute and file or record financing statements,
continuation statements, applications for registration and like papers
necessary to create, perfect or preserve Mortgagee's security interests and
rights in or to any of the Mortgaged Property, and (d) while any Default
exists, to perform any obligation of
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Mortgagor hereunder, however: (1) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (2) any sums advanced by
Mortgagee in such performance shall be added to and included in the
Indebtedness and shall bear interest at the rate or rates at which interest
is then computed on the Indebtedness; (3) Mortgagee as such attorney-in-fact
shall only be accountable for such funds as are actually received by
Mortgagee; and (4) Mortgagee shall not be liable to Mortgagor or any other
person or entity for any failure to take any action which it is empowered to
take under this SECTION 9.3.
9.4. SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon
and inure to the benefit of Mortgagee, the Lenders, and Mortgagor and their
respective successors and assigns. Mortgagor shall not, without the prior
written consent of Mortgagee, assign any rights, duties or obligations
hereunder.
9.5. NO WAIVER. Any failure by Mortgagee to insist upon strict
performance of any of the terms, provisions or conditions of the Loan
Documents shall not be deemed to be a waiver of same, and Mortgagee or the
Lenders shall have the right at any time to insist upon strict performance of
all of such terms, provisions and conditions.
9.6. CREDIT AGREEMENT. If any conflict or inconsistency exists
between this Mortgage and the Credit Agreement, the Credit Agreement shall
govern.
9.7. RELEASE OR RECONVEYANCE. Upon payment in full of the
Indebtedness and performance in full of the Obligations, Mortgagee, at
Mortgagor's expense, shall release the liens and security interests created
by this Mortgage and if required under applicable law, reconvey the Mortgaged
Property to Mortgagor.
9.8. WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Mortgagor
agrees, to the full extent that it may lawfully do so, that it will not at
any time insist upon or plead or in any way take advantage of any stay,
marshalling of assets, extension, redemption or moratorium law now or
hereafter in force and effect so as to prevent or hinder the enforcement of
the provisions of this Mortgage or the Indebtedness secured hereby, or any
agreement between Mortgagor and Mortgagee or any rights or remedies of
Mortgagee or the Lenders.
9.9. APPLICABLE LAW. The provisions of this Mortgage regarding
the creation, perfection and enforcement of the liens and security interests
herein granted shall be governed by and construed under the laws of the state
in which the Mortgaged Property is located. All other provisions of this
Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the
State of New York), without regard to conflicts of laws principles.
9.10. HEADINGS. The Article, Section and Subsection titles hereof
are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles,
Sections or Subsections.
9.11. ENTIRE AGREEMENT. This Mortgage and the other Loan Documents
embody the entire agreement and understanding between Mortgagee and Mortgagor
and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by
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evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
9.12. MORTGAGEE AS AGENT; SUCCESSOR AGENTS.
(a) Agent has been appointed to act as Agent hereunder by the
Lenders. Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of the Mortgaged Property) in accordance with the terms of the
Credit Agreement, any related agency agreement among Agent and the Lenders
(collectivley, as amended, supplemented or otherwise modified or replaced
from time to time, the "AGENCY DOCUMENTS") and this Mortgage. Mortgagor and
all other persons shall be entitled to rely on releases, waivers, consents,
approvals, notifications and other acts of Agent, without inquiry into the
existence of required consents or approvals of the Lenders therefor.
(b) Mortgagee shall at all times be the same Person that is
Agent under the Agency Documents. Written notice of resignation by Agent
pursuant to the Agency Documents shall also constitute notice of resignation
as Agent under this Mortgage. Appointment of a successor Agent pursuant to
the Agency Documents shall also constitute appointment of a successor Agent
under this Mortgage. Upon the acceptance of any appointment as Agent by a
successor Agent under the Agency Documents, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent as the Mortgagee under
this Mortgage, and the retiring Agent shall promptly (i) assign and transfer
to such successor Agent all of its right, title and interest in and to this
Mortgage and the Mortgaged Property, and (ii) execute and deliver to such
successor Agent such assignments and amendments and take such other actions
(including, without limitation, recording a notice of such assignment in the
County Clerk's office of _______________ County, _____________), as may be
necessary or appropriate in connection with the assignment to such successor
Agent of the liens and security interests created hereunder, whereupon such
retiring Agent shall be discharged from its duties and obligations under this
Mortgage. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Mortgage and the Agency Documents shall insure to its
benefits as to any actions taken or omitted to be taken by it under this
Mortgage while it was the Agent hereunder.
ARTICLE X
LOCAL LAW PROVISIONS
[TO COME]
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Mortgagor has on the date set forth in the
acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED AND DELIVERED by authority duly given.
MORTGAGOR: [NAME OF MORTGAGOR], a
_______________________________________
_______________________________________
By:
_______________________________________
Name:
Title:
X-0
XXXXX XX XXX XXXX )
) SS.:
COUNTY OF __________________ )
ON THE _____ DAY OF ______________ IN THE YEAR ____ BEFORE ME, THE
UNDERSIGNED, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED
_________________________, PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE
BASIS OF SATISFACTORY EVIDENCE TO BE THE INDIVIDUALS(S) WHOSE NAME(S) IS
(ARE) SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO ME THAT
HE/SHE/THEY EXECUTED THE SAME IN HIS/HER/THEIR CAPACITY(IES), AND THAT BY
HIS/HER/THEIR SIGNATURE(S) ON THE INSTRUMENT, THE INDIVIDUAL(S), OR THE
PERSON UPON BEHALF OF WHICH THE INDIVIDUAL(S) ACTED, EXECUTED THE INSTRUMENT.
____________________________________________
(SIGNATURE AND OFFICE OF INDIVIDUAL TAKING
ACKNOWLEDGEMENT)
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EXHIBIT A
Legal Description of premises located at [ADDRESS]:
A-1
SCHEDULE I
Permitted Encumbrances
I-1
