EXECUTION COPY
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CREDIT AGREEMENT
Dated as of September __, 2003
among
ALDERWOODS GROUP, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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Alderwoods Credit Agreement
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms......................................................................1
1.02 Other Interpretive Provisions.....................................................27
1.03 Accounting Terms..................................................................28
1.04 Rounding..........................................................................28
1.05 References to Agreements and Laws.................................................28
1.06 Times of Day......................................................................28
1.07 Letter of Credit Amounts..........................................................28
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans.........................................................................29
2.02 Borrowings, Conversions and Continuations of Loans................................29
2.03 Letters of Credit.................................................................31
2.04 Swing Line Loans..................................................................38
2.05 Prepayments.......................................................................40
2.06 Termination or Reduction of Commitments...........................................43
2.07 Repayment of Loans................................................................44
2.08 Interest..........................................................................45
2.09 Fees..............................................................................46
2.10 Computation of Interest and Fees..................................................46
2.11 Evidence of Indebtedness..........................................................47
2.12 Payments Generally................................................................47
2.13 Sharing of Payments...............................................................49
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.............................................................................50
3.02 Illegality........................................................................51
3.03 Inability to Determine Rates......................................................51
3.04 Increased Cost and Reduced Return; Capital Adequacy...............................52
3.05 Funding Losses....................................................................52
3.06 Matters Applicable to All Requests for Compensation...............................53
3.07 Survival..........................................................................54
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension............................................54
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4.02 Conditions to All Credit Extensions...............................................57
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws..........................58
5.02 Authorization; No Contravention...................................................58
5.03 Governmental Authorization; Other Consents........................................59
5.04 Binding Effect....................................................................59
5.05 Financial Statements; No Material Adverse Effect..................................59
5.06 Litigation........................................................................60
5.07 No Default........................................................................60
5.08 Ownership of Property; Liens......................................................60
5.09 Environmental Compliance..........................................................61
5.10 Insurance.........................................................................62
5.11 Taxes.............................................................................62
5.12 ERISA Compliance..................................................................62
5.13 Subsidiaries; Equity Interests....................................................63
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act....63
5.15 Disclosure........................................................................64
5.16 Compliance with Laws..............................................................64
5.17 Intellectual Property; Licenses, Etc..............................................64
5.18 Solvency..........................................................................65
5.19 Casualty, Etc.....................................................................65
5.20 Perfection, Etc...................................................................65
5.21 Tax Shelter Regulations...........................................................65
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements..............................................................65
6.02 Certificates; Other Information...................................................66
6.03 Notices...........................................................................69
6.04 Payment of Obligations............................................................69
6.05 Preservation of Existence, Etc....................................................69
6.06 Maintenance of Properties.........................................................70
6.07 Maintenance of Insurance..........................................................70
6.08 Compliance with Laws..............................................................70
6.09 Books and Records.................................................................70
6.10 Inspection Rights.................................................................70
6.11 Use of Proceeds...................................................................71
6.12 Covenant to Guarantee Obligations and Give Security...............................71
6.13 Compliance with Environmental Laws................................................73
6.14 Preparation of Environmental Reports..............................................73
6.15 Further Assurances................................................................73
6.16 Compliance with Terms of Leaseholds...............................................73
6.17 Interest Rate Hedging.............................................................73
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6.18 Lien Searches.....................................................................74
6.19 Cash Collateral Accounts..........................................................74
6.20 Material Contracts................................................................74
6.21 Conditions Subsequent to the Effective Date.......................................74
ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens.............................................................................76
7.02 Indebtedness......................................................................78
7.03 Investments.......................................................................79
7.04 Fundamental Changes...............................................................82
7.05 Dispositions......................................................................83
7.06 Restricted Payments...............................................................83
7.07 Change in Nature of Business......................................................84
7.08 Transactions with Affiliates......................................................84
7.09 Burdensome Agreements.............................................................84
7.10 Use of Proceeds...................................................................85
7.11 Financial Covenants...............................................................85
7.12 Capital Expenditures..............................................................86
7.13 Cemetery Development..............................................................86
7.14 Amendments of Organization Documents..............................................87
7.15 Accounting Changes................................................................87
7.16 Prepayments, Etc., of Indebtedness................................................87
7.17 Amendment, Etc., of Related Documents.............................................87
7.18 Partnerships, Etc.................................................................87
7.19 Speculative Refinancings..........................................................87
7.20 Formation of Subsidiaries.........................................................87
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default.................................................................87
8.02 Remedies upon Event of Default....................................................90
8.03 Application of Funds..............................................................90
ARTICLE IX
AGENTS
9.01 Appointment and Authorization of Agents...........................................91
9.02 Delegation of Duties..............................................................92
9.03 Liability of Agents...............................................................92
9.04 Reliance by Agents................................................................93
9.05 Notice of Default.................................................................93
9.06 Credit Decision; Disclosure of Information by Agents..............................93
9.07 Indemnification of Agents.........................................................94
9.08 Agents in Their Individual Capacities.............................................95
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9.09 Successor Agents..................................................................95
9.10 Administrative Agent May File Proofs of Claim.....................................96
9.11 Collateral and Guaranty Matters...................................................96
9.12 Other Agents; Arrangers and Managers..............................................97
ARTICLES X
MISCELLANEOUS
10.01 Amendments, Etc...................................................................97
10.02 Notices and Other Communications; Facsimile Copies................................99
10.03 No Waiver; Cumulative Remedies...................................................100
10.04 Attorney Costs, Expenses and Taxes...............................................100
10.05 Indemnification by the Borrower..................................................101
10.06 Payments Set Aside...............................................................102
10.07 Successors and Assigns ..........................................................102
10.08 Confidentiality..................................................................106
10.09 Setoff...........................................................................107
10.10 Interest Rate Limitation.........................................................107
10.11 Counterparts.....................................................................107
10.12 Integration......................................................................108
10.13 Survival of Representations and Warranties.......................................108
10.14 Severability.....................................................................108
10.15 Tax Forms........................................................................108
10.16 Governing Law....................................................................110
10.17 Binding Effect...................................................................110
10.18 Waiver of Right to Trial by Jury.................................................110
SIGNATURES...............................................................................S-1
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SCHEDULES
I Guarantors
1.01(r) Rose Hills Property
1.01(m) Michigan Cemetery Notes
2.01 Commitments and Pro Rata Shares
5.08(b) Existing Liens
5.08(c) Owned, Leased and Mortgaged Real Property
5.08(d) Discontinued Assets
5.13 Subsidiaries and Other Equity Investments
5.17 Intellectual Property Matters
6.05 Dissolved Entities
6.19 Cash Management Procedures
6.21(f) Local Counsel to the Loan Parties
7.02 Existing Indebtedness
7.03(e) Existing Investments
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C-1 Term Note
C-2 Revolving Credit Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
G Security Agreement
H Mortgage
I Intellectual Property Security Agreement
J-1 Opinion Matters -- Counsel to Loan Parties
J-2 Opinion Matters -- Local Counsel
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of September
__, 2003, among ALDERWOODS GROUP, INC., a Delaware corporation (the "Borrower"),
each lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), and BANK OF AMERICA, N.A., as Administrative Agent,
Swing Line Lender and L/C Issuer.
The Borrower has requested that (a) the Lenders lend up to
$325,000,000 to the Borrower to enable the Borrower to repay all of the
Indebtedness (as hereinafter defined) outstanding in respect of (i) 11% Senior
Secured Notes of the Borrower due 2007 (the "11% Notes"), (ii) the Credit
Agreement dated as of January 2, 2002 among the Borrower, the lenders party
thereto and The CIT Group/Business Credit, Inc., as agent for such lenders (the
"Existing Credit Facility") and (iii) the 9.5% Senior Subordinated Notes due
2004 issued by Rose Hills Company, a Delaware corporation and wholly owned
subsidiary of the Borrower (the "Rose Hills Notes") (the repayment of the 11%
Notes, the Existing Credit Facility and the Rose Hills Notes with the proceeds
of Borrowings under this Agreement being referred to herein as the
"Refinancing") and (b) from time to time, the Lenders lend to the Borrower and
the L/C Issuer (as hereinafter defined) issue Letters of Credit (as hereinafter
defined) for the account of the Borrower to provide a revolving credit facility
for the Borrower and its Subsidiaries. The Lenders have indicated their
willingness to so lend and the L/C Issuer has indicated its willingness to so
issue Letters of Credit, in each case, on the terms and subject to the
conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"11% Notes" has the meaning specified in the preliminary statements.
"Account Collateral" has the meaning specified in Section 1(f) of the
Security Agreement.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
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"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 5% or more of
the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"Agent-Related Persons" means the Administrative Agent and the
Arranger, together with their respective Affiliates and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agents" means, collectively, the Administrative Agent and the
Arranger.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Aggregate Credit Exposures" means, at any time, the sum of (i) the
unused portion of the Revolving Credit Commitment then in effect, (ii) the
unused portion of each Term Commitment then in effect and (iii) the Total
Outstandings at such time.
"Agreement" means this Credit Agreement.
"Annualized Amount" means with respect to the first three fiscal
quarters beginning with the quarter ending on December 27, 2003, for purposes of
calculating the Consolidated Interest Coverage Ratio and Consolidated Fixed
Charge Ratio, (a) for the first fiscal quarter beginning with the quarter ending
on December 27, 2003, Consolidated Interest Charges for such fiscal quarter
multiplied by four, (b) for the second fiscal quarter beginning with the quarter
ending on December 27, 2003, the sum of Consolidated Interest Charges for such
fiscal quarter and for the prior fiscal quarter multiplied by two, and (c) for
the third fiscal quarter beginning with the quarter ending on December 27, 2003,
the sum of Consolidated Interest Charges for such fiscal quarter and for the
prior two fiscal quarters multiplied by four and divided by three.
"Applicable Rate" means (a) with respect to Term Loans, a percentage
per annum equal to (i) for Eurodollar Rate Loans, the Eurodollar Rate then in
effect for such Term Loans plus 3.25% and (ii) for Base Rate Loans, the Base
Rate then in effect for such Term Loans plus 2.25% and (b) with respect to the
Revolving Credit Loans, the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):
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Eurodollar
Rate and
Consolidated Letters of
Pricing Level Leverage Ratio Credit Base Rate
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1 GREATER THAN 4.00:1 3.00% 2.00%
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2 GREATER THAN 3.00:1 but
LESS THAN OR EQUAL TO 4.00:1 2.75% 1.75%
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3 LESS THAN OR EQUAL TO 3.00:1 2.50% 1.50%
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Any increase or decrease in the Applicable Rate resulting from a
change in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 1 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered until the first
Business Day immediately following the date a Compliance Certificate is
delivered. The Applicable Rate in effect from the Effective Date through the
date which is 180 days thereafter shall be determined based upon Pricing Level
1.
"Appropriate Lender" means, at any time, (a) with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, (b) with respect to the Letter of Credit
Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued
pursuant to Section 2.03(a), the Revolving Credit Lenders and (c) with respect
to the Swing Line Facility, (i) the Swing Line Lender and (ii) if any Swing Line
Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses and
disbursements of internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
28, 2002, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Available Amount" means, as to any Letter of Credit, the maximum
amount available to be drawn under such Letter of Credit at such time.
"Availability Period" means the period from and including the
Effective Date to (a) in the case of the Revolving Credit Facility, the earliest
of (i) the Maturity Date, (ii) the date of termination of the Revolving Credit
Commitments pursuant to Section 2.06, and (iii) the date
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of termination of the commitment of each Revolving Credit Lender to make
Revolving Credit Loans and of the obligation of the L/C Issuer to make L/C
Credit Extensions pursuant to Section 8.02, and (b) in the case of the Term
Facility, the earliest of (i) the date which is 30 days after the Effective
Date, (ii) the date of termination of the Term Commitments pursuant to Section
2.06, and (iii) the date of termination of the commitment of each Term Lender to
make Term Loans pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"BAS" means Banc of America Securities LLC and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a Revolving Credit Borrowing, a Swing Line Borrowing
or a Term Borrowing, as the context may require.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Canadian Collateral" means 65% of the Equity Interests of any Foreign
Subsidiary which is owned directly by any Loan Party and is organized under the
laws of Canada or any province thereof.
"Capital Expenditure Carryover Amount" has the meaning specified in
Section 7.12.
"Capital Expenditures" means, with respect to any Person for any
period, any expenditure in respect of the purchase or other acquisition of any
fixed or capital asset (excluding normal replacements and maintenance which are
properly charged to current operations) that would be deemed a capital
expenditure under GAAP consistently applied by the Borrower.
"Cash Collateral Account" means a blocked deposit account at Bank of
America (or another commercial bank selected in compliance with Section 6.19) in
the name of the
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Collateral Agent and under the sole dominion and control of the Collateral
Agent, and otherwise established in a manner satisfactory to the Administrative
Agent.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Cash Equivalents" means any of the following types of Investments, to
the extent owned by the Borrower or any of its Subsidiaries free and clear of
all Liens (other than Liens created under the Collateral Documents):
(a) readily marketable obligations issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 360 days from
the date of acquisition thereof; provided that the full faith and credit of
the United States of America is pledged in support thereof;
(b) time deposits with, or insured certificates of deposit or bankers'
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is
organized under the laws of the United States of America, any state thereof
or the District of Columbia or is the principal banking subsidiary of a
bank holding company organized under the laws of the United States of
America, any state thereof or the District of Columbia, and is a member of
the Federal Reserve System, (ii) issues (or the parent of which issues)
commercial paper rated as described in clause (c) of this definition and
(iii) has combined capital and surplus of at least $500,000,000, in each
case with maturities of not more than 270 days from the date of acquisition
thereof;
(c) commercial paper issued by any Person organized under the laws of
any state of the United States of America and rated at least "Prime-1" (or
the then equivalent grade) by Xxxxx'x or at least "A-1" (or the then
equivalent grade) by S&P, in each case with maturities of not more than 270
days from the date of acquisition thereof; and
(d) Investments, classified in accordance with GAAP as Current Assets
of the Borrower or any of its Subsidiaries, in money market investment
programs registered under the Investment Company Act of 1940, which are
administered by financial institutions that have the highest rating
obtainable from either Xxxxx'x or S&P, and the portfolios of which are
limited solely to Investments of the character, quality and maturity
described in clauses (a), (b) and (c) of this definition.
"Cemetery Development" means the development of real property into
cemetery inventory.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means, an event or series of events by which:
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(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except
that a person or group shall be deemed to have "beneficial ownership" of
all securities that such person or group has the right to acquire (such
right, an "option right"), whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of 35% or more of
the equity securities of the Borrower entitled to vote for members of the
board of directors or equivalent governing body of such Person on a fully
diluted basis (and taking into account all such securities that such person
or group has the right to acquire pursuant to any option right); or
(b) during any period of 24 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office
as, a member of that board or equivalent governing body occurs as a result
of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on
behalf of the board of directors); or
(c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower, or control over
the equity securities of such Person entitled to vote for members of the
board of directors or equivalent governing body of such Person on a fully
diluted basis (and taking into account all such securities that such person
or group has the right to acquire pursuant to any option right)
representing 35% or more of the combined voting power of such securities.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
"Collateral" means all of the "Collateral" referred to in the
Collateral Documents and all of the other property and assets that are or are
intended under the terms of the Collateral Documents to be subject to Liens in
favor of the Administrative Agent for the benefit of the Secured Parties.
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"Collateral Documents" means, collectively, the Security Agreement,
the Intellectual Property Security Agreement, the Mortgages, each of the
mortgages, liens, collateral assignments, Security Agreement Supplements, IP
Security Agreement Supplements, security agreements, pledge agreements, account
control agreements or other similar agreements delivered to the Administrative
Agent and the Lenders pursuant to Section 6.12, and each of the other
agreements, instruments or documents that creates or purports to create a Lien
in favor of the Administrative Agent for the benefit of the Secured Parties.
"Commitment" means a Term Commitment or a Revolving Credit Commitment,
as the context may require.
"Committed Loan Notice" means a notice of (a) a Term Borrowing, (b) a
Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the
other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
"Compensation Period" has the meaning specified in Section
2.12(c)(ii).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D.
"Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period
(including all non-cash items calculated in accordance with GAAP), (ii) the
provision for federal, state, local and foreign income taxes payable by the
Borrower and its Subsidiaries for such period, (iii) the amount of depreciation
and amortization expense deducted in determining such Consolidated Net Income,
(iv) the amount of any extraordinary, non-recurring losses for such period and
(v) all noncash losses and noncash charges otherwise deducted from the
determination of Consolidated Net Income for such period (other than any such
noncash losses or noncash charges that require an accrual or reserve for cash
charges or cash expenses paid or payable (or to be paid or payable) at any time
during such period) and any write-downs or write-offs in an amount not to exceed
$10,000,000 for the last two fiscal quarters of 2003 and not to exceed
$10,000,000 in any fiscal year thereafter, in each case, to the extent deducted
from the determination of Consolidated Net Income for such period and minus (b)
(i) to the extent recognized in determining Consolidated Net Income for such
period, the amount of any extraordinary, non-recurring gains for such period and
(ii) all non-cash items increasing Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) (i) Consolidated EBITDA for the period of the four consecutive
fiscal quarters ending on such date, less (ii) the aggregate amount of all
Capital Expenditures made by or on behalf of the Borrower and its Subsidiaries
during such period to (b) the sum of (i) that portion of Consolidated Interest
Charges for such period which is payable in cash; provided, that with respect to
any calculation required to be made under the terms of this Agreement with
respect to the first three fiscal quarters beginning with the quarter ending on
December 27, 2003, the amount of this clause (b)(i) shall be determined based on
the Annualized Amount of such
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Consolidated Interest Charges, (ii) the aggregate principal amount (or the
equivalent thereto) of all regularly scheduled principal payments or redemptions
and all required prepayments, repurchases, redemptions or similar acquisitions
for value of outstanding debt for borrowed money made during such period, but
excluding any such payments to the extent refinanced through the incurrence of
additional Indebtedness otherwise expressly permitted under Section 7.02, (iii)
the aggregate amount of all Restricted Payments made in cash by or on behalf of
the Borrower during such period, and (iv) the aggregate amount of net taxes paid
in cash by or on behalf of the Borrower or its Subsidiaries during such period.
"Consolidated Funded Indebtedness" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all obligations in
respect of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (d) Attributable
Indebtedness in respect of capital leases and Synthetic Lease Obligations, (e)
without duplication, all Guarantees with respect to outstanding Indebtedness of
the types specified in clauses (a) through (d) above of Persons other than the
Borrower or any Subsidiary, and (f) all Indebtedness of the types referred to in
clauses (a) through (e) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in
which the Borrower or a Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to the Borrower or such
Subsidiary.
"Consolidated Interest Charges" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all cash
items treated as interest in accordance with GAAP other than any such items that
are capitalized and deferred or amortized during such period and (b) the portion
of rent expense of the Borrower and its Subsidiaries with respect to such period
under capital leases that is treated as interest in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the period of the four
consecutive fiscal quarters ending on such date to (b) Consolidated Interest
Charges for such period, provided, that with respect to any calculation required
to be made under the terms of this Agreement with respect to the first three
fiscal quarters beginning with the quarter ending on December 27, 2003, the
amount of clause (b) above shall be determined based on the Annualized Amount of
such Consolidated Interest Charges.
"Consolidated Leverage Ratio" means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended.
"Consolidated Net Income" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries for that period.
Alderwoods Credit Agreement
8
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
"Credit Extension" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"Current Assets" means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets on
the balance sheet of a company conducting a business the same as or similar to
that of such Person, after deducting appropriate and adequate reserves therefrom
in each case in which a reserve is proper in accordance with GAAP.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Term Loans, Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Discontinued Assets" means all discontinued operations and real
estate properties held for sale or identified by the Borrower as to be
discontinued or sold, and listed on Schedule 5.08(d).
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
Alderwoods Credit Agreement
9
"Dissolved Entity" means an entity listed on Schedule 6.05 subject to
dissolution after the Effective Date.
"Dollar" and "$" mean lawful money of the United States.
"Effective Date" means the first date all the conditions precedent in
Sections 4.01 and 4.02 are satisfied or waived in accordance with Sections 4.01
and 4.02 (or, in the case of Section 4.01(b), waived by the Person entitled to
receive the applicable payment), but in no event later than thirty days
following the execution of this Agreement by all parties hereto.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Materials or arising from alleged injury or threat to health, safety
or the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Interests" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting,
Alderwoods Credit Agreement
10
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal (as defined in Section 4203 or 4205,
respectively, of ERISA) by any Loan Party or any ERISA Affiliate from a
Multiemployer Plan or the receipt by a Loan Party or any ERISA Affiliate of a
notification pursuant to Section 4242 of ERISA, that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA
Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Eurodollar Rate = Eurodollar Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available, the
rate per annum equal to
Alderwoods Credit Agreement
11
the rate determined by the Administrative Agent to be the offered rate on
such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as
the rate of interest at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of
the Eurodollar Rate Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered
by Bank of America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time)
two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate
based on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Cash Flow" means, for any period (without duplication), (a)
Consolidated Net Income for such period, plus (b) an amount equal to the
aggregate amount of all noncash charges deducted in determining the Consolidated
Net Income for such period, less (c) an amount equal to the aggregate amount of
all noncash credits included in determining the Consolidated Net Income for such
period, less (d) an amount equal to the aggregate amount of all Capital
Expenditures and all expenditures for Cemetery Development made in cash by the
Borrower and its Subsidiaries during such period, less (e) an amount equal to
the aggregate amount of all Required Principal Payments made by the Borrower and
its Subsidiaries during such period, and the aggregate principal amount of all
optional prepayments made pursuant to Section 2.05(a) during such period (so
long as each such optional prepayment resulted in a corresponding permanent
commitment reduction pursuant to Section 2.06 at the time of such prepayment).
"Excluded Subsidiary" has the meaning specified in Section 5.13.
"Existing Credit Facility" has the meaning specified in the
preliminary statements.
Alderwoods Credit Agreement
12
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds received after March 31, 2004 to the extent in
excess of $1,000,000 in the aggregate in any fiscal year, pension plan
reversions, proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustments; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments in respect of loss
or damage to equipment, fixed assets or real property are applied (or in respect
of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of Section 2.05(b)(ii), so long as such
application is made within 270 days after the occurrence of such damage or loss.
"Facility" means the Term Facility, the Revolving Credit Facility, the
Swing Line Sublimit or the Letter of Credit Sublimit, as the context may
require.
"Federal" means the Federal government of the United States of
America.
"Federal Funds Rate" means, for any day, the 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 by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the fee letter, dated June 10, 2003, among the
Borrower, the Administrative Agent and the Arranger.
"Foreign Collateral" means 65% of the Equity Interests of any Foreign
Subsidiary which is owned directly by any Loan Party.
"Foreign Government Scheme or Arrangement" has the meaning specified
in Section 5.12(d).
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"Foreign Plan" has the meaning specified in Section 5.12(d).
"Foreign Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction other than the United States or any State thereof or the District
of Columbia.
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
Alderwoods Credit Agreement
13
"Fund" has the meaning specified in Section 10.07(g).
"Funded Debt" of any Person means Indebtedness of such Person that by
its terms matures more than one year after the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year after such date.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination, consistently
applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.07(h).
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guarantors" means, collectively, the Subsidiaries of the Borrower
listed on Schedule 5.13 hereto other than Excluded Subsidiaries and Foreign
Subsidiaries, and each other Subsidiary of the Borrower that shall be required
to execute and deliver a guaranty or guaranty supplement pursuant to Section
6.12.
Alderwoods Credit Agreement
14
"Guaranty" means, collectively, the Subsidiary Guaranty made by the
Guarantors in favor of the Administrative Agent on behalf of the Lenders,
substantially in the form of Exhibit F, together with each other guaranty and
guaranty supplement delivered pursuant to Section 6.12.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedge Bank" means any Person that is a Lender or an Affiliate of a
Lender, in its capacity as a party to a Secured Hedge Agreement.
"Honor Date" has the meaning specified in Section 2.03(c)(i).
"ICC" has the meaning specified in Section 2.03(h).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business and not more than 45 days past due);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interests in
such Person or any other Person or any warrants, rights or options to
acquire such Equity Interests, valued, in the case of redeemable preferred
interests, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends; and
Alderwoods Credit Agreement
15
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Information" has the meaning specified in Section 10.08.
"Information Memorandum" means the information memorandum dated July,
2003 used by the Arranger in connection with the syndication of the Commitments.
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Intellectual Property Security Agreement" has the meaning specified
in Section 4.01(a)(v).
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date of the Facility under which such Loan was made; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the last Business Day of each March,
June, September and December and the Maturity Date of the Facility under which
such Loan was made.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter (or nine months or twelve months thereafter, provided that
each Lender participating in such Borrowing with respect to such Interest
Period, confirms or has confirmed to the Administrative Agent that such Interest
Period is available to such Lender), as selected by the Borrower in its
Committed Loan Notice; provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
Alderwoods Credit Agreement
16
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date of the
Facility under which such Loan was made.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor incurs
debt of the type referred to in clause (h) of the definition of "Indebtedness"
set forth in this Section 1.01 in respect of such Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or division or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IP Rights" has the meaning set forth in Section 5.17.
"IP Security Agreement Supplement" has the meaning specified in
Section 1(g)(vi) of the Security Agreement.
"IRS" means the United States Internal Revenue Service.
"ISDA Master Agreement" means an agreement in the form of the Master
Agreement (Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc., as in effect from time to time.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.
"L/C Advance" means, with respect to each Revolving Credit Lender,
such Lender's funding of its participation in any L/C Borrowing in accordance
with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.
Alderwoods Credit Agreement
17
"L/C Credit Extension" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means collectively, Bank of America and one other Lender
acceptable to the Administrative Agent, each in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder.
"L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes the L/C Issuer and the Swing Line
Lender.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder. A
Letter of Credit may be a commercial letter of credit or a standby letter of
credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect for the Revolving Credit Facility (or,
if such day is not a Business Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $20,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Revolving
Credit Facility.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line
Loan.
"Loan Documents" means, collectively, (a) for purposes of this
Agreement and the Notes and any amendment, supplement or other modification
hereof or thereof and for all other purposes other than for purposes of the
Guaranty and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii)
the Guaranty, (iv) the Collateral Documents, (v) the Fee Letter and (vi) each
Letter of Credit Application and (b) for purposes of the Guaranty and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty,
(iv) the Collateral Documents,
Alderwoods Credit Agreement
18
(v) each Letter of Credit Application, (vi) the Fee Letter and (vii) each
Secured Hedge Agreement.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Local Accounts" has the meaning specified in Section 6.19.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
rights and remedies of any Agent or the Lenders under any Loan Document, or of
the ability of any Loan Party to perform its obligations under any Loan Document
to which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.
"Material Contract" means, with respect to any Person, each contract
to which such Person is a party involving aggregate consideration payable to or
by such Person of $5,000,000 or more in any year or otherwise material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of such Person.
"Maturity Date" means, with respect to the Revolving Credit Facility
and the Term Facility, the earlier of (i) the fifth anniversary of the Effective
Date and (ii) the date of termination in whole of the Term Commitments, the
Revolving Credit Commitments, the Letter of Credit Commitments, and the Swing
Line Commitments pursuant to Section 2.06 or 8.02.
"Maximum Rate" has the meaning specified in Section 10.10.
"Mayflower National" means Mayflower National Life Insurance Company,
an Indiana corporation.
"Michigan Cemetery Notes" means the promissory notes listed on
Schedule 1.01(m) hereto.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Mortgage" has the meaning specified in Section 6.21.
"Mortgaged Properties" means the properties indicated on Schedule
5.08(c) as being subject to the Mortgages.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA
and to which any Loan Party or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been
obligated to make contributions.
"Net Cash Proceeds" means:
Alderwoods Credit Agreement
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(a) with respect to the sale of any asset by any Loan Party or any of
its Subsidiaries, the excess, if any, of (i) the sum of cash and Cash
Equivalents received in connection with such sale (including any cash or
Cash Equivalents received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any Indebtedness
that is secured by such asset and that is required to be repaid in
connection with the sale thereof (other than Indebtedness under the Loan
Documents), (B) the out-of-pocket expenses incurred by such Loan Party or
such Subsidiary in connection with such sale, (C) income taxes reasonably
estimated to be actually payable within two years of the date of the
relevant asset sale as a result of any gain recognized in connection
therewith, and (D) amounts provided as a reserve against any liabilities
under any indemnification obligations associated with such sale; provided
that so long as such Loan Party or such Subsidiary is not otherwise
indemnified therefor, such amounts are reserved for in accordance with GAAP
at the time of receipt of such cash, based upon such Loan Party's or such
Subsidiary's reasonable estimate of such indemnification obligations (as
determined reasonably and in good faith by the treasurer or chief financial
officer of such Loan Party or such Subsidiary, as the case may be);
provided, however, that if, at the time such indemnification obligations
are actually paid or otherwise satisfied, the amount of the reserve
therefor exceeds the amount paid or otherwise satisfied, then the Borrower
shall reduce the Commitments in accordance with the terms of Section
2.06(b), and shall prepay the outstanding Loans in accordance with the
terms of Section 2.05(b), in an amount equal to the amount of such excess
reserve; and
(b) with respect to the sale of any capital stock or other Equity
Interest by the Borrower, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such sale over (ii) the sum of (A)
the underwriting discounts and commissions, and other out-of-pocket
expenses, incurred by the Borrower in connection with such sale and (B)
income taxes reasonably estimated to be actually payable within two years
of the date of the relevant sale as a result of any gain recognized in
connection therewith.
"Note" means a Term Note or a Revolving Credit Note, as the context
may require.
"NPL" means the National Priorities List under CERCLA.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, attorneys' fees and disbursements, indemnities and
other amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party
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20
to reimburse any amount in respect of any of the foregoing that any Lender, in
its sole discretion, may elect to pay or advance on behalf of such Loan Party.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Outstanding Amount" means (i) with respect to Term Loans, Revolving
Credit Loans and Swing Line Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to any borrowings and prepayments
or repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the
case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and (i) is sponsored or maintained by any Loan
Party or any ERISA Affiliate, (ii) to which any Loan Party or any ERISA
Affiliate contributes or has an obligation to contribute, or (iii) in the case
of a multiple employer or other plan described in Section 4064(a) of ERISA, to
which any Loan Party or any ERISA Affiliate has made contributions at any time
during the immediately preceding five plan years.
"Permitted Liens" means Liens permitted under Section 7.01 (b), (c),
(d), (e), (f) and (g).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) that is subject to ERISA and is established by any Loan
Party or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, any ERISA Affiliate.
Alderwoods Credit Agreement
21
"Pledged Debt" has the meaning specified in Section 1(d)(iv) of the
Security Agreement.
"Pledged Equity" has the meaning specified in Section 1(d)(iii) of the
Security Agreement.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment(s) of such Lender under
the applicable Facility or Facilities at such time and the denominator of which
is the amount of the Aggregate Commitments under the applicable Facility or
Facilities at such time; provided that if the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof. The initial Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Reduction Amount" has the meaning set forth in Section 2.05(b)(ix).
"Refinancing" has the meaning specified in the preliminary statements.
"Register" has the meaning set forth in Section 10.07(c).
"Related Documents" means the Seven Year Notes Indenture and the
Subordinated Notes Indenture.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has been
waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a Committed
Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the sum of the (a) Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded participation in
L/C Obligations and Swing Line Loans being deemed "held" by such Lender for
purposes of this definition), (b) aggregate unused Term Commitments and (c)
aggregate unused Revolving Credit Commitments; provided that the unused Term
Commitment, unused Revolving Credit Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
"Required Principal Payments" means, with respect to any Person for
any period, the sum of all regularly scheduled principal payments or redemptions
and all required prepayments, repurchases, redemptions or similar acquisitions
for value of outstanding Funded
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22
Debt made during such period, but excluding any such payments to the extent
refinanced through the incurrence of additional Indebtedness otherwise expressly
permitted under Section 7.02(c)(B).
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer, assistant treasurer, any vice president of a
Loan Party that has been properly authorized to execute documents and otherwise
act on behalf of such Loan Party or, in the case of the appropriate documents
delivered pursuant to Section 4.01(a)(v), the secretary of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other Equity Interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower's
stockholders, partners or members (or the equivalent Persons thereof).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to Section 2.01(b).
"Revolving Credit Commitment" means, as to each Revolving Credit
Lender, its obligation to (a) make Revolving Credit Loans to the Borrower
pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations, and
(c) purchase participations in Swing Line Loans, in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender's name on Schedule 2.01 under the caption "Revolving Credit
Commitment" or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means, at any time, any Lender that has a
Revolving Credit Commitment at such time.
"Revolving Credit Loan" has the meaning specified in Section 2.01(b).
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the form
of Exhibit C-2 hereto, evidencing the aggregate indebtedness of the Borrower to
such Revolving Credit Lender resulting from the Revolving Credit Loans made by
such Revolving Credit Lender.
"Rose Hills Property" means the property set forth on Schedule 1.01(r)
hereto.
Alderwoods Credit Agreement
23
"Rose Hills Notes" has the meaning specified in the preliminary
statements.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Secured Hedge Agreement" means any interest rate Swap Contract
required or permitted under Article VI or VII that is entered into by and
between the Borrower and any Hedge Bank.
"Secured Obligations" has the meaning specified in Section 2 of the
Security Agreement.
"Secured Parties" means, collectively, the Administrative Agent, the
other Agents, the Lenders, the Hedge Banks, each co-agent or sub-agent appointed
by the Administrative Agent from time to time pursuant to Section 9.01(c), and
the other Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Collateral Documents.
"Security Agreement" has the meaning specified in Section
4.01(a)(iii).
"Security Agreement Supplement" has the meaning specified in Section
25 of the Security Agreement.
"Security Plan Life" means Security Plan Life Insurance Company, a
Louisiana corporation, and its Subsidiaries, as set forth on Schedule 5.08(d).
"Seven Year Notes" means the 12 1/4% senior unsecured notes of the
Borrower due 2009 in an aggregate original principal amount of $330,000,000.
"Seven Year Notes Indenture" means the Indenture dated as of January
2, 2002 between the Borrower, as Issuer and Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, providing for the issuance of the Seven Year Notes.
"Solvent" and "Solvency" mean, with respect to any Person on any date
of determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
Alderwoods Credit Agreement
24
"SPC" has the meaning specified in Section 10.07(h).
"Subordinated Notes" means the 12 1/4% unsecured subordinated notes of
the Borrower due 2012 in an aggregate original principal amount of $24,679,000.
"Subordinated Notes Indenture" means the Indenture dated as of January
2, 2002 between the Borrower, as Issuer and Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, providing for the issuance of the Subordinated Notes.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other similar master agreement (any such
master agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Swing Line" means the swing line subfacility of the Revolving Credit
Facility made available by the Swing Line Lender pursuant to Section 2.04.
Alderwoods Credit Agreement
25
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$15,000,000 and (b) the Revolving Credit Commitments. The Swing Line Sublimit is
part of, and not in addition to, the Revolving Credit Facility Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" has the meaning specified in Section 3.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Term Lenders pursuant to Section
2.01(a).
"Term Commitment" means, as to each Term Lender, its obligation to
make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 2.01 under the caption "Term Commitment"
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"Term Facility" means, at any time, the aggregate Term Loans of all
Lenders at such time.
"Term Lender" means, at any time, any Lender that has a Term
Commitment at such time.
"Term Loan" means an advance made by any Term Lender under the Term
Facility.
"Term Note" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of Exhibit C-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Term Lender
resulting from the Term Loans made by such Term Lender.
Alderwoods Credit Agreement
26
"Threshold Amount" means $10,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Treasury Regulations" means the Federal treasury regulations
promulgated under the Code.
"Type" means, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"UCC Financing Statement" has the meaning specified in Section
4.01(a)(iii)(B).
"UK Collateral" means 65% of the Equity Interests of any Foreign
Subsidiary which is owned directly by a Loan Party and is organized under the
laws of the United Kingdom.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
1.02 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and
words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
(iv) The term "documents" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means
"to and including."
Alderwoods Credit Agreement
27
(b) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is more than one nearest number).
1.05 References to Agreements and Laws. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07 Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
Alderwoods Credit Agreement
28
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans. (a) The Term Borrowing. Subject to the terms and
conditions set forth herein, each Term Lender severally agrees to make a single
loan in an amount equal to its Pro Rata Share of the Term Facility to the
Borrower on any Business Day during the Availability Period. The Term Borrowing
shall consist of Term Loans made simultaneously by the Term Lenders in
accordance with their respective Pro Rata Share of the Term Facility. Amounts
borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed.
Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
(b) The Revolving Credit Borrowings. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender severally agrees to
make loans (each such loan, a "Revolving Credit Loan") to the Borrower from time
to time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender's
Revolving Credit Commitment; provided, however, that after giving effect to any
Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Revolving Credit Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Revolving Credit Commitment. Within the limits of each Lender's Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.01(b), prepay under Section 2.05, and reborrow
under this Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.
2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Term
Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or
Revolving Credit Loans from one Type to the other, and each continuation of
Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice to
the Administrative Agent, which may be given by telephone. Each such notice must
be received by the Administrative Agent not later than 12:00 p.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans, and (ii) on the requested date of any
Borrowing of Base Rate Loans or of any conversion of Eurodollar Rate Loans to
Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section
2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a
written Committed Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as
provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Term Borrowing,
a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit
Loans from one Type to the other, or a continuation of Eurodollar Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the
case may be (which shall be a Business Day), (iii) the principal amount of Loans
to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Term Loans or Revolving
Alderwoods Credit Agreement
29
Credit Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrower fails to specify a Type of
Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Term Loans or
Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any
such automatic conversion to Base Rate Loans shall be effective as of the last
day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to,
or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Pro Rata Share of
the applicable Term Loans or Revolving Credit Loans, and if no timely notice of
a conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in Section 2.02(a). In the case of a Term Borrowing or
a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of
its Loan available to the Administrative Agent in immediately available funds at
the Administrative Agent's Office not later than 2:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Committed Loan Notice with respect to such
Borrowing is given by the Borrower, there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings, second, to the payment in full of
any such Swing Line Loans, and third, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Term Borrowings, all Revolving Credit
Borrowings, all conversions of Term Loans or Revolving Credit Loans from one
Type to the other, and all continuations of Term Loans or Revolving Credit Loans
as the same Type, there shall not be more than ten Interest Periods in effect.
Alderwoods Credit Agreement
30
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
2.03 Letters of Credit. (a) The Letter of Credit Commitment. (i)
Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the other Revolving Credit Lenders set forth
in this Section 2.03, (1) from time to time on any Business Day during the
period from the Effective Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower, and to amend Letters of
Credit previously issued by it, in accordance with Section 2.03(b), and (2) to
honor drafts under the Letters of Credit; and (B) the Revolving Credit Lenders
severally agree to participate in Letters of Credit issued for the account of
the Borrower; provided that the L/C Issuer shall not be obligated to make any
L/C Credit Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in any Letter of Credit if as of the date of such
L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Loans of any Lender,
plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all
Swing Line Loans would exceed such Lender's Revolving Credit Commitment, or (z)
the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit
Sublimit. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower's ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law applicable to the L/C Issuer
or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Effective Date,
or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Effective Date and which the L/C Issuer in
good xxxxx xxxxx material to it;
(B) the expiry date of such requested Letter of Credit would occur
more than twelve months after the date of issuance, unless the Required
Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have
approved such expiry date;
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31
(D) the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer issuing such Letter of Credit; or
(E) such Letter of Credit is in an initial amount less than $100,000,
in the case of a commercial Letter of Credit, or $500,000, in the case of a
standby Letter of Credit, or is to be denominated in a currency other than
Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit. (i)
Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 12:00 p.m. at least two Business Days (or
such later date and time as the L/C Issuer may agree in a particular instance in
its sole discretion) prior to the proposed issuance date or date of amendment,
as the case may be. In the case of a request for an initial issuance of a Letter
of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C)
the expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the
L/C Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as
the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the L/C Issuer will provide
the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of
confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer's
usual and customary business practices. Immediately upon the issuance of each
Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of such
Lender's Pro Rata Share times the amount of such Letter of Credit.
Alderwoods Credit Agreement
32
(iii) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
(c) Drawings and Reimbursements; Funding of Participations. (i) Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 12:00 p.m. on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor
Date"), the Borrower shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing. If the Borrower fails to
so reimburse the L/C Issuer by such time, the Administrative Agent shall
promptly notify each Revolving Credit Lender of the Honor Date, the amount of
the unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such
Revolving Credit Lender's Pro Rata Share thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Credit Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Revolving Credit Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any
notice given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Credit Lender (including the Lender acting as L/C
Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 2:00 p.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Revolving
Credit Lender's payment to the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section
2.03.
(iv) Until each Revolving Credit Lender funds its Revolving Credit
Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer
for any amount drawn
Alderwoods Credit Agreement
33
under any Letter of Credit, interest in respect of such Lender's Pro Rata Share
of such amount shall be solely for the account of the L/C Issuer.
(v) Each Revolving Credit Lender's obligation to make Revolving Credit
Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under
Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right which such Lender
may have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender's obligation to make
Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrower of a
Committed Loan Notice ). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for
the amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled
to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted to any Revolving
Credit Lender (through the Administrative Agent) with respect to any amounts
owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.
(d) Repayment of Participations. (i) At any time after the L/C Issuer
has made a payment under any Letter of Credit and has received from any
Revolving Credit Lender such Lender's L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Pro Rata
Share thereof (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Revolving Credit Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.
Alderwoods Credit Agreement
34
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law;
(v) any exchange, release or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to departure from the Guaranty
or any other guarantee, for all or any of the Obligations of the Borrower
in respect of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will immediately notify the L/C Issuer.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
Alderwoods Credit Agreement
35
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, but subject to
the foregoing proviso, the L/C Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a 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.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked deposit accounts at Bank of America. If at any
time the Administrative Agent determines that any funds held as Cash Collateral
are subject to any right or claim of any Person other than the Administrative
Agent or that the total amount of such funds is less than the aggregate
Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the deposit accounts at Bank of
America as
Alderwoods Credit Agreement
36
aforesaid, an amount equal to the excess of (a) such aggregate Outstanding
Amount over (b) the total amount of funds, if any, then held as Cash Collateral
that the Administrative Agent determines to be free and clear of any such right
and claim. If at any time the Administrative Agent determines that the total
amount of funds then held as Cash Collateral exceeds the aggregate Outstanding
Amount of all L/C Obligations, upon the request of the Borrower, the
Administrative Agent will deposit the amount of such excess in an account
designated by the Borrower; provided no Default or Event of Default has occurred
and is continuing at such time. Upon the drawing of any Letter of Credit for
which funds are on deposit as Cash Collateral, such funds shall be applied, to
the extent permitted under applicable law, to reimburse the L/C Issuer.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share a Letter of Credit fee for each Letter of
Credit equal to the Applicable Rate times the daily maximum amount available to
be drawn under such Letter of Credit (whether or not such maximum amount is then
in effect under such Letter of Credit). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each standby Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee equal to 0.125% per annum calculated on the basis of the aggregate
undrawn amount of all outstanding Letters of Credit issued by such L/C Issuer,
payable quarterly in arrears. In addition, the Borrower shall pay directly to
the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit issued by such L/C Issuer as from
time to time in effect. Such customary fees and standard costs and charges are
due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
Alderwoods Credit Agreement
37
2.04 Swing Line Loans. (a) The Swing Line. Subject to the terms and
conditions set forth herein, the Swing Line Lender agrees to make loans (each
such loan, a "Swing Line Loan") to the Borrower from time to time on any
Business Day during the Availability Period with respect to the Revolving Credit
Facility in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Pro Rata Share of the Outstanding Amount of Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount
of such Lender's Commitment; provided, however, that after giving effect to any
Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount
of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender's Revolving Credit
Commitment, and provided, further, that the Borrower shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Revolving Credit
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender's Pro Rata Share times the
amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Revolving Credit Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set
forth in the proviso to the first sentence of Section 2.04(a), or (B) that one
or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower.
(c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any
time in its sole and absolute discretion may request, on behalf of the Borrower
(which hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving
Alderwoods Credit Agreement
38
Credit Lender make a Base Rate Loan in an amount equal to such Lender's Pro Rata
Share of the amount of Swing Line Loans then outstanding. Such request shall be
made in writing (which written request shall be deemed to be a Committed Loan
Notice for purposes hereof) and in accordance with the requirements of Section
2.02, without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized portion of
the Aggregate Revolving Credit Commitments and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Revolving Credit Lender shall make an amount
equal to its Pro Rata Share of the amount specified in such Committed Loan
Notice available to the Administrative Agent in immediately available funds for
the account of the Swing Line Lender at the Administrative Agent's Office not
later than 1:00 p.m. on the day specified in such Committed Loan Notice,
whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so
makes funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the
request for Base Rate Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Credit Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Credit Lender's payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be
deemed payment in respect of such participation.
(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.
(iv) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or to purchase and fund risk participations in Swing Line Loans
pursuant to this Section 2.04(c) shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the Swing
Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Credit Lender's obligation to make Revolving Credit Loans
pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.
Alderwoods Credit Agreement
39
(d) Repayment of Participations. (i) At any time after any Revolving
Credit Lender has purchased and funded a risk participation in a Swing Line
Loan, if the Swing Line Lender receives any payment on account of such Swing
Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata
Share of such payment (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's risk participation was
funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender
its Pro Rata Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the Federal Funds Rate. The Administrative Agent will
make such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.05 Prepayments. (a) Optional. (i) The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Loans in whole or in part without premium or penalty; provided that (1) such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (B) on the date of prepayment of Base Rate Loans; (2) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (3) any prepayment of Base Rate
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender's Pro Rata Share of such prepayment. If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required pursuant
to Section 3.05. Each prepayment of the outstanding Term Loans pursuant to this
Section 2.05(a) shall be applied to the Term Facility and to the principal
repayment installments thereof in order of maturity for the next succeeding four
fiscal quarters and, to the extent (if any) in excess thereof, to the remaining
principal repayment installments on a pro rata basis, and each such prepayment
shall be paid to the Lenders in accordance with their respective Pro Rata
Shares.
Alderwoods Credit Agreement
40
(ii) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 2:00 p.m. on the date of the prepayment, and
(2) any such prepayment shall be in a minimum principal amount of $100,000 or,
if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
(b) Mandatory. (i) Within five Business Days after financial
statements have been delivered pursuant to Section 6.01(a) and the related
Compliance Certificate has been delivered pursuant to Section 6.02(b), the
Borrower shall prepay an aggregate principal amount of Loans equal to 50% of
Excess Cash Flow for the fiscal year covered by such financial statements
commencing with the Borrower's 2004 fiscal year.
(ii) If any Loan Party or any of its Subsidiaries Disposes of any
property or assets (other than any Disposition of any of its capital stock or
other Equity Interests or property or assets permitted by Section 7.05(a), (b),
(c), (d) or (h)) which in the aggregate results in the realization by any Loan
Party or such Subsidiary of Net Cash Proceeds (determined as of the date of such
Disposition, provided such Net Cash Proceeds are then received by or paid for
the account of any Loan Party or such Subsidiary) the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by any Loan Party or such
Subsidiary; provided, however, that (1) any Disposition (or series of related
Dispositions) of property or assets of the Borrower or any of its Subsidiaries
that results in the realization of Net Cash Proceeds in an amount equal to
$50,000 or less, shall not be subject to the foregoing prepayment requirement;
(2) any Net Cash Proceeds received by the Borrower on or before March 31, 2004
from the Disposition of the Michigan Cemetery Notes shall not be subject to the
foregoing prepayment requirement; (3) with respect to any Net Cash Proceeds
realized (x) under a Disposition described in this Section 2.05(b)(ii) or (y)
from proceeds of insurance and condemnation awards described in Section
2.05(b)(v), so long as no Default shall have occurred and be continuing, the
Borrower or applicable Subsidiary may, subject to the dollar limits set forth
below, within 270 days following the receipt of such Net Cash Proceeds (A)
reinvest all or any portion of such Net Cash Proceeds in operating assets or (B)
enter into a definitive agreement for the reinvestment of such assets which
agreement shall have been consummated within 360 days following receipt of such
Net Cash Proceeds; (4) up to $10,000,000 of Net Cash Proceeds in the aggregate
in any fiscal year but not to exceed $35,000,000 of Net Cash Proceeds in the
aggregate realized under Dispositions described in this Section 2.05(b)(ii)
(other than Net Cash Proceeds from the sale of Security Plan Life) may be
reinvested in Capital Expenditures as set forth in Section 7.12 and shall be
excluded from the prepayment requirements under this Section 2.05(b)(ii) to the
extent reinvested in Capital Expenditures; and (5) Net Cash Proceeds from the
sale of Security Plan Life in an amount not to exceed the lesser of $25,000,000
or 40% of such Net Cash Proceeds may be used solely to recapitalize Mayflower
National. The Borrower shall have been deemed to have elected to reinvest all
Net Cash Proceeds not falling within clauses (1), (2), (4) or (5) of this
Section 2.05(b)(ii) in accordance with clause (3) of this Section 2.05(b)(ii)
unless the Borrower notifies the Administrative Agent to the contrary in the
next quarterly Compliance Certificate delivered
Alderwoods Credit Agreement
41
by the Borrower pursuant to Section 6.02(b) after the receipt of such Net Cash
Proceeds, and each Compliance Certificate shall include (x) a list of all Net
Cash Proceeds so reinvested during the previous fiscal quarter and (y) all
definitive agreements for the reinvestment of such assets entered into by the
Borrower or such Subsidiary during the previous fiscal quarter.
(iii) Upon the sale by any Loan Party or any of its Subsidiaries of
any of its capital stock or other Equity Interests, other than (A) the sale of
capital stock or other Equity Interests of a Subsidiary of a Loan Party to any
Loan Party or (B) the sale of capital stock or other Equity Interests of a
non-Guarantor to a Subsidiary of a Loan Party that is a non-Guarantor (in each
case, to the extent not prohibited by Sections 7.03, 7.05 and 7.06), the
Borrower shall prepay an aggregate principal amount of Loans equal to 50% of all
Net Cash Proceeds received therefrom immediately upon receipt thereof by any
Loan Party or such Subsidiary.
(iv) Upon the incurrence or issuance by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to Section 7.02(a), (b), or (c)), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Cash Proceeds received therefrom immediately upon receipt thereof by any Loan
Party or such Subsidiary.
(v) Upon any Extraordinary Receipt received by or paid to or for the
account of any Loan Party or any of its Subsidiaries and not otherwise included
in clause (ii), (iii) or (iv) of this Section 2.05(b), the Borrower shall prepay
an aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by any Loan Party or such
Subsidiary.
(vi) Upon the sale of accounts receivable by the Borrower or any of
its Subsidiaries pursuant to Section 7.05(h), the Borrower shall prepay an
aggregate principal amount of the Loans equal to 100% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by the Borrower or such
Subsidiary and such prepayment shall be applied to the Term Facility and the
Revolving Credit Facility on a pro rata basis; provided, however, that with
respect to the Term Facility, such prepayments shall be applied first, to the
principal repayment installments in the order of maturity for the next
succeeding four fiscal quarters and second, to the extent (if any) in excess
thereof, to the remaining principal repayment installments on a pro rata basis.
(vii) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(vii)
unless after the prepayment in full of the Loans and Swing Line Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
(viii) Each prepayment of Loans pursuant to this Section 2.05(b)
(other than clause (vi)) shall be applied, first, to the Term Facility and to
the principal repayment installments thereof in order of maturity for the next
succeeding four fiscal quarters and to the extent (if any) in excess thereof, to
the remaining principal repayment installments of such Term
Alderwoods Credit Agreement
42
Facility on a pro rata basis and second, to the Revolving Credit Facility in the
manner set forth in clause (ix) of this Section 2.05(b).
(ix) Prepayments of the Revolving Credit Facility made pursuant to
clause (i), (ii), (iii), (iv), (v), (vi), (vii) or (viii) of this Section
2.05(b), first, shall be applied to prepay L/C Borrowings outstanding at such
time until all such L/C Borrowings are paid in full, second, shall be applied to
prepay Swing Line Loans outstanding at such time until all such Swing Line Loans
are paid in full, third, shall be applied to prepay Revolving Credit Loans
outstanding at such time until all such Revolving Credit Loans are paid in full
and, fourth, shall be used to Cash Collateralize the L/C Obligations; and, in
the case of prepayments of the Revolving Credit Facility required pursuant to
clause (i), (ii), (iii), (iv), (v) or (vi) of this Section 2.05(b), the amount
remaining, if any, after the prepayment in full of all Loans and L/C Borrowings
outstanding at such time and the L/C Obligations have been Cash Collateralized
in full (the sum of such prepayment amounts, cash collateralization amounts and
remaining amount being, collectively, the "Reduction Amount") may be retained by
the Borrower for use in the ordinary course of its business, and the Revolving
Credit Facility shall be automatically and permanently reduced as set forth in
Section 2.06(b)(ii). Upon the drawing of any Letter of Credit which has been
Cash Collateralized, such funds shall be applied (without any further action by
or notice to or from the Borrower or any other Loan Party) to reimburse the L/C
Issuer or the Revolving Credit Lenders, as applicable, and any remaining cash
provided to Cash Collateralize such Letter of Credit shall be returned to the
Borrower in accordance with the terms of Section 2.03(g).
(x) Anything contained in this Section 2.05(b) to the contrary
notwithstanding, (A) if, following the occurrence of any "Asset Sale" (as such
term is defined in the Seven Year Notes Indenture or the Subordinated Notes
Indenture) by any Loan Party or any of its Subsidiaries, the Borrower is
required to commit by a particular date (a "Commitment Date") to apply or cause
its Subsidiaries to apply an amount equal to any of the "Excess Proceeds" (as
defined in the Seven Year Notes Indenture or the Subordinated Notes Indenture)
thereof in a particular manner, or to apply by a particular date (an
"Application Date") an amount equal to any such "Excess Proceeds" in a
particular manner, in either case in order to excuse the Borrower from being
required to make an "Asset Sale Offer" (as defined in the Seven Year Notes
Indenture or the Subordinated Notes Indenture) in connection with such "Asset
Sale", and the Borrower shall have failed to so commit or to so apply an amount
equal to such "Excess Proceeds" at least 5 days before the applicable Commitment
Date or Application Date, as the case may be, or (B) if the Borrower at any
other time shall have failed to apply or commit or cause to be applied an amount
equal to any such "Excess Proceeds", and, within 5 days thereafter assuming no
further application or commitment of an amount equal to such "Excess Proceeds"
the Borrower would otherwise be required to make an "Asset Sale Offer" in
respect thereof, then in either such case the Borrower shall immediately pay or
cause to be paid to the Administrative Agent an amount equal to such "Excess
Proceeds" to be applied to the payment of the Loans and L/C Borrowings and to
Cash Collateralize the L/C Obligations in the manner set forth in Section
2.05(b) in such amounts as shall excuse the Borrower from making any such "Asset
Sale Offer", other than with respect to such Excess Proceeds in excess of the
amounts required to prepay the Loans and L/C Borrowings and Cash Collateralize
the L/C Obligations.
2.06 Termination or Reduction of Commitments. (a) Optional. The
Borrower may, upon notice to the Administrative Agent, terminate the unused
portions of the Term
Alderwoods Credit Agreement
43
Commitments, the Letter of Credit Sublimit, or the unused Revolving Credit
Commitments, or from time to time permanently reduce the unused portions of the
Term Commitments, the Letter of Credit Sublimit, or the unused Revolving Credit
Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 12:00 p.m. three Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof and (iii) the Borrower shall not terminate or reduce the unused portions
of the Term Commitments, the Letter of Credit Sublimit, or the unused Revolving
Credit Commitments if, after giving effect thereto and to any concurrent
prepayments hereunder, the Total Outstandings would exceed the Aggregate
Commitments.
(b) Mandatory. (i) The Term Facility shall be automatically and
permanently reduced on the date of the Term Borrowing (after giving effect to
the Term Borrowing), and from time to time thereafter upon each repayment or
prepayment of the outstanding Term Loans, by an amount equal to the amount by
which (A) the Term Facility immediately prior to such reduction exceeds (B) the
aggregate principal amount of all Term Loans outstanding at such time.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which the prepayment of Revolving Credit
Loans outstanding thereunder is required to be made pursuant to Section
2.05(b)(i), (ii), (iii), (iv), (v) or (vi) by an amount equal to the applicable
Reduction Amount.
(iii) If after giving effect to any reduction or termination of unused
Commitments under this Section 2.06, the Letter of Credit Sublimit or the Swing
Line Sublimit exceeds the amount of the Aggregate Revolving Credit Commitments,
such Sublimit shall be automatically reduced by the amount of such excess.
(c) Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Term Commitment, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitment under this Section 2.06.
Each reduction of the unused portion of the Term Commitments pursuant to Section
2.06(a) shall be applied to the principal repayment installments of the Term
Facility on a pro rata basis. Upon any reduction of unused Commitments under a
Facility, the Commitment of each Lender under such Facility shall be reduced by
such Lender's Pro Rata Share of the amount by which such Facility is reduced.
All commitment fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07 Repayment of Loans. (a) Term Loans. The Borrower shall repay to
the Administrative Agent for the ratable account of the Term Lenders the
aggregate principal amount of all Term Loans outstanding on the last Business
Day of each fiscal quarter set forth below in the respective amounts set forth
opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.05):
Alderwoods Credit Agreement
44
Date Amount
--------------------------------------- ------------
Fiscal quarter ending January 3, 2004 $ 2,500,000
Fiscal quarter ending March 27, 2004 $ 2,500,000
Fiscal quarter ending June 19, 2004 $ 2,500,000
Fiscal quarter ending October 9, 2004 $ 2,500,000
Fiscal quarter ending January 1, 2005 $ 3,750,000
Fiscal quarter ending March 26, 2005 $ 3,750,000
Fiscal quarter ending June 18, 2005 $ 3,750,000
Fiscal quarter ending October 8, 2005 $ 3,750,000
Fiscal quarter ending December 31, 2005 $ 5,000,000
Fiscal quarter ending March 25, 2006 $ 5,000,000
Fiscal quarter ending June 17, 2006 $ 5,000,000
Fiscal quarter ending October 7, 2006 $ 5,000,000
Fiscal quarter ending December 30, 2006 $ 5,000,000
Fiscal quarter ending March 24, 2007 $ 5,000,000
Fiscal quarter ending June 16, 2007 $ 5,000,000
Fiscal quarter ending October 6, 2007 $ 5,000,000
Fiscal quarter ending December 29, 2007 $ 5,000,000
Fiscal quarter ending March 22, 2008 $ 5,000,000
Fiscal quarter ending June 14, 2008 $ 5,000,000
Maturity Date $195,000,000 (or, if different, the
then Outstanding Amount of all Term
Loans)
(b) Revolving Credit Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Maturity Date the aggregate principal amount of all Revolving Credit
Advances outstanding on such date.
(c) Swing Line Loans. The Borrower shall repay each Swing Line Loan on
the earlier to occur of (i) the date five Business Days after such Loan is made
and (ii) the Maturity Date.
2.08 Interest. (a) Subject to the provisions of Section 2.08(b), (i)
each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
upon the request of the Required Lenders, while any Event of Default
Alderwoods Credit Agreement
45
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 Fees. In addition to certain fees described in Section 2.03(i)
and (j):
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Appropriate Lender in accordance with its Pro Rata
Share, a commitment fee equal to 0.50% times the actual daily amount by
which (i) in the case of the Term Lenders, the aggregate Term Commitments
exceed the Outstanding Amount of Term Loans and (ii) in the case of the
Revolving Credit Lenders, the aggregate Revolving Credit Commitments exceed
the sum of (A) the Outstanding Amount of Revolving Credit Loans and (B) the
Outstanding Amount of L/C Obligations. The commitment fee shall accrue at
all times during the applicable Availability Period, including at any time
during which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing with the first such
date to occur after the Effective Date, and on the Maturity Date for the
applicable Facility.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Agents such fees as shall have been
separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 Computation of Interest and Fees. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
Alderwoods Credit Agreement
46
2.11 Evidence of Indebtedness. (a) The Credit Extensions made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and by the Administrative Agent in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive absent manifest error of the amount and date of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Upon the request of any Lender made through the Administrative Agent, the
Borrower shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender's Loans in addition to such
accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the date, Type (if applicable), amount and maturity of its Loans and
payments with respect thereto.
(b) In addition to the accounts and records referred to in Section
2.11(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit and Swing Line Loans. In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to Section 10.07(c), and by each Lender and the Administrative
Agent in its account or accounts pursuant to Sections 2.11(a) and 2.11(b), shall
be prima facie evidence of the amount of principal and interest due and payable
or to become due and payable from the Borrower to, in the case of the Register,
each Lender and, in the case of such account or accounts, such Lender, under
this Agreement and the other Loan Documents, absent manifest error; provided
that the failure of the Administrative Agent or such Lender to make an entry, or
any finding that an entry is incorrect, in the Register or such account or
accounts shall not limit or otherwise affect the obligations of the Borrower
under this Agreement and the other Loan Documents.
2.12 Payments Generally. (a) Notwithstanding anything to the contrary
in this Agreement or the other Loan Documents, all payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent's Office in Dollars and in immediately available
funds not later than 3:00 p.m. on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office. All payments received by the
Administrative Agent after 3:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
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(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Loans to be made in the
next succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan included in the applicable Borrowing. If such Lender does not pay such
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such
Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.12(c) shall be conclusive, absent
manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in
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accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.
(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
(g) Upon the occurrence and during the continuance of an Event of
Default, the Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or, in the case of a
Lender, under the Note held by such Lender, to charge from time to time against
any or all of the Borrower's accounts with such Lender any amount so due.
(h) Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Agents and the Lenders under or in respect of
this Agreement and the other Loan Documents on any date, such payment shall be
distributed by the Administrative Agent and applied by the Agents and the
Lenders in the order of priority set forth in Section 8.03. If the
Administrative Agent receives funds for application to the Obligations of the
Loan Parties under or in respect of the Loan Documents under circumstances for
which the Loan Documents do not specify the manner in which such funds are to be
applied, the Administrative Agent may, but shall not be obligated to, elect to
distribute such funds to each of the Lenders in accordance with such Lender's
Pro Rata Share of the sum of (i) the Outstanding Amount of all Loans outstanding
at such time and (ii) the Outstanding Amount of all L/C Obligations outstanding
at such time, in repayment or prepayment of such of the outstanding Loans or
other Obligations then owing to such Lender.
2.13 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations or Swing Line Loans held by them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each
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49
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share
(according to the proportion of (i) the amount of such paying Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff, but subject to Section 10.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation; provided, further, that, so long
as the Obligations under the Loan Documents shall not have been accelerated, any
excess payment received by any Appropriate Lender shall be shared on a pro rata
basis only with other Appropriate Lenders. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by the Borrower to or for the
account of any Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of
each Agent and each Lender, taxes imposed on or measured by its overall net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which such
Agent or such Lender, as the case may be, is organized or maintains a lending
office (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to any Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of such Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, the Borrower shall furnish to the
Administrative Agent (which shall forward the same to the affected Agent or
Lender, as the case may be) the original or a certified copy of a receipt
evidencing payment thereof to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise, property,
intangible or mortgage recording taxes or charges or similar levies which arise
from any payment made under any Loan
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50
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to any
Agent or any Lender, the Borrower shall also pay to such Agent or to such
Lender, as the case may be, at the time interest is paid, such additional amount
that such Agent or such Lender specifies is necessary to preserve the after-tax
yield (after factoring in all taxes, including taxes imposed on or measured by
net income) that such Agent or such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify each Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section)
paid by such Agent or such Lender, as the case may be, (ii) amounts payable
under Section 3.01(c) and (iii) any liability (including additions to tax,
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority; provided
that the Borrower shall not be required to compensate a Lender or Agent pursuant
to this Section 3.01 for any such amounts or liabilities incurred or accruing
more than 180 days prior to the date on which such Lender or Agent notifies the
Borrower in writing of the change giving rise thereto and of its intention to
claim compensation therefor; provided, further, that if the change giving rise
to such amounts or liabilities shall be retroactive, then the 180 day period
referred to above shall be extended to include the period of retroactive effect
thereof. Payment under this Section 3.01(d) shall be made within 30 days after
the date such Lender or such Agent makes a demand (in accordance with Section
3.06(a)) therefor.
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 Inability to Determine Rates. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for
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51
any requested Interest Period with respect to a proposed Eurodollar Rate Loan,
or that the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, or that Dollar deposits are not being offered
to banks in the London interbank eurodollar market for the applicable amount and
the Interest Period of such Eurodollar Rate Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make Eurodollar Rate Loans or convert Loans to Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy. (a) If any
Lender determines that as a result of the introduction of or any change in or in
the interpretation of any Law or such Lender's compliance therewith, there shall
be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender hereunder in connection with any of the foregoing
(excluding for purposes of this Section 3.04(a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements utilized in
the determination of the Eurodollar Rate), then from time to time upon written
demand (in accordance with Section 3.06(a)) of such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall pay to such Lender such
additional amounts as will compensate such Lender for such increased cost or
reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon written demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction; provided that the
Borrower shall not be required to compensate a Lender or Agent pursuant to this
Section 3.04 for any such amounts or liabilities incurred or accruing more than
270 days prior to the date on which such Lender notifies the Borrower in writing
of the change giving rise thereto and of its intention to claim compensation
therefor; provided, further, that if the change giving rise to such amounts or
liabilities shall be retroactive, then the 270 day period referred to above
shall be extended to include the period of retroactive effect thereof.
3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
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52
(a) any continuation, conversion, payment or prepayment of any
Eurodollar Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any
Eurodollar Rate Loan on the date or in the amount notified by the Borrower;
including any loss (but excluding any loss of anticipated profits) or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. The Borrower shall also pay any reasonable and customary
administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so
funded.
3.06 Matters Applicable to All Requests for Compensation. (a) A
certificate of any Agent or any Lender claiming compensation under this Article
III and setting forth the additional amount or amounts to be paid to it
hereunder and basis therefor in reasonable specificity shall be conclusive in
the absence of manifest error. In determining such amount, such Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) If (i) any Lender or Agent requests compensation pursuant to
Section 3.04, (ii) any Lender or Agent delivers a notice described in Section
3.02, (iii) the Borrower is required to pay any amount to any Lender or Agent or
any Governmental Authority on account of any Lender or Agent pursuant to Section
3.01 or (iv) any Lender is a Defaulting Lender, the Borrower may, at its sole
expense and effort (including with respect to the processing and recordation fee
referred to in Section 10.07(b)), upon notice to such Lender or Agent and the
Administrative Agent, require such Lender or Agent to transfer and assign,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.07), all of its interests, rights and obligations under this
Agreement to an assignee designated by the Borrower that shall assume such
assigned obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (w) such assignment will result in a reduction
in the claim for compensation under Section 3.04 or in the withdrawal of the
notice under Section 3.02 or in the reduction of payments under Section 3.01, as
the case may be, or in the case of clause (iv) above the applicable Lender is a
Defaulting Lender, (x) such assignment shall not conflict with any applicable
Law, (y) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Revolving Credit Commitment is being assigned,
of the L/C Issuer and the Swing Line Lender), which consent shall not
unreasonably be withheld or delayed, and (z) the Borrower or such assignee shall
have paid to the affected Lender or Agent in immediately available funds an
amount equal to the sum of the principal of and interest accrued to the date of
such payment on the outstanding Loans of such Lender or Agent, respectively,
plus
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53
all fees and other amounts accrued for the account of such Lender or Agent
hereunder (including any amounts under Section 3.04 and Section 3.01); provided,
further, that, if prior to such transfer and assignment the circumstances or
event that resulted in such Lender's or Agent's claim for compensation under
Section 3.04 or notice under Section 3.02 or the amounts payable pursuant to
Section 3.01, as the case may be, cease to cause such Lender or Agent to suffer
increased costs or reductions in amounts received or receivable or reduction in
return on capital, or cease to have the consequences specified in Section 3.02,
or cease to result in amounts being payable under Section 3.01, as the case may
be (including as a result of any action taken by such Lender or Agent pursuant
to paragraph (c) below), or if such Lender or Agent shall waive its right to
claim compensation under Section 3.04 in respect of such circumstances or event
or shall withdraw its notice under Section 3.02 or shall waive its right to
payments under Section 3.01 in respect of such circumstances or event, as the
case may be, or in the case of clause (iv) above the applicable Lender is no
longer a Defaulting Lender, then such Lender or Agent shall not thereafter be
required to make any such transfer and assignment hereunder.
3.07 Survival. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Effective Date)
and each in form and substance satisfactory to the Administrative Agent and its
legal counsel:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to each Agent, each Lender and the
Borrower;
(ii) (A) a Note executed by the Borrower in favor of each Lender
requesting a Note prior to the date hereof;
(iii) a security agreement, in substantially the form of Exhibit
G hereto (together with each other security agreement and security
agreement supplement delivered pursuant to Section 6.12, in each case as
amended, the "Security Agreement"), duly executed by each Loan Party,
together with:
(A) certificates representing the Pledged Equity referred to
therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,
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54
(B) copies of proper financing statements (the "UCC
Financing Statements"), to be filed on or before the day of the
initial Credit Extension under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority
liens and security interests created under the Security
Agreement, covering the Collateral described in the Security
Agreement,
(C) completed requests for information, dated on or before
the date of the initial Credit Extension, listing all effective
financing statements filed in the jurisdictions referred to in
clause (B) above that name any Loan Party as debtor, together
with copies of such other financing statements,
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement (other than
the Mortgages, the UCC Financing Statements, the Intellectual
Property Security Agreement and any other recordings or filings
that the Lenders agree may be undertaken subsequent to the
Effective Date) that the Administrative Agent may deem necessary
or desirable in order to perfect and protect the Liens created
thereby,
(E) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created
under the Security Agreement has been taken (including, without
limitation, receipt of duly executed payoff letters, deposit
account control agreement terminations in respect of the Existing
Credit Facility and UCC-3 termination statements);
(iv) an intellectual property security agreement, in
substantially the form of Exhibit I hereto (together with each other
intellectual property security agreement and intellectual property security
agreement supplement delivered pursuant to Section 6.12, in each case as
amended, the "Intellectual Property Security Agreement"), duly executed by
each Loan Party party thereto, together with evidence that all action that
the Administrative Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and security interests created
under the Intellectual Property Security Agreement has been taken;
(v) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party or is to be a
party;
(vi) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly
organized or formed,
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55
and that each Loan Party is validly existing, in good standing and
qualified to engage in business in its jurisdiction of formation;
(vii) a favorable opinion of Xxxxx Day, counsel to the Loan
Parties, addressed to each Agent and each Lender, as to the matters set
forth in Exhibit J-1;
(viii) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such
Loan Party and the validity against such Loan Party of the Loan Documents
to which it is a party, and such consents, licenses and approvals shall be
in full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;
(ix) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that the conditions specified in Section 4.02(a)
and (b) have been satisfied and (B) that there has been no event or
circumstance since the date of the Audited Financial Statements that has
had or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect;
(x) certificates and letters attesting to the Solvency of each
Loan Party before and after giving effect to the Refinancing, from the
Borrower's Chief Financial Officer;
(xi) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(xii) certified copies of each of the Related Documents, duly
executed by the parties thereto;
(xiii) one or more Requests for Credit Extension, as applicable,
relating to the initial Credit Extension;
(xiv) evidence that (A) the Existing Credit Facility, the 11%
Notes and the Rose Hills Notes have been or concurrently with the Effective
Date are being terminated, prepaid, redeemed or defeased or otherwise
satisfied or extinguished and (B) all Liens securing obligations under the
Existing Credit Facility have been or concurrently with the Effective Date
are being released;
(xv) a duly executed pledge agreement or equivalent document
under English law, together with any other documents necessary to create
and perfect a security interest over the UK Collateral, and evidence that
all steps necessary to accomplish such creation and perfection have been
taken and remain in full force and effect;
(xvi) a duly executed pledge agreement or equivalent document
under Canadian law, together with any other documents necessary to create
and perfect a security interest over the Canadian Collateral, legal
opinions of Canadian counsel in form and substance satisfactory to the
Administrative Agent and evidence that all steps
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necessary to accomplish such creation and perfection have been taken and
remain in full force and effect;
(xvii) a duly executed pledge agreement or equivalent document,
together with any other documents necessary to create and perfect a
security interest over any Foreign Collateral (other than the UK Collateral
and the Canadian Collateral), legal opinions of applicable foreign counsel
in form and substance satisfactory to the Administrative Agent and evidence
that all steps necessary to accomplish such creation and perfection under
the law of the jurisdiction of organization of the relevant Foreign
Subsidiary have been taken and remain in full force and effect; and
(xviii) such other assurances, certificates, documents, consents
or opinions as any Agent, the L/C Issuer, the Swing Line Lender or any
Lender reasonably may require.
(b) All fees required to be paid on or before the Effective Date shall
have been paid.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or, to
any Loan Party's knowledge, threatened before any Governmental Authority or
arbitrator that (i) could be reasonably likely to have a Material Adverse
Effect, (ii) purports to adversely affect the Refinancing or any portion thereof
or the ability of the Borrower or any other Loan Party to perform their
respective obligations under the Loan Documents, or (iii) purports to adversely
affect the legality, validity or enforceability of any Loan Document or the
consummation of the Refinancing.
(d) All governmental authorizations and all third party consents and
approvals necessary in connection with the Refinancing shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect; all applicable waiting periods in
connection with the Refinancing shall have expired without any action being
taken by any Governmental Authority; and no Law shall be applicable in the
judgment of the Lenders, in each case that restrains, prevents or imposes
materially adverse conditions upon the Refinancing or the rights of the Loan
Parties freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
4.02 Conditions to All Credit Extensions. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each other
Loan Party contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section
4.02, the
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representations and warranties contained in Sections 5.05(a) and (b) shall be
deemed to refer to the most recent statements furnished pursuant to Sections
6.01(a) and (b), respectively.
(b) No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds therefrom.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Section 4.02(a) and
(b) have been satisfied on and as of the date of the applicable Credit Extension
and the Administrative Agent shall have received for the account of such Lender
or L/C Issuer a certificate signed by a duly authorized officer of the Borrower,
dated the date of such Credit Extension, stating that such statements are true.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agents and the Lenders
that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each
Loan Party and each of its Subsidiaries (a)(i) is a corporation, partnership or
limited liability company duly organized or formed, validly existing and (ii) in
the case of the Loan Parties, except as set forth in Section 6.21(c), in good
standing under the Laws of the jurisdiction of its incorporation or organization
and in each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification, except to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is or
is to be a party, and the consummation of the Refinancing, are within such Loan
Party's corporate or other powers, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of any of such Person's Organization Documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, or
require any payment to be made under (i) any material Contractual Obligation
(other than the Contractual Obligations contemplated to be repaid pursuant to
the Refinancing) to which such Person is a party or affecting such Person or the
properties of such Person or any of its
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Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. No Loan Party or any of its Subsidiaries is in violation
of any Law or in breach of any such Contractual Obligation, the violation or
breach of which could be reasonably likely to have a Material Adverse Effect.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (i) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document (except for
notices required in connection with prepayments of the Existing Credit Facility,
the 11% Notes and the Rose Hills Notes), or for the consummation of the
Refinancing, (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created under the Collateral Documents (including, subject to Liens
permitted under the Loan Documents, the first priority nature thereof) or (iv)
the exercise by any Agent or any Lender of its rights under the Loan Documents
or the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for the recordings and filings referenced in the parenthetical
to Section 4.01(a)(iii)(D). All applicable waiting periods in connection with
the Refinancing (except for waiting periods in connection with prepayments of
the 11% Notes and the Rose Hills Notes) have expired without any action having
been taken by any competent Governmental Authority restraining, preventing or
imposing materially adverse conditions upon the Refinancing or the rights of the
Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of,
or to create any Lien on, any properties now owned or hereafter acquired by any
of them.
5.04 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
5.05 Financial Statements; No Material Adverse Effect. (a) The Audited
Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of the Borrower and
its Subsidiaries, taken as a whole, as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries, taken as a whole, as
of the date thereof, including liabilities for taxes, material commitments and
Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower,
taken as a whole, and its Subsidiaries dated June 14, 2003, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries, taken as a whole, as of the date
thereof and their
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results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.
(c) Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated pro forma balance sheet of the Borrower and its
Subsidiaries, taken as a whole, as at June 14, 2003, and the related
consolidated pro forma statements of income and cash flows of the Borrower and
its Subsidiaries, taken as a whole, for the six months then ended, certified by
the Chief Financial Officer of the Borrower, copies of which have been furnished
to each Lender, fairly present the consolidated pro forma financial condition of
the Borrower and its Subsidiaries, taken as a whole, as at such date and the
consolidated pro forma results of operations of the Borrower and its
Subsidiaries, taken as a whole, for the period ended on such date, in each case
giving effect to the Refinancing, all in accordance with GAAP.
(e) The consolidated forecasted balance sheets, statements of income
and statements of cash flows of the Borrower and its Subsidiaries delivered to
the Lenders pursuant to Section 4.01 or 5.05 were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light of
the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower's best estimate of its future
financial performance.
5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement, any other Loan Document, or any Related Document or the consummation
of the Refinancing, or (b) either individually or in the aggregate, could
reasonably be expected to be determined adversely to the Borrower or any of its
Subsidiaries and, if so determined, could reasonably be expected to have a
Material Adverse Effect.
5.07 No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to, or a party to, any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.
5.08 Ownership of Property; Liens. (a) Each Loan Party and each of its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for (i) Liens permitted under the Loan Documents
and (ii) such other defects in title, in each case as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Set forth on Schedule 5.08(b) hereto, is a complete and accurate
list as of the date hereof of all Liens on the property or assets of any Loan
Party, showing the lienholder
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thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party subject thereto. The property of the Loan
Parties is subject to no Liens, other than Liens set forth on Schedule 5.08(b),
or as otherwise permitted by Section 7.01.
(c) Set forth on Schedule 5.08(c) hereto, is a complete and accurate
list as of the date hereof of (i) all real property owned by any Loan Party,
showing the street address, county or other relevant jurisdiction, state, record
owner and book and estimated fair value thereof, (ii) all leases of real
property under which any Loan Party is the lessee, showing the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration date
and annual rental cost thereof, and identifying all real property listed
pursuant to clause (i) which is or shall be subject to a Mortgage in favor of
the Administrative Agent for the benefit of the Secured Parties. Each Loan Party
has good, marketable and insurable fee simple title to such real property, free
and clear of all Liens, other than Liens created or permitted by the Loan
Documents. Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms.
(d) Set forth on Schedule 5.08(d) is a complete and accurate list as
of the date hereof of Discontinued Assets.
5.09 Environmental Compliance. (a) The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have, and do not have, individually or in
the aggregate, a Material Adverse Effect.
(b) None of the properties currently owned or operated, or to the
Borrower's knowledge, formerly owned or operated, by any Loan Party or any of
its Subsidiaries is listed or, to the Borrower's knowledge, proposed for listing
on the NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan Party
or any of its Subsidiaries or, to the best of the Borrower's knowledge, on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries, except as could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; there is no asbestos or
asbestos-containing material on any property currently owned or operated by any
Loan Party or any of the Borrower's Subsidiaries, except as could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; and, to its knowledge, Hazardous Materials have not been released,
discharged or disposed of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries in violation of
Environmental Law.
(c) Neither any Loan Party nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened
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release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law, except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; and all Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any property currently or, to the
Borrower's knowledge, formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected to result
in material liability to any Loan Party or any of its Subsidiaries.
5.10 Insurance. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.
5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any of its Subsidiaries is
party to any tax sharing agreement other than the AGI Tax Sharing Agreement and
the AGI/Canco Tax Allocation and Indemnity Agreement, each dated as of January
2, 2002, among the Borrower and certain of its Affiliates.
5.12 ERISA Compliance. (a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto or the remedial amendment period for filing such application has
not expired and, to the knowledge of the Borrower, nothing has occurred which
would prevent, or cause the loss of, such qualification.
(b) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. To the knowledge of the Borrower, there has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event that has resulted or could reasonably be
expected to result in a material liability for any Loan Party or ERISA Affiliate
has occurred or is reasonably expected to occur; (ii) each Loan Party and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no Pension Plan has an "accumulated funding
deficiency" (as defined in Section 412 of the Code), whether or not waived
(except to the extent such failure to make all required contributions or such
accumulated
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funding deficiency is de minimus, has not resulted in the imposition of a lien
in favor of the Plan under Section 412 of the Code and has not resulted or could
not reasonably be expected to result in a material liability for any Loan Party
or ERISA Affiliate) and no application for a waiver of the minimum funding
standard or the extension of any amortization period pursuant to Section 412 of
the Code has been made with respect to any Pension Plan; (iii) neither any Loan
Party nor any ERISA Affiliate has incurred any material liability under Section
4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither any
Loan Party nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
(d) With respect to each scheme or arrangement mandated by a
government other than the United States (a "Foreign Government Scheme or
Arrangement") and with respect to each employee benefit plan maintained or
contributed to by any Loan Party or any Subsidiary of any Loan Party that is not
subject to United States law (a "Foreign Plan"):
(A) Any employer and employee contributions required by law or by the
terms of any Foreign Government Scheme or Arrangement or any Foreign Plan
have been made, or, if applicable, accrued, in accordance with normal
accounting practices.
(B) The fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through insurance
or the book reserve established for any Foreign Plan, together with any
accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations, as of the most recent valuation date, with respect to
all current and former participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used to account for such
obligations in accordance with applicable generally accepted accounting
principles; except where any shortfall does not result in a Material
Adverse Effect.
(C) Each Foreign Plan required to be registered has been registered
and has been maintained in good standing with applicable regulatory
authorities.
5.13 Subsidiaries; Equity Interests. Each Loan Party has no
Subsidiaries other than those specifically disclosed on Schedule 5.13, and all
of the outstanding Equity Interests in such Subsidiaries have been validly
issued, are fully paid and non-assessable and are owned by a Loan Party (except
as otherwise disclosed on such Schedule) as specified on Schedule 5.13 free and
clear of all Liens except those created under the Collateral Documents. No Loan
Party has any direct equity investments in any other corporation or entity other
than those specifically disclosed on Schedule 5.13. Schedule 5.13 includes
appropriate designations for Excluded Subsidiaries and Foreign Subsidiaries.
Each of the Subsidiaries identified as an Excluded Subsidiary on Schedule 5.13
hereto (each, an "Excluded Subsidiary") is (A) subject to regulatory
restrictions that prohibit it from giving guarantees or granting liens pursuant
to the Loan Documents, (B) not wholly owned by a Loan Party (and the other
partial ownership thereof is listed on such Schedule) or (C) otherwise hereby
agreed by the Borrower and the Administrative Agent to be an Excluded
Subsidiary.
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act. (a) The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning
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of Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock and no proceeds of any Borrowings or
drawings under any Letter of Credit will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock, in violation of Regulation T, U or X issued by the FRB,
provided, however, that in no case shall the Borrower or any of its Subsidiaries
purchase margin stock if such purchase results in the Borrower or such
Subsidiary exercising effective Control in the subject company whose stock is
being so purchased.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) 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, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940. Neither the making of any
Loan, nor the issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
any such Act or any rule, regulation or order of the SEC thereunder.
5.15 Disclosure. The Borrower has disclosed to the Agents and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries or any other Loan Party is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No written report, financial
statement, certificate or other information furnished by or on behalf of any
Loan Party to any Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or any other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
5.16 Compliance with Laws. Each Loan Party and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 Intellectual Property; Licenses, Etc. Each Loan Party owns, or
possesses the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, "IP Rights") that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person, and set forth on Schedule 5.17 is a complete and accurate
list of all registered IP Rights owned by each Loan Party. To the knowledge of
the Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by any Loan Party infringes upon any
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rights held by any other Person other than as set forth on Schedule 5.17. No
claim or litigation regarding any of the foregoing is pending or, to the
knowledge of the Borrower, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.18 Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
5.19 Casualty, Etc. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could be reasonably likely to have a
Material Adverse Effect.
5.20 Perfection, Etc. Except as otherwise set forth in Section 6.21 or
as otherwise agreed by the Lenders to be conditions subsequent to the Effective
Date, all filings and other actions necessary or desirable to perfect and
protect the security interest in the Collateral (other than the Local Accounts)
created under the Collateral Documents have been duly made or taken or will be
duly made or taken immediately after the Effective Date, and the Collateral
Documents create in favor of the Administrative Agent for the benefit of the
Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral (other than the
Local Accounts), subject only to Liens permitted under the Loan Documents,
securing the payment of the Secured Obligations. The Loan Parties are the legal
and beneficial owners of the Collateral free and clear of any Lien, except for
the liens and security interests created or permitted under the Loan Documents.
5.21 Tax Shelter Regulations. The Borrower does not intend to treat
the Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). If the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof. If the
Borrower so notifies the Administrative Agent, the Borrower acknowledges that
one or more of the Lenders may treat its Loans and/or its interest in Swing Line
Loans and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall, and shall (except in the case of the covenants set forth in Sections
6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:
6.01 Financial Statements. Deliver to the Administrative Agent in form
and detail reasonably satisfactory to the Administrative Agent and the Required
Lenders:
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(a) as soon as available, but in any event within 105 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year, and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public
accountant or independent chartered accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the
scope of such audit;
(b) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
such fiscal quarter and for the portion of the Borrower's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail
and certified by a Responsible Officer of the Borrower as fairly presenting
the financial condition, results of operations, shareholders' equity and
cash flows of the Borrower and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of
footnotes; and
(c) as soon as available, but in any event no later than 105 days
after the end of each fiscal year, an annual budget prepared by management
of the Borrower, in form reasonably satisfactory to the Administrative
Agent, of consolidated balance sheets, income statements and cash flow
statements of the Borrower and its Subsidiaries on a quarterly basis for
such fiscal year.
As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under Section 6.01(a) or (b), but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in Section 6.01(a) and (b) at the times specified therein.
6.02 Certificates; Other Information. Deliver to the Administrative
Agent, in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent certified
public accountants certifying such financial statements and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or, if any such Default shall exist, stating the nature and status
of such event;
(b) concurrently with the delivery of the financial statements
referred to in Section 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower, and in the
event of any change in generally
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accepted accounting principles used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 7.11, a statement of
reconciliation conforming such financial statements to GAAP;
(c) promptly after any request by the Administrative Agent or any
Lender (through the Administrative Agent), copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Loan
Party by independent accountants in connection with the accounts or books
of any Loan Party or any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower
may file or be required to file with the SEC under Section 13 or 15(d) of
the Securities Exchange Act of 1934, or with any Governmental Authority
that may be substituted therefor, or with any national securities exchange,
and in any case not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(e) promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party or of
any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to
the Lenders pursuant to any other clause of this Section 6.02;
(f) as soon as available and in any event within 45 days after the end
of each fiscal year, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and its
Subsidiaries and containing such additional information as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably specify;
(g) promptly and in any event within five Business Days after receipt
thereof by any Loan Party or any of its Subsidiaries, copies of each notice
or other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any of its Subsidiaries;
(h) promptly upon receipt thereof, copies of all notices, requests and
other documents received by any Loan Party or any of its Subsidiaries under
or pursuant to any Related Document and, from time to time upon request by
the Administrative Agent, such information and reports regarding the
Related Documents and other material instruments, indentures, loan and
credit and similar agreements of any Loan Party or any of its Subsidiaries
as the Administrative Agent may reasonably request;
(i) promptly after the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by any Loan Party or
any of its
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Subsidiaries with any Environmental Law or Environmental Permit that could
reasonably be expected to (i) have a Material Adverse Effect or (ii) cause
any property described in the Mortgages to be subject to any restrictions
on ownership, occupancy, use or transferability under any Environmental
Law;
(j) as soon as available and in any event within 45 days after the end
of each fiscal year, a report supplementing Schedule 5.08(c) hereto,
including an identification of all owned and leased real property disposed
of by any Loan Party during such fiscal year, a list and description
(including the street address, county or other relevant jurisdiction,
state, record owner, book value thereof and, in the case of leases of
property, lessor, lessee, expiration date and annual rental cost thereof)
of all real property acquired or leased during such fiscal year and a
description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to be accurate and
complete as of such fiscal year then ended;
(k) promptly after the Borrower has notified the Administrative Agent
of any intention by the Borrower to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy
of IRS Form 8886 or any successor form; and
(l) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative
Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and each Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
(through the Administrative Agent) that requests the Borrower to deliver such
paper copies until a written request to cease delivering paper copies is given
by the Administrative Agent or such Lender and (ii) the Borrower shall notify
(which may be by facsimile or electronic mail) the Administrative Agent of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
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6.03 Notices. Promptly notify the Administrative Agent:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of any
Loan Party or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between any Loan Party or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting any Loan Party or
any Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event that has resulted or could
reasonably be expected to result in a material liability for any Loan Party
or ERISA Affiliate;
(d) of any material change in accounting policies or financial
reporting practices by any Loan Party or any Subsidiary; and
(e) of the (A) occurrence of any Disposition of property or assets for
which the Borrower is required to make a mandatory repayment pursuant to
Section 2.06(b)(ii), (B) occurrence of any sale of capital stock or other
Equity Interests for which the Borrower is required to make a mandatory
repayment pursuant to Section 2.06(b)(iii), (C) incurrence or issuance of
any Indebtedness for which the Borrower is required to make a mandatory
repayment pursuant to Section 2.06(b)(iv) and (D) receipt of any
Extraordinary Receipt for which the Borrower is required to make a
mandatory repayment pursuant to Section 2.06(b)(v).
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
6.04 Payment of Obligations. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05 or with regards to the entities listed on Schedule 6.05;
provided, however, that the Borrower and its Subsidiaries may consummate any
merger or consolidation permitted under Section 7.04; (b) take all reasonable
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69
action to maintain all rights, privileges, permits, licenses and franchises
necessary or desirable in the normal conduct of its business, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
6.06 Maintenance of Properties. (a) Except as set forth in Sections
7.04 and 7.05, maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; (b) from time to time make or cause
to be made all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons. Each such policy of insurance requested by
the Administrative Agent shall name the Administrative Agent as the loss payee
or an additional insured, as applicable, thereunder for the ratable benefit of
the Lenders, and provide for not less than 30 days' prior notice to the
Administrative Agent of any material adverse modification, termination, lapse or
cancellation of such insurance.
6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 Books and Records. Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent
contractors of each Agent and each Lender at the sole cost and expense of such
Agent or Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however, that when an Event
of Default exists any Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
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6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for
general corporate purposes (including the Refinancing) not in contravention of
any Law or of any Loan Document.
6.12 Covenant to Guarantee Obligations and Give Security. Upon (x) the
request of the Administrative Agent following the occurrence and during the
continuance of a Default, (y) (1) the formation or acquisition of any new direct
or indirect Subsidiaries (other than Foreign Subsidiaries or Subsidiaries
subject to regulatory restrictions that prohibit the granting of liens or
guarantees pursuant to the Loan Documents) by any Loan Party or (2) the
occurrence of any event which causes the representation and warranty concerning
any Excluded Subsidiary set forth in Section 5.13 to cease to be true and
correct, or (z) the acquisition of any property by any Loan Party, and such
property, in the judgment of the Administrative Agent, shall not already be
subject to a perfected first priority security interest in favor of the
Administrative Agent for the benefit of the Secured Parties, then the Borrower
shall, in each case at the Borrower's expense:
(i) in connection with the formation or acquisition of a wholly owned
Subsidiary, within 30 days after such formation or acquisition, cause each
such Subsidiary, and cause each direct and indirect parent of such
Subsidiary (if it has not already done so), to duly execute and deliver to
the Administrative Agent a guaranty or guaranty supplement, in form and
substance satisfactory to the Administrative Agent, guaranteeing the other
Loan Parties' obligations under the Loan Documents;
(ii) in connection with the formation or acquisition of a Subsidiary,
deliver with the next quarterly Compliance Certificate to be delivered by
the Borrower pursuant to Section 6.02(b) following such formation or
acquisition, an updated Schedule 5.13 reflecting such formation or
acquisition;
(iii) within 30 days after such request, formation or acquisition,
furnish to the Administrative Agent, upon the request of the Administrative
Agent, a description of any additional acquired real and personal
properties of the Loan Parties and their respective Subsidiaries in detail
satisfactory to the Administrative Agent;
(iv) within 30 days after such request, formation or acquisition, duly
execute and deliver, and cause each such wholly owned Subsidiary and each
direct and indirect parent of such Subsidiary, whether or not such
Subsidiary is wholly owned, (if it has not already done so) to duly execute
and deliver, to the Administrative Agent mortgages, pledges, assignments,
Security Agreement Supplements, IP Security Agreement Supplements and other
security agreements, as specified by and in form and substance satisfactory
to the Administrative Agent, securing payment of all the Obligations of the
applicable Loan Party, such Subsidiary or such parent, as the case may be,
under the Loan Documents and constituting Liens on all such properties;
(v) within 30 days after such request, formation or acquisition, take,
and cause such wholly owned Subsidiary or such parent to take, whatever
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title
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71
documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments, Security Agreement Supplements, IP
Security Agreement Supplements and security agreements delivered pursuant
to this Section 6.12, enforceable against all third parties in accordance
with their terms;
(vi) within 60 days after such request, formation or acquisition,
deliver to the Administrative Agent, upon the request of the Administrative
Agent in its sole discretion, a signed copy of a favorable opinion,
addressed to the Administrative Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to the Administrative
Agent as to the matters contained in clauses (i), (iii) and (iv) above, as
to such guaranties, guaranty supplements, mortgages, pledges, assignments,
Security Agreement Supplements, IP Security Agreement Supplements and
security agreements being legal, valid and binding obligations of each Loan
Party party thereto enforceable in accordance with their terms, as to the
matters contained in clause (iv) above, as to such recordings, filings,
notices, endorsements and other actions being sufficient to create valid
perfected Liens on such properties, and as to such other matters as the
Administrative Agent may reasonably request;
(vii) as promptly as practicable after such request, formation or
acquisition, deliver, upon the request of the Administrative Agent in its
reasonable discretion, to the Administrative Agent with respect to each
parcel of real property owned or held by the entity that is the subject of
such request, formation or acquisition title reports, surveys and
engineering, soils and other reports, and environmental assessment reports,
each in scope, form and substance satisfactory to the Administrative Agent,
provided, however, that to the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly after the receipt
thereof, be delivered to the Administrative Agent;
(viii) upon the occurrence and during the continuance of an Event of
Default, promptly cause to be deposited any and all cash dividends paid or
payable to any Loan Party from any of its Subsidiaries from time to time
into a Cash Collateral Account, and with respect to all other dividends
paid or payable to any Loan Party from time to time, promptly execute and
deliver any and all further instruments and take all such other action as
the Administrative Agent may deem necessary or desirable in order to obtain
and maintain from and after the time such dividend is paid or payable a
perfected, first priority lien on and security interest in such dividends;
and
(ix) at any time and from time to time, promptly execute and deliver
any and all further instruments and documents and take all such other
action as the Administrative Agent may deem necessary or desirable in
obtaining the full benefits of, or in perfecting and preserving the Liens
of, such guaranties, mortgages, pledges, assignments, Security Agreement
Supplements, IP Security Agreement Supplements and security agreements in
favor of the Administrative Agent.
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6.13 Compliance with Environmental Laws. Comply, and cause all lessees
and other Persons operating or occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its operations
and properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
6.14 Preparation of Environmental Reports. Upon the occurrence and
during the continuance of a Default or other circumstances that may reasonably
be likely to have a Material Adverse Effect, at the request of the Required
Lenders, provide to the Lenders within 60 days after such request, at the
expense of the Borrower, an environmental site assessment report for any of its
properties described in such request, prepared by an environmental consulting
firm acceptable to the Administrative Agent, indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance, removal or
remedial action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will not
be provided within the time referred to above, the Administrative Agent may
retain an environmental consulting firm to prepare such report at the expense of
the Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary
that owns any property described in such request to grant at the time of such
request to the Administrative Agent, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter onto their respective properties to undertake such
an assessment.
6.15 Further Assurances. Promptly upon request by any Agent, or any
Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as any
Agent, or any Lender through the Administrative Agent, may reasonably require
from time to time in order to carry out more effectively the purposes of the
Loan Documents.
6.16 Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so, except, in any case, where
the failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.
6.17 Interest Rate Hedging. Maintain at all times, fixed interest rate
Swap Contracts and other fixed rate funded debt in form and substance and with
Persons reasonably
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acceptable to the Administrative Agent (with any Lender or Affiliate thereof
deemed acceptable to the Administrative Agent), covering a notional amount of
not less than 45% of Consolidated Funded Indebtedness excluding capital leases
and promissory notes existing on the Effective Date.
6.18 Lien Searches. Promptly following receipt of the acknowledgment
copy of any UCC financing statements filed in any applicable jurisdiction by or
on behalf of the Secured Parties, deliver to the Administrative Agent completed
requests for information listing such financing statement and all other
effective financing statements filed in such jurisdiction that name any Loan
Party as debtor, together with copies of such other financing statements.
6.19 Cash Collateral Accounts. (a) Maintain, and cause each of the
other Loan Parties to maintain, the cash management procedures described on
Schedule 6.19 hereto, (b) maintain, and cause each of the other Loan Parties to
maintain, all Cash Collateral Accounts with Bank of America or another
commercial bank located in the United States which has accepted the assignment
of such accounts to the Administrative Agent for the benefit of the Secured
Parties pursuant to the Security Agreement and (c) ensure no disbursements
(other than bank fees or charges related thereto) are made from accounts that
the Administrative Agent has agreed are not subject to account control
agreements in favor of the Administrative Agent, (the "Local Accounts"), except
for the daily transfer of funds described on Schedule 6.19.
6.20 Material Contracts. Perform and observe all the terms and
provisions of each Material Contract to be performed or observed by it, maintain
each such Material Contract in full force and effect, enforce each such Material
Contract in accordance with its terms, take all such action to such end as may
be from time to time requested by the Administrative Agent and, upon request of
the Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for action as
any Loan Party or any of its Subsidiaries is entitled to make under such
Material Contract, and cause each of its Subsidiaries to do so, except where
failure to do any of the foregoing is not likely to have a Material Adverse
Effect.
6.21 Conditions Subsequent to the Effective Date. (a) To the extent
not delivered prior to or on the Effective Date, within 60 days after the
Effective Date (which time period may be extended by an additional 120 days at
the sole discretion of the Administrative Agent), furnish to the Administrative
Agent deeds of trust, trust deeds and mortgages, in substantially the form of
Exhibit H hereto and covering the Mortgaged Properties (with such changes as may
be required for local law matters and otherwise in form and substance
satisfactory to the Administrative Agent) (together with each other mortgage
delivered pursuant to Section 6.12, in each case as amended, the "Mortgages"),
duly executed by the appropriate Loan Party, together with:
(i) evidence that the Mortgages have been duly executed,
acknowledged and delivered on or before such date and are in form suitable
for filing and recording in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to create a
valid first and subsisting Lien (subject to Liens permitted under the Loan
Documents) on the property described therein in favor of the
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Administrative Agent for the benefit of the Secured Parties and that all
filing and recording taxes and fees have been paid;
(ii) record owner and lien searches with respect to each of the
Mortgaged Properties;
(iii) an American Land Title Association/American Congress on
Surveying and Mapping form survey for the Rose Hills Property for which all
necessary fees (where applicable) have been paid, dated no more than 60
days after the day of the initial Credit Extension (or such later date
approved by the Administrative Agent in its sole discretion) certified to
the Administrative Agent in a manner satisfactory to the Administrative
Agent by a land surveyor duly registered and licensed in California and
reasonably acceptable to the Administrative Agent, showing all buildings
and other improvements, any off-site improvements, the location of any
easements, parking spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than
encroachments and other defects acceptable to the Administrative Agent;
(iv) an appraisal of each of the Mortgaged Properties, which
appraisals shall be from a Person acceptable to the Administrative Agent
and otherwise in form and substance satisfactory to the Administrative
Agent;
(v) a favorable opinion of each of the law firms listed in Part A
of Schedule 6.21(f), local counsel to the Loan Parties in the jurisdictions
in which the Mortgaged Properties are located, as set forth opposite their
respective names on such schedule, with respect to the enforceability and
perfection of the Mortgaged Properties and any related fixture filings
substantially in the form of Exhibit J-2 hereto; and
(vi) evidence that all other action that the Administrative Agent
may deem necessary or desirable in order to create valid first and
subsisting Liens on the property described in the Mortgages has been taken.
(b) To the extent not delivered prior to or on the Effective Date,
within 30 days after the Effective Date (which time period may be extended by an
additional 60 days at the sole discretion of the Administrative Agent):
(i) copies of the Assigned Agreements referred to in the Security
Agreement, together with a consent to such assignment, in substantially the
form of Exhibit C to the Security Agreement, duly executed by each party to
such Assigned Agreements other than the Loan Parties; and
(ii) to the extent requested by the Administrative Agent, duly
executed account control agreements in substantially the form of Exhibit B
to the Security Agreement for each of the deposit account and securities
accounts constituting part of the Account Collateral, together with legal
opinions from counsel to the Loan Parties with respect to perfection of
such Collateral in form and substance satisfactory to the Administrative
Agent.
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(c) To the extent not delivered prior to or on the Effective Date,
within 30 days after the Effective Date (which time period may be extended by an
additional 60 days at the sole discretion of the Administrative Agent):
(i) a favorable opinion of each of the law firms listed in Part B
of Schedule 6.21(f), local counsel to the Loan Parties in the jurisdictions
as set forth opposite their respective names on such Schedule, with respect
to corporate matters and perfection of the Collateral pledged pursuant to
the Security Agreement;
(ii) such documents and certifications as the Administrative
Agent may reasonably require to evidence that Alderwoods (Tennessee), Inc.
has paid all franchise taxes in the State of Tennessee and is in good
standing in the State of Tennessee; and
(iii) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each of the entities listed
on Schedule I hereto that are incorporated in the State of Pennsylvania are
in good standing in the State of Pennsylvania.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, or
sign or file or suffer to exist under the Uniform Commercial Code of any
jurisdiction a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign any accounts or other right to receive income, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 5.08(b)
and Liens reflected in the title search reports to be delivered pursuant to
Section 6.21(a)(ii) and any renewals or extensions thereof; provided that
the property covered thereby is not increased and the amount of
Indebtedness secured thereby not increased or the direct or any contingent
obligor changed and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.02(c)(B); provided, further,
that the Loan Parties shall (i) within 60 days after the Effective Date
(which time period may be extended by an additional 120 days at the sole
discretion of the Administrative Agent) take all actions necessary to
release the Liens covering the Mortgaged Properties reflected in the title
search reports referred to above as the Administrative Agent may request,
and (ii) deliver to the Administrative Agent at the end of each fiscal
quarter, an update of the status of and a summary of the actions taken by
the Loan Parties during the
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previous fiscal quarter to effect the release of such Liens listed on
Schedule 5.08(b) that the Administrative Agent may reasonably request.
(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from
the value of material property subject thereto or materially interfere with
the ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h) or securing appeal or other
surety bonds related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.02(c)(E);
provided that (i) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness, (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition and (iii)
with respect to capital leases, such Liens do not at any time extend to or
cover any Collateral or assets other than the assets subject to such
capital leases;
(j) the replacement, extension or renewal of any Lien permitted by
clause (i) above upon or in the same property theretofore subject thereto
or the replacement, extension or renewal (without increase in the amount or
change in any direct or contingent obligor) of the Indebtedness secured
thereby; and
(k) Liens arising as a result of a sale of assets by the Borrower or
any of its Subsidiaries pursuant to Section 7.05(h), provided that such
Liens shall cover only the assets sold and the proceeds thereof.
Alderwoods Credit Agreement
77
7.02 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) in the case of the Borrower:
(A) Indebtedness owed to a Guarantor, which Indebtedness (x)
shall constitute Pledged Debt, (y) shall be on terms acceptable to the
Administrative Agent and (z) shall be evidenced by promissory notes in
form and substance satisfactory to the Administrative Agent and such
promissory notes shall be pledged as security for the Obligations of
the holder thereof under the Loan Documents to which such holder is a
party and delivered to the Administrative Agent pursuant to the terms
of the Security Agreement; and
(B) Indebtedness evidenced by the Seven Year Notes and the
Subordinated Notes;
(b) in the case of any Guarantor of the Borrower, Indebtedness owed to
the Borrower or to a Guarantor, provided that, in each case, such
Indebtedness (x) shall constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall be evidenced by
promissory notes in form and substance satisfactory to the Administrative
Agent and such promissory notes shall be pledged as security for the
Obligations of the holder thereof under the Loan Documents to which such
holder is a party and delivered to the Administrative Agent pursuant to the
terms of the Security Agreement; and
(c) in the case of the Borrower and its Subsidiaries,
(A) Indebtedness under the Loan Documents;
(B) Indebtedness outstanding on the date hereof and listed on
Schedule 7.02 and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and the direct and
contingent obligors thereof shall not be changed, as a result of or in
connection with such refinancing, refunding, renewal or extension;
provided still further that the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if
any), and other material terms taken as a whole, of any such
extending, refunding or refinancing Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, are
no less favorable in any material respect to the Loan Parties or the
Lenders than the terms of any agreement or instrument governing the
Indebtedness being extended, refunded or refinanced and the interest
rate applicable to any such extending, refunding or refinancing
Indebtedness does not exceed the then applicable market interest rate;
Alderwoods Credit Agreement
78
(C) Guarantees of the Borrower or any Subsidiary in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any
wholly owned Subsidiary;
(D) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that
(i) such obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets,
or property held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person, and not for purposes
of speculation or taking a "market view;" and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to
the defaulting party;
(E) Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets
within the limitations set forth in Section 7.01(i); provided,
however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $10,000,000;
(F) unsecured Indebtedness in an aggregate principal amount not
to exceed $20,000,000 at any time outstanding; and
(G) Indebtedness incurred in connection with sales of accounts
receivable by the Borrower or any of its Subsidiaries permitted under
Section 7.05(h).
7.03 Investments. Make or hold any Investments, except:
(a) Investments in the form of Cash Equivalents;
(b) Investments of the Borrower in any Guarantor and Investments of
any Guarantor in the Borrower or in another Guarantor;
(c) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or
limit loss;
(d) Guarantees permitted by Section 7.02;
(e) Investments existing on the date hereof and set forth on Schedule
7.03(e);
(f) Investments consisting of intercompany debt permitted under
Section 7.02(a)(A) or 7.02(b);
Alderwoods Credit Agreement
79
(g) Investments by the Borrower in Swap Contracts permitted under
Section 7.02(c)(D);
(h) the purchase or other acquisition of all of the Equity Interests
in, or all or substantially all of the property and assets of, any Person
that, upon the consummation thereof, will be wholly owned directly by the
Borrower or one or more of its wholly owned Subsidiaries (including,
without limitation, as a result of a merger or consolidation); provided
that, with respect to each purchase or other acquisition made pursuant to
this Section 7.03(h):
(A) any such newly created or acquired Subsidiary shall comply
with the requirements of Section 6.12 (if applicable);
(B) the lines of business of the Person to be (or the property
and assets of which are to be) so purchased or otherwise acquired
shall be substantially similar lines of business as one or more of the
principal businesses of the Borrower and its Subsidiaries in the
ordinary course;
(C) such purchase or other acquisition shall not include or
result in any contingent liabilities that could reasonably be expected
to be material to the business, financial condition, operations or
prospects of the Borrower and its Subsidiaries, taken as a whole (as
determined in good faith by the board of directors (or the persons
performing similar functions) of the Borrower or such Subsidiary if
the board of directors is otherwise approving such transaction and, in
each other case, by a Responsible Officer);
(D) the total consideration (including, without limitation, the
fair market value of all Equity Interests issued or transferred to the
sellers thereof, earnouts and other contingent payment obligations to,
and the aggregate amounts paid or to be paid under noncompete,
consulting and other affiliated agreements with, the sellers thereof,
all write-downs of property and assets and reserves for liabilities
with respect thereto and all assumptions of debt, liabilities and
other obligations in connection therewith) paid by or on behalf of the
Borrower and its Subsidiaries for any such purchase or other
acquisition, when aggregated with the total consideration paid by or
on behalf of the Borrower and its Subsidiaries for all other purchases
and other acquisitions made by the Borrower and its Subsidiaries
pursuant to this Section 7.03(h), shall consist of (i) not more than
$10,000,000 in cash and (ii) capital stock of the Borrower with a fair
market value of not more than $10,000,000; provided that, if the
Consolidated Leverage Ratio of the Borrower and its Subsidiaries after
giving pro forma effect to any such Investment is less than 4:00:1:00,
such amount shall be increased by an additional $20,000,000 consisting
of (i) up to $10,000,000 in cash and (ii) capital stock of the
Borrower with a fair market value of up to $10,000,000;
(E) (1) immediately before and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall
have occurred and be continuing and (2) immediately after giving
effect to such purchase or
Alderwoods Credit Agreement
80
other acquisition, the Borrower and its Subsidiaries shall be in pro
forma compliance with all of the covenants set forth in Section 7.11,
such compliance to be determined on the basis of the financial
information most recently delivered to the Agents and the Lenders
pursuant to Section 6.01(a) or (b) as though such purchase or other
acquisition had been consummated as of the first day of the fiscal
period covered thereby; and
(F) the next quarterly Compliance Certificate of the Borrower
delivered pursuant to Section 6.02(b), following such purchase or
acquisition shall contain a certification of a Responsible Officer, in
form and substance reasonably satisfactory to the Administrative
Agent, that all of the requirements set forth in this clause (h) have
been satisfied on or prior to the consummation of such purchase or
other acquisition;
(i) Investments by Borrower with the Net Cash Proceeds from the sale
of Security Life Plan to recapitalize Mayflower National to the extent
permitted under Section 2.05(b)(ii);
(j) Investments by the Borrower and its Subsidiaries, including
non-Guarantors, not otherwise permitted under this Section 7.03 in an
aggregate amount not to exceed $10,000,000; provided that, with respect to
each Investment made pursuant to this Section 7.03(j):
(A) such Investment shall not include or result in any contingent
liabilities that could reasonably be expected to be material to the
business, financial condition, operations or prospects of the Borrower
and its Subsidiaries, taken as a whole (as determined in good faith by
the board of directors (or persons performing similar functions) of
the Borrower or such Subsidiary if the board of directors is otherwise
approving such transaction and, in each other case, by a Responsible
Officer);
(B) such Investment shall be in property and assets which are
part of, or in lines of business which are, substantially similar to
one or more of the principal businesses of the Borrower and its
Subsidiaries in the ordinary course;
(C) any determination of the amount of such Investment shall
include all cash and noncash consideration (including, without
limitation, the fair market value of all Equity Interests issued or
transferred to the sellers thereof, all indemnities, earnouts and
other contingent payment obligations to, and the aggregate amounts
paid or to be paid under noncompete, consulting and other affiliated
agreements with, the sellers thereof, all write-downs of property and
assets and reserves for liabilities with respect thereto and all
assumptions of debt, liabilities and other obligations in connection
therewith) paid by or on behalf of the Borrower and its Subsidiaries
in connection with such Investment; and
(D) (1) immediately before and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall
have occurred
Alderwoods Credit Agreement
81
and be continuing and (2) immediately after giving effect to such
purchase or other acquisition, the Borrower and its Subsidiaries shall
be in pro forma compliance with all of the covenants set forth in
Section 7.11, such compliance to be determined on the basis of the
financial information most recently delivered to the Administrative
Agent and the Lenders pursuant to Section 6.01(a) or (b) as though
such Investment had been consummated as of the first day of the fiscal
period covered thereby;
(k) Loans or advances to officers, employees or consultants of the
Borrower or any of its Subsidiaries for travel and moving expenses in the
ordinary course of business for bona fide business purposes of the Borrower
or any of its Subsidiaries;
(l) Other loans or advances to officers or employees of the Borrower
or any of its Subsidiaries in the ordinary course of business for
educational purposes not in excess of $1,000,000 in the aggregate at any
one time outstanding;
(m) Investments of funds received by the Borrower or any of its
Subsidiaries in the ordinary course of business, which funds are required
to be held in trust for the benefit of others by the Borrower or such
Subsidiary, as the case may be, and which funds do not constitute assets or
liabilities of the Borrower or such Subsidiary;
(n) Notes held by the Borrower or any Subsidiary that were obtained by
the Borrower or such Subsidiary in connection with Dispositions; and
(o) Investments in Subsidiaries other than Guarantors by other
Subsidiaries that are not Guarantors.
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or
more other Subsidiaries; provided that when any Guarantor is merging with
another Subsidiary, the Guarantor shall be the continuing or surviving
Person;
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; provided that if the transferor in such a transaction
is a Guarantor, then the transferee must either be the Borrower or a
Guarantor; and
(c) in connection with any acquisition permitted under Section 7.03,
any Subsidiary of the Borrower may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it;
provided that the Person surviving such merger shall be a wholly owned
Subsidiary of the Borrower and, to the extent that the Subsidiary so merged
or consolidated was a Guarantor, such surviving Person shall be a Guarantor
and shall comply with the requirements of Section 6.12;
Alderwoods Credit Agreement
82
provided, however, that in each case, immediately after giving effect
thereto, in the case of any such merger to which the Borrower is a party,
the Borrower is the surviving corporation.
7.05 Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory (including cemetery plots) in the
ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are
reasonably promptly applied to the purchase of assets useful in the
business of the Borrower or a Subsidiary;
(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly owned Subsidiary; provided that if the transferor of such property
is a Guarantor, the transferee thereof must either be the Borrower or a
Guarantor;
(e) Dispositions permitted by Section 7.04;
(f) the Dispositions of Discontinued Assets;
(g) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition,
(ii) the aggregate book value of all property Disposed of in reliance on
this clause (g) shall not exceed $35,000,000 in the aggregate (excluding
Dispositions of Discontinued Assets) and (iii) at least 75% of the purchase
price for such asset shall be paid to the Borrower or such Subsidiary
solely in cash or Cash Equivalents;
(h) the sale of accounts receivable by the Borrower or any of its
Subsidiaries in connection with the securitization thereof, which sale is
non-recourse to the extent customary in securitizations and in an aggregate
amount not to exceed $45,000,000;
(i) Dispositions of the Michigan Cemetery Notes; and
(j) Dispositions (or a series of related Dispositions) for which Net
Cash Proceeds received by the Borrower or such Subsidiary are less than
$50,000;
provided, however, that any Disposition pursuant to Section 7.05(a) through
Section 7.05(j) shall be for fair market value.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or issue or sell
Alderwoods Credit Agreement
83
any Equity Interests or accept any capital contributions, except that, so long
as no Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to the Borrower and
to wholly owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other Equity Interests of such Subsidiary
on a pro rata basis based on their relative ownership interests);
(b) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;
(c) except to the extent the Net Cash Proceeds thereof are required to
be applied to the prepayment of the Loans pursuant to Section 2.05(b)(iii),
the Borrower and each Subsidiary may purchase, redeem or otherwise acquire
shares of its common stock or other common Equity Interests with the
proceeds received from the substantially concurrent issue of new shares of
its common stock or other common Equity Interests;
(d) the Borrower may issue and sell shares of its common stock, so
long as the Net Cash Proceeds thereof are applied to the repayment of Loans
to the extent required by Section 2.05(b)(iii); and
(e) the Borrower may make regularly scheduled or required interest
payments, principal repayments or redemptions required by the terms of the
Subordinated Notes.
7.07 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
7.08 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate, provided that the foregoing restriction shall
not apply to transactions between or among Loan Parties.
7.09 Burdensome Agreements. Enter into or permit to exist any
Contractual Obligation (other than this Agreement, any other Loan Document or
any Related Document) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to or invest in the Borrower or any Guarantor, except for any agreement
in effect (A) on the date hereof or (B) at the time any Subsidiary becomes a
Subsidiary of the Borrower, so long as such agreement was not entered into
solely in contemplation of such Person becoming a Subsidiary of the Borrower,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Alderwoods Credit Agreement
84
Indebtedness permitted under Section 7.02(c)(E) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.
7.10 Use of Proceeds. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund Indebtedness originally incurred for such
purpose in violation of Regulation T, U or X issued by the FRB, provided,
however, that in no case shall the Borrower or any of its Subsidiaries purchase
margin stock if such purchase results in the Borrower or such Subsidiary
collectively exercising effective Control in the subject company whose stock is
being so purchased.
7.11 Financial Covenants. (a) Consolidated Interest Coverage Ratio.
Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal
quarter of the Borrower to be less than the ratio set forth below opposite such
fiscal quarter:
--------------------------------------------------------------------------------
Minimum
Consolidated
Interest
Coverage
Four Fiscal Quarters Ending Ratio
--------------------------------------------------------------------------------
Effective Date through fiscal quarter ending October 8, 2005 2.00:1.00
--------------------------------------------------------------------------------
October 9, 2005 through fiscal quarter ending October 7, 2006 2.25:1.00
--------------------------------------------------------------------------------
October 8, 2006 through fiscal quarter ending October 6, 2007 2.50:1.00
--------------------------------------------------------------------------------
Each fiscal quarter thereafter 2.75:1.00
--------------------------------------------------------------------------------
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio at any time during any period of four fiscal quarters of the Borrower set
forth below to be greater than the ratio set forth below opposite such period:
--------------------------------------------------------------------------------
Maximum
Consolidated
Four Fiscal Quarters Ending Leverage Ratio
--------------------------------------------------------------------------------
Effective Date through fiscal quarter ending March 27, 2004 5.50:1.00
--------------------------------------------------------------------------------
March 28, 2004 through fiscal quarter ending October 9, 2004 5.25:1.00
--------------------------------------------------------------------------------
October 10, 2004 through fiscal quarter ending January 1, 2005 5.00:1.00
--------------------------------------------------------------------------------
January 2, 2005 through fiscal quarter ending October 8, 2005 4.75:1.00
--------------------------------------------------------------------------------
Alderwoods Credit Agreement
85
--------------------------------------------------------------------------------
October 9, 2005 through fiscal quarter ending October 7, 2006 4.50:1.00
--------------------------------------------------------------------------------
October 8, 2006 through fiscal quarter ending October 6, 2007 4.00:1.00
--------------------------------------------------------------------------------
Each fiscal quarter thereafter 3.50:1.00
--------------------------------------------------------------------------------
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio at any time to be less than the ratio set forth
below for each period set forth below:
--------------------------------------------------------------------------------
Minimum
Consolidated Fixed
Charge Coverage
Four Fiscal Quarters Ending Ratio
--------------------------------------------------------------------------------
Effective Date and each fiscal quarter thereafter 1.00:1.00
--------------------------------------------------------------------------------
7.12 Capital Expenditures. Make or become legally obligated to make
any Capital Expenditure, except for Capital Expenditures in the ordinary course
of business not exceeding, in the aggregate for the Borrower and it Subsidiaries
during each fiscal year set forth below, the amount set forth opposite such
fiscal year:
Fiscal Year Amount
----------- ------------
2003 $35,000,000
2004 $35,000,000
2005 $35,000,000
2006 $35,000,000
2007 $35,000,000;
provided, however, that, if the Consolidated Leverage Ratio of the Borrower and
its Subsidiaries after giving pro forma effect to any such Capital Expenditure
is less than 4:00:1:00, the amount set forth above for fiscal years 2005 through
2007 shall be increased by an additional $5,000,000 in each such year; provided,
further, any amount up to $10,000,000 in each fiscal year of the Borrower and
$35,000,000 in the aggregate for all such fiscal years of the Borrower not
required to be prepaid pursuant to Section 2.05(b)(ii) may be used for Capital
Expenditures in addition to the amounts set forth above (collectively, the
"Total Capital Expenditures"); provided, further, that so long as no Default has
occurred and is continuing or would result from such expenditure, 50% of Total
Capital Expenditures, if not expended in the fiscal year for which it is
permitted above, may be carried over for expenditure in the next following
fiscal year (but not to succeeding years) (such amount, the "Capital Expenditure
Carryover Amount").
7.13 Cemetery Development. Make any expenditures for Cemetery
Development exceeding $10,000,000 in the aggregate for the Borrower and its
Subsidiaries during any fiscal year.
Alderwoods Credit Agreement
86
7.14 Amendments of Organization Documents. Amend any of its
Organization Documents in any manner that could reasonably be expected to be
materially adverse to the Secured Parties.
7.15 Accounting Changes. Make any change in (i) accounting policies or
reporting practices, except as required by or in conformity with GAAP, or (ii)
fiscal year.
7.16 Prepayments, Etc., of Indebtedness. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, except (i) the prepayment of the Credit Extensions in accordance
with the terms of this Agreement and (ii) regularly scheduled or required
repayments or redemptions of Indebtedness listed on Schedule 7.02, or amend,
modify or change in any manner any term or condition of any such Indebtedness
listed on Schedule 7.02 in any manner that could reasonably be expected to be
adverse to the Secured Parties.
7.17 Amendment, Etc., of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Related Document,
agree in any manner to any other amendment, modification or change of any term
or condition of any Related Document or take any other action in connection with
any Related Document that would impair the value of the interest or rights of
any Loan Party thereunder or that would impair the rights or interests of any
Agent or any Lender.
7.18 Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture.
7.19 Speculative Refinancings. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
7.20 Formation of Subsidiaries. Organize or invest in any new
Subsidiary except as permitted under Section 7.03(c).
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event
of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Loan
or any L/C Borrowing, or (ii) within three Business Days after the same
becomes due, any interest on any Loan or on any L/C Borrowing, or any
commitment or other fee due hereunder, or (iii) within five Business Days
after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or
Alderwoods Credit Agreement
87
(b) Specific Covenants. (i) The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05, 6.09, 6.10, 6.11, 6.12, 6.17, 6.18 or Article VII, (ii) any of
the Guarantors fails to perform or observe any term, covenant or agreement
contained in Sections 1 or 7 of the Guaranty or (iii) any of the Loan
Parties shall fail to perform or observe any term, covenant or agreement
contained in Sections 4, 5, 8, 10, or 12 of the Security Agreement or
Section 1.1(a) of the Mortgages; or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in Section 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and
such failure continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of
the Borrower or any other Loan Party herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made;
or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to
observe or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the
effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or
an offer to repurchase, prepay, defease or redeem such Indebtedness to be
made, prior to its stated maturity, or such Guarantee to become payable or
cash collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (A) any event of default under such Swap Contract
as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as defined in such Swap Contract) and, in either event, the
Swap Termination Value owed by the Loan Party or such Subsidiary as a
result thereof is greater than the Threshold Amount; provided that this
clause (e) shall not apply to Indebtedness (excluding the Seven Year Notes
and the Subordinated Notes) that becomes due (or for which an offer to
repurchase, prepay, defease or redeem such Indebtedness is required to be
made) as a result of a "due on sale" provision in such Indebtedness that is
limited to the specific property being sold so long as such Indebtedness is
paid when due; or
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(f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such
Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any
such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against
all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 days after its issue or levy;
or
(h) Judgments. There is entered against any Loan Party or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered
by independent third-party insurance as to which the insurer is rated at
least "A" by A.M. Best Company and does not dispute coverage), or (ii) any
one or more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B) there is a period of 30
consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of the Threshold Amount, or (ii) any Loan Party or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than
as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Loan
Party or any other Person contests in any manner the validity or
enforceability of any provision of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document
(unless released pursuant to the terms hereof or thereof); or
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(k) Change of Control. There occurs any Change of Control; or
(l) Collateral Document. Any Collateral Document after delivery
thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than
pursuant to the terms hereof or thereof) cease to create a valid and
perfected first priority (subject only to Liens permitted under the Loan
Documents) lien on and security interest in the Collateral purported to be
covered thereby.
8.02 Remedies upon Event of Default. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself, the other Agents and the Lenders all
rights and remedies available to it, the other Agents and the Lenders under
the Loan Documents or applicable Law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of any Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (other than principal and
interest) payable to the Agents in their capacities as such (including
Attorney Costs and amounts payable under Article III) ratably among them in
proportion to the amounts described in this clause First payable to them;
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Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs and amounts payable under
Article III), ratably among them in proportion to the amounts described in
this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among
the Lenders in proportion to the respective amounts described in this
clause Third payable to them;
Fourth, pro rata to (i) payment of that portion of the Obligations
constituting unpaid principal of the Loans, the Secured Hedge Agreements
and L/C Borrowings, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them and (ii)
the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit;
Fifth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable to
the Agents and the other Secured Parties on such date, ratably based upon
the respective aggregate amounts of all such Obligations owing to the
Agents and the other Secured Parties on such date; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied in
the order set forth above.
ARTICLE IX
AGENTS
9.01 Appointment and Authorization of Agents. (a) Each Lender hereby
irrevocably appoints, designates and authorizes each Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, nor shall any Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against any
Agent. Without limiting the generality of the foregoing sentence, the use of the
term "agent" herein and in the other Loan Documents with reference to any Agent
is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead, such
term is used merely as a matter of market custom, and is
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intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to the
Agents in this Article IX with respect to any acts taken or omissions suffered
by the L/C Issuer in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent" as used in
this Article IX and in the definition of "Agent-Related Person" included the L/C
Issuer with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the L/C Issuer.
(c) The Administrative Agent shall also act as the "collateral agent"
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, Swing Line Lender (if applicable), L/C Issuer (if applicable) and a
potential Hedge Bank) hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as "collateral agent" (and any co-agents, sub-agents
and attorneys-in-fact appointed by the Administrative Agent pursuant to Section
9.02 for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Administrative Agent),
shall be entitled to the benefits of all provisions of this Article IX
(including, without limitation, Section 9.07, as though such co-agents,
sub-agents and attorneys-in-fact were the "collateral agent" under the Loan
Documents) as if set forth in full herein with respect thereto.
9.02 Delegation of Duties. Any Agent may execute any of its duties
under this Agreement or any other Loan Document (including for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof) granted
under the Collateral Documents or of exercising any rights and remedies
thereunder at the direction of the Administrative Agent) by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
No Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
9.03 Liability of Agents. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by any
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or the perfection or priority of any Lien
or security interest created or purported to be created under the Collateral
Documents, or for any failure of
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any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 Reliance by Agents. (a) Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation reasonably believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Loan Party), independent accountants and other experts selected by such
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders (or such greater number of Lenders as may be expressly required
hereby in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Effective Date
specifying its objection thereto.
9.05 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless such Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default and stating that such notice is a "notice of
default." The Administrative Agent will notify the Lenders and the Borrower of
its receipt of any such notice. The Administrative Agent shall take such action
with respect to such Default as may be directed by the Required Lenders in
accordance with Article VIII; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable or in the
best interest of the Lenders.
9.06 Credit Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any
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matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to each Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower hereunder.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by any Agent herein, such Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
9.07 Indemnification of Agents. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
further, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section; provided further, that to the extent the L/C Issuer is
entitled to indemnification under this Section 9.07 solely in connection with
its role as L/C Issuer, only the Revolving Credit Lenders shall be required to
indemnify the L/C Issuer in accordance with this Section 9.07. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Liabilities, this Section 9.07 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person. Without
limitation of the foregoing, each Lender shall reimburse each Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that such Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive termination of the
Aggregate Commitments, the payment of all other Obligations and the resignation
of such Agent.
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9.08 Agents in Their Individual Capacities. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire Equity Interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Loan Parties and their respective Affiliates as though Bank of America were
not the Administrative Agent or the L/C Issuer hereunder and without notice to
or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise such rights and powers as though it were not the Administrative
Agent or the L/C Issuer, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
9.09 Successor Agents. Any Agent may resign as Agent upon 30 days'
notice to the Lenders; provided that any such resignation by Bank of America
shall also constitute its resignation as L/C Issuer and Swing Line Lender. If
any Agent resigns under this Agreement, the Required Lenders shall, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), at all times other than during the existence of an Event of Default
appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
such Agent, such Agent may appoint, after consulting with the Lenders and,
unless an Event of Default then exists, obtaining the consent of the Borrower
(such consent not to be unreasonably withheld or delayed), a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, the Person acting as such successor agent shall succeed to all
the rights, powers and duties of the retiring Agent, L/C Issuer and Swing Line
Lender and the respective terms "Administrative Agent," "L/C Issuer" and "Swing
Line Lender" shall mean such successor agent, Letter of Credit issuer and swing
line lender, and the retiring Agent's appointment, powers and duties as Agent
shall be terminated and the retiring L/C Issuer's and Swing Line Lender's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring L/C Issuer or Swing Line Lender
or any other Lender, other than the obligation of the successor L/C Issuer to
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
IX and Sections 10.04 and 10.05 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.
If no successor agent has accepted appointment as Agent by the date which is 30
days following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of such Agent, L/C Issuer or Swing Line Lender
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Upon the acceptance of any appointment as Agent
hereunder by a successor and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Agent shall thereupon succeed to and become
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vested with all the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent's resignation
hereunder as an Agent, the provisions of this Article IX shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as an Agent.
9.10 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of
the Lenders and the Agents (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the
Agents and their respective agents and counsel and all other amounts due
the Lenders and the Agents under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Agents and
their respective agents and counsel, and any other amounts due the Agents under
Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
9.11 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable) and the
expiration; termination
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or Cash Collateralization of all Letters of Credit, (ii) that is sold or to
be sold as part of or in connection with any sale permitted hereunder or
under any other Loan Document, or (iii) subject to Section 10.01, if
approved, authorized or ratified in writing by the Required Lenders;
(b) to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder; and
(c) to release any Liens under the Loan Documents on any Discontinued
Asset in connection with the Disposition of such Discontinued Asset
permitted by Section 7.05(f) and, in the case of any Subsidiary that is a
Discontinued Asset, release such Subsidiary from its obligations under the
Guaranty and Security Agreement, if any, and release any Liens under the
Loan Documents on the stock or assets of such Subsidiary in connection with
a Disposition thereof.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
its interest in particular types or items of property, or to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.11.
In each case as specified in this Section 9.11, the Administrative Agent will,
at the Borrower's expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the Guaranty, in each case in accordance with the terms of the Loan
Documents and this Section 9.11.
9.12 Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "book manager,"
"lead manager," "arranger," "lead arranger" or "co-arranger" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than, in the case of such Lenders, those applicable to all Lenders as
such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
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(a) waive any condition set forth in Section 4.01(a), or, in the case
of the initial Credit Extension, Section 4.02, without the written consent
of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent
of such Lender;
(c) postpone any date scheduled for any payment of principal or
interest under Section 2.07 or 2.08, or any date fixed by the
Administrative Agent for the payment of fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (v) of the second
proviso to this Section 10.01) any fees or other amounts payable hereunder
or under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive any obligation of the Borrower to pay interest at the
Default Rate or (ii) to amend any financial covenant hereunder (or any
defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any
fee payable hereunder;
(e) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of Section
2.05(b) or 2.06(b), respectively, in any manner that materially and
adversely affects the Lenders under such Facilities without the written
consent of each such Lender directly affected thereby;
(f) change any provision of this Section 10.01 or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;
(g) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent
of each Lender;
(h) release any Guarantor, without the written consent of each Lender,
except where such release is expressly permitted by the Loan Documents or
as otherwise set forth in Section 9.11(b); or
(i) amend, waive or consent to change any provision of Section 2.13 or
Section 8.03, without the written consent of the Required Lenders and, if
the Lenders under any Facility are directly affected by such amendment,
waiver or consent, Lenders holding more than 50% of the aggregate
Commitments under such Facility;
and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of
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the L/C Issuer under this Agreement or any Letter of Credit Application relating
to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver
or consent shall, unless in writing and signed by the Swing Line Lender in
addition to the Lenders required above, affect the rights or duties of the Swing
Line Lender under this Agreement; (iii) no amendment, waiver or consent shall,
unless in writing and signed by an Agent in addition to the Lenders required
above, affect the rights or duties of, or any fees or other amounts payable to,
such Agent under this Agreement or any other Loan Document; (iv) Section
10.07(h) may not be amended, waived or otherwise modified without the consent of
each Granting Lender all or any part of whose Loans are being funded by an SPC
at the time of such amendment, waiver or other modification; and (v) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.
10.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder or any other Loan Document shall
be in writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile number
or (subject to Section 10.02(c)) electronic mail address, and all notices and
other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.02 or
to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the
other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the L/C Issuer and the
Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone or facsimile transmission answerback
confirmation; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of Section 10.02(c)), when delivered if a Business Day
and otherwise on the next subsequent Business Day; provided, however, that
notices and other communications to the Administrative Agent, the L/C Issuer and
the Swing Line Lender pursuant to Article II shall not be effective until
actually received by such Person. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
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(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Agents and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites shall be deemed effective only to distribute routine
communications, such as financial statements and other information as provided
in Section 6.02, and to distribute Loan Documents for execution by the parties
thereto, and as between the parties hereto, shall not be deemed effective for
any other purpose.
(d) Reliance by Agents and Lenders. The Agents and the Lenders shall
be entitled to rely and act upon any notices (including telephonic Committed
Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with any Agent may be recorded by such Agent, and each of
the parties hereto hereby consents to such recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender or any
Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder or any other Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided, and provided under each other
Loan Document, are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation, syndication and
execution of this Agreement and the other Loan Documents, and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse each Agent and each Lender for all costs and expenses incurred in
connection with the enforcement of any rights or remedies under this Agreement
or the other Loan Documents (including all such costs and expenses incurred
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs. The foregoing costs and expenses shall
include, without limitation (a) all search, filing, recording, title insurance
and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses reasonably incurred by any Agent
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and (b) the cost of independent public accountants and other outside experts
retained by any Agent or, upon the occurrence of an Event of Default, retained
by any Lender. All amounts due under this Section 10.04 shall be payable within
ten Business Days after demand therefore, when such demand includes a reasonably
detailed invoice with respect to the amounts claimed. The agreements in this
Section shall survive the termination of the Aggregate Commitments and repayment
of all other Obligations. If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it hereunder or under any Loan Document,
including, without limitation, Attorney Costs and indemnities, such amount may
be paid on behalf of such Loan Party by any Agent or any Lender, in its sole
discretion.
10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors or officers (or their equivalents), employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) any Commitment,
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or any officer,
director or employee of such Indemnitee. No Indemnitee shall be liable for any
damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Effective Date). In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 10.05 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnitee or any other Person,
whether or not any Indemnitee is otherwise a party thereto and whether or
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not any of the transactions contemplated hereunder or under any of the other
Loan Documents is consummated. All amounts due under this Section 10.05 shall be
payable within ten Business Days after demand therefor, when such demand
includes a reasonably detailed invoice with respect to the amounts claimed. The
agreements in this Section shall survive the resignation of any Agent, the
replacement of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.
10.06 Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by any Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Rate from time to time in effect.
10.07 Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of Section 10.07(b), (ii) by
way of participation in accordance with the provisions of Section 10.07(d),
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 10.07(f), or (iv) to an SPC in accordance with the
provisions of Section 10.07(h) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this Section 10.07(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that (i) except in the case
of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund that is an Affiliate
of the assigning Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment
is not then in effect, the principal outstanding balance of the Loan of the
assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date, shall not be
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less than $5,000,000, in the case of any assignment in respect of the Revolving
Credit Facility, or $1,000,000, in the case of any assignment in respect of the
Term Facility (the foregoing amounts being applicable to the assignment to or
from related Approved Funds, in either case, in the aggregate), unless each of
the Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not (x) apply to rights in respect
of Swing Line Loans or (y) prohibit any Lender from assigning all or a portion
of its rights and obligations among separate Facilities on a non-pro rata basis;
(iii) any assignment of a Revolving Credit Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender (such consent not
to be unreasonably withheld or delayed) unless the Person that is the proposed
assignee is itself a Revolving Credit Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500; provided, however, that (a) such fee shall not be required for
assignments to Approved Funds that are Affiliates of such assigning Lender and
(b) such fee shall be payable only once in connection with simultaneous
assignments by a Lender and/or its related Approved Funds to one or more related
assignees that are not Affiliates of such assigning Lender. Subject to
acceptance and recording thereof by the Administrative Agent pursuant to Section
10.07(c), from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 10.07(d).
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be, absent manifest error, conclusive, and the Borrower, the
Agents and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
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(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to Section
10.07(e), the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 (but subject to Section 3.06) to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.07(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.09 as though it were a
Lender; provided such Participant agrees to be subject to Section 2.13 as though
it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent, (ii) in the case of any
assignment of a Revolving Commitment, the L/C Issuer and the Swing Line
Lender, and (iii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
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"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.04), (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including indemnification obligations and the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior debt of any SPC, it will not institute against, or join any other Person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or any portion of its right to receive payment with respect to any Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or Guarantee or credit or liquidity
enhancement to such SPC.
(i) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitments and Loans pursuant to
Section 10.07(b), Bank of America may, (i) upon 30 days' notice to the Borrower
and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the
Borrower, resign as Swing Line Lender. In the event of any such resignation as
L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall
retain all the rights and obligations of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its
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resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).
10.08 Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its and its Affiliates' directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable Laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder; (f) subject to an agreement containing provisions substantially the
same as those of this Section 10.08, to (i) any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of the Loan Parties; (g) with the
consent of the Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 10.08 or (ii)
becomes available to the any Agents or any Lender on a nonconfidential basis
from a source other than the Borrower; (i) to any state, Federal or foreign
authority or examiner (including the National Association of Insurance
Commissioners or any other similar organization) regulating any Lender; or (j)
to any rating agency when required by it (it being understood that, prior to any
such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Information relating to the Loan Parties received by it
from such Lender). In addition, the Agents and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Commitments, and
the Credit Extensions. For the purposes of this Section, "Information" means all
information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is available to any Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party;
provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential or is of the type that a reasonable person would
believe is confidential or proprietary in nature. Any Person required to
maintain the confidentiality of Information as provided in this Section 10.08
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, "Information" shall not
include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the "tax treatment" and
"tax structure" (in each case,
Alderwoods Credit Agreement
106
within the meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent or such Lender
relating to such tax treatment and tax structure; provided that with respect to
any document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of the Loans,
Letters of Credit and transactions contemplated hereby.
10.09 Setoff. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender and each of their respective Affiliates is authorized at
any time and from time to time, without prior notice to the Borrower or any
other Loan Party, any such notice being waived by the Borrower (on its own
behalf and on behalf of each Loan Party) to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other Indebtedness at any time
owing by, such Lender to or for the credit or the account of the respective Loan
Parties against any and all Obligations owing to such Lender hereunder or under
any other Loan Document, now or hereafter existing, irrespective of whether or
not such Agent or such Lender shall have made demand under this Agreement or any
other Loan Document and although such Obligations may be contingent or unmatured
or denominated in a currency different from that of the applicable deposit or
Indebtedness. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Administrative Agent
and each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) that the Administrative Agent, such Lender and their
respective Affiliates may have.
10.10 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If any Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by an Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
10.11 Counterparts. This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
by telecopier of an executed counterpart of a signature page to this Agreement
and each other Loan Document shall be effective as delivery of an original
executed counterpart of this Agreement and such other Loan Document. The Agents
may also require that any such documents and signatures delivered
Alderwoods Credit Agreement
107
by telecopier be confirmed by a manually-signed original thereof; provided that
the failure to request or deliver the same shall not limit the effectiveness of
any document or signature delivered by telecopier.
10.12 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
10.13 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.14 Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 Tax Forms. (a) (i) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code,
and in the case of a Foreign Lender claiming such an exemption under Section
881(c) of the Code, a certificate that establishes in writing to the
Administrative Agent that such Foreign Lender is not (i) a "bank" as defined in
Section 881(c)(3)(A) of the Code, (ii) a 10-percent shareholder within the
Alderwoods Credit Agreement
108
meaning of Section 871(h)(3)(B) of the Code, and (iii) a controlled foreign
corporation related to the Borrower with the meaning of Section 864(d) of the
Code. Thereafter and from time to time, each such Foreign Lender shall (A)
promptly submit to the Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) as may then
be available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes required
to be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable Law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.
Alderwoods Credit Agreement
109
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this Section 10.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is
a "United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section 10.15, and costs and
expenses (including Attorney Costs) of the Administrative Agent. The obligation
of the Lenders under this Section 10.15 shall survive the termination of the
Aggregate Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.
10.16 Governing Law. (a) This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
(b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
sitting in New York City or of the United States for the Southern District of
such State, and by execution and delivery of this Agreement, the Borrower, each
Agent and each Lender consents, for itself and in respect of its property, to
the non-exclusive jurisdiction of those courts. The Borrower, each Agent and
each Lender hereby irrevocably waives any objection, including any objection to
the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of any Loan Document or other document related thereto.
The Borrower, each Agent and each Lender waives personal service of any summons,
complaint or other process, which may be made by any other means permitted by
the law of such State.
10.17 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall have
been notified by each Lender, Swing Line Lender and the L/C Issuer that each
such Lender, Swing Line Lender and the L/C Issuer has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, each Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
10.18 Waiver of Right to Trial by Jury. Each party to this Agreement
hereby expressly waives any right to trial by jury of any claim, demand, action
or cause of action arising
Alderwoods Credit Agreement
110
under any Loan Documents or in any way connected with or related or incidental
to the dealings of the parties hereto or any of them with respect to any Loan
Document, or the transactions related thereto, in each case whether now existing
or hereafter arising, and whether founded in contract or tort or otherwise; and
each party hereby agrees and consents that any such claim, demand, action or
cause of action shall be decided by court trial without a jury, and that any
party to this agreement may file an original counterpart or a copy of this
Section 10.18 with any court as written evidence of the consent of the
signatories hereto to the waiver of their right to trial by jury.
[Remainder of Page Intentionally Left Blank]
Alderwoods Credit Agreement
111
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
ALDERWOODS GROUP, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Alderwoods Credit Agreement
S-1
BANK OF AMERICA, N.A., as
Administrative Agent
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Alderwoods Credit Agreement
S-2
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Alderwoods Credit Agreement
S-3
[OTHER LENDERS]
Alderwoods Credit Agreement
S-4
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
September __, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Alderwoods Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.
The undersigned hereby requests (select one):
[_] A Borrowing of Loans [_] A conversion or continuation of Loans
1. On _______________________________________ (a Business Day).
2. In the amount of $_________________________.
3. Comprised of ___________________________________.
[Type of Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of _______
months.
The Committed Borrowing requested herein complies with the proviso to
the first sentence of Section 2.01(b) of the Agreement.
ALDERWOODS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Committed Loan Notice
EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Swing Line Lender
and Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
September ___, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Alderwoods Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.
The undersigned hereby requests a Swing Line Loan:
1. On _______________________________________ (a Business Day).
2. In the amount of $_________________________.
The Swing Line Borrowing requested herein complies with the
requirements of the provisos to the first sentence of Section 2.04(a) of the
Agreement.
ALDERWOODS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Swing Line Loan Notice
EXHIBIT C-1
FORM OF TERM NOTE
$_____________ __________, 2003
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to _____________________ or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of the Term Loan set forth above from time to time made by the
Lender to the Borrower under that certain Credit Agreement, dated as of
September __, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among the Borrower, the Lenders
from time to time party thereto, and Bank of America, N.A., as Administrative
Agent.
The Borrower promises to pay interest on the unpaid principal amount
of the Term Loan from the date of such Loan until such principal amount is paid
in full, at such interest rates and at such times as provided in the Agreement.
All payments of principal and interest shall be made to the Administrative Agent
for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Term Note is one of the Term Notes referred to in the Agreement,
is entitled to the benefits thereof and may be prepaid in whole or in part
subject to the terms and conditions provided therein. This Term Note is also
entitled to the benefits of the Guaranty and is secured by the Collateral. Upon
the occurrence and continuation of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Term Note
shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement. The Term Loan made by the Lender shall be evidenced
by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Term Note and
endorse thereon the date, amount and maturity of its Loans and payments with
respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Term Note.
Term Note
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ALDERWOODS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Term Note
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
End of Principal or Principal
Type of Amount of Interest Interest Paid Balance This Notation
Date Loan Made Loan Made Period This Date Date Made By
----------------------------------------------------------------------------
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
Term Note
EXHIBIT C-2
FORM OF REVOLVING CREDIT NOTE
___________
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to _____________________ or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of each Revolving Credit Loan from time to time made by the
Lender to the Borrower under that certain Credit Agreement, dated as of
September __, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among the Borrower, the Lenders
from time to time party thereto, and Bank of America, N.A., as Administrative
Agent.
The Borrower promises to pay interest on the unpaid principal amount
of each Revolving Credit Loan from the date of such Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. Except as otherwise provided in Section 2.04(f) of the Agreement
with respect to Swing Line Loans, all payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent's Office. If any amount
is not paid in full when due hereunder, such unpaid amount shall bear interest,
to be paid upon demand, from the due date thereof until the date of actual
payment (and before as well as after judgment) computed at the per annum rate
set forth in the Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein. This Revolving Credit Note is also entitled to the benefits of the
Guaranty and is secured by the Collateral. Upon the occurrence and continuation
of one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Revolving Credit Note shall become, or may be
declared to be, immediately due and payable all as provided in the Agreement.
Revolving Credit Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business.
The Lender may also attach schedules to this Revolving Credit Note and endorse
thereon the date, amount and maturity of its Revolving Credit Loans and payments
with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Revolving Credit Note.
Revolving Credit Note
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ALDERWOODS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Revolving Credit Note
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
End of Principal or Principal
Type of Amount of Interest Interest Paid Balance This Notation
Date Loan Made Loan Made Period This Date Date Made By
----------------------------------------------------------------------------
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____ _____
Revolving Credit Note
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ________,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
September ___, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Alderwoods Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _________________________________________ of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant or independent chartered accountant
required by such section.
[Use following paragraph 1 for fiscal quarter-end financial
statements]
1. Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
[select one:]
Compliance Certificate
[to the best knowledge of the undersigned during such fiscal period,
the Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it, and no Default has occurred and is continuing.]
--or--
[the following covenants or conditions have not been performed or
observed and the following is a list of each such Default and its nature and
status:]
4. The representations and warranties of the Borrower contained in
Article V of the Agreement, or which are contained in any document furnished at
any time under or in connection with the Loan Documents, are true and correct on
and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements in
connection with which this Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ________________________, ______________.
ALDERWOODS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Compliance Certificate
For the Quarter/Year ended ___________________ ("Statement Date")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. Section 7.11 (a) - Consolidated Interest Coverage Ratio.
A. Consolidated EBITDA for four consecutive fiscal quarters
ending on above date ("Subject Period"):
1. Consolidated Net Income for Subject Period: $______
2. Consolidated Interest Charges (including all non-cash
items calculated in accordance with GAAP) for Subject
Period: $______
3. Provision for income taxes for Subject Period: $______
4. Depreciation expenses for Subject Period: $______
5. Amortization expenses for Subject Period: $______
6. Extraordinary non-recurring losses for Subject Period: $______
7. Non-cash losses or non-cash charges for Subject Period: $______
8. Write-downs and write-offs(1): $______
- minus -
9. Extraordinary non-recurring gains for Subject Period: $______
10. Non-cash items increasing Consolidated Net Income for
Subject Period: $______
11. Consolidated EBITDA (Lines I.A.1 + 2 + 3 + 4 + 5 + 6 +
7 + 8 - (9 + 10)): $______
B. Consolidated Interest Charges for Subject Period:
1. Cash items treated as interest in accordance with GAAP
other than any such items that are capitalized and
deferred or amortized during such period (including
rent expense under capitalized leases treated as
interest) $______
C. Consolidated Interest Coverage Ratio (Line I.A.11 /
Line I.B.1)(2): ____ to 1
----------
(1) Not to exceed $10,000,000 for the last two fiscal quarters of 2003 or
any fiscal year thereafter.
Compliance Certificate
Minimum required:
Minimum
Consolidated
Interest Coverage
Four Fiscal Quarters Ending Ratio
-------------------------------------- -----------------
Effective Date through fiscal quarter
ending October 8, 2005 2.00:1.00
October 9, 2005 through fiscal quarter
ending October 7, 2006 2.25:1.00
October 8, 2006 through fiscal quarter
ending October 6, 2007 2.50:1.00
each fiscal quarter thereafter 2.75:1.00
II. Section 7.11 (b) - Consolidated Leverage Ratio.
A. Consolidated Funded Indebtedness at Statement Date:
1. Outstanding principal amount of all obligations for
borrowed money $______
2. All purchase money Indebtedness $______
3. Obligations in respect of the deferred price of
property or services $______
4. Attributable Indebtedness in respect of leases and
Synthetic Lease Obligations $______
5. Without duplication, all Guarantees with respect to
Indebtedness described in 1, 2, 3, and 4 above of
Persons other than the Borrower and its Subsidiaries $______
6. All recourse Indebtedness of the types described in 1,
2, 3, 4, and 5 above of any partnership or joint
venture in which the Borrower or a Subsidiary is a
general partner or joint venturer $______
7. Consolidated Funded Indebtedness (Line IIA.1+2+3+4+5+6) $______
B Consolidated EBITDA for Subject Period (Line I.A.11 above): $______
C. Consolidated Leverage Ratio (Line II.A.7 / Line II.B): ____ to 1
Maximum permitted:
----------
(2) For any calculation to be made with respect to the first three fiscal
quarters beginning with the quarter ending December 27, 2003, the
amount of Consolidated Interest Charges shall be determined based on
an Annualized Amount.
Compliance Certificate
Maximum
Consolidated
Four Fiscal Quarters Ending Leverage Ratio
-------------------------------------- --------------
Effective Date through fiscal quarter
ending March 27, 2004 5.50:1.00
March 28, 2004 through fiscal quarter
ending October 9, 2004 5.25:1.00
October 10, 2004 through December 31,
2004 5.00:1.00
January 1, 2005 through fiscal quarter
ending October 8, 2005 4.75:1.00
October 9, 2005 through fiscal quarter
ending October 7, 2006 4.50:1.00
October 8, 2006 through fiscal quarter
ending October 6, 2007 4.00:1.00
each fiscal quarter thereafter 3.50:1.00
III. Section 7.11(c) - Consolidated Fixed Charge Coverage Ratio
A. Consolidated EBITDA for Subject Period (Line I.A.11 above): $______
-minus-
B. Capital Expenditures for Subject Period: $______
C. Consolidated Interest Charges for Subject Period payable in
cash (Line I.B.1 above): $______
D. Scheduled principal payments or redemptions for Subject
Period $______
E. Cash Restricted Payments for Subject Period $______
F. Consolidated Fixed Charge Coverage Ratio ([Line III.A - Line
III.B] / [Line III.C + Line III.D + Line III.E]): _______
Minimum required:
Minimum
Consolidated Fixed
Charge Coverage
Four Fiscal Quarters Ending Ratio
------------------------------ ------------------
Effective Date and each fiscal
quarter thereafter 1.00:1.00
Compliance Certificate
IV. Section 7.12 - Capital Expenditures.
A. 50% of Capital Expenditures that could have been made during
prior fiscal year but which were not made: $______
B. Amount of asset sale proceeds not required to be prepaid:(3) $______
C. Maximum permitted Capital Expenditures
$35,000,000(4) + Line IV.A + Line IV.B): $______
D. Actual Capital Expenditures made during fiscal year to date: $______
V. Section 7.13 - Cemetery Development
A. Aggregate permitted expenditures for Cemetery Development
during any fiscal year (LESS THAN OR EQUAL TO $10,000,000): $______
B. Actual expenditures for Cemetery Development made during
fiscal year to date: $______
VI. Section 7.02(c)(E) - Indebtedness in respect of capital leases and
Synthetic Lease Obligations
A. Aggregate permitted Indebtedness for capital leases,
Synthetic Lease Obligations and purchase money obligations
for fixed or capital assets (LESS THAN OR EQUAL TO
$10,000,000): $______
B. Actual Indebtedness for capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or
capital assets outstanding: $______
VII. Section 7.02(c)(F) - Unsecured Indebtedness
A. Aggregate permitted unsecured Indebtedness
(LESS THAN OR EQUAL TO $20,000,000): $______
B. Actual unsecured Indebtedness outstanding to date: $______
----------
(3) Not to exceed $10,000,000 per fiscal year or $35,000,000 in aggregate
for all fiscal years of the Borrower.
(4) For fiscal year 2005 through 2007, if the Consolidated Leverage Ratio
is less than 4.00:1.00, then $40,000,000.
Compliance Certificate
VIII. Section 7.03(h) - Acquisitions
A. Aggregate permitted acquisition consideration
(LESS THAN OR EQUAL TO $10,000,000 in cash and capital
stock of the Borrower with a fair market value of
LESS THAN OR EQUAL TO $10,000,000)(5) $______
B. Actual acquisition consideration paid: $______
IX. Section 7.03(j) - Unspecified Investments
A. Aggregate permitted unspecified Investments
(LESS THAN OR EQUAL TO $10,000,000): $______
B. Actual unspecified Investments: $______
X. Section 7.05(g) - Unspecified Dispositions
A. Aggregate permitted unspecified Dispositions (aggregate book
value of property Disposed must be LESS THAN OR EQUAL TO
$35,000,000)(6): $______
B. Actual unspecified Dispositions made to date: $______
XI. Section 7.05(h) - Sales of Accounts Receivable
A. Aggregate accounts receivable permitted for sale
(LESS THAN OR EQUAL TO $45,000,000): $______
B. Actual accounts receivable sold to date: $______
----------
(5) If Consolidated Leverage Ratio after giving effect to any such
acquisition is less than 4.00:1.00, these amounts shall be increased
by an additional $20,000,000 consisting of up to $10,000,000 in cash
and capital stock of the Borrower with a fair market value of up to
$10,000,000.
(6) At least 75% of the purchase price paid to Borrower or its Subsidiary
must be paid solely in cash or Cash Equivalents.
Compliance Certificate
XII. Section 2.05(b)(ii) - Reinvestment of Net Cash Proceeds
A. Aggregate Net Cash Proceeds from Dispositions (other than
Dispositions permitted by Section 7.05(a), (b), (c), (d) or
(h)) during fiscal quarter to date: $______
Aggregate Net Cash Proceeds from Dispositions (other than
Dispositions permitted by Section 7.05(a), (b), (c), (d) or
(h)) during fiscal year to date: $______
B. Actual Net Cash Proceeds reinvested during fiscal quarter to
date pursuant to Section 2.05(b)(ii)(3): $______
Description:___________________________________________
Actual Net Cash Proceeds reinvested during fiscal year to
date pursuant to Section 2.05(b)(ii)(3): $______
Description____________________________________________
C. Definitive Agreements entered into for future reinvestment
of Net Cash Proceeds pursuant to Section 2.05(b)(ii)(3)
Description:__________________________________________
D. Net Cash Proceeds not reinvested during fiscal quarter to
date pursuant to Section 2.05(b)(ii)(3): $______
Description:___________________________________________
Net Cash Proceeds not reinvested during fiscal year to date
pursuant to Section 2.05(b)(ii)(3): $______
Description:__________________________________________
Compliance Certificate
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [______] (the "Assignor") and [______] (the "Assignee"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (the "Credit Agreement"), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex 1 attached hereto are hereby agreed to and incorporated
herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit, Guarantees and Swing Line
Loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the "Assigned Interest").
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an
Affiliate/Approved Fund of [_____]]
3. Borrower(s): ______________________________
4. Administrative Agent: Bank of America, N.A., as the administrative agent
under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of September __, 2003
among Alderwoods Group, Inc., the Lenders party thereto
and Bank of America, N.A., as Administrative Agent.
Assignment and Assumption
6. Assigned Interest:
------------------------------------------------------------------------------
Aggregate
Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders* Assigned* Commitment/Loans(7)
------------------------------------------------------------------------------
_______________ $________________ $_______________ ______________%
------------------------------------------------------------------------------
_______________ $________________ $_______________ ______________%
------------------------------------------------------------------------------
_______________ $________________ $_______________ ______________%
------------------------------------------------------------------------------
[7. Trade Date: __________________](8)
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby
agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
----------
(7) Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
(8) To be completed if the Assignor and the Assignee intend that the
minimum assignment amount is to be determined as of the Trade Date.
Assignment and Assumption
[Consented to and](9) Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By:
---------------------------------
Title:
[Consented to:](10)
By:
---------------------------------
Title:
----------
(9) To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
(10) To be added only if the consent of the Borrower and/or other parties
(e.g. Swing Line Lender, L/C Issuer) is required by the terms of the
Credit Agreement.
Assignment and Assumption
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
Credit Agreement, dated as of September __, 2003 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the "Agreement;" the terms defined therein being used herein as therein
defined), among Alderwoods Group, Inc., a Delaware corporation (the "Borrower"),
the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem
Assignment and Assumption
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) 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.
2. Payments. [From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee whether
such amounts have accrued prior to or on or after the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.] [From and after
the Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding
the Effective Date and to the Assignee for amounts which have accrued from and
after the Effective Date.](11)
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
----------
(11) Administrative Agent to select first or second alternative.
Assignment and Assumption
EXHIBIT F
FORM OF GUARANTY
Guaranty
EXHIBIT G
FORM OF SECURITY AGREEMENT
Security Agreement
EXHIBIT H
FORM OF MORTGAGE
Mortgage
EXHIBIT I
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
Intellectual property Security Agreement
EXHIBIT J-1
OPINION MATTERS -
COUNSEL TO LOAN PARTIES
Opinion Matters - Counsel to Loan Parties
EXHIBIT J-2
OPINION MATTERS -
LOCAL COUNSEL
Opinion Matters - Local Counsel
