AMENDMENT NUMBER TWO
DATED AS OF APRIL 30, 1997
TO
$121,300,000 AMENDED AND RESTATED 1994 MEIP CREDIT AGREEMENT
DATED AS OF JUNE 14, 1994
AND
AMENDED AND RESTATED AS OF MAY 15, 1996
THIS AMENDMENT NUMBER TWO (this "AMENDMENT") is executed as of the
30th day of April, 1997, among XXXXXX MANAGEMENT INVESTMENT CORPORATION
("LMIC"), in its capacity as Agent for XXXXXX GROUP INTERNATIONAL, INC. (the
"BORROWER" or "LGII"), THE XXXXXX GROUP INC. ("TLGI"), the BANKS party to the
Credit Agreement (collectively, the "BANKS"), and WACHOVIA BANK OF GEORGIA,
N.A., as agent (the "AGENT").
W I T N E S S E T H:
WHEREAS, LMIC, acting in its capacity as agent for the Borrower, TLGI,
the Banks and the Agent entered into a $121,300,000 Amended and Restated 1994
MEIP Credit Agreement dated as of June 14, 1994, as amended and restated as of
May 15, 1996, and as further amended by Amendment Number One dated as of
December 2, 1996 (the "CREDIT AGREEMENT;" terms defined in the Credit Agreement
being used herein as therein defined unless otherwise defined herein);
WHEREAS, TLGI and LGII have each guaranteed the Obligations of the
Borrower under the Credit Agreement; and
WHEREAS, the Borrower, TLGI, LMIC, and LGII (collectively, the "CREDIT
PARTIES") have requested that the Banks make additional amendments to the Credit
Agreement and the Banks have agreed to do so, but only to the extent and subject
to the limitations set forth herein;
NOW, THEREFORE, for good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. AMENDMENTS. The Credit Agreement shall be amended as
follows:
(a) The definition of the term "FINANCE SUBSIDIARY" contained in
Section 1.01 of the Credit Agreement is hereby amended to read as
follows:
""FINANCE SUBSIDIARY" means any captive finance
Subsidiary of TLGI that engages in no material activity
other than (i) buying accounts receivable or other financial
assets of any Affiliate of TLGI, (ii) making loans or
otherwise extending credit to any such Affiliates, (iii)
succeeding to any or all of the business of LFW or Eagle or
otherwise engaging in finance activities similar to the
finance activities engaged in by LFW or Eagle from time to
time, or (iv) making Investments in other Finance
Subsidiaries."
(b) Section 5.03 of the Credit Agreement is hereby amended to read as
follows:
"SECTION 5.03 INTEREST CHARGES COVERAGE. TLGI will at
all times maintain (a) a ratio of EBITDA for the most
recently ended period of four consecutive fiscal quarters of
TLGI to Consolidated Interest Charges for such period of
four consecutive fiscal quarters of not less than 2.75 to
1.00 and (b) a ratio of EBITDA for the most recently ended
fiscal quarter to Consolidated Interest Charges for such
fiscal quarter of not less than 1.50 to 1.00. For purposes
of this Section 5.03, any costs and expenses incurred by
TLGI in contesting the 1996 tender offer for TLGI by Service
Corporation International, Inc., which are reflected in the
audited financial statements of TLGI as at December 31, 1996
which have been delivered to the Agent and the Banks, up to
an aggregate amount not to exceed $18,678,000 for all such
costs and expenses, shall be excluded from the calculation
of Consolidated Net Income in determining EBITDA for the
respective periods in which such costs were incurred."
(c) The proviso contained at the end of Section 5.08 of the Credit
Agreement is hereby amended to read as follows:
"; PROVIDED, HOWEVER, that notwithstanding any provision to
the contrary herein, none of TLGI, LGII or any Subsidiary of
either shall make any Investment in any Person effectively
located outside of the United States or Canada if after
giving effect to such Investment, the aggregate amount of
Investments of TLGI, LGII or any Subsidiary of either in any
Persons effectively located outside of the United States or
Canada, excluding Investments in Finance Subsidiaries which
are Wholly-Owned Subsidiaries, would exceed an amount equal
to 5% of Consolidated Net Worth. For the purpose of any
computation required to be made pursuant to this Agreement,
Investments shall be valued at lower of the cost or Fair
Value thereof as of the date of computation."
(d) Section 5.10 of the Credit Agreement is hereby amended to add the
following sentence at the end thereof:
"Nothing in this Section 5.10 shall prohibit any merger,
amalgamation, or consolidation which is permitted by Section
5.12."
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(e) Section 5.29(b) of the Credit Agreement is hereby amended to read
as follows:
"(b) Except as set out in clauses (i) and (ii) below or
as otherwise consented to by the Agent in its sole
discretion, TLGI and LGII will, and will cause each
Subsidiary (other than a Canadian Subsidiary), the shares or
other equity interests of which are Pledged Shares under the
Collateral Trust Agreement, to take any and all actions
necessary to ensure that there are no restrictions on a
transfer of such Pledged Shares pursuant to the due exercise
of the Trustee's powers under the Collateral Trust
Agreement, except with respect to any and all restrictions
under applicable law. The foregoing sentence does not apply
to:
(i) the interests of TLGI, LGII or any Pledgor Subsidiary
in any limited partnership or limited liability company
where the restriction is required to preserve the tax
status of the entity; and
(ii) the shares listed in Part I of SCHEDULE 4 hereto."
(f) Section 5.30(e) of the Credit Agreement is hereby amended to read
as follows:
"(e) such Subsidiary has no material assets other than
(i) Indebtedness owed to it by TLGI or LGII or an Affiliate
of TLGI, (ii) Investments in other Finance Subsidiaries
which are Wholly-Owned Subsidiaries and (iii) the accounts
receivable and other financial assets described in the
foregoing clause (d), and"
Section 2. REAFFIRMATION OF GUARANTIES. The Credit Parties (a) consent
to the terms and provisions of this Amendment provided for herein, (b) reaffirm
their obligations under their respective Guaranties, and (c) confirm that their
respective Guaranties remain in full force and effect with respect to the Credit
Agreement notwithstanding the waiver and amendment provided for herein.
Section 3. EFFECTIVENESS. This Amendment shall become effective only
after the Agent shall have received one or more counterparts of this Amendment,
in form and substance satisfactory to the Agent and its counsel, duly executed
by the Credit Parties, the Agent and the Required Banks.
Section 4. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each of
the Credit Parties hereby represents and warrants that as of the date of its
execution of this Amendment and the date of its effectiveness, in each case
after giving effect to the waiver and amendment provided for herein:
(a) There exists no Default or Event of Default under the Credit
Agreement;
(b) The representations and warranties contained Article IV of the Credit
Agreement are true and correct as of such dates, except to the extent any such
representation or warranty is stated to
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relate solely to an earlier date, in which case such representation or
warranty shall be true and correct on and as of such earlier date; and
(c) No default, unmatured default or similar event exists under any
agreement, instrument or other document evidencing or related to Debt of any
Credit Party or any Subsidiary thereof.
Section 5. EFFECT. Except as otherwise expressly provided herein, the
Credit Agreement is and shall continue in full force and effect and is hereby
ratified and confirmed.
Section 6. GOVERNING LAW. THIS AMENDMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF GEORGIA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
Section 7. SEVERABILITY. Each provision of this Amendment shall be
severable from every other provision of this Amendment for the purpose of
determining the legal enforceability of any provision hereof, and the
unenforceability of one or more provisions of this Amendment in one jurisdiction
shall not have the effect of rendering such provision or provisions
unenforceable in any other jurisdiction.
Section 8. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
XXXXXX MANAGEMENT INVESTMENT
CORPORATION, IN ITS CAPACITY AS AGENT FOR
XXXXXX GROUP INTERNATIONAL, INC., AS
BORROWER
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
XXXXXX GROUP INTERNATIONAL, INC.,
AS GUARANTOR
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
THE XXXXXX GROUP INC.
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
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WACHOVIA BANK OF GEORGIA, N.A.,
INDIVIDUALLY AND AS AGENT
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
ROYAL BANK OF CANADA
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
BANK OF MONTREAL
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
STAR BANK, N.A.
By:_______________________________________
Print Name:_______________________________
Title:____________________________________
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