EXHIBIT 10.30
EXECUTION COPY
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CREDIT FACILITY AGREEMENT
DATED AS OF OCTOBER 9, 1997
AMONG
JPS TEXTILE GROUP, INC.
JPS CONVERTER AND INDUSTRIAL CORP.
JPS ELASTOMERICS CORP.
THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF
AND
CITIBANK, N.A.
AS AGENT
AND
NATIONSBANK, N.A.
AS CO-AGENT
TABLE OF CONTENTS
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Section Page
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ARTICLE I
Definitions...........................................................2
1.01. Certain Defined Terms..........................................2
1.02. Computation of Time Periods...................................35
1.03. Accounting Terms..............................................35
1.04. Premises Incorporated by Reference............................35
1.05. Other Definitional Provisions.................................36
ARTICLE II
Amounts and Terms of Loans...........................................36
2.01. Promise to Repay..............................................36
2.02. Evidence of Indebtedness......................................36
2.03. Revolving Credit Facility.....................................36
2.04. Interest on the Revolving Loans...............................46
2.05. Fees..........................................................49
2.06. Prepayments...................................................50
2.07. Payments; Collection of Accounts..............................51
2.08. Special Provisions Governing Eurodollar Rate Loans............55
2.09. Increased Capital.............................................58
2.10. Authorized Officers of the Borrowing Subsidiaries.............59
ARTICLE III
Conditions to Loans and Letters of Credit............................59
3.01. Conditions Precedent to the Effectiveness of this Agreement...59
3.02. Conditions Precedent to All Revolving Loans and Letters
of Credit..................................................66
ARTICLE IV
Representations and Warranties.......................................67
4.01. Representations and Warranties on the Effective Date..........67
4.02. Subsequent Funding Representations and Warranties.............75
ARTICLE V
Reporting Covenants..................................................75
5.01. Financial Statements; Required Notices........................75
5.02. Environmental Notices.........................................80
5.03. Appraisals....................................................81
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ARTICLE VI
Affirmative Covenants................................................81
6.01. Corporate Existence, etc......................................81
6.02. Corporate Powers, etc.........................................81
6.03. Compliance with Laws, etc.....................................81
6.04. Payment of Taxes and Claims...................................82
6.05. Maintenance of Properties; Insurance..........................82
6.06. Inspection of Property; Books and Records; Discussions........82
6.07. Litigation, Claims, etc.......................................83
6.08. Labor Disputes................................................83
6.09. Maintenance of Licenses, Permits, etc.........................83
6.10. Required Interest Rate Contracts..............................83
6.11. Receipt of Certain Funds......................................84
6.12. Landlord Waivers and Bailee Waivers; Notice...................84
6.13. Liens on Assets After Payment of Permitted Financings.........84
6.14. Updated Appraisals............................................84
6.15. Pledge of Stock of Direct Subsidiaries of the Company.........85
ARTICLE VII
Negative Covenants...................................................85
7.01. Indebtedness..................................................85
7.02. Sales of Assets; Liens........................................86
7.03. Investments...................................................88
7.04. Accommodation Obligations.....................................88
7.05. Restricted Junior Payments....................................89
7.06. Transactions with Shareholders and Affiliates.................89
7.07. Restriction on Fundamental Changes............................89
7.08. ERISA.........................................................90
7.09. Operating Leases..............................................91
7.10. Sales and Leasebacks..........................................91
7.11. Covenant with Respect to JPS Capital..........................91
7.12. Amendment of Charter or By-Laws...............................91
7.13. Disposal of Subsidiary Stock..................................92
7.14. Issuance of Capital Stock.....................................92
7.15. Margin Regulations............................................92
7.16. Amendment of Certain Documents................................93
7.17. Cancellation of Debt; Prepayment..............................93
7.18. Environmental Liabilities.....................................93
ARTICLE VIII
Financial Covenants..................................................93
8.01. Minimum EBITDA................................................94
8.02. Minimum Interest Coverage Ratio...............................94
8.03. Minimum Fixed Charge Coverage Ratio...........................94
8.04. Maximum Capital Expenditures..................................95
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ARTICLE IX
Events of Default; Rights and Remedies...............................96
9.01. Events of Default.............................................96
9.02. Rights and Remedies...........................................99
ARTICLE X
The Agent; The Co-Agent.............................................100
10.01. Appointment.................................................100
10.02. Nature of Duties............................................101
10.03. Rights, Exculpation, etc....................................101
10.04. Reliance....................................................102
10.05. Indemnification.............................................102
10.06. The Agent and the Co-Agent Individually.....................102
10.07. Successor Agent; Resignation of Agent.......................103
10.08. Collateral Matters..........................................103
10.09. Relations Among Lenders.....................................105
ARTICLE XI
Miscellaneous.......................................................105
11.01. Concerning the Collateral and the Collateral Documents......105
11.02. Assignments and Participations..............................106
11.03. Expenses....................................................108
11.04. Indemnity...................................................108
11.05. Change in Accounting Principles.............................109
11.06. Setoff......................................................110
11.07. Ratable Sharing.............................................110
11.08. Amendments and Waivers......................................111
11.09. Independence of Covenants...................................111
11.10. Notices.....................................................112
11.11. Survival of Warranties and Agreements.......................112
11.12. Failure or Indulgence Not Waiver; Remedies Cumulative.......112
11.13. Termination.................................................112
11.14. Marshaling; Recourse to Security; Payments Set Aside........112
11.15. Severability................................................113
11.16. Headings....................................................113
11.17. Governing Law...............................................113
11.18. Limitation of Liability.....................................113
11.19. Successors and Assigns......................................113
11.20. Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial...................................113
11.21. Counterparts; Effectiveness; Inconsistencies................114
11.22. Performance of Obligations..................................114
11.23. Company as Agent for Borrowing Subsidiaries.................115
11.24. Construction................................................115
11.25. Entire Agreement............................................115
11.26. Releases....................................................115
Signature Pages.....................................................S-1
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EXHIBITS
Exhibit 1 -- Form of Assignment and Acceptance
Exhibit 2 -- Form of Compliance Certificate
Exhibit 3 -- Form of Notice of Borrowing
Exhibit 4 -- Form of Notice of Conversion/Continuation
Exhibit 5 -- Form of Note Evidencing Revolving Loans
Exhibit 6-A -- Form of Collection Account Agreement
Exhibit 6-B -- Form of Blocked Account Agreement
Exhibit 7 -- Form of Amendatory Agreement
Exhibit 8 -- Form of Officer's Solvency Certificate
Exhibit 9 -- Form of Officer's No Default Certificate
Exhibit 10 -- Form of Borrowing Base Certificate
Exhibit 11 -- Form of Request for Release of Receivables
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SCHEDULES
Schedule 1.01-A -- Real Property
Schedule 1.01-B -- Permitted Existing Accommodation Obligations
Schedule 1.01-C -- Permitted Existing Indebtedness
Schedule 1.01-D -- Permitted Existing Investments
Schedule 1.01-E -- Permitted Existing Liens
Schedule 4.01(c) -- Subsidiaries of the Company
Schedule 4.01(e) -- Conflict with Contractual Obligations or Requirements
of Law
Schedule 4.01(k) -- Litigation
Schedule 4.01(l) -- Certain Events
Schedule 4.01(t) -- Environmental Matters
Schedule 4.01(u) -- ERISA
Schedule 4.01(z) -- Joint Ventures
Schedule 4.01(aa) -- Bank Accounts
Schedule 6.05 -- Insurance Policies and Programs
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CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT dated as of October 9, 1997 (as
amended, supplemented or modified from time to time, this "Agreement") among JPS
TEXTILE GROUP, INC., a Delaware corporation (the "Company"), JPS CONVERTER AND
INDUSTRIAL CORP., a Delaware corporation ("JCIC"), and JPS ELASTOMERICS CORP., a
Delaware corporation ("JEC") (JCIC and JEC being collectively referred to herein
as the "Borrowing Subsidiaries"), the FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (collectively referred to herein, together with their
respective successors and assigns, as the "Lenders" and individually as a
"Lender"), CITIBANK, N.A. ("Citibank"), in its separate capacity as agent and
collateral agent for the Lenders hereunder (in such capacity, the "Agent"),
NATIONSBANK, N.A., in its separate capacity as co-agent for the Lenders
hereunder (in such capacity, the "Co-Agent"), amends and restates that certain
Fourth Amended and Restated Credit Agreement dated as of June 24, 1994, as
amended (the "Existing Credit Agreement"), among the Company, the Borrowing
Subsidiaries, the Senior Lenders party thereto (the "Existing Lenders"),
Citibank, as agent and administrative agent for the Existing Lenders (the
"Existing Agent") and General Electric Capital Corporation, as co-agent and
collateral agent for the Existing Lenders (the "Existing Collateral Agent").
W I T N E S S E T H:
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WHEREAS, on June 26, 1997 the Company and JPS Capital Corp.
commenced a pre-petition solicitation of votes for the acceptance or rejection,
as the case may be, by the holders of the Subordinated Indebtedness and the
Senior Preferred Stock (as such terms are defined in the Existing Credit
Agreement) of the Plan of Reorganization (as defined below);
WHEREAS, on August 1, 1997 the Company commenced a case under
Chapter 11 of the Bankruptcy Code in order to confirm the Plan of
Reorganization;
WHEREAS, on September 9, 1997, the Bankruptcy Court (as
defined below) entered the Confirmation Order (as defined below);
WHEREAS, the Existing Credit Agreement is scheduled to
terminate on the earlier of November 1, 1997 and the effective date of the Plan
of Reorganization (the "Original Scheduled Termination Date");
WHEREAS, it is a condition precedent to the effectiveness of
the Plan of Reorganization that the Company and the Borrowing Subsidiaries shall
have executed an agreement for a working capital facility on terms reasonably
satisfactory to the Creditors' Committee (as defined in the Plan of
Reorganization);
WHEREAS, the Company and the Borrowing Subsidiaries have
requested the Agent and the Lenders to amend the Existing Credit Agreement to
provide such working capital facility;
WHEREAS, such amendment would provide, among other things, for
(i) an increase in the Revolving Credit Facility from a maximum amount of
$118,000,000 to a maximum
amount of $135,000,000, (ii) an extension of the Revolving Credit Termination
Date from the Original Scheduled Termination Date to the fifth anniversary of
the Effective Date (as defined below), and (iii) other amendments, all as more
fully described herein;
WHEREAS, the Company, the Borrowing Subsidiaries, the Lenders
and the Agent have agreed to amend and restate the Existing Credit Agreement to
provide for such amendments on the terms set forth in this Agreement, which
Agreement shall become effective upon satisfaction of certain conditions
precedent set forth herein;
WHEREAS, effective immediately prior to the Effective Date
referred to below, the Existing Collateral Agent assigned to the Agent all of
its rights and obligations under the Existing Credit Agreement and the Loan
Documents referred to therein and all Existing Lenders assigned to one or more
Lenders all or a portion of their respective rights and obligations under the
Existing Credit Agreement and said Loan Documents;
WHEREAS, effective on the Effective Date, the Company, the
Borrowing Subsidiaries, the Lenders and the Agent have agreed that the Co-Agent
shall be a party hereto; and
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or evidence payment of all or any of such
obligations and liabilities, that this Agreement amend and restate in its
entirety the Existing Credit Agreement, and that from and after the date hereof
the Existing Credit Agreement be of no further force or effect except as to
evidence the incurrence of the "Obligations" thereunder and the representations
and warranties made thereunder;
NOW, THEREFORE, in consideration of the above premises the
Company, the Borrowing Subsidiaries, the Lenders, the Agent and the Co-Agent
hereby agree as follows:
ARTICLE I
Definitions
1.01. Certain Defined Terms.
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The following terms used in this Agreement shall have the
following meanings (such meanings to be applicable, except to the extent
otherwise indicated in a definition of a particular term, both to the singular
and the plural forms of the terms defined):
"Accommodation Obligation", as applied to any Person, shall
mean any contractual obligation, contingent or otherwise, of that Person with
respect to any Indebtedness or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in
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the ordinary course of business), co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including Contractual Obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make
payment other than for value received.
"Affiliate", as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the Securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise.
"Agent" shall mean Citibank, in its capacity as agent and
collateral agent for the Lenders hereunder and shall include any successor Agent
appointed pursuant to Section 10.07.
"Agreement" shall have the meaning ascribed to such term in
the preamble hereto, including the Exhibits and Schedules, as the same may be
amended, supplemented or otherwise modified from time to time.
"Amendatory Agreement" shall mean the Amendatory Agreement
dated as of the Effective Date among the Borrowing Subsidiaries, JPS Auto, JCC,
International Fabrics and the Agent, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Applicable Margin" means at all times during the applicable
periods set forth below, (i) in the case of Base Rate Loans, the applicable rate
per annum set forth below under the heading "Base Rate Margin" and (ii) in the
case of Eurodollar Rate Loans, the applicable rate per annum set forth below
under the heading "Eurodollar Rate Margin":
LEVERAGE RATIO BASE RATE MARGIN EURODOLLAR RATE
MARGIN
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greater or equal to 3.25 to 1 0.25% 1.75%
greater or equal to 2.75 to 1 but less than 3.25 to 1 0% 1.50%
greater or equal to 2.25 to 1 but less than 2.75 to 1 0% 1.25%
greater or equal to 1.75 to 1 but less than 2.25 to 1 0% 1.00%
greater than 1.75 to 1 0% 0.75%
3
The Leverage Ratio used to compute the Applicable Margin following the Effective
Date shall be the Leverage Ratio for the Leverage Ratio Period covered by the
Compliance Certificate most recently delivered by the Loan Parties to the Agent
pursuant to Section 5.01(d)(ii); changes in the Applicable Margin resulting from
a change in the Leverage Ratio shall become effective as to all Loans upon
delivery by the Loan Parties to the Agent of a new Compliance Certificate
pursuant to Section 5.01(d)(ii). Notwithstanding anything to the contrary set
forth in this Agreement (including the then effective Leverage Ratio), the
Applicable Margin (x) in respect of Base Rate Loans shall be 0% per annum and
(y) in respect of Eurodollar Rate Loans shall be 1.5% per annum, in each case
for the period commencing on the Effective Date and ending on the date that the
Loan Parties deliver the Compliance Certificate in respect of the Company's
second full fiscal quarter after the Effective Date. If the Loan Parties shall
fail to deliver a Compliance Certificate within the time required pursuant to
Section 5.01(d)(ii), the Applicable Margin from and including the first day
after such Compliance Certificate was required to be delivered to, but not
including, the date the Loan Parties deliver to the Agent such Compliance
Certificate shall conclusively equal the highest Applicable Margin set forth
above.
"APB 16" shall mean Accounting Principles Board Opinion No.
16 as in effect at the time that any adjustment required thereunder is to be
made on the balance sheet of a Person.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit 1 (with blanks appropriately filled in)
delivered to the Agent in connection with an assignment of a Lender's interest
under this Agreement pursuant to Section 11.02.
"Bankruptcy Code" shall mean title 11 of the United States
Code (11 U.S.C. ss. 101 et seq.), as amended from time to time, or any successor
statute.
"Bankruptcy Court" shall mean the bankruptcy court or other
court exercising competent jurisdiction over the Case or a particular proceeding
in the Case, as the case may be.
"Base Rate" shall mean, for any period, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate per annum
shall at all times be equal to the highest of:
(i) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter
of one percent (1/4 of 1%) or, if there is no nearest one-quarter of one percent
(1/4 of 1%), to the next higher one-quarter of one percent (1/4 of 1%)) of (A)
one-half of one percent (1/2 of 1%) per annum, plus (B) the rate obtained by
dividing (I) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average (adjusted
to the basis of a year of
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365 or 366 days, as the case may be) being determined weekly by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and published
by, the Federal Reserve Bank of New York, or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of recognized
standing selected by Citibank by (II) a percentage equal to one hundred percent
(100%) minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including, but
not limited to, any marginal reserve requirement) for Citibank in respect of
liabilities consisting of or including (among other liabilities) three-month
U.S. dollar non-personal time deposits in the United States, plus (C) the
average during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. Dollar deposits of Citibank in the United States; and
(iii) the sum of one-half of one percent (1/2 of 1%)
plus the Federal Funds Rate then in effect.
"Base Rate Loans" shall mean all Revolving Loans outstanding
which bear interest at a rate determined by reference to the Base Rate as
provided in Section 2.04(a)(i).
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the
Company or an ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Blocked Account" shall mean any lock box or deposit account
maintained by a Loan Party or a Pledgor and in the name of such Loan Party or
Pledgor, as the case may be, and the Agent at a Collecting Bank, in the case of
the Borrowing Subsidiaries, and at a Blocked Account Bank, in the case of the
Company and Pledgors, to which proceeds of Collateral or, in the case of the
Company, Unrestricted Proceeds may be deposited from time to time.
"Blocked Account Agreement" shall mean an agreement in
substantially the form of Exhibit 6-B and otherwise in form and substance
satisfactory to the Agent, executed by the Company or a Pledgor, as the case may
be, a Blocked Account Bank and the Agent.
"Blocked Account Bank" shall mean a bank selected by a Pledgor
or the Company that (a) has been confirmed by the Agent not to be in uncertain
financial condition and (b) has executed a Blocked Account Agreement.
"Borrowing" shall mean, except as otherwise provided in
Section 2.08(e)(ii), a borrowing consisting of Loans of the same type made on
the same day by the Lenders.
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"Borrowing Base" shall mean at any time, with respect to any
Borrowing Subsidiary, an amount equal to the sum of (i) up to ninety percent
(90%) of the Net Face Amount of Eligible Receivables of such Borrowing
Subsidiary at such time, (ii) the sum of (A) up to fifty- five percent (55%) of
Eligible Yarn Inventory of such Borrowing Subsidiary at such time, (B) up to
sixty percent (60%) of Eligible Raw Materials of such Borrowing Subsidiary at
such time, (C) up to thirty-five percent (35%) of Eligible Work in Process of
such Borrowing Subsidiary at such time, and (D) up to sixty percent (60%) of
Eligible Finished Goods of such Borrowing Subsidiary at such time and (iii) such
Borrowing Subsidiary's Fixed Asset Share of the Fixed Asset Portion in effect at
such time.
"Borrowing Subsidiary" shall have the meaning ascribed to such
term in the preamble hereto.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York, or is a day on
which banking institutions located in such state are required or authorized by
law or other governmental action to close and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Eurodollar Rate,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
during that period and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of the Company and its
Subsidiaries) by the Company and its Subsidiaries during such period that, in
conformity with GAAP, are required to be included in or reflected by the
property, plant or equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Company and its Subsidiaries (including
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by the Company or its Subsidiaries to the extent of the gross
amount of such purchase price less the book value of the equipment being traded
in at such time), but excluding expenditures (a) made in connection with (i) the
replacement or restoration of assets, to the extent reimbursed or financed from
insurance proceeds paid on account of the loss of or damage to the assets being
replaced or restored, or from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being replaced and (ii) Permitted
Acquisitions, or (b) made with Unrestricted Proceeds. For purposes of the
definition of Fixed Charge Coverage Ratio and Section 8.04, in the event any
Permitted Additional Investment in excess of $1,000,000 is made in accordance
with the definition of such term, Capital Expenditures shall include the amount
of such Permitted Additional Investment (whether or not such amount would
otherwise be included in Capital Expenditures).
"Capital Lease" as applied to any Person, shall mean any lease
of any property (whether real, personal, or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
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"Carpet Guaranty" shall mean the Amended and Restated Guaranty
dated as of March 18, 1993, as amended, executed by JCC, pursuant to which JCC
has guaranteed all the Obligations of each Borrowing Subsidiary, as the same may
be further amended, supplemented or otherwise modified from time to time.
"Carpet Security Agreement" shall mean the Security Agreement
dated as of November 16, 1995, as amended, between JCC and the Agent, as the
same may be further amended, supplemented or otherwise modified from time to
time.
"Case" shall mean the case commenced by the Company on August
1, 1997 under chapter 11 of the Bankruptcy Code.
"Cash Collateral Account" shall mean the interest bearing
account at Citibank's offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Account No. 4060-4538 into which cash collateral shall be deposited. The Cash
Collateral Account shall be under the sole dominion and control of the Agent,
provided that all amounts deposited therein shall be held by the Agent for the
benefit of the Agent, the Lenders and the Issuing Bank.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by an agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one (1) year after the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within ninety (90) days after the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either Standard & Poor's Corporation or
Xxxxx'x Investors Service, Inc. (or, if at any time neither Standard & Poor's
Corporation nor Xxxxx'x Investors Service, Inc. shall be rating such
obligations, then from such other nationally recognized rating services
acceptable to the Agent) and not listed in Credit Watch published by Standard &
Poor's Corporation; (iii) commercial paper, other than commercial paper issued
by the Company or any of its Affiliates, maturing no more than ninety (90) days
after the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or P-1 from either Standard & Poor's Corporation or
Xxxxx'x Investors Service, Inc. (or, if at any time neither Standard & Poor's
Corporation nor Xxxxx'x Investors Service, Inc. shall be rating such
obligations, then the highest rating from such other nationally recognized
rating services acceptable to the Agent); and (iv) domestic and Eurodollar
certificates of deposit or time deposits or bankers' acceptances maturing within
ninety (90) days after the date of acquisition thereof issued by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia or Canada having combined capital and
surplus of not less than $250,000,000.
"Change of Control" shall mean (i) any Person or group of
Persons (within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act) has acquired beneficial ownership (within the meaning of Rules
13d-3 and 13d-5 promulgated by the Securities and
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Exchange Commission under the Securities Exchange Act, except that such Person
shall be deemed to have beneficial ownership of all shares that any such Person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time) of 50% or more of the outstanding Voting Stock of the
Company, (ii) a change in the Board of Directors of the Company (the "Board")
occurs with the result that the members of the Board on the Effective Date (the
"Incumbent Directors") no longer constitute a majority of the Board, provided
that any person becoming a director whose election or nomination for election
was supported by a majority of the Incumbent Directors shall be considered an
Incumbent Director for purposes of this clause (ii), or (iii) the Company shall
cease to beneficially own 100% of the capital stock of any Borrowing Subsidiary.
"Citibank" shall mean Citibank, N.A., a national banking
association.
"Citibank Account" of a Borrowing Subsidiary shall mean the
account of such Borrowing Subsidiary at Citibank's office at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 into which each Revolving Loan made to such Borrowing
Subsidiary shall be disbursed.
"Claim" shall mean, as to any Person, (a) any right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (b) any right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
"Collateral" shall mean all property and interests in property
now owned or hereafter acquired by the Company or any Subsidiary of the Company
in or upon which a security interest, pledge, lien or mortgage is granted or of
which a collateral assignment is made under the Collateral Documents.
"Collateral Documents" shall mean the Company Guaranty, the
Company Security Agreement, the Company Pledge Agreement, the Subsidiary
Guaranties, the Subsidiary Security Agreements, the JPS Auto Guaranty, the JPS
Auto Security Agreement, the Carpet Security Agreement, the Carpet Guaranty, the
Real Property Collateral Documents, the Trademark Security Agreements, the
International Fabrics Security Agreement, the International Fabrics Guaranty,
the Amendatory Agreement and all other security agreements, pledge agreements,
mortgages, deeds of trust, collateral assignments and other agreements or
conveyances at any time delivered to the Agent (including pursuant to Section
6.15) to create or evidence Liens to secure the Obligations.
"Collecting Bank" shall mean a bank selected by a Borrowing
Subsidiary in the ordinary course of business that (a) has been confirmed by the
Agent not to be in uncertain financial condition and (b) has executed a
Collection Account Agreement.
-8-
"Collection Account Agreement" shall mean an agreement in
substantially the form of Exhibit 6-A and otherwise in form and substance
satisfactory to the Agent, executed by a Borrowing Subsidiary, a Collecting Bank
and the Agent.
"Commission" shall mean the Securities and Exchange
Commission.
"Commitment" shall mean, with respect to each Lender, at any
time, the lesser of (i) such Lender's Pro Rata Share of the amount of the
Revolving Credit Facility at such time and (ii) the amount set forth below the
name of such Lender opposite the heading "Commitment" on the signature pages
hereof or the signature page of the Assignment and Acceptance by which it became
a Lender, as adjusted from time to time to give effect to any applicable
Assignment and Acceptance. "Commitments" shall mean, at any time, collectively,
the aggregate amount of the Commitments of all the Lenders at such time.
"Common Stock" shall mean the common stock, $0.01 par value
per share, of the Company.
"Company" shall mean the entity described in the preamble
hereto as JPS Textile Group, Inc. as reorganized pursuant to the Plan of
Reorganization.
"Company Guaranty" shall mean the Amended and Restated
Guaranty dated as of the Effective Date executed by the Company in favor of the
Agent and the Lenders, pursuant to which the Company has guaranteed all of the
Obligations of each of the Borrowing Subsidiaries, as the same may be amended,
supplemented or otherwise modified from time to time.
"Company Pledge Agreement" shall mean the Amended and Restated
Pledge Agreement dated as of the Effective Date between the Company and the
Agent, as the same may be amended, supplemented or otherwise modified from time
to time.
"Company Security Agreement" shall mean the Amended and
Restated Security Agreement dated as of the Effective Date between the Company
and the Agent, as the same may be amended, supplemented or otherwise modified
from time to time.
"Compliance Certificate" shall mean a certificate in the form
of Exhibit 2 delivered to the Agent by the Loan Parties pursuant to Section
5.01(d)(ii) and covering, among other things, the Loan Parties' compliance with
the covenants contained in Articles VII and VIII.
"Concentration Account" shall mean the account of the Agent
(Account No. 3885- 8061) at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 into which all funds from the Blocked Accounts of the Borrowing
Subsidiaries shall be deposited.
"Confirmation Order" shall mean an order of the Bankruptcy
Court entered pursuant to Section 1129 of the Bankruptcy Code confirming the
Plan of Reorganization.
-9-
"Consolidated Cash Interest Expense" means, for any period,
with respect to the Company and its Subsidiaries on a consolidated basis during
such period, all of the following as determined in conformity with GAAP, (i)
total interest expense, whether paid or accrued (including the interest
component of Capital Lease obligations), including, without limitation, all
commissions, discounts and other fees and charges owed with respect to Letters
of Credit and net costs under Interest Rate Contracts, but excluding, however,
(A) amortization of discount, (B) interest paid in property other than cash, (C)
interest payable by the Company prior to the Effective Date in respect of the
Subordinated Indebtedness (as defined in the Existing Credit Agreement) or (D)
any other interest expense not payable in cash, minus (ii) any net payments
received during such period under Interest Rate Contracts and any interest
income received in respect of its Investments in cash and Cash Equivalents.
"Consolidated Fixed Charges" shall mean, for any period, with
respect to the Company and its Subsidiaries on a consolidated basis during such
period, all of the following as determined in conformity with GAAP, (i)
Consolidated Cash Interest Expense, plus (ii) scheduled payments of principal on
Indebtedness of the Company and its Subsidiaries (including the principal
component of Capital Lease obligations), plus (iii) cash dividends or
distributions paid by any of the Borrowing Subsidiaries or the Pledgors (other
than Customary Dividends), plus (iv) loans made by the Borrowing Subsidiaries to
the Company pursuant to Section 7.01(viii), plus (v) cash payments made in
respect of Warranty Liabilities.
"Consolidated Net Income" shall mean, for any period, with
respect to the Company and its Subsidiaries on a consolidated basis during such
period, the net earnings (or loss) after taxes of the Company and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"Consolidated Rental Payments" shall mean, for any period, the
aggregate amount of all rents paid or, as used in Section 7.09, accrued under
all Operating Leases of the Company or any of its Subsidiaries as lessee (net of
sublease income), all as determined on a consolidated basis in conformity with
GAAP.
"Contaminant" shall mean any waste, pollutant (as that term is
defined in 42 U.S.C. 9601(33) or in 33 U.S.C. 1362(13)), hazardous substance (as
that term is defined in 42 U.S.C. 9601(14)), hazardous chemical (as that term is
defined by 29 CFR ss. 1910.1200(c)), toxic substance, hazardous waste (as that
term is defined in 42 U.S.C. 6901), radioactive material, special waste,
petroleum, including crude oil or any petroleum-derived substance, waste, or
breakdown or decomposition product thereof, or any constituent of any such
substance or waste, including but not limited to polychlorinated biphenyls, and
asbestos.
"Contingent Note Indenture" shall mean that certain Indenture
dated as of the Effective Date between the Company, JPS Capital and First Trust
National Association, as trustee, as the same may be amended, supplemented or
otherwise modified from time to time.
-10-
"Contingent Notes" shall mean JPS Capital's Contingent Payment
Notes due on the Maturity Date (as defined in the Contingent Note Indenture),
governed by the terms of the Contingent Note Indenture, in the aggregate initial
principal amount of $34,000,000, subject to adjustment pursuant to the
Contingent Note Indenture.
"Contractual Obligation", as applied to any Person, shall mean
any provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject
(including, without limitation, any restrictive covenant affecting such Person
or any of its properties).
"Contribution Agreement" shall mean the Amended and Restated
Contribution Agreement dated as of the Effective Date entered into by and among
each Borrowing Subsidiary, as such agreement may be amended, modified or
supplemented from time to time with the consent of the Agent.
"Credit Insured Receivable" shall mean an account of a
Borrowing Subsidiary with respect to which the following statements are true:
(i) such Borrowing Subsidiary has obtained credit insurance or other form of
credit protection covering such account on terms and conditions and from a
financial institution satisfactory to the Agent; provided, however, that the
factoring arrangements with Xxxxxx Financial, Inc., NationsBanc Commercial
Corporation and Congress Xxxxxxx as in effect on the Effective Date are deemed
to be satisfactory to the Agent; and (ii) such credit insurance or other form of
credit protection is in full force and effect and not in dispute.
"Customary Dividends" shall mean dividends or other
distributions from the Company's Subsidiaries to the Company, the proceeds of
which are used solely by the Company for the purpose of paying (a) ordinary
operating expenses of the Company (excluding any such operating expenses related
to or incurred on behalf of an Unrestricted Subsidiary or in connection with a
Permitted Acquisition) and (b) taxes owing by the Company and its Subsidiaries
(including interest, penalties and legal expenses relating to such payments);
provided, however, Customary Dividends shall not include any dividend or
distribution made by the Company to fund the payment by the Company of (i) any
portion of the Company's tax liability attributed to the operations of any
Unrestricted Subsidiary and (ii) any Taxes (as defined in the Contingent Note
Indenture) except that portion of such Taxes in excess of the amount of cash and
cash equivalents then held by JPS Capital.
"Customary Permitted Liens" shall mean:
(i) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for taxes, assessments or charges of any Governmental
Authority or claims not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which
-11-
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens (other than any
Lien imposed under ERISA) imposed by law, created in the ordinary course of
business and for amounts not yet due or which are being contested in good faith
by appropriate proceedings which are sufficient to prevent imminent foreclosure
of such Liens, are promptly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;
(iii) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social security benefits
or to secure the performance of tenders, bids, leases, contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under government
contracts;
(iv) easements (including, without limitation,
reciprocal easement agreements and utility agreements), rights-of-way,
covenants, consents, reservations, encroachments, variations and other
restrictions, charges or encumbrances (whether or not recorded) affecting the
use of real property, which do not materially detract from the value of such
property or materially impair the use thereof; and
(v) extensions, renewals or replacements of any
Lien referred to in paragraphs (i) through (iv) above, provided (A) that, in the
case of paragraphs (i) through (iii) above, the principal amount of the
obligation secured thereby is not increased and (B) that any such extension,
renewal or replacement is limited to the property originally encumbered thereby;
provided, however, to the extent that the amount of obligations of the Loan
Parties arising from claims being contested in good faith secured by such Liens
in clauses (i) and (ii) above exceeds $2,000,000 in the aggregate, the Loan
Parties shall have set aside full cash reserves in the amount of such
obligations or there shall be availability under the Revolving Credit Facility
in such amount.
"Designated Prepayment" shall have the meaning ascribed to
such term in Section 2.06(b)(ii).
"Disclosure Statement" shall mean the disclosure statement of
the Company and JPS Capital, dated June 25, 1997, as amended, supplemented, or
modified from time to time, describing the Plan of Reorganization (and the
transactions and events contemplated thereby) that was filed in the Case on
August 1, 1997.
-12-
"Disproportionate Advance" shall have the meaning ascribed to
such term in Section 2.03(c)(i)(B).
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"EBITDA" shall mean, for any period, with respect to the
Company and its Subsidiaries on a consolidated basis during such period, all of
the following as determined in conformity with GAAP, (i) the sum of the amounts
for such period of (A) Consolidated Net Income, (B) depreciation, amortization
expense (including amortization of excess reorganization value) and other
non-cash charges identified to the Agent by the Company and reasonably
acceptable to the Agent, (C) consolidated interest expense (including fees for
Letters of Credit), (D) Federal, state, local and foreign income taxes, (E)
warranty receipts to the extent not included in Consolidated Net Income and (F)
Transaction Costs (and other reorganization expenses incurred prior to the
Effective Date) to the extent deducted in the calculation of Consolidated Net
Income; minus (ii) gains (or plus losses) from asset sales calculated pursuant
to GAAP for such period.
"Effective Date" shall mean the first date on which all the
conditions precedent set forth in Section 3.01 shall be satisfied or waived by
the Lenders.
"Effective Date of Reorganization" shall mean the first date
on which the Plan of Reorganization shall have become effective in accordance
with its terms.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth of at least $50,000,000 calculated in accordance
with GAAP; (iii) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
("OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (iv) the central bank of any country
which is a member of the OECD; and (v) any finance company, insurance company or
other financial institution which is approved by the Agent as an Eligible
Assignee for purposes of this Agreement.
"Eligible Finished Goods" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary which is classified, consistent with past
practice, on such Borrowing Subsidiary's accounting system as Finished Goods,
which is otherwise Eligible Inventory but not Eligible Yarn Inventory.
-13-
"Eligible Inventory" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary (i) with respect to which the Agent has a
valid and perfected first priority Lien, (ii) with respect to which no warranty
contained in any of the Loan Documents has been breached, (iii) which is not in
the reasonable opinion of the Agent obsolete or unmerchantable and (iv) which
the Agent, in its reasonable credit judgment, deems to be Eligible Inventory,
based on such credit and collateral considerations as the Agent may deem
appropriate. Eligible Inventory shall be valued at the lower of cost on a
first-in, first-out basis or market.
"Eligible Raw Materials" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary which is classified, consistent with past
practice, on such Borrowing Subsidiary's accounting system as Raw Materials,
which is otherwise Eligible Inventory but not Eligible Yarn Inventory.
"Eligible Receivables" shall mean only accounts arising out of
sales in the ordinary course of business, made by any Borrowing Subsidiary to a
person, firm or corporation which is neither an Affiliate of such Borrowing
Subsidiary nor controlled by such an Affiliate, and which are not in dispute. No
Receivable shall be an Eligible Receivable (i) if it is more than (A) ninety
(90) days past due, according to the original terms of sale, or (B) one hundred
twenty (120) days past the original invoice date thereof according to the
original terms of sale or (ii) if, in the judgment of the Agent any of the
following is true with respect to such Receivable;
(A) any warranty contained in this Agreement
with respect either to Eligible Receivables in general or to such specific
Receivable has been breached; or
(B) over fifty percent (50%) of the
Receivables owed by the account debtor are ineligible for any reason;
or
(C) the account debtor with respect to such
Receivable has filed a petition for bankruptcy or any other relief
under the Bankruptcy Code or any other law relating to bankruptcy,
insolvency, reorganization or relief of debtors; made an assignment for
the benefit of creditors; had filed against it any petition or other
application for relief under the Bankruptcy Code or any such other law;
has failed, suspended business operations, become insolvent, called a
meeting of its creditors for the purpose of obtaining any financial
concession or accommodation, or had or suffered a receiver or a trustee
to be appointed for all or a significant portion of its assets or
affairs; or
(D) the account debtor with respect to such
Receivable is also a supplier to or creditor of any such Borrowing
Subsidiary unless such Borrowing Subsidiary has received a no-setoff
letter satisfactory to the Agent; or
(E) the sale represented by such
Receivable is to an account debtor outside the continental United
States, unless the sale is on letter of credit,
-14-
acceptance or other credit support terms acceptable to the Agent or
such account is a Credit Insured Receivable; or
(F) the sale to such account debtor with
respect to such Receivable is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, or consignment basis, unless, with
respect to Receivables on a xxxx-and-hold basis, such Receivable is a
Credit Insured Receivable; or
(G) such Receivable is not subject to a
valid and perfected first priority Lien in favor of the Agent or is
subject to a Lien in favor of any Person other than the Agent; or
(H) such Receivable is subject to any
deduction, offset, counterclaim, return privilege or other condition;
or
(I) the account debtor with respect to
such Receivable is located in New Jersey or Minnesota, unless such
Borrowing Subsidiary (a) has received a certificate of authority to do
business and is in good standing in such state, or (b) has filed a
"Notice of Business Activities Report" with the appropriate office or
agency of such state for the then current year; provided, however, if
such Receivable is a Credit Insured Receivable, the financial
institution providing such credit insurance shall have satisfied the
foregoing requirements in lieu of such Borrowing Subsidiary; or
(J) the account debtor with respect to
such Receivable is the United States of America or any department,
agency or instrumentality thereof, unless such Borrowing Subsidiary has
assigned its right to payment of such account to the Agent pursuant to
the Assignment of Claims Act of 1940, as amended, and such assignment
has been accepted and acknowledged by the appropriate government
officers; or
(K) the Agent, in accordance with its
customary criteria, deems such Receivable ineligible.
"Eligible Work in Process" of a Borrowing Subsidiary shall
mean Inventory of such Borrowing Subsidiary which is classified, consistent with
past practice, on such Borrowing Subsidiary's accounting system as Work in
Process or Goods in Process, which is otherwise Eligible Inventory but not
Eligible Yarn Inventory.
"Eligible Yarn Inventory" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary consisting of yarn on cones, spindles or
similar storage forms and which has not entered the initial stages for warp
preparation, which is otherwise Eligible Inventory.
-15-
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under Federal or state
environmental laws or regulations, or (ii) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment or condition
resulting from any such Release.
"Equipment" of any Person, shall mean and include all
"equipment", as such term is defined in section 9-109 of the UCC, of such Person
now owned and hereafter acquired including, without limitation, all machinery,
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, fixtures and trade fixtures, tools,
toolings, molds, dies, vehicles, vessels, aircraft and all other goods of every
type and description (other than Inventory).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Internal Revenue Code) as the Company, and (ii)
partnership, trade or business (whether or not incorporated) which is under
common control (within the meaning of Section 414(c) of the Internal Revenue
Code) with the Company.
"Eurodollar Affiliate" shall mean, with respect to each
Lender, the Affiliate of such Lender, if any, set forth below such Lender's name
under the heading "Eurodollar Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Borrowing
Subsidiaries and the Agent (but in any event subject to Section 2.08(h)).
"Eurodollar Interest Payment Date" shall mean, (i) with
respect to any Eurodollar Rate Loan, the last day of each Eurodollar Interest
Period applicable to such Eurodollar Rate Loan and, (ii) with respect to any
Eurodollar Rate Loan having a Eurodollar Interest Period in excess of three (3)
calendar months, the last day of each three (3) month interval during such
Eurodollar Interest Period.
"Eurodollar Interest Period" shall have the meaning ascribed
to such term in Section 2.08(b).
"Eurodollar Interest Rate Determination Date" shall mean the
date on which the Agent determines the Eurodollar Rate applicable to a
Borrowing, continuation or conversion of Eurodollar Rate Loans. The Eurodollar
Interest Rate Determination Date shall be the second Business Day prior to the
first day of the Eurodollar Interest Period applicable to such Borrowing,
continuation or conversion.
-16-
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, an interest
rate per annum obtained by dividing (i) the rate of interest determined by the
Agent to be the average (rounded upward to the nearest whole multiple of
one-sixteenth of one percent (1/16 of 1%) per annum if such average is not such
a multiple) of the rate per annum determined by the Agent to be the rate per
annum at which deposits in Dollars are offered by the Agent to major banks in
the London interbank Euro dollar market at approximately 11:00 a.m. (London
time) on the Eurodollar Interest Rate Determination Date for such Eurodollar
Interest Period for a period equal to such Eurodollar Interest Period and in an
amount substantially equal to the amount of the Eurodollar Rate Loan to be made
by the Agent, in its capacity as a Lender, to be outstanding during such
Eurodollar Interest Period, by (ii) a percentage equal to 100% minus the
Eurodollar Reserve Percentage. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Eurodollar Rate Loans" shall mean those Loans outstanding
which bear interest at a rate determined by reference to the Eurodollar Rate as
provided in Section 2.04(a)(i).
"Eurodollar Rate Taxes" shall have the meaning ascribed to
such term in Section 2.08(g)(i).
"Eurodollar Reserve Percentage" shall mean for any date that
percentage (expressed as a decimal) which is in effect on such date, as
prescribed by the Federal Reserve Board, for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with deposits exceeding $5,000,000,000 in respect of "Eurocurrency
liabilities" having a term equal to the applicable Eurodollar Interest Period
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents).
"Event of Default" shall mean any of the occurrences set forth
in Section 9.01 after the expiration of any applicable grace period expressly
provided therein.
"Existing Agent" shall have the meaning ascribed to such term
in the preamble hereto.
"Existing Collateral Agent" shall have the meaning ascribed to
such term in the preamble hereto.
"Existing Credit Agreement" shall have the meaning ascribed to
such term in the preamble hereto.
-17-
"Existing Lenders" shall have the meaning ascribed to such
term in the preamble hereto.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any successor thereto.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System or any governmental authority succeeding to its
functions.
"Fee Agreement" shall mean the Fee Agreement dated as of the
Effective Date addressed to the Loan Parties from Citibank and acknowledged and
agreed to by the Loan Parties.
"Final Order" shall mean an order of the Bankruptcy Court that
is in effect and is not stayed, and as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Company or, in the event that an appeal, writ of
certiorari, or reargument or rehearing thereof has been sought, such order of
the Bankruptcy Court shall have been affirmed by the highest court to which such
order was appealed, or certiorari, reargument or rehearing has been denied, and
the time to take any further appeal, petition for certiorari or move for
reargument or rehearing shall have expired.
"Fiscal Year" shall mean the fiscal year of the Company, which
shall be the fifty-two (52) or fifty-three (53) week period ending on the
Saturday closest to October 31 in each year or such other period as the Company
may designate and the Agent may approve in writing.
"Fixed Asset Portion" shall mean $55,000,000; provided,
however, the amount of the Fixed Asset Portion shall be reduced by the aggregate
amount of each of the following: (i) the amount of any cash proceeds from sales
of assets (other than Inventory) sold in the ordinary course of business that
exceed Two Million Dollars ($2,000,000) in the aggregate in any Fiscal Year, net
of (A) the costs of sale, lease, assignment or other disposition, (B) any
income, franchise, transfer or other tax liability arising from such transaction
and (C) amounts applied to the repayment of Indebtedness (other than the
Obligations) secured by a Lien on the asset disposed of; (ii) in the event of
the sale of all or substantially all of the capital stock or assets of any
Borrowing Subsidiary (to the extent otherwise permitted hereunder), the amount
of the Fixed
-18-
Asset Value of such Borrowing Subsidiary plus fifty percent (50%) of the amount,
if any, by which the Net Cash Proceeds from such sale exceed such Fixed Asset
Value; (iii) in the event of a Permitted Disposition, an amount equal to fifty
percent (50%) of the Net Cash Proceeds from such disposition; (iv) the amount of
Net Cash Proceeds from sales of assets (other than in connection with a
Permitted Disposition) and (v) in the event of the receipt by any Loan Party of
any Net Cash Proceeds of Equity Issuances, the lesser of (A) the amount of such
Net Cash Proceeds and (B) $25,000,000; and provided further, however, the Fixed
Asset Portion shall be reduced on the last day of each fiscal quarter of the
Company ending during each Fiscal Year set forth below by one-fourth of the
amount set forth opposite such period:
Fiscal Year Annual Amount
----------- -------------
Fiscal Year 1998 $3,000,000
Fiscal Year 1999 4,000,000
Fiscal Year 2000 5,000,000
Fiscal Year 2001 6,000,000
Fiscal Year 2002 7,000,000
"Fixed Asset Share" shall mean with respect to JCIC, 87%, and
with respect to JEC, 13%.
"Fixed Asset Value" shall mean with respect to JCIC,
$47,850,000, and with respect to JEC, $7,150,000.
"Fixed Charge Coverage Ratio" shall mean, with respect to any
period, the ratio of (i) cumulative EBITDA for such period, minus Capital
Expenditures made or incurred by the Company and its Subsidiaries during such
period, minus cash payments (other than any such payments made by or on behalf
of JPS Capital) for income taxes to (ii) Consolidated Fixed Charges for such
period.
"Funding Date" shall mean, with respect to any Revolving Loan,
the date of the funding of such Revolving Loan.
"GAAP" shall mean generally accepted accounting principles 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, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination, subject to the terms of Section 11.05.
-19-
"Governmental Acts" shall have the meaning ascribed to such
term in Section 2.03(g)(viii)(A).
"Governmental Authority" shall mean any nation or government,
any federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indebtedness", as applied to any Person, shall mean (i) all
indebtedness, obligations or other liabilities of such Person for borrowed
money, (ii) all indebtedness, obli gations or other liabilities of such Person
evidenced by Securities or other similar instruments, (iii) all reimbursement
obligations and other liabilities of such Person with respect to letters of
credit issued for such Person's account, (iv) all obligations of such Person to
pay the deferred purchase price of property or services, (v) all obligations in
respect of Capital Leases of such Person, (vi) all Accommodation Obligations of
such Person, (vii) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any asset of such Person, whether or not
such indebtedness, obligations or liabilities are assumed by or are a personal
liability of such Person, all as of such time, and (viii) all indebtedness,
obligations or other liabilities in respect of Interest Rate Contracts and
foreign currency exchange agreements.
"Interest Coverage Ratio" shall mean, with respect to any
period, the ratio of (i) cumulative EBITDA for such period to (ii) Consolidated
Cash Interest Expense for such period.
"Interest Rate Contracts" shall mean interest rate exchange,
collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time hereafter, and any successor statute.
"International Fabrics" shall mean International Fabrics,
Inc., a Delaware corporation and a wholly-owned Subsidiary of the Company.
"International Fabrics Guaranty" shall mean the Guaranty dated
as of August 5, 1993, as amended, executed by International Fabrics, pursuant to
which International Fabrics has guaranteed all of the Obligations of the
Borrowing Subsidiaries, as the same may be further amended, supplemented or
otherwise modified from time to time.
"International Fabrics Security Agreement" shall mean the
Security Agreement dated as of August 5, 1993, as amended, executed by
International Fabrics, pursuant to which International Fabrics has granted a
Lien to the Agent on all of its personal property as security for the
International Fabrics Guaranty, as the same may be further amended, supplemented
or otherwise modified from time to time.
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"Inventory" of any Person, shall mean and include all now
owned and hereafter acquired "inventory", as such term is defined in section
9-109 of the UCC, goods, materials, supplies, merchandise and other personal
property furnished under any contract of service or intended for sale or lease,
including, without limitation, all raw materials, work in process,
finished goods and materials, parts and supplies of any kind, nature or
description which are used or consumed in such Person's business, all returned
or repossessed goods now, or at any time or times hereafter, in the possession
or under the control of such Person or the Agent, and all documents of title or
documents representing the same, but excluding all goods not owned by such
Person which have been sold on consignment by such Person to the extent included
in the foregoing; together with all proceeds and products thereof.
"Investment" shall mean, as applied to any Person, any direct
or indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not arise
from sales of goods or services to that Person in the ordinary course of
business. The amount of any Investment shall be determined in conformity with
GAAP.
"IRS" shall mean the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuing Bank" shall mean Citibank.
"ITM Joint Venture" shall mean Ingeneria Textil Mexicana, S.A.
de C.V., a Mexican variable capital stock corporation, 50% of the capital stock
of which is held by International Fabrics and the remainder of the capital stock
of which is held by Grupo Industrial Santa Fe, S.A. de C.V., a Mexican variable
capital stock corporation.
"JCC" means JPS Carpet Corp., a Delaware corporation and a
wholly-owned Subsidiary of the Company.
"JPS Auto" means JPS Auto Inc., a Delaware corporation and a
wholly-owned Subsidiary of the Company.
"JPS Auto Guaranty" shall mean the Amended and Restated
Guaranty dated as of March 18, 1993, as amended, executed by JPS Auto, pursuant
to which JPS Auto has guaranteed all of the Obligations of each Borrowing
Subsidiary, as the same may be further amended, supplemented or otherwise
modified from time to time.
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"JPS Auto Security Agreement" shall mean the Amended and
Restated Subsidiary Consolidated Security Agreement dated as of March 18, 1993,
as amended, among JPS Auto and the Agent, as the same may be further amended,
supplemented or otherwise modified from time to time.
"JPS Capital" shall mean JPS Capital Corp., a Delaware
corporation and a wholly-owned Subsidiary of the Company.
"Lender" shall have the meaning ascribed to such term in the
preamble hereto and shall include the Agent and the Co-Agent, in each case in
such Person's capacity as a Lender hereunder, and the Issuing Bank in its
capacity as issuer of Letters of Credit.
"Letter of Credit" shall mean any letter of credit issued by
the Issuing Bank for the account of a Borrowing Subsidiary pursuant to Section
2.03(g).
"Letter of Credit Obligations" shall mean, at any time, the
sum of (i) Reimbursement Obligations at such time and (ii) the aggregate maximum
amount then available for drawing under the Letters of Credit.
"Letter of Credit Reimbursement Agreement" shall mean, with
respect to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank may employ in the ordinary course of
business for its own account.
"Letter of Credit Sublimit" shall mean Twenty Million Dollars
($20,000,000).
"Leverage Ratio" shall mean, for any Leverage Ratio Period,
the ratio of the average of the Indebtedness of the Company and its Subsidiaries
on a consolidated basis outstanding on each day during such Leverage Ratio
Period (other than Indebtedness in respect of the Contingent Notes) to EBITDA of
the Company and its Subsidiaries for such Leverage Ratio Period.
"Leverage Ratio Period" shall mean the twelve month period
ending on the last day of any fiscal quarter or Fiscal Year of the Company
covered by any Compliance Certificate.
"Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including, without limitation,
attorneys', experts' and consulting fees and costs of investigation and
feasibility studies), fines, penalties and monetary sanctions, interest, direct
or indirect, known or unknown, absolute or contingent, past, present or future.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights of way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same purpose or economic effect as any of the
foregoing, and the filing of any financing statement (other than a financing
-22-
statement filed by a "true" lessor pursuant to 9-408 of the UCC) naming the
owner of the asset to which such Lien relates as debtor, under the UCC or other
comparable law of any jurisdiction.
"Loan Account" shall have the meaning ascribed to such term in
Section 2.07(d).
"Loan Documents" shall mean this Agreement, the Notes, the
Collateral Documents, the Fee Agreement and all other security agreements,
mortgages, deeds of trust, financing statements, patent and trademark security
agreements, lease assignments, guaranties, Interest Rate Contracts and other
agreements, instruments and written indicia of Contractual Obligations between
or among the Company or any of its Subsidiaries and the Agent or any Lender
delivered to the Agent or such Lender by or on behalf of the Company or any of
its Subsidiaries pursuant to or in connection with the transactions contemplated
hereby, as any such agreement, instrument or written indicia may be amended,
supplemented or otherwise modified from time to time.
"Loan Party" shall mean the Company or any of the Borrowing
Subsidiaries, and "Loan Parties" shall mean, collectively, the Company and the
Borrowing Subsidiaries.
"Margin Stock" shall have the meaning ascribed to such term in
Regulation G and Regulation U.
"Material Adverse Effect" shall mean, with respect to the
Company or any of its Subsidiaries, a material adverse effect upon the condition
(financial or otherwise), operations, performance, properties or prospects of
the Company and its Subsidiaries, taken as a whole, or the ability of the
Company and its Subsidiaries as a whole to perform under the Loan Documents.
"Maximum Amount of Revolving Loans" shall mean, at any time,
(i) the lesser of (A) the Commitments in effect at such time and (B) the
aggregate Borrowing Base of the Borrowing Subsidiaries at such time, less the
reserves contemplated by Section 2.03(f), and less such other reserves as the
Agent, in its sole discretion, may establish from time to time, including,
without limitation, reserves against Collateral located on leased premises for
which no landlord waiver in form and substance satisfactory to the Agent has
been obtained, minus (ii) the amount of the Letter of Credit Obligations at such
time.
"Multiemployer Plan" shall mean an employee benefit plan
defined in Section 4001(a)(3) of ERISA which is, or within the immediately
preceding six (6) years was, contributed to by the Company or an ERISA
Affiliate.
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"Net Cash Proceeds" shall mean (a) proceeds received on or
after the Effective Date by any of the Loan Parties or any Pledgor in cash or
Cash Equivalents from (i) the issuance of any common or preferred stock by the
Company, any other additions to equity of the Company (other than retained
earnings) or any contributions to capital of the Company or (ii) the issuance of
Subordinated Indebtedness, in each case net of reasonable costs incurred in
connection with such transaction and any income, franchise, transfer or other
tax liability arising from such transaction and (b) proceeds received by any
Loan Party or Pledgor in cash or Cash Equivalents from the sale, lease,
assignment or other disposition, or financing or refinancing (including, without
limitation, Permitted Financings), of any asset or property outside of the
ordinary course of business, excluding, (i) in each case, proceeds permitted
under this Agreement to be used for replacement assets (provided the Agent has
received notice from such Loan Party or Pledgor pursuant to Section 6.11 of its
intention to use such proceeds at the time of such disposition, such proceeds
are in fact so used within thirty (30) days after such disposition and the
application of such proceeds for such use would not cause a default under any
indenture governing Subordinated Indebtedness), and (ii) any such proceeds
received by the Company from the sale of stock of any Unrestricted Subsidiary,
in the case of each of clauses (a) and (b) above, net of (A) the costs of sale,
lease, assignment or other disposition, (B) any income, franchise, transfer or
other tax liability arising from such transaction and (C) amounts applied to the
repayment of Indebtedness (other than the Obligations) secured by a Lien on the
asset disposed of. For this purpose, all proceeds of insurance paid on account
of the loss of or damage to any such asset or property, or group of assets or
properties, and awards of compensation for any such asset or property, or group
of assets or properties, taken by condemnation or eminent domain shall be deemed
to be Net Cash Proceeds after giving effect to the netting provisions set forth
in clauses (A), (B) and (C) of the preceding sentence. The proceeds of the sale
of any past-due Receivable permitted to be sold in accordance with the terms of
Section 7.02(a) shall not constitute Net Cash Proceeds.
"Net Cash Proceeds of Equity Issuances" shall mean Net Cash
Proceeds of the type specified in clause (a)(i) of the definition of "Net Cash
Proceeds".
"Net Face Amount" shall mean, with respect to any Eligible
Receivable, the invoice amount of such Eligible Receivable less the amount of
all discounts pertaining thereto.
"Note" shall have the meaning ascribed to such term in Section
2.02.
"Notice of Borrowing" shall mean, with respect to a proposed
Borrowing pursuant to Section 2.03(b), a notice substantially in the form of
Exhibit 3.
"Notice of Conversion/Continuation" shall mean, with respect
to a proposed conversion or continuation of a Revolving Loan pursuant to Section
2.04(c), a notice substantially in the form of Exhibit 4.
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"Obligations" shall mean all present and future Indebtedness
and other liabilities of any Loan Party owing to the Agent, any Lender, the
Issuing Bank or any Person entitled to indemnification pursuant to Section
11.04, or any of their respective successors, transferees or assigns, of every
type and description, whether or not evidenced by any note, guaranty or other
instrument, arising under or in connection with this Agreement, the Notes or any
other Loan Document, whether or not for the payment of money, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all Reimbursement Obligations, all interest,
charges, expenses, fees, attorneys' fees and disbursements and any other sum
chargeable to any Loan Party under this Agreement or any other Loan Document.
"Officers' Certificate" shall mean, as to a corporation, a
certificate executed on behalf of such corporation by (i) its chairman or
vice-chairman of the board (if an officer) or its president or any
vice-president and (ii) by its chief financial officer, its controller or its
treasurer.
"Operating Lease" shall mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) by that Person as lessee
which is not a Capital Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Permits" shall mean any permit, approval, authorization,
license, variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Acquisition" shall mean any Proposed Acquisition
with respect to which the following conditions have been met:
(i) the Company shall have complied with Section 6.15;
(ii) the Company shall have delivered a written notice to the
Agent and the Lenders of its intention to make such Proposed
Acquisition no less than 15 Business Days (or such shorter period
agreed to by the Agent) prior to the proposed consummation date
therefor (the "Consummation Date") setting forth the material terms
thereof, the source of funding for the purchase price of such Proposed
Acquisition and the identification of each Unrestricted Subsidiary
being created or acquired in or in connection with such Proposed
Acquisition;
(iii) if any amount of (A) the purchase price of such Proposed
Acquisition (including any purchase price adjustments or any other
consideration being provided for such Proposed Acquisition) or (B) any
transaction costs associated with such Proposed Acquisition are being
provided by the Company, then such amount shall be paid by the Company
solely from Unrestricted Proceeds and/or in Common Stock;
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(iv) no Borrowing Subsidiary or Pledgor shall have any
Investment in, or be liable for any obligation of, any Unrestricted
Subsidiary created by the Company in connection with such Proposed
Acquisition or any Person, the capital stock of which is being acquired
in such acquisition;
(v) on the Consummation Date for such Proposed Acquisition and
after giving effect thereto, (A) no Potential Event of Default or Event
of Default shall have occurred and be continuing and (ii) all
representations and warranties under the Loan Documents shall be true
and correct in all material respects as though made on and as of such
date (except for representations and warranties which expressly speak
only as of a different date and changes permitted or contemplated by
this Agreement); and
(vi) the Company shall have provided the Agent and the Lenders
such other financial information, financial analyses, documentation or
other information relating to such Proposed Acquisition as the Agent or
the Lenders may reasonably request.
"Permitted Additional Investments" shall mean Investments by
any Loan Party not in excess of Five Million Dollars ($5,000,000) in the
aggregate at any one time outstanding for all Loan Parties (or such greater
amount as shall be agreed to by the Requisite Lenders), provided that (i) all
assets (including stock) acquired therein are pledged to the Agent as security
for the Obligations pursuant to the applicable Collateral Documents (or in the
case of an Investment in a newly acquired or created Subsidiary, pledge and
security agreements substantially in the form of applicable Collateral
Documents), (ii) any such newly acquired or created Subsidiary has guaranteed
the Obligations pursuant to a guaranty substantially in the form of the
guaranties of the Obligations executed by the existing Pledgors, and (iii) no
Event of Default or Potential Event of Default shall result from such
Investments.
"Permitted Dispositions" shall mean (i) Permitted Financings
and (ii) sales of fixed assets other than in the ordinary course of business
permitted pursuant to the first sentence of Section 7.02(a), including sales
that occur in connection with sale and leaseback transactions; provided,
however, the Net Cash Proceeds of the transactions in both clauses (i) and (ii)
above collectively shall not exceed Thirty Five Million Dollars ($35,000,000) in
the aggregate since the Effective Date without the prior written consent of the
Requisite Lenders; provided, further, a Permitted Disposition shall not include
any transaction prohibited by Section 7.07(a) and shall only include those
dispositions with respect to which each of the following conditions shall have
been met: (A) the Agent shall have received such landlord or mortgagee waivers,
documents and agreements as the Agent has reasonably deemed necessary to permit
the Agent to protect and enforce its Liens on Collateral; (B) all
representations and warranties set forth in subsection (a) through (aa) of
Section 4.01 (except for (1) representations and warranties which expressly
speak only as of a different date and (2) changes permitted or contemplated by
this Agreement) shall have been true, correct and complete in all material
respects as of the date of such disposition; (C) on the date of such
disposition, no Event of Default or Potential Event of Default shall have
occurred and be continuing or would result from the consummation of such
disposition; and (D) the Net Cash Proceeds of such disposition shall have been
applied to the repayment of the Obligations pursuant to Section 2.06(b);
provided, further, (a) in the event any Loan Party would receive Net Cash
Proceeds in excess of an aggregate amount of Ten Million Dollars ($10,000,000)
from the sale of any fixed assets pursuant to the first sentence of Section
7.02(a) (other than in connection with a sale and leaseback transaction) in a
single transaction or series of
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related transactions, such Loan Party shall have submitted the documentation for
such disposition to the Lenders and shall have obtained the prior written
consent of the Requisite Lenders to such disposition and (b) in the event of a
Permitted Financing or a sale of fixed assets in connection with a sale and
leaseback transaction by a Borrowing Subsidiary, such Borrowing Subsidiary shall
have submitted the documentation for such disposition to the Lenders and shall
have obtained the prior written consent of the Requisite Lenders to such
disposition, but only if the Net Cash Proceeds of such disposition and all prior
dispositions of such type received by such Borrowing Subsidiary since the
Effective Date exceed in the aggregate (I) for JEC, Ten Million Dollars
($10,000,000) and (II) for JCIC, Twenty-Five Million Dollars ($25,000,000).
"Permitted Existing Accommodation Obligations" shall mean
those Accommodation Obligations of the Company and its Subsidiaries reflected on
Schedule 1.01-B.
"Permitted Existing Indebtedness" shall mean the Indebtedness
of the Company and its Subsidiaries reflected on Schedule 1.01-C.
"Permitted Existing Indebtedness Permitted to be Secured"
shall mean that portion of the Permitted Existing Indebtedness reflected on
Schedule 1.01-C.
"Permitted Existing Investments" shall mean Investments
existing on the date hereof reflected on Schedule 1.01-D and Investments by the
Company existing on the date hereof in the stock of its Subsidiaries existing on
the date hereof.
"Permitted Existing Liens" shall mean the Liens on assets of
the Company and its Subsidiaries, other than any Environmental Liens, reflected
on Schedule 1.01-E.
"Permitted Financings" shall mean any financing or refinancing
(excluding Indebtedness permitted under Section 7.01(v)) of fixed assets owned
by the Company or any of its Subsidiaries, including mortgages of real property;
provided, however, (i) the terms of such financing or refinancing shall meet the
requirements for Permitted Dispositions set forth in the definition of Permitted
Dispositions (other than those requirements set forth in clause (a) of the third
proviso of such definition); (ii) the loan proceeds received by such Loan Party
from the financing or refinancing of any fixed asset or group of fixed assets
shall have been in the aggregate (net of borrowing costs) at least sixty percent
(60%) of the fair market value of such fixed assets; (iii) the maturity date of
the Indebtedness incurred in connection with such financing or refinancing shall
be a date more than six months after the Revolving Credit Termination Date and
(iv) the outstanding aggregate principal amount of Indebtedness incurred since
the Effective Date in connection with all such financings or refinancings shall
not exceed $20,000,000.
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"Person" shall mean any natural person, employee, corporation,
limited partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or
other organization, whether or not a legal entity, or any other non-governmental
entity, or any Governmental Authority.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA (other than a Multiemployer Plan) in respect of which either the
Company or an ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Plan of Reorganization" shall mean the Joint Plan of
Reorganization of JPS Textile Group, Inc. and JPS Capital Corp. Under Chapter 11
of the Bankruptcy Code, dated August 1, 1997, filed in the Case on August 1,
1997, as thereafter amended or modified from time to time and confirmed by the
Bankruptcy Court.
"Pledgor" shall mean, with respect to any time of
determination, any Person (other than a Loan Party) that is then party to any
Collateral Document.
"Potential Event of Default" shall mean an event which, with
the giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Prohibited Stock" means any capital stock which, by its terms
(or by the terms of any Security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (i) matures or is mandatorily
redeemable at the option of the holder thereof, in whole or in part, on or at
any time prior to the second anniversary of the Scheduled Termination Date, (ii)
provides for mandatory payment of any dividends or (iii) constitutes
Indebtedness.
"Pro Rata Share" shall mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Lender's Commitment and the denominator of which shall be the aggregate
amount of all of the Lenders' Commitments, as adjusted from time to time to give
effect to any applicable Assignment and Acceptance.
"Property" shall mean any real or personal property, plant,
building, facility, structure, underground storage tank, equipment or unit, or
other asset owned, leased or operated by the Company or any of its Subsidiaries.
"Proposed Acquisition" shall mean (a) any purchase by an
Applicable Purchaser (as defined below) of (i) any capital stock of any Person
if, following such purchase, such Person would be a Subsidiary of the Company (a
"Stock Purchase"), or (ii) any merger or consolidation of a Permitted Party (as
defined below) with any Person (a "Combination"), provided that, in each such
case referred to in this clause (a), such Person is in the same or a similar
line of business as the Loan Parties, and (b) any acquisition by an Applicable
Purchaser of all or substantially all of the assets, operations, any division or
any operating unit of any Person (an "Asset Acquisition"), provided that, in
each such case, such Person is in (or such assets are usable in, or such
operations or division are in) the same or a similar line of business as the
Loan Parties. For purposes of the foregoing, (A) "Applicable Purchaser" shall
mean, (1) in the case of a Stock Purchase, any of (x) the Company, (y) a newly
created, direct Unrestricted Subsidiary of the Company or (z) an Unrestricted
Subsidiary of such a newly created, direct Unrestricted Subsidiary, and (2) in
the
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case of an Asset Acquisition, either (x) a newly created, direct Unrestricted
Subsidiary of the Company or (y) an Unrestricted Subsidiary of such a newly
created, direct Unrestricted Subsidiary; and (B) "Permitted Party" shall mean
either (1) a newly created, direct Unrestricted Subsidiary of the Company or (2)
an Unrestricted Subsidiary of such a newly created, direct Unrestricted
Subsidiary (the survivor or combined entity in any Combination with a Permitted
Party being thereafter an Unrestricted Subsidiary).
"RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. ss. 6901 et seq., and any successor statute, and regulations
promulgated thereunder.
"Real Property Collateral Documents" shall mean any mortgages,
deeds of trust, leasehold mortgages or other such documents executed by each
Borrowing Subsidiary in favor of the Agent for the benefit of the Lenders
relating to such Borrowing Subsidiary's real property, as the same may be
amended, supplemented or otherwise modified from time to time.
"Receivables" shall mean all present and future "accounts", as
such term is defined in section 9-106 of the UCC, and shall include, without
limitation, all accounts receivable, related contract rights and all forms of
obligations whatsoever owing, whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance;
together with all promissory notes, instruments and documents of title
representing any of the foregoing, all rights in merchandise or goods (including
returned goods) which any of the same may represent, all right, title, security
and guaranties with respect to any of the foregoing, including any right of
stoppage in transit and all insurance proceeds and corporate and other business
records relating to any of the foregoing; together, with all proceeds thereof.
"Regulation A" shall mean Regulation A of the Federal Reserve
Board as in effect from time to time.
"Regulation D" shall mean Regulation D of the Federal Reserve
Board as in effect from time to time.
"Regulation G" shall mean Regulation G of the Federal Reserve
Board as in effect from time to time.
"Regulation U" shall mean Regulation U of the Federal Reserve
Board as in effect from time to time.
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"Regulation X" shall mean Regulation X of the Federal Reserve
Board as in effect from time to time.
"Reimbursement Obligations" shall mean the unpaid
reimbursement or repayment obligations of the Borrowing Subsidiaries to the
Issuing Bank pursuant to Letter of Credit Reimbursement Agreements with respect
to Letters of Credit for amounts paid out thereunder.
"Release" shall mean any past or present release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment or into or out of
any Property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or Property.
"Relevant Condition" shall mean, with respect to any
Restricted Junior Payment (other than a Customary Dividend) or any loan by a
Borrowing Subsidiary to the Company, that (a) no Event of Default or Potential
Event of Default has occurred and is continuing on the date of such Restricted
Junior Payment or such loan (a "Relevant Date") or would result therefrom and
(b) the Company shall have delivered to the Agent a certificate in form and
substance acceptable to the Agent signed by the chief financial officer of the
Company certifying (i) that the Company and its Subsidiaries on a consolidated
basis had a pro forma Fixed Charge Coverage Ratio for the four fiscal quarter
period ending on the last day of the fiscal quarter ending immediately prior to
such Relevant Date of at least 2.5 to 1 (including, in calculating such Fixed
Charge Coverage Ratio, the amount of such proposed Restricted Junior Payment or
such loan and the amount of all other Restricted Junior Payments (other than
Customary Dividends) or loans of the type referred to above made subsequent to
the last day of such fiscal quarter, and deeming Capital Expenditures to be in a
minimum amount of at least $10,000,000 for such period), and (ii) the Maximum
Amount of Revolving Loans (less the amount of such proposed Restricted Junior
Payment or such loan) minus all outstanding Revolving Loans would have been at
least $20,000,000 for each Business Day during the 60 day period ending on such
Relevant Date, and (c) the Loan Parties shall have delivered the financial
statements and Compliance Certificate required by Sections 5.01(a), (b), (c) and
(d)(ii) in respect of such four quarter fiscal period.
"Remedial Action" shall mean actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Reportable Event" shall have the meaning ascribed to such
term in Section 4043 of ERISA or regulations promulgated thereunder.
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"Request for Release of Receivables" shall have the meaning
ascribed to such term in Section 7.02(a).
"Requirements of Law" shall mean, as to any Person, the
charter and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including, without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, U and X and other securities
credit margin regulations of the Federal Reserve Board, and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement or
Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" shall mean, at any time, Lenders holding,
in the aggregate, more than fifty percent (50%) of the then aggregate amount of
the Commitments or, if the Commitments shall have been terminated, holding Notes
evidencing more than fifty percent (50%) of the then aggregate unpaid principal
amount of the Revolving Loans.
"Restricted Junior Payment" shall mean (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class of
capital stock (or equivalent partnership interest) of any Subsidiary of the
Company now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of any such Subsidiary now or hereafter outstanding,
(iii) any payment or prepayment of principal of, premium, if any, or interest
on, and any redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, any Subordinated Indebtedness, and (iv) any
payment made to purchase, repurchase, retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
capital stock of any such Subsidiary now or hereafter outstanding.
"Revolving Credit Accommodations" shall mean, at any time, the
sum of (i) all Revolving Loans outstanding at such time and (ii) all Letter of
Credit Obligations outstanding at such time.
"Revolving Credit Facility" shall mean the revolving credit
facility provided for in Section 2.03 not to exceed, in the aggregate at any
time outstanding, One Hundred Thirty-Five Million Dollars ($135,000,000), less
all reductions in such amount effected pursuant to Sections 2.03 and 2.06.
"Revolving Credit Termination Date" shall mean the earlier of
(i) the Scheduled Termination Date and (ii) the date of termination of the
Commitments pursuant to Section 9.02(a) or Section 11.13.
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"Revolving Loan" shall have the meaning ascribed to such term
in Section 2.03(a)(i).
"Scheduled Termination Date" shall mean the fifth anniversary
of the Effective Date.
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordi nated or otherwise, or in general any
instruments commonly known as "securities", or any certificates of interest,
shares, or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended to the date hereof and from time to time hereafter, and
any successor statute.
"Solvent" shall mean, when used with respect to any Person,
that at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value) is in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities; and
(ii) it is then able to pay its debts as they mature;
and
(iii) it owns property having a value (both at fair
valuation and at present fair saleable value) in excess of the total amount
required to pay its debts; and
(iv) it has capital sufficient to carry on its
business.
"Specified Documents" shall mean the Contingent Note
Indenture, the Certificate of Incorporation of the Company, the Certificate of
Incorporation of JPS Capital, any agreement with respect to any Subordinated
Indebtedness and all other agreements or instruments executed and delivered
pursuant to or in connection with or under any of the foregoing and the
transactions contemplated thereby.
"Subordinated Indebtedness" shall mean the Indebtedness
evidenced by, or in respect of, any indebtedness incurred by the Company with
the prior written consent of the Requisite Lenders subordinated in right of
payment to the Obligations on the terms approved in writing by the Requisite
Lenders and containing such other terms as are approved in writing by the
Requisite Lenders, and with such restrictions on the use of the proceeds thereof
as shall be specified in writing by the Requisite Lenders.
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"Subsidiary" of a Person shall mean any corporation,
partnership (limited or general), trust or other entity of which a majority of
the stock (or equivalent ownership or controlling interest) having voting power
to elect a majority of the Board of Directors (if a corporation) or to select
the trustee or equivalent controlling interest, shall, at the time such
reference becomes operative, be directly or indirectly owned or controlled by
such Person or one or more of the other subsidiaries of such Person or any
combination thereof; provided, however, that (a) for purposes of Section
3.02(b)(iv), Sections 4.01(a) through 4.01(f), Sections 4.01(h) through 4.01(j),
Sections 4.01(l), (p), (q), (s), (v), (w), (x) and (y), Article V, Sections
6.02, 6.05, 6.06 and 6.08, Sections 6.11 through 6.14, Articles VII (other than
Section 7.06) through XII and the defined terms used in said sections and
articles (or used in said defined terms) (but only for purposes of such sections
and articles), references to any Subsidiary of the Company or of any Loan Party
shall not include any Unrestricted Subsidiaries, and (b) for purposes of Section
3.02(b)(iv), Sections 4.01(a), (b), (d), (e), (f), (h), (i), (j), (l), (p), (q),
(s), (t), (v), (w), (x) and (y), Article V, Article VI (other than Sections
6.03, 6.04 and 6.07), Article VII (other than Sections 7.06, 7.11, 7.14 and
7.18), Articles VIII through XII and the defined terms used in any of the
foregoing (or used in said defined terms) (but only for purposes of such
sections and articles) references to any Subsidiary of the Company or of any
Loan Party shall not include JPS Capital.
"Subsidiary Guaranties" shall mean the Amended and Restated
Guaranties dated as of the Effective Date executed by each Borrowing Subsidiary,
pursuant to which each such Borrowing Subsidiary has guaranteed all of the
Obligations of the other Borrowing Subsidiary, as each may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary Security Agreements" shall mean the Amended and
Restated Subsidiary Security Agreements dated as of the Effective Date among
each Borrowing Subsidiary and the Agent, as each may be amended, supplemented or
otherwise modified from time to time.
"Termination Event" shall mean (i) any Reportable Event with
respect to any Benefit Plan described in Section 4043 of ERISA and the
regulations issued thereunder for which the thirty (30) day notice has not been
waived, (ii) the withdrawal of the Company, or an ERISA Affiliate from a Benefit
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (iii) the occurrence of an obligation arising under
Section 4041 of ERISA of either the Company or an ERISA Affiliate to provide
affected parties with a written notice of an intent to terminate a Benefit Plan
in a distress termination described in Section 4041(c) of ERISA, (iv) the
institution by the PBGC of proceedings to terminate any Benefit Plan, (v) any
event or condition which constitutes grounds under Section 4042 of ERISA for the
appointment of a Trustee to administer a Benefit Plan, or (vi) the partial or
complete withdrawal of the Company or any ERISA Affiliate from a Multiemployer
Plan.
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"Trademark Security Agreements" shall mean the Amended and
Restated Trademark and License Security Agreements dated as of March 18, 1993,
as amended, among each Borrowing Subsidiary and the Agent, as each may be
further amended, supplemented or otherwise modified from time to time.
"Transaction Costs" shall mean the fees, costs and expenses
payable by the Company or any Borrowing Subsidiary, pursuant hereto or in
connection herewith or in respect hereof and the fees, costs and expenses
payable by the Company or any Borrowing Subsidiary in connection with (i) the
preparation, negotiation and execution of this Agreement and the other Loan
Documents executed in connection herewith, (ii) the commencement and
continuation of the Case, (iii) any restructuring of the Company pursuant to the
terms of the Plan of Reorganization or otherwise and (iv) the preparation,
filing, confirmation and implementation of the Plan of Reorganization.
"Transaction Documents" shall mean (i) the Loan Documents,
(ii) the Contribution Agreement, (iii) the Specified Documents and (iv) the Plan
of Reorganization, excluding any agreement or instrument executed and delivered
pursuant to or in connection with the Plan of Reorganization other than the
Specified Documents.
"UCC" means the Uniform Commercial Code as enacted and in
effect in the State of New York, as it may be amended from time to time.
"Unrestricted Proceeds" shall mean proceeds received by the
Company from (a) dividends and distributions to it (i) as to which the Relevant
Condition shall have been satisfied or (ii) not constituting Restricted Junior
Payments, (b) loans made to it by either Borrowing Subsidiary as to which the
Relevant Condition shall have been satisfied, (c) the issuance by it of
Subordinated Indebtedness unless the Requisite Lenders otherwise restrict the
use of such proceeds in their written consent to the incurrence of such
Indebtedness in accordance with the definition of "Subordinated Indebtedness",
(d) net cash proceeds received by the Company from the disposition of any
capital stock of any Unrestricted Subsidiary permitted pursuant to Section
7.02(a), and (e) Net Cash Proceeds from Equity Issuances (less any amounts
required to be applied to the Obligations pursuant to Section 2.06 as a result
of the reduction in the Fixed Asset Portion).
"Unrestricted Subsidiary" means any Subsidiary of the Company
all of the capital stock of which is held by the Company and none of the capital
stock of which is held by a Borrowing Subsidiary or a Pledgor, created or
acquired by the Company in connection with a Permitted Acquisition and
identified to the Agent pursuant to clause (ii) of the definition of "Permitted
Acquisition", and any subsidiary of any Unrestricted Subsidiary.
"Unused Commitment Fee Rate" means at all times during the
applicable periods set forth below, the applicable rate per annum set forth
below under the heading "Unused Commitment Fee":
34
LEVERAGE RATIO UNUSED COMMITMENT FEE
----------------------------- -----------------------------
less than or equal to 2.75 to 1 0.375%
greater than or equal to 2.75 to 1 0.25%
The Leverage Ratio used to compute the Unused Commitment Fee Rate following the
Effective Date shall be the Leverage Ratio for the Leverage Ratio Period covered
by the Compliance Certificate most recently delivered by the Loan Parties to the
Agent pursuant to Section 5.01(d)(ii); changes in the Unused Commitment Fee Rate
resulting from a change in the Leverage Ratio shall become effective upon
delivery by the Loan Parties to the Agent of a new Compliance Certificate
pursuant to Section 5.01(d)(ii). Notwithstanding anything to the contrary set
forth in this Agreement (including the then effective Leverage Ratio), the
Unused Commitment Fee Rate shall be 0.375% per annum for the period commencing
on the Effective Date and ending on the date that the Loan Parties deliver the
Compliance Certificate in respect of the Company's second full fiscal quarter
after the Effective Date. If the Loan Parties shall fail to deliver a Compliance
Certificate within the time required pursuant to Section 5.01(d)(ii), the Unused
Commitment Fee Rate from and including the first day such Compliance Certificate
was required to be delivered to but not including the date the Loan Parties
deliver to the Agent such Compliance Certificate shall conclusively equal the
highest Unused Commitment Fee Rate set forth above.
"Voting Stock" means, with respect to any Person, Securities
with respect to any class or classes of capital stock of such Person entitling
the holders thereof ordinarily (and apart from rights arising under special
circumstances) to vote in the election of members of the board of directors of
such Person.
"Warrant Agreement" means the Warrant Agreement dated as of
the Effective Date between the Company and the Warrant Agent named therein, as
the same may be amended, supplemented or otherwise modified from time to time.
"Warrants" means the warrants to purchase Common Stock issued
on the Effective Date pursuant to the Warrant Agreement.
"Warranty Liabilities" shall mean the liabilities the Company
and its Subsidiaries have accrued for the estimated future costs associated with
warranties for certain defective roofing products sold by X.X. Xxxxxxx & Co.,
Inc.
"Weekly Settlement Date" shall have the meaning ascribed to
such term in Section 2.07(a).
35
1.02. Computation of Time Periods. In this Agreement, in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed.
1.03. Accounting Terms. For purposes of this Agreement, all
----------------
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.04. Premises Incorporated by Reference. The premises set
----------------------------------
forth in the preamble hereto are incorporated into this Agreement by this
reference thereto and are made a part hereof.
1.05. Other Definitional Provisions. References herein to
-----------------------------
"Articles", "Sections", "subsections", "paragraphs", "clauses", "Exhibits", and
"Schedules", shall be to Articles, Sections, subsections, paragraphs, clauses,
Exhibits and Schedules of this Agreement.
ARTICLE II
Amounts and Terms of Loans
2.01. Promise to Repay. Each Borrowing Subsidiary hereby
----------------
agrees to pay when due the principal amount of each Revolving Loan which is made
to it, and further agrees to pay all unpaid interest accrued thereon, in
accordance with the terms hereof and of the Notes.
2.02. Evidence of Indebtedness. Each of the Borrowing
------------------------
Subsidiaries shall execute and deliver to each Lender as applicable on the
Effective Date, a Note, each in the principal amount equal to such Lender's
Commitment and otherwise substantially in the form of Exhibit 5 evidencing the
Revolving Loans and thereafter shall execute and deliver such other promissory
notes as are necessary to evidence the Revolving Loans owing to the Lenders
after giving effect to any assignment thereof pursuant to Section 11.02 (all
such promissory notes and all amendments thereto, replacements thereof and
substitutions therefor being collectively referred to as the "Notes"; and "Note"
means any one of the Notes). Each Note issued on the Effective Date shall be
issued in replacement of each Note issued by the Borrowing Subsidiaries pursuant
to the Existing Credit Agreement (the "Existing Notes"). Each Lender party to
the Existing Credit Agreement shall return to the Borrowing Subsidiaries for
cancellation each Existing Note issued to it.
2.03. Revolving Credit Facility.
-------------------------
(a) Availability. (i) Subject to the terms and conditions set
forth in this Agreement, each Lender hereby severally and not jointly agrees to
36
make to any Borrowing Subsidiary from time to time during the period from the
Effective Date to the Business Day next preceding the Revolving Credit
Termination Date, revolving loans (each individually, a "Revolving Loan" and
collectively, the "Revolving Loans"), in an amount which shall not exceed, in
the aggregate at any time outstanding, such Lender's Pro Rata Share of the
Commitments in effect at such time; provided, however, that at no time shall the
aggregate principal amount of all Revolving Loans outstanding at any time exceed
the Maximum Amount of Revolving Loans at such time; provided further, however,
that at no time shall the aggregate principal or face amount of all Revolving
Credit Accommodations outstanding at any time for the account of any Borrowing
Subsidiary exceed its Borrowing Base at such time, less the reserves
contemplated by Section 2.03(f), and less such other reserves as the Agent, in
its sole discretion, may deem appropriate.
(ii) All Revolving Loans under this Agreement
shall be made by the Lenders simultaneously and proportionately to their
respective Pro Rata Shares. It shall be understood that no Lender shall be
responsible for any failure by any other Lender to perform its obligation to
make a Revolving Loan hereunder and that the Commitment of any Lender shall not
be increased or decreased as a result of the failure by any other Lender to
perform its obligation to make a Revolving Loan.
(iii) Revolving Loans may be voluntarily prepaid
pursuant to Section 2.06(a) and, subject to the provisions of this Agreement,
any amounts so prepaid may be reborrowed, up to the amount available under this
Section 2.03(a) at the time of such Borrowing, until the Business Day next
preceding the Revolving Credit Termination Date. Each Lender's Commitment shall
expire, and each Revolving Loan then outstanding shall be repaid by the
Borrowing Subsidiary that borrowed such Revolving Loan, on the Revolving Credit
Termination Date.
(b) Notice of Borrowing. Whenever any Borrowing Subsidiary
desires to borrow under this Section 2.03, such Borrowing Subsidiary shall
deliver to the Agent a Notice of Borrowing (i) no later than 11:00 a.m. (New
York time) on the Effective Date, in the case of a Borrowing on the Effective
Date (which shall only be a Borrowing of Base Rate Loans), (ii) no later than
11:00 a.m. (New York time) at least one (1) Business Day in advance of the
proposed Funding Date, in the case of a Borrowing after the Effective Date of
Base Rate Loans and (iii) no later than 11:00 a.m. (New York time) at least
three (3) Business Days in advance of the proposed Funding Date in the case of a
Borrowing after the Effective Date of Eurodollar Rate Loans; provided, however,
that such Borrowing Subsidiary may deliver to the Agent a Notice of Borrowing no
later than 11:00 a.m. (New York time) on the proposed Funding Date if in
connection with such Borrowing the Agent would be required to comply with
37
paragraph (B) of Section 2.03(c). The Notice of Borrowing shall specify (i) the
Borrowing Subsidiary requesting the Revolving Loan, (ii) the Funding Date (which
shall be a Business Day) in respect of the Revolving Loan, (iii) the amount of
the proposed Borrowing and (iv) whether the proposed Revolving Loan will be a
Base Rate Loan or a Eurodollar Rate Loan and if a Eurodollar Rate Loan, the
Eurodollar Interest Period for such Loan. In lieu of delivering the
above-described Notice of Borrowing, the Borrowing Subsidiary requesting the
Revolving Loan may give the Agent telephonic notice of any proposed Borrowing by
the time required under this Section 2.03(b); provided, however, that such
notice shall be confirmed in writing by delivery to the Agent promptly (but in
no event later than the Funding Date of the requested Revolving Loan) of a
Notice of Borrowing. Any Notice of Borrowing (or telephonic notice in lieu
thereof) pursuant to this Section 2.03(b) shall be irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt of a
Notice of Borrowing under Section 2.03(b) (or telephonic notice in lieu
thereof), the Agent, at its option and in its sole discretion, shall do either
of the following; provided, however, in the case of a Borrowing of Base Rate
Loans of less than the amount of Citibank's unused Commitment at the time of
such Borrowing, the Agent shall act only in accordance with paragraph (B) below:
(A) The Agent shall notify each Lender by
telex or telecopy or other similar form of teletransmission, of the
proposed Borrowing. Each Lender shall make the amount of its Revolving
Loan available to the Agent in Dollars and in immediately available
funds, to such bank and account, in New York, New York, as the Agent
may designate, not later than 1:00 p.m. (New York time) on the Funding
Date. After the Agent's receipt of the proceeds of such Revolving
Loans, the Agent shall make the proceeds of such Revolving Loans
available to the Borrowing Subsidiary named in the Notice of Borrowing
in New York, New York on such Funding Date and shall disburse such
funds in Dollars and in immediately available funds to the Citibank
Account of such Borrowing Subsidiary and thereafter to an account,
designated in writing by such Borrowing Subsidiary in the Notice of
Borrowing; or
(B) The Agent shall first advance the
amount of the proposed Borrowing (including Borrowings for Revolving
Loans deemed made with respect to Reimbursement Obligations) to the
Borrowing Subsidiary out of the funds, if any, such Borrowing
Subsidiary has in its Citibank Account at the time of such Borrowing
and then, to the extent additional funds are needed, the Agent shall
advance such additional funds disproportionately (a "Disproportionate
Advance") out of the Agent's own funds. The Agent shall request
settlement with the Lenders on a weekly or more frequent basis as
necessary to conform each Lender's Revolving Credit Accommodations
outstanding at such time, to its Pro Rata Share. In the event of such
Disproportionate Advances, each Lender's share of the interest paid by
the Borrowing Subsidiary shall be adjusted as necessary to account for
the disproportion. The Agent's request for funding by the Lenders of
their Revolving Loans or for settlement to conform the Lenders' Pro
Rata Shares may be made by telex or telecopy or other similar form of
teletransmission. Each Lender shall make the amount of its Revolving
Loan or settlement available to the Agent in Dollars and in immediately
available funds, to such bank and account, in New York, New York as the
Agent may designate, not later than 2:00 p.m. (New York time) on the
day such request was made, or, if such request is made after 11:00 a.m.
38
on such day, no later than 11:00 a.m. (New York time) on the next
following Business Day. Notwith standing the foregoing, the Agent will
not at any time make any Disproportionate Advance if and to the extent
that such Disproportionate Advance, when aggregated with all other
Disproportionate Advances that have not yet been repaid by any
Borrowing Subsidiary or by the Lenders exceeds the amount of Citibank's
unused Commitment, in which case the Agent shall act only in accordance
with subsection (A) above. If a Lender does not reimburse the Agent for
its Pro Rata Share of any Disproportionate Advance as required by this
subsection (B), such Lender agrees to pay to the Agent forthwith on
demand the amount of its Pro Rata Share of such Disproportionate
Advance together with interest thereon, for each day such share remains
unpaid until the date such amount is paid or repaid to the Agent at the
Federal Funds Rate.
(ii) In connection with Revolving Loans funded
pursuant to Section 2.03(c)(i)(A), unless the Agent shall have been notified by
any Lender prior to any Funding Date in respect of any Borrowing of Revolving
Loans that such Lender does not intend to make available to the Agent such
Lender's Revolving Loan on such Funding Date, the Agent may assume that such
Lender has made such amount available to the Agent on such Funding Date and the
Agent in its sole discretion may, but shall not be obligated to, make available
to the Borrowing Subsidiary requesting such Borrowing a corresponding amount on
such Funding Date. If such corresponding amount is not in fact made available to
the Agent by such Lender on or prior to a Funding Date, such Lender agrees to
pay and such Borrowing Subsidiary agrees to repay severally to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to such Borrowing
Subsidiary until the date such amount is paid or repaid to the Agent, at (A) in
the case of such Lender, the Federal Funds Rate and (B) in the case of such
Borrowing Subsidiary, the interest rate applicable at the time to a Borrowing of
Base Rate Loans made on such Funding Date. If such Lender shall pay to the Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Revolving Loan, and if both such Lender and such Borrowing Subsidiary shall have
paid and repaid, respectively, such corresponding amount, the Agent shall
promptly return to such Borrowing Subsidiary such corresponding amount in same
day funds. Nothing in this Section 2.03(c) shall be deemed to relieve any Lender
of its obligation hereunder to make its Revolving Loan on any Funding Date.
(d) Use of Proceeds of Revolving Loans and Use of Letters of
Credit. The proceeds of the Revolving Loans shall be used by each Borrowing
Subsidiary for the payment of Transaction Costs and then for working capital in
the ordinary course of business and for other lawful and permitted corporate
purposes, in each case to the extent not otherwise prohibited hereunder. Letters
of Credit may be used for the purpose of supporting certain Permitted Existing
Indebtedness and in support of working capital in the ordinary course of
business and for other lawful and permitted corporate purposes to the extent not
otherwise prohibited hereunder; provided, however, Letters of Credit shall not
be used for the purpose of providing credit support for Indebtedness or
Operating Leases of the Company and its Subsidiaries.
39
(e) Reduction of Commitments; Revolving Credit Termination
Date. (i) The Borrowing Subsidiaries shall have the right, at any time and from
time to time, to terminate in whole or permanently reduce in part, without
premium or penalty, the Commitments in an amount up to the amount of (A) the
aggregate Commitments in effect at such time, less (B) the aggregate principal
amount of the Revolving Credit Accommodations then outstanding. The Borrowing
Subsidiaries shall give not less than two (2) Business Days' prior written
notice to the Agent designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction. Promptly after
receipt of a notice of such termination or reduction, the Agent shall notify
each Lender of the proposed termination or reduction. Such termination or
partial reduction of the Commitments shall be effective on the date specified in
the Borrowing Subsidiaries' notice and shall reduce the Commitment of each
Lender proportionately in accordance with its Pro Rata Share. Any such partial
reduction of the Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount.
(ii) The Commitments shall be permanently
reduced on a Dollar for Dollar basis by the amount of any Designated Prepayment
in respect of Net Cash Proceeds applied to the Revolving Loans pursuant to
Section 2.06(b) except as provided in the proviso of the first sentence of
Section 2.06(b)(iii). Each such reduction shall reduce the Commitment of each
Lender proportionately in accordance with its Pro Rata Share. Notwithstanding
the foregoing, all proceeds of any insurance, condemnation awards or eminent
domain proceeds relating to any assets or property shall not permanently reduce
the Commitments if such proceeds (A) are at such time placed in reserve in
accordance with Section 2.03(f)(i), (B) are to be applied to the replacement or
restoration of such assets or property in accordance with the terms of Section
6.11, (C) are received in connection with assets or property sold pursuant to a
Permitted Disposition or (D) are subject to Liens permitted under Section
7.02(b)(vi).
(iii) Each Lender's Commitment shall expire
without further action on the part of the Lenders, and all then outstanding
Revolving Loans shall be paid in full, on the Revolving Credit Termination Date.
(f) Revolving Credit Facility Reserves. Upon notification to
the Agent pursuant to Section 6.11 of the receipt by any Loan Party of any Net
Cash Proceeds constituting insurance proceeds, condemnation awards or eminent
domain proceeds, a reserve against the Revolving Credit Facility shall be
automatically and immediately created in the aggregate amount of such Net Cash
Proceeds. Each such reserve shall xxxxx to the extent that (i) the Loan Party
whose property is damaged, lost or taken uses such proceeds to restore, repair
or replace such property and/or (ii) such Loan Party makes a mandatory
prepayment required pursuant to Section 2.06(b) as a result of the receipt by
such Loan Party of such Net Cash Proceeds.
(g) Issuance of Letters of Credit. (i) Subject to the terms
and conditions set forth in this Agreement, the Issuing Bank agrees to issue for
the account of any Borrowing Subsidiary one or more Letters of Credit, up to an
40
aggregate face amount at any one time outstanding equal to the Letter of Credit
Sublimit, from time to time during the period commencing on the Effective Date
and ending on a Business Day at least two (2) Business Days preceding the
Revolving Credit Termination Date. The Letter of Credit Obligations shall
constitute financial accommodations under the Revolving Credit Facility and
shall reduce availability under the Commitments by the amount of such Letter of
Credit Obligations.
(ii) In addition to being subject to the
satisfaction of the conditions precedent contained in Section 3.02, the
obligation of the Issuing Bank to issue any Letter of Credit is subject to the
satisfaction in full of the following conditions:
(A) the Borrowing Subsidiary requesting
the Letter of Credit shall have delivered to the Issuing Bank and the
Agent at such times and in such manner as the Issuing Bank may
prescribe, a Letter of Credit Reimbursement Agreement and such other
documents and materials as may be required pursuant to the terms
thereof and the terms of the proposed Letter of Credit shall be
satisfactory to the issuer thereof;
(B) immediately after the issuance of such
Letter of Credit, the aggregate principal amount of Letter of Credit
Obligations then existing with respect to Letters of Credit issued by
the Issuing Bank, shall not exceed the Letter of Credit Sublimit and no
mandatory repayment of the Obligations would be required under Section
2.06(b)(iv) as a result of such issuance;
(C) such Letter of Credit shall have a
tenor of no longer than one (1) year; provided, however, if on the
Revolving Credit Termination Date any Letter of Credit Obligations
remain outstanding, each Borrowing Subsidiary with outstanding Letter
of Credit Obligations shall deposit in the Cash Collateral Account cash
(proportionately based on the relative amount of the Letter of Credit
Obligations of each such Borrowing Subsidiary) in an amount equal to
105% of such Letter of Credit Obligations; and
(D) as of the date of issuance, no order,
judgment or decree of any court, arbitrator or Governmental Authority
shall purport by its terms to enjoin or restrain the Issuing Bank from
issuing the Letter of Credit and no law, rule or regulation applicable
to the Issuing Bank and no request or directive (whether or not having
the force of law and whether or not the failure to comply therewith
would be unlawful) from any Governmental Authority with jurisdiction
over the Issuing Bank shall prohibit or request that the Issuing Bank
refrain from the issuance of letters of credit generally or the
issuance of such Letter of Credit.
(iii) To open a Letter of Credit, the Borrowing
Subsidiary requesting the same shall give the Issuing Bank and the Agent written
notice not later than 11:00 a.m. (New York time) on the fifth Business Day
preceding the requested issuance date thereof under this Agreement. Such notice
shall be irrevocable and shall specify (A) the stated amount of the Letter of
41
Credit requested, (B) the effective date (which day shall be a Business Day) of
issuance of such requested Letter of Credit, (C) the date on which such Letter
of Credit is to expire (which date shall be a Business Day), (D) the Person for
whose benefit the requested Letter of Credit is to be issued, and (E) the amount
of then outstanding Letter of Credit Obligations.
(iv) Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement:
(A) the Borrowing Subsidiary for whose
account a Letter of Credit has been issued shall unconditionally
reimburse the Issuing Bank for drawings under such Letter of Credit no
later than the earlier of (I) the time specified in such Letter of
Credit Reimbursement Agreement, and (II) one (1) Business Day after the
payment by the Issuing Bank; and
(B) In connection with a Letter of Credit
issued by the Issuing Bank, to the extent any Reimbursement Obligation
is not paid when due, such Reimbursement Obligation shall be deemed to
be a Revolving Loan payable to the Lenders in the amount of such
Reimbursement Obligation made in accordance with Section 2.03(a);
(C) any Reimbursement Obligation with
respect to any Letter of Credit shall bear interest from the date of
the relevant drawing under the pertinent Letter of Credit at the
interest rate applicable to Base Rate Loans until paid in full.
(v) No action taken or omitted to be taken by
the Issuing Bank under or in connection with any Letter of Credit (except in
connection with its gross negligence or willful misconduct) shall put the
Issuing Bank under any resulting liability to any Lender or, subject to
paragraph (ii) above, relieve any such Lender of its obligations hereunder to
the Issuing Bank. In the event this Agreement and any Letter of Credit
Reimbursement Agreement are inconsistent, the terms of this Agreement shall
prevail. In determining whether to pay under any Letter of Credit, the Issuing
Bank shall have no obligation to the Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
(vi) (A) Immediately upon issuance by the
Issuing Bank of any Letter of Credit for the account of a Borrowing Subsidiary
in accordance with the procedures set forth in this Section 2.03(g), each Lender
(other than the Issuing Bank) shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest in the amount of such Lender's Pro Rata Share
in such Letter of Credit (including, without limitation, all obligations of such
Borrowing Subsidiary with respect thereto other than amounts owing to the
Issuing Bank under the last sentence of Section 2.05(c)(ii)) and any security
therefor or guaranty pertaining thereto.
42
(B) If the Issuing Bank makes any payment
under any Letter of Credit and the Borrowing Subsidiary does not repay
such amount to the Issuing Bank pursuant to paragraph (iv) above or
paragraph (vii) below or effect a Borrowing as provided in
paragraph(iv)(B) above, the Agent shall promptly notify each Lender of
such failure, and each Lender (other than the Issuing Bank) shall
promptly and unconditionally pay to the Agent for the account of the
Issuing Bank the amount of such Lender's Pro Rata Share of such
payment, in Dollars and in immediately available funds, and the Agent
shall promptly pay such amount, and any other amounts received by the
Agent for the Issuing Bank's account pursuant to this paragraph (vi),
to the Issuing Bank. All such payments, including Borrowings effected
pursuant to paragraph (iv)(B) above, shall constitute Revolving Loans
by such Borrowing Subsidiary made pursuant to Section 2.03(a) and
Section 2.03(c) (irrespective of the satisfaction of the conditions
specified in Section 3.02 or the requirement in Section 2.03(b) to
deliver a Notice of Borrowing, which condition and requirement, for the
purpose of funding any Reimbursement Obligation owing to any Issuing
Bank, the Lenders hereby irrevocably waive). If the
Agent so notifies a Lender prior to 11:00 a.m. (New York time) on any
Business Day, such Lender shall make available to the Agent for the
account of the Issuing Bank its Pro Rata Share of the amount of such
payment on such Business Day in Dollars and in immediately available
funds in New York, New York. If and to the extent such Lender shall not
have so made its Pro Rata Share of the amount of such payment available
to the Agent for the account of the Issuing Bank, such Lender agrees to
pay to the Agent for the account of the Issuing Bank forthwith on
demand such amount together with interest thereon, for each day from
the date such payment was first due until the date such amount is paid
to the Agent for the account of the Issuing Bank, at the Federal Funds
Rate for three (3) Business Days and then at the Base Rate. The failure
of any Lender (other than the Issuing Bank) to make available to the
Agent for the account of the Issuing Bank its Pro Rata Share of any
such payment shall not relieve any other Lender (other than the Issuing
Bank) of its obligation hereunder to make available to the Agent for
the account of the Issuing Bank its Pro Rata Share of any payment on
the date such payment is to be made.
(C) Whenever the Issuing Bank receives a
payment on account of a Reimbursement Obligation, including any
interest thereon, as to which the Agent has previously received
payments from the Lenders (other than the Issuing Bank) for the account
of the Issuing Bank pursuant to this paragraph (vi), it shall promptly
pay to the Agent and the Agent shall promptly pay to each Lender which
has funded its participating interest therein, in New York, New York,
in Dollars and in the kind of funds so received, an amount equal to
such Lender's Pro Rata Share thereof. Each such payment shall be made
by the Issuing Bank or the Agent, as the case may be, on the Business
Day on which such Person receives the funds paid to such Person
pursuant to the preceding sentence, if received prior to 11:00 a.m.
(New York time) on such Business Day, and otherwise on the next
succeeding Business Day.
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(D) Upon the request of any Lender, the
Issuing Bank shall furnish to such Lender copies of any Letter of
Credit or Letter of Credit Reimbursement Agreement to which the Issuing
Bank is party and such other documentation as may reasonably be
requested by such Lender.
(E) The obligations of a Lender (other than
the Issuing Bank) to make payments to the Agent for the account of the
Issuing Bank with respect to a Letter of Credit issued on behalf of a
Borrowing Subsidiary by such Issuing Bank shall be irrevocable, shall
not be subject to any qualification or exception whatsoever, and shall
be honored in accordance with the terms and conditions of this
Agreement under all circumstances (subject to paragraph (ii) above),
including, without limitation, any of the following circumstances
(except in connection with the gross negligence or willful misconduct
of the Issuing Bank):
(I) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents;
(II) the existence of any claim, set-off,
defense or other right which a Borrowing Subsidiary may have
at any time against a beneficiary named in a Letter of Credit
or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, the
Issuing Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between such Borrowing
Subsidiary and the beneficiary named in any Letter of Credit);
(III) any draft, certificate of any other
document presented under the 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;
(IV) the surrender or impairment of any
security for the performance or observance of any of the terms
of any of the Loan Documents; or
(V) the occurrence of any Event of
Default or Potential Event of Default.
(vii) (A) Each Borrowing Subsidiary unconditionally
agrees to pay to the issuer of any Letter of Credit the amount of all
Reimbursement Obligations, interest and other amounts payable to such
issuers under or in connection with any Letter of Credit issued on
behalf of such Borrowing Subsidiary immediately when due, irrespective
of any claim, setoff, defense or other right which such Borrowing
Subsidiary may have at any time against the Issuing Bank or any other
Person.
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(B) In the event any payment by a
Borrowing Subsidiary received by the Issuing Bank with respect to such
Letter of Credit and distributed by the Agent to the Lenders on account
of their participations is thereafter set aside, avoided or recovered
from the Issuing Bank in connection with any receivership, liquidation
or bankruptcy proceeding or otherwise, each Lender which received such
distribution shall, upon demand by the Issuing Bank, contribute such
Lender's Pro Rata Share of the amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Issuing
Bank upon the amount required to be repaid by it.
(viii) (A) In addition to amounts payable as
elsewhere provided in this Section 2.03(g), each Borrowing Subsidiary
hereby agrees to protect, indemnify, pay and save the Agent, the
Issuing Bank and each Lender harmless from and against any and all
Liabilities and Costs which the Agent or the Issuing Bank or any Lender
may incur or be subject to as a consequence, direct or indirect, of (I)
the issuance of a Letter of Credit for the account of such Borrowing
Subsidiary other than, in the case of the Issuing Bank, as a result of
its gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction or (II) the failure of
the Issuing Bank to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Governmental Authority (all such
acts or omissions herein called "Governmental Acts").
(B) As between the Borrowing Subsidiary
for whose account a Letter of Credit has been issued, the Lenders, the
Agent or the Issuing Bank, such Borrowing Subsidiary assumes all risks
of the acts and omissions of, or misuse of such Letter of Credit by,
the beneficiary of such Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of
Credit Reimbursement Agreements, the Agent, the Issuing Bank and the
Lenders shall not be responsible: (I) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (II) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign 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; (III) for failure of the beneficiary of a Letter of Credit to
comply duly with conditions required in order to draw upon such Letter
of Credit; (IV) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or other similar form of teletransmission or otherwise, whether
or not they be in cipher; (V) for errors in interpretation of technical
terms; (VI) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof; (VII) for the misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; and (VIII) for any consequences arising from
45
causes beyond the control of the Agent, the Issuing Bank and any Lender
including, without limitation, any Governmental Acts. None of the above
shall affect, impair, or prevent the vesting of any of the rights or
powers of the Issuing Bank under this paragraph (viii).
(C) In furtherance and extension and not
in limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Issuing Bank under or in connection with
Letters of Credit issued on behalf of a Borrowing Subsidiary or any
related certificates, if taken or omitted in good faith, shall not, in
the absence of gross negligence or willful misconduct, put the Issuing
Bank, the Agent or any Lender under any resulting liability to such
Borrowing Subsidiary or relieve such Borrowing Subsidiary of any of its
obligations hereunder to any such Person.
2.04. Interest on the Revolving Loans.
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(a) Rate of Interest. (i) All Loans shall bear interest on the
unpaid principal amount thereof from the date made until paid in full at a
fluctuating rate determined from time to time by reference to the Base Rate or
the Eurodollar Rate. The Loans shall bear interest, subject to Section 2.04(d)
and paragraph (ii) below, as follows:
(A) If a Base Rate Loan, then at a rate per annum
equal to the sum of (I) the Applicable Margin for Base Rate Loans plus
(II) the Base Rate as in effect from time to time as interest accrues;
and
(B) If a Eurodollar Rate Loan, then at a rate per
annum equal to the sum of (I) the Applicable Margin for Eurodollar Rate
Loans plus (II) the Eurodollar Rate determined for the applicable
Eurodollar Interest Period.
(ii) Notwithstanding paragraph (i) above,
interest in respect of any Revolving Loan shall not exceed the maximum rate
permitted by applicable law.
(b) Interest Payments. Subject to Section 2.04(d), interest
accrued on all Base Rate Loans in any calendar quarter shall be payable by each
Borrowing Subsidiary borrowing such Base Rate Loan in arrears (i) on the first
Business Day of the month following each January 31, April 30, July 31 and
October 31 during the term of this Agreement, commencing on the first such day
following the making of each such Base Rate Loan, (ii) upon the prepayment
thereof in full and (iii) at maturity. Interest accrued on each Eurodollar Rate
Loan shall be payable by each Borrowing Subsidiary borrowing such Eurodollar
Rate Loan in arrears (A) on each Eurodollar Interest Payment Date applicable to
that Loan, (B) upon prepayment thereof in full and (C) at maturity.
(c) Conversion or Continuation. (i) Subject to the provisions
of Section 2.08, a Borrowing Subsidiary shall have the option (A) to convert at
any time all or any part of out standing Loans which comprise part of the same
Borrowing and which, in the aggregate, equal $5,000,000 or an integral multiple
of $1,000,000 in excess of that amount from Base Rate Loans to Eurodollar Rate
Loans; or (B) to convert all or any part of outstanding Loans which, in the
aggregate, equal $5,000,000 or an integral multiple of $1,000,000 in excess of
that amount from Eurodollar Rate Loans to Base Rate Loans on the expiration date
of any Eurodollar Interest Period applicable thereto; or (C) upon the expiration
of any Eurodollar Interest Period applicable to a Borrowing of Eurodollar Rate
Loans, to continue all or any portion of such Loans equal to $5,000,000 or an
integral multiple of $1,000,000 in excess of that amount as Eurodollar Rate
Loans of the same type, and the succeeding Eurodollar Interest Period of such
continued Loans shall commence on the expiration date of the Eurodollar Interest
Period applicable thereto; provided, however, that no outstanding Loan may be
continued as, or be converted into, a Eurodollar Rate Loan when any Event of
Default or Potential Event of Default has occurred and is continuing.
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(ii) In the event a Borrowing Subsidiary shall
elect to convert or continue a Revolving Loan under this Section 2.04(c), such
Borrowing Subsidiary shall deliver a Notice of Conversion/Continuation to the
Agent no later than 11:00 a.m. (New York time) at least one (1) Business Day in
advance of the proposed conversion date in the case of a conversion to a Base
Rate Loan, and no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed conversion/continuation date in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan. A Notice
of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the amount of
the Loan to be converted/continued, (C) the nature of the proposed conversion/
continuation, and (D) in the case of a conversion to, or continuation of, a
Eurodollar Rate Loan, the requested Eurodollar Interest Period. In lieu of
delivering the above-described Notice of Conversion/Continuation, such Borrowing
Subsidiary may give the Agent telephonic notice of any proposed
conversion/continuation by the time required under this Section 2.04(c);
provided, however, that such notice shall be confirmed in writing by delivery to
the Agent promptly (but in no event later than the proposed
conversion/continuation date) of a Notice of Conversion/ Continuation. Promptly
after receipt of a Notice of Conversion/Continuation under this Section 2.04(c)
(or telephonic notice in lieu thereof), the Agent shall notify each Lender by
telex, telecopy, telegram, telephone or other similar form of transmission, of
the proposed conversion/continuation.
(iii) Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Revolving Loan (or telephonic notice in
lieu thereof) shall be irrevocable and the Borrowing Subsidiary delivering such
notice shall be bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 2.04(a) and the payment dates specified in Section 2.04(b),
effective immediately upon the occurrence of any Event of Default (except for
Events of Default arising from any Loan Party's failure to comply with Sections
6.01 through 6.03, 6.05 through 6.08, 6.11, 7.08, 7.12, 7.15, 7.16, and 7.18)
and for as long thereafter as any such Event of Default shall be continuing, (i)
the principal balance of all Loans then outstanding and, to the extent permitted
by applicable law, any interest payments on the Loans not paid when due, shall
bear interest payable upon demand at a rate which is two percent (2%) per annum
in excess of the rate of interest otherwise payable under this Agreement and
(ii) any letter of credit fee payable pursuant to Section 2.05(c) shall be
increased by two percent (2%) per annum in excess of the per annum rate
specified for such fee.
(e) Computation of Interest. Interest on Base Rate Loans and
Eurodollar Rate Loans shall be computed on the basis of the actual number of
days elapsed in the period during which interest accrues and a year of 360 days.
In computing interest on any Revolving Loan, the date of the making of the Loan
or the first day of a Eurodollar Interest Period, as the case may be, shall be
included and the date of payment or the expiration date of a Eurodollar Interest
Period, as the case may be, shall be excluded.
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(f) Changes; Legal Restrictions. Except as provided in Section
2.08(d) with respect to certain determinations on Eurodollar Interest Rate
Determination Dates, in the event that after the date hereof (a) the adoption of
or any change in any law, treaty, rule, regulation, guideline or determination
of a court or Governmental Authority or any change in the interpretation or
application thereof by a court or Governmental Authority, or (b) compliance by
any Lender with any request or directive (whether or not having the force of law
and whether or not the failure to comply therewith would be unlawful) from any
central bank or other Governmental Authority or quasi-governmental authority:
(i) subjects a Lender (or its applicable
lending office or Eurodollar Affiliate) to any tax, duty or other charge of any
kind which such Lender determines to be applicable to this Agreement, the
Commitments, the Loans, the Letters of Credit or change in the basis of taxation
of payments to such Lender of principal, fees, interest, or any other amount
payable hereunder, except for net income or franchise taxes imposed by any
jurisdiction (all such non-excepted taxes, duties and other charges being
hereinafter referred to as "Taxes"); or
(ii) does or may impose, modify, or hold
applicable, in the determination of a Lender, any reserve, special deposit,
compulsory loan, FDIC insurance, capital allocation or similar requirement
against assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances or loans by,
Commitments made, or other credit extended by, or any other acquisition of funds
by, a Lender or any applicable lending office or Eurodollar Affiliate of such
Lender (except, with respect to Base Rate Loans, to the extent that the reserve
and FDIC insurance requirements are reflected in the definition of "Base Rate"
and, with respect to Eurodollar Rate Loans, to the extent that the reserve
requirements are reflected in the definition of "Eurodollar Rate"); or
(iii) does or is reasonably likely to impose on
such Lender any other condition materially more burdensome in nature, extent or
consequence than those in existence as of the Effective Date; and the result of
any of the foregoing is to increase the cost to such Lender of making, renewing
or maintaining the Loans or its Commitment to any Borrowing Subsidiary or
issuing to any Borrowing Subsidiary any Letter of Credit or to reduce any amount
receivable thereunder, then, in any such case, such Borrowing Subsidiary shall
promptly pay to such Lender, upon demand, such amount or amounts (based upon an
allocation thereof by such Lender to the financing transactions contemplated by
this Agreement and affected by this Section 2.04(f)) as may be necessary to
compensate that Lender for any such additional cost incurred or reduced amount
received. Such Lender shall deliver to such Borrowing Subsidiary a written
statement of the costs or reductions claimed and the basis therefor, and the
allocation made by such Lender of such costs and reductions shall be conclusive,
absent manifest error. If a Lender subsequently recovers any amount of Taxes
previously paid by such Borrowing Subsidiary pursuant to this Section 2.04(f),
such Lender shall, within thirty (30) days after receipt of such refund and to
the extent permitted by applicable law, pay to such Borrowing Subsidiary the
amount of any such recovery.
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2.05. Fees.
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(a) Fee Agreement. The Company and the Borrowing Subsidiaries
shall pay to the Agent, solely for its own account, the fees specified in the
Fee Agreement on the dates specified therein. No Person other than Citibank
shall have any interest in such fees.
(b) Unused Commitment Fee. The Borrowing Subsidiaries shall
pay to the Agent, for the account of each Lender, an unused commitment fee
accruing at the rate of the Unused Commitment Fee Rate from and after the
Effective Date until the Obligations are paid in full and the Commitments are
terminated, upon the average daily amount of the excess of such Lender's Pro
Rata Share of the Commitments over such Lender's Pro Rata Share of all Revolving
Credit Accommodations outstanding from time to time. All such commitment fees
payable under this paragraph (b) shall be payable quarterly in arrears on the
first Business Day in each fiscal quarter beginning after the Effective Date.
(c) Letter of Credit Fees. (i) Each Borrowing Subsidiary that
has requested the issuance of a Letter of Credit shall pay to the Agent, for the
benefit of the Lenders, quarterly in arrears, a letter of credit fee equal to
the Applicable Margin for Eurodollar Rate Loans applied to the maximum amount
available to be drawn under all outstanding Letters of Credit issued for the
account of such Borrowing Subsidiary. Each Lender shall receive from the Agent
the percentage of such fee that is equal to such Lender's Pro Rata Share. Such
Borrowing Subsidiary shall pay to the Agent, solely for the account of the
Issuing Bank, quarterly in arrears, an issuing fee equal to a rate per annum to
be agreed upon between the Issuing Bank and such Borrowing Subsidiary applied to
the maximum amount available to be drawn under all outstanding Letters of Credit
issued for the account of such Borrowing Subsidiary. All such letter of credit
fees payable under this paragraph (c) shall be payable on the first Business Day
in each fiscal quarter beginning after the Effective Date.
(ii) Each such Borrowing Subsidiary shall also
pay to the Agent, for the account of the Issuing Bank, the standard charges
assessed by such Person in connection with the issuance, administration,
amendment and payment or cancellation of such Letter of Credit.
49
(d) Payment of Fees. The fees described in this Section 2.05
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of the Company or any Borrowing Subsidiary to pay each fee described herein
shall be in addition to, and not in lieu of, the obligation of the Company or
such Borrowing Subsidiary to pay interest, other fees and expenses otherwise
described in this Agreement or the Fee Agreement. Fees shall be payable when due
in New York, New York in immediately available funds. All fees shall be
non-refundable when paid. All fees and expenses specified or referred to in this
Agreement due to the Agent or a Lender, including, without limitation, those
referred to in this Section 2.05, in Section 11.03 and in the Fee Agreement,
shall bear interest, if not paid when due, at the rate then applicable to past
due Base Rate Loans (but not to exceed the maximum rate permitted by applicable
law), shall constitute Obligations and shall be secured by all of the
Collateral. All fees described in this Section 2.05 and the Fee Agreement, which
are expressed as a per annum charge shall be calculated on the basis of the
actual number of days elapsed in a 360-day year.
2.06. Prepayments.
-----------
(a) Voluntary Prepayments. Any Borrowing Subsidiary may, upon
prior written or telephonic notice confirmed promptly in writing to the Agent
prior to 11:00 a.m. on any Business Day (which notice the Agent shall promptly
transmit by telegram, telex or telephone to each Lender), prepay on such
Business Day any Base Rate Loan in whole or in part, without premium or penalty,
in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount; provided, however, that (i) such Borrowing
Subsidiary may prepay such Loans in full without regard to such minimum amount
and (ii) the Borrowing Subsidiaries may prepay Revolving Loans in an aggregate
amount less than the amount of Citibank's Revolving Loans outstanding at such
time without any such prior written notice pursuant to Section 2.07(a).
Eurodollar Rate Loans may be prepaid in whole or in part, without premium or
penalty, on the expiration date of the Eurodollar Interest Period applicable
thereto and otherwise only upon payment of the amounts described in Section
2.08(f). Prepayments of Revolving Loans under this clause (a) shall not reduce
the Commitments. Notwithstanding the foregoing, in the event that any prepayment
is made in connection with the termination of this Agreement, such prepayment
shall be made only upon ten (10) Business Days' prior written notice to the
Agent. Any notice of prepayment given to the Agent under this Section 2.06(a)
shall specify the date of prepayment and the aggregate principal amount of the
prepayment. If a notice of prepayment has been delivered as provided herein, the
principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified in such notice.
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(b) Mandatory Prepayments. (i) If after the Effective Date any
Loan Party or Pledgor receives any Net Cash Proceeds, the Obligations shall be
mandatorily prepaid, without premium or penalty, by an amount equal to such Net
Cash Proceeds; provided, however, in the case of Net Cash Proceeds of
Subordinated Indebtedness to the extent constituting Unrestricted Proceeds and
in the case of Net Cash Proceeds of Equity Issuances, such Net Cash Proceeds
shall be applied to the Obligations only if and when received by a Borrowing
Subsidiary or Pledgor.
(ii) Each mandatory prepayment described in
clause (i) of this Section 2.06(b) shall be referred to herein as a "Designated
Prepayment". A Loan Party or Pledgor, as the case may be, shall give the Agent
not less than two (2) Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of the circumstances giving rise to such
Designated Prepayment and of the date on which such Designated Prepayment will
be made (which date shall be no later than the date on which such Designated
Prepayment becomes due and payable pursuant to this Section 2.06(b).
(iii) Designated Prepayments shall be applied to
the repayment of the Revolving Loans then outstanding and, to the extent applied
to the Revolving Loans, the Commitments shall be permanently reduced by the
amount of any such Designated Prepayment; provided, however, that the
Commitments shall not be permanently reduced by the amount of (A) Designated
Prepayments of Net Cash Proceeds from Permitted Dispositions, (B) financings or
refinancings pursuant to which Indebtedness permitted by Section 7.01 (other
than Subordinated Indebtedness the proceeds of which do not constitute
Unrestricted Proceeds) is incurred or (C) Designated Prepayments of Net Cash
Proceeds of Equity Issuances. Each Designated Prepayment shall be apportioned
among the Lenders in accordance with their respective Pro Rata Shares of
Revolving Loans being prepaid. The Borrowing Subsidiaries shall be obligated to
pay as a mandatory prepayment of their Obligations the amount of each Designated
Prepayment required to be applied to the Revolving Loans.
(iv) Each Borrowing Subsidiary shall make
prepayments of Revolving Loans made to it to the extent necessary to assure that
(A) the aggregate principal amount of the Revolving Loans outstanding at any
time does not exceed at such time the Maximum Amount of Revolving Loans then in
effect and (B) the aggregate principal amount of all Revolving Credit
Accommodations outstanding at any time made to such Borrowing Subsidiary does
not exceed at such time its Borrowing Base then in effect, less the reserves
contemplated in Section 2.03(f) and such other reserves as the Agent, in its
sole discretion, may deem appropriate. To the extent the Commitments at any time
are less than the amount of Letter of Credit Obligations outstanding at such
time, each Borrowing Subsidiary with outstanding Letter of Credit Obligations
shall deposit in the Cash Collateral Account cash (proportionately based on the
relative amount of the Letter of Credit Obligations of each such Borrowing
Subsidiary) in the amount by which such Letter of Credit Obligations exceed such
Commitments. To the extent that any Borrowing Subsidiary's outstanding Letter of
Credit Obligations exceed its Borrowing Base at such time, less the reserves
contemplated in Section 2.03(f) and such other reserves as the Agent, in its
sole discretion, may deem appropriate, then such Borrowing Subsidiary shall
deposit in the Cash Collateral Account cash in the amount of such excess. Each
Borrowing Subsidiary hereby grants the Agent a security interest for the benefit
of the Agent, the Lenders and the Issuing Bank in the Cash Collateral Account
and all funds from time to time deposited in the Cash Collateral Account as
security for, and to provide for the payment of, the Letter of Credit
Obligations.
51
2.07. Payments; Collection of Accounts.
--------------------------------
(a) Manner and Time of Payment. All payments of principal,
interest, Reimbursement Obligations and fees hereunder or under any Letter of
Credit payable to the Lenders shall be made without condition or reservation of
right, in Dollars and in immediately available funds, delivered to the Agent not
later than 11:00 a.m. (New York time) on the date due, to such account of the
Agent in New York, New York, as the Agent may designate, for the account of the
Lenders; and funds received by the Agent after that time and date shall be
deemed to have been paid on the next succeeding Business Day. Payments actually
received by the Agent for the account of the Lenders shall be paid to them
promptly after receipt thereof by the Agent; provided, however, that the Agent
shall pay to such Lenders interest thereon, at the lesser of (i) the Federal
Funds Rate and (ii) the rate of interest applicable to Base Rate Loans, from the
Business Day following receipt of such funds by the Agent until such funds are
paid to such Lenders. Notwithstanding the foregoing, all funds received or on
deposit in the Concentration Account by 3:00 p.m. on any Business Day shall be
applied to repay first any Disproportionate Advance and then any of Citibank's
Revolving Loans outstanding at such time. To the extent all Disproportionate
Advances and Citibank's Revolving Loans are paid in full, all funds remaining in
the Concentration Account, which are not otherwise applied to the Obligations
pursuant to any notice of prepayment received by the Agent in accordance with
Section 2.06, shall be retained by the Agent in the Concentration Account and
invested as provided in paragraph (e) below and shall be paid to the Lenders by
the Agent on a weekly basis, on a settlement date to be selected each week by
the Agent (the "Weekly Settlement Date"). Such payments shall be applied to the
Obligations as provided in paragraph (b) below. Such Obligations shall be deemed
not to have been repaid until the next Weekly Settlement Date and interest on
such Obligations will continue to accrue at the rates set forth herein for such
Obligations up to but not including such Weekly Settlement Date. On the Weekly
Settlement Date, if any Revolving Loans of Citibank have been repaid, Citibank
shall purchase, without recourse or warranty, an undivided interest and
participation in that portion of the Revolving Loans so that, after such
purchase, each Lender (including Citibank) will have Revolving Credit
Accommodations outstanding (subject to Section 2.03(a)(ii)) in the amount of its
Pro Rata Share.
(b) Apportionment of Payments. So long as there does not exist
an Event of Default, all payments of principal and interest in respect of
outstanding Loans, all payments of the fees described herein and in the Fee
Agreements, and all payments in respect of any other Obligations shall be
allocated among such of the Agent and the Lenders as are entitled thereto as
provided herein. After the occurrence and during the continuance of an Event of
Default, and unless providing notice to the Loan Parties that payments and
proceeds shall be otherwise applied, the Agent may, and upon the direction of
the Requisite Lenders shall, apply all payments remitted to the Agent and all
amounts and proceeds of Collateral received by the Agent, subject to the
52
provisions of this Agreement, (i) first, to pay Obligations in respect of any
fees, expense reimbursements or indemnities then due to the Agent from any Loan
Party (including, without limitation, any Disproportionate Advance by the
Agent); (ii) second, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Lenders from any Loan Party; (iii)
third, to pay interest due in respect of Loans and Reimbursement Obligations;
(iv) fourth, to pay or prepay principal of Loans and Reimbursement Obligations,
and to pay (or to the extent such Obligations are contingent, prepay or provide
cash collateral in respect of) Letter of Credit Obligations; (v) fifth, to pay
or prepay Obligations due or to become due in respect of Interest Rate Contracts
to which any Lender is a party; and (vi) sixth, to the ratable payment of all
other Obligations; provided, however, that if sufficient funds are not available
to fund all payments to be made in respect of the Obligations owing by the Loan
Parties described in any of the foregoing clauses (i) through (v), the available
funds shall be allocated to the payment of such Obligations ratably, based on
the proportion of the Agent's and each Lender's interest in the aggregate
outstanding Obligations described in such clause; provided, further, that in the
event any Disproportionate Advance is outstanding at such time the available
funds first shall be allocated so as to conform each Lender's Revolving Credit
Accommodations outstanding at such time to its Pro Rata Share.
The Agent shall promptly distribute to each Lender at its
primary address set forth on the appropriate signature page hereof, or at such
other address as a Lender may request in writing, such funds as it may be
entitled to receive, provided that the Agent shall not in any event be bound to
inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender and may suspend all payments or seek appropriate
relief (including, without limitation, instructions from the Requisite Lenders
or an action in the nature of interpleader) in the event of any doubt or dispute
as to any apportionment or distribution contemplated hereby. The order of
priority herein is set forth solely to determine the rights and priorities of
the Lenders as among themselves and may at any time or from time to time be
changed by the Lenders as they may elect, in writing in accordance with Section
11.08, without necessity of notice to or consent of or approval by any Loan
Party or any other Person.
(c) Payments on Non-Business Days. Whenever any payment to be
made by any Loan Party hereunder shall be stated to be due on a day which is not
a Business Day, payments shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.05, as the case
may be.
(d) Agent's or Lender's Accounting. (i) The Agent shall
maintain a loan account (the "Loan Account") on its books in which shall be
recorded (x) the names and addresses of the Lenders and the Commitments of, and
principal amount of Loans and Letter of Credit Obligations owing to, each Lender
from time to time; (y) all other appropriate debits and credits as provided in
this Agreement, including, without limitation, all interest, fees (including
attorneys' fees and disbursements), expenses, charges and other Obligations; (z)
53
all payments of Obligations made by any Borrowing Subsidiary, or for such
Borrowing Subsidiary's account. All entries in the Loan Account shall be made in
accordance with the Agent's customary accounting practices as in effect from
time to time. The Agent will render a statement of the Loan Account monthly to
each Borrowing Subsidiary and will deliver a copy thereof to each Lender. The
Agent will notify each Lender on each Weekly Settlement Date, if any Letter of
Credit Obligations with respect to Letters of Credit issued by the Issuing Bank
are outstanding on such date, and the principal amount of such Letter of Credit
Obligations owing to each Lender on such date. Each and every such statement
shall be deemed final, binding and conclusive upon such Borrowing Subsidiary in
all respects as to all matters reflected therein (absent manifest error), unless
such Borrowing Subsidiary, within fifteen (15) days after the date such
statement is rendered, delivers to the Agent written notice of any objections
which such Borrowing Subsidiary may have to any such statement. In that event,
only those items expressly objected to in such notice shall be deemed to be
disputed by such Borrowing Subsidiary. Notwithstanding the foregoing, the
Agent's entries in the Loan Account evidencing Loans and other financial
accommodations made from time to time shall be final, binding and conclusive
upon such Borrowing Subsidiary (absent manifest error) as to the existence and
amount of the Obligations recorded in the Loan Account. The Agent may, in its
discretion, and will at the request of the Requisite Lenders, charge to the Loan
Account any or all interest, fees and expenses incurred by any Borrowing
Subsidiary hereunder or under the other Loan Documents.
(ii) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
the Borrowing Subsidiaries to such Lender resulting from each Revolving Loan
owing to such Lender from time to time, including the amount of principal and
interest payable and paid to such Lender from time to time hereunder and under
each of the Notes; provided that the failure of any Lender to so maintain such
account or accounts shall not affect the Obligations of the Company or the
Borrowing Subsidiaries.
(e) Collection of Accounts and Payments. (i) Each Borrowing
Subsidiary shall maintain one or more Blocked Accounts and such Borrowing
Subsidiary shall, promptly upon receipt thereof, immediately deposit in its
respective Blocked Accounts, all monies, checks, notes, drafts or funds received
by it and including, without limitation, all proceeds of Collateral, Net Cash
Proceeds and other cash proceeds of operations whether arising in the ordinary
course of business or otherwise. In the event the Company or any Pledgor has
cash and Cash Equivalents in excess of $5,000,000 for more than 10 Business Days
(or such longer period as shall be agreed to by the Agent), the Company or such
Pledgor, as the case may be, shall deposit such cash in and hold such Cash
Equivalents through a Blocked Account and the Company or such Pledgor shall have
access to the funds on deposit in such Blocked Account at any time prior to the
receipt by the applicable Blocked Account Bank and the Company of notice from
the Agent that an Event of Default or Potential Event of Default has occurred
and is continuing; provided, however, that, in the event that the Company or
such Pledgor, as the case may be, enters into a Contractual Obligation any
amount of the payment of which will be made with any such cash or Cash
Equivalents (such amount being a "Committed Amount"), the Company or such
Pledgor, as the case may be, shall (1) forthwith withdraw such Committed Amount
from such Blocked Account and deposit the same into an account that is not a
Blocked Account and (2) simultaneously notify the Agent and each Lender in
writing of (x) the Committed Amount and (y) the Contractual Obligation that will
be paid with such Committed Amount).
54
(ii) Funds on deposit in a Blocked Account of a
Borrowing Subsidiary on each Business Day shall be wire-transferred to the
Concentration Account in accordance with the Collection Account Agreements and
shall be applied to such Borrowing Subsidiary's Obligations to the extent and at
the times provided in Sections 2.06 and 2.07(a). The Agent shall use its best
efforts to invest all funds, if any, on deposit in the Concentration Account at
3:00 p.m. on any Business Day which are not applied to the Obligations on such
Business Day pursuant to Section 2.06 or 2.07(a), in an overnight investment at
the best rate of return available for such investment for the benefit of such
Borrowing Subsidiary at the time such investment is made. Each Borrowing
Subsidiary hereby grants to the Agent a security interest for the benefit of the
Agent, the Lenders and the Issuing Bank in the Concentration Account and all
funds from time to time deposited in the Concentration Account as security for
the Obligations. All interest or other income on such funds resulting from
overnight investments shall be held in the Concentration Account as additional
cash collateral constituting additional security for the Obligations.
(iii) Each Borrowing Subsidiary agrees to pay to
the Agent any and all reasonable fees, costs and expenses which the Agent incurs
in connection with opening and maintaining the Blocked Accounts, lock box or
other similar payment collection mechanism for such Borrowing Subsidiary and
depositing for collection any check or item of payment received by and/or
delivered to the Collecting Banks, the Agent on account of the Obligations of
such Borrowing Subsidiary. Each Borrowing Subsidiary agrees to reimburse the
Agent for any amounts paid to any Collecting Bank arising out of any required
indemnification by the Agent of such Collecting Bank against damages incurred by
the Collecting Bank in the operation of a Blocked Account. The Company shall,
and shall cause each Pledgor to, pay the Agent any and all reasonable fees,
costs and expenses which the Agent incurs in connection with opening and
maintaining the Blocked Accounts for the Company and such Pledgor.
2.08. Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to Euro dollar Rate Loans as to the matters covered:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan
shall be for a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 in excess of that amount. At least $5,000,000 in principal amount of
the Revolving Loans shall be Base Rate Loans at the time any Eurodollar Rate
Loan is requested to be made, any Base Rate Loan is requested to be converted
into a Eurodollar Rate Loan or any Eurodollar Rate Loan is requested to be
continued.
55
(b) Determination of Eurodollar Interest Period. By giving
notice as set forth in Section 2.04(c) (with respect to a conversion into or
continuation of Eurodollar Rate Loans), the Borrowing Subsidiary giving such
notice shall have the option, subject to the other provisions of this Section
2.08, to specify an interest period (each, a "Eurodollar Interest Period") to
apply to the Borrowing of Eurodollar Rate Loans described in such notice, which
Eurodollar Interest Period shall be either a one, two, three, six or twelve
month period. The determination of Eurodollar Interest Periods shall be subject
to the following provisions:
(i) In the case of immediately successive
Eurodollar Interest Periods applicable to a Borrowing of Eurodollar Rate Loans,
each successive Eurodollar Interest Period shall commence on the day on which
the next preceding Eurodollar Interest Period expires;
(ii) If any Eurodollar Interest Period would
otherwise expire on a day which is not a Business Day, the Eurodollar Interest
Period shall be extended to expire on the next succeeding Business Day;
provided, however, that if any such Eurodollar Interest Period applicable to a
Borrowing of Eurodollar Rate Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business Day
occurs in that month, that Eurodollar Interest Period shall expire on the
immediately preceding Business Day;
(iii) Such Borrowing Subsidiary may not select a
Eurodollar Interest Period for any Revolving Loan which terminates later than
the Revolving Credit Termination Date; and
(iv) There shall be no more than five (5) Eurodollar
Interest Periods under this Agreement in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable
after 11:00 a.m. (New York time) on the Eurodollar Interest Rate Determination
Date, the Agent shall determine (which determination shall, absent manifest
error, be presumptively correct) the interest rate which shall apply to the
Eurodollar Rate Loans for which an interest rate is then being determined for
the applicable Eurodollar Interest Period and shall promptly give notice thereof
(in writing or by telephone confirmed in writing) to the Borrowing Subsidiaries
and to each Lender.
(d) Interest Rate Unascertainable, Inadequate or Unfair. If,
with respect to any Eurodollar Interest Period, the Agent determines that
deposits in Dollars (in the applicable amounts) are not being offered by
Citibank in the relevant market for such Eurodollar Interest Period, the Agent
shall forthwith give notice thereof to the Borrowing Subsidiaries, whereupon
until the Agent notifies the Borrowing Subsidiaries that the circumstances
giving rise to such suspension no longer exist, (a) the right of the Borrowing
Subsidiaries to elect to have Loans bear interest based upon the Eurodollar Rate
shall be suspended, and (b) each outstanding Eurodollar Rate Loan shall be
converted into a Base Rate Loan on the last day of the then current Eurodollar
Interest Period therefor, notwithstanding any prior election by the Borrowing
Subsidiaries to the contrary.
56
(e) Illegality. (i) In the event that on any date any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties) that the making or
continuation of any Eurodollar Rate Loan has become unlawful by compliance by
that Lender in good faith with any law, governmental rule, regulation or order
of any Governmental Authority (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, and in any
such event, such Lender shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrowing Subsidiaries and the Agent (which notice
the Agent shall promptly transmit to each Lender) of that determination.
(ii) Upon the giving of the notice referred to
in Section 2.08(e)(i), (A) the Borrowing Subsidiaries' right to request of such
Lender and such Lender's obligation to make Eurodollar Rate Loans shall be
immediately suspended, and such Lender shall make each Revolving Loan, as part
of any requested Borrowing of Eurodollar Rate Loans, as a Base Rate Loan, which
Base Rate Loan shall, for all purposes, be considered a part of such Borrowing,
and (B) if the affected Eurodollar Rate Loan or Loans are then outstanding, the
Borrowing Subsidiaries owing such Loans shall immediately (or, if permitted by
applicable law, no later than the date permitted thereby, upon at least one (1)
Business Day's written notice to the Agent and the affected Lender) convert each
such Loan into a Base Rate Loan.
(iii) In the event that such Lender determines at
any time following its giving of the notice referred to in Section 2.08(e)(i)
that such Lender may lawfully make Eurodollar Rate Loans of the type referred to
in such notice, such Lender shall promptly give notice (by telephone confirmed
in writing) to the Borrowing Subsidiaries and the Agent (which notice the Agent
shall promptly transmit to each Lender) of that determination, whereupon the
Borrowing Subsidiaries' right to request of such Lender, and such Lender's
obligation to make, Eurodollar Rate Loans shall be restored.
(f) Compensation. In addition to such amounts as are required
to be paid by any Borrowing Subsidiary pursuant to Sections 2.04(a), 2.04(d) and
2.04(f), each Borrowing Subsidiary shall compensate each Lender, upon demand,
for all losses, expenses and liabilities (including, without limitation, any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to such Borrowing Subsidiary) which such Lender
may sustain (i) if for any reason a Borrowing, conversion or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion/Continuation or in a telephonic request for
borrowing or conversion/continuation or a successive Eurodollar Interest Period
does not commence after notice therefor is given pursuant to Section 2.04(c),
(ii) if any prepayment of any Eurodollar Rate Loan (including, without
limitation, any prepayment pursuant to Section 2.06) occurs for any reason on a
date which is not the last day of the applicable Eurodollar Interest Period,
(iii) as a consequence of any required conversion of a Eurodollar Rate Loan to a
Base Rate Loan as a result of any of the events indicated in Section 2.08(e), or
(iv) as a consequence of any other failure by such Borrowing Subsidiary to repay
Eurodollar Rate Loans when required by the terms of this Agreement. Such Lender
shall deliver to such Borrowing Subsidiary a written statement as to such
losses, expenses and liabilities which statement shall be conclusive as to such
amounts in the absence of manifest error.
57
(g) Eurodollar Rate Taxes. Each Borrowing Subsidiary
agrees that:
(i) such Borrowing Subsidiary will pay, prior
to the date on which penalties attach thereto, all present and future income,
stamp and other taxes, levies, or costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of a Revolving Loan solely as a
result of the interest rate being determined by reference to the Eurodollar Rate
or the provisions of this Agreement relating to the Eurodollar Rate or the
recording, registration, notarization or other formalization of any thereof or
any payments of principal, interest or other amounts made on or in respect of a
Revolving Loan made to such Borrowing Subsidiary when the interest rate is
determined by reference to the Eurodollar Rate (all such taxes, levies, costs
and charges being herein collectively called "Eurodollar Rate Taxes"); provided,
however, that Eurodollar Rate Taxes shall not include net income, franchise or
similar taxes imposed by any jurisdiction. Such Borrowing Subsidiary shall also
pay such additional amounts equal to increases in net income or franchise taxes
attributable to payments made by such Borrowing Subsidiary pursuant to this
clause (i). Promptly after the date on which payment of any such Eurodollar Rate
Tax is due pursuant to applicable law, such Borrowing Subsidiary will, at the
request of such Lender, furnish to such Lender evidence, in form and substance
satisfactory to such Lender, that such Borrowing Subsidiary has met its
obligation under this Section 2.08(g); and
(ii) such Borrowing Subsidiary will indemnify each
Lender against, and reimburse each Lender on demand for, any Eurodollar Rate
Taxes paid by such Lender in respect of a Revolving Loan made to such Borrowing
Subsidiary or in respect of any Note, as determined by such Lender in its sole
discretion. That Lender shall provide such Borrowing Subsidiary with (A)
appropriate receipts for any payments or reimbursements made by such Borrowing
Subsidiary pursuant to this clause (ii) and (B) such information as may
reasonably be required to indicate the basis for such Eurodollar Rate Taxes;
provided, however, that if a Lender subsequently recovers, or receives a net tax
benefit with respect to, any amount of Eurodollar Rate Taxes previously paid by
such Borrowing Subsidiary pursuant to this Section 2.08(g)(ii), such Lender
shall, within thirty (30) days after receipt of such refund, and to the extent
permitted by applicable law, pay to such Borrowing Subsidiary the amount of any
such recovery or permanent net tax benefit.
(h) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of, any of
its branch offices, agencies or the office of an Affiliate of that Lender;
provided, however, no such Lender shall be entitled to receive any greater
amount under Section 2.04(f) or 2.08(g) as a result of the transfer of any such
Loan than such Lender would be entitled to immediately prior thereto unless (i)
such transfer occurred at a time when circumstances giving rise to the claim for
such greater amount did not exist and were not reasonably foreseeable in the
view of such Lender and (ii) such claim would have arisen even if such transfer
had not occurred.
58
(i) Affiliates Not Obligated. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall have
any rights, liability or obligation under this Agreement.
2.09. Increased Capital. If either (a) the introduction of or
-----------------
any change in or in the interpretation of any law or regulation or (b)
compliance by any Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law and whether
or not the failure to comply therewith would be unlawful) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and such Lender determines
that the amount of such capital is increased by or based upon the existence of
such Lender's Commitment and other commitments of this type or upon the
existence of letters of credit (or similar contingent obligations), then,
upon demand by such Lender, each Borrowing Subsidiary shall immediately pay to
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender in the light of such circumstances, to the
extent that such Lender determines such increase in capital to be allocable to
the existence of such Lender's Commitment or to the issuance or maintenance of
any Letter of Credit for the account of such Borrowing Subsidiary. A certificate
as to such amounts submitted to the Borrowing Subsidiaries by such Lender,
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
2.10. Authorized Officers of the Borrowing Subsidiaries. Each
-------------------------------------------------
Borrowing Subsidiary shall notify the Agent in writing of the names of the
officers and employees authorized to request Revolving Loans and Letters of
Credit and to request a conversion/continuation of any Revolving Loan and shall
provide the Agent with a specimen signature of each such officer or employee.
The Agent shall be entitled to rely conclusively on such officer's or employee's
authority to request such Loan or Letter of Credit or such
conversion/continuation until the Agent receives written notice to the contrary.
The Agent shall have no duty to verify the authenticity of the signature
appearing on any written Notice of Borrowing or Notice of Conversion/Continua
tion and, with respect to an oral request for such a Revolving Loan or Letter of
Credit or such conversion/continuation, the Agent shall have no duty to verify
the identity of any person representing himself as one of the officers or
employees authorized to make such request on behalf of such Borrowing
Subsidiary. None of the Agent or any Lender shall incur any liability to such
Borrowing Subsidiary in acting upon any telephonic notice referred to above
which the Agent believes in good faith to have been given by a duly authorized
officer or other person authorized to borrow on behalf of such Borrowing
Subsidiary or for otherwise acting in good faith under this Section 2.10.
59
ARTICLE III
Conditions to Loans and Letters of Credit
3.01. Conditions Precedent to the Effectiveness of this
-------------------------------------------------
Agreement. This Agreement shall become effective on the date (the "Effective
---------
Date") when the following conditions precedent have been satisfied (unless
waived by the Requisite Lenders or unless the deadline for delivery has been
extended by the Agent):
(a) Certain Documents. The Agent shall have received on or
before the Effective Date all of the following, all of which, except as
otherwise specifically described below, shall be in form and substance
satisfactory to each Lender and in sufficient copies for each of the Lenders:
(i) This Agreement, executed by the Company,
each Borrowing Subsidiary, each Lender and the Agent, together with all Exhibits
and Schedules, and the Notes;
(ii) Notices of Borrowing pursuant to Section
2.03(b) hereof dated the Effective Date executed by each of the Borrowing
Subsidiaries;
(iii) The Amendatory Agreement substantially in
the form of Exhibit 7 duly executed by the Borrowing Subsidiaries, JCC, JPS Auto
and International Fabrics;
(iv) The Contribution Agreement duly executed
by each Borrowing Subsidiary;
(v) The Company Guaranty, substantially in the
form of the Company Guaranty (as defined in the Existing Credit Agreement);
(vi) The Company Security Agreement,
substantially in the form of the Company Security Agreement (as defined in the
Existing Credit Agreement);
(vii) The Company Pledge Agreement, substantiall
y in the form of the Company Pledge Agreement (as defined in Existing Credit
Agreement), together with appropriate stock powers endorsed in blank;
(viii) Subsidiary Guaranties executed by JCIC and
JEC, substantially in the form of the Subsidiary Guaranties (as defined in the
Existing Credit Agreement);
(ix) Subsidiary Security Agreements executed by
JCIC and JEC, substantially in the form of the Subsidiary Security Agreements
(as defined in the Existing Credit Agreement);
60
(x) Notices of Amendment dated as of the
Effective Date to the Trademark Security Agreements executed by the Borrowing
Subsidiaries;
(xi) Amendments to the Real Property Collateral
Documents, as may be required as a result of the transactions contemplated by
this Agreement, for each parcel of real property set forth on Schedule 1.01-A,
together with endorsements to the title insurance policies relating to each of
the parcels purported to be encumbered thereby;
(xii) Executed copies of each UCC-1 financing
statement signed by the Company and the Agent and filed in each jurisdiction set
forth in the Company Security Agreement and the schedules thereto;
(xiii) An Assignment Agreement executed by the
Agent and the Existing Collateral Agent pursuant to which the Existing
Collateral Agent assigns to the Agent all of its rights as Collateral Agent
under the Collateral Documents;
(xiv) Executed copies of each UCC-3 financing
statement signed by the Collateral Agent and filed in each jurisdiction set
forth in the Subsidiary Security Agreements, the JPS Auto Security Agreement,
the Carpet Security Agreement and the International Fabrics Security Agreement
and the schedules thereto, pursuant to which each UCC-1 executed by a Borrowing
Subsidiary or a Pledgor in favor of the Collateral Agent, as secured party, is
assigned to the Agent;
(xv) An opinion of Weil, Gotshal & Xxxxxx LLP,
counsel to the Company, addressing such matters as the Lenders may reasonably
require;
(xvi) An opinion of Xxxxxxx Xxxxxxxxx Xxxxxxx &
Xxxxxxx L.L.P., South Carolina counsel to the Agent, addressing such matters
relating to the personal property Liens granted to the Agent as the Lenders may
reasonably require;
(xvii) Executed copies of the Contingent Note
Indenture and the Warrant Agreement, in each case certified as of the Effective
Date by the Secretary or Assistant Secretary of the Company (A) to be true,
correct and complete copies of such documents and (B) not to have been amended
or rescinded from the form so certified and to be in full force and effect;
(xviii) A copy of the Disclosure Statement,
certified as of the Effective Date by the Secretary or an Assistant Secretary of
the Company (A) to be a true, correct and complete copy of such document, (B) to
have been duly authorized by the Company's Board of Directors and to have been
duly executed by the Company and filed with the Bankruptcy Court and (C) not to
have been amended from the form so certified or rescinded;
61
(xix) A certificate of the Secretary or
Assistant Secretary of the Company, dated as of the Effective Date, certifying
(A) that attached thereto is a true, correct and complete copy of the
Confirmation Order (including the Plan of Reorganization attached to the
Confirmation Order) and (B) that no appeal or motion for rehearing has been
filed in connection with such Confirmation Order;
(xx) A certificate of the Secretary or
Assistant Secretary of the Company dated the Effective Date certifying (A) the
names and true signatures of the incumbent officers of the Company authorized to
sign this Agreement and all other Loan Documents executed by the Company in
connection with this Agreement, (B) the By-Laws of the Company as in effect on
the date of such certification, (C) the resolutions of the Company's Board of
Directors approving and authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents executed in connection with this
Agreement to which it is a party and (D) that there have been no changes in the
Certificate of Incorporation of the Company from the Certificate of
Incorporation of the Company delivered, or the filing of which has been
confirmed, pursuant to Section 3.01(a)(xxiv);
(xxi) A certificate of the Secretary or Assistant
Secretary of each Borrowing Subsidiary dated the Effective Date certifying (A)
the names and true signatures of the incumbent officers of each such Borrowing
Subsidiary authorized to sign this Agreement, the Contribution Agreement and the
other Loan Documents executed in connection with this Agreement to which it is a
party, (B) the By-laws of each Borrowing Subsidiary as in effect on the date of
such certification, (C) the resolutions of each such Subsidiary's Board of
Directors approving and authorizing the execution, delivery and performance of
this Agreement, the Contribution Agreement and the other Loan Documents executed
in connection with this Agreement to which it is a party and (D) that there have
been no changes in the Certificate of Incorporation of such Borrowing Subsidiary
since the date of the most recent certification thereof by the Secretary of
State of Delaware delivered to the Agent;
(xxii) A certificate of the Secretary or Assistant
Secretary of each Pledgor dated the Effective Date certifying (A) the names and
true signatures of the incumbent officers of such Pledgor authorized to sign the
Loan Documents executed in connection with this Agreement to which it is a
party, (B) the By-laws of such Pledgor as in effect on the date of such
certification, (C) the resolutions of such Pledgor's Board of Directors
approving and authorizing the execution, delivery and performance of the Loan
Documents executed in connection with this Agreement to which it is a party and
(D) that there have been no changes in the Certificate of Incorporation of such
Pledgor since the date of the most recent certification thereof by the Secretary
of State of Delaware delivered to the Agent;
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(xxiii) A certificate of the Secretary or Assistant
Secretary of JPS Capital dated the Effective Date certifying (A) the By-laws of
JPS Capital as in effect on the date of such certification and (B) that there
have been no changes in the Certificate of Incorporation of JPS Capital from the
Certificate of Incorporation of JPS Capital delivered, or the filing of which
has been confirmed, pursuant to Section 3.01(a)(xxiv);
(xxiv) The Certificate of Incorporation of the
Company and each Subsidiary of the Company, as amended, modified or supplemented
to the Effective Date, certified to be true, correct and complete by the
Secretary of State of Delaware on, or as of a recent date prior to, the
Effective Date or, in the case of the Company and JPS Capital, in lieu thereof,
oral or written confirmation received on the Effective Date from Xxxxxxxx,
Xxxxxx & Finger that its Certificate of Incorporation was filed with the
Secretary of State of Delaware on the Effective Date;
(xxv) Good Standing Certificates certified by the
appropriate Secretaries of State (or equivalent) relating to the Company and
each Subsidiary of the Company for each of the states in which the Company or
such Subsidiary is qualified to do business;
(xxvi) A certificate of the Chief Financial
Officer or Treasurer of the Company certifying (i) the most recent projected
consolidated and consolidating income statement, balance sheets and cash flow
statements (and any narrative or assumptions provided by the Company as a back
up to such projections as may be reasonably requested by the Lenders) for the
Company and its Subsidiaries on a monthly basis for Fiscal Year 1998 and on an
annual basis for the Fiscal Years 1999 through 2002, (ii) a business plan of the
Company and its Subsidiaries, in form and substance satisfactory to each Lender;
(iii) copies of the most recent year-to-date consolidated and consolidating
financial statements of the Company and its Subsidiaries, setting forth in
comparative form the figures for the comparable year-to-date period of the
immediately preceding Fiscal Year; and (iv) such other financial information
(including any annual or quarterly financial statements of the Company and its
Subsidiaries) as the Agent or any Lender may reasonably request;
(xxvii) A certificate of the Chief Executive
Officer and Chief Financial Officer of each Borrowing Subsidiary substantially
in the form of Exhibit 8 dated the Effective Date certifying that after giving
effect to the transactions contemplated by this Agreement, such Person is
Solvent;
(xxviii) Certificates from the Loan Parties'
insurance brokers to the effect that the insurance policies set forth on
Schedule 6.05 with respect to the Loan Parties are in full force and effect,
including the endorsements designating the Agent as additional insured or loss
payee;
(xxix) A Borrowing Base Certificate dated the
Effective Date executed by each of the Borrowing Subsidiaries;
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(xxx) Collection Account Agreements replacing
each Blocked Account Agreement (as defined in the Existing Credit Agreement)
executed by each Collecting Bank and providing for the removal of the Existing
Collateral Agent from the terms thereof;
(xxxi) A report from the Company covering such
matters relating to environmental Liabilities and Costs as the Agent shall
reasonably request; and
(xxxii) Such additional documentation as the Agent
or the Requisite Lenders may reasonably require.
(b) Plan of Reorganization. The terms and conditions of the
Plan of Reorganization shall not have been amended or modified from the form of
the Plan of Reorganization attached to the Confirmation Order without the
approval of the Requisite Lenders; provided, however, that modifications which
in the reasonable judgment of the Agent do not impair or adversely affect the
rights and remedies of the Lenders may have been implemented by the Company
without such approval. All conditions precedent to the effectiveness of the Plan
of Reorganization shall have been satisfied (or waived), the Confirmation Order
shall have become a Final Order and the Effective Date of Reorganization shall
have occurred.
(c) Other Agreements. The Company shall have delivered to the
Agent and the Lenders copies of the Incentive Plan, the Registration Rights
Agreement and the employment agreements annexed to the Plan of Reorganization,
in each case certified as of the Effective Date by the Secretary or Assistant
Secretary of the Company (i) to be true, correct and complete copies of such
documents and (ii) not to have been amended or rescinded from the form so
certified and to be in full force and effect.
(d) Implementation of the Plan. In accordance with the terms
of the Plan of Reorganization, (i) the Company shall have issued the Common
Stock and (ii) the Senior Subordinated Notes, the Senior Subordinated Discount
Notes, the Subordinated Debentures, the Common Stock and the Preferred Stock
shall have been canceled (as each such term in this clause (ii) not otherwise
defined in this Agreement is defined in the Existing Credit Agreement), and the
distribution, if any, required to be made on the Effective Date of
Reorganization pursuant to the Plan of Reorganization in respect of the
interests and claims evidenced by any of the foregoing shall have been made. In
addition, each of the Contingent Note Indenture and the Warrant Agreement shall
have become effective and the Certificate of Incorporation of the Company and
JPS Capital, as amended as provided in the Plan of Reorganization, shall have
been filed with the Office of the Secretary of State of the State of Delaware
and such amendments shall have become effective.
(e) Representations and Warranties. All of the representations
and warranties of the Loan Parties contained in subsections (a) through (aa) of
Section 4.01 and in any other Loan Document (other than for changes permitted or
contemplated by this Agreement) shall be true and correct in all material
respects on and as of the Effective Date as though made on and as of that date
(except any such representations and warranties stated to be given on a specific
date other than the Effective Date).
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(f) No Default. No Event of Default or Potential Event of
Default hereunder shall have occurred and be continuing on the Effective Date.
(g) No Injunction. No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental Authority shall and, except as set
forth on Schedule 4.01(k), no litigation shall be pending or threatened which in
the judgment of the Agent or Requisite Lenders (i) could have a Material Adverse
Effect or (ii) purports to affect the transactions contemplated hereby.
(h) Collateral Information. The Agent shall have received
complete and accurate information from each Loan Party and each Pledgor with
respect to the name and the location of the principal place of business and
chief executive office for such Person; all UCC financing statements and other
documents deemed by the Agent to be necessary or desirable shall have been duly
filed, registered or recorded in the appropriate jurisdictions to perfect or
maintain perfected Liens on the Collateral created by the Collateral Documents;
and the Agent shall have received evidence that all Liens granted to the Agent
with respect to all Collateral are and/or continue to be perfected and of first
priority, except as otherwise permitted under this Agreement.
(i) Consents. Each of the Company, JPS Capital, the Borrowing
Subsidiaries and the Pledgors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person and shall have obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority, in each
case, as may be necessary to allow each of the Company, the Borrowing
Subsidiaries and each Pledgor lawfully (A) to execute, deliver and perform, in
all material respects, its obligations under this Agreement, the other Loan
Documents and the Transaction Documents to which it is, or is to be, a party and
each other agreement or instrument to be executed and delivered by it pursuant
thereto or in connection therewith and (B) to create and perfect or continue the
perfection of the Liens on the Collateral to be owned by it in the manner and
for the purpose contemplated by the Collateral Documents.
(j) No Material Adverse Change. No adverse change deemed
material by the Agent, in its sole opinion, or by the Requisite Lenders, in
their opinion, shall have occurred since November 2, 1996 through the Effective
Date, as to the condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries, individually or
taken as a whole, except as set forth in the Disclosure Statement or Schedule
4.01(l) (and it being understood that the commencement, continuation and
prosecution of the Case and the confirmation and implementation of the Plan of
Reorganization do not constitute such a change).
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(k) Exhibits and Schedules. All Exhibits and Schedules to this
Agreement shall have been completed and submitted to the Agent prior to the
Effective Date, shall be in form and substance satisfactory to the Lenders and
shall contain no facts or information which the Agent or any Lender, in its sole
judgment, determines to be unacceptable.
(l) Interest, Fees and Expenses Paid. The Loan Parties shall
have paid (i) to the Existing Agent, for its own account and for the account of
each Existing Lender, as applicable, all accrued and unpaid interest and all
fees and expenses due and payable under the Existing Credit Agreement and the
Fee Agreement (as defined in the Existing Credit Agreement) to which the Agent
is a party, (ii) to the Existing Collateral Agent, for its own account, all fees
due and payable under the Fee Agreement (as defined in the Existing Credit
Agreement) to which the Existing Collateral Agent is a party, which Fee
Agreement shall be terminated on the Effective Date, and (iii) to the Agent, for
its own account and for the account of each of the Lenders, as applicable, all
fees and expenses due and payable under the Credit Agreement and the Fee
Agreement on or before the Effective Date.
(m) Concurrent Satisfaction. The conditions contained in this
Section 3.01 may be deemed to have occurred concurrently with the effectiveness
of this Agreement.
3.02. Conditions Precedent to All Revolving Loans and Letters
-------------------------------------------------------
of Credit. The obligation of each Lender to make any Revolving Loan requested to
---------
be made by it, and of the Issuing Bank to issue any Letter of Credit, on any
date (including the Effective Date), is subject to the following conditions
precedent as of such date:
(a) Notice of Borrowing. With respect to a request for a
Revolving Loan, the Agent shall have received in accordance with the provisions
of Section 2.03(b), on or before any Funding Date, an original and duly executed
Notice of Borrowing.
(b) Additional Matters. As of the Funding Date for any
Revolving Loan or the date of issuance of any Letter of Credit:
(i) Representations and Warranties. All of
the representations and warranties of the Loan Parties contained in Sections
4.01(a) through (aa) and in any other Loan Document (except for (A)
representations and warranties which expressly speak only as of a different date
and (B) changes permitted or contemplated by this Agreement) shall be true and
correct in all material respects on and as of such Funding Date, as though made
on and as of such date;
(ii) No Default. No Event of Default or
Potential Event of Default shall have occurred and be continuing or would result
from the making of the requested Revolving Loan or the issuance of the requested
Letter of Credit;
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(iii) No Injunction. No law or regulation shall
prohibit, and no order, judgment or decree of any Governmental Authority shall,
and, except as set forth on Schedule 4.01(k), no litigation shall be pending or
threatened which in the judgment of the Agent or the Requisite Lenders would,
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, (A) any Lender from making the Revolving Loan
requested to be made on the Funding Date or (B) the Issuing Bank from issuing
the Letter of Credit requested to be issued on any date of issuance; and
(iv) No Material Adverse Change. No adverse
change deemed material by the Agent, in its sole opinion, or by the Requisite
Lenders, in their opinion, shall have occurred after the Effective Date as to
the condition (financial or otherwise), operations, performance, properties or
prospects of the Company and its Subsidiaries, taken as a whole.
Each submission by a Borrowing Subsidiary to the Agent of a Notice of Borrowing
with respect to a Revolving Loan and the acceptance by such Borrowing Subsidiary
of the proceeds of each such Loan made hereunder, or the request for the
issuance of a Letter of Credit and the issuance of such Letter of Credit, shall
constitute a representation and warranty by such Borrowing Subsidiary as of the
Funding Date in respect of such Revolving Loan or the date of issuance in
respect of such Letter of Credit that all the conditions contained in this
Section 3.02 have been satisfied.
ARTICLE IV
Representations and Warranties
4.01. Representations and Warranties on the Effective Date. In
----------------------------------------------------
order to induce the Lenders to enter into this Agreement each Loan Party hereby
represents and warrants to each Lender and the Agent that the following
statements are true, correct and complete:
(a) Organization; Corporate Powers. Each of the Company and
its Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified to do business as a foreign corporation and in good standing
under the laws of each jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, except for
those jurisdictions (other than Alabama and Vermont) where failure to so qualify
and be in good standing does not have a Material Adverse Effect and (iii) has
all requisite corporate power and authority to own, operate and encumber its
property and assets and to conduct its business as presently conducted and as
proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Transaction Documents.
(b) Authority. (i) Each of the Company and each Subsidiary of
the Company has the requisite corporate power and authority (A) to execute,
deliver and perform each of the Transaction Documents executed by it, or to be
executed by it, and (B) to file the Transaction Documents filed by it, or to be
filed by it, with the appropriate Governmental Authority.
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(ii) The execution, delivery and performance
(or filing, as the case may be) of each of the Transaction Documents to which it
is party and the consummation of the transactions contemplated thereby, have
been duly authorized by the Board of Directors of the Company and of each
Subsidiary of the Company and no other corporate or stockholder proceedings on
the part of the Company, any Subsidiary of the Company or any of their
respective stockholders are necessary to consummate such transactions, other
than those which have been obtained.
(iii) Each of the Transaction Documents to which
it is party has been duly executed and delivered (or filed, as the case may be)
by the Company and each Subsidiary of the Company and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, is in full force and effect; no term or condition of the Contribution
Agreement or any Specified Document has been amended, modified or waived from
the terms and conditions contained in the Contribution Agreement and the
Specified Documents delivered to the Agent pursuant to this Agreement without
the prior written consent of the Requisite Lenders (except as permitted by
Sections 7.11 and 7.12); the Company and its Subsidiaries and, to the best
knowledge of the Loan Parties, the other parties thereto have performed and
complied in all material respects with all the terms, provisions, agreements and
conditions set forth in each Transaction Document and required to be performed
or complied with by such parties on or before the Effective Date (except as
permitted by Section 3.01); and no default by any of the Company or its
Subsidiaries or, to the best knowledge of the Loan Parties, the other parties
thereto exists under any Specified Document.
(c) Subsidiaries and Ownership of Capital Stock. Except as
otherwise permitted in Section 7.07, (i) Schedule 4.01(c) sets forth all of the
Subsidiaries of the Company; (ii) Schedule 4.01(c) also sets forth (A) the
number of issued and authorized shares of each class of capital stock of each
Subsidiary of the Company and (B) the identity of the holders of all shares of
each class of capital stock of each such Subsidiary; and (iii) no capital stock
(or any securities, instruments, warrants, option or purchase rights, conversion
or exchange rights, calls, commitments or claims of any character convertible
into or exercisable for capital stock) of the Company or any Subsidiary of the
Company is subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. The outstanding capital stock
of the Company and each Subsidiary of the Company is duly authorized, validly
issued, fully paid and nonassessable and is not Margin Stock.
(d) Consents and Authorizations. Except as set forth in
Schedule 4.01(e), the Company and each Subsidiary of the Company have obtained
all consents and authorizations required pursuant to any of their respective
Contractual Obligations with any other Person the failure of which to obtain
would have or is reasonably likely to have a Material Adverse Effect, and shall
have obtained all consents and authorizations of, and effected all notices to
and filings with, any Governmental Authority, as may be necessary to allow the
Company and each Subsidiary of the Company lawfully to execute, deliver and
perform their respective obligations under the Transaction Documents and each
other agreement or instrument to be executed and delivered by them pursuant
thereto or in perfection of the Liens on the Collateral owned by them in the
manner and for the purpose contemplated by, and to the extent required by, this
Agreement and the Collateral Documents.
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(e) No Conflict. The execution, delivery and performance of
each Transaction Document to which it is party by each of the Company and any
Subsidiary of the Company and each of the transactions contemplated thereby do
not and will not (i) to the best knowledge of the Loan Parties and except as set
forth on Schedule 4.01(e), constitute a tortious interference with any
Contractual Obligation of any Person, or (ii) conflict with or violate such
Person's Certificate of Incorporation or By-Laws, or other organizational
documents, as the case may be, or (iii) except as set forth on Schedule 4.01(e),
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law or, subject to
clause (i) above, Contractual Obligation of the Company or any Subsidiary of the
Company, or require termination of any Contractual Obligation, the consequences
of which conflict or default or termination would have or is reasonably likely
to have a Material Adverse Effect, or (iv) except as set forth on Schedule
4.01(e), result in or require the creation or imposition of any Lien whatsoever
upon any of the properties or assets of the Company or of any Subsidiary of the
Company (other than Liens in favor of the Agent arising pursuant to the Loan
Documents or Liens permitted pursuant to Section 7.02(b)), or (v) require any
approval of stockholders.
(f) Governmental Consents. The execution, delivery and
performance of each Transaction Document to which it is party by the Company and
each Subsidiary of the Company and the transactions contemplated thereby do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by any Governmental Authority, except filings,
consents or notices which have been, or will in due course, be made, obtained or
given.
(g) Governmental Regulation. Neither the Company nor any
Subsidiary of the Company is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
the Investment Company Act of 1940 or any other federal or state statute or
regulation such that its ability to incur Indebtedness is limited or its ability
to consummate the transactions contemplated hereby or by the Transaction
Documents is materially impaired.
(h) Restricted Junior Payments. Since the date hereof, no
Subsidiary of the Company has directly or indirectly declared, ordered, paid or
made or set apart any sum or property for any Restricted Junior Payment or
agreed to do so, except to the extent permitted pursuant to Section 7.05.
69
(i) Plan of Reorganization. The Company has received the
Confirmation Order and the Confirmation Order has become a Final Order, unless
receipt of the Final Order has been waived with the consent of the Requisite
Lenders (which consent shall not be unreasonably withheld). All other conditions
precedent to the confirmation and effectiveness of the Plan of Reorganization
have been satisfied or waived and the Effective Date of Reorganization has
occurred.
(j) Capitalization. (i) As of the Effective Date, (A) there
are outstanding no shares of any class of capital stock of the Company other
than the Common Stock, and (B) none of such capital stock is subject to issuance
upon the exercise of outstanding options, warrants or other similar rights to
acquire shares of such stock, except for the Warrants and as set forth in the
Plan of Reorganization and the Disclosure Statement.
(ii) Upon the issuance thereof in accordance
with the Plan of Reorganization, the Contingent Notes shall be distributed and
issued in compliance with all applicable Requirements of Law. Each of the
Contingent Notes is unsecured and none of the Company or any of its Subsidiaries
(other than JPS Capital) has any liability in respect of the Contingent Notes
(it being understood that the Company, as a party to the Contingent Note
Indenture, has certain obligations under the Contingent Note Indenture other
than in respect of the Indebtedness evidenced by the Contingent Notes).
(k) Litigation; Adverse Effects. (i) Except as set forth in
Schedule 4.01(k), (A) there is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to the knowledge of any Loan Party,
threatened against the Company or any Subsidiary of the Company or any property
of any of them which is reasonably likely to (A) result in any Material Adverse
Effect, (B) materially and adversely affect the ability of any party to any of
the Transaction Documents to perform its obligations thereunder or (C)
materially and adversely affect the ability of the Company or any Subsidiary of
the Company to perform their respective Obligations or the Lenders' ability to
enforce such Obligations.
(ii) Neither the Company nor any of its
Subsidiaries is (A) in violation of any applicable law which violation has or is
reasonably likely to have a Material Adverse Effect or (B) subject to or in
default with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or Governmental Authority which has or is reasonably
likely to have a Material Adverse Effect. Except as set forth in Schedule
4.01(k), there is no action, suit, proceeding or investigation pending or, to
the best knowledge of any Loan Party, threatened against or affecting the
Company or any of its Subsidiaries challenging the validity or the
enforceability of any of the Transaction Documents.
(l) No Material Adverse Change. Since November 2, 1996, there
has occurred no event which materially and adversely affects, and no material
adverse change in, the condition (financial or otherwise), operations,
performance or prospects of the Company and its Subsidiaries taken as a whole,
or the ability of the Company and its Subsidiaries, taken as a whole, to perform
their obligations under the Transaction Documents to which they are a party and
the transactions contemplated thereby, except as set forth in the Disclosure
Statement or in Schedule 4.01(l) (and it being understood that the commencement,
continuation and prosecution of the Case and the confirmation and implementation
of the Plan of Reorganization do not constitute such an event or change).
70
(m) Payment of Taxes. All tax returns and reports of each of
the Company and each Subsidiary of the Company required to be filed, have been
timely filed, and all taxes, assessments, fees and other governmental charges
thereupon and upon their respective properties, assets, income and franchises
which are shown on such returns as being due and payable, have been paid when
due and payable, except such taxes, if any, that are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. To
the best knowledge of the Company, as of the Effective Date, there are no tax
examinations or audits in progress which have identified any potential tax
liability of the Company or any Subsidiary of the Company that is reasonably
likely to result in a material liability of the Company or such Subsidiary. None
of the Loan Parties has any knowledge of any proposed tax assessment against the
Company or any Subsidiary of the Company that is reasonably likely to have a
Material Adverse Effect, which is not being actively contested in good faith by
such Person.
(n) Material Adverse Agreements. Except as set forth in
Schedules 4.01(e) and 4.01(k), neither the Company nor any Subsidiary of the
Company is a party to or subject to any Contractual Obligation or other
restriction contained in their respective charters, By-laws or similar governing
documents which has or is reasonably likely to have a Material Adverse Effect.
(o) Performance. Except as set forth in Schedule 4.01(e),
neither the Company nor any Subsidiary of the Company is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obli gation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have or are not reasonably likely to have a Material Adverse
Effect.
(p) Securities Activities. Neither the Company nor any
Subsidiary of the Company is engaged principally in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
(q) Disclosure. The representations and warranties of the
Company and its Subsidiaries contained in the Transaction Documents and the
Disclosure Statement and all certificates and other documents delivered to the
Agent, in connection therewith, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. None of the Loan Parties has intentionally
withheld any material fact from the Lenders in regard to any matter raised in
the Transaction Documents or the Disclosure Statement.
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(r) Requirements of Law. The Company, each Subsidiary of the
Company and each Person acting on behalf of any of them is in compliance with
all Requirements of Law (including, without limitation, the Securities Act and
the Securities Exchange Act, and the applicable rules and regulations
thereunder, state securities law and "Blue Sky" law) applicable to them and
their respective businesses, in each case, except where the failure to so comply
would not have or is not reasonably likely to have a Material Adverse Effect.
(s) Patents, Trademarks, Permits, Etc. The Company and each
Subsidiary of the Company own, are licensed or otherwise have the lawful right
to use, or have all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes used in
or necessary for the conduct of their businesses as currently conducted which
are material to their condition (financial or otherwise), operations,
performance and prospects, taken as a whole. The use of such permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes by the Company and each of its Subsidiaries
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of the Company or any of its Subsidiaries which has or is reasonably likely
to have a Material Adverse Effect.
(t) Environmental Matters. Except as disclosed in Schedule
4.01(t) or as reported to the Agent pursuant to Section 5.02, (i) the operations
of the Company and each of its Subsidiaries comply in all substantial respects
with all applicable environmental, health and safety Requirements of Law; (ii)
the Company and each of its Subsidiaries have obtained all environmental, health
and safety permits necessary for their respective operations, and all such
permits are in good standing and the Company and its Subsidiaries are in
material compliance with all terms and conditions of such permits; (iii) neither
the Company nor any of its Subsidiaries nor any of their present Property or
operations, and to the best of any Loan Party's knowledge, neither the Company's
nor any of its Subsidiary's past Property or operations, are the subject of any
order from or agreement with any Governmental Authority or private party or any
judicial or administrative proceeding or investigations respecting any
environmental, health or safety Requirements of Law, and is not the subject of
any Remedial Action or other Liabilities and Costs greater than Two Hundred
Fifty Thousand Dollars ($250,000) for any single event or in the aggregate for
the Company and its Subsidiaries (other than the Unrestricted Subsidiaries) Two
Million Five Hundred Thousand Dollars ($2,500,000) arising from the Release or
threatened Release of a Contaminant into the environment; (iv) neither the
Company nor any of its Subsidi aries has filed any notice under any Requirement
of Law indicating past or present treatment, storage or disposal of a hazardous
waste, as that term is defined under 40 CFR Part 261 or any state equivalent;
(v) neither the Company nor any of its Subsidiaries has filed any notice under
any applicable Requirement of Law reporting a Release of a Contaminant into the
environment; (vi) there is not now, nor has there ever been, on or in the
Property of the Company or on or in the Property of its Subsidiaries: (A) any
generation, treatment, recycling, storage or disposal of any hazardous waste, as
that term is defined under 40 CFR Part 261 or any state equivalent, (B) any
72
underground storage tanks or surface impoundments, (C) any asbestos-containing
material, or (D) any polychlorinated biphenyls (PCB's) used in hydraulic oils,
electrical transformers or other equipment; (vii) neither the Company nor any of
its Subsidiaries has received any notice or claim to the effect that it is or
may be liable to any Person as a result of the Release or threatened Release of
a Contaminant into the environment, or as a result of exposure to asbestos or to
cotton dust, which may result in liability in excess of workers compensation in
an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) for each
event, or in the aggregate for the Company and its Subsidiaries (other than the
Unrestricted Subsidiaries) Two Million Five Hundred Thousand Dollars
($2,500,000); (viii) after due inquiry, no Environmental Lien has attached to
any Property of the Company or the Property of any of its Subsidiaries; (ix) to
the best of any Loan Party's knowledge, after due inquiry, neither the Company
nor any of its Subsidiaries have entered into any negotiations or agreements
with any Person (including, without limitation, the prior owner(s) of any
Property owned by the Company or any of its Subsidiaries) relating to any
Remedial Action or environmentally-related Claim; (x) to the best of any Loan
Party's knowledge, after due inquiry, neither the Company nor any of its
Subsidiaries have any material contingent liability in connection with any
Release or threatened Release of any Contaminants into the environment; (xi)
within the last twenty-four months the Company or its Subsidiaries have
inspected the Property and, to the best of any Loan Party's knowledge, all
asbestos-containing material which is on or part of the Property (excluding any
raw materials used in the manufacture of products or products themselves) is in
good repair according to the current standards and practices governing such
material, and its presence or condition does not violate any applicable
Requirement of Law; and (xii) none of the products that the Company or any of
its Subsidiaries manufactures, distributes or sells, or, to the best of any Loan
Party's knowledge, ever has manufactured, distributed or sold, contains an
asbestos-containing material.
(u) ERISA. Neither the Company nor any of its Subsidiaries
maintains or contributes to any Plan other than a Plan listed on Schedule
4.01(u). Neither the Company nor any ERISA Affiliate maintains or contributes to
any Benefit Plan or Multiemployer Plan other than the Benefit Plans and
Multiemployer Plans set forth on Schedule 4.01(u). Except as otherwise provided
on Schedule 4.01(u), each Plan which is intended to be a qualified plan has been
determined by the Internal Revenue Service to be qualified under Section 401(a),
and each trust related to any such Plan has been so determined to be exempt from
federal income tax under Section 501(a) of the Internal Revenue Code prior to
its amendment by the Tax Reform Act of 1986, and such Plan and trust are being
operated in all material respects in compliance with and will be timely amended
in accordance with the Tax Reform Act of 1986 and the Omnibus Budget
Reconciliation Act of 1987 as interpreted by the regulations promulgated
thereunder. Except as otherwise provided on Schedule 4.01(u), neither the
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Company nor any of the Subsidiaries maintains or contributes to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
lifetime benefits to retirees other than as may be required by Part 6 of Title I
of ERISA. The Company and all of its ERISA Affiliates are in compliance in all
material respects with the responsibilities, obligations or duties imposed on it
by ERISA or regulations promulgated thereunder with respect to all Plans. No
material accumulated funding deficiency (as defined in Section 302(a)(2) of
ERISA and Section 412(a) of the Internal Revenue Code) exists in respect to any
Benefit Plan. Neither the Company nor any Subsidiary of the Company nor any
fiduciary of any Plan has engaged in a nonexempt "prohibited transaction"
described in Section 406 of ERISA or Section 4975 of the Internal Revenue Code
and (except as a result of the commencement or continuation of the Case) neither
the Company nor any ERISA Affiliate has taken any action which would constitute
or result in a Termination Event with respect to any Plan, such that all such
actions, individually or collectively, would result in a material obligation to
pay money. Neither the Company nor any ERISA Affiliate has incurred any material
liability to the PBGC which remains outstanding other than the liability to pay
the PBGC insurance premiums for the current year (except as asserted by the PBGC
in the Case and to the extent allowed therein). Schedule B to the most recent
annual report filed with the Internal Revenue Service with respect to each
Benefit Plan and furnished to the Agent is complete and accurate in all material
respects. Except as provided on Schedule 4.01(u), since the date of each such
Schedule B, there has been no material adverse change in the funding status or
financial condition of the Benefit Plan relating to such Schedule B which would
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has failed to make a required installment under subsection (m) of Section 412 of
the Internal Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment which would in the aggregate have a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate is required to provide security to a Plan under
Section 401(a)(29) of the Internal Revenue Code due to a Plan amendment that
results in an increase in current liability for the plan year. Neither the
Company nor any ERISA Affiliate is now contributing or has ever contributed to
or been obligated to contribute to any Multiemployer Plan, and no employees or
former employees of the Company or any ERISA Affiliate has been covered by any
Multiemployer Plan in respect of their employment by the Company or any ERISA
Affiliate, and, accordingly, the representations and warranties in this Section
4.01(u) do not apply to Multiemployer Plans.
(v) Solvency. Each of the Borrowing Subsidiaries is Solvent
after giving effect to (x) the transactions contemplated by the Plan of
Reorganization and this Agreement and (y) the payment and accrual of (1) all
Transaction Costs payable on the Effective Date with respect to any of the
foregoing and (2) all obligations, if any, under any Plan or the equivalent for
unfunded past service liability and any other unfunded medical (including
post-retirement) and death benefits.
(w) Pledge of Collateral. (i) Each Loan Party and Pledgor has
good and marketable title to the Collateral pledged by it, and all such
Collateral is free and clear of all Liens except for Customary Permitted Liens
and except as specifically permitted or contemplated by the terms and provisions
of the Collateral Document relating to such Collateral.
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(ii) The granting and perfecting of the security
interest in the capital stock of the Subsidiaries of the Company constituting a
portion of the Collateral for the benefit of the Lenders, as contemplated by the
terms of the Collateral Documents, is not made in violation of the registration
provisions of the Securities Act, any other applicable federal securities laws,
applicable state securities or "Blue Sky" law, any applicable provisions of the
Delaware General Corporation Law or any other Requirement of Law.
(x) Indenture Qualification. As of the date on which this
representation and warranty is made, the offering and issuance of the Contingent
Notes pursuant to the terms of the Plan of Reorganization are exempt from
registration under Section 5 of the Securities Act and are qualified under the
Trust Indenture Act of 1939, as amended.
(y) Assets and Properties. Substantially all of the assets and
properties owned by, leased to or used by the Company and/or each Subsidiary of
the Company are in adequate operating condition and repair, ordinary wear and
tear excepted, are free and clear of any known defects except such defects as do
not substantially interfere with the continued use thereof in the conduct of
normal operations, and are able to serve the function for which they are
currently being used, in each case where the failure of such asset to meet such
requirements would not have or is not reasonably likely to have a Material
Adverse Effect. The Receivables of the Company and each Subsidiary of the
Company have arisen in the ordinary course of their respective business and
reflect bona fide obligations for the payment for goods and services provided by
the Company, such Subsidiary or the Company's or such Subsidiary's predecessors,
and the assets owned by, leased to or used by the Company and/or each Subsidiary
of the Company constitute all of the assets used in the conduct of the Company's
or such Subsidiary's business as presently conducted, and, except during the
continuance of an Event of Default or as set forth on Schedule 4.01(e), neither
this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of the Company or such Subsidiary in and to any of such assets in a manner that
would have or is reasonably likely to have a Material Adverse Effect.
(z) Joint Venture; Partnership. Except as set forth on
Schedule 4.01(z), neither the Company nor any Subsidiary of the Company is
engaged in any joint venture or partnership with any other Person, other than by
means of the Investments permitted by Section 7.03(vii).
(aa) Bank Accounts. Set forth on Schedule 4.01(aa) is a
complete and accurate list as of the Effective Date of all financial
institutions at which any Loan Party or Pledgor maintains a deposit, checking or
similar account, including each Citibank Account and all lock boxes and
Collection Accounts with the Collecting Banks and the appropriate names and
account numbers identifying each such account. The Loan Parties have disclosed
all additions, subtractions and modifications to such Schedule 4.01(aa) to the
Agent since the Effective Date and all Blocked Accounts opened since the
Effective Date.
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4.02. Subsequent Funding Representations and Warranties. In
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order to induce the Lenders to enter into this Agreement and to make the
Revolving Loans, and to induce the Issuing Bank to issue any Letters of Credit,
each Loan Party hereby represents and warrants to each Lender, the Issuing Bank
and the Agent that the statements set forth in subsections (a) through (aa) of
Section 4.01 (except for (a) representations and warranties which expressly
speak only as of a different date and (b) changes permitted or contemplated by
this Agreement) are true, correct and complete in all material respects on and
as of the Funding Date in respect of each Borrowing after the Effective Date and
the date of issuance of each Letter of Credit.
ARTICLE V
Reporting Covenants
On and after the Effective Date and so long as any Loan Party
shall have any Obligation or any Lender shall have any Commitment hereunder,
unless the Requisite Lenders (or, if applicable, the Agent) shall otherwise give
prior written consent thereto:
5.01. Financial Statements; Required Notices. The Company and
--------------------------------------
each of its Subsidiaries shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial state ments in conformity with
GAAP, and each of the financial statements described below shall be prepared
from such system and records. The Loan Parties shall deliver or cause to be
delivered to the Agent (with copies to the Agent sufficient for each Lender and
which the Agent shall promptly deliver to each Lender):
(a) As soon as practicable, and in any event within thirty
(30) days after the end of each month (or up to an additional forty-five (45)
days if extended by the Agent), a consolidated balance sheet, income statement
and cash flow statement of the Company and unconsolidated balance sheets and
income statements of each Subsidiary of the Company, all prepared by the Company
and certified by the Company's chief financial officer;
(b) As soon as practicable, and in any event within forty-five
(45) days after the end of each of the Company's fiscal quarters (including,
without limitation, the fourth fiscal quarter of each Fiscal Year) (or up to an
additional thirty (30) days if extended by the Agent), balance sheets, income
statements and cash flow statements of the Company all prepared by the Company
on a consolidated and (except for the cash flow statements) consolidating basis
certified by the Company's chief financial officer;
(c) Within ninety (90) days after the close of each of the
Company's Fiscal Years (or up to an additional thirty (30) days if extended by
the Agent), annual financial state ments, consisting of balance sheets, income
statements and cash flow statements, all prepared on a consolidated and (except
for cash flow statements) consolidating basis and, with respect to the
76
consolidated statements, certified without qualification by the firm of
independent certified public accountants of recognized national standing
regularly retained by the Company and reasonably acceptable to the Agent, and
accompanied by such firm's letter to the effect that, in the course of its audit
(conducted in accordance with generally accepted auditing standards), it
obtained no knowledge that an Event of Default or Potential Event of Default has
occurred.
(d) (i) Together with each delivery of any financial statement
pursuant to clauses (a), (b) and (c) above, an Officers' Certificate of each
Loan Party substantially in the form of Exhibit 9, stating that the executive
officers signatory thereto have reviewed the terms of this Agreement and the
principal Loan Documents, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition of,
in the case of the Company, the Company and its Subsidiaries taken as a whole,
and, in the case of each Borrowing Subsidiary, such Borrowing Subsidiary, during
the accounting period covered by such financial statements, and that such review
has not disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the date of
the Officers' Certificate, of any condition or event which constitutes an Event
of Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Company or any Subsidiary has taken, is taking and proposes to
take with respect thereto; and (ii) together with each delivery of any financial
statement pursuant to clauses (b) and (c) above, a Compliance Certificate of the
Company setting forth calculations for the Leverage Ratio for the Leverage Ratio
Period ended on the last day of the accounting period covered by such financial
statement (for purposes of determining the Applicable Margin and the Unused
Commitment Fee Rate) and demonstrating in reasonable detail compliance during
and at the end of such accounting period with the covenants contained in Article
VII and Article VIII.
(e) Simultaneously with the delivery of the financial
statements referred to in clause (c) above, a statement of the firm of
independent certified public accountants which reported on the financial
statements included therein that nothing has come to their attention to cause
such independent certified public accountants to believe that calculations
contained in the Compliance Certificate are inaccurate, delivered simultaneously
therewith pursuant to clause (d) above.
(f) Promptly upon any Loan Party obtaining knowledge (i) of
any condition or event which constitutes an Event of Default or Potential Event
of Default, or becoming aware that any Lender has given any notice or taken any
other action with respect to a claimed Event of Default or Potential Event of
Default under this Agreement or (ii) of any condition or event which has or
would be reasonably likely to have a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of any such condition
or event, or specifying the notice given or action taken by such Lender and the
nature of such claimed default, Event of Default, Potential Event of Default,
event or condition, and what action the Loan Parties have taken, are taking and
propose to take with respect thereto.
77
(g) Promptly upon any Loan Party obtaining knowledge of (A)
the institution of, or threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Company or any of its
Subsidiaries or any property of the Company or any of its Subsidiaries not
previously disclosed in writing by a Loan Party to the Lenders pursuant to this
Section 5.01(g), or (B) any material development in any action, suit,
proceeding, governmental investigation or arbitration already disclosed, which,
in either case, has or is reasonably likely to have a Material Adverse Effect,
such Loan Party shall promptly give notice thereof to the Agent and provide such
other information as may be reasonably available to it to enable the Lenders and
their counsel to evaluate such matters.
(h) No later than forty-five (45) days (or such shorter period
as may be agreed to by the Agent) prior to the beginning of each of the
Company's Fiscal Years, consolidated and consolidating annual business and
financial plans for the Company and its Subsidiaries and annual financial
projections for the following Fiscal Year, prepared on a monthly basis, and
quarterly updates thereto in the event of any material change to such plans, all
in form satisfactory to the Agent, together with all supporting details
reasonably requested by the Agent, and reported by the chief executive officer
or chief financial officer of the Company as being based, on the Company's best
estimates, information and assumptions at the time, and all such statements to
be in reasonable detail and supported by a schedule enumerating the assumptions
therein;
(i) As soon as possible, and in any event within ten (10) days
after either the Company or an ERISA Affiliate knows or has reason to know that
a Termination Event has occurred, a written statement of the chief financial
officer of the Company describing such Termi nation Event and the action, if
any, which the Company or an ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or threatened by the
IRS, the DOL or PBGC with respect thereto;
(j) As soon as possible, and in any event within fifteen (15)
days, after either the Company or any of its Subsidiaries knows or has reason to
know that a prohibited transaction (defined in Section 406 of ERISA and Section
4975 of the Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Company describing such transaction;
(k) Within ten (10) days after the filing thereof with the
DOL, IRS or PBGC, copies of each annual report, including Schedule B thereto,
filed with respect to each Benefit Plan;
(l) Within ten (10) days after the filing thereof with the
IRS, a copy of each funding waiver request filed with respect to any Benefit
Plan and all communications received by either the Company or an ERISA Affiliate
with respect to such request;
(m) Within thirty (30) days upon the occurrence thereof, the
first to occur of an amendment of any existing Benefit Plan which will result in
an increase in the benefits under such Benefit Plan or a notification to
employees of the Company or any of its Subsidiaries of any such increase, or the
establishment of any new material Plan or the commencement of contributions to
any Plan to which either the Company or an ERISA Affiliate was not previously
contributing;
78
(n) Promptly upon, and in any event within ten (10) Business
Days after, receipt by either the Company or an ERISA Affiliate of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(o) Promptly upon, and in any event within ten (10) Business
Days after, receipt by either the Company or any of its Subsidiaries of an
unfavorable determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Internal Revenue Code, copies of each such
letter;
(p) Promptly upon, and in any event within ten (10) Business
Days after receipt by either the Company or an ERISA Affiliate of a notice from
a Multiemployer Plan regarding the imposition of withdrawal liability, copies of
each such notice;
(q) Promptly upon, and in any event within fifteen (15)
Business Days after, either the Company or any ERISA Affiliate fails to make a
required installment under subsection (m) of Section 412 of the Internal Revenue
Code or any other payment required under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a notification
of such failure;
(r) Monthly detailed information and documentation relating to
(i) the Receivables of the Company and each of its Subsidiaries (including,
without limitation, obligor, aging, amounts and concentration) and (ii) the
Inventory of the Company and each of its Subsidiaries (including all sales of or
other reductions of and all additions to such Inventory), and
within ten (10) days after the end of each month, a borrowing base certificate
in the form of Exhibit 10 (or another form acceptable to the Agent and the
Company) covering all the Receivables and Inventory of the Company and each of
its Subsidiaries as at the end of the previous month; provided, however, the
Company shall deliver to the Agent at the request of the Agent billing and
collection information with respect to Receivables on a weekly basis, if at any
time the Borrowing Base of the Borrowing Subsidiaries as reported on the most
recently received borrowing base certificate applicable at the time of such
receipt does not exceed the outstanding Revolving Credit Accommodations by at
least $15,000,000;
(s) At least once each fiscal quarter (and more often if so
requested by the Agent), a report for the Company and its Subsidiaries, dated
the last day of such quarter, and certified by the Company's chief financial
officer, which report shall include a schedule of any acquisition or disposition
by the Company or any Subsidiary thereof of Equipment with a value in excess of
$50,000, and shall cover the period since the last prior report delivered to the
Agent;
79
(t) Such other information respecting (i) Receivables,
Inventory, Equipment and real property covered by the Real Property Collateral
Documents owned by the Company or any of its Subsidiaries, including, without
limitation reports identifying such Equipment and real property by location and
by Loan Party or Pledgor, and (ii) the Company's or any such Subsidiary's
business or condition (financial or otherwise), operations, performance,
properties or prospects as the Agent may, from time to time, reasonably request.
Each Loan Party authorizes the Agent to communicate directly with its
independent certified public accountants and autho rizes such accountants to
disclose to the Agent any and all financial statements and other information of
any kind, including copies of any management letter or the substance of any oral
information, that such accountants may have with respect to such Receivables,
Inventory, Equipment and real property referred to above or the Company's or any
such Subsidiary's condition (financial or otherwise), operations, properties,
performance and prospects. The Agent and each Lender shall treat any non-public
information so obtained as confidential and shall give the Company notice of any
such communication. The Company on or before the Effective Date, shall have
delivered a letter addressed to such accountants instructing them to disclose
such information in compliance with this subsection (t);
(u) Copies of all financial statements, reports and notices,
if any, sent or made available generally by the Company to the holders of its
publicly-held Securities or to a trustee under the Contingent Note Indenture or
any indenture governing Subordinated Indebtedness or filed with the Commission,
and of all press releases made available generally by the Company or any of its
Subsidiaries to the public concerning material developments in the business of
the Company or any such Subsidiary;
(v) Copies of any management reports prepared by the Company's
independent certified public accountants in connection with the annual audit;
5.02. Environmental Notices. (a) Except as disclosed on
---------------------
Schedule 4.01(t), each Loan Party shall notify the Agent in writing (which
notice the Agent shall promptly forward to each Lender), promptly, and in any
event within twenty (20) days after such Loan Party's learning thereof, of any:
(i) notice or claim to the effect that the Company or any of its Subsidiaries is
or may be liable to any Person as a result of the Release or threatened Release
of any Contaminant into the environment; (ii) notice that the Company or any of
its Subsidiaries is under investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the Release or threatened
Release of any Contaminant into the environment; (iii) notice that any Property
of the Company or its Subsidiaries is subject to an Environmental Lien; (iv)
notice of violation to the Company or any of its Subsidiaries or awareness by
the Company or any of its Subsidiaries of a condition which might reasonably
result in a notice of violation of any environmental, health or safety
Requirement of Law, which could have a Material Adverse Effect; (v) commencement
or threat of any judicial or administrative proceeding alleging a violation of
any environmental, health or safety Requirement of Law; (vi) new or proposed
changes to any existing environmental, health or safety Requirement of Law that
could have a Material Adverse Effect on the operations of the Company or its
Subsidiaries; or (vii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by the Company or its Subsidiaries
80
that could subject the Company or its Subsidiaries to environmental, health or
safety Liabilities and Costs that could have a Material Adverse Effect. With
respect to clauses (i) through (vii) above, such notice shall be required only
if the liability or potential liability which is the subject matter of the
notice is likely to exceed Two Hundred Fifty Thousand Dollars ($250,000), or if
such liability or potential liability, when added to other liabilities of the
Company and its Subsidiaries of the kind referred to in clauses (i) through
(vii) above, exceeds Two Million Five Hundred Thousand Dollars ($2,500,000).
(b) On December 31 of each calendar year, the Loan Parties
shall submit to the Agent a report prepared by the appropriate officers of such
Loan Parties providing an update of the status of each material health or safety
compliance hazard or liability issue identified in (i) any notice or report
required pursuant to Section 5.02(a) and (ii) any other environmental, health
and safety compliance obligation, remedial obligation or liability. The Agent
shall forward such report to the Lenders within a reaonable time after its
receipt thereof.
(c) At any time upon the occurrence and during the
continuation of any Event of Default under Section 9.01(a) or after requesting,
and failing to receive within forty-five (45) days of such request, a waiver by
the Requisite Lenders of an Event of Default that has occurred and is continuing
under Section 9.01(b) or (d), the Agent, may, and is hereby authorized by the
Loan Parties to, conduct at the Loan Parties' expense, a "Phase I" environmental
audit of all or some of the Loan Parties' Properties, such audit to be conducted
by an environmental consulting firm designated by the Agent; provided, however,
that only one such audit may be conducted. The Agent and each Lender shall hold
the results of such audit as confidential information in accordance with such
Person's customary procedures for handling confidential information of this
nature; provided, however, each such Person shall be permitted to disclose such
information to a proposed assignee or participant, or as required by any
Governmental Authority or representative thereof, or as required or requested by
any bank regulator or examiner, or pursuant to legal process, or to its
accountants, lawyers and other advisors engaged in connection with the
transactions contemplated by this Agreement, and shall require any proposed
assignee or participant or such accountants, lawyers or other advisors to agree
to comply with this provision.
5.03. Appraisals. In the event that any Loan Party would
----------
receive Net Cash Proceeds in excess of an aggregate amount of Ten Million
Dollars ($10,000,000) from any Permitted Financing of real property or any
Permitted Disposition made as part of sale and leaseback transaction in
connection with any single transaction or series of related transactions, the
Agent shall have the right to request, and receive prior to such financing or
disposition, an appraisal of such fixed assets by an outside appraiser selected
by the Agent, which appraisal the Agent shall promptly forward to each Lender.
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ARTICLE VI
Affirmative Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date and so long as any Lender shall have any Commitment hereunder and
until payment in full of all of the Obligations, unless the Requisite Lenders
(or, if applicable, the Agent) shall otherwise give prior written consent
thereto:
6.01. Corporate Existence, etc. Each Loan Party shall, and
------------------------
shall cause each of its Subsidiaries to, at all times maintain its corporate
existence and preserve and keep in full force and effect its rights and
franchises unless the failure to maintain such rights and franchises would not
have a Material Adverse Effect. The Company shall promptly provide each Lender
with a complete list of the Subsidiaries of the Company upon the occurrence of
any change in the list of such Subsidiaries as set forth on Schedule 4.01(c).
6.02. Corporate Powers, etc. Each Loan Party shall, and shall
---------------------
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified except for those jurisdictions (other than Alabama and Vermont) where
failure to so qualify does not have or is not reasonably likely to have a
Material Adverse Effect. Each of the Company and its Subsidiaries will transact
business in its own name and will invoice all accounts in its own name.
6.03. Compliance with Laws, etc. Each Loan Party shall, and
-------------------------
shall cause each of its Subsidiaries to, (a) comply with all Requirements of
Law, and all Contractual Obligations affecting such Person or the business,
properties, assets or operations of such Person, and (b) obtain as needed all
Permits necessary for its operations and maintain such in good standing, except
in the case of clauses (a) and (b) above, where the failure to comply with which
will not have or is not reasonably likely to have a Material Adverse Effect.
6.04. Payment of Taxes and Claims. Each Loan Party shall pay
---------------------------
or cause to be paid, and shall cause each of its Subsidiaries to pay, (a) all
taxes, assessments and other governmental charges imposed upon it or on any of
its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have or is reasonably likely to have a Material
Adverse Effect, and (b) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
such Loan Party or any such Subsidiary, as the case may be, which have become
due and payable and which by law have or may become a Lien (other than a
Customary Permitted Lien) upon any of such Loan Party's or such Subsidiary's
properties or assets, prior to time when any penalty or fine shall be incurred
with respect thereto; provided, however, that no such taxes, assessments and
governmental charges referred to in clause (a) above or claims referred to in
clause (b) above need be paid if being contested in accordance with the Plan of
Reorganization or in good faith by appropriate proceedings promptly instituted
and diligently conducted and if adequate reserves shall have been set aside
therefor in accordance with GAAP.
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6.05. Maintenance of Properties; Insurance. Each Loan Party
------------------------------------
shall, and shall cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty or condemnation, all of its properties
material to its operations and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, consistent with past practice. Each
Loan Party shall, and shall cause its Subsidiaries to, maintain or cause to be
maintained, with financially sound and reputable insurers reasonably acceptable
to the Agent, the insurance policies and programs listed on Schedule 6.05 or
substantially similar programs or policies and amounts or other programs,
policies and amounts acceptable to the Agent; provided, however, the
requirements of this sentence and the next sentence shall not apply to any fixed
assets that have been sold pursuant to a Permitted Disposition or are subject to
Liens permitted under Section 7.02(b)(vi). Not later than thirty (30) days later
than the renewal, replacement or material modification of any policy or program,
the Loan Parties shall deliver or cause to be delivered to the Lenders a
certificate of insurance setting forth for each such policy or program: (i) the
amount of such policy, (ii) the risks insured against by such policy, (iii) the
name of the insurer and each insured party under such policy, and (iv) the
policy number of such policy.
6.06. Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
Each Loan Party shall permit, and cause each of its Subsidiaries to permit, any
authorized representative(s) designated by the Agent to visit and inspect any of
its properties or the properties of any of its Subsidiaries, including their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with their
officers, employees, representatives, agents or independent certified public
accountants, upon reasonable notice and during normal business hours. Each such
visitation and inspection by or on behalf of the Agent shall be at such Loan
Party's expense. Each Loan Party shall, and shall cause each of its Subsidiaries
to, keep proper books of record and account in which entries in conformity with
GAAP (and all Requirements of Law) shall be made of all dealings and
transactions in relation to their businesses and activities and as otherwise
required under Section 5.01. Such books and records shall include true and
complete records of all Indebtedness of any Loan Party to any other Loan Party
as permitted by Section 7.01(viii).
6.07. Litigation, Claims, etc. Each Loan Party shall, or shall
-----------------------
cause any of its Subsidiaries to, provide the Agent and the Lenders with (a) a
litigation status report with respect to any suit at law or in equity asserted
against it of the type referred to in Section 4.01(k)(i), in form and substance
satisfactory to the Agent, promptly after the close of each calendar quarter;
(b) notice of any suit at law or in equity or claim brought or asserted against
it promptly after learning thereof with respect to any suit or claim involving
money or property valued in excess of Five Hundred Thousand Dollars ($500,000)
or any such suits or claims which in the aggregate involve money or property
valued in excess of One Million Dollars ($1,000,000), except, in each case,
where the same is fully covered by insurance (other than any applicable
deductible); and (c) prompt notice of any investigation or proceeding before or
by any Governmental Authority, the effect of which is reasonably likely to
limit, prohibit or restrict materially the manner in which it currently conducts
its business or to declare any substance contained in the products manufactured
or distributed by it to be dangerous.
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6.08. Labor Disputes. Each Loan Party shall, and shall cause
--------------
each of its Subsidiaries to, notify the Agent in writing (which notice the Agent
shall promptly forward to each Lender), promptly, but in any event within two
(2) Business Days after learning thereof, of any material labor dispute to which
it may become a party, any strikes or walkouts relating to any of its plants or
other facilities and the expiration of any labor contract to which it is a party
or by which it is bound.
6.09. Maintenance of Licenses, Permits, etc. Each Loan Party
-------------------------------------
shall, and shall cause each of its Subsidiaries to, maintain in full force and
effect all licenses, permits, governmental approvals, franchises, authorizations
or other rights necessary for the operation of its business, except where the
failure to obtain any of the foregoing would not have or is not reasonably
likely to have a Material Adverse Effect; and notify the Agent in writing (which
notice the Agent shall promptly forward to each Lender), promptly after learning
thereof, of the suspension, cancellation, revocation or discontinuance of or of
any pending or threatened action or proceeding seeking to suspend, cancel,
revoke or discontinue any such license, permit, governmental approval,
franchise, authorization or right.
6.10. Required Interest Rate Contracts. In the event the Agent
--------------------------------
or the Requisite Lenders shall so request, each Loan Party shall take all steps
necessary to arrange that payments owing to such Loan Party from any
counterparty under any Interest Rate Contract shall be paid directly to the
Agent to be applied to the Obligations and to take all such other action with
respect to each such Interest Rate Contract as the Requisite Lenders may
request, including, without limitation, executing an assignment of each such
Interest Rate Contract in a form satisfactory to the Agent.
6.11. Receipt of Certain Funds. From and after the Effective
------------------------
Date, within three (3) Business Days after receipt by the Company or any
Subsidiary of the Company of any Net Cash Proceeds consisting of insurance
proceeds, a condemnation award or eminent domain proceeds in excess of Five
Hundred Thousand Dollars ($500,000), the Company or such Subsidiary shall
provide to the Agent written notification (or telephonic notice promptly
confirmed in writing) (which notification the Agent shall promptly forward to
each Lender) thereof and a description of the property damaged, lost or taken.
The Company or such Subsidiary shall specify in such notice whether or not the
property damaged, lost or taken will be restored or replaced, and if so, the
Company or such Subsidiary shall include a description of its plans to restore
or replace such property. The Company or any Subsidiary of the Company shall not
be permitted to use insurance proceeds or condemnation awards in an amount
greater than Two Million Five Hundred Thousand Dollars ($2,500,000) for the
restoration, repair or replacement of the damaged property without the prior
written consent of the Agent. Notwithstanding the foregoing this Section 6.11
shall not apply to any insurance proceeds, condemnation award or eminent domain
proceeds received in connection with assets or property that have been sold
pursuant to a Permitted Disposition or are subject to Liens permitted under
Section 7.02(b)(vi).
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6.12. Landlord Waivers and Bailee Waivers; Notice. Each Loan
-------------------------------------------
Party shall use its best efforts (i) to obtain and deliver to the Agent landlord
waivers in form and substance satisfactory to the Agent for all properties
leased by such Loan Party on which Collateral is located and (ii) to obtain and
deliver to the Agent bailee waivers in form and substance satisfactory to the
Agent for all bailment locations used by such Loan Party to store Collateral on
or after the Effective Date; provided, however, "best efforts" shall not include
the expenditure of money or the bringing of any action or proceeding to induce
any landlord or bailee to execute a landlord or bailee waiver (as the case may
be). Promptly upon the occurrence thereof, each Loan Party shall provide the
Agent with notice of any material default in such Loan Party's obligations under
a lease which covers property on which Collateral is located.
6.13. Liens on Assets After Payment of Permitted Financings.
-----------------------------------------------------
In the event any Indebtedness for a Permitted Financing is paid in full prior to
the Revolving Credit Termination Date, the Loan Party prepaying such
Indebtedness shall take such actions and execute such agreements and documents
as the Agent deems necessary to xxxxx x Xxxx to the Agent for the benefit of the
Agent and the Lenders, pursuant to the Collateral Documents, on the fixed assets
that had been subject to such Permitted Financing; provided, however, nothing in
this Section 6.13 shall be deemed to permit any such repayment of Indebtedness.
6.14. Updated Appraisals. Each Loan Party shall, or shall
------------------
cause any of its Subsidiaries to, no later than December 19, 1997, provide the
Agent and the Lenders with an appraisal meeting such regulatory requirements as
the Agent shall request, including (i) an orderly liquidation valuation and an
auction valuation of all Equipment of each such Loan Party or Subsidiary, as the
case may be and (ii) a fair market valuation of all real property of each such
Loan Party or Subsidiary, as the case may be, in each case prepared by an
outside appraiser selected by the Agent.
6.15. Pledge of Stock of Direct Subsidiaries of the Company.
-----------------------------------------------------
Upon the creation or acquisition (including in or in connection with a Permitted
Acquisition or a Permitted Additional Investment) after the Effective Date by
the Company of any direct Subsidiary of the Company, (a) in the case of any such
Subsidiary that is organized under the laws of a state of the United States of
America or the District of Columbia, the Agent shall be granted, pursuant to the
Company Pledge Agreement, a Lien in the capital stock of such Subsidiary held by
the Company and (b) in the case of a Subsidiary of the Company organized under
the laws of a jurisdiction other than a state of the United States of America or
the District of Columbia (a "Non-Domestic Subsidiary"), the Agent shall be
granted, pursuant to a pledge agreement in form and substance satisfactory to
the Agent, a Lien in 65% of the capital stock of such Non-Domestic Subsidiary
held by the Company (or such greater percentage thereof as shall not have any
adverse tax effects in the reasonable judgment of the Company).
85
ARTICLE VII
Negative Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date and so long as any Lender shall have any obligation hereunder and
until payment in full of all of the Obligations, unless the Requisite Lenders
(or, if applicable, the Agent) shall otherwise give prior written consent
thereto:
7.01. Indebtedness. Neither the Company nor any of its
------------
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness arising from current
liabilities for goods and services purchased in the normal course of business;
(iii) the Permitted Existing Indebtedness, and
xtensions, renewals, replacements and refinancings thereof, not exceeding the
principal amount outstanding on the date of such extension, renewal, replacement
or refinancing;
(iv) Subordinated Indebtedness;
(v) Indebtedness incurred by the Company or any
of its Subsidiaries for Capital Expenditures and Capital Lease obligations to
the extent permitted under the second proviso of Section 8.04 in an aggregate
amount not to exceed (when added to Indebtedness in respect of Permitted
Financings) Twenty Million Dollars ($20,000,000) at any time outstanding;
(vi) Indebtedness in respect of Interest Rate
Contracts with respect to which the relevant Loan Party is in full compliance
with Section 6.10;
(vii) Indebtedness in respect of Accommodation
Obligations permitted by Section 7.04;
(viii) Indebtedness of any Loan Party to any other
Loan Party; provided, however, loans made by any Borrowing Subsidiary to the
Company shall only be permitted to be made if the Relevant Condition shall be
satisfied with respect thereto;
(ix) Indebtedness in respect of Permitted
Financings; and
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(x) Indebtedness arising in respect of
Transaction Costs to the extent not fully paid on the Effective Date.
7.02. Sales of Assets; Liens.
----------------------
(a) Sales. Neither the Company nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
properties or assets, whether now owned or hereafter acquired, or any income or
profits therefrom, except, in the case of the Company and so long as no
Potential Event of Default or Event of Default has occurred and is continuing,
assets consisting of any stock or stock equivalents of an Unrestricted
Subsidiary, and except, in the Case of the Company and its Subsidiaries, as part
of a Permitted Disposition, without the prior written consent of the Requisite
Lenders, and, in any event (including in the case of a Permitted Disposition),
for less than (i) the fair market value of such assets as determined by the
board of directors of the Company or such Subsidiary in its reasonable
discretion and (ii) ninety percent (90%) of the net book value of such assets;
provided, however, the foregoing shall not prohibit (x) sales of Inventory
occurring in the ordinary course of business of the Company and its Subsidiaries
and (y) sales of assets occurring in the ordinary course of business of the
Company and its Subsidiaries that do not exceed in the aggregate Two Million
Dollars ($2,000,000) in any Fiscal Year; provided, further, to the extent any
Loan Party would receive Net Cash Proceeds in excess of an aggregate amount of
Ten Million Dollars ($10,000,000) from the sale of any assets in a single
transaction or series of related transactions (other than in connection with
sale and leaseback transactions constituting Permitted Dispositions) which would
not otherwise require the consent of the Requisite Lenders hereunder, and such
Net Cash Proceeds would, upon receipt thereof by such Loan Party, be required to
be applied to any portion of the Revolving Loans pursuant to Section 2.06(b),
then such Loan Party shall obtain the prior written consent of the Requisite
Lenders to such sale. Notwithstanding the foregoing, any Loan Party shall be
permitted to sell to any institution in the business of receivables collection,
credit insurance or factoring (which may be a Lender) any past-due Receivable,
and the Agent shall release its Lien thereon, so long as the following
conditions are met with respect to each such sale: (A) to the extent that the
aggregate face amount of all past-due Receivables sold pursuant to this sentence
in the twelve-month period preceding the date of such sale plus the face amount
of such past-due Receivable exceeds $1,000,000, the Agent shall have indicated
its consent to such sale by executing a Request for Release of Receivables in
the form of Exhibit 11 (the "Request for Release of Receivables") specifically
referring to such past-due Receivable delivered by such Loan Party to the Agent;
and (B) in all cases such Loan Party's grant of a Lien on such past-due
Receivable to such institution and the Agent's release of such Receivable from
the Collateral shall become effective only upon the consummation of such sale to
such institution and only upon such Loan Party's receipt of the cash proceeds of
such sale.
(b) Liens. Neither the Company nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or permit to exist any Lien
on or with respect to any of their Property or assets (including all Collateral)
except:
87
(i) Liens securing the Obligations;
(ii) any interest or title of a lessor or
secured by a lessor's interest under any lease permitted by this Agreement;
(iii) Liens existing on the date of this
Agreement securing the Permitted Existing Indebtedness Permitted to be Secured;
(iv) Permitted Existing Liens;
(v) Customary Permitted Liens and Liens listed
as exceptions to title on the title insurance policies delivered in connection
with this Agreement;
(vi) purchase money Liens (including the
interest of a lessor under a Capital Lease), Liens on property existing at the
time of acquisition thereof by the Company or any of its Subsidiaries, Liens
securing Indebtedness permitted by clause (v) of Section 7.01 and Liens on fixed
assets securing Indebtedness permitted by clause (ix) of Section 7.01;
(vii) Liens (other than Environmental Liens) with
respect to judgments or attachments which do not result in an Event of Default
or Potential Event of Default hereunder;
(viii) to the extent Indebtedness secured thereby
is permitted to be extended, renewed, replaced or refinanced pursuant to Section
7.01, a future Lien upon any property which is subject to a Lien described in
clauses (iii), (iv) and (vi) above, if such future Lien attaches only to the
same property, secures only such permitted extensions, renewals, replacements or
refinancings and is of like quality, character and extent;
(ix) Liens arising under Section 302(f) of
ERISA or Section 412(n) of the Internal Revenue Code where the delinquent
contribution which gave rise to the Lien is paid within thirty (30) days of its
original due date; and
(x) Liens on past-due Receivables sold in
accordance with the terms and conditions of Section 7.02(a) in favor of the
purchasers thereof.
7.03. Investments. Neither the Company nor any of its
-----------
Subsidiaries shall directly or indirectly make or own any Investment in any
Person except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments and
Investments consisting of stock and stock equivalents of any additional Pledgors
and of any Unrestricted Subsidiaries;
88
(iii) Investments by the Company in the Borrowing
Subsidiaries or by any Borrowing Subsidiary in any other Borrowing Subsidiary;
(iv) Permitted Additional Investments;
(v) Investments by the Company (A) in JPS
Capital for the purpose of redeeming Contingent Notes, (B) in Permitted
Acquisitions and (C) in any Unrestricted Subsidiary, provided that, in each
case, such Investments are made solely with Unrestricted Proceeds;
(vi) Investments in the form of intercompany
loans and advances from the Company and/or JCIC to International Fabrics not to
exceed in the aggregate $2,000,000 at any time outstanding; provided that any
such loan and advances which exceed in the aggregate $1,000,000 at any time
outstanding shall be in form and substance satisfactory to the Agent; and
(vii) cash Investments by International Fabrics
in the ITM Joint Venture not to exceed $300,000 in the aggregate.
7.04. Accommodation Obligations. Neither the Company nor any
-------------------------
of its Subsidi aries shall directly or indirectly create or become or be liable
with respect to any Accommodation Obligation except:
(i) guaranties resulting from the endorsement
of negotiable instruments for collection in the ordinary course of business;
(ii) any guaranty of the Obligations by the
Company or by any Subsidiary of the Company;
(iii) any guaranty by the Company of the
obligations of any Subsidiary of the Company;
(iv) obligations, warranties and indemnities,
not relating to Indebtedness of any Person (other than customary obligations,
warranties and indemnities under the documents evidencing Indebtedness permitted
under Section 7.01), which have been or are undertaken or made by the Company
and its Subsidiaries and not otherwise prohibited by this Agreement;
(v) Permitted Existing Accommodation
Obligations and extensions and renewals thereof, and substitutions therefor in
the same or a lesser amount and in respect of the same transaction; and
89
(vi) Accommodation Obligations arising under or
in connection with the Transaction Documents and, in the case of the Company,
the Contingent Note Indenture (other than in respect of the Indebtedness
evidenced by the Contingent Notes).
7.05. Restricted Junior Payments. No Subsidiary of the
--------------------------
Company shall declare or make any Restricted Junior Payment, except:
(i) Customary Dividends; and
(ii) dividends or other distributions from the
Borrowing Subsidiaries or the Pledgors to the Company as to which the Relevant
Condition shall have been satisfied.
7.06. Transactions with Shareholders and Affiliates. Neither
---------------------------------------------
the Company nor any of its Subsidiaries shall directly or indirectly enter into
or permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any holder or holders of more than ten percent (10%) of any class of equity
securities of the Company, or with any Affiliate thereof or of any such holder,
on terms that are less favorable to the Company or such Subsidiary than those
that might be obtained in an arm's length transaction at the time from Persons
who are not such a holder or Affiliate. Nothing contained in this Section 7.06
shall prohibit any transaction expressly permitted by Section 7.05 or
contemplated in the Plan of Reorganization. The Net Face Amount of Receivables
owing from the ITM Joint Venture to the Borrowing Subsidiaries shall not exceed
$2,500,000 in the aggregate at any time.
7.07. Restriction on Fundamental Changes.
----------------------------------
(a) Neither the Company nor any of its Subsidiaries shall
enter into any merger or consolidation, or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or any
substantial part of its business, property or assets, whether now or hereafter
acquired, xcept as permitted by Section 7.02(a); provided that the Company shall
be permitted to dissolve or liquidate (i) JPS Capital in accordance with its
charter and by-laws, (ii) JPS Auto and (iii) JCC.
(b) Except in connection with a Permitted Acquisition or a
Permitted Additional Investment, neither the Company nor any of its Subsidiaries
shall (i) acquire by purchase or otherwise all or substantially all of the
business, property or assets of, or stock or other evidence of beneficial
ownership of, any Person or division or business of such Person or (ii) create
any Subsidiary.
(c) The Company and its Subsidiaries shall not change their
corporate, capital or legal structure, except as permitted by clause (a) or (b)
above. The Company agrees that JPS Auto and JCC shall not engage in any business
or own or acquire any assets (other than, in the case of JCC, cash and Cash
Equivalents and fixed assets used by or leased to a Borrowing Subsidiary). The
Company shall not engage in any business or activity other than acting as a
holding company for its Subsidiaries and the Unrestricted Subsidiaries.
90
(d) Neither the Company nor any of its Subsidiaries or
Unrestricted Subsidiaries shall engage in any businesses other than the
businesses engaged in by the Loan Parties on the Effective Date and any business
or activities which are substantially similar, related or incidental thereto.
7.08. ERISA. The Company shall not do any of the following to
-----
the extent that such act or failure to act would result in the aggregate, after
taking into account any other such acts or failure to act, in a material
obligation to pay money:
(i) Engage, or permit an ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code for which a class exemption is not
available or a private exemption has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived;
(iii) Fail, or permit an ERISA Affiliate to fail,
to pay timely required contributions or annual installments due with respect to
any waived funding deficiency to any Plan subject to Section 412 of the Internal
Revenue Code;
(iv) Terminate, or permit an ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of the Company
or an ERISA Affiliate under Title IV of ERISA; or
(v) Fail, or permit any ERISA Affiliate to
fail, to pay any required installment under section (m) of Section 412 of the
Internal Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment.
7.09. Operating Leases. During any Fiscal Year, neither the
----------------
Company nor any of its Subsidiaries shall become liable in any way, whether
directly or by assignment or by Accommodation Obligation, for the obligations of
the lessee under any Operating Lease unless, immediately after giving effect to
the incurrence of liability with respect to such Operating Lease, the aggregate
amount of all Consolidated Rental Payments for such Fiscal Year shall not exceed
Twenty Million Dollars ($20,000,000), without taking into account any customary
reimbursement for taxes, insurance, maintenance or other expenses.
92
7.10. Sales and Leasebacks. Neither the Company nor any of its
--------------------
Subsidiaries shall become liable, directly or by way of Accommodation
Obligation, with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real or personal or mixed) whether now owned or
hereafter acquired, (i) which the Company or a Subsidiary of the Company has
sold or transferred or is to sell or transfer to any other Person and the Net
Cash Proceeds of which sales equal or exceed ninety percent (90%) of the net
book value of such assets, or (ii) which the Company or a Subsidiary of the
Company intends to use for substantially the same purposes as any other property
which has been or is to be sold or transferred by that entity to any other
Person in connection with such lease; provided, however, such leases shall be
permitted in connection with fixed assets sold by the Company or any of its
Subsidiaries pursuant to a Permitted Disposition.
7.11. Covenant with Respect to JPS Capital. The Company shall
------------------------------------
not, and shall not permit JPS Capital to, amend, modify, terminate or supplement
the Contingent Note Indenture or the Contingent Notes, and shall not permit JPS
Capital to amend or modify any of its charter documents or by-laws without the
prior written consent of the Requisite Lenders; provided that no such consent
shall be required for any such amendment, modification or supplement which
affects solely a non-material provision or non-material provisions of one or
more of such documents in a manner which is not adverse to the Agent or any of
the Lenders. Notwithstanding anything to the contrary contained in this
Agreement, it is understood and agreed that (i) JPS Capital may retain and use
as set forth in its charter all cash at any time held by JPS Capital and all
investments made in accordance with paragraph seventh (b) of its charter and all
income and interest earned thereon and (ii) no payment from any funds held by
JPS Capital as of the date hereof (or from any interest or income earned thereon
on or after the date hereof) to any Person in accordance with the terms of the
Contingent Note Indenture or permitted or required pursuant to JPS Capital's
charter documents shall be deemed at any time to constitute an Event of Default
or a Potential Event of Default.
7.12. Amendment of Charter or By-Laws. Neither the Company nor
-------------------------------
any of its Subsidiaries shall amend its charter documents or By-Laws, except (i)
upon at least ten (10) days' prior written notice to the Agent and then only
with the prior written consent of the Requisite Lenders and (ii) in the case of
the Company's charter documents, to authorize capital stock (other than
Prohibited Stock).
7.13. Disposal of Subsidiary Stock. Except as permitted by
----------------------------
Section 7.02 or Section 7.07, (i) the Company shall not directly or indirectly
sell, assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity securities of (or warrants, rights or options to acquire
shares or other equity securities of) any of the Company's Subsidiaries, except
to qualify directors if required by applicable law, or (ii) none of the
Company's Subsidiaries shall directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other securities
of (or warrants, rights or options to acquire shares or other securities of)
such Subsidiary, or any other Subsidiary of the Company, except to qualify
directors if required by applicable law and except that any Subsidiary of the
Company may issue additional shares of its capital stock to the Company if such
shares are pledged pursuant to the Company Pledge Agreement.
92
7.14. Issuance of Capital Stock. (a) No Subsidiary of the
-------------------------
Company shall issue or sell any additional shares of its capital stock or any
securities convertible into or exchangeable for any shares of its capital stock,
grant any rights (either preemptive or other) to subscribe for or to purchase,
or any options for the purchase of, enter into any agreement providing for the
issuance (contingent or otherwise) of, or create calls, commitments or claims of
any character relating to, any of its capital stock or any stock or securities
convertible into or exchangeable for any of its capital stock.
(b) The Company shall not (i) issue or sell any Prohibited
Stock or (ii) grant any put option or other similar right that commits or
requires the Company to repurchase, redeem or otherwise acquire for value any
capital stock of the Company at any time prior to the second anniversary of the
Scheduled Termination Date unless the payment made by the Company in respect of
such repurchase, redemption or acquisition consists solely of (A) Securities the
issuance of which is not otherwise prohibited by this Agreement and/or (B)
Unrestricted Proceeds, provided that such commitment or requirement of the
Company to effect such repurchase, redemption or acquisition is conditioned on
its receipt of Unrestricted Proceeds in an amount necessary to make such
payment, it being understood that, for purposes of clauses (i) and (ii) above,
any capital stock not constituting Prohibited Stock at the time such capital
stock is issued and any put option or similar right that is not prohibited by
this subsection (b) at the time it is granted shall not violate this subsection
(b) if after such issuance or grant the Scheduled Termination Date is extended.
7.15. Margin Regulations. No portion of the proceeds of any
------------------
credit extended under this Agreement shall be used in any manner which might
cause the extension of credit or the application of such proceeds to violate
Regulation G, Regulation U or Regulation X or any other regulation of the
Federal Reserve Board or to violate the Securities Exchange Act or the
Securities Act, in each case as in effect on the date or dates of such Borrowing
and such use of proceeds.
7.16. Amendment of Certain Documents. Neither the Company nor
------------------------------
any of its Subsidiaries shall amend, modify, terminate or supplement the
Contribution Agreement or any agreement or instrument with respect to
Subordinated Indebtedness to which they are a party without the prior written
consent of the Requisite Lenders (or, as otherwise provided in this Agreement,
without the prior written consent of the Agent); provided that, other than with
respect to the Contribution Agreement, no such consent shall be required for any
such amendment, modification or supplement which affects solely a non-material
provision or non-material provisions of one or more of such documents in a
manner which is not adverse to the Agent or any of the Lenders.
93
7.17. Cancellation of Debt; Prepayment. Neither the Company
--------------------------------
nor any of its Subsidiaries shall cancel any claim or debt, except in the Case
or for adequate consideration and in the ordinary course of its business, or
voluntarily prepay, repurchase, redeem, retire or defease any long-term
Indebtedness; provided, however, that the foregoing shall not prohibit the
prepayment of (i) the Obligations to the extent otherwise permitted by this
Agreement and (ii) Subordinated Indebtedness and the Contingent Notes made
solely with Unrestricted Proceeds.
7.18. Environmental Liabilities. Except as disclosed in
-------------------------
Schedule 4.01(t), neither the Company nor any of its Subsidiaries shall become
subject to any Liabilities and Costs which the Agent deems has or is likely to
have a Material Adverse Effect arising out of or related to (a) the Release or
threatened Release at any location of any Contaminant into the environment, or
any Remedial Action in response thereto, or (b) any violation of any
environmental, health or safety Requirement of Law; provided, however, that this
covenant shall not be violated so long as (i) the Company or such Subsidiary
shall have notified the Agent of the assertion of such liability or required
expenditures promptly upon receiving written notice of such assertion, (ii) the
Company or such Subsidiary shall have continued to furnish the Agent with such
information concerning such asserted liability or required expenditure as the
Agent shall have reasonably requested, or is otherwise provided herein, (iii)
the Company or such Subsidiary shall be diligently pursuing indemnification for
such liability or required expenditures from any Person which has an obligation
to provide such indemnification, and (iv) the Agent is satisfied that the
imposition of such liability during the pendency of the Company's or such
Subsidiary's pursuit of indemnification will not materially impair the Company's
or such Subsidiary's ability to perform its financial obligations under this
Agreement.
ARTICLE VIII
Financial Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date so long as any Lender has any Commitment hereunder and until
payment in full of all the Obligations, unless the Requisite Lenders shall
otherwise give prior written consent thereto:
8.01. Minimum EBITDA. EBITDA of the Company and its
--------------
Subsidiaries on a consolidated basis, as determined as of the last day of each
fiscal quarter set forth below for the twelve month period ending on such day,
shall not be less than the minimum amount set forth opposite such fiscal
quarter:
Fiscal Quarter Minimum Amount
-------------- --------------
The fourth fiscal quarter of Fiscal Year 1997 $33,000,000
The first fiscal quarter of Fiscal Year 1998 32,000,000
The second fiscal quarter of Fiscal Year 1998 32,000,000
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The third fiscal quarter of Fiscal Year 1998 32,000,000
The fourth fiscal quarter of Fiscal Year 1998 32,000,000
The first fiscal quarter of Fiscal Year 1999 32,000,000
The second fiscal quarter of Fiscal Year 1999 33,000,000
The third fiscal quarter of Fiscal Year 1999 33,000,000
The fourth fiscal quarter of Fiscal Year 1999 34,000,000
The first fiscal quarter of Fiscal Year 2000 34,000,000
The second fiscal quarter of Fiscal Year 2000 35,000,000
The third fiscal quarter of Fiscal Year 2000 35,000,000
The fourth fiscal quarter of Fiscal Year 2000 36,000,000
The first fiscal quarter of Fiscal Year 2001 36,000,000
The second fiscal quarter of Fiscal Year 2001 37,000,000
The third fiscal quarter of Fiscal Year 2001 38,000,000
The fourth fiscal quarter of Fiscal Year 2001 39,000,000
The first fiscal quarter of Fiscal Year 2002 40,000,000
The second fiscal quarter of Fiscal Year 2002 41,000,000
The third fiscal quarter of Fiscal Year 2002 42,000,000
and thereafter
8.02. Minimum Interest Coverage Ratio. The Interest Coverage
-------------------------------
Ratio of the Company and its Subsidiaries on a consolidated basis, as determined
as of the last day of each fiscal quarter for the twelve month period ending on
such day, shall not be less than 3.5 to 1.
8.03. Minimum Fixed Charge Coverage Ratio. The Fixed Charge
-----------------------------------
Coverage Ratio of the Company and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter set forth below for the
twelve month period ending on such day, shall not be less than the minimum ratio
set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
The fourth fiscal quarter of Fiscal Year 1997 0.80 to 1
The first fiscal quarter of Fiscal Year 1998 0.80 to 1
The second fiscal quarter of Fiscal Year 1998 0.80 to 1
The third fiscal quarter of Fiscal Year 1998 0.50 to 1
The fourth fiscal quarter of Fiscal Year 1998 0.80 to 1
The first fiscal quarter of Fiscal Year 1999 0.90 to 1
The second fiscal quarter of Fiscal Year 1999 1.00 to 1
The third fiscal quarter of Fiscal Year 1999 1.05 to 1
The fourth fiscal quarter of Fiscal Year 1999 1.10 to 1
The first fiscal quarter of Fiscal Year 2000 1.10 to 1
The second fiscal quarter of Fiscal Year 2000 1.15 to 1
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The third fiscal quarter of Fiscal Year 2000 1.20 to 1
The fourth fiscal quarter of Fiscal Year 2000 1.20 to 1
The first fiscal quarter of Fiscal Year 2001 1.25 to 1
The second fiscal quarter of Fiscal Year 2001 1.30 to 1
The third fiscal quarter of Fiscal Year 2001 1.40 to 1
The fourth fiscal quarter of Fiscal Year 2001 1.50 to 1
The first fiscal quarter of Fiscal Year 2002 1.50 to 1
The second fiscal quarter of Fiscal Year 2002 1.55 to 1
The third fiscal quarter of Fiscal Year 2002 1.55 to 1
and thereafter
8.04. Maximum Capital Expenditures. Capital Expenditures made
----------------------------
or incurred by the Company and its Subsidiaries on a consolidated basis for any
Fiscal Year shall not exceed in the aggregate the maximum amount set forth below
opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1997 $23,000,000
1998 25,000,000
1999 25,000,000
2000 23,000,000
2001 23,000,000
2002 20,000,000;
provided, however, if the maximum amount set forth above opposite any Fiscal
Year exceeds the amount of Capital Expenditures made or incurred by the Company
and its Subsidiaries on a consolidated basis for such Fiscal Year, then Capital
Expenditures made or incurred by the Company and its Subsidiaries on a
consolidated basis for the next Fiscal Year may exceed the maximum amount set
forth above opposite such next Fiscal Year (but not subsequent Fiscal Years) by
the amount of such excess from the immediately preceding Fiscal Year; provided
further, however, that, notwithstanding anything contained in this Agreement to
the contrary, the terms of any external financing (other than any Permitted
Financing) incurred after the Effective Date pursuant to Section 7.01(v), the
proceeds of which are used by the Company and/or its Subsidiaries to make or
incur Capital Expenditures shall be in form and substance satisfactory to the
Requisite Lenders.
ARTICLE IX
Events of Default; Rights and Remedies
9.01. Events of Default. Each of the following occurrences
-----------------
shall, from and after the Effective Date, constitute an Event of Default under
this Agreement:
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(a) Failure to Make Payments When Due. Any Loan Party or any
Pledgor shall fail to pay when due any interest or principal on any Revolving
Loan or any fee or other Obligation payable under any Loan Document.
(b) Breach of Certain Covenants. Any Loan Party or any Pledgor
shall fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on such Loan Party under (i) Sections 6.10, 6.11 or 6.15,
Article VII (except for Sections 7.04, 7.06, and 7.10) or Article VIII or any
section of the Collateral Documents (which failure continues after the
expiration of any grace period specified under such section); or (ii) Section
6.13, 7.04, 7.06 or 7.10 and such failure under this clause (ii) shall continue
for fifteen (15) days.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by any Loan Party or any Pledgor to the Agent or
any Lender herein or in any of the other Loan Documents or in any statement or
certificate at any time given by such Loan Party or any of its Subsidiaries
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made or deemed made.
(d) Other Defaults. Subject to any applicable notice and cure
periods set forth in the Collateral Documents, any Loan Party shall default in
the performance of or compliance with any term contained in this Agreement or in
any of the other Loan Documents or any default or event of default shall occur
under any of the Collateral Documents (other than as covered by subsection (a)
or (b) above), and such default or event of default shall continue for thirty
(30) days after such Loan Party knew or, in the exercise of due care, had reason
to know of such default.
(e) Default as to Other Indebtedness. Any Loan Party or any
Subsidiary of any Loan Party shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) on
any Indebtedness, other than an Obligation, if the aggregate amount of such
Indebtedness is Five Million Dollars ($5,000,000) or more; or any breach,
default or event of default shall occur, or any other event shall occur or
condition shall exist, under any instrument, agreement or indenture pertaining
thereto, if the effect thereof (with or without the giving of notice or lapse of
time or both) is to accelerate, or permit the holder(s) of such Indebtedness to
accelerate, the maturity of any such Indebtedness; or any such Indebtedness
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled required prepayment prior to the stated maturity thereof),
or the holder of any Lien (other than Liens upon property leased to a Loan Party
which were created by the landlord prior to the commencement of the lease), in
any amount, shall commence foreclosure of such Lien upon property of such Loan
Party or any such Subsidiary having a value in excess of Five Million Dollars
($5,000,000).
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i)
An involuntary case shall be commenced against any Loan Party or any of its
Subsidiaries, and the petition shall not be dismissed within sixty (60) days
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after commencement of the case, or a court of competent jurisdiction shall enter
a decree or order for relief in respect of such Loan Party or any of its
Subsidiaries, in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any other
similar relief shall be granted under any applicable federal, state or foreign
law.
(ii) A decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over any
Loan Party or any of its Subsidiaries, or over all or a substantial part of the
property of such Loan Party or any of its Subsidiaries, shall be entered; or an
interim receiver, trustee or other custodian of such Loan Party or any of its
Subsidiaries, or of all or a substantial part of the property of such Loan Party
or any of its Subsidiaries, shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the property of
such Loan Party or any of its Subsidiaries, shall be issued and any such event
shall not be stayed, vacated, dismissed, bonded or discharged within sixty (60)
days of entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Except
in or with respect to the Case, any Loan Party or any of Subsidiary of any Loan
Party shall have an order for relief entered with respect to it or commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking of possession by a receiver, trustee or other custodian for all or a
substantial part of its property; any Loan Party or any Subsidiary of any Loan
Party shall make any assignment for the benefit of creditors or shall be unable
or fail, or admit in writing its inability, to pay its debts as such debts
become due; or the Board of Directors (or any committee thereof) of such Loan
Party or any such Subsidiary adopts any resolution or otherwise authorizes any
action to approve any of the foregoing (other than a resolution adopted by the
Board of Directors of the Company authorizing the commencement of the Case and
the transactions contemplated thereby).
(h) Judgments and Attachments. (i) Any money judgment (other
than a money judgment covered by insurance, but only if the insurer has admitted
liability with respect to such money judgment), writ or warrant of attachment,
or similar process involving in any case an amount in excess of Five Million
Dollars ($5,000,000) shall be entered or filed against any Loan Party or any
Subsidiary of any Loan Party, or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days,
or (ii) any judgment or order of any court or administrative agency awarding
material damages shall be entered against any Loan Party or any Subsidiary of
any Loan Party, in any action under the Federal securities laws seeking
rescission of the purchase or sale of, or for damages arising from the purchase
or sale of, any Subordinated Indebtedness in excess of $5,000,000 in the
aggregate, and such judgment or order shall have become final after exhaustion
of all available appellate remedies.
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(i) Dissolution. Any order, judgment or decree shall be
entered against any Loan Party or any Subsidiary of any Loan Party, decreeing
its involuntary dissolution or split up and such order shall remain undischarged
and unstayed for a period in excess of thirty (30) days; or any Loan Party or
any Subsidiary of any Loan Party shall otherwise dissolve or cease to exist.
(j) Collateral Documents; Failure of Security or
Subordination. For any reason any Collateral Document ceases to be in full force
and effect or any Lien intended to be created thereby ceases to be or is not
valid and perfected; or any Lien in favor of the Agent contemplated by this
Agreement or any Collateral Document, or any of the documents and instru ments
evidencing any Subordinated Indebtedness shall, at any time, be invalidated or
otherwise cease to be in full force and effect; or any such Lien or any
Obligation shall be subordinated or shall not have the priority contemplated by
this Agreement, the Collateral Documents or such subordination provisions, for
any reason.
(k) Change of Control. A Change of Control shall occur.
(l) ERISA Liabilities. Any Termination Event occurs which will
or is reasonably likely to subject either the Company or an ERISA Affiliate to a
liability which the Agent determines will or is reasonably likely to have a
Material Adverse Effect, or, the plan administrator of any Benefit Plan applies
for and receives approval under Section 412(d) of the Internal Revenue Code for
a waiver of the minimum funding standards of Section 412(a) of the Internal
Revenue Code and the Agent determines that the business hardship upon which the
Section 412(d) waiver was based will or is reasonably likely to subject either
the Company or an ERISA Affiliate to a liability which the Agent determines will
or is reasonably likely to have a Material Adverse Effect.
(m) Solvency. Any Borrowing Subsidiary shall cease to
be Solvent.
(n) Material Adverse Change. Since the Effective Date,
there shall have occurred any condition or event which the Agent and the
Requisite Lenders determine has or might have a Material Adverse Effect.
(o) Plan of Reorganization. The Plan of Reorganization
shall have been amended or modified in any material respect after the Effective
Date without the prior written consent of the Requisite Lenders (other than any
modification which does not impair or adversely affect the rights and remedies
of the Lenders under the Loan Documents and which does not otherwise cause an
Event of Default hereunder).
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 11.08.
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9.02. Rights and Remedies.
-------------------
(a) Acceleration. Upon the occurrence of any Event of Default
described in the foregoing Section 9.01(f) or 9.01(g) with respect to any
Person, the Commitments shall automatically and immediately terminate and the
unpaid principal amount of and any and all accrued interest on the Loans and all
Reimbursement Obligations shall automatically become immediately due and
payable, with all additional interest from time to time accrued thereon and
without presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration), all
of which are hereby expressly waived by the Loan Parties, and the obligation of
each Lender to make any Revolving Loan hereunder or the Issuing Bank to issue
any Letter of Credit shall thereupon terminate; and upon the occurrence and
during the continuance of any other Event of Default, the Agent shall at the
request, or may with the consent, of the Requisite Lenders, by written notice to
the Loan Parties, (i) declare that the Commitments are terminated, whereupon the
Commitments and the obligation of each Lender to make any Revolving Loan
hereunder or the Issuing Bank to issue any Letter of Credit shall immediately
terminate, and/or (ii) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Loans and all Letter of Credit Obligations to
be, and the same shall thereupon be, immediately due and payable with all
additional interest from time to time accrued thereon and without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by the Loan Parties.
(b) Deposit for Letters of Credit. Upon demand by the Agent or
the Issuing Bank after the occurrence and during the continuance of any Event of
Default, each Borrowing Subsidiary shall, promptly upon the demand of the Agent,
deposit in the Cash Collateral Account with respect to each Letter of Credit
then outstanding for the account of such Borrowing Subsidiary, cash or Cash
Equivalents in an amount equal to the greatest amount for which such Letter of
Credit may be drawn. Each Borrowing Subsidiary hereby grants to the Agent for
the benefit of the Agent, the Issuing Bank and the Lenders, a security interest
in the Cash Collateral Account and all funds from time to time deposited in the
Cash Collateral Account as security for, and to provide for the payment of, the
Reimbursement Obligations.
(c) Rescission. If at any time after acceleration of the
maturity of the Loans, the Loan Parties shall pay all arrears of interest and
all payments on account of principal of the Loans and Reimbursement Obligations
which shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified in this Agreement) and all Events of Default and Potential Events of
Default (other than nonpayment of principal of and accrued interest on the Loans
due and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 11.08, then by written notice to the Loan Parties, the
Requisite Lenders may elect, in the sole discretion of such Requisite Lenders,
to rescind and annul the acceleration and its consequences; provided, however,
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that any such action shall not affect any subsequent Event of Default or
Potential Event of Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Lenders to
a decision which may be made at the election of the Requisite Lenders; they are
not intended to benefit the Loan Parties and do not give the Loan Parties the
right to require the Lenders to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
ARTICLE X
The Agent; The Co-Agent
10.01. Appointment. (a) Each Lender and the Issuing Bank
-----------
hereby designates and appoints Citibank as the Agent of such Lender and the
Issuing Bank under this Agreement and the other Loan Documents. Each Lender and
the Issuing Bank hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and the Loan Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes or the Obligations) or the other Loan Documents, the Agent shall
not be required to exercise any discretion or take any action. Notwithstanding
the foregoing, the Agent shall be required to act or refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders (unless the instructions or consent of all
of the Lenders is required hereunder or thereunder) and such instructions shall
be binding upon all Lenders and the Issuing Bank; provided, however, the Agent
shall not be required to take any action which the Agent reasonably believes (i)
will expose it to personal liability unless the Agent receives an
indemnification satisfactory to it from the Lenders with respect to such action
or (ii) is contrary to this Agreement, the other Loan Documents or applicable
law. The Agent agrees to act as such on the express conditions contained in this
Article X.
(b) The provisions of this Article X are solely for the
benefit of the Agent, the Co-Agent, the Issuing Bank and the Lenders, and
neither the Company nor any Subsidiary of the Company shall have any rights to
rely on or enforce any of the provisions hereof (other than as expressly set
forth in Section 10.07 or in Section 10.08). In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the Lenders
and the Issuing Bank and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for the Company
or any Subsidiary of the Company. The Agent may perform any of its duties
hereunder or under the other Loan Documents by or through its agents or
employees.
10.02. Nature of Duties. (a) The Agent shall not have any
----------------
duties or respon sibilities except those expressly set forth in this Agreement
or in the Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
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any of the other Loan Documents, expressed or implied, is intended to or shall
be construed to impose upon the Agent any obligation in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. If the Agent seeks the consent or approval of the Requisite
Lenders to the taking or refraining from taking any action hereunder or under
the other Loan Documents, the Agent shall send notice thereof to each Lender.
The Agent shall promptly notify each Lender at any time that the Requisite
Lenders have instructed the Agent to act or refrain from acting pursuant hereto.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Co-Agent is a Lender designated as a "Co-Agent" for title
purposes only and in such capacity shall have no obligations or duties
whatsoever under this Agreement to the Loan Parties, the Pledgors, any Lender or
the Issuing Bank and shall have no rights as a Co-Agent separate from its rights
as a Lender.
10.03. Rights, Exculpation, etc. None of the Agent or any of
------------------------
its Affiliates, officers, directors, employees, agents, attorneys or
consultants, shall be liable to any Lender for any action taken or omitted by
them hereunder or under any of the Loan Documents, or in connection herewith or
therewith, except that the Agent shall be obligated for its respective gross
negligence or willful misconduct in the performance of its express obligations
hereunder. The Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith pursuant to Section 2.07(b), and if any
such apportionment or distribution is subsequently determined to have been made
in error the sole recourse of any Person to whom payment was due, but not made,
shall be to recover from the recipients of such payments any payment in excess
of the amount to which they are determined to have been entitled. Each of the
Agent, each Lender and the Issuing Bank shall make its own independent
investigation of the financial condition and affairs of the Company and its
Subsidiaries in connection with the making and the continuance of the Loans
hereunder and shall make its own appraisal of the creditworthiness of the
Company and its Subsidiaries, and none of the Agent, any Lender or the Issuing
Bank shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or the Issuing Bank with any credit or other
information with respect thereto. None of the Agent, any Lender or the Issuing
Bank shall be responsible to any Lender or the Issuing Bank for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, legality, collectibility,
or sufficiency of this Agreement, any of the Collateral Documents or any of the
other Loan Documents, or any of the transactions contemplated hereby and
thereby; or of the Transaction Documents or any of the transactions contemplated
thereby, or for the financial condition of the Company or any of its
Subsidiaries. The Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of the Company or any of its Subsidiaries, or the existence or
possible existence of any Potential Event of Default or Event of Default. The
Agent may at any time request instructions from the Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the Loan
Documents the Agent is permitted or required to take or to grant, and if such
instructions are promptly requested, the Agent shall be absolutely entitled to
102
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from the Requisite Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent acting or refraining from acting under this Agreement,
the Collateral Documents or any of the other Loan Documents in accordance with
the instructions of the Requisite Lenders.
10.04. Reliance. The Agent shall be entitled to rely upon any
--------
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Loan Parties), independent public accountant and other experts selected by it.
10.05. Indemnification. To the extent that the Agent is not
---------------
reimbursed and indemnified by the Loan Parties, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement, the Collateral Documents or any of the other Loan Documents or any
action taken or omitted by the Agent under this Agreement, the Collateral
Documents or any of the other Loan Documents, in proportion to each Lender's Pro
Rata Share; provided, however, that no Lender shall be liable to the Agent for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. The obligations of the Lenders
under this Section 10.05 shall survive the payment in full of all Obligations
and the termination of this Agreement.
10.06. The Agent and the Co-Agent Individually. With respect
---------------------------------------
to its Pro Rata Share of the Commitments hereunder and the Loans made by it, the
Agent and the Co-Agent shall have and may exercise the same rights and powers
hereunder and are subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" or "Requisite
Lenders" or any similar terms shall include the Agent and the Co-Agent in their
individual capacities as a Lender or one of the Requisite Lenders. The Agent and
the Co- Agent may accept deposits from, lend money to, and generally engage in
any kind of banking, trust or any other business with the Company or any of its
Subsidiaries as if it were not acting as the Agent or the Co-Agent pursuant
hereto.
10.07. Successor Agent; Resignation of Agent. (a) The Agent
-------------------------------------
may resign from the performance of all its functions and duties hereunder at any
time by giving at least thirty (30) Business Days' prior written notice to the
Lenders and the Loan Parties. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clauses (b) and (c)
below or as otherwise provided below.
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(b) Upon any such notice of resignation by the Agent, the
Requisite Lenders shall appoint a successor Agent who shall be satisfactory to
the Loan Parties (which may not be unreasonably withheld, and shall not be
required upon the occurrence and during the continuance of an Event of Default).
(c) If a successor Agent shall not have been appointed within
the thirty (30) Business Day period provided in paragraph (a) of this Section
10.07, the retiring Agent, with the consent of the Loan Parties (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall serve as Agent until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above.
(d) Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement. The
Agent agrees to take such action as may be reasonably necessary to assign to the
successor Agent its rights as Agent under the Loan Documents prior to such
resignation. Thereafter all references to the "Agent" in the Loan Documents
shall refer to the successor Agent.
10.08. Collateral Matters.
------------------
(a) The Agent is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to or after an Event of Default, to take any
action with respect to any Collateral or Collateral Documents to which they are
a party which may be necessary to perfect and maintain perfected the security
interest in and the Liens upon the Collateral granted pursuant to the Collateral
Documents. Without limiting the generality of the foregoing, the Agent shall
have the sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders and the Issuing Bank with respect to all
payments and collections arising in connection with this Agreement and the other
Loan Documents; (ii) execute and deliver each Loan Document to which the Agent
is a party and accept delivery of each such agreement delivered by any Loan
Party or other Person; (iii) act as collateral agent for the Lenders and the
Issuing Bank for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein; provided,
however, the Agent hereby appoints, authorizes and directs the Lenders and the
Issuing Bank to act as collateral sub-agent for the Agent, the Lenders and the
Issuing Bank for purposes of the perfection of all security interests and Liens
with respect to any deposit account of any Loan Party maintained with, and cash
and Cash Equivalents held by, such Lender or the Issuing Bank; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and Liens created or purported to be created by the Loan Documents;
(vi) release any Lien upon Collateral that is a Contaminant or upon which a
104
Release has occurred or which has otherwise been affected by a Release or
Contaminant; provided, however, that the Agent shall have the right, in its
discretion, to assign such Lien to the requesting Person; and (vii) except as
may be otherwise specifically restricted by the terms of this Agreement or any
other Loan Document, exercise all remedies given to the Agent, the Lenders or
the Issuing Bank with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.
(b) The Agent, the Issuing Bank and each Lender hereby
irrevocably authorize the Agent, at such party's option and in such party's
discretion, to release any Lien granted to or held, respectively, by the Agent
upon any Collateral (i) upon termination of the Commitments and payment and
satisfaction in full of all Loans, Reimbursement Obligations and all other
Obligations which have matured and which the Agent has been notified in writing
are then due and payable; or (ii) constituting property (including, without
limitation, any past-due Receivable permitted to be sold pursuant to Section
7.02(a)) being sold or disposed of if the Loan Party selling or disposing of
such property certifies to the Agent that the sale or disposition is being made
in compliance with Section 7.02(a) (and the Agent may rely conclusively on such
certificate without further inquiry, or in the case of a sale of past-due
Receivables, the Agent may rely on the certification of such Loan Party set
forth in the Request for Release of Receivables, delivered to the Agent in
connection with such sale, without further inquiry); or (iii) constituting
property in which the Loan Parties owned no interest at the time the Lien was
granted or at any time thereafter; or (iv) constituting fixed assets that are
sold or refinanced as party of a Permitted Disposition; or (v) if approved,
authorized or ratified in writing by the Agent at the direction of the Requisite
Lenders; or (vi) constituting fixed assets that are financed or refinanced by
Indebtedness permitted by Sections 7.01(v) and (ix). Upon request by the Agent
at any time, the Lenders will confirm in writing the Agent's authority, as the
case may be, to release particular types or items of Collateral pursuant to this
Section 10.08(b). The Lenders hereby authorize the Agent to execute any Request
for Release of Receivables delivered to the Agent in connection with a sale of
past-due Receivables made pursuant to Section 7.02(a).
(c) Without in any manner limiting the Agent's authority to
act without any specific or further authorization or consent by the Requisite
Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in
writing, upon request by the Loan Parties, the authority to release Collateral
conferred upon the Agent under clauses (i) through (viii) of Section 10.08(b).
So long as no Event of Default is then continuing, upon receipt by the Agent of
any such written confirmation from the Requisite Lenders of such party's
authority to release any particular items or types of Collateral, and in any
event upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Agreement, and upon at least five (5) Business
Days' prior written request by the Loan Parties, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens upon such Collateral granted to
the Agent for the benefit of the Lenders herein or pursuant hereto or any of the
other Loan Documents; provided, however, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose it to liability or create any obligation or entail any consequence
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other than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of the Loan Parties in respect of) all interests
retained by the Loan Parties, including (without limitation) the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(d) The Agent shall not have any obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by the Loan Parties or is cared for, protected or insured or has been encumbered
or that the Liens granted to the Agent herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 10.08 or in any of the Collateral
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Agent's own respective
interests in the Collateral as one of the Lenders and that the Agent shall not
have any duty or liability whatsoever to any Lender.
10.09. Relations Among Lenders. Each Lender, in its capacity
-----------------------
as a Lender, agrees that it will not take any action, nor institute any actions
or proceedings in connection with any of the Loan Documents, against any Loan
Party or any other obligor hereunder or with respect to any Collateral, without
the prior written consent of the Requisite Lenders.
ARTICLE XI
Miscellaneous
11.01. Concerning the Collateral and the Collateral Documents.
------------------------------------------------------
Each Lender and the Issuing Bank authorizes and directs the Agent for the
benefit of the Agent, the Issuing Bank and each Lender, to enter into the
Amendatory Agreement and any amendments to the other Collateral Documents. Each
Lender and the Issuing Bank agrees that any action taken by the Agent or the
Requisite Lenders, which such Persons reasonably believe to be in accordance
with the provisions of this Agreement or the Collateral Documents, and the
exercise by the Agent or the Requisite Lenders of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders.
11.02. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more banks or financial
institutions all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the Loans
owing to it and the Notes payable to it); provided, however, that (i) unless the
Agent otherwise consents, each such assignment shall be of a constant, and not a
varying, percentage of the assigning Lender's rights and obligations under this
Agreement and the assignment shall cover the same percentage of such Lender's
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Commitments and Revolving Loans, (ii) unless the Agent otherwise consents or
unless as a result of such assignment the assigning Lender's rights and
obligations under this Agreement in respect of Loans, Letter of Credit
Obligations and Commitments shall be reduced to zero, the aggregate amount of
the Commitments of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 (unless
such assignment is by one original signatory to this Agreement to another such
signatory) and shall be an integral multiple of $5,000,000, (iii) each such
assignment shall be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its approval, acceptance
and recording in the Register, an Assignment and Acceptance, together with
processing and recordation fee of Three Thousand Five Hundred Dollars ($3,500).
Upon such execution, delivery, approval acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section
3.01(a)(xxvi) or delivered pursuant to Article V and such other Loan Documents
and other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any
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other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and shall record in the Loan Account the names and addresses of
each Lender and the Commitment of, and principal amount of the Loans owing to,
such Lender from time to time. The Loan Parties, the Agent and the Lenders may
treat each Person whose name is recorded in the Loan Account as a Lender
hereunder for all purposes of this Agreement.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, the Agent shall, if such Assignment and Acceptance has been properly
completed and is in substantially the form of Exhibit 1, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Loan Parties.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments and the Loans and Letter of Credit Obligations owing to it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment, Loans and Letter of Credit
Obligations to the Borrowing Subsidiaries hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the Loan Parties, the Agent 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 and
with regard to any and all payments to be made under this Agreement and (iv) the
holder of any such participation shall not be entitled to voting rights under
this Agreement except for voting rights with respect to the amendment or
modification of those provisions of this Agreement for which, pursuant to
Section 11.08, the consent of all the Lenders would be required.
(f) Notwithstanding anything contained in this Agreement to
the contrary, any Lender may at any time (x) assign all or any portion of its
rights hereunder (including, without limitation, Obligations owing to it and
Notes held by it) to a Federal Reserve Bank and/or (y) create a security
interest in all or any portion of such rights in favor of any Federal Reserve
bank, in either case in accordance with Regulation A.
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11.03. Expenses.
--------
(a) Generally. The Loan Parties agree upon demand to pay, or
reimburse each of the Agent for, all the Agent's reasonable internal (except
with respect to legal costs and expenses) and external audit, legal, appraisal,
valuation and investigation expenses and for all other out-of-pocket costs and
expenses of every type and nature (including, without limitation, the reasonable
fees, expenses and disbursements of Sidley & Austin and any other attorneys
retained by the Agent, auditors, accountants, appraisers, investment bankers,
printers, insurance consultants, environmental advisers (including any
environmental advisers engaged pursuant to Section 5.02(c)), and other
consultants and agents) incurred by the Agent in connection with (A) the Agent's
own audit and investigation of the Company and its Subsidiaries; (B) the
negotiation, preparation and execution of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article III), the Collateral Documents and the other Loan Documents
and the making of the Loans hereunder; (C) the creation, perfection or
protection of the Agent's Liens on the Collateral (including, without
limitation, any fees and expenses for title and lien searches, local counsel in
various jurisdictions, filing and recording fees and taxes, duplication costs
and corporate search fees); (D) administration of this Agreement, the Loan
Documents, the Loans and the Collateral, including consultation with attor neys
in connection therewith; and (E) the protection, collection or enforcement of
any of the Obligations or the Collateral.
(b) After Default. The Loan Parties further agree to pay, or
reimburse each of the Agent and each Lender for all out-of-pocket costs and
expenses, including, without limitation, attorneys' fees and disbursements (and,
in the case of any Lender not using outside counsel, the allocated internal
costs of counsel and their expenses), and costs of settlement incurred by each
of the Agent or any Lender after the occurrence of an Event of Default (i) in
enforcing any Obligation or in foreclosing against the Collateral or exercising
or enforcing any other right or remedy available by reason of such Event of
Default; (ii) in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "workout" or in
any insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Loan Parties and
related to or arising out of the transactions contemplated hereby or by any of
the Transaction Documents; (iv) in taking any other action in or with respect to
any suit or proceeding (whether in bankruptcy or otherwise); (v) in protecting,
preserving, collecting, leasing, selling, taking possession of, or liquidating
any of the Collateral; or (vi) attempting to enforce or enforcing any security
interest in any of the Collateral or any other rights under the Collateral
Documents.
11.04. Indemnity. The Loan Parties further agree to defend,
---------
protect, indemnify, and hold harmless each of the Agent, the Co-Agent, each and
all of the Lenders, each of their respective Affiliates and each of the
respective officers, directors, employees, agents, attorneys and consultants
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article III) of any of the foregoing
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(collectively called the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect or consequential and whether based on any Federal or state laws
or other statutory regulations, including, without limitation, securities and
commercial laws and regulations, under common law or at equitable cause, or on
contract or otherwise, including any liability and costs under Federal, state or
local environmental, health or safety laws, regulations, or common law
principles, arising from or in connection with the past, present or future
operations of any Loan Party or its predecessors in interest, or the past,
present or future environmental condition of the Property, the presence of
asbestos-containing materials at the Property, or the Release or threatened
Release of any Contaminant into the environment from the Property) in any manner
relating to or arising out of this Agreement (or any prior version of this
Agreement) and any other document or instrument executed in connection
therewith, the Collateral Documents or the other Loan Documents, or any act,
event or transaction related or attendant thereto, the Case, the filing, the
soliciting of approvals or rejections, and the confirmation of, the Plan of
Reorganization and the implementation of the terms thereof, the Confirmation
Order, the Lenders' Commitments, the making of and participation in the Loans
and the management of such Loans, or the use or intended use of the proceeds of
the Loans hereunder (collectively, the "Indemnified Matters"); provided,
however, that no Loan Party shall have any obligation to an Indemnitee hereunder
with respect to (i) matters for which such Indemnitee has been compensated
pursuant to or for which an exemption is provided in Sections 2.04(f) and
2.08(g) or any other provision of this Agreement and (ii) Indemnified Matters
caused by or resulting from the willful misconduct or gross negligence of that
Indemnitee, as determined by a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, each Loan Party shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
11.05. Change in Accounting Principles. Except as otherwise
-------------------------------
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to the Agent
pursuant to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Company with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found in Article VII and Article VIII, the parties
hereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the desired result that the criteria for
evaluating the financial condition of the Company and its Subsidiaries shall be
the same after such changes as if such changes had not been made; provided,
however, that no change in generally accepted accounting
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principles that would affect the method of calculation of any of the financial
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Requisite Lenders
and the Loan Parties, to so reflect such change in accounting principles.
11.06. Setoff. In addition to any Liens granted to the Agent
------
or the Lenders and any rights now or hereafter granted under applicable law and
not by way of limitation of any such Lien or rights, upon the occurrence and
during the continuance of any Event of Default, each Lender is hereby authorized
by each Loan Party at any time or from time to time, without notice to such Loan
Party, or to any other Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender (excluding all
Committed Amounts referred to in Section 2.07(e) of which the Agent or such
Lender has notice pursuant to such section) to or for the credit or the account
of any Loan Party against and on account of the Obligations of any Loan Party to
that Lender including, but not limited to, all Loans and all claims of any
nature or description arising out of or connected with this Agreement or any of
the other Loan Documents, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the Agent shall have declared the
principal of and interest on the Loans and other amounts due hereunder to be due
and payable as permitted by Article IX and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
11.07. Ratable Sharing. Subject to Sections 2.03(a)(ii),
---------------
2.03(c)(i)(B) and 2.07(b), the Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described in Section 2.05, but including,
without limitation, all amounts received by Citibank in respect of its Revolving
Loans pursuant to Section 2.07(a)), equitable adjustment will be made so that,
in effect, all such amounts will be shared among them ratably in proportion to
the respective principal amounts of the Loans then outstanding to each Lender
(or if no Loans are outstanding, ratably according to the respective amount of
each Lender's Commitment of all Lenders' Commitments), whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations (excluding the fees described in Section 2.05) or the Collateral,
(ii) if any of them shall by voluntary payment or by the exercise of any right
of counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of the Obligations held by it which is
greater than its ratable share, determined in proportion to the respective
principal amounts of the Loans then outstanding to each Lender (or if no Loans
are outstanding, ratably according to the respective amount of each Lender's
Commitment of all Lender Commitments), of the payments on account of the
Obligations (excluding the fees described in Section 2.05), the one receiving
such excess payment shall purchase, without recourse or warranty, an undivided
interest and participation (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in such Obliga tions owed to the others so
that all such recoveries with respect to such Obligations shall be
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applied ratably in proportion to the respective principal amounts of the Loans
then outstanding to each Lender (or if no Loans are outstanding, ratably
according to the respective amount of each Lender's Commitment of all Lender
Commitments); provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to adjust
for such recovery, but without interest except to the extent the purchasing
party is required to pay interest in connection with such recovery. Each
Borrowing Subsidiary agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 11.07 may, to the fullest extent
permitted by law, exercise all its rights of payment (including, subject to
Section 11.06, the right of setoff) with respect to such participation as fully
as if such Lender were the direct creditor of such Borrowing Subsidiary in the
amount of such participation.
11.08. Amendments and Waivers. No amendment or modification of
----------------------
any provision of this Agreement (including the Exhibits and Schedules) or the
other Loan Documents shall be effective without the written agreement of the
Requisite Lenders and the Loan Parties, and no termination or waiver of any
provision of this Agreement or the other Loan Documents, or consent to any
departure by the Loan Parties therefrom, shall in any event be effective without
the written concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold at their sole discretion; except that
any amendment, modification, or waiver of any provision of Article II relating
to any increase of the Commitments, to the reduction of the principal amount of
the Loans (other than amounts payable pursuant to Section 2.06(b)), the final
maturity of the Loans, to the reduction of interest rates applicable to the
Loans, to a decrease in the amount of the fees payable pursuant hereto, to the
definition of "Requisite Lenders" and "Pro Rata Share" and to the provisions
contained in this Section 11.08 shall be effective only if evidenced by a
writing signed by or on behalf of all Lenders. No amendment, modification,
termination, or waiver of any provision of Article X or any other provision
referring to the Agent or the Co-Agent shall be effective without the written
concurrence of the Agent or the Co-Agent, as the case may be. The Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents in respect of the Loan Documents
to which the Agent is a party on behalf of such Lender. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given. No notice to or demand on a Loan Party in any case shall
entitle such Loan Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.08 shall be binding on each
assignee, transferee or recipient of a Lender's Commitment or Loans at the time
outstanding, each future assignee, transferee or recipient of a Lender's
Commitment or Loans, and, if signed by a Loan Party, on such Loan Party.
11.09. Independence of Covenants. All covenants hereunder
-------------------------
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the
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limitations of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or condition
exists.
11.10. Notices. Unless otherwise specifically provided herein,
-------
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, telecopied, telexed or sent by
courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or
telex or four (4) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed). Notices
to the Agent pursuant to Article II shall not be effective until received by the
Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 11.10) shall
be as set forth below each party's name on the signature pages hereof, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.
11.11. Survival of Warranties and Agreements. All agreements,
-------------------------------------
representations and warranties made herein shall survive the execution and
delivery of this Agreement (or any prior version of this Agreement) and the
other Loan Documents and the making and repayment of the Loans hereunder.
11.12. Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of the Agent or any Lender in the exercise of
any power, right or privilege under any of the Loan Documents shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies existing under the Loan
Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
11.13. Termination. Upon the termination in whole of the
-----------
Commitments pursuant to the terms of this Agreement, each Loan Party shall pay
to the Agent an amount equal to any and all Obligations then outstanding owing
by such Loan Party.
11.14. Marshaling; Recourse to Security; Payments Set Aside.
----------------------------------------------------
None of the Lenders or the Agent shall be under any obligation to marshal any
assets in favor of the Loan Parties or any other party or against or in payment
of any or all of the Obligations. Recourse to security shall not be required at
any time. To the extent that any Loan Party makes a payment or payments to the
Agent or the Lenders or the Agent or the Lenders enforce their security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
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11.15. Severability. In case any provision in or obligation
------------
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
11.16. Headings. Section headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
11.17. Governing Law. This Agreement shall be governed by, and
-------------
shall be construed and enforced in accordance with, the laws of the State of New
York.
11.18. Limitation of Liability. To the extent permitted by
-----------------------
applicable law, no claim may be made by any Loan Party, any Lender or other
Person against the Agent or any Lender or their respective Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each Loan Party and each Lender hereby
waives, releases and agrees not to xxx upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
11.19. Successors and Assigns. This Agreement and the other
----------------------
Loan Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders. The terms and provisions of
this Agreement shall inure to the benefit of any assignee or transferee of the
Loans and Commitments of any Lender, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon Lenders shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. No Loan Party's rights or any
interest therein hereunder, and no Loan Party's duties and Obligations
hereunder, may be assigned without the written consent of the Requisite Lenders.
11.20. Consent to Jurisdiction and Service of Process;
----------------------------------------------
Waiver of Jury Trial. EXCEPT TO THE EXTENT THAT THE BANKRUPTCY COURT OTHERWISE
--------------------
HAS RETAINED JURISDICTION PURSUANT TO THE CONFIRMATION ORDER, ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, SUCH LOAN PARTY ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT
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OR ANY OF THE OTHER LOAN DOCUMENTS FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. EACH LOAN PARTY IRREVOCABLY DESIGNATES AND APPOINTS THE CORPORATION
TRUST COMPANY, 0000 XXXXXX XXXXXX, XXXXXXXXXX, XXXXXXXX, AS ITS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. EACH LOAN PARTY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESSES SPECIFIED ON THE SIGNATURE
PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING.
EACH OF THE LOAN PARTIES, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES (A) TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT LIMITATION, ANY
OBJECTION OF 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 SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
ANY LENDER OR THE AGENT TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE
COURTS OF ANY OTHER JURISDICTION.
11.21. Counterparts; Effectiveness; Inconsistencies. This
--------------------------------------------
Agreement and any amendments, waivers, consents, or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. On the Effective Date the Existing Credit Agreement shall be
amended and restated in its entirety by this Agreement and the Existing Credit
Agreement shall thereafter be of no force and effect except as to evidence the
incurrence by the Loan Parties of the Obligations thereunder. The terms and
conditions of this Agreement, and the Agent's and the Lenders' rights and
remedies under this Agreement, shall apply to all of the Obligations incurred
under the Existing Credit Agreement. It is expressly understood and agreed by
the parties hereto that this Agreement is in no way intended to constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence payment of all or any of such obligations and liabilities.
This Agreement and each of the other Loan Documents shall be construed to the
extent reasonable to be consistent one with the other, but to the extent that
the terms and conditions of this Agreement are actually inconsistent with the
terms and conditions of any other Loan Document, this Agreement shall govern.
11.22. Performance of Obligations. Each Loan Party agrees that
--------------------------
the Agent may, but shall have no obligation to, make any payment or perform any
act required of such Loan Party
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under any Loan Document or take any other action which the Agent in its sole
discretion deems necessary or desirable to protect or preserve the Collateral,
including, without limitation, any action to (i) pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral and (ii) effect any repairs or obtain any insurance
called for by the terms of any of the Loan Documents and to pay all or any part
of the premiums therefor and the costs thereof.
11.23. Company as Agent for Borrowing Subsidiaries. Each
-------------------------------------------
Borrowing Subsidiary hereby designates and appoints the Company as the agent of
such Borrowing Subsidi ary, and each Borrowing Subsidiary irrevocably authorizes
the Company, to execute and deliver such Notices of Borrowing, Notices of
Conversion/Continuation or other notices required hereunder on behalf of such
Borrowing Subsidiary. Any notice required to be delivered to any Loan Party
hereunder shall be deemed delivered to each Loan Party if delivered to the
Company in accordance with the terms hereof. The Company hereby accepts such
designation as agent for the Borrowing Subsidiaries and agrees to act thereas
until all Obligations have been paid in full and this Agreement has been
terminated. Each Borrowing Subsidiary agrees not to revoke, modify or withdraw
such designation until all Obligations have been paid in full and this Agreement
has been terminated.
11.24. Construction. The parties acknowledge that each party
------------
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
11.25. Entire Agreement. This Agreement, taken together with
----------------
all of the other Loan Documents and all certificates and other documents
delivered by any Loan Party to the Agent or the Lenders, embody the entire
agreement and supersede all prior agreements, written and oral, relating to the
subject matter hereof.
11.26. Releases. In further consideration of the Lenders'
--------
execution of this Agreement, each of the Company and the Borrowing Subsidiaries
hereby releases each of the Agent, the Existing Agent, the Existing Collateral
Agent, each Existing Lender and each Lender and their respective affiliates,
officers, employees, directors, agents and attorneys (collectively, the
"Releasees") from any and all claims, demands, liabilities, responsibilities,
disputes, causes of action (whether at law or equity) and obligations of every
nature whatsoever, whether liquidated or unliquidated, known or unknown, matured
or unmatured, fixed or contingent that any of the Loan Parties may have against
the Releasees which arise from or relate to any actions, or inactions which the
Releasees may have taken prior to the date hereof with respect to the
Obligations, any Collateral, the Credit Agreement, any Loan Document and any
third parties liable in whole or in part for the Obligations.
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IN WITNESS WHEREOF, this Agreement has been duly executed on
the date set forth above.
JPS TEXTILE GROUP, INC.
By:________________________________
Title:
JPS CONVERTER AND INDUSTRIAL CORP.
By:________________________________
Title:
JPS ELASTOMERICS CORP.
By:________________________________
Title:
Notice Address:
c/o JPS Textile Group, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
With copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
X-0
XXXXXXXX, N.A., as Agent, Issuing
Bank and as a Lender
By:________________________________
Vice President
Commitment: $25,000,000
Pro Rata Share: 18.5185%
Notice Address:
If sent by mail to:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxxxx 0, Xxxx 4
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Vice President
Telecopy: (000) 000-0000
With a copy to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
S-2
NATIONSBANK, N.A., as Co-Agent and as
a Lender
By:________________________________
Title:
Commitment: $25,000,000
Pro Rata Share: 18.5185%
Notice Address:
If sent by mail to:
NationsBank, N.A.
X.X. Xxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
Or, if sent by courier, to:
NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
S-3
GENERAL ELECTRIC CAPITAL CORPORATION
By:________________________________
Title:
Commitment: $25,000,000
Pro Rata Share: 18.5185%
Notice Address:
General Electric Capital
Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Luck
Telecopy: (000) 000-0000
With copies to:
General Electric Capital
Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
S-4
XXXXXX FINANCIAL, INC.
By:________________________________
Title:
Commitment: $22,500,000
Pro Rata Share: 16.6667%
Notice Address:
Xxxxxx Financial, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
S-5
BNY FINANCIAL CORPORATION
By:________________________________
Title:
Commitment: $22,500,000
Pro Rata Share: 16.6667%
Notice Address:
BNY Financial Corporation
1290 Avenue of the Xxxxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Vice President
Telecopy: (000) 000-0000
S-6
BANKBOSTON, N.A.
By:________________________________
Title:
Commitment: $15,000,000
Pro Rata Share: 11.1111%
Notice Address:
BankBoston, N.A.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
S-7
