[CONFORMED COPY]
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JOURNAL REGISTER COMPANY
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CREDIT AGREEMENT
Dated as of May 2, 1997
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THE CHASE MANHATTAN BANK,
as Agent
THE BANK OF NEW YORK,
CIBC, INC.,
FLEET NATIONAL BANK and
KEYBANK NATIONAL ASSOCIATION,
as Managing Agents
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached
but is inserted for convenience only.
PAGE
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RECITALS..................................................................... 1
Section 1. Definitions and Accounting Matters............................... 2
1.01 Certain Defined Terms............................................. 2
1.02 Accounting Terms and Determinations; Fiscal
Periods........................................................ 31
1.03 Classes and Types of Loans........................................ 32
Section 2. Commitments...................................................... 33
2.01 Loans............................................................. 33
2.02 Borrowings........................................................ 38
2.03 Changes of Commitments............................................ 38
2.04 Commitment Fees................................................... 39
2.05 Lending Offices................................................... 40
2.06 Several Obligations; Remedies Independent......................... 40
2.07 Evidence of Debt.................................................. 41
2.08 Conversion or Continuation of Loans; Optional
Prepayments.................................................... 41
2.09 Mandatory Prepayments............................................. 44
Section 3. Payments of Principal and Interest............................... 47
3.01 Repayment of Loans................................................ 47
3.02 Interest.......................................................... 50
Section 4. Payments; Pro Rata Treatment; Computations;
Etc............................................................ 51
4.01 Payments.......................................................... 51
4.02 Pro Rata Treatment................................................ 52
4.03 Computations...................................................... 53
4.04 Minimum Amounts................................................... 53
4.05 Certain Notices................................................... 53
4.06 Non-Receipt of Funds by the Agent................................. 54
4.07 Sharing of Payments, Etc.......................................... 55
Section 5. Yield Protection and Illegality.................................. 57
5.01 Additional Costs.................................................. 57
5.02 Limitation on Types of Loans...................................... 60
5.03 Illegality........................................................ 61
5.04 Treatment of Affected Loans....................................... 61
5.05 Compensation...................................................... 62
Section 6. Conditions Precedent............................................. 63
6.01 Effectiveness..................................................... 63
6.02 Initial and Subsequent Loans...................................... 65
(i)
PAGE
Section 7. Representations and Warranties................................... 67
7.01 Corporate Existence............................................... 67
7.02 Financial Condition............................................... 67
7.03 Litigation.......................... ............................. 67
7.04 No Breach......................................................... 68
7.05 Corporate Action.................................................. 68
7.06 Approvals......................................................... 68
7.07 Margin Stock...................................................... 69
7.08 ERISA............................................................. 69
7.09 Taxes............................................................. 69
7.10 Investment Company Act............................................ 69
7.11 Public Utility Holding Company Act................................ 70
7.12 Compliance with Laws.............................................. 70
7.13 Disclosure........................................................ 70
7.14 Security Documents................................................ 70
7.15 Assets of the Borrower............................................ 71
7.16 Material Agreements............................................... 71
7.17 Solvency.......................................................... 71
7.18 Labor Matters..................................................... 72
7.19 Hazardous Materials............................................... 72
7.20 Subsidiaries, Etc................................................. 75
7.21 Copyrights, Permits and Trademarks................................ 75
7.22 Mortgage Properties............................................... 76
7.23 NOLs; Etc......................................................... 76
7.24 Capitalization.................................................... 76
Section 8. Covenants of the Borrower. ..................................... 77
8.01 Financial Statements; Continuing Disclosure....................... 77
8.02 Litigation........................................................ 81
8.03 Corporate Existence, Etc.......................................... 81
8.04 Insurance......................................................... 82
8.05 Prohibition of Fundamental Changes................................ 83
8.06 Limitation on Liens............................................... 86
8.07 Indebtedness...................................................... 88
8.08 Investments....................................................... 90
8.09 Restricted Payments............................................... 90
8.10 Capital Expenditures.............................................. 91
8.11 Total Debt Ratio.................................................. 92
8.12 Fixed Charges Ratio............................................... 92
8.13 Interest Coverage Ratio........................................... 92
8.14 Working Capital................................................... 93
8.15 Lines of Business................................................. 93
8.16 Transactions with Affiliates............... ...................... 93
8.17 Sale and Leaseback................................................ 93
8.18 Amendment of Certain Documents.................................... 94
8.19 Use of Proceeds................................................... 94
8.20 Sales of Accounts................................................. 94
8.21 Interest Rate Protection.......................................... 94
8.22 Mortgages......................................................... 95
8.23 Environmental Matters............................................. 97
8.25 Certain Obligations Respecting Subsidiaries....................... 98
(ii)
8.26 Inactive Subsidiaries............................................. 99
Section 9. Events of Default................................................ 99
Section 10. The Agent.......................................................104
10.01 Appointment, Powers and Immunities...............................104
10.02 Reliance by Agent................................................105
10.03 Defaults.........................................................105
10.04 Rights as a Bank.................................................105
10.05 Indemnification..................................................106
10.06 Non-Reliance on Agent and Other Banks............................106
10.07 Failure to Act...................................................107
10.08 Resignation or Removal of Agent..................................107
10.09 Consents under Other Credit Documents............................108
Section 11. Miscellaneous...................................................108
11.01 Waiver...........................................................108
11.02 Notices..........................................................109
11.03 Expenses, Etc....................................................109
11.04 Amendments, Etc..................................................111
11.05 Successors and Assigns...........................................111
11.06 Assignments and Participations...................................112
11.07 Survival.........................................................114
11.08 Captions.........................................................114
11.09 Counterparts.....................................................114
11.10 Governing Law; Submission to Jurisdiction........................114
11.11 Waiver of Jury Trial.............................................115
11.12 Confidentiality..................................................115
Annex 1 - Commitments and Loans
Annex 2 - Cash Flow Adjustments
Annex 3 - NEN Permitted Dispositions
SCHEDULE I - Consents and Approvals
SCHEDULE II - Litigation
SCHEDULE III - Investments
SCHEDULE IV - Subsidiaries
SCHEDULE V - Liens
SCHEDULE VI - Indebtedness
SCHEDULE VII - Hazardous Materials
SCHEDULE VIII - Capitalization
EXHIBIT A - Form of Borrower Security Agreement
EXHIBIT B-1 - Form of Amendment No. 1 to JCI/JNI Security Agreement
EXHIBIT B-2 - Form of Amendment No. 1 to Subsidiary Guarantee
EXHIBIT C - Form of Compliance Certificate
EXHIBIT D - Form of Confidentiality Agreement
(iii)
EXHIBIT E-1 - Form of Term Note
EXHIBIT E-2 - Form of Revolving Credit Note
EXHIBIT E-3 - Form of NEN Acquisition Note
EXHIBIT E-4 - Form of New Britain Acquisition Note
EXHIBIT E-5 - Form of PAD Note
(iv)
CREDIT AGREEMENT dated as of May 2, 1997 between: JOURNAL
REGISTER COMPANY, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "BORROWER"); each of the banks and other
financial institutions that is a signatory hereto or which, pursuant to Section
11.06(b) hereof, shall become a "Bank" hereunder (individually, a "BANK" and,
collectively, the "BANKS"); and THE CHASE MANHATTAN BANK, as agent for the Banks
(in such capacity, together with its successors in such capacity, the "AGENT").
Journal News, Inc. and Journal Company, Inc. (collectively,
the "EXISTING BORROWERS"), in each case a wholly owned subsidiary of Journal
Register Company, LLC ("JOURNAL REGISTER LLC"), a limited liability company duly
organized and validly existing under the laws of the State of New York, are
borrowers under an Amendment and Restatement dated as of December 17, 1996 of
Credit Agreement dated as of December 21, 1994 (the "1994 CREDIT AGREEMENT")
with the Banks and the Agent (as heretofore modified and supplemented and in
effect on the date of this Agreement, the "EXISTING CREDIT AGREEMENT").
Substantially concurrently herewith, Journal Register LLC is merging with and
into the Borrower, with the Borrower being the surviving entity of such merger.
Effective on the Effective Date (as defined below), the Borrower wishes to
become a party to the Existing Credit Agreement as borrower and to assume all of
the obligations of the Existing Borrowers under or in respect of the Existing
Credit Agreement, and in that connection the parties to the Existing Credit
Agreement wish to amend in certain respects and to restate in its entirety the
Existing Credit Agreement, it being the intention of the parties that the loans
outstanding under the Existing Credit Agreement on the Effective Date (other
than such loans required to be paid as of the Effective Date as contemplated
hereby) shall continue and remain outstanding and not be repaid on the Effective
Date, but shall be assigned and reallocated among the Banks as provided in
Section 2.01 hereof.
The Borrower and its subsidiaries are engaged as an integrated
group in the business of publishing, distributing and selling newspapers, and in
related businesses, and in furnishing the required supplies, services,
equipment, credit and other facilities for such integrated operation. The
integrated operation requires financing on such a basis that credit supplied to
the Borrower be made available from time to time to its subsidiaries, as
required for the continued successful operation of the Borrower and its
subsidiaries, separately, and the integrated operation as a whole. In that
connection, the Borrower has requested that the Banks make loans to the Borrower
(to be made available by the Borrower to its subsidiaries) in an aggregate
principal amount up to but not exceeding $632,995,000 to provide financing for
general corporate purposes, permitted acquisitions of newspaper companies and
working capital
CREDIT AGREEMENT
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for the ongoing operations of the Borrower and its subsidiaries. The Banks are
willing to make such loans to the Borrower on the terms and conditions of this
Agreement.
Accordingly, the parties hereto hereby agree that the Existing
Agreement shall, as of the Effective Date, be amended in certain respects and
restated in its entirety as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and VICE VERSA):
"ACQUISITION" shall mean any transaction, or any series of
related transactions, consummated after the date of this Agreement, by which the
Borrower and/or any of its Subsidiaries (a) acquires any going business or all
or substantially all of the assets of any corporation, partnership, joint
venture or other firm or any division of any corporation, partnership, joint
venture or other firm or the right to use or manage or otherwise exploit any
such business or assets, whether through purchase or lease of assets, merger or
otherwise, (b) directly or indirectly acquires control of at least a majority
(in number of votes) of the securities of a corporation which have ordinary
voting power for the election of directors or (c) directly or indirectly
acquires control of a majority ownership interest in any partnership, joint
venture or other firm. The terms "ACQUIRE" and "ACQUIRED" used as a verb shall
have a correlative meaning.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in a form supplied by the Agent.
"AFFILIATE" shall mean, with respect to the Borrower and its
Subsidiaries, any other Person which directly or indirectly controls, or is
under common control with, or is controlled by, the Borrower and, if such other
Person is an individual, any member of the immediate family (including parents,
spouse and children) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "CONTROL" (including, with its correlative meanings, "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of
CREDIT AGREEMENT
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securities or partnership or other ownership interests, by contract or
otherwise), PROVIDED that, in any event, any Person which owns directly or
indirectly 5% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or 5% or more of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person. Notwithstanding the foregoing, (a) no individual
shall be an Affiliate of the Borrower or any of its Subsidiaries solely by
reason of his or her being a director, officer or employee of the Borrower or
any of its Subsidiaries, (b) none of the Borrower or any of its Subsidiaries
shall be an Affiliate.
"AMENDMENT NO. 1 EFFECTIVE DATE" shall mean the effective date
of Amendment No. 1 dated as of May 5, 1995 to the 1994 Credit Agreement.
"AMENDMENT NO. 2 EFFECTIVE DATE" shall mean the effective date
of Amendment No. 2 dated as of June 20, 1995 to the 1994 Credit Agreement.
"APPLICABLE LENDING OFFICE" shall mean, for each Bank and for
each Type of Loan, the "Lending Office" of such Bank (or of an affiliate of such
Bank) designated for such Type of Loan in the Administrative Questionnaire
submitted by such Bank or such other office of such Bank (or of an affiliate of
such Bank) as such Bank may from time to time specify to the Agent and the
Borrower as the office by which its Loans of such Type are to be made and
maintained.
"APPLICABLE MARGIN" shall mean:
(a) with respect to Base Rate Loans, 0.25% at all times when
the Total Debt Ratio is greater than or equal to 5.0 to 1 and 0.0% at
all times when the Total Debt Ratio is less than 5.0 to 1; and
(b) with respect to Eurodollar Loans, 1.50% at all times when
the Total Debt Ratio is greater than or equal to 5.0 to 1, 1.25% at all
times when the Total Debt Ratio is greater than or equal to 4.5 to 1
but less than 5.0 to 1, 1.00% at all times when the Total Debt Ratio is
greater than or equal to 4.0 to 1 but less than 4.5 to 1, 0.75% at all
times when the Total Debt Ratio is greater than or equal to 3.5 to 1
but less than 4.0 to 1, 0.625% at all times when the Total Debt Ratio
is greater than or equal to 3.0 to 1 but less than 3.5 to 1 and 0.50%
at all times when the Total Debt Ratio is less than 3.0 to 1.
CREDIT AGREEMENT
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For purposes of this definition, the Total Debt Ratio shall be determined (i)
for any day during the period commencing on the Effective Date and ending on the
third Business Day after the first date the Borrower delivers to the Agent
consolidated financial statements of the Borrower pursuant to either Section
8.01(a) or 8.01(b) hereof on the basis of the Total Debt Ratio determined as of
the Effective Date on a pro forma basis (after giving effect to the initial
public offering of the Borrower, the application of the proceeds thereof, the
payment in full of the Warburg Subordinated Debt, the making of the Loans
hereunder and the other transactions contemplated to occur on or prior to the
Effective Date) and certified by a Senior Officer in the certificate delivered
pursuant to Section 6.01(g) hereof and (ii) for any day thereafter on the basis
of the then most recent consolidated financial statements of the Borrower
delivered to the Agent pursuant to said Section 8.01(a) or 8.01(b). Any change
in the Applicable Margins as a result of a change in the Total Debt Ratio shall
be effective as of the third Business Day following the date the relevant
consolidated financial statements of the Borrower are so delivered to the Agent,
PROVIDED that in the event that the Borrower shall fail to deliver to the Agent
any consolidated financial statements by the respective date required pursuant
to said Sections 8.01(a) or 8.01(b), the Applicable Margins shall be deemed to
be equal to the highest Applicable Margins provided for in this Agreement for
each day during the period commencing on the date said financial statements were
so required to be delivered and ending on the third Business Day following the
date such financial statements are in fact delivered to the Agent; PROVIDED,
FURTHER, that the Applicable Margins shall be subject to adjustment in
accordance with paragraphs (a) and (b) above on and as of any Borrowing Date if
(i) a borrowing of Revolving Credit Loans occurs on such Borrowing Date in
excess of $10,000,000 in aggregate principal amount (unless the proceeds of such
borrowing are to be, and are in fact, used to make repayments of Term Loans, in
which case no such adjustment to the Applicable Margins shall be so required to
be made on such Borrowing Date) and (ii) such borrowing results in a change in
the Total Debt Ratio as of such Borrowing Date that would in turn result in a
change in the Applicable Margins as reflected in the certificate of a Senior
Officer delivered to the Agent in accordance with and as required by Section
6.02(b) hereof. Notwithstanding the provisions of the immediately preceding
sentence, no reduction in the Applicable Margins provided for by this definition
shall be effective earlier than the date three Business Days after the date the
Agent receives a notice from the Borrower specifically requesting such
reduction.
"APPROVED TITLE REPORTS" shall mean, collectively, (a) the
Approved Title Reports referred to in Section 6.01(q) of the
CREDIT AGREEMENT
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Existing Credit Agreement, (b) the NEN Title Reports after having been marked by
the Borrowers' counsel and approved by the Agent and showing only those title
exceptions which are acceptable to the Agent as of the Amendment No. 1 Effective
Date, (c) the New Britain Title Reports after having been marked by the
Borrowers' counsel and approved by the Agent and showing only those title
exceptions which are acceptable to the Agent as of the Amendment No. 2 Effective
Date and (d) with respect to any Mortgage Property Acquired by any Obligor after
the Amendment No. 2 Effective Date if such Acquisition is financed in whole or
in part with the proceeds of PAD Loans hereunder or Permitted Additional Debt as
permitted by Section 8.07(e) hereof, title reports prepared by the Title Insurer
for the benefit of the Agent covering such Mortgage Property updated to within
30 days prior to the date such PAD Loans are made or such Permitted Additional
Debt is incurred, in each case, after having been marked by the Borrowers'
counsel and approved by the Agent and showing only those title exceptions which
are acceptable to the Agent as of the date such PAD Loans are made or such
Permitted Additional Debt is incurred.
"BANKRUPTCY CODE" shall mean the United States Federal
Bankruptcy Code of 1978, as amended from time to time.
"BASE RATE" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (a) the Federal Funds Rate for such day PLUS 1/2 of
1% and (b) the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in the Base
Rate shall take effect at the time of such change in the Base Rate.
"BASE RATE LOANS" shall mean Loans which bear interest at
rates based upon the Base Rate.
"BORROWER SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of Exhibit A hereto between the Borrower and the
Agent, as the same shall be amended, supplemented or otherwise modified and in
effect from time to time.
"BORROWING DATE" shall mean each date on which Loans are made
hereunder.
"BUSINESS DAY" shall mean any day on which commercial banks
are not authorized or required to close in New York City and, if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, or a Conversion of or into, or a Continuation of, or an Interest Period for,
a Eurodollar Loan or a notice by the Borrower with respect to any
CREDIT AGREEMENT
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such borrowing,payment, prepayment, Conversion, Continuation or Interest Period,
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period,
expenditures (including, without limitation, the aggregate amount of Capital
Lease Obligations incurred during such period) made by the Borrower or any of
its Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP; PROVIDED that "Capital
Expenditures" shall not include (a) capitalized interest to the extent otherwise
included in "Capital Expenditures" as required by GAAP or (b) at the option of
the Borrower (which option shall be (i) irrevocable and (ii) notified to the
Agent), any such expenditures (including, without limitation, Capital Lease
Obligations incurred) up to but not exceeding $5,000,000 in the aggregate in any
fiscal year and up to but not exceeding $10,000,000 in the aggregate.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"CASH EQUIVALENTS" shall mean:
(a) direct obligations of the United States of America, or of
any agency thereof, or obligations guaranteed as to principal and
interest by the United States of America, or of any agency thereof, in
either case maturing not more than 180 days from the date of
acquisition thereof;
(b) certificates of deposit or Eurodollar time deposits
maturing on demand or within 180 days from the date of acquisition
thereof issued by any Bank or bank or trust company organized under the
laws of the United States of America or any state thereof and having
capital, surplus and undivided profits of at least $500,000,000;
(c) commercial paper rated A-1 or better or P-1 or better by
Standard & Poor's Rating Agency Incorporated or
CREDIT AGREEMENT
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Xxxxx'x Investors Service, Inc., respectively, maturing not more than
180 days from the date of acquisition thereof;
(d) operating deposit accounts with banks (including banks
with a smaller capital, surplus and undivided profits than that
specified in clause (b) above); and
(e) repurchase agreements and reverse repurchase agreements
with a term not in excess of 180 days with any Person relating to
obligations referred to in clause (a) above (PROVIDED that such
agreements are entered into on terms and conditions substantially
similar to the terms and conditions set forth in the form of Master
Repurchase Agreement promulgated by the Public Securities Association
with a "Buyer's Margin Amount" (as defined therein) at least equal to
100%).
"CASH FLOW" shall mean, for any period, the sum of the
following for the Borrower and its Subsidiaries for such period, determined on a
consolidated basis without duplication in accordance with GAAP: operating income
before taxes, Interest Expense, amortization and depreciation and extraordinary
gains and losses and excluding all other non-cash subtractions from net
operating income not otherwise excluded and excluding all other non-cash items
of income; PROVIDED that: (a) if any portion of such period occurs on or after
October 1, 1995 but on or before June 30, 1997, Cash Flow shall be determined on
a pro forma basis for such period as if the Taunton Acquisition occurred on the
first day of such period utilizing the actual Cash Flow of The Taunton Daily
Gazette for the relevant period as increased by an amount equal to the amount
specified for the relevant calendar month in Xxxxx 0 xxxxxx, (x) except with
respect to the Taunton Acquisition, if the Borrower or any of its Subsidiaries
shall have Acquired or Disposed of one or more Newspapers or MVO or other
businesses related to newspaper publishing (or any part of any thereof) to any
Person other than an Obligor during such period, Cash Flow for any portion of
such period occurring prior to the date 12 complete calendar months after the
consummation of such Acquisition or Disposition, as the case may be, shall be
increased or decreased, as the case may be, by such an amount as shall be agreed
between the Borrower and the Majority Banks (or, if the Borrower and the
Majority Banks shall fail to agree as to any such amount within 30 days after
the consummation of such Acquisition or Disposition, as the case may be, by the
actual amount of the cash flow attributable to such Newspapers or MVO or other
business), (c) there shall be excluded from the calculation of Cash Flow which
includes any period during the fiscal year ended December 31, 1996, (i) reserves
of up to $2,500,000 for additional litigation and receivables reserves and (ii)
CREDIT AGREEMENT
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capitalized expenses in respect of the Borrower's and its Subsidiaries'
development and implementation of their on-line services of up to $750,000, (d)
there shall be excluded from the calculation of Cash Flow which includes any
period during the fiscal year ending December 31, 1997 capitalized expenses in
respect of the Borrower's and its Subsidiaries' development and implementation
of their on-line services of up to $500,000 and (e) there shall be excluded from
the calculation of Cash Flow payments under the Management Bonus Plan and
accrued expenses relating to the discontinuance of JRN's StarShare Plan of up to
an aggregate amount of $35,000,000.
"CASUALTY EVENT" shall mean, with respect to any Property of
any Person, any loss of, damage to or destruction of, or any condemnation or
taking of, such Property for which such Person or any of its Subsidiaries
receives insurance proceeds, or proceeds of a condemnation award or other
compensation.
"XXXXXX" shall mean Xxxxxx Media, Inc. and its Subsidiaries.
"CHASE" shall mean The Chase Manhattan Bank.
"CLASS" shall have the meaning assigned to such term in
Section 1.03 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"COMMITMENTS" shall mean, collectively, the Revolving Credit
Commitments and the PAD Commitments.
"COMMITMENT PERCENTAGE" shall mean (a) with respect to any
Revolving Credit Bank, the ratio of (i) the amount of the Revolving Credit
Commitment of such Bank TO (ii) the aggregate amount of the Revolving Credit
Commitments of all of the Revolving Credit Banks (or, if the Revolving Credit
Commitments have expired or terminated, the ratio of (i) the aggregate
outstanding principal amount of the Revolving Credit Loan(s) held by such Bank
TO (ii) the aggregate outstanding principal amount of the Revolving Credit Loans
held by all of the Revolving Credit Banks); (b) with respect to any Term Loan
Bank, the ratio of (i) the aggregate outstanding principal amount of the Term
Loan(s) held by such Bank TO (ii) the aggregate outstanding principal amount of
the Term Loans held by all of the Term Loan Banks; and (c) with respect to each
Series of PAD Loans and each Bank holding PAD Loans of any Series of PAD Loans,
the ratio of (i) the amount of the PAD Commitment of such Series of such Bank TO
(ii) the aggregate amount of the PAD Commitments of such Series
CREDIT AGREEMENT
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of all of the Banks holding PAD Loans of such Series (or, if the such Series of
PAD Commitments have expired or terminated, the ratio of (i) the aggregate
outstanding principal amount of the PAD Loan(s) of such Series held by such Bank
TO (ii) the aggregate outstanding principal amount of the PAD Loans of such
Series held by all of the Banks).
"COMPLIANCE CERTIFICATE" shall mean a certificate of the chief
financial officer or controller of the Borrower, substantially in the form of
Exhibit C hereto and appropriately completed.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a
conversion pursuant to Section 2.08 hereof of Base Rate Loans into Eurodollar
Loans or Eurodollar Loans into Base Rate Loans which may be accompanied by the
transfer by a Bank (at its sole discretion) of a Loan from one Applicable
Lending Office to
another.
"CREDIT DOCUMENTS" shall mean, collectively, this Agreement,
the Notes, the Subsidiary Guarantee and the Security Documents.
"DEFAULT" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"DISPOSITION" shall mean (a) any sale, assignment, transfer or
other disposition of any Property (whether now owned or hereafter acquired) by
the Borrower or any of its Subsidiaries to any other Person, excluding any such
sale, assignment, transfer or other disposition in the ordinary course of
business and on ordinary business terms, or (b) the entering into of any
agreement by the Borrower or any of its Subsidiaries with any other Person
pursuant to which such other Person has the right to use or manage or otherwise
exploit any Property (whether now owned or hereafter acquired) of the Borrower
or such Subsidiary and pursuant to which such other Person is entitled, directly
or indirectly, to retain all or a substantial part of the revenues derived from
the use or management or other exploitation of such Property. The terms
"DISPOSE" and "DISPOSED" used as a verb shall have a correlative meaning.
CREDIT AGREEMENT
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"DOLLARS" and "$" shall mean lawful money of the United States
of America.
"EFFECTIVE DATE" shall mean the date upon which the conditions
to effectiveness of this Agreement specified in Section 6 hereof shall have been
satisfied or waived.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person,
any written or oral notice, claim, demand or other communication (each, a
"CLAIM") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property or health, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the presence, or
Release, of any Hazardous Material at or from any location, whether or not owned
by such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence or Release of Hazardous Materials
or arising from alleged injury or threat of injury to health, safety or the
environment.
"ENVIRONMENTAL LAWS" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of the environment (including the environment as it affects human
health or safety) or to emissions, discharges, Releases or threatened Releases
of pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes into the indoor or outdoor environment, including, without limitation,
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing, distribution,
generation, recycling, use, treatment, storage, disposal, transport or handling
of pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes (or the effect of the same on human health or safety).
"EQUITY ISSUANCE" shall mean (a) the issuance or sale after
the Effective Date by the Borrower or any of its Subsidiaries to any Person or
Persons of (i) any capital stock, (ii) any warrants or options exercisable in
respect of any capital stock (other than (x) any warrants or options issued to
directors, officers, employees or consultants of the Borrower or
CREDIT AGREEMENT
- 11 -
any of its Subsidiaries pursuant to employee benefit plans established in the
ordinary course of business and (y) any capital stock of the Borrower or such
Subsidiary issued upon the exercise of such warrants or options) or (iii) any
other security or instrument representing an equity interest (or the right to
obtain any equity interest) in the Borrower or such Subsidiary or (b) the
receipt by the Borrower or any of its Subsidiaries after the Effective Date of
any capital contribution (whether or not evidenced by any equity security issued
by the recipient of such contribution); PROVIDED that Equity Issuance shall not
include (w) any such issuance or sale by any Subsidiary of the Borrower to the
Borrower or any other Subsidiary of the Borrower, (x) any capital contribution
by the Borrower or any of its Subsidiaries to any other Subsidiary of such
Person, (y) any such issuance or sale pursuant to the Management Bonus Plan or
Stock Incentive Plan or (z) any such issuance or sale relating to the
acquisition by the Borrower of all of the capital stock or other ownership
interests of INS from Warburg and/or Warburg Affiliates.
"EQUITY RIGHTS" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade or
business that is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which the Borrower is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which the Borrower is a member.
"EURODOLLAR BASE RATE" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic mean (rounded
upwards, if necessary, to the nearest 1/100 of 1%), as determined by the Agent,
of the rates per annum quoted by the respective Reference Banks at approximately
11:00 a.m. London time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for the offering by
the respective Reference Banks to leading banks
CREDIT AGREEMENT
- 12 -
in the London interbank market of Dollar deposits having a term comparable to
such Interest Period and in an amount comparable to the principal amount of the
Eurodollar Loans to be made by the respective Reference Banks for such Interest
Period. If any Reference Bank is not participating in any Eurodollar Loan during
any Interest Period therefor, such Reference Bank shall quote a rate per annum
for such Loan for such Interest Period by reference to an amount equal to
$5,000,000. If any Reference Bank does not timely furnish such information for
determination of any Eurodollar Base Rate, the Agent shall determine such
Eurodollar Base Rate on the basis of information timely furnished by the
remaining Reference Banks.
"EURODOLLAR LOANS" shall mean Loans the interest rates on
which are determined on the basis of rates referred to in the definition of
"Eurodollar Base Rate" in this Section 1.01.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the quotient of
the Eurodollar Base Rate for such Loan for such Interest Period DIVIDED BY 1
MINUS the Reserve Requirement for such Loan for such Interest Period.
"EVENT OF DEFAULT" shall have the meaning given to such term
in Section 9 hereof.
"EXCESS CASH FLOW" shall mean, for any period, the sum of the
following for such period: (a) Cash Flow MINUS (b) the sum of the following
(without duplication of deductions): (i) Total Debt Service PLUS (ii)
prepayments of principal of the Loans made pursuant to Section 2.08 hereof
(other than any such prepayments made pursuant to Section 2.08(d) hereof),
PROVIDED that, in the case of any such prepayments of principal of the Revolving
Credit Loans, the Revolving Credit Commitments shall have been reduced by a like
amount, PLUS (iii) prepayments of principal of the Loans made pursuant to
Section 2.09 hereof (other than any such prepayments made pursuant to Section
2.09(d) hereof) PLUS (iv) Capital Expenditures made as permitted by Section 8.10
hereof (other than Capital Expenditures made pursuant to clause (z) thereof, but
only to the extent funded with the proceeds of Revolving Credit Loans) PLUS (v)
cash payments in respect of Permitted Acquisitions made as permitted by Section
8.05(b)(iv) hereof (except to the extent made with the proceeds of Loans
hereunder or the proceeds of Permitted Additional Debt) PLUS (vi) Restricted
Payments made as permitted by Section 8.09(c) PLUS (vii) any net increase in
Working Capital (or MINUS any net decrease in Working Capital) PLUS (viii) costs
paid in cash in connection with obtaining Interest Rate
CREDIT AGREEMENT
- 13 -
Protection Agreements PLUS (ix) taxes (other than deferred taxes) paid during
such period or paid or expected to be paid in cash thereafter in respect of such
period, in each case in respect of income or activities earned or conducted
during such period.
"EXISTING BANK" shall mean each Bank which is a party to both
the Existing Credit Agreement and this Agreement.
"EXISTING CREDIT AGREEMENT" shall have the meaning given to
such term in the second paragraph hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, PROVIDED that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the immediately preceding Business Day as
so published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Chase on such day on such transactions as determined by the
Agent.
"FIXED CHARGES RATIO" shall mean, at any date, the ratio of
(a) Cash Flow for the period of 12 complete consecutive months ended on, or most
recently ended prior to, such date TO (b) Total Fixed Charges for such period.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.
"GUARANTEE" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under or with
respect to, the Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a debtor to make
payment of his, her or its obligations or an agreement to assure a creditor
against loss, and including, without limitation, causing a bank to issue
CREDIT AGREEMENT
- 14 -
a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall
have a correlative meaning.
"HAZARDOUS MATERIAL" shall mean, collectively, (a) any
petroleum or petroleum products, flammable materials, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, and transformers or
other equipment that contain polychlorinated biphenyls ("PCBS"), (b) any
chemicals or other materials or substances that are now or hereafter become
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
"INACTIVE SUBSIDIARIES" shall mean, collectively, Xxxxxx and
its Subsidiaries, The Hartford Times, Inc., Community Offset, Inc., Central New
Jersey Publishing Company, All Home Distribution, Inc., Asheboro Publications,
Inc., Orange Coast Publishing Company and The Tribune Publishing Company of
Royal Oak, Michigan.
"INDEBTEDNESS" shall mean, as to any Person: (a) indebtedness
created, issued or incurred by such Person for borrowed money (whether by loan
or the issuance and sale of debt securities); (b) obligations of such Person to
pay the deferred purchase or acquisition price of property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) such indebtedness or
other obligations of others secured by a Lien on Property of such Person,
whether or not the respective indebtedness or other obligation so secured has
been assumed by such Person; (d) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person; (e) Capital Lease
Obligations of such Person; and (f) Indebtedness of others Guaranteed by such
Person; PROVIDED that, with respect to the Borrower or any of its Subsidiaries,
there shall be excluded from Indebtedness of the Borrower or of its Subsidiaries
any of the foregoing obligations
CREDIT AGREEMENT
- 15 -
of the Borrower or its Subsidiaries described in clauses (a) through (f) above
to the Borrower or any of its Subsidiaries.
"INS" shall mean INS Holdings, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware.
"INTEREST COVERAGE RATIO" shall mean, at any date, the ratio
of (a) Cash Flow for the period of twelve complete consecutive months ended on,
or most recently ended prior to, such date TO (b) cash Interest Expense for such
period.
"INTEREST EXPENSE" shall mean, for any period, interest
expense of the Borrower and its Subsidiaries for such period (determined on a
consolidated basis without duplication in accordance with GAAP) including,
without limitation, the following: (a) all interest in respect of Indebtedness
(other than Warburg Subordinated Debt) of the Borrower and its Subsidiaries
(including imputed interest expense in respect of Capital Lease Obligations)
paid, accrued or capitalized during such period; PLUS (b) all commitment and
agency fees paid to the Banks and/or the Agent and all commitment and agency
fees accrued during such period and in either case in connection with this
Agreement (but excluding any legal fees or expenses in connection with this
Agreement and the other Credit Documents); PLUS (c) the net amounts payable (or
MINUS the net amounts receivable) by the Borrower and its Subsidiaries during
such period under Interest Rate Protection Agreements (but in any event
excluding capitalized costs incurred in connection with obtaining Interest Rate
Protection Agreements and the related amortization).
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is made or
Converted from a Base Rate Loan or the last day of the immediately preceding
Interest Period for such Loan and ending on the numerically corresponding day in
the first, second, third or sixth month thereafter, as the Borrower may select
as provided in Section 4.05 hereof, except that each Interest Period which
commences on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (a) if any Interest Period for any
Revolving Credit Loan would otherwise commence before and end after the
Revolving Credit Commitment Termination Date, such Interest Period shall end on
the Revolving Credit Commitment Termination Date; (b) no Interest Period for any
Term Loan may commence before and end after any Principal Payment Date unless,
after giving effect thereto, the aggregate
CREDIT AGREEMENT
- 16 -
principal amount of the Term Loans having Interest Periods which end after such
Principal Payment Date shall be equal to or less than the aggregate principal
amount of the Term Loans scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Principal Payment Date; (c) no
Interest Period for any PAD Loan of any Series may commence before and end after
any Principal Payment Date for PAD Loans of such Series unless, after giving
effect thereto, the aggregate principal amount of the PAD Loans of such Series
having Interest Periods which end after such Principal Payment Date shall be
equal to or less than the aggregate principal amount of the PAD Loans of such
Series scheduled to be outstanding after giving effect to the payment of
principal required to be made on such Principal Payment Date; (d) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, in the case of an Interest Period for
Eurodollar Loans, if such next succeeding Business Day falls in the next
succeeding calendar month, on the immediately preceding Business Day); and (e)
notwithstanding the foregoing, no Interest Period shall have a duration of less
than one month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period (by reason of clause (a), (b), (c) or (d) above or
otherwise), such Loan shall not be available hereunder.
"INTEREST RATE PROTECTION AGREEMENT" shall mean an interest
rate swap, cap or collar agreement or similar arrangement between any Person and
a financial institution providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding 90
days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business); (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed
CREDIT AGREEMENT
- 17 -
to be advanced, lent or extended to such Person; or (d) the entering into of any
Interest Rate Protection Agreement.
"JCI" shall mean Journal Company, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware.
"JCI/JNI SECURITY AGREEMENT" shall mean the Security Agreement
dated as of December 21, 1994 between the Subsidiary Guarantors and the Agent,
as the same shall be amended, supplemented or otherwise modified and in effect
from time to time.
"JNI" shall mean Journal News, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware.
"JRN" shall mean Journal Register Newspapers, Inc., a
non-stock corporation duly organized and validly existing under the laws of the
State of Delaware.
"LENDER" shall mean, at any time, (a) each Bank party to this
Agreement at such time and (b) any other Person holding Permitted Additional
Debt at such time if such other Person was a Bank party to this Agreement at the
time it provided such Permitted Additional Debt.
"LIEN" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement and the other Credit Documents, a
Person shall be deemed to own subject to a Lien any Property which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
other than an operating lease relating to such Property.
"LOANS" shall mean the Revolving Credit Loans, Term Loans and
PAD Loans.
"MAJORITY BANKS" shall mean Majority Revolving Credit Banks
and Majority Term Loan Banks.
"MAJORITY REVOLVING CREDIT BANKS" shall mean Revolving Credit
Banks having at least 60% of the sum of (a) the aggregate unused amount of the
Revolving Credit Commitments at such time PLUS (b) the aggregate outstanding
principal amount of the Revolving Credit Loans at such time or, if the Revolving
Credit Commitments have terminated, Revolving Credit Banks holding at
CREDIT AGREEMENT
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least 60% of the aggregate outstanding principal amount of the Revolving Credit
Loans.
"MAJORITY TERM LOAN BANKS" shall mean Banks having at least
60% of the sum of (a) the aggregate outstanding principal amount of the Term
Loans at such time PLUS (b) the aggregate outstanding principal amount of the
PAD Loans at such time PLUS (c) if any PAD Commitments are then in effect, the
aggregate unused amount of the PAD Commitments at such time.
"MANAGEMENT BONUS PLAN" shall mean the Borrower's "Management
Bonus Plan" pursuant to which the Borrower will pay management bonuses totalling
approximately $32,000,000, comprised of approximately 1,100,000 shares of common
stock of the Borrower valued at the initial public offering price of the
Borrower's common stock and a cash portion that the Borrower expects will be
used to satisfy the recipients' tax obligations arising from the shares of
common stock.
"MARGIN STOCK" shall mean margin stock within the meaning of
Regulation U and Regulation X.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the Property, business, financial condition, operations, assets,
liabilities, capitalization or prospects of the Borrower and its Subsidiaries
taken as a whole, (b) the ability of the Borrower or any of its Subsidiaries to
perform any of such Person's non-monetary obligations under any of the
Transaction Documents, (c) the validity or enforceability of any of the
Transaction Documents, (d) the rights and remedies of the Banks and the Agent
under any of the Credit Documents or (e) the timely payment of the principal of
or interest on the Loans or other amounts payable in connection therewith.
"MORTGAGE NOTICE" shall have the meaning given to such term in
Section 8.22 hereof.
"MORTGAGE PROPERTIES" shall mean, collectively, the properties
identified in Exhibit D-1 to the 1994 Credit Agreement, the NEN Mortgage
Properties, the New Britain Mortgage Properties and any additional real property
Acquired by any Obligor after the Amendment No. 2 Effective Date if such real
property is financed in whole or in part with the proceeds of PAD Loans
hereunder or Permitted Additional Debt incurred as permitted by Section 8.07(e)
hereof, PROVIDED that from and after the date of the Disposition of any of the
foregoing properties, there shall be excluded from Mortgage Properties the
properties so Disposed of.
CREDIT AGREEMENT
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"MORTGAGES" shall mean mortgages or deeds of trust, as the
case may be, if any, to be granted by the Mortgagors to the Agent, pursuant to
Section 8.22 hereof substantially in the form of Exhibit D to the 1994 Credit
Agreement (with such changes thereto as the Agent shall reasonably request)
covering the Mortgage Properties.
"MORTGAGORS" shall mean each of the Subsidiary Guarantors, and
each other Subsidiary of the Borrower that is required to execute and deliver a
Mortgage pursuant to the terms of this Agreement.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined
as such in Section 3(37) of ERISA to which contributions have been made by the
Company or any ERISA Affiliate and which is covered by Title IV of ERISA.
"MVO" shall mean Mississippi Valley Offset Company Inc., a
Missouri corporation that is a Subsidiary of JNI and a Subsidiary Guarantor.
"NEN ACQUISITION" shall mean the Acquisition of various
publications and commercial printing operations located largely in the States of
Connecticut and Rhode Island contemplated by the Asset Purchase Agreement dated
as of March 10, 1995 by and among NH Acquisition Corp. and Capital Cities Media,
Inc., Foothills Trader, Inc., Guilford Publishing Company, Inc., Imprint, Inc.
and Xxxxxx Publishing Company (including all schedules and exhibits thereto).
"NEN ACQUISITION LOAN BANKS" shall mean Banks from time to
time holding NEN Acquisition Loans after giving effect to any assignments
thereof permitted by Section 11.06 hereof.
"NEN ACQUISITION LOANS" shall mean the loans provided for by
Section 2.01(c) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
The NEN Acquisition Loans outstanding as of the Effective Date are set forth in
Annex 1 hereto.
"NEN ACQUISITION ENVIRONMENTAL REPORTS" shall mean the Phase I
Environmental Reports entitled "Elm City Citizen Newspapers, 000 Xxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx", "Shore Line Newspapers, 000 Xxxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxx Xxxxxx, Xxxxxxxxxxx", "Xxxxxx Newspapers, Inc., 187 Main
Street, Wakefield, Rhode Island", "Imprint Newspapers, 00 Xxxxx Xxxx, Xxxx
Xxxxxxxx, Xxxxxxxxxxx" and "Imprint Printing, Inc., 00 Xxxxx Xxxx Xxxx, Xxxxx
Xxxxx, Xxx Xxxxx Xxxxxx, Connecticut", each prepared by H2M Associates, Inc. and
dated November, 1994.
CREDIT AGREEMENT
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"NEN MORTGAGE PROPERTIES" shall mean the properties identified
in Attachment B to Amendment No. 1 to the 1994 Credit Agreement.
"NEN SURVEYS" shall have the meaning given to such term
in Section 4.11 of Amendment No. 1 to the 1994 Credit Agreement.
"NEN TITLE REPORTS" shall have the meaning given to such term
in Section 4.12 of Amendment No. 1 to the 1994 Credit Agreement.
"NET PROCEEDS" shall mean:
(a) with respect to any receipt of proceeds of any Disposition
referred to in Section 2.09(b) hereof or any insurance payment, or any
condemnation award or other compensation in respect of any Casualty Event
referred to in Section 2.09(c) hereof, the excess, if any, of: (i) the aggregate
amount of such proceeds OVER (ii) the sum of (x) the reasonable fees and
out-of-pocket expenses incurred by the Borrower or any of its Subsidiaries, in
the case of any such Disposition, in effecting such Disposition or, in the case
of any such Casualty Event, in collecting such payment or compensation (as the
case may be) PLUS (y) the taxes paid (or reasonably estimated to be payable) by
the Borrower or any of its Subsidiaries in connection with any such Disposition
or Casualty Event but only to the extent payable within 120 days of such
Disposition or such Casualty Event (as the case may be) or, if such taxes are
not so paid within such 120 days, only if an amount equal to such taxes is
deposited with the Agent for credit to an escrow account to be held in such
account and used to pay the same when due PLUS (z) in the case of any such
Disposition or Casualty Event, any contractually required repayments of
Indebtedness of the Borrower or any of its Subsidiaries to the extent secured by
a Lien on the related Property;
(b) with respect to any Equity Issuance, the aggregate amount
of all cash received by the Borrower or any of its Subsidiaries in respect of
such Equity Issuance or sale by the Borrower net of (only in the case of an
Equity Issuance referred to in clause (a) of the definition of that term or such
a sale by the Borrower) reasonable fees and out-of-pocket expenses incurred by
the Borrower or such Subsidiary in connection therewith; and
(c) with respect to any issuance of Subordinated Debt
permitted under Section 8.07 hereof, the aggregate amount of all cash received
by the Borrower or any of its Subsidiaries in respect of such issuance net of
reasonable fees and out-of-pocket expenses (including, without limitation,
underwriting discounts)
CREDIT AGREEMENT
- 21 -
incurred by the Borrower or such Subsidiary in connection therewith.
"NEW BANK" shall mean each Bank which is a party to this
Agreement but not the Existing Credit Agreement.
"NEW BRITAIN ACQUISITION" shall mean the Acquisition of "The
New Britain Herald" located in New Britain, Connecticut and other Property as
contemplated by the Stock Purchase Agreement dated as of June 20, 1995 by and
among each of the shareholders of the Herald Publishing Company and New Britain
Publishing Company (including all schedules and exhibits thereto).
"NEW BRITAIN ACQUISITION ENVIRONMENTAL REPORTS" shall mean the
Phase I Environmental Site Assessment for The Herald Publishing Company at 0-00
Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxxx, dated June, 1995, prepared by
Xxxxxxxx X. Xxxxxxx, The East Hartford Gazette, 00 Xxxxxxxxxxx Xxxxxxxxx, Xxxx
Xxxxxxxx, Xxxxxxxxxxx, dated June, 1995, prepared by Xxxxxxxx X. Xxxxxxx and One
Herald Square, New Britain Connecticut, dated March, 1991, prepared by
Consulting Environmental Engineers, Inc. and the Environmental Site Assessment
for The Herald at 0 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxxx, dated April, 1995,
prepared by Xxxxx & Xxxxxxx, Inc.
"NEW BRITAIN ACQUISITION LOAN BANKS" shall mean the Banks from
time to time holding New Britain Acquisition Loans after giving effect to any
assignments thereof permitted by Section 11.06 hereof.
"NEW BRITAIN ACQUISITION LOANS" shall mean the loans provided
for by Section 2.01(d) hereof, which may be Base Rate Loans and/or Eurodollar
Loans. The New Britain Acquisition Loans outstanding as of the Effective Date
are set forth in Annex 1 hereto.
"NEW BRITAIN MORTGAGE PROPERTIES" shall mean the properties
identified in Attachment B to Amendment No. 2 to the 1994 Credit Agreement.
"NEW BRITAIN SURVEYS" shall have the meaning given to such
term in Section 4.11 of Amendment No. 2 to the 1994 Credit Agreement.
"NEW BRITAIN TITLE REPORTS" shall have the meaning given to
such term in Section 4.12 of Amendment No. 2 to the 1994 Credit Agreement.
CREDIT AGREEMENT
- 22 -
"NEWSPAPER" shall mean each newspaper owned or operated by, or
proposed to be Acquired by, any Subsidiary of the Borrower (or, if the context
so requires, a Subsidiary of the Borrower that owns or operates, or proposes to
Acquire, such a newspaper) and may include, without limitation, tangible assets
used or usable in the operation of such newspaper, real property used in
connection with such newspaper, contracts, leases and agreements relating to
such newspaper, all licenses required for the operation of such newspaper in
accordance with applicable laws and regulations and copyrights, trademarks,
trade names, logos, jingles, service marks, slogans and promotional materials
used in connection with such newspaper.
"1994 CREDIT AGREEMENT" shall have the meaning given to such
term in the second paragraph hereof.
"NOTES" shall mean the promissory notes (if any) issued by the
Borrower pursuant to Section 2.07 hereof.
"OBLIGORS" shall mean, collectively, the Borrower and the
Subsidiary Guarantors.
"PAD COMMITMENTS" shall mean any commitment(s) to make loans
to the Borrower pursuant to Section 2.01(e) hereof.
"PAD LOANS" shall mean, collectively, (a) the NEN Acquisition
Loans, (b) the New Britain Acquisition Loans and (c) the loans made pursuant to
the PAD Commitments, which may be Base Rate Loans and/or Eurodollar Loans.
Notwithstanding anything herein to the contrary, PAD Loans are not considered to
be Permitted Additional Debt.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" shall mean an Acquisition of any one
or more Newspapers in the United States of America made as permitted by Section
8.05(b)(iv) hereof.
"PERMITTED ADDITIONAL DEBT" shall have the meaning assigned to
such term in Section 8.07(e) hereof.
"PERMITTED LIENS" shall mean, with respect to Liens on the
Property of the Borrower and/or any of its Subsidiaries, collectively, Liens
permitted by Section 8.06 hereof.
"PERSON" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture,
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trust, unincorporated organization or government (or any agency, instrumentality
or political subdivision thereof).
"PLAN" shall mean an employee benefit or other plan
established or maintained by the Borrower or any ERISA Affiliate and which is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"POST-DEFAULT RATE" shall mean, in respect of any principal of
any Loan or any other amount owing to any of the Banks or the Agent under or
pursuant to this Agreement or any other Credit Document, a rate per annum equal
to 5% PLUS the Base Rate as in effect from time to time PLUS the Applicable
Margin (PROVIDED that, if any amount in respect of which interest is payable at
the Post-Default Rate is principal of a Eurodollar Loan and the day interest
thereon commences to be payable at the Post-Default Rate is a day other than the
last day of an Interest Period therefor, the "Post-Default Rate" for such
principal shall be, for the period from and including such day to but excluding
the last day of such Interest Period, 5% PLUS the interest rate for such Loan
for such Interest Period as provided in Section 3.02(b) hereof and, thereafter,
the rate provided for above in this definition).
"PRIME RATE" shall mean the rate of interest from time to time
announced by Chase at its principal office in New York, New York as its prime
commercial lending rate.
"PRINCIPAL PAYMENT DATES" shall mean (a) with respect to Term
Loans, NEN Acquisition Loans and New Britain Acquisition Loans, the Quarterly
Dates occurring in March, June, September and December of each year, commencing
with the first Quarterly Date after the Effective Date through and including (i)
December, 2002, with respect to Term Loans, and (ii) March, 2003, with respect
to NEN Acquisition Loans and New Britain Acquisition Loans, (b) May 5, 2003,
with respect to the last scheduled installment of the NEN Acquisition Loans, (c)
May 1, 2003, with respect to the last scheduled installment of the New Britain
Acquisition Loans and (d) with respect to each Series of PAD Loans other than
NEN Acquisition Loans and New Britain Acquisition Loans, the dates on which the
Borrower is required to pay each scheduled installment of such Loans as may be
hereafter agreed between the Borrower and the Bank providing such Loans,
PROVIDED that the requirements of Section 3.01(e) hereof are satisfied.
"PROPERTY" shall mean all property of any kind whatsoever,
whether real, personal or mixed and whether tangible
CREDIT AGREEMENT
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or intangible, and any right or interest in or to any such property of any kind
whatsoever.
"QUARTERLY DATES" shall mean the last Business Day of each
March, June, September and December in each year, the first of which shall be
the first such day after the date of this Agreement.
"REFERENCE BANKS" shall mean Chase and/or such other Bank or
Banks as the Agent shall select (after consultation with the Borrower) and
designate to the Borrower as a "Reference Bank" hereunder (or their Applicable
Lending Offices, as the case may be).
"REGULATION A", "REGULATION D", "REGULATION U" and "REGULATION
X" shall mean, respectively, Regulation A, Regulation D, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"REGULATORY CHANGE" shall mean, with respect to any Bank, any
change after the date of this Agreement in United States Federal, state or
foreign law or regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks including such Bank of or under any United States
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"RELEASE" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"REQUIRED LENDERS" shall mean, at any time, Lenders having at
least 60% of the sum of (a) the aggregate outstanding principal amount of the
Loans at such time PLUS (b) the aggregate unused amount of the Commitments at
such time PLUS (c) the aggregate outstanding principal amount of Permitted
Additional Debt at such time.
"RESERVE REQUIREMENT" shall mean, for any Interest Period for
any Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency
CREDIT AGREEMENT
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reserves) are required to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as
such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall include any other reserves required to
be maintained by such member banks by reason of any Regulatory Change with
respect to (a) any category of liabilities which includes deposits by reference
to which the Eurodollar Base Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or (b) any category of
extensions of credit or other assets which includes Eurodollar Loans.
"RESTRICTED PAYMENT" shall mean (a) dividends (in cash,
property or obligations) on, or other payments or distributions on account of,
or payments or the setting apart of money for a sinking or other analogous fund
for the purchase, redemption, retirement or other acquisition of, any shares of
any class of stock of the Borrower, but excluding dividends payable solely in
shares of common stock of the Borrower (or, in the case of dividends on
preferred stock of the Borrower, in shares of common stock or preferred stock of
the same issue) and (b) payments (in cash, property or obligations) or
distributions on account of, or payments or the setting apart of money for a
sinking or other analogous fund for the purchase, redemption, retirement or
other acquisition of any Subordinated Debt.
"REVOLVING CREDIT BANKS" shall mean (a) on the Effective Date,
the Banks having Revolving Credit Commitments as indicated on Annex 1 hereto and
(b) thereafter, the Banks from time to time holding Revolving Credit Loans and
Revolving Credit Commitments after giving effect to any assignments thereof
permitted by Section 11.06 hereof.
"REVOLVING CREDIT COMMITMENT" shall mean: (a) for each
Revolving Credit Bank that is a party to this Agreement on the Effective Date,
the obligation of such Bank to make Revolving Credit Loans up to an aggregate
principal amount equal to the amount set forth opposite the name of such Bank on
Annex 1 hereto; and (b) for each Revolving Credit Bank that acquires all or a
portion of another Revolving Credit Bank's Revolving Credit Commitment by
assignment pursuant to Section 11.06(b) hereof, the obligation of such Bank to
make Revolving Credit Loans up to an aggregate principal amount equal to such
Bank's Revolving Credit Commitment after giving effect to such assignment (in
each case, as the same may be reduced or increased from time to time pursuant to
Section 2.03 hereof or Section 11.06(b) hereof). The original aggregate
principal amount of the Revolving Credit Commitments is $235,000,000 as of the
Effective Date.
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"REVOLVING CREDIT LOANS" shall mean the loans provided for by
Section 2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall mean the
Quarterly Date occurring in December, 2003.
"SCHEDULED PAYMENT" shall mean each repayment of the principal
of the Term Loans required to be made on a Principal Payment Date pursuant to
Section 3.01(a) hereof, each repayment of the principal of the NEN Acquisition
Loans required to be made on a Principal Payment Date pursuant to Section
3.01(c) hereof, each repayment of the principal of the New Britain Acquisition
Loans required to be made on a Principal Payment Date pursuant to Section
3.01(d) hereof, each repayment of PAD Loans other than NEN Acquisition Loans and
New Britain Acquisition Loans pursuant to Section 3.01(e) hereof and the
reduction in the Revolving Credit Commitments required by Section 2.03(b)(v)
hereof. For purposes of computing Total Debt Service, the amount of each
Scheduled Payment shall be (a) the aggregate principal amount of the Term Loans,
NEN Acquisition Loans, New Britain Acquisition Loans and PAD Loans actually
repaid pursuant to Section 3.01(a), Section 3.01(c), Section 3.01(d) or Section
3.01(e), respectively, hereof on a Principal Payment Date after giving effect to
any reductions in the amount required to be repaid on such Principal Payment
Date pursuant to Section 2.08 or 2.09 hereof PLUS (b) the aggregate principal
amount of the Revolving Credit Loans actually repaid pursuant to Section 2.09(a)
hereof after giving effect to the reduction in the Revolving Credit Commitments
pursuant to Section 2.03(b)(v) hereof.
"SECURITY DOCUMENTS" shall mean, collectively, the Borrower
Security Agreement, the JCI/JNI Security Agreement and all Uniform Commercial
Code financing statements required thereby to be filed with respect to the
security interests created pursuant thereto and, if and to the extent executed
and delivered pursuant to Section 8.22 hereof, the Mortgages, any Supplemental
Mortgages and the Supplement to the Subsidiary Guarantee referred to in Section
8.22(ii) hereof (PROVIDED that, notwithstanding the foregoing, the Mortgages,
such Supplemental Mortgages and such Subsidiary Guarantee shall be deemed to be
Security Documents and Transaction Documents for purposes of Sections 7.04, 7.05
and 7.06 hereof).
"SENIOR OFFICER" shall mean the President, Executive Vice
President, Chief Financial Officer, Controller or Vice President-Finance of the
Borrower, as the context requires.
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"STOCK INCENTIVE PLAN" shall mean the Borrower's "1997 Stock
Incentive Plan" which authorized the granting of up to 4,843,750 shares of
common stock of the Borrower through incentive stock options and non-qualified
stock options to acquire common stock of the Borrower and awards of common stock
to directors, officers and employees of or consultants to the Borrower and its
Subsidiaries and Affiliates.
"SUBORDINATED DEBT" shall mean unsecured Indebtedness (i) for
which the Borrower is directly and primarily liable, (ii) in respect of which no
Subsidiary of the Borrower is contingently or otherwise obligated and (iii) that
is subordinated to the obligation of the Borrower to pay principal of and
interest on the Loans and Notes and other amounts hereunder on terms, and
pursuant to documentation containing other terms (including interest,
amortization, covenants and events of default), in form and substance
satisfactory to the Majority Banks; PROVIDED that in no event shall any
Subordinated Debt provide for the payment of any principal thereof prior to the
date which is at least 91 days after the last scheduled principal payment date
of any of the Loans.
"SUBSIDIARY" shall mean, for any Person, any corporation,
partnership (other than any limited partnership of which such Person is solely a
limited partner) or other entity of which at least a majority of the securities
or other ownership interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions of such corporation, partnership or other entity (irrespective
of whether or not at the time securities or other ownership interests of any
other class or classes of such corporation, partnership or other entity shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person; PROVIDED that Xxxxxx shall not be deemed to be a
Subsidiary of JNI for any purpose of this Agreement other than to the extent
Xxxxxx is included in the historical financial statements of JNI and its
Subsidiaries. "WHOLLY OWNED SUBSIDIARY" shall mean any such corporation,
partnership or other entity of which all such securities or other ownership
interests, other than directors' qualifying shares, are so owned or controlled.
"SUBSIDIARY GUARANTEE" shall mean the Guarantee Agreement
dated as of December 21, 1994 between the Subsidiary Guarantors (including,
without limitation, from and after the Effective Date, JNI and JCI) and the
Agent, as the same shall be
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amended, supplemented or otherwise modified and in effect from time to time.
"SUBSIDIARY GUARANTORS" shall mean each of the Subsidiaries of
the Borrower which are, from time to time, parties to the Subsidiary Guarantee.
"SUPPLEMENTAL MORTGAGE" shall have the meaning given to such
term in Section 8.22 hereof.
"SURVEYS" shall mean, collectively, (a) the surveys delivered
to the Agent pursuant to Section 6.01(p) of the 1994 Credit Agreement, (b) the
NEN Surveys, (c) the New Britain Surveys and (d) and each other survey of
Mortgage Property Acquired by any Obligor after the Amendment No. 2 Effective
Date if such Acquisition is financed in whole or in part with the proceeds of
PAD Loans hereunder or Permitted Additional Debt as permitted by Section 8.07(e)
hereof, each dated not more than 30 days prior to the date such PAD Loans are
made or such Permitted Additional Debt is incurred, certified to the Agent, made
in accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys" established and adopted by the American Land Title Association
and American Congress on Surveying and Mapping in 1992, and meeting the accuracy
requirements of an "Urban" survey as defined therein, showing all buildings and
other improvements, if any, all encroachments, if any, all set-back lines, if
any, and all areas affected by any easements or other instruments of record, if
any (the recording data in respect of which shall be marked on the survey),
containing metes and bounds description of such Mortgage Properties, setting
forth the flood zone designations, if any, in which such Mortgage Properties are
located.
"TAUNTON ACQUISITION" shall mean the acquisition by Taunton
Acquisition Corp., a Delaware corporation, of the assets of The Taunton Daily
Gazette.
"TERM LOAN BANKS" shall mean the Banks from time to time
holding Term Loans after giving effect to any assignments thereof permitted by
Section 11.06 hereof.
"TERM LOANS" shall mean the loans provided for by Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"TITLE COMMITMENTS" shall have the meaning given to such term
in Section 8.22 hereof.
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"TITLE INSURER" shall mean First American Title Insurance
Company or such other title insurance company as the Majority Banks shall
approve.
"TITLE POLICIES" shall have the meaning given to such term in
Section 8.22 hereof.
"TITLE REPORTS" shall mean, collectively, (a) the title
reports delivered to the Agent pursuant to Section 6.01(q) of the 1994 Credit
Agreement, (b) the NEN Title Reports, (c) the New Britain Title Reports and (d)
each other title report prepared by the Title Insurer for the benefit of the
Agent covering Mortgage Property Acquired by any Obligor after the Amendment No.
2 Effective Date if such Acquisition is financed in whole or in part with the
proceeds of PAD Loans hereunder or Permitted Additional Debt as permitted by
Section 8.07(e) hereof.
"TOTAL DEBT" shall mean, at any date, all Indebtedness of the
Borrower and its Subsidiaries that would be listed as a liability on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such date
prepared in accordance with GAAP and including in any event obligations in
respect of (a) agreements- not-to-compete and (b) the liabilities described in
Schedule VI hereto but excluding in any event income taxes payable or deferred,
unearned circulation revenue, liabilities under Plans and liabilities of the
type described in Statement of Financial Accounting Standards Nos. 87, 106, 107
and 109 of the Financial Accounting Standards Board to the extent the same may
be treated as an accrued expense under GAAP.
"TOTAL DEBT RATIO" shall mean, at any date, the ratio of (a)
the aggregate principal amount of Total Debt of the Borrower and its
Subsidiaries then outstanding TO (b) Cash Flow for the period of twelve complete
consecutive months ended on, or most recently ended prior to, such date.
"TOTAL DEBT SERVICE" shall mean, for any period, the sum of
the following for the Borrower and its Subsidiaries for such period, determined
on a consolidated basis without duplication in accordance with GAAP: (a)
Scheduled Payments and other regularly scheduled payments of principal of
Indebtedness which Indebtedness is included in Total Debt; (b) Interest Expense;
and (c) payments of principal of and cash interest on Warburg Subordinated Debt
(other than the payment in full of the Warburg Subordinated Debt pursuant to
Section 6.01(f) hereof); PROVIDED that solely for purposes of determining
compliance with: (i) Section 8.12 hereof at any date, payments of principal of
and cash interest on Warburg Subordinated Debt (to the extent included in the
calculation of Total Debt Service for such
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period), shall be deemed, except as otherwise permitted by clause (ii) below, to
have been paid in equal monthly installments during such period; (ii) Section
8.12 hereof at any date occurring during fiscal year 1996, payments of principal
of and cash interest on Warburg Subordinated Debt (to the extent included in the
calculation of Total Debt Service for such period), may, at the election (which
election shall be notified by the Borrower to the Agent on or prior to the date
of each such payment) of the Borrower, be deemed to have been paid in equal
monthly installments during a period of up to 24 complete calendar months ended
on, or most recently ended prior to, such payment date; and (iii) Section 8.12
hereof at any date occurring on or after January 1, 1997, each payment of
principal of or cash interest on Warburg Subordinated Debt made during fiscal
year 1996 (to the extent included in the calculation of Total Debt Service for
such fiscal year) shall be reduced by the sum of the following (without
duplication of deductions): (w) the amount of such payment of principal or cash
interest made with proceeds of Permitted Additional Debt and with proceeds (up
to but not exceeding $5,000,000 in the aggregate) of Warburg Subordinated Debt;
(x) Excess Cash Flow for fiscal year 1995, if any; (y) Excess Cash Flow for the
period commencing on January 1, 1996 and ended on the date of such payment of
principal or interest; and (z) the lesser of (I) $6,000,000 and (II) cash
balances and Cash Equivalents of the Borrower as at December 31, 1994 as shown
on the combined consolidated financial statements of JNI and JCI and their
respective Subsidiaries delivered to the Agent pursuant to the Existing Credit
Agreement.
"TOTAL FIXED CHARGES" shall mean, for any period, the sum of
the following for the Borrower and its Subsidiaries for such period, determined
on a consolidated basis without duplication in accordance with GAAP: (a) Total
Debt Service; (b) Capital Expenditures made as permitted by Section 8.10 hereof
(other than Capital Expenditures made pursuant to clause (z) thereof); and (c)
taxes (other than deferred taxes) paid during such period or paid or expected to
be payable in cash thereafter in respect of such period, in each case in respect
of income or activities earned or conducted during such period.
"TRANSACTION DOCUMENTS" shall mean, collectively, the Credit
Documents and each other material agreement, instrument or other document
(including all schedules and exhibits thereto) entered into and delivered in
connection with any Acquisition consummated by any Obligor after the Effective
Date if such Acquisition is financed in whole or in part with the proceeds PAD
Loans hereunder or Permitted Additional Debt as permitted by Section 8.07(e)
hereof.
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"TYPE" shall have the meaning assigned to such term in Section
1.03 hereof.
"WARBURG" shall mean, collectively: (i) Warburg, Xxxxxx
Capital Company, L.P., a Delaware limited partnership, (ii) Warburg, Xxxxxx
Capital Partners, L.P., a Delaware limited partnership, (iii) Warburg, Xxxxxx
Investors, L.P., a Delaware limited partnership, (iv) Warburg, Xxxxxx & Co., a
New York general partnership, and (v) any other venture banking fund in which
Warburg, Xxxxxx & Co. is the general partner.
"WARBURG AFFILIATE" shall mean any Subsidiary of any of the
entities listed in clauses (i) through (v), inclusive, of the definition of
"Warburg" in this Section 1.01.
"WARBURG SUBORDINATED DEBT" shall mean Indebtedness of JNI
and/or JCI owed to Warburg immediately prior to the Effective Date as listed in
Schedule VI hereto.
"WORKING CAPITAL" shall mean, at any time, the excess, if any,
of the current assets (net of cash and Cash Equivalents and excluding accrued
interest thereon) of the Borrower and its Subsidiaries over their current
liabilities (excluding any such liabilities in respect of the current portion of
long-term debt, liabilities under Plans and liabilities of the type described in
Statement of Financial Accounting Standards Nos. 87, 106, 107 and 109 of the
Financial Accounting Standards Board and accrued Interest Expense, accrued
income taxes payable or deferred, each determined on a consolidated basis
without duplication in accordance with GAAP).
1.02 ACCOUNTING TERMS AND DETERMINATIONS; FISCAL PERIODS.
---------------------------------------------------
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Agent and the Banks hereunder shall (unless otherwise disclosed to the Banks
in writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation of
the latest financial statements furnished to the Banks hereunder (which, prior
to the delivery of the first consolidated financial statements under Section
8.01 hereof, shall mean the combined financial statements of Journal Register
LLC and its Subsidiaries as at December 31, 1996 referred to in Section 7.02
hereof). All calculations made for the purposes of determining compliance with
CREDIT AGREEMENT
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this Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
consolidated financial statements furnished to the Banks pursuant to Section
8.01(a) or (b) hereof (or prior to the delivery of the first financial
statements under Section 8.01 hereof, used in the preparation of the combined
financial statements of Journal Register LLC and its Subsidiaries as at December
31, 1996 referred to in Section 7.02 hereof) unless (i) the Borrower shall have
objected to determining such compliance on such basis at the time of delivery of
such consolidated financial statements or (ii) the Majority Banks shall have
objected to so determining such compliance within 30 days after delivery to the
Banks of such consolidated financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest consolidated financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first consolidated financial statements delivered under Section 8.01 hereof,
shall mean the combined financial statements of Journal Register LLC and its
Subsidiaries as at December 31, 1996 referred to in Section 7.02 hereof).
(b) The Borrower shall deliver to the Banks at the same
time as the delivery of any annual or quarterly financial statement under
Section 8.01(a) or (b) hereof, as the case may be, (i) a description in
reasonable detail of any material variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the
immediately preceding annual or quarterly financial statements as to which no
objection has been made in accordance with the last sentence of paragraph (a)
above and (ii) reasonable estimates of the difference between such statements
arising as a consequence thereof.
(c) The Borrower will not, nor will the Borrower permit any
of its Subsidiaries to, change the last day of its fiscal year from December 31,
or the last days of the first three fiscal quarters in each of its fiscal years
from March 31, June 30 and September 30, respectively.
1.03 CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Class" and by "Type". The Class of a Loan (or of a Commitment
to make a Loan) refers to whether such Loan is a Revolving Credit Loan, a Term
Loan or a PAD Loan, each of which constitutes a Class. The "Type" of a Loan
refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of
which
CREDIT AGREEMENT
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constitutes a Type. In addition, PAD Loans (and Commitments to make PAD Loans)
are distinguished by "Series". The Series of a PAD Loan (or of a Commitment to
make a PAD Loan) refers both to the date such PAD Loan was made (or the date
such PAD Commitment was extended to the Borrower) and the purpose for which the
proceeds of such PAD Loan may be utilized and only PAD Loans made on the same
specified date and only for the same specified purpose are included within a
particular Series of PAD Loans. Loans may be identified by both Class and Type
and PAD Loans may also be identified by Series.
Section 2. COMMITMENTS.
2.01 LOANS.
(a) TERM LOANS. On the Effective Date, (i) the "Term Loans"
(as defined in the Existing Credit Agreement) held by the Existing Banks under
the Existing Credit Agreement immediately prior to the Effective Date shall
automatically, and without any action on the part of any Person, be designated
and continued as Term Loans hereunder and each of the New Banks that is a Term
Loan Bank (and each Existing Bank, if any, whose relative proportion of Term
Loans hereunder is increasing over its relative proportion of "Term Loans" held
by it under the Existing Credit Agreement (each an "INCREASING EXISTING TERM
LOAN BANK")) shall, by assignments from the Existing Banks, if any, whose
relative proportion of the Term Loans hereunder is decreasing from its relative
proportion of "Term Loans" held by it under the Existing Credit Agreement (which
assignments shall be deemed to occur automatically on the Effective Date),
acquire a portion of the Term Loans of the Existing Banks so designated and
continued (the Term Loan Banks shall, through the Agent, make such additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each Increasing Existing Term Loan Bank severally agrees, on the terms and
conditions of this Agreement, to make a term loan (on a non pro-rata basis) to
the Borrower in Dollars and/or (iii) the Borrower shall prepay the Term Loans of
the Existing Banks (on a non pro-rata basis), in each case in such amounts, such
that after giving effect thereto, the Term Loan Banks shall hold the Term Loans
hereunder in the respective principal amounts specified in Annex 1 hereto.
From and after the Effective Date, the Borrower (as provided
in Section 2.08(a) hereof) may Convert Term Loans of one Type into Term Loans of
another Type (as provided in Section 2.08(a) hereof) or Continue Term Loans of
one Type as Term Loans of the same Type (as provided in Section 2.08(a) hereof).
CREDIT AGREEMENT
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(b) REVOLVING CREDIT LOANS. On the Effective Date, (i) the
"Revolving Credit Loans" (as defined in the Existing Credit Agreement) held by
the Existing Banks under the Existing Credit Agreement immediately prior to the
Effective Date shall automatically, and without any action on the part of any
Person, be designated and continued as Revolving Credit Loans outstanding under
the Revolving Credit Commitments, (ii) each Revolving Credit Bank (including,
without limitation, each New Bank that is a Revolving Credit Bank) shall have a
Revolving Credit Commitment in the amount set opposite the name of such Bank on
Annex 1 hereto, (iii) each of the New Banks that is a Revolving Credit Bank (and
each Existing Bank, if any, whose relative proportion of Revolving Credit
Commitments hereunder is increasing over its relative proportion of "Revolving
Credit Commitments" held by it under the Existing Credit Agreement (each an
"INCREASING EXISTING REVOLVING CREDIT BANK")) shall, by assignments from the
Existing Banks, if any, whose relative proportion of the Revolving Credit
Commitments hereunder is decreasing from its relative proportion of "Revolving
Credit Commitments" held by it under the Existing Credit Agreement (which
assignments shall be deemed to occur automatically on the Effective Date),
acquire a portion of the Revolving Credit Loans of the Existing Banks so
designated and continued (and the Revolving Credit Banks shall, through the
Agent, make such additional adjustments among themselves as shall be necessary),
(iv) each such New Bank and each Increasing Existing Revolving Credit Bank
severally agrees, on the terms and conditions of this Agreement, to make (on a
non pro-rata basis) a revolving credit loan to the Borrower in Dollars and/or
(v) the Borrower shall prepay the Revolving Credit Loans of the Existing Banks
(on a non pro-rata basis), in each case in such amounts, such that after giving
effect thereto and any other Revolving Credit Loans made to the Borrower on the
Effective Date, the Revolving Credit Banks shall hold the Revolving Credit Loans
hereunder ratably in accordance with their respective Revolving Credit
Commitments.
From and after the Effective Date, each Revolving Credit Bank
severally agrees, on the terms of this Agreement, to make Revolving Credit Loans
to the Borrower in Dollars during the period from and including the Effective
Date to but excluding the Revolving Credit Commitment Termination Date in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount of such Bank's Revolving Credit Commitment as then in effect. Subject
to the terms of this Agreement, during such period the Borrower may borrow,
prepay and reborrow the amount of the Revolving Credit Commitments by means of
Base Rate Loans and Eurodollar Loans and may (as provided in Section 2.08(a)
hereof) Convert Revolving Credit Loans of one Type into Revolving Credit Loans
of the other Type or Continue Revolving
CREDIT AGREEMENT
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Credit Loans of one Type as Revolving Credit Loans of the same Type.
(c) NEN ACQUISITION LOANS. On the Effective Date, (i) the
"NEN Acquisition Loans" (as defined in the Existing Credit Agreement) held by
the Existing Banks under the Existing Credit Agreement shall automatically, and
without any action on the part of any Person, be designated and continued as NEN
Acquisition Loans hereunder and each of the New Banks that is a NEN Acquisition
Loan Bank (and each Existing Bank, if any, whose relative proportion of NEN
Acquisition Loans hereunder is increasing over its relative proportion of "NEN
Acquisition Loans" held by it under the Existing Credit Agreement (each an
"INCREASING EXISTING NEN ACQUISITION LOAN BANK")) shall, by assignments from the
Existing Banks, if any, whose relative proportion of the NEN Acquisition Loans
hereunder is decreasing from its relative proportion of "NEN Acquisition Loans"
held by it under the Existing Credit Agreement (which assignments shall be
deemed to occur automatically on the Effective Date), acquire a portion of the
NEN Acquisition Loans of the Existing Banks so designated and continued (and the
NEN Acquisition Loan Banks shall, through the Agent, make such additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each Increasing Existing NEN Acquisition Loan Bank severally agrees, on the
terms and conditions of this Agreement, to make a term loan (on a non pro-rata
basis) to the Borrower in Dollars and/or (iii) the Borrower shall prepay the NEN
Acquisition Loans of the Existing Banks (on a non pro-rata basis), in each case
in such amounts, such that after giving effect thereto, the NEN Acquisition Loan
Banks shall hold the NEN Acquisition Loans hereunder in the respective principal
amounts specified in Annex 1 hereto.
From and after the Effective Date, the Borrower may (as
provided in Section 2.08(a) hereof) Convert NEN Acquisition Loans of one Type
into NEN Acquisition Loans of the other Type or Continue NEN Acquisition Loans
of one Type as NEN Acquisition Loans of the same Type.
(d) NEW BRITAIN ACQUISITION LOANS. On the Effective Date,
(i) the "New Britain Acquisition Loans" (as defined in the Existing Credit
Agreement) held by the Existing Banks under the Existing Credit Agreement shall
automatically, and without any action on the part of any Person, be designated
and continued as New Britain Acquisition Loans hereunder and each of the New
Banks that is a New Britain Acquisition Loan Bank (and each Existing Bank, if
any, whose relative proportion of New Britain Acquisition Loans hereunder is
increasing over its relative proportion of "New Britain Acquisition Loans" held
by it under
CREDIT AGREEMENT
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the Existing Credit Agreement (each an "INCREASING EXISTING NEW NEW BRITAIN
ACQUISITION LOAN BANK")) shall, by assignments from the Existing Banks, if any,
whose relative proportion of the New Britain Acquisition Loans hereunder is
decreasing from its relative proportion of "New Britain Acquisition Loans" held
by it under the Existing Credit Agreement (which assignments shall be deemed to
occur automatically on the Effective Date), acquire a portion of the New Britain
Acquisition Loans of the Existing Banks so designated and continued (and the New
Britain Acquisition Loan Banks shall, through the Agent, make such additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each Increasing Existing New Britain Acquisition Loan Bank severally agrees, on
the terms and conditions of this Agreement, to make a term loan (on a non
pro-rata basis) to the Borrower in Dollars and/or (iii) the Borrower shall
prepay the New Britain Acquisition Loans of the Existing Banks (on a non
pro-rata basis), in each case in such amounts, such that after giving effect
thereto, the New Britain Acquisition Loan Banks shall hold the New Britain
Acquisition Loans hereunder in the respective principal amounts specified in
Annex 1 hereto.
From and after the Effective Date, the Borrower may (as
provided in Section 2.08(a) hereof) Convert New Britain Acquisition Loans of one
Type into New Britain Acquisition Loans of the other Type or Continue New
Britain Acquisition Loans of one Type as New Britain Acquisition Loans of the
same Type.
(e) PAD LOANS. From and after the Effective Date, any Bank
or any other Person (other than Warburg or any Warburg Affiliate) may provide a
new PAD Commitment to the Borrower in compliance with Section 8.07(e) hereof as
if it were Permitted Additional Debt, PROVIDED that each of the following
conditions is satisfied as of the date each such new PAD Commitment becomes
effective hereunder:
(i) no Default shall have occurred and be continuing as
of such date;
(ii) the sum of the aggregate outstanding principal amount
of the PAD Loans (excluding the NEN Acquisition Loans and New Britain
Acquisition Loans) PLUS the aggregate outstanding principal amount of
Permitted Additional Debt PLUS the aggregate unused amount of the PAD
Commitments then in effect PLUS the unused amount of such new PAD
Commitment shall not exceed $125,000,000 as of such date; and
(iii) such Bank or such other Person shall have agreed
to provide such new Commitment and, if not already a Bank,
CREDIT AGREEMENT
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shall have agreed to be bound by the provisions of this Agreement as a
"Bank" hereunder pursuant to documentation in form and substance
satisfactory to the Agent;
and upon the execution and delivery of such documentation, such Bank or such
other Person, if not already a Bank hereunder, shall become a "Bank" hereunder
having the obligations, rights and benefits of a Bank hereunder holding a PAD
Commitment in an amount equal to the amount of such new PAD Commitment.
If a Bank extends a new PAD Commitment to the Borrower
pursuant to this Section 2.01(e), such Bank agrees, on the terms of this
Agreement and subject to such other conditions as may be agreed to between the
Borrower and such Bank, to make a PAD Loan or PAD Loans to the Borrower in
Dollars on such date(s) as shall be agreed between such Bank and the Borrower in
an aggregate principal amount as shall be agreed between such Bank and the
Borrower. Thereafter, the Borrower may (as provided in Section 2.08(a) hereof)
Convert PAD Loans of one Type into PAD Loans of the other Type or Continue Pad
Loans of one Type as PAD Loans of the same Type.
(f) LIMIT ON EURODOLLAR LOANS.
(i) On the Effective Date, all "Interest Periods" under the
Existing Credit Agreement in respect of the "Eurodollar Loans" thereunder that
are being continued hereunder shall be continued hereunder until the end of such
Interest Periods and shall not be terminated and, subject to the provisions
hereof, the Borrower shall be permitted to Continue such Loans as Eurodollar
Loans or to Convert such Loans into Base Rate Loans of the appropriate Class
hereunder. Notwithstanding the restatement of the Existing Credit Agreement as
of the Effective Date, all accrued and unpaid interest on the "Loans" under the
Existing Credit Agreement that are being continued hereunder shall remain
payable and be paid by the Borrower to the respective Existing Banks in
accordance with Section 3.02 hereof as if such Loans were made hereunder. As of
the Effective Date, after giving effect to the adjustments contemplated by
Sections 2.01(a), (b), (c) and (d) and this Section 2.01(f), the relevant Banks
shall hold Loans of a particular Class pro rata according to their respective
Commitments and within each such Class the relevant Banks shall hold Loans of a
particular Type pro rata according to the amounts of their respective Commitment
Percentages and, in the case of Eurodollar Loans having different Interest
Periods, such Loans shall be allocated pro rata among the relevant Banks
according the amount of such Loans respectively held by such Banks.
CREDIT AGREEMENT
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(ii) No more than eight separate Interest Periods in respect
of Eurodollar Loans of a Class may be outstanding from each Bank at any one
time.
(g) ASSUMPTION OF EXISTING LOANS. By its execution of this
Agreement the Borrower hereby assumes all of the obligations of JNI and JCI, as
borrowers, under the Existing Credit Agreement with respect to the loans
thereunder that are being continued hereunder and all other amounts payable with
respect thereto that remain unpaid as of the Effective Date (except for amounts
contemplated to be paid as of the Effective Date under Section 6.01(f) hereof).
From and after the Effective Date, neither JNI nor JCI shall be borrowers
hereunder but shall each be a Subsidiary Guarantor party to the Subsidiary
Guarantee and fully liable thereunder.
2.02 BORROWINGS. The Borrower shall give the Agent (which
shall promptly notify the Banks) notice of each borrowing hereunder as provided
in Section 4.05 hereof. Not later than 12:00 noon New York time on the date
specified for each borrowing hereunder, each Bank shall make available the
amount of the Loan to be made by it on such date to the Agent, at account
designated by the Agent, in immediately available funds, for account of the
Borrower. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by depositing
the same, in immediately available funds, in an account of the Borrower
(designated by the Borrower) maintained with Chase.
2.03 CHANGES OF COMMITMENTS.
(a) VOLUNTARY. The Borrower shall have the right to
terminate or reduce the aggregate amount of the Revolving Credit Commitments at
any time or from time to time prior to the Revolving Credit Commitment
Termination Date; PROVIDED that (i) the Borrower shall give notice of each such
termination or reduction as provided in Section 4.05 hereof and (ii) each
partial reduction shall be in an aggregate amount at least equal to $1,000,000.
(b) REDUCTION OF REVOLVING CREDIT COMMITMENTS.
(i) The Revolving Credit Commitments shall automatically
terminate at the opening of business on the Revolving Credit Commitment
Termination Date.
CREDIT AGREEMENT
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(ii) The Revolving Credit Commitments shall automatically
reduce by the aggregate principal amount of each prepayment of
Revolving Credit Loans made as required by Section 2.09(b), 2.09(c),
2.09(d) or 2.09(e) hereof.
(iii) The Revolving Credit Commitments shall automatically
reduce by the amount of any prepayment of Revolving Credit Loans that
would have been required to have been made pursuant to Section 2.09(b),
2.09(c), 2.09(d) or 2.09(e) hereof but for the provisions of Section
2.09(g) hereof.
(iv) If any event of the type described in Section 2.09(b),
2.09(c), 2.09(d) or 2.09(e) hereof occurs on any date when no Loans are
outstanding and the Revolving Credit Commitments are in effect, then on
such date the Revolving Credit Commitments shall automatically reduce
by an amount equal to the aggregate principal amount of the Loans that
would have been required to have been repaid had Loans been outstanding
on such date in a principal amount equal to the aggregate amount of the
Revolving Credit Commitments in effect on such date.
(v) The Revolving Credit Commitments shall automatically
reduce to (x) $195,000,000 at the opening of business on the Quarterly
Date occurring in December, 2000, (y) $155,000,000 at the opening of
business on the Quarterly Date occurring in December, 2001 and (z)
$115,000,000 at the opening of business on the Quarterly Date occurring
in December, 2002, PROVIDED that, if at the opening of business on any
such Quarterly Date the amount of the Revolving Credit Commitments then
in effect is equal to or less than the respective amount specified
above, no further reductions in the Revolving Credit Commitments as of
such date shall be required pursuant to this Section 2.03(b)(v).
(c) EFFECT OF COMMITMENT REDUCTIONS. Commitments once
terminated or reduced may not be reinstated.
2.04 COMMITMENT FEES. The Borrower shall pay to the Agent
for account of each Bank having a PAD Commitment a commitment fee on the daily
average unused amount of such Bank's PAD Commitment, for the period from and
including such date as shall be agreed between such Bank and the Borrower to but
excluding the earlier of the date such PAD Commitment is terminated or expires,
at a rate per annum equal to 3/8 of 1%, except that for any day on which the
Total Debt Ratio is less than 4.50 to 1, commitment fees payable by the Borrower
hereunder
CREDIT AGREEMENT
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in respect of the PAD Commitments shall be calculated at a rate per annum equal
to 1/4 of 1% (PROVIDED that no reduction in commitment fee pursuant to this
sentence shall be effective earlier than the date three Business Days after the
date the Agent receives a certificate of the Borrower as to the related
reduction in the Total Debt Ratio and specifically requesting such reduction in
such commitment fee). The Borrower shall pay to the Agent for account of each
Revolving Credit Bank a commitment fee on the daily average unused amount of
such Bank's Revolving Credit Commitment, for the period from and including the
Effective Date to but excluding the earlier of the date such Commitment is
terminated or expires, at a rate per annum equal to 3/8 of 1%, except that for
any day on which the Total Debt Ratio is less than 4.50 to 1, commitment fees
payable by the Borrower hereunder in respect of the Revolving Credit Commitments
shall be calculated at a rate per annum equal to 1/4 of 1% (PROVIDED that no
reduction in commitment fee pursuant to this sentence shall be effective earlier
than the date three Business Days after the date the Agent receives a
certificate of the Borrower as to the related reduction in the Total Debt Ratio
and specifically requesting such reduction in such commitment fee). Accrued
commitment fees shall be payable on each Quarterly Date, commencing with the
first Quarterly Date after the Effective Date, in arrears and on the earlier of
the date the related Commitments are terminated or expire. Notwithstanding the
foregoing, as of the Effective Date the commitment fees with respect to the
Revolving Credit Commitments shall be determined on the basis of the Total Debt
Ratio as of the Effective Date as set forth in the certificate furnished
pursuant to Section 6.01(g) hereof.
2.05 LENDING OFFICES. The Loans of each Type made by each
Bank shall be made and maintained at such Bank's Applicable Lending Office for
Loans of such Type.
2.06 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure
of any Bank to make any Loan to be made by it on the date specified therefor
shall not relieve any other Bank of its obligation to make its Loan on such
date, but neither any Bank nor the Agent shall be responsible for the failure of
any other Bank to make a Loan to be made by such other Bank. The amounts payable
by the Borrower at any time hereunder and under the Notes to each Bank shall be,
as between the Borrower on the one hand and such Bank on the other hand, a
separate and independent debt and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement and the Notes, and it shall not
be necessary for any other Bank or the Agent to consent to, or be joined as an
additional party in, any proceedings for such purposes; PROVIDED that this
Section 2.06 shall not be construed
CREDIT AGREEMENT
- 41 -
to permit acceleration of the Loans or cancellation of the Commitments by any
Bank except in accordance with Section 9 hereof or as otherwise expressly
permitted by the terms hereof.
2.07 EVIDENCE OF DEBT.
(a) Each Bank shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Bank resulting from each Loan made or continued hereunder by such Bank,
including the amounts of principal and interest payable and paid to such Bank
from time to time hereunder.
(b) The Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made or continued hereunder, the Class and
Type thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Bank hereunder and (iii) the amount of any sum received by the
Agent hereunder for the account of the Banks and each Bank's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraph (a) or (b) of this Section 2.07 shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Bank or the Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the Loans
in accordance with the terms of this Agreement.
(d) Any Bank may request that Loans made or continued by it
hereunder be evidenced by a promissory note(s). In such event, the Borrower, at
its own expense, shall prepare, execute and deliver to such Bank a promissory
note(s) payable to the order of such Bank (or, if requested by such Bank, to
such Bank and its registered assigns) and substantially in the form of Exhibit
E-1, E-2, E-3, E-4 or E-5, as appropriate, and such note(s) shall be evidence of
such Loans (and all amounts payable in respect thereof).
2.08 CONVERSION OR CONTINUATION OF LOANS; OPTIONAL
PREPAYMENTS.
(a) CONVERSION OR CONTINUATION. Subject to Section 4.04
hereof, the Borrower shall have the right to Convert Loans of one Type into
Loans of the other Type or to Continue Loans of one Type as Loans of the same
Type, at any time or from time to time; PROVIDED that: (i) the Borrower shall
give the Agent notice of each such Conversion or Continuation as provided
CREDIT AGREEMENT
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in Section 4.05 hereof; and (ii) Eurodollar Loans may be Converted only on the
last day of an Interest Period for such Loans.
(b) OPTIONAL PREPAYMENTS. Subject to Section 4.04 hereof,
the Borrower shall have the right to prepay Loans in whole or in part without
premium or penalty (but subject to the penultimate sentence of Section 3.02
hereof) at any time or from time to time; PROVIDED that: (i) the Borrower shall
give the Agent notice of each such prepayment as provided in Section 4.05 hereof
(and, upon the date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder); (ii) Eurodollar Loans may be
prepaid at any time and from time to time, PROVIDED that the Borrower pays any
amounts owing under Section 5.05 hereof in the event of any such prepayment on a
date other than the last day of an Interest Period for such Loans; and (iii)
unless such prepayment is being made pursuant to Section 2.08(c) or 2.08(d),
each such prepayment shall, at the option of the Borrower, be applied to the
prepayment of Revolving Credit Loans, Term Loans, and/or PAD Loans (the amount
of the Loans of each Class and Series of Loans so prepaid to be applied ratably
to the installments of such Loans then outstanding).
(c) TERM LOAN AND PAD LOAN OPTIONAL PREPAYMENTS. On any
any Business Day (the "PREPAYMENT DATE") occurring in any calendar year, the
Borrower shall have the right to prepay in whole but not in part without premium
or penalty (but subject to the penultimate sentence of Section 3.02 hereof) the
one or two quarterly installments of principal of all Term Loans and PAD Loans
that are scheduled to be paid on the first and/or second (as the case may be)
Principal Payment Dates immediately following the Prepayment Date; PROVIDED
that: (i) the Borrower shall give the Agent notice of each such prepayment as
provided in Section 4.05 hereof (and, upon the date specified in any such notice
of prepayment, the amount to be prepaid shall become due and payable hereunder)
and a certificate of a Senior Officer with respect to each such prepayment,
which notice shall specify that such prepayment is being made pursuant to this
Section 2.08(c) and which certificate shall be in form and detail satisfactory
to the Agent and shall specify the amount of the Term Loans and PAD Loans to be
prepaid pursuant to this Section 2.08(c) and shall contain a calculation of
interest thereon to be paid as required by the penultimate sentence of Section
3.02 hereof; (ii) Euro- dollar Loans may be prepaid at any time and from time to
time, provided that the Borrower pays any amounts owing under Section 5.05
hereof in the event of any such prepayment on a date other than the last day of
an Interest Period for such Loans; (iii) the amount so prepaid (the "PREPAYMENT
AMOUNT") shall be equal to the
CREDIT AGREEMENT
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aggregate principal amount of all Term Loans and all PAD Loans scheduled to be
paid on the first and/or second (as the case may be) Principal Payment Dates
immediately following the Prepayment Date PLUS accrued interest on such Loans
through the Prepayment Date (it being understood that if the Agent shall receive
an amount more than the Prepayment Amount, then the amount of such prepayment in
excess of the Prepayment Amount shall be deemed to have been a prepayment of
Term Loans and PAD Loans made pursuant to Section 2.08(b) hereof); and (iv) the
Borrower may make only one prepayment pursuant to this Section 2.08(c) during
any calendar year.
(d) ESTIMATED EXCESS CASH FLOW. The Borrower shall have the
right to prepay without premium or penalty (but subject to the penultimate
sentence of Section 3.02 hereof) the amount the Borrower reasonably estimates
will be payable pursuant to Section 2.09(d) hereof on the next date for such
prepayment specified in said Section 2.09(d) (the "REQUIRED PREPAYMENT DATE");
PROVIDED that: (i) the Borrower shall give the Agent notice of each such
prepayment as provided in Section 4.05 hereof (and, upon the date specified in
any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder) and a certificate of a Senior Officer with respect to each
such prepayment, which notice shall specify that such prepayment is being made
pursuant to this Section 2.08(d) and which certificate shall be in form and
detail satisfactory to the Agent and shall contain a calculation of estimated
Excess Cash Flow computed with respect to the related Required Prepayment Date
and prepaid pursuant to this Section 2.08(d); (ii) Eurodollar Loans may be
prepaid at any time and from time to time, provided that the Borrower pays any
amounts owing under Section 5.05 hereof in the event of any such prepayment on a
date other than the last day of an Interest Period for such Loans; (iii) each
such prepayment shall be applied in the manner provided in said Section 2.09(d);
(iv) the Borrower may make only one prepayment pursuant to this Section 2.08(d)
during any calendar year; and (v) if the actual amount of the Loans that would
otherwise have been required to be prepaid pursuant to said Section 2.09(d) on
the Required Prepayment Date determined in accordance with said Section 2.09(d)
shall exceed the estimated amount paid by the Borrower pursuant to this Section
2.08(d), then the Borrower shall make a prepayment in an amount equal to such
excess in accordance with said Section 2.09(d) on or before the Required
Prepayment Date (it being understood that if such estimated amount exceeds such
actual amount, the Borrower shall not be entitled to any refund with respect to
such excess and such excess shall be applied to the prepayment of the next
Scheduled Payment or, if the Term Loans and PAD Loans shall have been paid in
full, to
CREDIT AGREEMENT
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the repayment of Revolving Credit Loans and the reduction of the Revolving
Credit Commitments).
2.09 MANDATORY PREPAYMENTS.
(a) REVOLVING CREDIT COMMITMENT REDUCTIONS. If, after
giving effect to any termination or reduction of the Revolving Credit
Commitments pursuant to Section 2.03 hereof, the aggregate unpaid principal
amount of the Revolving Credit Loans exceeds the aggregate amount of the
Revolving Credit Commitments as then in effect, the Borrower shall prepay
Revolving Credit Loans on the date of such termination or reduction in an
aggregate amount equal to the amount of such excess.
(b) DISPOSITIONS. If, at any time or from time to time, the
Borrower or any of its Subsidiaries shall receive Net Proceeds from any
Disposition (other than any Disposition permitted under clauses (i), (ii), (v)
and (vi) of Section 8.05(c) hereof, but, in the case of said clause (ii), only
to the extent such Net Proceeds are applied (or are committed to be applied) by
the Borrower or such Subsidiary within 90 days of such Disposition to purchase
like Property to be used in the ordinary course of its business), the Borrower
shall, within 240 days after receipt of such Net Proceeds (subject to the
proviso below, if such proceeds have not been applied by such 240th day, then on
such 240th day) unless the Borrower shall have used all or a portion of such
proceeds to consummate an Acquisition, apply or cause to be applied (as provided
in Section 2.09(f) hereof) to the prepayment of principal of the Loans an amount
equal to the lesser of (i) the amount of such Net Proceeds or (ii) the amount
thereof remaining after the consummation of such Acquisition; PROVIDED that if
on such 240th day such proceeds have not been so used but the Borrower or any of
its Subsidiaries shall have entered into an agreement with respect to an
Acquisition, then, within 90 days thereafter, the Borrower or such Subsidiary
may use all or a portion of such Net Proceeds (but not in excess of the
aggregate amount of all cash consideration and all cash costs and expenses in
respect of such Acquisition) to consummate such Acquisition, and any portion of
such Net Proceeds not so used shall be applied to prepay the Loans as provided
herein; and, PROVIDED FURTHER that the Borrower shall have no obligations to
make any such application in respect of the Net Proceeds received in respect of
any single Disposition unless and until the aggregate amount of all Net Proceeds
received in respect of all Dispositions effected on and after the Effective Date
exceeds $2,000,000, in which case an amount equal to the amount of such excess
shall be so applied.
CREDIT AGREEMENT
- 45 -
(c) CASUALTY EVENTS. Within two Business Days after receipt
of any proceeds by the Borrower or any of its Subsidiaries in respect of any
Casualty Event affecting any Property of the Borrower or any of its Subsidiaries
(except to the extent such proceeds are to be applied (or are committed to be
applied) within 180 days after the date of receipt of such proceeds towards the
repair, reconstruction or replacement of such Property, and if such proceeds
have not been so utilized by such 180th day, then on such 180th day) the
Borrower shall apply, or cause to be applied, an amount equal to the Net
Proceeds of such Casualty Event or such unutilized portion thereof (as provided
in Section 2.09(f) hereof), to prepay principal of the Loans, PROVIDED that the
Borrower shall have no obligation to make any such application in respect of the
Net Proceeds received in respect of any single Casualty Event unless the amount
of such Net Proceeds exceeds $50,000, in which case an amount equal to the full
amount received shall be so applied.
(d) EXCESS CASH FLOW. Not later than five Business Days
after receipt by the Agent of the annual consolidated financial statements of
the Borrower and its Subsidiaries to be delivered by the Borrower pursuant to
Section 8.01(b) hereof (or, if such consolidated financial statements are not
received by the last day on which they are required to be delivered, not later
than five Business Days after the last day on which such financial statements
are required by said Section 8.01(b) to be so delivered) in respect of each
fiscal year of the Borrower (commencing with fiscal year 1999), the Borrower
shall apply an amount equal to 50% of Excess Cash Flow for such fiscal year or
the excess of such amount over the estimated Excess Cash Flow prepayment for
such fiscal year made pursuant to Section 2.08(d) hereof (as provided in Section
2.09(f) hereof) to the prepayment of principal of the Loans; PROVIDED that the
Borrower shall not be required to make any prepayment under this Section 2.09(d)
with respect to any fiscal year if, as of the last day of such fiscal year, the
Total Debt Ratio is less than 3.0 to 1 (as demonstrated in the Compliance
Certificate delivered under Section 8.01 hereof accompanying the audited
consolidated financial statements of the Borrower as of the end of and for such
fiscal year).
(e) EQUITY ISSUANCES AND SUBORDINATED DEBT. Not later than
240 days after receipt by the Borrower of Net Proceeds of any Equity Issuance
(other than the proceeds of the Borrower's initial public offering received as
of the Effective Date and applied as contemplated by Section 6.01(f) hereof) or
the issuance or incurrence of any Subordinated Debt permitted under Section
8.07(g) hereof after the Effective Date (and, subject to the proviso below, if
such proceeds have not been applied by such
CREDIT AGREEMENT
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240th day, then on such 240th day) unless the Borrower shall have used all or a
portion of such proceeds to consummate an Acquisition, the Borrower shall apply
or cause to be applied (as provided in Section 2.09(f) hereof) to the prepayment
of principal of the Loans an amount equal to the lesser of (i) the amount of
such Net Proceeds or (ii) the amount thereof remaining after the consummation of
such Acquisition; PROVIDED that if on such 240th day such proceeds have not been
so used but the Borrower or any of its Subsidiaries shall have entered into an
agreement with respect to an Acquisition, then, within 90 days thereafter, the
Borrower or such Subsidiary may use all or a portion of such proceeds (but not
in excess of the aggregate amount of all cash consideration and all cash costs
and expenses in respect of such Acquisition) to consummate such Acquisition, and
any portion of such proceeds not so used shall be applied to prepay the Loans as
provided herein.
(f) APPLICATION OF PAYMENTS. Prepayments of Loans made
pursuant to clauses (b), (c), (d) and (e) of this Section 2.09 shall be applied,
first, to the Term Loans and PAD Loans pro rata in accordance with the
respective aggregate principal amounts of the Loans of such Classes and, with
respect to PAD Loans, pro rata in accordance with the aggregate principal
amounts of the PAD Loans of each Series (the amount of the Loans of each such
Class and Series so prepaid to be applied ratably to the installments of such
Loans then outstanding) and, if the Term Loans and PAD Loans shall have been
paid in full, to the Revolving Credit Loans.
(g) LIMITATIONS ON PREPAYMENTS OF LOANS. Notwithstanding
anything in this Section 2.09 to the contrary:
(i) if any Permitted Additional Debt is outstanding at the
time any prepayment of Loans is required to be made pursuant to
paragraph (b), (c), (d) or (e) above, then the maximum amount of Net
Proceeds or Excess Cash Flow, as the case may be, that shall be
required to be applied to the prepayment of the Loans and the reduction
of the Revolving Credit Commitments pursuant to said paragraph (b),
(c), (d) or (e) at such time shall be equal to (x) the product (the
"ADJUSTED AMOUNT") of (I) the amount of Net Proceeds or Excess Cash
Flow, as the case may be, that would otherwise be required to be so
applied but for the provisions of this Section 2.09(g)(i) (the
"ORIGINAL AMOUNT") MULTIPLIED BY (II) a fraction, the numerator of
which is the sum of the aggregate outstanding principal amount of the
Loans and the unused amount of the Revolving Credit Commitments at such
time and the denominator of which is the sum of the aggregate
outstanding principal amount of the Loans, the
CREDIT AGREEMENT
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unused Revolving Credit Commitments and the aggregate outstanding
principal amount of Permitted Additional Debt at such time PLUS (y)
the amount, if any, by which (I) the Original Amount MINUS the
Adjusted Amount EXCEEDS (II) the amount of any prepayment of Permitted
Additional Debt that is required to be made simultaneously with the
prepayment of the Loans pursuant to paragraph (b), (c), (d) or (e) of
this Section 2.09; and
(ii) no prepayment of Revolving Credit Loans pursuant to any
of paragraph (b), (c), (d), (e) or (f) above shall be required to be
made except to the extent that on the date such prepayment is required
to be made the amount otherwise required to be prepaid exceeds the
aggregate unused amount of the Revolving Credit Commitments in effect
on such date.
(h) NOTICE; DELIVERY OF CERTIFICATE. The Borrower shall give
notice to the Agent of each prepayment pursuant to this Section 2.09 in the same
manner and at the same time as is required for any optional prepayment pursuant
to Section 2.08 hereof. At the time it makes any prepayment of the Loans as
required by paragraph (b), (c), (d), (e) or (f) above or, if no prepayment of
the Loans is required by paragraph (e) above, at the time it receives Net
Proceeds of any Equity Issuance, the Borrower will deliver to the Agent a
certificate of a Senior Officer, in form and detail satisfactory to the Agent,
containing calculations of Excess Cash Flow or Net Proceeds or the Total Debt
Ratio in respect of, or after giving effect to, the related Disposition,
Casualty Event or Equity Issuance, as the case may be, and any deductions
therefrom in respect of amounts that are not required to be prepaid pursuant to
this Section 2.09, and specifying the amount of each such prepayment or, if no
prepayment of Loans is required by paragraph (e) or (g) above, specifying that
no prepayment of the Loans is required and also specifying the amount of the
reduction pursuant to Section 2.03(b) hereof, if any, in the Revolving Credit
Commitments.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF LOANS.
(a) The Borrower hereby promises to pay to the Agent for
account of each Term Loan Bank the aggregate principal amount of the Term Loans
held by such Bank in twenty-three consecutive quarterly installments payable on
the Principal Payment Dates, the aggregate principal amount to be paid on each
Principal Payment Date in respect of all Term Loans held by all Term Loan Banks
to be in the amount specified below:
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Principal Payment Date Aggregate Amount
OCCURRING IN: OF PAYMENT
---------------------- ------------------
June 1997 $10,000,000
September 1997 $10,000,000
December 1997 $10,000,000
March 1998 $13,000,000
June 1998 $13,000,000
September 1998 $13,000,000
December 1998 $13,000,000
March 1999 $14,937,500
June 1999 $14,937,500
September 1999 $14,937,500
December 1999 $14,937,500
March 2000 $16,937,500
June 2000 $16,937,500
September 2000 $16,937,500
December 2000 $16,937,500
March 2001 $18,937,500
June 2001 $18,937,500
September 2001 $18,937,500
December 2001 $18,937,500
March 2002 $17,750,000
June 2002 $17,750,000
September 2002 $17,750,000
December 2002 $17,750,000
(b) The Borrower hereby promises to pay to the Agent for
account of each Revolving Credit Bank the full outstanding principal amount of
such Bank's Revolving Credit Loans, and each of such Bank's Revolving Credit
Loans shall mature, on the Revolving Credit Commitment Termination Date.
(c) The Borrower hereby promises to pay to the Agent for
account of each NEN Acquisition Loan Bank the aggregate principal amount of the
NEN Acquisition Loans held by such Bank in twenty-five consecutive quarterly
installments payable on the Principal Payment Dates, the aggregate principal
amount to be paid on each Principal Payment Date in respect of all NEN
Acquisition Loans held by all NEN Acquisition Loan Banks to be in the amount
specified below:
Principal Payment Date Aggregate Amount
OCCURRING IN/ON: OF PAYMENT
---------------------- -----------------
June 1997 $ 742,500
September 1997 $ 742,500
December 1997 $ 742,500
March 1998 $ 907,500
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June 1998 $ 907,500
September 1998 $ 907,500
December 1998 $ 907,500
March 1999 $1,072,500
June 1999 $1,072,500
September 1999 $1,072,500
December 1999 $1,072,500
March 2000 $1,237,500
June 2000 $1,237,500
September 2000 $1,237,500
December 2000 $1,237,500
March 2001 $1,361,250
June 2001 $1,361,250
September 2001 $1,361,250
December 2001 $1,361,250
March 2002 $1,402,500
June 2002 $1,402,500
September 2002 $1,402,500
December 2002 $1,402,500
March 2003 $1,897,500
May 5, 2003 $1,897,500
(d) The Borrower hereby promises to pay to the Agent for
account of each New Britain Acquisition Loan Bank the aggregate principal amount
of the New Britain Acquisition Loans held by such Bank in twenty-five
consecutive quarterly installments payable on the Principal Payment Dates, the
aggregate principal amount to be paid on each Principal Payment Date in respect
of all New Britain Acquisition Loans held by all New Britain Acquisition Loan
Banks to be in the amount specified below:
Principal Payment Date Aggregate Amount
OCCURRING IN/ON: OF PAYMENT
---------------------- -----------------
March 1997 $292,500
June 1997 $292,500
September 1997 $292,500
December 1997 $292,500
March 1998 $357,500
June 1998 $357,500
September 1998 $357,500
December 1998 $357,500
March 1999 $422,500
June 1999 $422,500
September 1999 $422,500
December 1999 $422,500
March 2000 $487,500
June 2000 $487,500
CREDIT AGREEMENT
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September 2000 $487,500
December 2000 $487,500
March 2001 $536,250
June 2001 $536,250
September 2001 $536,250
December 2001 $536,250
March 2002 $552,500
June 2002 $552,500
September 2002 $552,500
December 2002 $552,500
March 2003 $552,500
May 1, 2003 $942,500
(e) The Borrower hereby promises to pay to the Agent for
the account of each Bank holding PAD Loans (other than NEN Acquisition Loans
and New Britain Acquisition Loans) the aggregate principal amount of such
Loans held by such Bank on such days and at such times as shall be agreed by
such Bank and the Borrower, PROVIDED that if the proceeds (or any part of the
proceeds) of such Loans are to be used to finance Permitted Acquisitions, the
Borrower shall not, except upon the acceleration of such Loans following an
Event of Default, agree or be contractually obligated to repay such Loans more
quickly than would be permitted by Section 8.07(e)(i) hereof if such Loans were
Permitted Additional Debt.
3.02 INTEREST. The Borrower hereby promises to pay to the
Agent for account of each Bank interest on the unpaid principal amount of each
Loan made by such Bank for the period from and including the date of such Loan
to but excluding the date such Loan shall be paid in full, at the following
rates per annum:
(a) during such periods such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) PLUS the Applicable Margin;
and
(b) during such periods such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such
Loan for such Interest Period PLUS the Applicable Margin.
Notwithstanding the foregoing, (x) upon the occurrence and during the
continuance of an Event of Default specified in clause (a) of Section 9 hereof
arising by reason of a failure to pay principal of or interest on any of the
Loans, the Borrower will (to the fullest extent permitted by the law of the
State of New York) pay to the Agent for account of each Bank interest at the
applicable Post-Default Rate on the full outstanding principal amount of
CREDIT AGREEMENT
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each of such Bank's Loans (whether or not due and payable) and (y) upon the
occurrence and during the continuance of an Event of Default specified in said
clause (a) arising by reason of a failure to pay any other amount, the Borrower
will (to the fullest extent permitted by the law of the State of New York) pay
to the Agent for account of the Agent or any Bank to which such amount is owed
interest on such amount at the applicable Post- Default Rate. Accrued interest
on each Loan shall be payable (i) in the case of each Base Rate Loan, quarterly
on the Quarterly Dates, commencing with the first Quarterly Date occurring after
the Effective Date, (ii) in the case of each Eurodollar Loan, on the last day of
each Interest Period therefor and, if such Interest Period is longer than three
months, at three month intervals following the first day of such Interest
Period, and (iii) in the case of each Loan, upon the payment or prepayment
thereof or the Conversion of such Loan to a Loan of the other Type (but only on
the principal amount so paid, prepaid or Converted), except that interest
payable at the Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided for herein or any
change therein, the Agent shall give notice thereof to the Banks to which such
interest is payable and the Borrower.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement, the Notes and the other Credit Documents shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Agent at an account designated by the Agent, not later than
11:00 a.m. New York time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) Any Bank for whose account any such payment is to be
made, may (but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the Borrower
with such Bank (with notice to the Borrower and the Agent, PROVIDED that the
failure of such Bank to so notify the Borrower and the Agent shall not affect
the validity of the actions taken by such Bank as permitted by this paragraph
(b)).
CREDIT AGREEMENT
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(c) The Borrower shall, at the time of making each payment
under this Agreement or any Note for account of any Bank, specify to the Agent
(which shall notify the intended recipients thereof) the Loans or other amounts
payable by the Borrower hereunder to which such payment is to be applied in
which case such payment shall, subject to Section 4.02 hereof and unless an
Event of Default shall have occurred and be continuing, be applied as so
specified (and in the event that the Borrower fail to so specify, or if an Event
of Default has occurred and is continuing, the Agent may distribute such payment
to the Banks and/or the other Person(s) to which amounts are payable by the
Borrower hereunder in such manner as the Majority Banks or, in the absence of
instructions from the Majority Banks, the Agent may determine to be appropriate,
subject to Section 4.02 hereof).
(d) Each payment received by the Agent under this Agreement
or any Note for account of a Bank shall be paid promptly to such Bank in
immediately available funds, for account of such Bank's Applicable Lending
Office for the Loan in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or
any Note would otherwise fall on a day which is not a Business Day such payment
shall be made on the immediately preceding Business Day.
4.02 PRO RATA TREATMENT. Except to the extent otherwise
provided herein: (a) each payment of commitment fees under Section 2.04 hereof
in respect of Commitments of a particular Class and Series shall be made for
account of the relevant Banks, and each termination or reduction of the amount
of the Commitments of a particular Class and Series under Section 2.03 hereof
shall be applied to the respective Commitments of such Class and Series of the
relevant Banks, pro rata according to the amounts of their Commitment
Percentages; (b) the making, Conversion and Continuation of Revolving Credit
Loans, Term Loans or PAD Loans of a particular Series of a particular Type
(other than Conversions provided for by Section 5.04 hereof) shall be made pro
rata among the relevant Banks according to the amounts of their respective
Commitment Percentages and Eurodollar Loans of a particular Class and Series
made, Converted or Continued on the same day but having different Interest
Periods shall be allocated pro rata among the relevant Banks according to the
amounts of such Loans respectively held by such Banks; (c) each payment or
prepayment of Revolving Credit Loans, Term Loans or PAD Loans of a particular
Series by the Borrower shall be made for account of the relevant Banks pro rata
in accordance with the respective unpaid principal amounts of such Loans held by
the relevant Banks; and (d) each payment of interest on Revolving
CREDIT AGREEMENT
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Credit Loans, Term Loans or PAD Loans of a particular Series shall be made for
account of the relevant Banks pro rata in accordance with the amounts of the
interest on such Loans then due and payable to such Banks.
4.03 COMPUTATIONS. Interest on Eurodollar Loans and
commitment fees shall be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day) occurring in
the period for which payable and interest on Base Rate Loans shall be computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable. Notwithstanding the foregoing, interest on Base Rate
Loans determined by reference to the Federal Funds Rate shall be computed on the
basis of a year of 360 days.
4.04 MINIMUM AMOUNTS. Except for Conversions made pursuant
to Section 5.04 hereof and prepayments made pursuant to Section 2.08(d) or 2.09
hereof, each borrowing, Conversion, Continuation and prepayment of principal of
(a) Base Rate Loans shall be in an amount equal to $2,000,000 or a multiple of
$1,000,000 ($500,000 in the case of PAD Loans of each Series) in excess thereof
and (b) Eurodollar Loans shall be in an amount equal to $5,000,000 ($1,000,000
in the case of PAD Loans of each Series) or a multiple of $1,000,000 ($500,000
in the case of PAD Loans of each Series) in excess thereof (borrowings,
Conversions, Continuations or prepayments of or into Loans of different Types
or, in the case of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions, Continuations
and prepayments for purposes of the foregoing, one for each Type or Interest
Period). Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of Eurodollar Loans having the same Interest Period
shall be at least equal to $5,000,000 ($1,000,000 in the case of PAD Loans of
each Series) and, if any Eurodollar Loans would otherwise be in a lesser
principal amount for any period, such Loans shall be Base Rate Loans during such
period.
4.05 CERTAIN NOTICES. Notices by the Borrower to the Agent
of terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans, of Types of Loans and of the duration of
Interest Periods shall be irrevocable and shall be effective only if received by
the Agent not later than 10:00 a.m. New York time on the number of Business Days
prior to the date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
CREDIT AGREEMENT
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NUMBER OF
NOTICE BUSINESS DAYS PRIOR
---------- -------------------
Termination or
reduction of Commitments 2
Borrowing or prepayment of,
or Conversion into,
Base Rate Loans (other than
any such borrowing on the
Effective Date) 1
Borrowing of Base Rate
Loans on the Effective
Date same day
Borrowing or prepayment of,
Conversion into,
Continuation as, or
duration of Interest Period
for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 4.04 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid and the
date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day). Each such notice of borrowing or Continuation of, or Conversion
into, a Eurodollar Loan shall specify the duration of the Interest Period
therefor. The Agent shall promptly notify the Banks of the contents of each such
notice. In the event that the Borrower fail to select the Type of Loan, or the
duration of any Interest Period for any Eurodollar Loan, within the time period
and otherwise as provided in this Section 4.05, such Loan (if outstanding as a
Eurodollar Loan) will be automatically Converted into a Base Rate Loan on the
last day of the then current Interest Period for such Loan or (if outstanding as
a Base Rate Loan) will remain as, or (if not then outstanding) will be made as,
a Base Rate Loan.
4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Bank or the Borrower (the "PAYOR") prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Bank) the
proceeds of a Loan to be made by such Bank hereunder or (in the case of the
Borrower) a payment to the Agent for account of one or more of the Banks
hereunder (such payment being herein called the "REQUIRED
CREDIT AGREEMENT
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PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient(s) of such payment shall, on demand, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date (the "ADVANCE
DATE") such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such day and, if such recipient(s) shall fail promptly to make such payment, the
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, PROVIDED that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Agent within three
Business Days of the Advance Date, then, retroactively to the Advance Date, the
Payor and the recipient(s) shall each be obligated to pay interest on the
Required Payment as follows:
(i) if the Required Payment shall represent a payment to be
made by the Borrower to the Banks, the Borrower and the recipient(s)
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the Post-Default Rate
(and, in case the recipient(s) shall return the Required Payment to the
Agent, without limiting the obligation of the Borrower under Section
3.02 hereof to pay interest to such recipient(s) at the Post-Default
Rate in respect of the Required Payment) and
(ii) if the Required Payment shall represent proceeds of a Loan to
be made by the Banks to the Borrower, the Payor and the Borrower shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the rate of interest provided for
such Required Payment pursuant to Section 3.02 hereof (and, in case the
Borrower shall return the Required Payment to the Agent, without
limiting any claim the Borrower may have against the Payor in respect
of the Required Payment).
4.07 SHARING OF PAYMENTS, ETC.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a Bank may
otherwise have, each Bank shall be entitled, at its option, to offset balances
held by it for
CREDIT AGREEMENT
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account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Bank's Loans, or
any other amount payable to such Bank hereunder, which is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case it shall promptly notify the Borrower and the Agent thereof, PROVIDED that
such Bank's failure to give such notice shall not affect the validity thereof.
(b) (i) At any time and from time to time prior to the time
that all of the Loans are declared or become due and payable pursuant to Section
9 hereof and all of the Commitments hereunder are terminated pursuant to said
Section 9, if any Bank shall obtain payment of any principal of or interest on
any Loan of any Class and Series made by it to the Borrower under this Agreement
or payment of any other amount relating to the Loans or Commitments of such
Class and Series under this Agreement or any other Credit Document through the
exercise of any right of set-off, banker's lien or counterclaim or similar right
or otherwise, and, as a result of such payment, such Bank shall have received a
greater percentage of the principal of or interest on the Loans or Commitments
of such Class and Series or such other amounts relating to the Loans of such
Class and Series then due hereunder by the Borrower to such Bank than the
percentage received by any other Banks, it shall promptly purchase from such
other Banks participations in (or, if and to the extent specified by such Bank,
direct interests in) the Loans of such Class and Series made by such other Banks
(or in interest due thereon, as the case may be) or such other amounts relating
to the Loans or Commitments of such Class and Series, respectively, in such
amounts and make such other adjustments from time to time as shall be equitable,
to the end that all the Banks shall share the benefit of such excess payment
(net of any expenses which may be incurred by such Bank in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid principal
and/or interest on the Loans of such Class and Series held by each of the Banks
or such other amounts relating to the Loans or Commitments of such Class and
Series owing to each of the Banks. To such end all the Banks shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
(ii) At any time from and after the time that all of the Loans
are declared or become due and payable pursuant to Section 9 hereof and all of
the Commitments hereunder are terminated pursuant to said Section 9, if any Bank
shall obtain payment of any principal of or interest on any Loan made by it to
the Borrower under this Agreement or payment of any other amount
CREDIT AGREEMENT
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under this Agreement or any other Credit Document through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or otherwise,
and, as a result of such payment, such Bank shall have received a greater
percentage of the principal of or interest on the Loans or such other amounts
then due hereunder by the Borrower to such Bank than the percentage received by
any other Banks, it shall promptly purchase from such other Banks participations
in (or, if and to the extent specified by such Bank, direct interests in) the
Loans made by such other Banks (or in interest due thereon, as the case may be)
or such other amounts, respectively, in such amounts and make such other
adjustments from time to time as shall be equitable, to the end that all the
Banks shall share the benefit of such excess payment (net of any expenses which
may be incurred by such Bank in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal and/or interest on the Loans held
by each of the Banks or such other amounts owing to each of the Banks. To such
end all the Banks shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(c) The Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Loans made by other Banks (or in
interest due thereon, as the case may be) may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Bank were a direct holder of Loans in the amount of such
participation.
(d) Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If, under any applicable bankruptcy,
insolvency or other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
Section 5. YIELD PROTECTION AND ILLEGALITY.
5.01 ADDITIONAL COSTS.
(a) The Borrower shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be
CREDIT AGREEMENT
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necessary to compensate it for any costs which such Bank determines are
attributable to its making or maintaining of any Eurodollar Loans or its
obligation to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Bank hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts receivable being
herein called "ADDITIONAL COSTS"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Notes in respect of any of such
Loans (other than taxes imposed on or measured by the overall net
income of such Bank or of its Applicable Lending Office for any of such
Loans by the jurisdiction in which such Bank has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including any of such Loans or any deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof), or any commitment of such Bank (including the Commitments of
such Bank hereunder); or
(iii) imposes any other condition affecting this Agreement or its
Notes (or any of such extensions of credit or liabilities) or
Commitments.
If any Bank requests compensation from the Borrower under this
Section 5.01(a), the Borrower may, by notice to such Bank (with a copy to the
Agent), suspend the obligation of such Bank to make or Continue Eurodollar
Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable).
(b) Without limiting the effect of the provisions of Section
5.01(a) hereof, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of
CREDIT AGREEMENT
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liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Borrower (with a copy to the Agent), the obligation of such Bank to make
or Continue, or to Convert Base Rate Loans into, Eurodollar Loans hereunder
shall be suspended until such Regulatory Change ceases to be in effect (in which
case the provisions of Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Borrower shall pay directly to
each Bank from time to time on request such amounts as such Bank may determine
to be necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by such Bank (or any Applicable Lending Office),
pursuant to any law or regulation or any interpretation, directive or request
(whether or not having the force of law) of any court or governmental or
monetary authority (i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or governmental or
supervisory authority, of capital in respect of its Commitments or Loans (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Bank (or any Applicable Lending
Office) to a level below that which such Bank (or any Applicable Lending Office)
could have achieved but for such law, regulation, interpretation, directive or
request).
(d) Each Bank will notify the Borrower of any event occurring
after the date of this Agreement that will entitle such Bank to compensation
under paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but
in any event within 60 days, after such Bank obtains actual knowledge thereof;
PROVIDED, however, that if any Bank fails to give such notice within 60 days
after it obtains actual knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section 5.01 in respect of any
costs resulting from such event, only be entitled to payment under this Section
5.01 for costs incurred from and after the date 60 days prior to the date that
such Bank does give such notice; and PROVIDED, FURTHER, that each Bank will
designate a different Applicable Lending Office for the Loans of such Bank
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such Bank,
be disadvantageous to such Bank, except that such Bank shall have no obligation
to designate an Applicable Lending Office located in the United States of
America. Each Bank will furnish to the Borrower a certificate setting forth the
basis and amount of each request by such Bank
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for compensation under paragraph (a) or (c) of this Section 5.01. Determinations
and allocations by any Bank for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to Section 5.01(a) or (b) hereof, or of the
effect of capital maintained pursuant to Section 5.01(c) hereof, on its costs or
rate of return of maintaining Loans or its obligation to make Loans, or on
amounts receivable by it in respect of Loans, and of the amounts required to
compensate such Bank under this Section 5.01, shall be conclusive, PROVIDED that
such determinations and allocations are made on a reasonable basis.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of the Eurodollar
Base Rate for any Interest Period:
(a) the Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) if the related Loans are Revolving Credit Loans, the
Majority Revolving Credit Banks or, if the related Loans are Term
Loans, the Majority Term Loan Banks (determined, solely for the
purposes of this Section 5.02(b), as if no PAD Loans or PAD Loan
Commitments were outstanding) or, if the related Loans are PAD Loans of
a particular Series, Banks holding at least 60% of the aggregate
outstanding principal amount of the PAD Loans of such Series determine
(which determination shall be conclusive) and notify the Agent that the
relevant rates of interest referred to in the definition of "Eurodollar
Base Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans for such Interest Period is to be
determined are not likely adequately to cover the cost to such Banks of
making or maintaining Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower and each of the Banks which are to make
or hold such Loans prompt notice thereof, and so long as such condition remains
in effect, such Banks shall be under no obligation to make additional Eurodollar
Loans, to Continue Eurodollar Loans or to Convert Base Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans held by such Banks,
either prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base
Rate Loans in accordance with Section 2.08 hereof.
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5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar Loans
hereunder, then such Bank shall promptly notify the Borrower thereof (with a
copy to the Agent) and such Bank's obligation to make or Continue, or to Convert
Base Rate Loans into, Eurodollar Loans shall be suspended until such time as
such Bank may again make and maintain Eurodollar Loans (in which case the
provisions of Section 5.04 hereof shall be applicable).
5.04 TREATMENT OF AFFECTED LOANS. If the obligation of any
Bank to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
is suspended pursuant to Section 5.01 or 5.03 hereof, such Bank's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion effected as permitted by Section 5.01(b) or 5.03 hereof, on
such earlier date as such Bank may specify to the Borrower with a copy to the
Agent) and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 5.01 or 5.03 hereof which gave rise to such
Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans of any
Class have been so Converted, all payments and prepayments of principal
which would otherwise be applied to such Bank's Eurodollar Loans of
such Class shall be applied instead to its Base Rate Loans of such
Class; and
(b) all Loans which would otherwise be made or Continued by
such Bank as Eurodollar Loans shall be made or Converted and Continued
instead as Base Rate Loans and all Base Rate Loans of such Bank which
would otherwise be Converted into Eurodollar Loans shall be made as or
shall remain as Base Rate Loans.
If such Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.01 or 5.03 hereof which gave rise to the
Conversion of such Bank's Eurodollar Loans of any Class pursuant to this Section
5.04 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans of such Class
held by other Banks are outstanding, such Bank's Base Rate Loans of such Class
shall be automatically Converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all Loans of such Class held by
such Banks and by such Bank are held pro rata (as to principal
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amounts, Types and Interest Periods) in accordance with their respective
Commitments.
5.05 COMPENSATION. The Borrower shall pay to the Agent for
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank determines
are attributable to:
(a) any payment, prepayment (including any mandatory
prepayment) or Conversion of a Eurodollar Loan made by such Bank for
any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 9 hereof but excluding any prepayment made as
of the Effective Date) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) to borrow a Eurodollar
Loan from such Bank on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof or
to Convert a Base Rate Loan into a Eurodollar Loan on the date for such
Conversion, or to Continue a Eurodollar Loan on the date for such
Continuation, in each case as specified in the relevant notice of
Conversion or Continuation, as the case may be, given pursuant to
Section 2.08(a) hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed, Continued or Converted for the period from the date
of such payment, prepayment, Conversion or failure to borrow, Continue or
Convert to the last day of the then current Interest Period for such Loan (or,
in the case of a failure to borrow, Continue or Convert, the Interest Period for
such Loan which would have commenced on the date specified for such borrowing,
Continuation or Conversion) at the applicable rate of interest for such Loan
provided for herein over (ii) the interest component of the amount such Bank
would have bid in the London interbank market for Dollar deposits of leading
banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Bank).
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Section 6. CONDITIONS PRECEDENT.
6.01 EFFECTIVENESS. The effectiveness of this Agreement is
subject to the conditions precedent that, on or prior to June 30, 1997, the
Agent shall have received the following documents (with sufficient copies for
each Bank), each of which shall be reasonably satisfactory to the Agent in form
and substance:
(a) CORPORATE DOCUMENTS. Certificates of the appropriate
governmental authority as to the good standing of each Obligor in its
jurisdiction of organization, certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
or other authority for each of them (including, without limitation,
board of director resolutions and evidence of the incumbency of
officers) with respect to the execution, delivery and performance of
this Agreement and each other Transaction Document to which each is a
party and each other document to be delivered by any of them from time
to time in connection herewith and therewith and the Loans hereunder
(and the Agent and each Bank may conclusively rely on such certificate
until it receives notice in writing from the Borrower to the contrary).
(b) SENIOR OFFICER'S CERTIFICATE. A certificate of a
Senior Officer, dated the Effective Date, to the effect set forth in
clauses (i) and (ii) of Section 6.02(a) hereof.
(c) BORROWER SECURITY AGREEMENT. The Borrower Security
Agreement, substantially in the form of Exhibit A hereto, duly executed
by the Borrower and the Agent. In addition, the Borrower shall have
taken such other action as the Agent shall have requested in order to
perfect the security interests created pursuant to the Borrower
Security Agreement, including, without limitation, delivering to the
Agent (i) stock certificates with undated stock powers executed in
blank, (ii) copies of duly completed and executed Uniform Commercial
Code financing statements with respect to the Property covered by the
Security Agreement, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements, in
proper form for filing in all jurisdictions in which such filing is
necessary or appropriate to establish, perfect, protect and preserve
the rights, titles, interests, remedies, powers, privileges and Liens
of the Agent, for the benefit of the Banks, thereunder, and (iii) the
results of record searches, by a Person satisfactory to the Agent, of
the Uniform Commercial Code filings which may have been filed with
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respect to the Property of the Borrower covered thereby and such other
Persons or names as the Agent shall specify, in the filing offices and
other records in each of the jurisdictions requested by the Agent, and
of judgment and tax liens with respect to the Borrower.
(d) JCI/JNI SECURITY AGREEMENT. Amendment No. 1 to the JCI/JNI
Security Agreement, substantially in the form of Exhibit B-1 hereto,
duly executed by each of the Subsidiary Guarantors and the Agent. In
addition, the Subsidiary Guarantors shall have taken such other action
(including, without limitation, delivering to the Agent, for filing,
appropriately completed and duly executed copies of Uniform Commercial
Code financing statements) as the Agent shall have requested in order
to perfect the security interests created pursuant to the JCI/JNI
Security Agreement (to the extent such filings have not already been
effected pursuant to the Existing Credit Agreement).
(e) SUBSIDIARY GUARANTEE. Amendment No. 1 to the Subsidiary
Guarantee, substantially in the form of Exhibit B-2 hereto, duly
executed by the Subsidiary Guarantors and the Agent.
(f) REPAYMENT OF CERTAIN AMOUNTS. Evidence that (i) the
accrued and unpaid interest on, any "Loans" held by any Existing Bank
under the Existing Credit Agreement that are required to be prepaid as
of the Effective Date under Section 2.01 hereof, and all accrued and
unpaid commitment fees on the "Revolving Credit Commitments" under the
Existing Credit Agreement held by the Existing Banks shall have been
paid in full, (ii) all Warburg Subordinated Debt shall have been (or
shall be simultaneously) paid in full (or arrangements for payment in
full of the Warburg Subordinated Indebtedness within one day of the
Effective Date satisfactory to the Agent shall have been made) and
(iii) $90,000,000 in aggregate principal amount of the "Terms Loans"
outstanding under the Existing Credit Agreement shall have been prepaid
as of the Effective Date (and not less than $55,000,000 of the proceeds
from the Borrower's initial public equity offering shall be used to
make such prepayment).
(g) APPLICATION OF IPO PROCEEDS; TOTAL DEBT RATIO. A
certificate of a Senior Officer, dated the Effective Date, (i) to the
effect that the initial public equity offering by the Borrower shall
have been consummated and specifying the intended use by the Borrower
of the net proceeds thereof (including, without limitation, the payment
in full of the
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Warburg Subordinated Debt and the prepayment of Term Loans required by
Section 6.01(f) hereof) and (ii) setting forth the Total Debt Ratio as
at the Effective Date (calculated as of the Effective Date on a pro
forma basis after giving effect to such initial public equity offering
and the application of the proceeds thereof to repay such Indebtedness
and the aggregate amount of Loans to be made or continued on the
Effective Date).
(h) OPINION OF SPECIAL NEW YORK COUNSEL TO THE OBLIGORS. An
opinion of Wachtell, Lipton, Xxxxx & Xxxx, special New York counsel to
certain of the Obligors, addressed to the Banks and the Agent and dated
the Effective Date, in form and substance satisfactory to the Agent
(and the Borrower hereby instructs such counsel to deliver such opinion
to the Banks and the Agent).
(i) OPINION OF SPECIAL NEW YORK COUNSEL TO CHASE. An opinion
of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel to Chase,
dated the Effective Date, in form and substance satisfactory to the
Agent.
(j) OTHER DOCUMENTS. The Agent shall have received such other
certificates, opinions, documents and instruments relating to the
transactions contemplated hereby as the Agent or any Bank or special
New York counsel to Chase may reasonably request.
The obligation of any Bank to continue any "Revolving Credit Loan" or "Term
Loan" under the Existing Credit Agreement or to make any other extension of
credit hereunder on the Effective Date is also subject to the payment by the
Borrower of such fees as the Borrower shall have agreed to pay to any Bank or
the Agent in connection herewith, including, without limitation, the reasonable
fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel
to Chase, in connection with the negotiation, preparation, execution and
delivery of this Agreement and the other Credit Documents and the extensions of
credit hereunder (to the extent that statements for such fees and expenses have
been delivered to the Borrower).
From and after the Effective Date the "Notes" under the
Existing Credit Agreement shall be deemed cancelled, and each Existing Bank
agrees to return such "Notes" to the Borrower as soon as practicable.
6.02 INITIAL AND SUBSEQUENT LOANS.
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(a) The obligation of each Bank to make each Loan to be made
by it to the Borrower hereunder (including, without limitation, the continuance
of certain loans and commitments under the Existing Credit Agreement on the
Effective Date as provided in Section 2.01 hereof and the making of any other
Loan on the Effective Date) is subject to the further conditions precedent that
both immediately prior to such Loan and after giving effect thereto: (i) no
Default shall have occurred and be continuing and (ii) the representations and
warranties made by the Borrower and each other Obligor in each of the Credit
Documents to which it is a party, shall be true on and as of the date of the
making of such Loans with the same force and effect as if made on and as of such
date (except to the extent such representations and warranties expressly relate
to an earlier date).
(b) In addition, the obligation of each Revolving Credit Bank
to make each Revolving Credit Loan to be made by it to the Borrower hereunder on
any Borrowing Date (including, without limitation, the making of the initial
Revolving Credit Loans) is subject to the further condition precedent that, if
the aggregate principal amount of all Revolving Credit Loans to be made
hereunder on such Borrowing Date is in excess of $10,000,000 (unless the
proceeds of such Loans are to be, and are in fact, used to make repayments of
Term Loans), the Agent shall have received a certificate of a Senior Officer (in
form and detail satisfactory to the Agent) stating the Total Debt Ratio after
giving effect to the making of such Revolving Credit Loans and annexing thereto
calculations of the Total Debt Ratio.
(c) In addition, the obligation of each Revolving Credit Bank
to make each Revolving Credit Loan to be made by it to the Borrower hereunder
(including, without limitation, the making of the initial Revolving Credit
Loans) is subject to the further condition precedent that both immediately prior
to such Loan and after giving effect thereto no action shall have been taken by
the Majority Banks (including, without limitation, any modification or amendment
to this Agreement or the waiver of any default hereunder) which action has the
effect of causing the condition precedent specified in clauses (i) and (ii) of
paragraph (a) above to be satisfied unless such action has been consented to by
the Majority Revolving Credit Banks or such conditions precedent would otherwise
be satisfied in the absence of such action by the Majority Banks.
(d) Each notice of borrowing by the Borrower hereunder shall
be deemed to constitute a certification to the effect set forth in clauses (i)
and (ii) of paragraph (a) above (both as of the date of such notice and, unless
the Borrower otherwise
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notifies the Agent prior to the date of such borrowing, as of the date of such
borrowing).
Section 7. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to each of the Banks and the Agent that:
7.01 CORPORATE EXISTENCE. Each of the Borrower and its
Subsidiaries: (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify would (either individually or in the aggregate) have a Material Adverse
Effect.
7.02 FINANCIAL CONDITION. The audited combined financial
statements of Journal Register LLC and its Subsidiaries for the fiscal years of
Journal Register LLC ended on December 31, 1995 and December 31, 1996 are
complete and correct and fairly present the combined financial condition of
Journal Register LLC and its Subsidiaries as at the respective dates of
presentation specified therein and the combined results of their operations for
the respective periods of presentation specified therein, all in accordance with
GAAP applied on a consistent basis. Neither Journal Register LLC nor any of its
Subsidiaries had on December 31, 1996 any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in the combined balance sheet of Journal Register LLC
and its Subsidiaries as at said date included in the financial statements
referred to in the first sentence of this Section 7.02 and except as set forth
in Schedule II hereto. Since December 31, 1996, there has been no material
adverse change in the financial condition, business, operations, prospects,
assets, liabilities or capitalization of Journal Register LLC and its
Subsidiaries taken as a whole.
7.03 LITIGATION. Except as described in Schedule II hereto,
there are no legal or arbitral proceedings or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the knowledge
of the Borrower) threatened against the Borrower or any of its Subsidiaries
which might reasonably be expected to be adversely determined and, if
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so determined, might reasonably be expected to have a Material Adverse Effect.
7.04 NO BREACH.
(a) The making and performance by the Borrower and each of its
Subsidiaries of the Transaction Documents to which it is or is intended to be a
party will not conflict with or result in a breach of, or require any consent
under, (i) its charter or by-laws, (ii) any applicable law or regulation
(including, without limitation, Regulation U or Regulation X), or (iii) any
judgment, order, writ, injunction or decree of any court or governmental
authority or agency applicable to or binding on the Borrower or any of its
Subsidiaries, as the case may be.
(b) The making and performance by the Borrower and each of its
Subsidiaries of each of the Transaction Documents to which it is or is intended
to be a party as contemplated hereby will not conflict with or result in a
breach of, or require any consent under, any agreement or instrument to which
the Borrower or any of its Subsidiaries is a party or by which it is bound or to
which it is subject, or constitute a default under any such agreement or
instrument, or result in, or require, the creation or imposition of any Lien
(other than the Liens created by the Security Documents) upon any of its
Properties pursuant to the terms of any such agreement or instrument.
7.05 CORPORATE ACTION. The Borrower and each of its
Subsidiaries has all necessary corporate power and authority to execute, deliver
and perform its obligations under each of the Transaction Documents to which it
is or is intended to be a party and the execution, delivery and performance
thereof by the Borrower and each of its Subsidiaries has been duly authorized by
all necessary corporate action on its part; and this Agreement has been duly and
validly executed and delivered by the Borrower and constitutes, and each of the
other Transaction Documents to which the Borrower and each of its Subsidiaries
is intended to be a party when executed and delivered by it will constitute, its
legal, valid and binding obligation, enforceable in accordance with its terms,
except as the same may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
7.06 APPROVALS. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency are necessary for
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the execution, delivery or performance by the Borrower and each of its
Subsidiaries of the Transaction Documents to which it is or is intended to be a
party or for the validity or enforceability thereof except for the
authorizations, approvals, consents, filings and/or registrations listed or
described in Schedule I hereto (each of which has been obtained or made and is
in full force and effect, except as specified in said Schedule I, and true and
complete copies of which have been furnished to the Agent).
7.07 MARGIN STOCK. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock and no part of the proceeds of
any Loan hereunder will be used to buy or carry any Margin Stock. Neither the
making of any Loan hereunder, nor the use of any of the proceeds thereof, will
violate or be inconsistent with the provisions of Regulation U or Regulation X.
7.08 ERISA. The Borrower and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any unsatisfied liability to the PBGC or any Plan or
Multiemployer Plan (other than an obligation to fund or make contributions to
any such Plan in accordance with its terms and in the ordinary course of
business or an obligation to pay premiums when due).
7.09 TAXES. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and has paid and will pay all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any of its Subsidiaries, except (a) for any such tax the payment of which is
being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained in accordance with GAAP or (b) as
specified in Schedule II hereto. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Borrower, adequate.
7.10 INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
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7.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
7.12 COMPLIANCE WITH LAWS. The Borrower and each of its
Subsidiaries is in compliance with, and has obtained all permits, licenses and
other authorizations which are required under, all applicable Federal, state and
local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements and
other governmental restrictions, except to the extent failure so to comply, or
to obtain any such permit, license or authorization, would not, individually or
in the aggregate, have a Material Adverse Effect.
7.13 DISCLOSURE. No information, report, financial statement,
exhibit, schedule or disclosure letter furnished in writing by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or any Bank in connection
with the negotiation, preparation or delivery of this Agreement and the other
Transaction Documents or included therein or delivered pursuant thereto contains
any untrue statement of material fact or omits or omitted to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. All written information furnished
after the date hereof by the Borrower and its Subsidiaries to the Agent and the
Banks in connection with this Agreement and the other Transaction Documents and
the transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact (other than matters of a general economic nature)
known to the Borrower or any of its Subsidiaries that could have a Material
Adverse Effect that has not been disclosed herein, in the other Transaction
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Banks for use in connection with the
transactions contemplated hereby.
7.14 SECURITY DOCUMENTS. On and after the Effective Date, the
JCI/JNI Security Agreement will create in favor of the Agent, for the ratable
benefit of the Banks, a legal, valid, enforceable and perfected security
interest in all right, title and interest of the Obligors party thereto in the
collateral described therein, subject to no other Lien, except for Permitted
Liens and except as provided in Section 2(a) of the JCI/JNI
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Security Agreement; PROVIDED that with respect to such security interest in such
collateral located in a state, perfection of such security interest will occur
only after the financing statements (which financing statements are referred to
in Section 6.01(d) hereof) required to be filed in such state have been properly
filed. On and after the Effective Date, the Borrower Security Agreement will
create in favor of the Agent, for the ratable benefit of the Banks, a legal,
valid, enforceable and perfected security interest in all right, title and
interest of the Borrower in the collateral described therein, subject to no
other Lien, except for Permitted Liens and except as provided in Section 2(a) of
the Borrower Security Agreement; PROVIDED that with respect to such security
interest in such collateral located in a state, perfection of such security
interest will occur only after the financing statements (which financing
statements are referred to in Section 6.01(c) hereof) required to be filed in
such state have been properly filed.
7.15 ASSETS OF THE BORROWER. Each of the Borrower and its
Subsidiaries has good and marketable title in fee simple to, or valid and
subsisting leasehold interests in, all its real property, and good and
marketable title to all of its other Properties, free and clear of Liens (other
than Permitted Liens).
7.16 MATERIAL AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries is (a) a party to any agreement or instrument or subject to any
corporate restriction which has or is likely to have a Material Adverse Effect
or (b) in default under any agreement or instrument to which any of them is a
party or by which any of them is bound or to which any of them is subject in any
manner which is, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect.
7.17 SOLVENCY. After giving effect to the transactions
contemplated hereby and by the other Transaction Documents and the making of the
Loans:
(a) the fair salable value of the assets of the Borrower and
each of its Subsidiaries exceeds and will, immediately following the
making of each Loan, exceed the amount which will be required to be
paid on or in respect of its existing debts and other liabilities as
they mature;
(b) neither the Borrower nor any of its Subsidiaries has, or
will have, immediately following the making of each Loan, unreasonably
small capital to carry out its business as conducted or as proposed to
be conducted; and
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(c) neither the Borrower nor any of its Subsidiaries intends
to, or believes that it will, incur debts beyond its ability to pay
such debts as they mature.
7.18 LABOR MATTERS. None of the Borrower or any of its
Subsidiaries has experienced any strike, labor dispute, slow down or work
stoppage due to labor disagreements which has had (during the period of five
years prior to the date hereof) or would have or is continuing to have a
Material Adverse Effect.
7.19 HAZARDOUS MATERIALS. The Borrower and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not, individually or in the
aggregate, have a Material Adverse Effect. The Borrower and each of its
Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not, individually or in the
aggregate, have a Material Adverse Effect.
In addition, except as set forth in: (i) Schedule VII hereto,
(ii) the Letter dated June 16, 1992 from the United States Environmental
Protection Agency to New Haven Register, Inc., (iii) the documents entitled
"Pre-Financing Environmental Risk Assessment of Community Newspapers, Inc."
prepared by Pilko & Associates, Inc. ("PILKO") dated January 3, 1991;
"Environmental Assessment of the Register Citizen, Torrington, Connecticut"
prepared by Pilko dated September 24, 1993; "Underground Storage Tank
Investigation, The Register Citizen, for Torrington, Connecticut" prepared by
Fuss & X'Xxxxx, Inc. dated September 28, 1993; "Environmental Assessment of
Journal Company, Inc. and New Haven Acquisition Corp." prepared by Pilko dated
September 11, 1993; "Environmental Assessment of New Haven Register, New Haven,
Connecticut" prepared by Pilko dated October 12, 1993; "Environmental Assessment
of Composing Facility, St. Louis, Missouri prepared by Pilko dated October 12,
1993; "Environmental Assessment of 15 Operating Facilities owned by Journal
Company, Inc., Telephone Interviews Concerning 4 Additional Sites" prepared by
Pilko dated December, 1993; "Limited Subsurface Assessment Report of 000
Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxxxxxx" prepared by Cistar Associates, Inc.
dated July 21, 1993; "Phase I Environmental Site Assessment of Farmington Valley
Herald, Simsbury, Connecticut" prepared by Fuss
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& X'Xxxxx, Inc. dated August 1994; and "Limited Environmental Investigation of
The Bristol Press, Bristol, Connecticut" prepared by Environmental Risk Limited
dated July 1994, (iv) the NEN Acquisition Environmental Reports and (v) the New
Britain Acquisition Environmental Reports (together, the "ENVIRONMENTAL
REPORTS"):
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is
pending or, to the best knowledge of the Borrower and its Subsidiaries,
threatened by any Person with respect to any alleged failure by the
Borrower or any of its Subsidiaries to have any permit, license or
authorization required in connection with the conduct of the business
of the Borrower or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, use,
disposal or Release of any Hazardous Materials generated by the
Borrower or any of its Subsidiaries.
(b) To the best of the knowledge of the Borrower and its
Subsidiaries, neither the Borrower nor any of its Subsidiaries has
handled any Hazardous Material, other than as a generator, on any
property now or previously owned or leased by the Borrower or any of
its Subsidiaries to an extent that it has, or may reasonably be
expected to have, a Material Adverse Effect and to the best knowledge
of the Borrower and its Subsidiaries:
(i) no polychlorinated biphenyls are present at
any property currently owned or any premises currently leased
by the Borrower or any of its Subsidiaries;
(ii) no asbestos is present at any property
currently owned or any premises currently leased by the
Borrower or any of its Subsidiaries;
(iii) no underground storage tanks for Hazardous Materials,
active or abandoned, are now or were previously operated at
any property currently owned by the Borrower or any of its
Subsidiaries, and, with respect to premises currently leased
by the Borrower or any of its Subsidiaries, no underground
storage tanks for Hazardous Materials, active or abandoned,
are now or were previously operated by the Borrower or any of
its Subsidiaries, except for certain tanks used for the
storage of heating oil;
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(iv) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order,
at, on or under any property now or previously owned by the
Borrower or any of its Subsidiaries; and
(v) no Hazardous Materials have been otherwise
Released at, on or under any property now or previously owned
or any premises now or currently leased by the Borrower or any
of its Subsidiaries to an extent that it has, or may
reasonably be expected to have, a Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous
Material to any location that is listed on the National Priorities List
("NPL") under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), listed for possible
inclusion on the NPL by the Environmental Protection Agency in the
Comprehensive Environmental Response and Liability Information System,
as provided for by 40 C.F.R. ss. 300.5 ("CERCLIS"), or on any similar
state or local list or that is the subject of Federal, state or local
enforcement actions or other investigations that may lead to
Environmental Claims against the Borrower or any of its Subsidiaries.
(d) No Hazardous Material generated by the Borrower or any of
its Subsidiaries has been recycled, treated, stored, disposed of or
Released by the Borrower or any of its Subsidiaries at any location
other than those listed in Schedule VII hereto, except for certain
tanks used for the storage of heating oil.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Borrower or
any of its Subsidiaries and no property now, or to the best knowledge
of the Borrower previously, owned or premises leased by the Borrower or
any of its Subsidiaries is listed or proposed for listing on the
National Priorities list promulgated pursuant to CERCLA, on CERCLIS or
on any similar state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any
Environmental Laws on any of the property owned or premises leased by
the Borrower or any of its Subsidiaries, and no government actions have
been taken or are in process
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which could subject any of such property to such Liens and neither the
Borrower nor any of its Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous Materials
at any property owned by it in any deed to such property.
(g) Neither the Borrower nor any of its Subsidiaries has
retained or assumed any liabilities (contingent or otherwise) in
respect of any Environmental Claims (i) under the terms of any contract
or agreement or (ii) by operation of law as a result of the sale of
assets or stock.
(h) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation
to any property or facility now or previously owned or leased by the
Borrower or any of its Subsidiaries which have not been made available
to the Banks.
7.20 SUBSIDIARIES, ETC. Schedule IV hereto sets forth as of
the Effective Date a complete and correct list of all Subsidiaries of the
Borrower (and the respective jurisdiction of incorporation of each such
Subsidiary) and of all Investments held by the Borrower or any of its
Subsidiaries in any joint venture or other Person. Except as otherwise specified
in said Schedule IV and except for the Liens created by the Security Documents,
the Borrower owns, free and clear of Liens, all outstanding shares of each such
Subsidiary (and each such Subsidiary owns, free and clear of Liens, all
outstanding shares of its Subsidiaries) and all such shares are validly issued,
fully paid and non-assessable and the Borrower (or the respective Subsidiary)
also owns, free and clear of Liens, all such Investments. None of the Inactive
Subsidiaries of the Borrower is engaged in any business of any kind whatsoever
on the date hereof. None of the Inactive Subsidiaries of the Borrower has any
Indebtedness or other obligations (contingent or otherwise) which, if such
Inactive Subsidiary failed to pay or perform the same, would have a Material
Adverse Effect.
7.21 COPYRIGHTS, PERMITS AND TRADEMARKS. The Borrower and its
Subsidiaries owns or possesses, or has a valid license or sub-license in, all
domestic and foreign letters patent, patents, patent applications, patent and
know-how licenses, inventions, technology, permits, trademark registrations and
applications, trademarks, trade names, trade secrets, service marks, copyrights,
product designs, applications, formulae, processes, circulation and other lists
of subscribers or purchasers of newspapers and the industrial property rights
("PROPRIETARY
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RIGHTS") used or necessary in the operation of its businesses in the manner in
which they are currently being conducted and which are material to the Property,
business, financial condition, operations, assets, liabilities, capitalization
or prospects of the Borrower and its Subsidiaries taken as a whole. Neither the
Borrower nor any of its Subsidiaries is aware of any existing or threatened
infringement or misappropriation of any proprietary rights of others by the
Borrower or any of its Subsidiaries or of any proprietary rights of the Borrower
or any of its Subsidiaries by others which is material to the financial
condition, business, operations, prospects, assets, liabilities or
capitalization of the Borrower and its Subsidiaries taken as a whole.
7.22 MORTGAGE PROPERTIES. The Mortgage Properties identified
as being owned or leased by Subsidiaries of JNI and JCI are the only real
property owned or leased by the Borrower or any of its Subsidiaries other than
(i) office or garage space and (ii) other premises leased by the Borrower or any
of its Subsidiaries, PROVIDED that the aggregate annual rental for all such
other premises described in this clause (ii) does not exceed $1,000,000.
7.23 NOLS; ETC. As of December 31, 1993 and after giving
effect to the Consolidation and the other Transactions contemplated by the
Transaction Documents, the Borrower in good faith reasonably believes that JNI
and JCI and their respective Subsidiaries will have net operating loss
carryforwards for federal tax reporting purposes of not less than $260,000,000
in the aggregate unrestricted by any provision of Section 382 of the Code and
interest carryforwards for federal tax reporting purposes of not less than
$19,000,000 in the aggregate.
7.24 CAPITALIZATION.
(a) Set forth in Schedule VIII hereto are the number and type
of shares of authorized capital stock of the Borrower on the Effective Date, and
the number of shares that are duly and validly issued and outstanding, and each
of such issued and outstanding shares has been duly and validly issued and is
fully paid and nonassessable. As of the Effective Date, except as set forth in
Schedule VIII, (x) there are no outstanding Equity Rights with respect to the
Borrower or any of its Subsidiaries and (y) there are no outstanding obligations
of the Borrower or any of its Subsidiaries to repurchase, redeem, or otherwise
acquire any shares of capital stock of the Borrower or any of its Subsidiaries
nor are there any outstanding obligations of the Borrower or any of its
Subsidiaries to make payments to any Person, such as "phantom stock" payments,
where the amount
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thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.
(b) As of the Effective Date, the Borrower owns 100% of the
capital stock of each of JNI and JCI. All of the issued and outstanding capital
stock of each of JNI and JCI has been validly issued and is fully paid and
non-assessable.
Section 8. COVENANTS OF THE BORROWER. So long as any of the
Commitments are in effect and until payment in full of the principal of and
interest on all Loans and all other amounts payable by the Borrower hereunder:
8.01 FINANCIAL STATEMENTS; CONTINUING DISCLOSURE. The
Borrower shall deliver to the Agent (with sufficient copies for each of the
Banks):
(a) as soon as available and in any event within 50 days after
the end of each of the first three fiscal quarters of each fiscal year
of the Borrower, consolidated and consolidating statements of income of
the Borrower and its Subsidiaries for such fiscal quarter and for the
period from the beginning of the respective fiscal year to the end of
such fiscal quarter, and the related consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of
such fiscal quarter, setting forth (in the case of such consolidated
statements of income) in comparative form the corresponding
consolidated figures for the corresponding fiscal quarter in the
preceding fiscal year and (in the case of such consolidated balance
sheet) in comparative form the corresponding consolidated balance sheet
figures as at the end of the corresponding fiscal quarter in the
preceding fiscal year, accompanied by a certificate of a Senior
Officer, which certificate shall state that said financial statements
fairly present the financial condition and results of operations of the
Borrower and its Subsidiaries in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for,
the relevant period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 105 days
after the end of each fiscal year of the Borrower, audited consolidated
statements of income, retained earnings and cash flows of the Borrower
and its Subsidiaries and unaudited consolidating statements of income
of the Borrower and its Subsidiaries for such year, and the related
CREDIT AGREEMENT
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consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such year, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal
year, and accompanied by (i) an opinion on such consolidated financial
statements of independent certified public accountants of recognized
national standing, which opinion shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Subsidiaries as at the
end of, and for, such fiscal year, and a certificate of such
accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of
any Default and (ii) a certificate of a Senior Officer, which
certificate shall state that such consolidating financial statements
consolidated financial statements fairly present the consolidating
financial condition and results of operations of the Borrower and its
Subsidiaries in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for, such
fiscal year;
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Borrower or any of its Subsidiaries shall have filed with the
Securities and Exchange Commission (or any governmental agency
substituted therefor) or any national securities exchange;
(d) promptly upon the mailing thereof to the public
shareholders, if any, of the Borrower or any of its Subsidiaries
generally, copies of all financial statements, reports and proxy
statements so mailed;
(e) within ten days after the Borrower or any of its
Subsidiaries knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial
officer of the Borrower setting forth details respecting such event or
condition and the action, if any, that the Borrower or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by the
Borrower or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in Section 4043(b)
of ERISA and the regulations issued thereunder, with respect
to a Plan, as to which PBGC
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has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (PROVIDED that a failure to meet the
minimum funding standard of Section 412 of the Code or Section
302 of ERISA, including, without limitation, the failure to
make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall
be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for
any Plan;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by
the Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the
Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Borrower or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy any secondary liability
as a result of a purchaser default) or the receipt by the
Borrower or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate
or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Borrower or an ERISA
Affiliate fails to
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timely provide security to the Plan in accordance with the
provisions of said Sections;
(f) promptly after the Borrower knows or has reason to know
that any Default has occurred, a notice (which notice shall state that
it is a "Notice of Default") of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter
as possible, a description of the action taken and proposed to be taken
with respect thereto;
(g) promptly upon receipt thereof, a copy of any notice,
filing, claim or other document received by the Borrower in respect of
any Subordinated Debt of the Borrower;
(h) promptly after the occurrence thereof, notice of any
strike, labor dispute, slow down or work stoppage due to a labor
disagreement (or any material development regarding any thereof)
affecting the Borrower or any of its Subsidiaries which could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect;
(i) promptly upon obtaining actual knowledge of any claim,
demand, action, event, condition or report or investigation involving
any potential or actual liability of the Borrower or any of its
Subsidiaries arising in connection with (a) any noncompliance with or
violation of the requirements of any Environmental Law which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect or (b) a Release or threatened Release of any
Hazardous Materials into the environment which could reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect or which Release the Borrower or one of its Subsidiaries would
have a duty to report to a governmental authority under any
Environmental Law and which Release could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, a
notice describing the same in reasonable detail;
(j) each time the Borrower furnishes a statement pursuant to
clause (a) or clause (b) of this Section 8.01, a report (in the form
heretofore furnished to the Agent) describing in reasonable detail the
circulation volume and advertising lineage for each of the newspaper
properties of the Borrower and its Subsidiaries for the fiscal quarter
or fiscal year covered by such statement; and
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(k) from time to time such other information regarding (i) the
business, affairs or financial condition of the Borrower or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer
Plan and any reports or other information required to be filed under
ERISA), (ii) compliance by the Borrower and any of its Subsidiaries
with its obligations under any Transaction Document and (iii) such
other matters relating to the transactions contemplated hereby, as any
Bank or the Agent may reasonably request.
The Borrower will furnish to the Agent (with sufficient copies for each of the
Banks), each time it or they furnish financial statements pursuant to clause (a)
or (b) of this Section 8.01, a Compliance Certificate, duly completed and
executed by a Senior Officer (i) to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing, describing the
same in reasonable detail and describing the action taken and proposed to be
taken with respect thereto) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Borrower is in compliance with
Sections 8.05(c)(ii) and (iii), 8.06(h) and (i), 8.07(e) and (f), 8.08(e), 8.09,
8.10, 8.11, 8.12, 8.13, 8.14 and 8.20 hereof as of the end of the respective
fiscal quarter or fiscal year.
8.02 LITIGATION. The Borrower will promptly give to each Bank
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Borrower or any of
its Subsidiaries, except proceedings which, if adversely determined, could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
8.03 CORPORATE EXISTENCE, ETC. The Borrower will, and will
cause each of its Subsidiaries to:
(a) preserve and maintain its corporate existence and all of
its material rights, privileges and franchises (provided that nothing
in this Section 8.03 shall prohibit any transaction expressly permitted
by Section 8.05 hereof);
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements could reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect;
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(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance with
GAAP or except to the extent such taxes, assessments, charges and
levies do not exceed $50,000 (as to the Borrower and its Subsidiaries)
in the aggregate;
(d) maintain all of its Property used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;
(e) keep proper books of record and account in which full,
true and correct entries shall be made of all dealings and transactions
in relation to its business and activities, and permit representatives
of any Bank or the Agent, during normal business hours, to examine,
copy and make extracts from its books and records, to inspect its
Properties, and to discuss its business and affairs with its officers
and independent public accountants (and by this provision the Borrower
authorizes said accountants to discuss the business and affairs of the
Borrower with such representatives), all to the extent reasonably
requested by such Bank or the Agent, as the case may be; and
(f) hold a meeting at least annually with the Banks (if so
requested by the Agent) to discuss such matters relating to the
financial condition of the Borrower and its Subsidiaries and such other
matters as any of the Banks shall reasonably request.
8.04 INSURANCE.
(a) The Borrower will, and will cause each of its Subsidiaries
to, keep insured by financially sound and reputable insurers all Property of a
character usually insured by corporations engaged in the same or similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations and carry such other
insurance as is usually carried by such corporations. Each policy of property
insurance required to be maintained by the Borrower and its Subsidiaries under
this Section 8.04 shall name the Agent as loss payee or additional insured (but
only to the extent that any single loss shall exceed $100,000 (as to the
Borrower and its Subsidiaries)) and shall provide that it will not be canceled
or reduced, or allowed to lapse without renewal,
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except after not less than 30 days' written notice to the Agent, nor by any
occupancy or use of any Property for purposes more hazardous than permitted by
such policy nor by any foreclosure or other proceedings relating to such
Property. The Borrower will advise the Agent promptly of any policy
cancellation, reduction or amendment.
(b) After the Effective Date, upon the request of the Agent at
any time or from time to time, not later than 15 Business Days prior to the
termination or expiry date of any insurance required to be maintained by the
Borrower hereunder the Borrower shall deliver to the Agent certificates of
insurance evidencing that such insurance has been renewed, subject only to the
payment of premiums as they become due. In addition, the Borrower will not
modify any of the provisions of any policy with respect to casualty or liability
insurance without delivering the original copy of the endorsement reflecting
such modification to the Agent accompanied by a written report of any firm of
independent insurance brokers of nationally recognized standing, stating that,
in their opinion, such policy (as so modified) adequately protects the interests
of the Banks and the Agent, is in compliance with the provisions of this Section
8.04 and is comparable in all respects with insurance carried by responsible
owners and operators of similar Properties. The Borrower shall not obtain or
carry separate insurance concurrent in form or contributing in the event of loss
with that required by this Section 8.04 unless the Agent is the named insured
thereunder, with loss payable as provided herein (but only to the extent any
single loss thereunder shall exceed $100,000 (as to the Borrower and its
Subsidiaries)). The Borrower shall immediately notify the Agent whenever any
such separate insurance is obtained and shall deliver to the Agent certificates
of insurance evidencing the same.
8.05 PROHIBITION OF FUNDAMENTAL CHANGES.
(a) The Borrower will not, nor will the Borrower permit any of
its Subsidiaries to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), except that:
(i) any Subsidiary of the Borrower other than an Inactive
Subsidiary may be merged or consolidated with or into (A) the Borrower,
if the Borrower party to such transaction shall be the continuing or
surviving corporation or (B) any other Subsidiary of the Borrower;
PROVIDED that (x) if any such transaction shall be between a Subsidiary
of the Borrower and a Wholly Owned Subsidiary of the Borrower,
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the Wholly Owned Subsidiary shall be the continuing or surviving
corporation and if any such transaction shall be between a Subsidiary
of the Borrower that is a Subsidiary Guarantor and a Subsidiary of the
Borrower that is not a Subsidiary Guarantor, the Subsidiary that is a
Subsidiary Guarantor shall be the continuing or surviving corporation
and (y) any merger involving JNI and JCI shall comply with clause (iii)
below;
(ii) the capital stock of each Inactive Subsidiary of the
Borrower may be Disposed of and each such Inactive Subsidiary may be
liquidated;
(iii) JNI and JCI may merge with each other; PROVIDED that (x) the
continuing or surviving corporation is organized under the laws of, and
has its chief executive office in, a state of the United States of
America, (y) no Default shall have occurred and be continuing or would
occur after giving effect to such merger and (z) after giving effect to
such merger, the continuing or surviving corporation will have net
operating loss carryforwards for federal tax reporting purposes in an
aggregate amount of not less than an amount equal to the excess of
$260,000,000 OVER the amount of any net operating loss carryforwards
utilized after December 31, 1993 against income of JNI and JCI and
their respective Subsidiaries and will have interest carryforwards for
federal tax reporting purposes in an aggregate amount of not less than
an amount equal to the excess of $19,000,000 OVER the amount of any
interest carryforwards utilized after December 31, 1993 against income
of JNI and JCI and their respective Subsidiaries; and
(iv) JRN and INS may merge into or consolidate with the
Borrower or any of its Subsidiaries, PROVIDED that the Borrower, if it
is a party to such transaction, shall be the continuing or surviving
entity.
(b) The Borrower will not, nor will the Borrower permit any of
its Subsidiaries to, acquire any business or assets from, or any capital stock
or other ownership interest of, or be a party to any Acquisition of, any Person
other than:
(i) purchases by the Borrower and its Subsidiaries in the
ordinary course of business of inventory and other assets to be sold or
used in the ordinary course of business;
(ii) Investments permitted by Section 8.08 hereof;
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(iii) Capital Expenditures made as permitted by Section 8.10
hereof;
(iv) Acquisitions by the Borrower of Newspapers in the United
States (PROVIDED that (w) each such Acquisition shall be financed
solely with equity securities of the Borrower and/or the proceeds of an
issuance or sale of equity securities by the Borrower and/or proceeds
of Revolving Credit Loans and/or Permitted Additional Debt and/or Net
Proceeds from any Disposition and/or the cumulative Excess Cash Flow
that remains after the Borrower has performed its obligations under
Section 2.09(d) hereof and after giving effect to any Restricted
Payments made as permitted by Section 8.09(a) hereof, (x) no
Acquisition of any Newspaper may be made pursuant to this clause (iv)
if, after giving effect thereto, cash flow attributable to such
Newspaper's commercial printing business, if any, would have
contributed more than 10% of Cash Flow of the Borrower and its
Subsidiaries and the Newspaper(s) to be Acquired (calculated on a pro
forma basis) for the period of 12 complete calendar months ended on, or
most recently ended prior to, the date of the consummation of such
Acquisition, (y) no Default shall have occurred and be continuing or
would occur after giving effect to such Acquisition and (z) prior to
such Acquisition, the Agent shall have received a certificate of a
Senior Officer certifying as to the foregoing and containing
calculations, in form and detail satisfactory to the Agent,
demonstrating compliance with this Section 8.05 and Sections 8.07,
8.11, 8.12, 8.13 and 8.14 hereof after giving effect to such
Acquisition);
(v) the Borrower and each of its Subsidiaries may
acquire any business or assets from, or any capital stock or other
ownership interests of, or be a party to any Acquisition of, each
other; and
(vi) the Borrower or any its Subsidiaries may acquire all
of the capital stock or other ownership interests of INS from Warburg
and/or Warburg Affiliates.
(c) The Borrower will not, nor will the Borrower permit any of
its Subsidiaries to, Dispose of any of its Property or business (including,
without limitation, any capital stock of any such Subsidiary, receivables and
leasehold interests), whether now owned or hereafter acquired, except:
(i) any inventory or other assets Disposed of in the ordinary
course of business;
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(ii) obsolete or worn-out property, tools or equipment no longer
used or useful in its business so long as the amount thereof Disposed
of in any single calendar year by the Borrower and its Subsidiaries
shall not have a fair market value in excess of $1,000,000;
(iii) any other assets of the Borrower or any of its Subsidiaries
Disposed of for cash in an amount not less than their fair market value
so long as the aggregate fair market value of the assets so Disposed of
by the Borrower and its Subsidiaries during any calendar year does not
exceed $5,000,000 or such higher amount as may be consented to by the
Majority Banks;
(iv) assets of the Borrower or any of its Subsidiaries consisting
of cash, Cash Equivalents and Inter-company Notes (as defined in the
JCI/JNI Security Agreement) Disposed of by the Borrower or any of its
Subsidiaries to each other;
(v) the Borrower and its Subsidiaries may Dispose of any of
its Property or business (including, without limitation, any capital
stock of any of such Person's Subsidiaries, receivables and leasehold
interests), whether now owned or hereafter acquired, to each other; and
(vi) the Borrower and its Subsidiaries may Dispose of all or
any part of the assets heretofore acquired as part of the NEN
Acquisition and identified on Annex 3 hereto for cash in an amount not
less than their fair market value so long as the aggregate fair market
value of the assets so Disposed of by the Borrower and its Subsidiaries
does not exceed $1,775,000.
8.06 LIMITATION ON LIENS. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its Property (including, without limitation, the
Property covered by the Security Documents), whether now owned or hereafter
acquired, except:
(a) Liens created by the Security Documents including, without
limitation, such Liens securing Indebtedness to any Bank incurred as
permitted by Section 8.07(e) hereof;
(b) Liens on assets of its Subsidiaries existing on the date
hereof and listed in Schedule V hereto (except that nothing herein
shall limit or otherwise affect the obligation of the Borrower under
Section 8.22(a) hereof to deliver Title Policies or Title Commitments
containing only
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such exceptions and such affirmative coverage and endorsements as are
approved or required by the Majority Banks under said Section 8.22(a));
(c) Liens for taxes, assessments or charges imposed on it or
any of its property by any governmental authority not yet due or which
are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of
the Borrower or any of its Subsidiaries, as the case may be, in
accordance with GAAP;
(d) statutory Liens of carriers, warehousemen, mechanics,
materialmen, repairmen, or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 30
days or which are being contested in good faith and by appropriate
proceedings;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(f) Liens (other than any Lien imposed by ERISA) incurred on
deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto, all of which, in the aggregate, are not material in amount,
and which do not in any case materially detract from the value of the
Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(h) Liens (except in the case of Mortgage Properties) securing
Indebtedness incurred by the Borrower or any of its Subsidiaries to
finance the purchase of Property used in the ordinary course of its
business in an aggregate amount not exceeding $4,000,000 (as to the
Borrower and its Subsidiaries) at any one time outstanding, so long as
no such Lien shall cover any other Property or secure any Indebtedness
other than the Indebtedness incurred to purchase such Property;
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(i) additional Liens (except in the case of Mortgage
Properties) securing Indebtedness or other obligations of the Borrower
or any of its Subsidiaries in an aggregate amount not exceeding
$400,000 (as to the Borrower and its Subsidiaries) at any one time
outstanding;
(j) any extension, renewal or replacement of the foregoing,
PROVIDED that the Liens permitted by this clause (j) shall not be
spread to cover any additional Indebtedness or Property (other than a
substitution of like Property); and
(k) until the Effective Date, the Liens in respect of the
Existing Credit Agreement.
8.07 INDEBTEDNESS. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, create, incur or suffer to exist any
Indebtedness except:
(a) Indebtedness under the Credit Documents to which it
is a party;
(b) Indebtedness in respect of the Existing Credit
Agreement and, until the day after the Effective Date, the Warburg
Subordinated Debt;
(c) Indebtedness of the Borrower or any of its Subsidiaries
(other than Indebtedness in respect of the Existing Credit Agreement
and the Warburg Subordinated Debt) outstanding on the date hereof and
listed on Schedule VI hereto;
(d) income taxes payable, unearned circulation revenue and
liabilities under Plans, to the extent the same may be treated as
accrued expenses under GAAP, and taxes paid or payable in cash in
respect of income or activities earned or conducted during periods
prior to December 31, 1994;
(e) Indebtedness ("PERMITTED ADDITIONAL DEBT") of the Borrower
to one or more of the Banks (other than Indebtedness under this
Agreement) and/or to any other Person in an aggregate principal or face
amount not exceeding (as to the Borrower), on or after the Effective
Date an amount equal to $125,000,000 (MINUS the sum of the aggregate
outstanding principal amount of the PAD Loans (excluding the NEN
Acquisition Loans and New Britain Acquisition Loans) PLUS the aggregate
unused amount of the PAD Commitments then in effect) at any one time
outstanding, PROVIDED that: (i) if the proceeds (or any part of the
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proceeds) of such Indebtedness are to be used to finance Permitted
Acquisitions, the Borrower shall not, except upon the acceleration of
such Indebtedness following an event of default, agree or be
contractually obligated to repay more than 6% of the original principal
amount of such Indebtedness in the first 12 month period following the
incurrence of such Indebtedness, more than 8% of the original principal
amount of such Indebtedness in the second 12 month period following the
incurrence of such Indebtedness, more than 10% of the original
principal amount of such Indebtedness in the third 12 month period
following the incurrence of such Indebtedness, more than 12% of the
original principal amount of such Indebtedness in the fourth 12 month
period following the incurrence of such Indebtedness, more than 14% of
the original principal amount of such Indebtedness in the fifth 12
month period following the incurrence of such Indebtedness, more than
16% of the original principal amount of such Indebtedness in the sixth
12 month period following the incurrence of such Indebtedness, more
than 17% of the original principal amount of such Indebtedness in the
seventh 12 month period following the incurrence of such Indebtedness
or more than 17% of the original principal amount of such Indebtedness
in the eighth 12 month period following the incurrence of such
Indebtedness, except that the Borrower may agree or be contractually
obligated to repay all or any part of such Indebtedness in a single
payment, or pursuant to scheduled payments, on or after June 30, 2004;
(ii) both immediately prior to, and after giving effect to, the
incurrence of such Indebtedness, no Default shall have occurred and be
continuing; (iii) such Indebtedness is incurred pursuant to and
governed by agreements and instruments containing such terms and
conditions as are satisfactory to the Majority Banks (unless such terms
and conditions are no less favorable to the Borrower than those of this
Agreement and unless this Agreement permits the Borrower to agree to
different terms and conditions); and (iv) if such Indebtedness is
provided by one or more of the Lenders, such Indebtedness may be
guaranteed by the Borrower's Subsidiaries under the Subsidiary
Guarantee and its obligations in respect of such Indebtedness and such
Subsidiaries' obligations under the Subsidiary Guarantee in respect of
such Indebtedness may be secured PARI PASSU with the Secured
Obligations under and as defined in each of the Security Documents;
(f) Indebtedness of the Borrower and its Subsidiaries
(other than Indebtedness described in clauses (a) through (e) above) in
an aggregate principal or face amount not
CREDIT AGREEMENT
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exceeding $25,000,000 (as to the Borrower and its Subsidiaries) at any
one time outstanding;
(g) Subordinated Debt of the Borrower, PROVIDED that (i) the
Net Proceeds of such Subordinated Debt are applied to the prepayment of
the Loans to the extent required by Section 2.09(e) hereof and (ii)
after giving effect to the incurrence of such Subordinated Debt and the
application of proceeds thereof, no Default shall have occurred and be
continuing; and
(h) Indebtedness evidenced by promissory notes issued in
connection with repurchases of stock and/or options contemplated by
Section 8.09(c) hereof.
8.08 INVESTMENTS. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments in Cash Equivalents;
(b) Investments existing on the date hereof and listed on
Schedule III hereto;
(c) the Interest Rate Protection Agreements required by
Section 8.21 hereof;
(d) subject to Section 8.05 hereof, additional Investments
by the Borrower and its Subsidiaries in each other;
(e) additional Investments by the Borrower and its
Subsidiaries not exceeding an aggregate amount of $2,000,000 (as
to the Borrower and its Subsidiaries);
(f) Investments by the Borrower in the Inactive Subsidiaries
of the Borrower outstanding on the date hereof; and
(g) Acquisitions expressly permitted by Section 8.05 hereof.
8.09 RESTRICTED PAYMENTS. The Borrower will not, nor will
the Borrower permit any of its Subsidiaries to, make any Restricted Payment
except for:
(a) cash dividends paid by the Borrower on its common stock
in an amount not exceeding in any fiscal year of the Borrower an
amount equal to 50% of the cumulative Excess
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Cash Flow (commencing with the fiscal year ending December 31,
1997) that remains after giving effect to any Acquisitions made
as permitted by Section 8.05(b)(iv) hereof and after deducting
any cash dividends theretofore made as permitted under this
clause (c), PROVIDED that no such dividend shall be made on any
date if (x) a Default has occurred and is continuing on such date
(or would occur after giving effect thereto) or (y) the Total
Debt Ratio on such date is equal to or greater than 4.0 to 1 (or
would be equal to or greater than 4.0 to 1 after giving effect
thereto);
(b) additional cash dividends paid by the Borrower on its
common stock in an amount not exceeding $2,000,000 in any fiscal
year of the Borrower;
(c) repurchases of common stock of the Borrower or options
thereto from any management official upon his or her death or
termination of employment for cash or promissory notes, so long
as the aggregate amount paid in cash (i) for such common stock or
options or (ii) in respect of such promissory notes in any fiscal
year of the Borrower shall not exceed $5,000,000; and
(d) the payment in full of the Warburg Subordinated Debt as
contemplated by Section 6.01(f)(iii) hereof.
8.10 CAPITAL EXPENDITURES. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, make any Capital Expenditure on any
date during any of the fiscal years of the Borrower set forth below if (a) Cash
Flow for the period of 12 complete consecutive months ending on, or most
recently ended prior to, such date MINUS (b) the sum of the aggregate amount of
Capital Expenditures made by the Borrower and its Subsidiaries during such 12
month period and the amount of such Capital Expenditure proposed to be made
would be less than the amount set forth below opposite such year:
YEAR AMOUNT
---- ------
1997 $125,000,000
1998 $140,000,000
1999 $155,000,000
2000 $170,000,000
2001 $190,000,000
2002 $210,000,000
PROVIDED that (x) to the extent the Borrower or any of its Subsidiaries shall
sell or otherwise dispose of any capital asset
CREDIT AGREEMENT
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in the ordinary course of business or receive insurance proceeds in respect of
any capital asset that is the subject of a Casualty Event and, subject to the
requirements of Sections 2.09(b) and (c) hereof, apply (or commit to apply) the
proceeds thereof within 180 days after such Disposition or reasonably promptly
after such Casualty Event to acquire a like capital asset, the amount of such
proceeds so applied shall not be deemed to be a Capital Expenditure within the
period in which such acquisition is made, (y) notwithstanding the foregoing, the
Borrower and its Subsidiaries may make Capital Expenditures of up to $20,000,000
(as to the Borrower and its Subsidiaries) during any fiscal year of the Borrower
and (z) in addition to the foregoing, the Borrower and its Subsidiaries may make
Capital Expenditures in respect of a printing facility in the area in and
surrounding Philadelphia, Pennsylvania of up to $25,000,000 (as to the Borrower
and its Subsidiaries) (it being understood that the Borrower and its
Subsidiaries may make Capital Expenditures in respect of such printing facility
in excess of $25,000,000 to the extent permitted above).
8.11 TOTAL DEBT RATIO. The Borrower will not, at any time
during any period set forth below, permit the Total Debt Ratio to exceed the
ratio set forth opposite such period:
PERIOD RATIO
------ -----
From and including December 31, 1996
through and including December 30, 1997 5.50 to 1
From and including December 31, 1997
through and including December 30, 1998 5.50 to 1
From and including December 31, 1998
through and including December 30, 1999 5.00 to 1
From and including December 31, 1999
through and including December 30, 2000 4.50 to 1
From and including December 31, 2000
and at all times thereafter 4.00 to 1
8.12 FIXED CHARGES RATIO. The Borrower will not, at any
time, permit the Fixed Charges Ratio to be less than 1 to 1.
8.13 INTEREST COVERAGE RATIO. The Borrower will not, at any
time permit the Interest Coverage Ratio to be less than 2 to 1.
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8.14 WORKING CAPITAL. The Borrower will not at any time
permit Working Capital to be less than zero.
8.15 LINES OF BUSINESS. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to engage to any substantial extent in
any business other than the business of printing, publishing, distributing and
selling newspapers and proprietary information data bases in connection
therewith, commercial printing activities of the types engaged in on the date
hereof and other activities incidental or related to each of the foregoing.
8.16 TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement (including, without limitation, Section 8.05
hereof), the Borrower will not, nor will the Borrower permit any of its
Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise Dispose of any assets
to an Affiliate; (c) merge into or consolidate with or purchase or acquire
assets from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, Guarantees and assumptions of obligations of an Affiliate); PROVIDED
that (i) any Affiliate who is an individual may serve as a director, officer or
employee of the Borrower or its Subsidiaries and receive reasonable compensation
for his or her services in such capacity, (ii) the Borrower and its Subsidiaries
may enter into transactions providing for the purchase or sale of inventory and
other assets or the provision of services (including, without limitation,
printing and advertising representation services) in the ordinary course of
business if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Borrower and its Subsidiaries as the
monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate, and (iii) the Borrower or any its
Subsidiaries may acquire all of the capital stock or other ownership interests
of INS from Warburg and/or Warburg Affiliates.
8.17 SALE AND LEASEBACK. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, enter into any arrangement with any
other Person (other than the Borrower and its Subsidiaries) providing for the
leasing by the Borrower or any of its Subsidiaries of real or personal property
which has been or is to be sold or transferred by the Borrower or any of its
Subsidiaries to such other Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or any of its Subsidiaries.
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8.18 AMENDMENT OF CERTAIN DOCUMENTS. The Borrower will not,
without the prior written consent of the Majority Banks, amend or otherwise
modify, or consent to any amendment or other modification of, or waive any
provision of any of the following agreements to which it is a party: (a) its
certificate of incorporation or by-laws (or equivalent documents) or (b) any
agreement, instrument or other document evidencing or governing any Subordinated
Debt of the Borrower.
8.19 USE OF PROCEEDS. The Borrower will use (a) the proceeds
of the Revolving Credit Loans solely (i) for general corporate purposes of the
Borrower and its Subsidiaries, including for working capital requirements of the
Borrower and its Subsidiaries in the ordinary course of business, (ii) for
extensions of credit to any of its Subsidiaries and (iii) to finance Permitted
Acquisitions and (b) the proceeds of each Series of PAD Loans other than NEN
Acquisition Loans and New Britain Acquisition Loans for any permitted purpose
under this Agreement except as may be otherwise agreed between the Banks holding
such PAD Loans and the Borrower. In all events, the Borrower will use the
proceeds of the Loans in compliance with all applicable legal and regulatory
requirements, including, without limitation, Regulation U and Regulation X.
8.20 SALES OF ACCOUNTS. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, sell, with or without recourse, or
discount or otherwise sell for less than the face value thereof, any of their
notes or accounts receivable except that the Borrower or any of its Subsidiaries
may sell, without recourse, accounts receivable of individual account debtors
that the Borrower or such Subsidiary reasonably and in good faith believes to be
uncollectible or otherwise difficult to collect in the ordinary course of
business so long as the aggregate face amount (less applicable reserves) of all
such accounts receivable of the Borrower and its Subsidiaries so sold in any
fiscal year of the Borrower does not exceed $500,000 (as to the Borrower and its
Subsidiaries).
8.21 INTEREST RATE PROTECTION. From and after Effective Date,
the Borrower and/or its Subsidiaries will have in place and thereafter maintain
in full force and effect one or more Interest Rate Protection Agreements (in a
manner reasonably satisfactory to the Majority Banks) with one or more of the
Banks (or with another bank or financial institution having a capital, surplus
and undivided profits of at least $500,000,000) such that the average maximum
rate of interest payable by the Borrower for consecutive periods (each of which
shall be of at least two years duration) as to a principal amount at least equal
to 50% of the aggregate principal amount of the Loans scheduled to be
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outstanding during the respective period shall not exceed 10%; PROVIDED that the
Borrower's obligations under this Section 8.21 shall not apply for any period
during which the Total Debt Ratio is less than 3.0 to 1 (as demonstrated by the
most recent consolidated financial statements of the Borrower and related
Compliance Certificate required to be delivered under Section 8.01 hereof).
8.22 MORTGAGES. Not later than 45 days after the date the
Majority Banks (through the Agent) give notice (the "MORTGAGE NOTICE") to the
Borrower requesting the granting of the Mortgages, the Borrower will (i) cause
each of the Mortgagors to duly execute, acknowledge and deliver the applicable
Mortgages to the Agent (which Mortgages shall include metes and bounds
descriptions of the respective Mortgage Properties), (ii) concurrently with the
delivery of the Mortgages to the Agent, cause the Subsidiary Guarantors to enter
into a Supplement to the Subsidiary Guarantee with the Agent in substantially
the form of Exhibit B-1 to the 1994 Credit Agreement (with such changes thereto
as the Agent shall reasonably request), and (iii) furnish or cause to be
furnished to the Agent:
(a) policies of mortgage title insurance (the "TITLE
POLICIES") in ALTA Loan Policy - 1970 Form (rev. 10/17/70 and
10/17/84), or equivalent policies, issued by the Title Insurer in an
amount, as to each Mortgage Property, equal to 125% of the fair market
value of such Mortgage Property as established by the appraisals, if
any, referred to in Section 8.22(g) hereof, insuring the Mortgages as
valid first liens on the respective Mortgage Properties, showing fee
simple title to the Mortgage Properties vested in the applicable
Mortgagor subject only to such exceptions as are set forth in the
Approved Title Reports and such additional exceptions which arose after
the date of such reports as the Majority Banks in the exercise of their
reasonable discretion may approve, and containing such affirmative
coverage and endorsements as the Majority Banks may reasonably require.
The Title Policies shall contain tie-in endorsements satisfactory to
the Agent and the Majority Banks, aggregating the insurance under all
Title Policies, so that the amount of insurance afforded by the Title
Policy covering each Mortgage Property is equal to the aggregate amount
of the insurance under the Title Policies covering all Mortgage
Properties. In lieu of the Title Policies, the Borrower may cause the
Subsidiary Guarantors to deliver to the Agent, within the 45-day period
specified above, binding, irrevocable commitments by the Title Insurer,
dated the date of delivery of the Mortgages to the Agent, to issue the
Title Policies to the Agent as of such date in
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compliance with the foregoing requirements of this Section 8.22(a),
which commitments (the "TITLE COMMITMENTS") shall contain no printed
exceptions in Schedule B thereto (including any exceptions as to
defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records or attaching subsequent
to the date thereof but prior to the date of recordation of the
Mortgages) and shall otherwise be in form and substance reasonably
satisfactory to the Agent and the Majority Banks; PROVIDED that the
Borrower shall furnish or cause to be furnished to the Agent, within
such 45-day period, evidence of the payment in full of all premiums and
shall deliver the Title Policies or cause the same to be delivered to
the Agent within 30 days after the earlier of (i) the delivery of the
Title Commitments to the Agent, or (ii) the expiration of such 45-day
period. Concurrently with the delivery of the Title Policies or the
Title Commitments, as the case may be, the Borrower will furnish copies
of (i) all instruments of record and (ii) all other documents specified
in the Title Commitments or Title Policies, as the case may be,
encumbering or otherwise affecting the Mortgage Properties;
(b) the Surveys, redated to a date not more than 90 days prior
to the date of the Mortgage Notice, together with such certificates
since such redating as the Title Insurer may require in order to issue
the Title Policies and Title Commitments as hereinabove provided;
(c) opinions (dated the date on which the Mortgages are
delivered to the Agent) of local counsel to be issued to the Agent and
the Banks to the effect set forth in Exhibit G-1 to the 1994 Credit
Agreement (with such changes thereto as the Agent shall reasonably
request) and also to the effect that the Mortgages have been duly
authorized, executed and delivered by the respective Mortgagors and, in
the case of the Mortgages covering the Mortgage Property in the State
of Missouri, by the trustee designated therein (such trustee to be
specified by the Borrower with the approval of the Agent), and that
such trustee has full power and authority to serve in such capacity and
to exercise all rights and powers under such Mortgage;
(d) evidence satisfactory to the Agent of (i) the due
recordation of the Mortgages and filing of financing statements
reasonably satisfactory to the Agent in connection therewith in the
appropriate recording and filing offices and (ii) the payment of all
filing and recording fees and expenses, of any mortgage, mortgage
recording,
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intangibles or other tax payable in connection with the Mortgages or
the obligations secured thereby, and of the premiums for the Title
Policies and all other charges in connection therewith;
(e) such affidavits, releases, indemnities, undertakings or
other documents as the Title Insurer may require in order to issue the
Title Policies as hereinabove provided;
(f) such direct access reinsurance agreements with such other
title insurance companies on such forms and in such amounts, all as the
Majority Banks shall reasonably require;
(g) if so requested by the Majority Banks (through the Agent),
an appraisal of the Mortgage Properties, in form and substance
satisfactory to the Majority Banks, complying with the Appraisal
Policies and Review Procedures of the Board of Governors of the Federal
Reserve System (12 CFR Part 323);
(h) the hazard, flood and other insurance policies
required by the Mortgages; and
(i) if so requested by the Majority Banks (through the Agent),
an environmental survey and assessment covering each of the Mortgage
Properties.
If any Subsidiary Guarantor or the Borrower shall acquire any real property
other than the Mortgage Properties after the date of this Agreement, the
Borrower shall give notice thereof to the Agent, and the Majority Banks may, by
notice to the Borrower (through the Agent) require the Borrower to grant or
cause such Subsidiary Guarantor to grant a mortgage on such real property (a
"SUPPLEMENTAL MORTGAGE") to the Agent, in such form as the Majority Banks shall
reasonably require, as additional security for the obligations secured by the
Mortgages, in which event the Borrower, within 45 days after the giving of such
notice to it, shall grant, or cause such Subsidiary Guarantor to grant, such
Supplemental Mortgage to the Agent together with such other documents of the
types specified above in this Section 8.22 as the Majority Banks may reasonably
require.
8.23 ENVIRONMENTAL MATTERS. The Borrower will, and will cause
each of its Subsidiaries to, comply in all material respect with all
Environmental Laws now or hereafter applicable to the Borrower and its
Subsidiaries, and shall obtain, at or prior to the time required by applicable
Environmental Laws, all environmental, health and safety permits, licenses and
other
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authorizations necessary for its operations and maintain such authorizations in
full force and effect.
8.24 CERTAIN CORPORATE ACTIONS. Except as expressly permitted
by this Agreement, the Borrower will not, nor will the Borrower permit any of
its Subsidiaries to, enter into any transaction (other than the Borrower's
initial public offering, the merger of Journal Register LLC with and into the
Borrower, the Management Bonus Plan or the Stock Incentive Plan) or take any
action that would result in an "ownership change" of the Borrower or any
Subsidiary as described in Section 382 of the Code.
8.25 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.
(a) The Borrower will, and will cause each of its Subsidiaries
to, take such action from time to time as shall be necessary to ensure that (i)
each of its Subsidiaries at all times is a Wholly Owned Subsidiary (except for
any stock or other equity interests of such Subsidiary which is owned by a third
party as of the Effective Date, as listed in Schedule IV hereto) and (ii) each
of its Subsidiaries is and becomes a party to the Subsidiary Guarantee and the
JCI/JNI Security Agreement, PROVIDED that, in the event of any Subsidiary
organized as a partnership or limited liability company, the Borrower shall
cause each of the partners or members thereof, as the case may be, to enter into
a pledge agreement in form and substance satisfactory to the Agent pursuant to
which the Agent, on behalf of the Banks, shall be granted a first prior
perfected security interest in all of the equity interests of such partnership
or limited liability company to secure the obligations owing to the Banks
hereunder and under the other Credit Documents, subject to no other Lien (and
the organizational document for such partnership or limited liability company
shall expressly authorize each such partner or member to so pledge its equity
interests therein and shall contain no other restriction against the Agent
enforcing such security interest and transferring such equity interests to a
third party). In the event that any such additional shares of stock or other
equity interests shall be issued by any Subsidiary of the Borrower, the Borrower
agrees forthwith to, and to cause its Subsidiaries to, deliver to the Agent
pursuant to the Security Documents the certificates (if any) evidencing such
shares of stock or other equity interests, accompanied by undated stock powers
executed in blank and to take such other action as the Agent shall request to
perfect the security interest created therein pursuant to the Security
Documents.
(b) The Borrower will not permit any of its Subsidiaries to
enter into, after the date of this Agreement, any
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indenture, agreement, instrument or other arrangement that, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the incurrence or
payment of Indebtedness, the granting of Liens, the declaration or payment of
dividends, the making of loans, advances or Investments or the sale, assignment,
transfer or other disposition of Property.
8.26 INACTIVE SUBSIDIARIES. Anything in this Agreement to the
contrary notwithstanding, the Borrower will not, nor will the Borrower permit
any of its Subsidiaries to, engage in any transaction or any other business with
or for the benefit of any Inactive Subsidiary. Anything in this Agreement to the
contrary notwithstanding, the Borrower will not permit any of its Inactive
Subsidiaries to engage in any business or create or incur any Indebtedness or
create or incur any other obligations (contingent or otherwise) after the date
hereof.
Section 9. EVENTS OF DEFAULT. If one or more of the
following events (herein called "EVENTS OF DEFAULT") shall occur
and be continuing:
(a) the Borrower shall default in the payment (including any
required prepayment) when due of any principal of or interest on
any Loan or any other amount payable by the Borrower hereunder or
under any of the other Credit Documents; or any Obligor shall
default in the payment when due of any amount payable by such
Obligor under any of the Credit Documents; or
(b) the Borrower or any of its Subsidiaries shall default in
the payment when due of any principal of or interest on any of
its Indebtedness (other than as described in paragraph (a) above)
aggregating $2,000,000 or more, or in the payment when due of any
amount under any Interest Rate Protection Agreement for a
notional principal amount exceeding $1,000,000; or any event
specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness or any event
specified in any Interest Rate Protection Agreement shall occur
if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated maturity or
to have the interest rate thereon reset to a level so that
securities
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evidencing such Indebtedness trade at a level specified in
relation to the par value thereof or, in the case of an Interest
Rate Protection Agreement, to permit the payments owing under
such Interest Rate Protection Agreement to be liquidated; or
(c) any representation, warranty or certification made or
deemed made by any Obligor in any Transaction Document (or in any
modification or supplement thereto), or in any certificate
furnished to any Bank or the Agent pursuant to the provisions
thereof, shall prove to have been false or misleading as of the
time made, deemed made or furnished in any material respect; or
(d) the Borrower shall default in the performance of any of
its obligations under clause (f) of Section 8.01 hereof, clause
(a) of Section 8.03 hereof (as to the obligation to maintain the
corporate existence of the Borrower and its Subsidiaries only),
clause (a) of Section 8.04 hereof, Sections 8.05 through 8.22
(inclusive) hereof or Section 8.25 hereof; or the Borrower or any
other Obligor shall default in the performance of any of its or
their other obligations hereunder or under any of the other
Credit Documents to which the Borrower or any other Obligor is a
party and such default shall continue unremedied for a period of
30 days after notice thereof to the Borrower by the Agent or any
Bank (through the Agent); or
(e) the Borrower or any of its Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(f) the Borrower or any of its Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code (as now or hereafter in
effect), (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or (vi) take any corporate action for
the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower or any of its
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Subsidiaries, in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or
the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the
like of the Borrower or such Subsidiary or of all or any
substantial part of its assets, or (iii) similar relief in
respect of the Borrower or such Subsidiary under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against the Borrower or such Subsidiary
shall be entered in an involuntary case under the Bankruptcy
Code; or
(h) a final judgment or judgments for the payment of money
in excess of $2,000,000 in the aggregate shall be rendered by a
court or courts against the Borrower and/or any of its
Subsidiaries and the same shall not be discharged (or adequate
provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 45 days from the
date of entry thereof and the Borrower or such Subsidiary shall
not, within said period of 45 days, or such longer period during
which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during
such appeal; or
(i) an event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or condition,
together with all other such events or conditions, the Borrower
or any ERISA Affiliate shall incur or in the opinion of the
Majority Banks shall be reasonably likely to incur a liability to
a Plan, a Multiemployer Plan or PBGC (or any combination of the
foregoing) which is material in relation to the financial
condition, business, operations, prospects, assets, liabilities
or capitalization of the Borrower and its Subsidiaries taken as a
whole; or
(j) except for any expiration or termination in accordance
with its terms or resulting from any action by the Agent or any
Bank, any of the Liens created by the Security Documents or, if
the same have been executed and delivered by the individual
parties thereto and be in effect, any of the Mortgages, shall not
constitute a valid and perfected Lien on the collateral described
therein (to
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the extent perfection by filing, registration, recordation or
possession is required herein or therein) in favor of the Agent,
free and clear of all other Liens (other than Permitted Liens);
or except for expiration in accordance with its terms, any of the
Security Documents (in the case of any of the Mortgages, if the
same have been executed and delivered by the individual parties
thereto) shall for whatever reason be terminated or cease to be
in full force and effect, or the enforceability thereof shall be
contested by the Borrower or any other Obligor; or if the
Mortgagor under any Mortgage covering any Mortgage Property
located in Missouri (if the Mortgage relating to such Mortgage
Property shall have been executed and delivered by the individual
parties thereto and be in effect) shall give notice to any of the
Agent and the Banks terminating the operation of such Mortgage as
security for Loans made hereunder or obligations incurred
hereunder after the date on which such notice is given; or
(k) Any of the following events shall occur and be
continuing:
(i) any person or group (within the meaning of Rule
13d-5 under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and Section 13(d) and 14(d) of the
Exchange Act (other than Warburg and the Warburg Affiliates)
becomes, directly or indirectly, in a single transaction or in
a related series of transactions by way of merger,
consolidation or other business combination or otherwise, the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 35% (or such higher percentage as
shall be owned at such time by Warburg and/or the Warburg
Affiliates) of the capital stock of the Borrower on a
fully-diluted basis (in other words, giving effect to the
exercise of any warrants, options and conversion and other
rights); or
(ii) a majority of the Board of Directors of the
Borrower shall no longer be composed of individuals (x) who
are members of said Board on the Effective Date, (y) whose
election or nomination to said Board has been approved by
individuals referred to in the foregoing clause (x)
constituting at the time of such election or nomination at
least a majority of said Board or (z) whose election or
nomination to said Board was approved by individuals referred
to in the foregoing clauses (x) and (y) constituting at the
time of such election or nomination at least a majority of
said Board;
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(l) any Federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body takes any final
and nonappealable action which has the effect of reducing (i) the net
operating loss carryforwards referred to in Section 7.24 hereof to an
amount below an amount (the "ADJUSTED NOL") equal to the excess of
$260,000,000 over the amount of any net operating loss carryforwards
utilized after December 31, 1993 against income of JNI and JCI and
their respective Subsidiaries, or the effect of materially limiting the
use of the Adjusted NOL or (ii) the interest carryforwards referred to
in Section 7.24 hereof below an amount (the "ADJUSTED INTEREST
CARRYFORWARD") equal to the excess of $19,000,000 over the amount of
any interest carryforwards utilized after December 31, 1993 against
income of JNI and JCI and their respective Subsidiaries, or the effect
of materially limiting the use of the Adjusted Interest Carryforward;
or
(n) there shall have been asserted against the Borrower or any
of its Subsidiaries an Environmental Claim that, in the judgment of the
Majority Banks is reasonably likely to be determined adversely against
the Borrower or such Subsidiary, and the amount thereof (either
individually or in the aggregate) is reasonably likely to have a
Material Adverse Effect (insofar as such amount is payable by the
Borrower or such Subsidiary but after deducting any portion thereof
that is reasonably expected to be paid by other creditworthy Persons
jointly and severally liable therefor);
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 9 with respect to any Obligor, (A) the Agent
may and, upon request of the Majority Banks shall, by notice to the Borrower,
terminate the Commitments and they shall thereupon terminate, and (B) the Agent
may and, upon request of the Majority Banks shall, by notice to the Borrower
declare the principal amount then outstanding of, and the accrued interest on,
the Loans and all other amounts payable by the Borrower hereunder and under the
Notes (including, without limitation, any amounts payable under Section 5.05
hereof) to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower; and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 9 with respect to any Obligor, the
Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Borrower hereunder and under the Notes (including, without
limitation, any amounts
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payable under Section 5.05 hereof) shall automatically become immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
Section 10. THE AGENT.
10.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Credit Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 hereof shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents): (a) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents, and shall not by reason of this Agreement or
any other Credit Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or in any other Transaction Document, or
in any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Transaction Document, or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, any Note or any other Transaction Document or any other
document referred to or provided for herein or therein or for any failure by the
Borrower or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Credit Document; and (d)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other Credit Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a notice of the assignment or transfer thereof shall have been filed with the
Agent, together with the consent of the Borrower to such assignment or transfer
(to the extent provided in Section 11.06(b) hereof). No Managing Agent, Co-Agent
or Lead Manager referred to on the cover page or the signature pages of
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this Agreement shall have any rights or obligations under this Agreement except
in its capacity as a "Bank" hereunder.
10.02 RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
As to any matters not expressly provided for by this Agreement or any other
Credit Document, the Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Banks or, if provided herein, in accordance
with the instructions given by the Majority Revolving Credit Banks, the Majority
Term Loan Banks or all of the Banks as is required in such circumstance, and
such instructions of such Banks and any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.
10.03 DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks. The Agent shall (subject to Section 10.07 hereof) take
such action with respect to such Default as shall be directed by the Majority
Banks or, if provided herein, the Majority Revolving Credit Banks or the
Majority Term Loan Banks, PROVIDED that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interest of the Banks except to the extent
that this Agreement expressly requires that such action be taken, or not be
taken, only with the consent or upon the authorization of the Majority Banks,
the Majority Revolving Credit Banks, the Majority Term Loan Banks or all of the
Banks.
10.04 RIGHTS AS A BANK. With respect to its Commitments and
the Loans made by it, Chase (and any successor acting as Agent) in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. Chase (and any successor acting as
Agent) and its affiliates may (without having to account therefor to any Bank)
accept deposits
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from, lend money to, make investments in and generally engage in any kind of
banking, trust or other business with the Borrower (and any of its Subsidiaries
or Affiliates) as if it were not acting as the Agent, and Chase and its
affiliates may accept fees and other consideration from the Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
10.05 INDEMNIFICATION. The Banks agree to indemnify the Agent
(to the extent not reimbursed under Section 11.03 hereof, but without limiting
the obligations of the Borrower under said Section 11.03) ratably in accordance
with the aggregate principal amount of the Loans held by the Banks (or, if no
Loans are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Agent (including by any Bank) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Transaction Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Borrower is
obligated to pay under Section 11.03 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, PROVIDED that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
10.06 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or under any other
Credit Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any of the
other Credit Documents or any other document referred to or provided for herein
or therein or to inspect the Properties or books of the Borrower or any of its
Subsidiaries. Except for notices, reports and other
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documents and information expressly required to be furnished to the Banks by the
Agent hereunder or under the Security Documents or delivered to the Agent with
the intent that such notices, reports and other documents and information shall
be distributed to the Banks pursuant to the terms hereof, the Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Subsidiaries (or any of its affiliates) that may come
into the possession of the Agent or any of its affiliates.
10.07 FAILURE TO ACT. Except for action expressly required of
the Agent hereunder and under the other Credit Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the Banks of
their indemnification obligations under Section 10.05 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
10.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower, and
the Agent may be removed at any time with or without cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in the United States of America, with a combined capital and surplus
of at least $500,000,000, PROVIDED that if such successor Agent shall not have
an office in New York, New York at which payments hereunder and notices
delivered hereunder and under the Security Documents are to be made, then the
parties hereto agree to effect such modifications to this Agreement and the
Security Documents as shall be appropriate to permit such payments to be made
and such notices to be delivered to a non-New York office. 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 hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any
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actions taken or omitted to be taken by it while it was acting as the Agent.
10.09 CONSENTS UNDER OTHER CREDIT DOCUMENTS. Except as
otherwise provided in Section 11.04 hereof with respect to this Agreement and
the Notes, the Agent may, with the prior written consent of the Required Lenders
(but not otherwise), consent to any modification, supplement or waiver under any
of the Credit Documents or agree to additional obligations being secured by the
Collateral under and as defined in the relevant Security Document if the Lien
for such additional obligations shall be junior to the Lien in favor of the
other obligations secured by the relevant Security Document (except that no such
consent shall be required for Liens securing Permitted Additional Debt incurred
as permitted by Section 8.07(e) hereof if such Liens may be PARI PASSU with the
Liens in favor of the Agent for the benefit of the Banks as permitted by said
Section 8.07(e)), PROVIDED that, without the prior consent of each Lender, the
Agent shall not (except as expressly provided herein or in the Credit Documents)
(a) release any collateral or otherwise terminate any Lien under any Credit
Document providing for collateral security, or agree to any other additional
obligations being secured by such collateral security, except that no such
consent shall be required, and the Agent is hereby authorized, to release any
Lien covering Property that is the subject of a Disposition of Property
permitted hereby or by any of the other Credit Documents or to which the
Required Lenders have consented or (b) release the Borrower or any Subsidiary
Guarantor from its obligations under the Credit Documents except that no such
consent shall be required, and the Agent is hereby authorized, to release any
Subsidiary Guarantor from its obligations under the Credit Documents in
connection with the Disposition by the Borrower (or any of its Subsidiaries) of
all of the capital stock of such Subsidiary Guarantor, if owned by the Borrower,
or the Disposition by such Subsidiary Guarantor of all of the Property of such
Subsidiary Guarantor, in either case, as permitted hereby or by any of the other
Credit Documents or with respect to which the Required Lenders have consented.
Section 11. MISCELLANEOUS.
11.01 WAIVER. No failure on the part of the Agent or any Bank
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
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power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
11.02 NOTICES. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement or any Note) shall be given or made by telecopy,
telegraph, cable or otherwise in writing and telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at (i) in the case of the Borrower
and the Agent, the "Address for Notices" specified below its name on the
signature pages hereof and (ii) in the case of each of the Banks, the address
(or telecopy number) set forth in its Administrative Questionnaire; or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier, delivered to the telegraph or cable office or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
11.03 EXPENSES, ETC. The Borrower agrees to pay or reimburse
each of the Banks and the Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel to Chase)
in connection with (i) the negotiation, preparation, execution and delivery of
this Agreement and the other Credit Documents, the making of the Loans hereunder
and the syndication of the credit facilities hereby provided and (ii) the
negotiation or preparation of any modification, supplement or waiver of any of
the terms of this Agreement or any of the other Credit Documents (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses of the Banks
and the Agent (including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any enforcement or
collection proceedings resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this Section
11.03; (c) all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Credit Documents or any other document referred to
herein or therein and all costs, expenses, taxes, assessments and other charges
incurred in connection with
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any filing, registration, recording or perfection of any security interest
contemplated by any Credit Document or any other document referred to therein;
and (d) all costs, expenses and other charges in respect of title insurance
procured with respect to the Liens created pursuant to the Mortgages.
The Borrower hereby agrees to indemnify the Agent and each
Bank and their respective directors, officers, employees, attorneys and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them (including, without
limitation, any and all losses, liabilities, claims, damages or expenses
incurred by the Agent or any Bank, whether or not the Agent or any Bank is a
party thereto) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to the Loans hereunder or any actual or proposed use by
the Borrower or any of its Subsidiaries of the proceeds of any of the Loans
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified). Without limiting the generality of the foregoing,
the Borrower will indemnify the Agent and each Bank from, and hold the Agent and
each Bank harmless against, any losses, liabilities, claims, damages or expenses
described in the preceding sentence (including any Lien filed against any
Mortgage Property or any part of the Property covered thereby thereunder in
favor of any governmental entity, but excluding, as provided in the preceding
sentence, any loss, liability, claim, damage or expense incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified)
arising under any Environmental Law as a result of the past, present or future
operations of the Borrower or any of its Subsidiaries (or any predecessor in
interest to the Borrower or any of its Subsidiaries), or the past, present or
future condition of any site or facility owned, operated or leased at any time
by the Borrower or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any Hazardous Materials at or
from any such site or facility, including any such Release or threatened Release
that shall occur during any period when the Agent or any Bank shall be in
possession of any such site or facility following the exercise by the Agent or
any Bank of any of its rights and remedies hereunder or under any of the
Security Documents.
CREDIT AGREEMENT
- 111 -
11.04 AMENDMENTS, ETC. Except as otherwise expressly provided
herein, any provision of this Agreement or the Notes or any of the other Credit
Documents may be amended or modified only by an instrument signed by the
Borrower and the Majority Banks, or by the Borrower and the Agent acting with
the written consent of the Majority Banks, and any provision of this Agreement
or any of the other Credit Documents may be waived by the Majority Banks or by
the Agent acting with the consent of the Majority Banks; PROVIDED that: (i) no
amendment, modification or waiver shall: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
the Commitments of a Bank without the consent of such Bank, (b) extend the date
fixed for the scheduled payment of principal of or interest on any Loan held by
any Bank or any fee or waive any Event of Default arising by reason of a failure
to pay any such principal or interest or fee without the consent of such Bank,
(c) reduce the amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee is payable hereunder without the consent
of such Bank, (d) alter the terms of this Section 11.04 without the consent of
all of the Banks, or (e) amend the definition of the term "Majority Banks",
"Majority Revolving Credit Banks", "Majority Term Loan Banks", "Lender" or
"Required Lenders", or modify in any other manner the number or percentage of
the Banks required to make any determinations or waive any rights hereunder or
to modify any provision hereof or thereof without the consent of all of the
Banks and any amendment, modification or waiver of the definition of the terms
"Lender" and "Required Lenders" or other modification of the number or
percentage of the Lenders required to make any determinations to be made by any
or all of the Lenders or waive any rights in favor of the Lenders or modifying
any provision thereof shall also require the consent of all of the Lenders; (ii)
any amendment, modification or waiver of (a) any of the conditions precedent
specified in Section 6.02 hereof with respect to the making of Revolving Credit
Loans shall require the consent of the Majority Revolving Credit Banks and (b)
any of the conditions precedent to the making of any Series of PAD Loans other
than the requirements of Sections 2.01(e) hereof shall require only the consent
of Banks holding at least 60% of the related Series of PAD Commitments for such
PAD Loans; and (iii) any amendment of Section 10 hereof, or which alters the
rights or obligations of the Agent hereunder or under any of the other Credit
Documents, shall require the consent of the Agent.
11.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
CREDIT AGREEMENT
- 112 -
11.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Borrower may not assign its rights or obligations
hereunder or under the Notes without the prior consent of all of the Banks and
the Agent.
(b) Each Bank may assign any of its Loans, its Notes, and its
Commitments (but only with the consent of, in the case of its outstanding
Commitments, the Borrower and the Agent, which consent shall not be unreasonably
withheld); PROVIDED that (i) no such consent by the Borrower or the Agent shall
be required in the case of any assignment to another Bank and no consent by the
Borrower shall be required if a Default has occurred and is continuing; (ii)
each such assignment shall be in an amount such that, after giving effect to
such assignment, the sum of (A) the aggregate amount of the unused Commitments
(if the Commitments are then in effect) of each of the assignor Bank and the
assignee bank PLUS (B) the aggregate amount of the Loans held by each of the
assignor Bank and the assignee bank shall be equal to or greater than $5,000,000
(unless, after giving effect to such assignment and all other such assignments
by such assigning Bank occurring simultaneously or substantially simultaneously
therewith, such assigning Bank shall hold no Commitments or Loans hereunder);
(iii) each such assignment by a Bank of its Revolving Credit Loans, Revolving
Credit Note or Revolving Credit Commitment shall be made in such manner so that
the same portion of its Revolving Credit Loans, Revolving Credit Note and
Revolving Credit Commitment is assigned to the respective assignee; (iv) each
such assignment by a Bank of its Term Loans and Term Note shall be made in such
manner so that the same portion of its Term Loans and Term Note is assigned to
the respective assignee; and (v) each such assignment by a Bank of its PAD Loans
of a particular Series or PAD Commitments of a particular Series and PAD Note
for PAD Loans of such Series shall be made in such manner so that the same
portion of its PAD Loans of such Series and PAD Commitment of such Series and
PAD Note for PAD Loans of such Series is assigned to the respective assignee.
Upon execution and delivery by the assignee to the Borrower and the Agent of an
instrument in writing pursuant to which such assignee agrees to become a "Bank"
hereunder (if not already a Bank) having the Commitment(s) and Loans specified
in such instrument, and upon consent thereto by the Borrower and the Agent, to
the extent required above, the assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the consent of the
Borrower and the Agent), the obligations, rights and benefits of a Bank
hereunder holding the Commitment(s) and Loans (or portions thereof) assigned to
it (in addition to the Commitment(s) and Loans, if any, theretofore held by such
assignee) and the assigning Bank shall, to the extent of
CREDIT AGREEMENT
- 113 -
such assignment, be released from the Commitment(s) (or portion(s) thereof) so
assigned. Upon each such assignment the assigning Bank shall pay the Agent an
assignment fee of $3,000.
(c) A Bank may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loan held by it or Loans made
or to be made by it, in which event each such participant shall be entitled to
the rights and benefits of the provisions of Section 8.01(k) hereof with respect
to its participation in such Loan as if (and the Borrower shall be directly
obligated to such participant under such provisions as if) such participant were
a "Bank" for purposes of said Section, but shall not have any other rights or
benefits under this Agreement or any Note (the participant's rights against such
Bank in respect of such participation to be those set forth in the agreement
(the "PARTICIPATION AGREEMENT") executed by such Bank in favor of the
participant). All amounts payable by the Borrower to any Bank under Section 5
hereof shall be determined as if such Bank had not sold or agreed to sell any
participations in such Loan and as if such Bank were funding all of such Loan in
the same way that it is funding the portion of such Loan in which no
participations have been sold. In no event shall a Bank that sells a
participation be obligated to the participant under the Participation Agreement
to take or refrain from taking any action hereunder or under such Bank's Note
except that such Bank may agree in the Participation Agreement that it will not,
without the consent of the participant, agree to (i) the increase or extension
of the term, or the extension of the time or waiver of any requirement for the
reduction or termination, of such Bank's Commitments, (ii) the extension of any
date fixed for the payment of principal of or interest on the related Loan or
Loans or any portion of any fees payable to the participant, (iii) the reduction
of any payment of principal thereof, (iv) the reduction of the rate at which
either interest is payable thereon or (if the participant is entitled to any
part thereof) commitment fee is payable hereunder to a level below the rate at
which the participant is entitled to receive interest or commitment fee (as the
case may be) in respect of such participation or (v) release any collateral or
otherwise terminate any Lien under the Security Documents (other than in
connection with the Disposition of Property permitted hereunder or to which the
Majority Banks have consented hereunder).
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06, any Bank may
(without notice to the Borrower, the Agent or any other Bank and without payment
of any fee) (i) assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A and
CREDIT AGREEMENT
- 114 -
any Operating Circular issued by such Federal Reserve Bank and (ii) assign all
or any portion of its rights under this Agreement and its Loans and its Notes to
an affiliate of such Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
(e) A Bank may furnish any information concerning the Borrower
and/or any of its Subsidiaries in the possession of such Bank from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.12 hereof.
(f) Anything in this Section 11.06 to the contrary
notwithstanding, no Bank may assign or participate any interest in any Loan held
by it hereunder to the Borrower or any of its Subsidiaries or any Affiliates
without the prior consent of each Bank.
11.07 SURVIVAL. The obligations of the Borrower under Sections
5.01, 5.05 and 11.03 hereof, and the obligations of the Banks under Section
10.05 hereof, shall survive the repayment of the Loans and the termination of
the Commitments. In addition, each representation and warranty made, or deemed
to be made by a notice of any Loan, herein or pursuant hereto shall survive the
making of such representation and warranty, and no Bank shall be deemed to have
waived, by reason of making any Loan, any Default that may arise by reason of
such representation or warranty proving to have been false or misleading,
notwithstanding that such Bank or the Agent may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such Loan was made.
11.08 CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the law of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State Court sitting in New York County
for the
CREDIT AGREEMENT
- 115 -
purposes of all legal proceedings arising out of or relating to this agreement
or the transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
11.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 CONFIDENTIALITY. Each Bank and the Agent agrees to keep
confidential, in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, all non-public information provided to such Bank by or on
behalf of the Borrower or any of its Subsidiaries or Affiliates in connection
with this Agreement and identified as being confidential at the time the same is
delivered to the Banks or the Agent; PROVIDED that any Bank or the Agent may
disclose such information (a) to the extent required by statute, rule,
regulation or judicial process, (b) to counsel for any of the Banks or the
Agent, (c) to bank examiners, auditors or accountants, (d) to the Agent or any
other Bank (or to Chase Securities Inc.), (e) in connection with any litigation
to which any one or more of the Banks or the Agent is a party, (f) to a
subsidiary or affiliate of any Bank or the Agent, (g) to any assignee or
participant (or prospective assignee or participant) of or in any Loans so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Bank a Confidentiality Agreement
substantially in the form of Exhibit D hereto, (h) to any other Person in the
course of the enforcement of any Bank's or the Agent's rights or remedies
hereunder or under any other Credit Document, (i) to any other creditor of any
Obligor at any time during the continuance of an Event of Default or (j) that
subsequently becomes publicly available (other than by reason of a breach by any
Bank or the Agent of its obligations under this Section 11.12).
CREDIT AGREEMENT
- 116 -
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed as of the day and year first above written.
JOURNAL REGISTER COMPANY
By /S/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President &
Chief Financial Officer
CREDIT AGREEMENT
- 117 -
AGENT
THE CHASE MANHATTAN BANK,
individually and as Agent
By /S/ XXXX X. XXXXX
-----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
MANAGING AGENTS
THE BANK OF NEW YORK
By /S/ XXXXXX X. XXXXX
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
CIBC, INC.
By /S/ XXXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Director
FLEET NATIONAL BANK
By /S/ XXXX XXXXXX
-----------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By /S/ XXXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
CREDIT AGREEMENT
- 118 -
CO-AGENTS
TORONTO DOMINION (NEW YORK), INC.
By /S/ XXXXX XXXXXX
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
By /S/ XXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
LEAD MANAGERS
CORESTATES BANK
By /S/ XXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
OTHER BANKS
ABN-AMRO BANK, N.V.
By /S/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Group Vice President
By /S/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Group Vice President & Director
CREDIT AGREEMENT
- 119 -
BANK OF HAWAII
By /S/ J. XXXXX XXXXXXX
-----------------------------
Name: J. Xxxxx Xxxxxxx
Title: Vice President
FIRST NATIONAL BANK OF MARYLAND
By /S/ W. XXXXX XXXXXXX
-----------------------------
Name: W. Xxxxx Xxxxxxx
Title: Vice President
FIRST HAWAIIAN BANK
By /S/ XXXXX X. XXXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
GREAT WEST LIFE & ANNUITY
INSURANCE COMPANY
By /S/ XXXXX X. XXXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
Investments
By /S/ XXXX XXXXXXX
-----------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
Private Placement Investments
MICHIGAN NATIONAL BANK
By /S/ XXXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Commercial Relationship Manager
CREDIT AGREEMENT
- 120 -
SOCIETE GENERALE
By /S/ XXXX XXXXX
-----------------------------
Name: Xxxx Xxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By /S/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SUMMIT BANK AS SUCCESSOR TO
UNITED JERSEY BANK CENTRAL, N.A.
By /S/ XXXXX X. XXXX, XX.
-----------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /S/ XXXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Director
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /S/ XXXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Authorized Sigantory
CREDIT AGREEMENT
- 121 -
DEEPROCK & COMPANY
By XXXXX XXXXX MANAGEMENT,
as Investment Advisor
By /S/ XXXXX X. PAGE
-----------------------------
Name: Xxxxx X. Page
Title: Vice President
CREDIT AGREEMENT
ANNEX 1
COMMITMENTS AND LOANS
[See BII\78737]
ANNEX 2
ADJUSTMENTS TO CASH FLOW
------------------------
AMOUNT OF
CALENDAR MONTH INCREASE
-------------- ---------
October 1995 $26,380
November 1995 $27,469
December 1995 $25,007
January 1996 $24,300
February 1996 $23,681
March 1996 $25,928
April 1996 $25,317
May 1996 $26,706
June 1996 $24,295
July 1996 $24,300
August 1996 $25,311
September 1996 $26,145
October 1996 $26,380
November 1996 $27,469
December 1996 $25,007
January 1997 $20,819
February 1997 $20,505
March 1997 $21,369
April 1997 $21,436
May 1997 $21,853
June 1997 $20,555
ANNEX 2
ANNEX 3
NEN PERMITTED DISPOSITIONS
--------------------------
PROPERTY NET RETURN
-------- ----------
00 Xxxxx Xxxx, Xxxx Xxxxxxxx, XX (Imprint News) $ 400,000
000 Xxx Xxxxx Xxxxxx, Xxxxxxx, XX (Citizen) $ 400,000
000 X. Xxxx Xxxxxx, Xxxxxxxx, XX (Shoreline Times) $ 400,000
0-00 Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, XX (Circ) $ 75,000
0000 Xxxxxxxxxx Xx., Xxxxxxxx, XX (FVH) $ 100,000
Old Lake County, Ohio Facility $ 400,000
Total $1,775,000
ANNEX 3
SCHEDULE I
CONSENTS AND APPROVALS
- Lease Agreement, dated 8/12/92 between Herald Publishing Company and
Tokai Financial Services, Inc. (Digital Copier).
- Master Lease No. 1748, dated 5/1/93 between The Herald Publishing
Company and NELCO, Ltd. (Macintosh Computer Equipment).
- Lease, (no date) between Herald Publishing Co. and Master Lease
Corporation (card access system).
- Lease, dated 10/10/90 between The Herald Publishing Company and
Master Lease Corporation (Security System).
- Forms UCC-1 evidencing the security interest of Fleet Bank in the assets of
The Herald Publishing Company (Forms UCC-3 to be filed promptly following the
closing of the New Britain Acquisition).
SCHEDULE I
SCHEDULE II
LITIGATION
The following is a list of current or pending litigation matters. No assurances
can be made as to the outcome of these actions.
JOURNAL NEWS, INC.
1. XXXXXX, ET AL. V. JOURNAL NEWS, INC., ET AL. - Field in Cuyahoga
County, Ohio, Court of Common Pleas - suit for judgment, personal
injury claim. Insurance coverage has been acknowledged by
insurance company.
THE NEW HAVEN REGISTER
1. XXXXX XXXXXXXXXX V. XXXXXX CAMERA AND THE NEW HAVEN REGISTER -
Personal injury claim. Case is continuing. Insurance coverage has
been acknowledged by insurance company.
2. XXXXXX XXXXX V. THE NEW HAVEN REGISTER - Personal injury claim.
Case is continuing.
3. XXXX XXXXXXXX - Personal injury claim. Case is continuing.
Insurance coverage has been acknowledged by insurance company.
4. XXXXXXX XXXXX - Personal injury claim. Case is continuing.
5. XXXXXXXX XXXXX - Personal injury claim. Case is continuing.
Insurance coverage has been acknowledged by insurance company.
6. XXXXXX XXXXXX - Personal injury claim. Case is continuing.
7. XXXXXXX X. XXXXX V. THE NEW HAVEN REGISTER - Civil lawsuit. Case
is continuing.
8. XXXXXX XXXXXXX V. XXXXXXX XXXX AND THE NEW HAVEN REGISTER -
Personal injury claim. Case is continuing.
9. XXXXX XXXXXXXX V. THE NEW HAVEN REGISTER - Personal injury claim.
Case is continuing.
10. OFFICE OF CONNECTICUT ATTORNEY GENERAL INVESTIGATION -
Investigation by the Connecticut Attorney General's office of a
complaint regarding classified advertising in the New Haven
Register. The investigation concerns whether an aspect of the New
Haven Register's cross-selling program with certain affiliated
weekly newspapers constitutes a violation of Connecticut or federal
antitrust laws. No judicial or administrative proceeding has been
brought as a result of this investigation, and it is too early to
SCHEDULE II
2
predict whether such a proceeding will be brought or what the outcome
would be. Nonetheless, the Company believes that there are substantial
arguments that the practice at issue does not violate applicable
antitrust laws.
LORIAN JOURNAL COMPANY
1. XXXXX XXXXX V. THE MORNING JOURNAL, ET AL. - Filed in Lorain County
Court of Common Pleas. Defamation claim. Insurance coverage has
been acknowledged by the insurance company.
2. WORKERS' COMPENSATION CLAIM AGAINST THE MORNING JOURNAL BY XXXXXXX
XXXXX - Workers' Compensation claim.
3. XXXXXX XXXXXX AND XXXXXX XXXXXX XX. VS. THE MORNING JOURNAL - Filed
in Lorain County Court of Common Pleas. Accident injury. Case is
continuing. Insurance coverage has been acknowledged by the
insurance company.
4. XXXXXX X. XXXXXX XX. V. THE LORAIN JOURNAL, INC. - Filed in Huron
County Common Pleas Court. Accident injury. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
5. XXXX XXX XXXXXXX V. THE MORNING JOURNAL AND XXXXXXXX XXXXXX - Filed
in Lorain County Court of Common Pleas. Accident injury. Case is
continuing. Insurance coverage has been acknowledged by the
insurance company.
MISSISSIPPI VALLEY OFFSET
1. XXXX XXXXXX V. MISSISSIPPI VALLEY OFFSET, INC. - Workers'
Compensation claim. Case continuing.
SUBURBAN PUBLICATIONS, INC.
1. XXXXXXX X. XXXX VS. SUBURBAN PUBLICATIONS, INC. - Filed in Court of
Common Pleas, Xxxxxxxxxx County, PA. Claim for unpaid legal fees
by his client resulting from out of court settlement of case. Case
is continuing.
DAILY LOCAL NEWS COMPANY OF WEST CHESTER, PA.
1. XXXXXX V. DAILY LOCAL NEWS - Libel case. Case is continuing.
2. XXXXX V. DAILY LOCAL NEWS - Libel case. Case is continuing.
SCHEDULE II
3
XXXX PUBLISHING COMPANY, INC.
1. NYS UNEMPLOYMENT INSURANCE DIVISION V. THE RECORD - Employee vs.
Independent Contractor claim. Case is continuing.
2. XXXXX XXXX V. THE RECORD - Libel case. Case is continuing.
3. DEMERRITI V. THE RECORD - Case is continuing.
CAPITOL CITY PUBLISHING
1. SOUTH JERSEY REGIONAL AIRPORT V. THE TRENTONIAN - Libel case. Case
is continuing. Insurance coverage has been acknowledged by the
insurance company.
2. ACTIVE PET SUPPLIES V. THE TRENTONIAN - Libel case. Case is
continuing. Insurance coverage has been acknowledged by the
insurance company.
3. RICHART V. THE TRENTONIAN - Libel case. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
4. XXXXXXX X. THE TRENTONIAN - Invasion of privacy. Case is
continuing. Insurance coverage has been acknowledged by the
insurance company.
5. NARO V. THE TRENTONIAN - Libel. Case is continuing. Insurance
coverage has been acknowledged by the insurance company.
6. XXXXXX V. THE TRENTONIAN - Injury. Case is continuing. Insurance
coverage has been acknowledged by the insurance company.
7. HORYD V. THE TRENTONIAN - Defamation and trespass. Case is
continuing. Insurance coverage has been acknowledged by the
insurance company.
8. XXXXXXX V. THE TRENTONIAN - Defamation. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
9. XXXXXX X. THE TRENTONIAN - Copyright. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
10. XXXXX V. THE TRENTONIAN - Defamation. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
11. MAURIZZIO V. THE TRENTONIAN - Defamation. Case is continuing.
SCHEDULE II
4
12. XXXXX V. THE TRENTONIAN - 3rd Party personal injury. Case is
continuing.
SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS, INC.
1. XXXXXX XXXXXX, ET AL. V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
Filed in the Circuit Court of St. Louis County, MO. Carrier claim.
Case is continuing.
2. An assessment from the State of Missouri for certain income taxes for
the years 1988 through 1991 has been appealed by the Company. This
matter is continuing. The Company has provided adequate reserves for
this matter.
3. XXX XXXXXX, ET AL. V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
Filed in the Missouri Circuit Court, 22nd Judicial Circuit
(St. Louis City) - Carrier claim. Case is continuing.
4. XXXXXXX XXXXXXX V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS - Filed
in the Circuit Court of the City of St. Louis. Wrongful discharge
claim. Case is continuing.
5. XXXXXXXXX XXXXXXXX V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
Libel claim. Insurance coverage has been acknowledged by the
insurance company.
6. XXXXXXXXX XXXXX V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS - Filed
with Equal Employment Opportunity Commission. Family Medical Leave
Act claim.
NORTHEAST PUBLISHING, INC.
1. XXXX XXXXXXXX V. NORTHEAST PUBLISHING, INC. - Wrongful discharge.
Case is continuing.
2. XXXX XXXXXXXX V. NORTHEAST PUBLISHING, INC. - Wrongful discharge.
Case is continuing.
3. XXXXXXX XXXXXX X. NORTHEAST PUBLISHING, INC. - General liability
claim. Case is continuing. Insurance coverage has been
acknowledged by the insurance company.
4. XXXXX XXXXXX V. NORTHEAST PUBLISHING, INC. - General liability
claim. Case is continuing. Insurance coverage has been
acknowledged by the insurance company.
SCHEDULE II
5
5. XXXXXXXX XXXXX V. NORTHEAST PUBLISHING, INC. - Discrimination claim
filed with Massachusetts Commonwealth Against Discrimination
(MCAD). Case is continuing.
6. XXXXX XXXXX V. NORTHEAST PUBLISHING, INC. - General liability
claim. Case is continuing. Insurance coverage has been
acknowledged by the insurance company.
7. XXXXXXX XXXXXXX V. NORTHEAST PUBLISHING, INC., XXX XXXXXXX AND
XXXXX XXXXXX - Discrimination claim filed with MCAD. Case is
continuing.
8. SAMSON OMOSEFUNMI V. NORTHEAST PUBLISHING, INC. - Filed in
Massachusetts Superior Court. Libel suit. Case is continuing.
Insurance coverage has been acknowledged by the insurance company.
PHOENIXVILLE NEWSPAPERS, INC.
1. XXXXX X. XXXXXXXXXX AND XXXXXXXXXX CONSTRUCTION CO. V. XXXXXXX X.
XXXXXXXX, III AND PHOENIXVILLE NEWSPAPERS, INC. AND JOURNAL
REGISTER COMPANY D/B/A THE PHOENIX AND THE PHOENIX - Libel case.
Libel coverage is in place.
2. XXXXXXXXX X. XXXXXX V. XXXXXXX X. XXXXXXXX V. PHOENIXVILLE
NEWSPAPERS, INC. T/A THE PHOENIX AND XXXXXXX XXXXX - Libel case.
Case is continuing.
THE NEWS HERALD
1. XXXXXXX XXXXXXXXX V. THE NEWS HERALD - Filed with Federal Court.
Filed for motion for summary judgment in December 1996.
2. XXXXXXX SPRATKA V. THE NEWS HERALD - Defamation claim. Case is
continuing.
3. XXXXX ENGLISH V. THE NEWS HERALD - Liability case. Case is
continuing.
4. XXXX XXXXXXXX V. THE NEWS HERALD - Workers' Compensation. Case is
continuing.
TIMES HERALD PUBLISHING CO., INC.
1. XXXXXXX XXXXXX V. NORRISTOWN TIMES HERALD, XXXXXX X. XXXXXXXXXX,
XXXXXXXX XXXXX AND XXX XXXXXX - Libel case. Case is continuing.
SCHEDULE II
6
2. SPECTRUM MARKETING SERVICES V. THE TIMES HERALD - Liability case.
Case is continuing.
NEW ENGLAND NEWSPAPERS, INC.
1. XXXXXX XXXXXXXX V. THE TIMES - Libel case. Case is continuing.
2. XXXX XXXXX V. THE TIMES - Unfair labor practice charge filed with
RICHR.
THE EVENING CALL PUBLISHING COMPANY
1. XXXXX XXXX V. THE EVENING CALL PUBLISHING COMPANY - Breach of
contract. Case is continuing.
2. XXXXX XXXXXX V. THE EVENING CALL PUBLISHING COMPANY - Unemployment
benefits. Case is continuing.
SCHEDULE II
SCHEDULE III
INVESTMENTS
1. The Borrower holds investments in stock of its
subsidiaries, which subsidiaries are listed on Schedule IV.
2. The initial membership dues contributed to Journal Register Company
are as follows:
a) Suburban Newspapers of Greater St. Louis $ 5,000
b) Xxxxx Telegraph Printing Company 5,000
c) Evening Call Publishing Company 5,000
d) Capitol City Publishing Company 5,000
e) Community Service Publishing Company 5,000
f) New England Newspapers, Inc. 5,000
g) Northeast Publishing, Inc. 5,000
h) Phoenixville Newspapers, Inc. 5,000
i) Xxxx Publishing Company 5,000
j) Daily Local News Company 5,000
k) Suburban Publications, Inc. 5,000
l) Times Herald Publishing Company 5,000
m) The Lorain Journal Company including
Lake County News Herald 10,000
n) Mansfield Journal Company including
Dover Times Reporter 10,000
o) The New Haven Register 5,000
p) The Register Citizen 5,000
q) Bristol Press 5,000
------
$95,000
3. A bond with the City of Xxxxx Sewer Authority on behalf of the
Xxxxx Telegraph in the amount of $5,000.
4. Postage guarantees with the US Post Office are as follows:
a) Alton, Illinois $5,409
b) Willoughby, Ohio 1,834
c) Xxxxxxxxx, Xxxx 000
d) New Philadelphia/Dover, Ohio 3,871
e) Troy, New York 5,280
f) Phoenixville, Pennsylvania 1,808
g) St. Louis, Missouri 5,409
h) Fall River, New York 1,000
i) Lorain, Ohio 21,590
j) West Chester, Pennsylvania 5,860
k) Woonsocket, Rhode Island 19
5. A Security Deposit with the Painesville, Ohio Electric Co. in the
amount of $60.
SCHEDULE III
2
6. Mansfield Journal Company and The Lorain Journal Company are owners of
Debenture Bonds issued by the Associated Press. The Bonds have a
maturity date of January 1, 2000 and accrue interest at the rate of 4%,
payable semiannually. The amount of the investment as of March 31,
1997, is $1,000.
7. Certain subsidiaries of the Borrowers, together with other members
of JRC, participate in the Journal Register Company Employee
Benefits Plan (the "Plan"). The Plan provides medical and dental
benefits to eligible employees and their beneficiaries and to fund
such benefits. Each member company pays a monthly premium which is
based upon the number of employees then eligible to participate in
the Plan. The funds are paid directly to a trust (the "Trust"),
which was established pursuant to 501(c)(9) of the Internal Revenue
Code, and the assets are used exclusively to provide benefits under
the Plan. The Borrowers plan to continue their participation in
the Plan and the Trust.
8. A Security Deposit of $500 with the City of Mentor as security for the
Lake County News Herald's commercial printing job with the City of
Mentor.
9. A Security Deposit with the Worker's Compensation Board of Ohio, on
behalf of the Dover Times Reporter in the amount of $195.
10. A Security Deposit with the Associated Press, on behalf of the Xxxx
Publishing Company and Northeast Publishing Company in the amount
of $1,000.
11. A Security Deposit with the Associated Press, on behalf of New
England Newspapers in the amount of $1,000.
12. A Security Deposit with Xxxx Xxxxxxxxx (property landlord) on behalf of
Suburban Publications in the amount of $400 for the rental of office
space.
13. Membership Fee paid to Journal Register Company, on behalf of New
England Newspapers in the amount of $2,700 related to membership in
ISSG.
14. A Security Deposit with Xxxxx Xxxxxxxxx (property landlord) on behalf
of the Lorain Journal Company in the amount of $625 for the rental of
office space.
15. A Security Deposit with Ludwigs Corner Bureau Office and Kennett
Square Bureau on behalf of Daily Local News Company in the amount
of $665 and $195 respectively.
SCHEDULE III
3
16. Various security deposits for rent on behalf of Suburban Newspapers
of Greater St. Louis totaling $8,683.
17. A Security Deposit for the rental of the Clinton, Wallingford, and
Guilford Bureau Officers, on behalf of the New Haven Register in
the amount of $5,657.
18. A Security Deposit for the rental of a copy machine and rental of
the Westport office on behalf of County Kids totaling $1,430.
19. A Security Deposit for Sales and Use Tax with the Missouri
Department of Revenue Division of Taxation and Collection on behalf
of Suburban Newspapers of Greater St. Louis in the amount of
$4,983.
20. Security Deposits for rent on behalf of Southern Rhode Island
Newspapers in the amount of $985.
SCHEDULE III
SCHEDULE IV
JOURNAL NEWS, INC. - DELAWARE
SUBSIDIARIES OF JNI
COMPANY JURISDICTION
------- ------------
Mansfield Journal Company Ohio
The Lorain Journal Company Ohio
Mississippi Valley Offset Company, Inc. Missouri
Xxxxxx Media, Inc. Delaware
Xxxxxx Communications, Ltd.* New York
Xxxxxx Freeport Pennysaver, Inc.* Delaware
Xxxxxx Pennysaver IV, Inc.* Delaware
Xxxxxx Pennysaver III, Inc.* Delaware
Xxxxxx Pennysaver II, Inc.* Delaware
Xxxxxx Pennysaver, Inc.* Delaware
All Home Distribution, Inc.* New York
Pennysaver Home Distribution Corp.* New York
NHR Holding Company, Inc. Delaware
NH Acquisition Corp. Delaware
New Haven Register, Inc. Connecticut
Hartford Times, Inc. Maryland
County Kids, Inc. Connecticut
Community Offset, Inc. Connecticut
Central New Jersey Publishing Company Delaware
Torrington Acquisition Corp. Delaware
Bristol Acquisition Corp. Delaware
New England Acquisition Corp. Delaware
New Britain Publishing Company Delaware
The Herald Publishing Company Connecticut
The Herald Publishing Company, East Connecticut
The New Britain Herald Realty Company Connecticut
Middletown Acquisition Corp. Delaware
--------
*A direct or indirect subsidiary of Xxxxxx Media, Inc.
SCHEDULE IV
2
JOURNAL COMPANY, INC. - DELAWARE
SUBSIDIARIES OF JCI
COMPANY JURISDICTION
------- ------------
Xxxxx Telegraph Printing Company1 Missouri
Capitol City Publishing Co., Inc. New Jersey
Empire State Holdings Corporation Delaware
The Evening Call Publishing Company Rhode Island
New England Newspapers, Inc. New York
News Company of Ladue, Inc. Missouri
Northeast Publishing, Inc. Massachusetts
Northgate Commercial Printing Company Illinois
St. Louis Sun Publishing Company Delaware
Suburban Field Marketing, Inc. Missouri
Suburban Newspapers of Greater St. Louis, Inc.2 Missouri
Sunrise Industries, Inc. Delaware
Times Herald Publishing Company, Inc. Delaware
Xxxx Publishing Co., Inc. New York
Asheboro Publications, Inc. Delaware
Orange Coast Publishing Co. California
Tribune Publishing Company of Royal Oak Michigan
Taunton Acquisition Corp. Delaware
--------
1Alton stock is subject to that certain Stock Pledge Agreement dated May
21, 1985 between Sunrise Industries, Inc. and Xxxxxx X. Xxxxxx, Esq., as
agent on behalf of Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx, the
Xxxxxxx Trust, the X. Xxxxxxx Trust and Xxxxxxx Xxxxxxx, to secure
promissory notes payable to Xxxxxx X. Xxxxxx, Esq., as agent for Xxxx
Xxxxxxx, Xxxxx Xxxxxxx and the X. Xxxxxxx Trust.
2See Item 4 of Schedule V for JCI and its Subsidiaries
SCHEDULE IV
3
SUBSIDIARIES OF INS HOLDINGS, INC.
COMPANY JURISDICTION
------- ------------
INS Holdings, Inc. Delaware
INS Holdings (Kansas), Inc. Kansas
Integrated Newspaper Systems, Inc. Kansas
SCHEDULE IV
4
COMPANY JURISDICTION
------- ------------
Journal Register Company, LLC New York
Journal Register Company Delaware
Journal Register Newspaper, Inc. New Jersey
SCHEDULE IV
SCHEDULE V
LIENS ON PROPERTY OF JNI AND ITS SUBSIDIARIES
1. The mortgage referred to in Item 1 of Schedule VI.
2. Liens, encumbrances and other matters of title set forth in the
Title Reports.
3. The matters described in Schedule 4(h) of the NEN Acquisition
Agreement.
LIENS ON PROPERTY OF JCI AND ITS SUBSIDIARIES
1. Liens, encumbrances and other matters of title set forth in the
Title Reports.
2. Pledge of all of the then issued and outstanding shares of common
stock of Xxxxx Telegraph Printing Company pursuant to a certain
Stock Pledge Agreement dated May 21, 1985 between Sunrise
Industries, Inc. and Xxxxxx X. Xxxxxx, Esq., as agent on behalf of
Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, the Xxxxxxx Trust, the X. Xxxxxxx
Trust and Xxxx Xxx Xxxxxxx.
3. UCC-1 filed July 2, 1990 (1887137), debtor is Xxxxxxxx Printing
Co., secured party is Xxxxx Newspapers, Inc. Profit Sharing Plan
amended May 12, 1992 (2128305) to change name of debtor to Suburban
Newspapers of Greater St. Louis, Inc; UCC-1 filed July 2, 1990
(1887138), debtor is Xxxxxxxx Printing Co., secured party is Xxxxx
Newspapers, Inc. amended April 30, 1992 to change name of debtor to
Suburban Newspapers of Greater St. Louis, Inc. Both cover the
following property:
Xxxx Urbanite ten unit press U1204, 1976
Unit #1:U1204 - N 1000 series
Unit #2:U1204 - R 1000 series
Xxxx #0:X0000 - AS 1000 series
Unit #4:U1204B - L 1000 series **
Unit #5:U1204B - J 1000 series **
Xxxx #0:X0000X - X 0000 series **
Unit #7:U543A - F 500 series **
Unit #8:U543B - G 500 series
Unit #9:U543C - H 500 series
Unit #10:U734A - M 700 series
22 3/4 inch cutoff
standard dampener feed rollers
1000 series units as air pressure for water
and ink form rollers
SCHEDULE V
2
500 & 700 series are mechanical linkage
** new units installed Feb. 1990
Folder: Inverted folder U1204
32 pins
2 formers with skip slitters
configuration is standard Xxxx
MOTORS(2): (1) (2)
HP 100 100
Make Xxxxxxxxxxxx Xxxxxxxxxxxx
XX volts/amps 240/336 240/336
field volts/amps 240/4.93 240/4.93
frame no. J408-ATZ J408-ATZ
serial # 4-S-77 1-S-77
CONTROLLERS(2):
HP 100 100
Make Fincor Fincor
Model 2193A-100-40F 2193A-100-40F
Serial # 36182 36183
Voltage 240 240
Dwg or Print # C1039819 & C1039819 &
C1039821 C1039821 &
B10398290-2
Note: The Second Security Agreement between Xxxxx Newspapers and Jefferson
County Newspapers, Inc. dated June 30, 1992 and the Second Security Agreement
between Twin Cities Newspapers, Inc. and the Selma Times-Journal Publishing
Company Employees' Profit Sharing Trust dated August 1, 1974, as amended and
subordinated by a Subordination of Second Security Agreement dated May 1, 1976
which originally created these interests cover a broader range of property
including trade names, goodwill, circulation and advertising lists in addition
to personal property. These security interests are both subordinate to the First
Security Agreement between X.X. Xxxxxx and Twin Cities Newspapers, Inc.
dated August 1, 1974.
4. Security interest in 4,800 shares of Stock of Twin Cities
Newspapers, Inc. under an Escrow Agreement between Xxxxxx X. Xxxxxx
and Twin Cities Newspapers, Inc. et. al. and Commerce Bank of
Festus Missouri as Escrow Agent, to secure a Promissory Note to
H.L. and X. Xxxxxx from Twin Cities Newspapers, Inc. dated August
1, 1974 (December 14, 1993 principal balance of $80,000) and the
payments under a Non-competition Agreement between X.X. Xxxxxx and
SCHEDULE V
3
Twin Cities Newspapers, Inc. between August 1, 1974 (December 14,
1993 principal balance of $25,000). Twin Cities Newspapers, Inc.
is the predecessor by merger to Jefferson County Newspapers, Inc.,
which is the predecessor by merger to the Suburban Newspapers of
Greater Saint Louis, Inc. Secured parties do not have physical
possession of Stock of Suburban Newspapers of Greater St. Louis,
Inc.
5. UCC-1 Financing Statements described in Schedules 4(c) to the NEN
Acquisition Agreement.
SCHEDULE V
SCHEDULE VI
INDEBTEDNESS
1. Deferred building purchase obligation between The Dormers
Corporation and New Haven Acquisition Corporation. The outstanding
balance as of March 31, 1997 is $894,835.
2. Capital leases between Copier Concepts and Suburban Newspapers of
Greater St. Louis. The amount outstanding as of March 31, 1997 is
$16,579.
3. Amounts payable to the XxXxxxx Family by Suburban Newspapers of
Greater St. Louis. The amount outstanding as of March 31, 1997 is
$44,735.
4. Amount payable to Xxxxxx Xxxxx by New Haven Acquisition
Corporation. The amount outstanding as of March 31, 1997 is
$71,179.
SCHEDULE VI
SCHEDULE VII
HAZARDOUS MATERIALS FOR JNI AND SUBSIDIARIES
1. The items described in the Environmental Report as defined in this
Agreement.
2. The environmental indemnity with respect to the sale of certain
subsidiaries of JNI to Thomson Newspapers Corporation.
HAZARDOUS MATERIALS FOR JCI AND ITS SUBSIDIARIES
1. The items described in the Environmental Reports as defined in this
agreement.
2. "Phase II Site Assessment of 000 Xxxx Xxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx" prepared by ENSR Consulting and Engineering, dated June
1992.
3. The environmental indemnity with respect to the sale of assets at
000 Xxxx Xxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx.
4. The quarterly ground water report with respect to the sale of assets at
000 Xxxx Xxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx.
5. Additional site investigation of 000 Xxxx Xxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx, prepared by Atlas Environmental Engineering, dated
March 1997.
SCHEDULE VII
SCHEDULE VIII
CAPITALIZATION
Authorized and Issued Capital Stock:
300,000,000 shares of common stock, par value $.01 per share ("Common
Stock"), authorized, of which 48,437,500 are issued and outstanding
1,000,000 shares of preferred stock, par value $.01 per share ("Common
Stock"), authorized, of which none are issued and outstanding.
Outstanding Equity Rights and Payments:
1,937,500 options to purchase 1,937,500 shares of Common Stock
issued pursuant to the Stock Incentive Plan
Registration Rights Agreement by and among the Company, Warburg,
Xxxxxx Capital Company, L.P., Warburg, Xxxxxx Capital Partners,
L.P. and Warburg, Xxxxxx Investors, L.P.
Voting Agreement by and among the Company and Warburg, Xxxxxx
Capital Company, L.P., Warburg, Xxxxxx Capital Partners, L.P. and
Warburg, Xxxxxx Investors, L.P.
Journal Register Company Management Bonus Plan
The Company intends to terminate its StarShare Plan (the "StarShare
Plan") prior to the completion of the Company's initial public offering
(the "IPO"). The Units (as defined in the StarShare Plan) then
outstanding shall not be terminated. However, the Company is currently
seeking agreement from holders of such Units to provide that (i) the
valuation of each Unit then outstanding shall be $10.00 and (ii) with
respect to any Unit then outstanding which Unit has not vested in the
5th Performance Period or the 6th Performance Period (each as defined
in the StarShare Plan), (a) 75% of such Unit shall vest upon the
completion of the IPO and (b) 25% of such Unit shall vest in accordance
with the terms of the StarShare Plan.
SCHEDULE VIII
EXHIBIT A
[Form of Borrower Security Agreement]
BORROWER SECURITY AGREEMENT
BORROWER SECURITY AGREEMENT dated as of ______, 1997 between JOURNAL
REGISTER COMPANY, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "BORROWER") and THE CHASE MANHATTAN BANK, as
agent for the banks and other financial institutions party to the Credit
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "AGENT").
Journal Register Company, LLC ("JOURNAL REGISTER LLC"), a limited
liability company duly organized and validly existing under the laws of the
State of New York and the Agent are parties to a Pledge Agreement dated as of
December 21, 1994 (as heretofore modified and supplemented and in effect on the
date hereof, the "EXISTING PLEDGE AGREEMENT"), pursuant to which Journal
Register LLC, pledged and granted a security interest in the Collateral (as so
defined) as security for the Secured Obligations (as so defined) including,
INTER ALIA, obligations of Journal News, Inc. and Journal Company, Inc.
(collectively, the "EXISTING BORROWERS"), in each case a wholly owned subsidiary
of Journal Register LLC, under an Amendment and Restatement dated as of December
17, 1996 of Credit Agreement dated as of December 21, 1994 (the "1994 CREDIT
AGREEMENT") with the Banks and the Agent (as heretofore modified and
supplemented and in effect on the date of this Agreement, the "EXISTING CREDIT
AGREEMENT"). Substantially concurrently herewith, Journal Register Company, LLC
is merging with and into the Borrower, with the Borrower being the surviving
entity of such merger. As of the date hereof, the Borrower shall become a party
to the Existing Credit Agreement as borrower and to assume all of the
obligations of the Existing Borrowers under or in respect of the Existing Credit
Agreement, and in that connection the parties to the Existing Credit Agreement
shall amend in certain respects and restate in its entirety the Existing Credit
Agreement pursuant to a Credit Agreement dated as of May 2, 1997 (as modified
and in effect from time to time, the CREDIT AGREEMENT").
To induce said banks to amend and restate the Credit Agreement and
to extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower has
agreed to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined), and to confirm
the prior pledge and grant of a security interest in the "Collateral" (as
defined in the Existing Pledge Agreement)
BORROWER SECURITY AGREEMENT
- 2 -
pursuant to the Existing Pledge Agreement and in that connection to amend and
restate in its entirety the Existing Pledge Agreement. Accordingly, the parties
hereto hereby agree as follows:
Section 1. DEFINITIONS. Terms defined in the Credit Agreement are
used herein as defined therein. In addition, as used herein:
"ACCOUNTS" shall have the meaning ascribed thereto in Section 3(d)
hereof.
"BUSINESS" shall mean the business of newspaper publishing and
offset printing and the other businesses from time to time, now or
hereafter, conducted by the Borrower and its Subsidiaries.
"COLLATERAL" shall have the meaning ascribed thereto in Section 3
hereof.
"COLLATERAL ACCOUNT" shall have the meaning ascribed thereto in
Section 4.01 hereof.
"COPYRIGHT COLLATERAL" shall mean all Copyrights, whether now owned
or hereafter acquired by the Borrower, that are associated with the
Business, including each Copyright identified in Annex 2 hereto.
"COPYRIGHTS" shall mean all copyrights, copyright registrations and
applications for copyright registrations, including, without limitation,
all renewals and extensions thereof, the right to recover for all past,
present and future infringements thereof, and all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"DOCUMENTS" shall have the meaning ascribed thereto in Section 3(j)
hereof.
"EQUIPMENT" shall have the meaning ascribed thereto in Section 3(h)
hereof.
"INSTRUMENTS" shall have the meaning ascribed thereto in Section
3(e) hereof.
"INTELLECTUAL PROPERTY" shall mean, collectively, all Copyright
Collateral, all Patent Collateral and all Trademark Collateral, together
with (a) all inventions, processes, production methods, proprietary
information, know-how and trade secrets used or useful in the Business;
BORROWER SECURITY AGREEMENT
- 3 -
(b) all licenses or user or other agreements granted to the Borrower with
respect to any of the foregoing, in each case whether now or hereafter
owned or used including, without limitation, the licenses or other
agreements with respect to the Copyright Collateral, the Patent Collateral
or the Trademark Collateral listed in Annex 5 hereto; (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and
automatic machinery software and programs, and the like pertaining to the
operation by the Borrower of the Business; (d) all field repair data,
sales data and other information relating to sales or service of products
now or hereafter manufactured and which pertain to the Business; (e) all
accounting information which pertains to the Business and all media in
which or on which any of the information or knowledge or data or records
which pertain to the Business may be recorded or stored and all computer
programs used for the compilation or printout of such information,
knowledge, records or data; (f) all licenses, consents, permits,
variances, certifications and approvals of governmental agencies now or
hereafter held by the Borrower pertaining to the operation by the Borrower
and its Subsidiaries of the Business; and (g) all causes of action, claims
and warranties now or hereafter owned or acquired by the Borrower in
respect of any of the items listed above.
"INVENTORY" shall have the meaning ascribed thereto in Section 3(f)
hereof.
"ISSUERS" shall mean (a) JCI and JNI and (b) thereafter, each direct
Subsidiary of the Borrower.
"MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"OTHER INDEBTEDNESS" shall mean all obligations of the Borrower
and/or its Subsidiaries to any Bank in respect of any Interest Rate
Protection Agreement entered into by the Borrower and/or its Subsidiaries
and such Bank pursuant to Section 8.21 of the Credit Agreement and all
obligations of the Borrower to any Bank in respect of Indebtedness of the
Borrower incurred as permitted by Section 8.07(e) of the Credit Agreement.
BORROWER SECURITY AGREEMENT
- 4 -
"PATENT COLLATERAL" shall mean all Patents, whether now owned or
hereafter acquired by the Borrower, that are associated with the Business,
including each Patent identified in Annex 3 hereto.
"PATENTS" shall mean all patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties,
damages and payments now or hereafter due and/or payable under and with
respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, the right to xxx for past, present
and future infringements thereof, and all rights corresponding thereto
throughout the world.
"PLEDGED STOCK" shall have the meaning ascribed thereto in Section
3(a) hereof.
"SECURED OBLIGATIONS" shall mean, collectively, (a) the obligations
of the Borrower to pay the principal of and interest on the Loans made (or
as of the Effective Date, continued) by the Banks to, and the Notes held
by each Bank of, the Borrower and all other amounts from time to time
owing to the Banks or the Agent by the Borrower under the Credit Agreement
and the Notes and interest thereon, (b) the obligations of the Borrower to
pay all amounts from time to time owing to any Bank by the Borrower in
respect of any Interest Rate Protection Agreement entered into by the
Borrower and such Bank pursuant to Section 8.21 of the Credit Agreement,
(c) the obligations of the Borrower to pay all amounts from time to time
owing to any Bank by the Borrower in respect of Indebtedness of the
Borrower to such Bank incurred as permitted by Section 8.07(e) of the
Credit Agreement and (d) all obligations of the Borrower to the Banks and
the Agent hereunder and under the other Credit Documents (other than the
Credit Agreement and the Notes) to which the Borrower is a party.
"STOCK COLLATERAL" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the proceeds
of and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers.
"TRADEMARK COLLATERAL" shall mean all Trademarks, whether now owned
or hereafter acquired by the Borrower,
BORROWER SECURITY AGREEMENT
- 5 -
that are associated with the Business, including each Trademark identified
in Annex 4 hereto. Notwithstanding the foregoing, the Trademark Collateral
does not and shall not include any Trademark which would be rendered
invalid, abandoned, void or unenforceable by reason of its being included
as part of the Trademark Collateral.
"TRADEMARKS" shall mean all trade names, trademarks and service
marks, logos, trademark and service xxxx registrations, and applications
for trademark and service xxxx registrations, including, without
limitation, all renewals of trademark and service xxxx registrations, all
rights corresponding thereto throughout the world, the right to recover
for all past, present and future infringements thereof, all other rights
of any kind whatsoever accruing thereunder or pertaining thereto,
together, in each case, with the product lines and goodwill of the
business connected with the use of, and symbolized by, each such trade
name, trademark and service xxxx.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as
in effect in the State of New York from time to time.
Section 2. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Banks and the Agent that:
(a) the Borrower is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Section 3
hereof and no Lien exists or will exist upon any such Collateral at any
time (and, with respect to the Stock Collateral, no right or option to
acquire the same exists in favor of any other Person), except for Liens
permitted under Section 8.06 of the Credit Agreement and except for the
pledge and security interest in favor of the Agent for the benefit of the
Banks created or provided for herein which pledge and security interest
constitutes a first priority perfected pledge and security interest in and
to all of such Collateral (other than Intellectual Property registered or
otherwise located outside of the United States of America);
(b) the Pledged Stock evidenced by the certificates identified in
Annex 1 hereto is, and all other Pledged Stock in which the Borrower shall
hereafter grant a security interest pursuant to Section 3 hereof will be,
duly authorized, validly issued, fully paid and nonassessable and none of
such Pledged Stock is or will be subject to any contractual restriction,
or any restriction under the
BORROWER SECURITY AGREEMENT
- 6 -
charter or by-laws of the respective Issuers of such Pledged Stock, upon
the transfer of such Pledged Stock (except for any such restriction
contained herein or in the Credit Agreement);
(c) the Pledged Stock evidenced by the certificates identified in
Annex 1 hereto constitutes all of the issued and outstanding shares of
capital stock of any class of the Issuers beneficially owned by the
Borrower on the date hereof (whether or not registered in the name of the
Borrower) and said Annex 1 correctly identifies, as at the date hereof,
the respective Issuers of such Pledged Stock, the respective class and par
value of the shares comprising such Pledged Stock and the respective
number of shares (and registered owner thereof) evidenced by each such
certificate;
(d) Annexes 2, 3 and 4 hereto, respectively, set forth under the
name of the Borrower a complete and correct list of all Copyrights,
Patents and Trademarks owned by the Borrower on the date hereof; except
pursuant to licenses and other user agreements entered into by the
Borrower in the ordinary course of business, which are listed in Annex 5
hereto, the Borrower owns and possesses the right to use, and has done
nothing to authorize or enable any other Person to use, any Copyright,
Patent or Trademark listed in said Annexes 2, 3 and 4, and all
registrations listed in said Annexes 2, 3 and 4 are valid and in full
force and effect; except as may be set forth in said Annex 5, the Borrower
owns and possesses the right to use all Copyrights, Patents and Trademarks
necessary for the operation of the Business;
(e) Annex 5 hereto sets forth a complete and correct list of all
licenses and other user agreements included in the Intellectual Property
on the date hereof;
(f) to the Borrower's knowledge, (i) except as set forth in Annex 5
hereto, there is no violation by others of any right of the Borrower with
respect to any Copyright, Patent or Trademark listed in Annexes 2, 3 and 4
hereto and (ii) the Borrower is not, in connection with the Business,
infringing in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted or are pending
against the Borrower or, to the Borrower's knowledge, threatened, and no
claim against the Borrower has been received by the Borrower, alleging any
such violation, except as may be set forth in said Annex 5;
BORROWER SECURITY AGREEMENT
- 7 -
(g) the Borrower does not own any Trademarks registered in the
United States of America to which the last sentence of the definition of
Trademark Collateral applies;
(h) any goods now or hereafter produced by the Borrowers or any of
its Subsidiaries included in the Collateral have been and will be produced
in compliance with the requirements of the Fair Labor Standards Act, as
amended; and
(i) Annex 6 hereto correctly and completely specifies the location
of the chief executive office or principal place of business of the
Borrower and also correctly and completely specifies the place at which
all Inventory or Equipment of the Borrower is located.
Section 3. COLLATERAL. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, the Borrower hereby pledges and grants to the Agent
(and confirms the prior pledge and grant to the Agent pursuant to the Existing
Pledge Agreement, which are hereby confirmed hereunder), for the benefit of the
Banks and the holders of Other Indebtedness as hereinafter provided, a security
interest in all of the Borrower's right, title and interest in, to and under the
following property, whether now owned by the Borrower or hereafter acquired and
whether now existing or hereafter coming into existence, and wherever located
(all being collectively referred to herein as "COLLATERAL"):
(a) the shares of capital stock (whether common or preferred) of the
respective Issuers evidenced by the certificates identified in Annex 1
hereto and all other shares of capital stock of whatever class of the
Issuers, now or hereafter owned by the Borrower, together with in each
case the certificates evidencing the same (collectively, the "PLEDGED
STOCK");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
BORROWER SECURITY AGREEMENT
- 8 -
(c) without affecting the obligations of the Borrower under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which any Issuer is not the
surviving corporation, all shares of each class of the capital stock of
the successor corporation (unless such successor corporation is the
Borrower itself) formed by or resulting from such consolidation or merger;
(d) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of the Borrower constituting any right to the
payment of money, including (but not limited to) all moneys due and to
become due to the Borrower in respect of any loans or advances for the
purchase price of Inventory or Equipment or other goods sold or leased or
for services rendered, all moneys due and to become due to the Borrower
under any guarantee (including a letter of credit) of the purchase price
of Inventory or Equipment sold by the Borrower and all tax refunds and any
and all rights of the Borrower in any escrow or trust account, whether
fixed or contingent, and, upon the termination or revocation thereof or
return of sums contained in any escrow or trust account or otherwise, any
and all amounts due to, to become due to, or received by, the Borrower
therefrom, whether as a result of one or more orders of a Bankruptcy Court
or otherwise (such accounts, general intangibles and moneys due and to
become due being herein called collectively "ACCOUNTS");
(e) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of the Borrower including, without
limitation, any of the foregoing evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Accounts, including (but not limited to) promissory
notes, drafts, bills of exchange, and trade acceptances (herein
collectively called "INSTRUMENTS");
(f) all inventory (as defined in the Uniform Commercial Code) of the
Borrower, including Motor Vehicles held by the Borrower for lease, fuel,
tires and other spare parts, all goods obtained by the Borrower in
exchange for such inventory, and any products made or processed from such
inventory including all substances, if any, commingled therewith or added
thereto (herein collectively called "INVENTORY");
BORROWER SECURITY AGREEMENT
- 9 -
(g) all Intellectual Property and all other accounts or general
intangibles of the Borrower not constituting Intellectual Property or
Accounts;
(h) all equipment (as defined in the Uniform Commercial Code) of the
Borrower, including all Motor Vehicles used in the Business (herein
collectively called "EQUIPMENT");
(i) each contract and other agreement of the Borrower relating to
the sale or other disposition of Inventory or Equipment;
(j) all documents of title (as defined in the Uniform Commercial
Code) or other receipts of the Borrower covering, evidencing or
representing Inventory or Equipment (herein collectively called
"DOCUMENTS");
(k) all rights, claims and benefits of the Borrower against any
Person arising out of, relating to or in connection with Inventory or
Equipment purchased by the Borrower, including, without limitation, any
such rights, claims or benefits against any Person storing or transporting
such Inventory or Equipment;
(l) the balance from time to time in the Collateral Account;
(m) all tangible property (including all machinery, apparatus,
equipment, fittings, personal property, and any other fixtures
whatsoever), now or hereafter located on or attached to real estate, and
any and all products and accessions to any such property which may exist
at any time;
(n) all rents, revenues, proceeds, issues, profits, royalties,
income and other benefits derived from real estate, and from any
improvements or fixtures thereon;
(o) all proceeds of insurance in effect with respect to any real
estate, or with respect to improvements or fixtures thereon, and any and
all awards made for the taking by eminent domain, or by any proceeding or
purchase in lieu thereof, of any real estate, or any improvements or
fixtures thereon, including without limitation any awards resulting from
any damage to any real estate, improvements or fixtures for which
compensation shall be given by any governmental authority; and
BORROWER SECURITY AGREEMENT
- 10 -
(p) all other tangible and intangible property of the Borrower,
including, without limitation, proceeds, products and accessions of and to
any of the property of the Borrower described in clauses (a) through (o)
above in this Section 3 (including, without limitation, any proceeds of
insurance thereon), and, to the extent related to any property described
in said clauses or such proceeds, products and accessions, all books,
correspondence, credit files, records, invoices and other papers,
including, without limitation, all tapes, cards, computer runs and other
papers and documents in the possession or under the control of the
Borrower or any computer bureau or service company from time to time
acting for the Borrower.
Section 4. CASH PROCEEDS OF COLLATERAL.
4.01 COLLATERAL ACCOUNT. There has heretofore been established at
Chase a cash collateral account (the "COLLATERAL ACCOUNT") in the name and under
the control of the Agent into which there shall be deposited from time to time
the cash proceeds of any of the Collateral (including proceeds of insurance
thereon) required to be delivered to the Agent pursuant hereto and into which
the Borrower may from time to time deposit any additional amounts which any of
them wishes to pledge to the Agent for the benefit of the Banks as additional
collateral security hereunder. The balance from time to time in the Collateral
Account shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Agent shall
remit the collected balance outstanding to the credit of the Collateral Account
to or upon the order of the Borrower as the Borrower shall from time to time
instruct. However, at any time following the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by such of
the Banks as are required for such purpose under the Credit Agreement, shall),
in its (or their) discretion, apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified in Section 5.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only by the Agent and only as
provided herein.
4.02 PROCEEDS OF ACCOUNTS. Except as permitted by Section 5.01(b)
hereof, the Borrower shall instruct all account debtors and other Persons
obligated in respect of all Accounts to make all payments in respect of the
Accounts either (a) directly to the Agent (by instructing that such payments be
remitted to a
BORROWER SECURITY AGREEMENT
- 11 -
post office box which shall be in the name and under the control of the Agent)
or (b) to one or more other banks in the United States of America (by
instructing that such payments be remitted to a post office box which shall be
in the name and under the control of the Agent) under arrangements, in form and
substance satisfactory to the Agent, pursuant to which the Borrower shall have
irrevocably instructed such other bank (and such other bank shall have agreed)
to remit all proceeds of such payments directly to the Agent for deposit into
the Collateral Account. All payments made to the Agent, as provided in the
preceding sentence, shall be immediately deposited in the Collateral Account. In
addition to the foregoing, the Borrower agrees that if the proceeds of any
Collateral hereunder (including payments made in respect of Accounts) shall be
received by it, the Borrower shall as promptly as possible deposit such proceeds
into the Collateral Account. Until so deposited, all such proceeds shall be held
in trust by the Borrower for and as the property of the Agent (for the benefit
of the Banks and the holders of Other Indebtedness) and shall not be commingled
with any other funds or property of the Borrower.
4.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. Amounts on deposit
in the Collateral Account shall be invested from time to time in such Cash
Equivalents as the Borrower (or, after the occurrence and during the continuance
of a Default, the Agent) shall determine, which Cash Equivalents shall be held
in the name and be under the control of the Agent, provided that (i) at any time
after the occurrence and during the continuance of an Event of Default, the
Agent may (and, if instructed by such of the Banks as are required for such
purpose under the Credit Agreement, shall) in its (or their) discretion at any
time and from time to time elect to liquidate any such Cash Equivalents and to
apply or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof and (ii) if requested
by the Borrower, such Cash Equivalents may be held in the name and under the
control of one or more of the Banks.
Section 5. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant
of the pledge and security interest pursuant to Section 3 hereof, the Borrower
hereby agrees with each Bank and the Agent as follows:
5.01 DELIVERY AND OTHER PERFECTION. The Borrower shall:
(a) if any of the above-described shares, securities, monies or
property required to be pledged by the Borrower under clauses (a), (b) and
(c) of Section 3 hereof are
BORROWER SECURITY AGREEMENT
- 12 -
received by the Borrower, forthwith either (x) transfer and deliver to the
Agent such shares or securities so received by the Borrower (together with
the certificates for any such shares and securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank) all of
which thereafter shall be held by the Agent, pursuant to the terms of this
Agreement, as part of the Collateral (and until so transferred and
delivered to the Agent, all such shares, securities, monies or property
shall be held in trust by the Borrower for and as the property of the
Agent (for the benefit of the Banks and the holders of Other Indebtedness)
or (y) take such other action as the Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in such shares,
securities, monies or property referred to in said clauses (a), (b) and
(c);
(b) deliver and pledge to the Agent (for the benefit of the Banks
and the holders of Other Indebtedness) any and all Instruments, endorsed
and such instruments of assignment and transfer in such form and substance
as the Agent may request; provided that so long as no Default shall have
occurred and be continuing, the Borrower may retain for collection in the
ordinary course any Instruments received by it in the ordinary course of
business and the Agent shall, promptly upon request of the Borrower, make
appropriate arrangements for making any other Instrument pledged by the
Borrower available to it for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed
appropriate by the Agent, against trust receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Agent) to create,
preserve, perfect or validate any security interest granted pursuant
hereto or to enable the Agent to exercise and enforce its rights hereunder
with respect to such security interest, including, without limitation,
causing any or all of the Stock Collateral to be transferred of record
into the name of the Agent or its nominee (and the Agent agrees that if
any Stock Collateral is transferred into its name or the name of its
nominee, the Agent will thereafter promptly give to the Borrower copies of
any notices and communications received by it with respect to the Stock
Collateral pledged by the Borrower hereunder), provided that notices to
account debtors in respect of any Accounts or Instruments shall be subject
to the provisions of clause (i) below;
BORROWER SECURITY AGREEMENT
- 13 -
(d) without limiting the obligations of the Borrower under Section
5.04(c) hereof, upon the acquisition after the date hereof by the Borrower
of any Equipment covered by a certificate of title or ownership, cause the
Agent to be listed as the lienholder on such certificate of title and
within 120 days of the acquisition thereof deliver evidence of the same to
the Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Agent may reasonably require in order to reflect the
security interests granted by this Agreement;
(f) furnish to the Agent from time to time (but, unless a Default
shall have occurred and be continuing, no more frequently than quarterly)
statements and schedules further identifying and describing the Copyright
Collateral, the Patent Collateral and the Trademark Collateral,
respectively, and such other reports in connection with the Copyright
Collateral, the Patent Collateral and the Trademark Collateral, as the
Agent may reasonably request, all in reasonable detail;
(g) promptly upon request of the Agent, following receipt by the
Agent of any statements, schedules or reports pursuant to clause (f)
above, modify this Agreement by amending Annex 2, 3 or 4 hereto, as the
case may be, to include any Copyright, Patent or Trademark which becomes
part of the Collateral under this Agreement;
(h) permit representatives of the Agent, upon reasonable notice, at
any time during normal business hours to inspect and make abstracts from
its books and records pertaining to the Collateral, and permit
representatives of the Agent to be present at the Borrower's place of
business to receive copies of all communications and remittances relating
to the Collateral, and forward copies of any notices or communications
received by the Borrower with respect to the Collateral all in such manner
as the Agent may require;
(i) upon the occurrence and during the continuance of any Default,
upon request of the Agent, promptly notify (and the Borrower hereby
authorizes the Agent so to notify) each account debtor in respect of any
Accounts or Instruments that such Collateral has been assigned to the
Agent hereunder, and that any payments due or to become due in
BORROWER SECURITY AGREEMENT
- 14 -
respect of such Collateral are to be made directly to the Agent; and
(j) in the event of any termination, revocation or return of sums
contained in any escrow account, trust account or escrow or trust
arrangement in which the Borrower has a direct or indirect interest,
whether legal or equitable, promptly deposit any amounts recovered by the
Borrower from any such account or from any Person who theretofore received
any such amount from any such account, directly into the Collateral
Account.
5.02 OTHER FINANCING STATEMENTS AND LIENS. Except as otherwise
permitted under Section 8.06 of the Credit Agreement, without the prior written
consent of the Agent (granted with the authorization of such of the Banks as are
required for such purpose under the Credit Agreement), the Borrower shall not
file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Agent is not named as the sole secured
party for the benefit of the Banks.
5.03 PRESERVATION OF RIGHTS. The Agent shall not be required to take
steps necessary to preserve any rights against prior parties to any of the
Collateral.
5.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
(a) STOCK COLLATERAL.
(1) The Borrower will cause the Stock Collateral to constitute at
all times 100% of the total number of shares of each class of capital stock of
each Issuer then outstanding.
(2) So long as no Event of Default shall have occurred and be
continuing, the Borrower shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Stock Collateral for all
purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other instrument or agreement referred to herein or
therein, provided that the Borrower agrees that it will not vote the Stock
Collateral in any manner that is inconsistent with the terms of this Agreement,
the Credit Agreement, the Notes or any such other instrument or agreement; and
the Agent shall execute and deliver to the Borrower or cause to be executed and
delivered to the Borrower all such proxies, powers of attorney, dividend and
other orders, and all such instruments, without recourse, as the Borrower may
reasonably request for the purpose of enabling the
BORROWER SECURITY AGREEMENT
- 15 -
Borrower to exercise the rights and powers which it is entitled to exercise
pursuant to this Section 5.04(a)(2).
(3) Unless and until an Event of Default has occurred and is
continuing, but subject to the provisions of Section 8.09 of the Credit
Agreement which limit the right of the Borrower and its Subsidiaries to declare
or make any Restricted Payment, the Borrower shall be entitled to receive and
retain any dividends on the Stock Collateral paid in cash out of earned surplus.
(4) If any Event of Default shall have occurred, then so long as
such Event of Default shall continue, and whether or not the Agent or any Bank
exercises any available right to declare any Secured Obligation due and payable
or seeks or pursues any other relief or remedy available to it under applicable
law or under this Agreement, the Credit Agreement, the Notes, the Subsidiary
Guarantee or any other agreement relating to such Secured Obligation, all
dividends and other distributions on the Stock Collateral shall be paid directly
to the Agent and retained by it in the Collateral Account as part of the Stock
Collateral, subject to the terms of this Agreement, and, if the Agent shall so
request in writing, the Borrower agrees to execute and deliver to the Agent
appropriate additional dividend, distribution and other orders and documents to
that end, provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of the Borrower
(except to the extent theretofore applied to the Secured Obligations) be
returned by the Agent to the Borrower.
(b) INTELLECTUAL PROPERTY.
(1) For the purpose of enabling the Agent to exercise rights and
remedies under Section 5.05 hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, the
Borrower hereby grants to the Agent, to the extent assignable, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Borrower) to use, assign, license or sublicense any of the
Intellectual Property (other than the Trademark Collateral or goodwill
associated therewith) now owned or hereafter acquired by the Borrower, wherever
the same may be located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the contrary, but
subject to the provisions of Section 8.05 of the Credit Agreement which limit
the right of the Borrower and its
BORROWER SECURITY AGREEMENT
- 16 -
Subsidiaries to dispose of their property, so long as no Event of Default shall
have occurred and be continuing, the Borrower will be permitted to exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of the
business of the Borrower. In furtherance of the foregoing, unless an Event of
Default shall have occurred and is continuing the Agent shall from time to time,
upon the request of the Borrower, execute and deliver any instruments,
certificates or other documents, in the form so requested, which the Borrower
shall have certified are appropriate (in its judgment) to allow them to take any
action permitted above (including relinquishment of the license provided
pursuant to clause (1) immediately above as to any specific Intellectual
Property). Further, upon the payment in full of all of the Secured Obligations
and cancellation or termination of the Commitments or earlier expiration of this
Agreement or release of the Collateral, the Agent shall grant back to the
Borrower the license granted pursuant to clause (1) immediately above. The
exercise of rights and remedies under Section 5.05 hereof by the Agent shall not
terminate the rights of the holders of any licenses or sublicenses theretofore
granted by the Borrower in accordance with the first sentence of this clause
(2).
(c) MOTOR VEHICLES.
(1) At the request of the Agent, the Borrower shall deliver to the
Agent originals of the certificates of title or ownership for the Motor Vehicles
owned by it with the Agent listed as lienholder.
(2) Upon the acquisition after the date hereof by the Borrower of
any Motor Vehicle, at the request of the Agent the Borrower shall deliver to the
Agent originals of the certificates of title or ownership for such Motor
Vehicle, together with the manufacturer's statement of origin, with the Agent
listed as lienholder; provided, however, if the Motor Vehicle to be acquired is
subject to a purchase money security interest, the Agent shall be listed as a
junior lienholder to the Person holding such purchase money security interest.
(3) Without limiting Section 5.10 hereof, the Borrower hereby
appoints the Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of the obligations of the Borrower under this
Agreement, for the purpose of (i) executing on behalf of the Borrower title or
ownership applications for filing with appropriate state agencies to enable
Motor Vehicles now owned or hereafter acquired by the Borrower to be retitled
and the Agent listed as lienholder thereon,
BORROWER SECURITY AGREEMENT
- 17 -
(ii) filing such applications with such state agencies and (iii) executing such
other documents and instruments on behalf of, and taking such other action in
the name of, the Borrower as the Agent may deem necessary or advisable to
accomplish the purposes hereof (including, without limitation, the purpose of
creating in favor of the Agent (for the benefit of the Banks and the holders of
Other Indebtedness) a perfected lien on the Motor Vehicles and exercising the
rights and remedies of the Agent under Section 5.05 hereof). This appointment as
attorney-in-fact is irrevocable and coupled with an interest.
(4) Any certificates of title or ownership delivered pursuant to the
terms hereof shall be accompanied by odometer statements for each Motor Vehicle
covered thereby.
5.05 EVENTS OF DEFAULT, ETC. During the period during which an Event
of Default shall have occurred and be continuing:
(i) the Borrower shall, at the request of the Agent, assemble the
Collateral owned by it at such place or places, reasonably convenient to
both the Agent and the Borrower, designated in its request;
(ii) the Agent may make any reasonable compromise or settlement deemed
desirable with respect to any of the Collateral and may extend the time of
payment, arrange for payment in installments, or otherwise modify the
terms of, any of the Collateral;
(iii) the Agent shall have all of the rights and remedies with respect
to the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and remedies
to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent permitted
by law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Agent were the sole and absolute
owner thereof (and the Borrower agrees to take all such action as may be
appropriate to give effect to such right);
(iv) the Agent in its discretion may, in its name or in the name of
the Borrower or otherwise, demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so; and
BORROWER SECURITY AGREEMENT
- 18 -
(v) the Agent may, upon 10 Business Days' prior written notice to
the Borrower of the time and place, with respect to the Collateral or any
part thereof which shall then be or shall thereafter come into the
possession, custody or control of the Agent, the Banks or any of their
respective agents, sell, lease, assign or otherwise dispose of all or any
of such Collateral, at such place or places as the Agent deems best, and
for cash or on credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of time or place
thereof (except such notice as is required above or by applicable statute
and cannot be waived) and the Agent or any Bank or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the Collateral
so disposed of at any public sale (or, to the extent permitted by law, at
any private sale), and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Borrower, any such demand,
notice or right and equity being hereby expressly waived and released. In
the event of any sale, assignment, or other disposition of any of the
Trademark Collateral, the goodwill of the Business connected with and
symbolized by the Trademark Collateral subject to such disposition shall
be included, and the Borrower shall supply to the Agent or its designee,
for inclusion in such sale, assignment or other disposition, all
Intellectual Property relating to such Trademark Collateral. The Agent
may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05, including by virtue of the exercise of the license granted to the Agent in
Section 5.04(b)(1) hereof, shall be applied in accordance with Section 5.09
hereof.
The Borrower recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. The Borrower
acknowledges that any such private sales may be at prices and on terms less
favorable to the Agent than those
BORROWER SECURITY AGREEMENT
- 19 -
obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, agree that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the respective Issuer
thereof to register it for public sale.
5.06 DEFICIENCY. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Borrower shall remain liable for any
deficiency.
5.07 REMOVALS, ETC. Without at least 30 days prior written notice to
the Agent, the Borrower shall not (i) maintain any of its books or records with
respect to the Collateral at any office or maintain its chief executive office
or its principal place of business at any place, or permit any Inventory or
Equipment to be located anywhere other than at one of the locations identified
in Annex 6 hereto or in transit from one of such locations to another or (ii)
change its corporate name, or the name under which it does business, from the
name shown on the signature page hereto.
5.08 PRIVATE SALE. The Agent, the Banks and the holders of Other
Indebtedness shall incur no liability as a result of the sale of the Collateral,
or any part thereof, at any private sale pursuant to Section 5.05 hereof
conducted in a commercially reasonable manner. The Borrower hereby waives any
claims against the Agent or any Bank arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale or was less than
the aggregate amount of the Secured Obligations, even if the Agent accepts the
first offer received and does not offer the Collateral to more than one offeree.
5.09 APPLICATION OF PROCEEDS. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time held
by the Agent under Section 4 hereof or this Section 5, shall be applied by the
Agent:
FIRST, to the payment of the costs and expenses of such collection,
sale or other realization, including reasonable out-of-pocket costs and
expenses of the Agent and the fees
BORROWER SECURITY AGREEMENT
- 20 -
and expenses of its agents and counsel, and all expenses, and advances
Made or incurred by the Agent in connection therewith;
NEXT, to the payment in full of the Secured Obligations in each case
equally and ratably in accordance with the respective amounts thereof then
due and owing or as the Banks holding the same may otherwise agree; and
FINALLY, after payment in full of the Secured Obligations, to the
payment to the Borrower, or its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining.
As used in this Section 5, "PROCEEDS" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Borrower or any issuer of or obligor on any of the
Collateral.
5.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this Agreement to the Agent while no Event of Default has occurred and is
continuing, upon the occurrence and during the continuance of any Event of
Default the Agent is hereby appointed the attorney-in-fact of the Borrower for
the purpose of carrying out the provisions of this Section 5 and taking any
action and executing any instruments which the Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Agent shall be entitled under
this Section 5 to make collections in respect of the Collateral, the Agent shall
have the right and power to receive, endorse and collect all checks made payable
to the order of the Borrower representing any dividend, payment, or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
5.11 PERFECTION. Prior to or concurrently with the execution and
delivery of this Agreement, the Borrower shall (i) file such financing
statements and other documents in such offices as the Agent may request to
perfect the security interests granted by Section 3 hereof, (ii) cause the Agent
(to the extent requested by any Bank) to be listed as the lienholder on all
certificates of title or ownership relating to Motor Vehicles owned by the
Borrower and (iii) deliver to the Agent all certificates identified in Annex 1
hereto, accompanied by undated stock powers duly executed in blank.
BORROWER SECURITY AGREEMENT
- 21 -
5.12 TERMINATION. When all Secured Obligations shall have been paid
in full and the Commitments of the Banks under the Credit Agreement shall have
expired or been terminated, the obligations of the Borrower under this Agreement
shall terminate, and the Agent shall forthwith cause to be assigned, transferred
and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the Borrower and to be released and
cancelled all licenses and rights referred to in Section 5.04(b)(1) hereof. The
Agent shall also execute and deliver to the Borrower upon such termination such
Uniform Commercial Code termination statements, certificates for terminating the
Liens on the Motor Vehicles and such other documentation as shall be reasonably
requested by the Borrower to effect the termination and release of the Liens on
the Collateral.
5.13 EXPENSES. The Borrower agrees to pay to the Agent all
out-of-pocket expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the enforcement of any of the provisions of this
Section 5, or performance by the Agent of any obligations of the Borrower in
respect of the Collateral which the Borrower has failed or refused to perform,
or any actual or attempted sale, or any exchange, enforcement, collection,
compromise or settlement in respect of any of the Collateral, and for the care
of the Collateral and defending or asserting rights and claims of the Agent in
respect thereof, by litigation or otherwise, including expenses of insurance,
and all such expenses shall be Secured Obligations to the Agent secured under
Section 3 hereof.
5.14 FURTHER ASSURANCES. The Borrower agrees that, from time to time
upon the written request of the Agent, the Borrower will execute and deliver
such further documents and do such other acts and things as the Agent may
reasonably request in order fully to effect the purposes of this Agreement.
5.15 RELEASE OF MOTOR VEHICLES. So long as no Default shall have
occurred and be continuing, upon the request of the Borrower, the Agent shall
execute and deliver to the Borrower such instruments as the Borrower shall
reasonably request to remove the notation of the Agent as lienholder on any
certificate of title for any Motor Vehicle; provided that any such instruments
shall be delivered, and the release effective only upon receipt by the Agent of
a certificate from the Borrower stating that the Motor Vehicle the lien on which
is to be released is to be sold or has suffered a Casualty Event (with title
thereto passing to the casualty insurance company therefor in settlement of the
claim for such loss) and any proceeds of
BORROWER SECURITY AGREEMENT
- 22 -
such sale or Casualty Event in excess of $50,000, unless such proceeds are not
required to be applied as provided in Section 2.09(b) or (c) of the Credit
Agreement, being paid to the Agent hereunder.
5.16 RELEASE OF COLLATERAL. So long as no Default shall have
occurred and be continuing, upon the request of the Borrower, the Agent shall
execute and deliver to the Borrower such instruments as the Borrower shall
reasonably request to release any Collateral that is the subject of a
Disposition that is permitted by the Credit Agreement or to which the Required
Lenders have consented.
Section 6. MISCELLANEOUS.
6.01 NO WAIVER. No failure on the part of the Agent or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
6.02 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall
be governed by, and construed in accordance with, the law of the State of New
York. The Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
State Court sitting in New York County for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Borrower irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
6.03 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH BANK
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.04 NOTICES. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
address or telecopier number specified pursuant to Section 11.02 of the Credit
Agreement and
BORROWER SECURITY AGREEMENT
- 23 -
shall be deemed to have been given at the times specified in said Section 11.02.
6.05 WAIVERS, ETC. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Borrower and the Agent (with the consent of such of the Banks as are required
for such purpose under the Credit Agreement). Any such amendment or waiver shall
be binding upon the Borrower, the Agent and each Bank, each holder of any
Secured Obligation and the Borrower.
6.06 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Borrower, the Agent, the Banks and each holder of the Secured Obligations
(provided, however, that the Borrower shall not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent, acting
with the consent of such of the Banks as are required for such purpose under the
Credit Agreement).
6.07 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument
and any of the parties hereto may execute this Agreement by signing any such
counterpart.
6.08 AGENTS. The Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
6.09 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Banks in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
BORROWER SECURITY AGREEMENT
- 24 -
IN WITNESS WHEREOF, the parties hereto have caused this Borrower
Security Agreement to be duly executed as of the day and year first above
written.
JOURNAL REGISTER COMPANY
By_________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Agent
By__________________________________
Name:
Title:
BORROWER SECURITY AGREEMENT
ANNEX 1
LIST OF PLEDGED STOCK
REGISTERED
ISSUER CERTIFICATE NOS. OWNER NUMBER OF SHARES
------ ---------------- ---------- ----------------
Journal News, Journal __ shares of
Inc. Register common stock
Company
Journal Company, Journal __ shares of
Inc. Register common stock
Company
ANNEX 1 TO BORROWER SECURITY AGREEMENT
ANNEX 2
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
TITLE DATE FILED REGISTRATION NO. EFFECTIVE DATE
----- ---------- ---------------- --------------
None.
ANNEX 2 TO BORROWER SECURITY AGREEMENT
ANNEX 3
LIST OF PATENTS AND PATENT APPLICATIONS
FILE
DATE PATENT COUNTRY REGISTRATION NO.
----- ------ ------- ----------------
None.
ANNEX 4 TO BORROWER SECURITY AGREEMENT
ANNEX 4
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
U.S. TRADEMARKS
APPLICATION (A)
REGISTRATION (R) REGISTRATION
XXXX OR SERIES NO. (S) OR FILING DATE
---- ----------------- --------------
None.
ANNEX 5 TO BORROWER SECURITY AGREEMENT
ANNEX 5
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
None.
ANNEX 5 TO BORROWER SECURITY AGREEMENT
ANNEX 6
LIST OF LOCATIONS
State Street Square
00 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX
ANNEX 6 TO BORROWER SECURITY AGREEMENT
EXHIBIT B-1
[Form of Amendment No. 1 to JCI/JNI Security Agreement]
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
AMENDMENT NO. 1 dated as of _______, 1997 between JOURNAL NEWS,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware ("JNI"); JOURNAL COMPANY, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware ("JCI); each of the
other Subsidiaries of the Journal Register Company, a corporation duly organized
and validly existing under the laws of the State of Delaware (the "BORROWER")
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereof (individually a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS" and, together with JCI and JNI, the "OBLIGORS"); and THE CHASE
MANHATTAN BANK, as agent for the banks and other financial institutions party to
the Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "AGENT").
The Obligors and the Agent are parties to a Security Agreement dated
as of December 21, 1994 (as heretofore modified and supplemented and in effect
on the date hereof, the "SECURITY AGREEMENT"), pursuant to which the Obligors
pledged and granted to a security interest in the Collateral (as defined
therein) as security for the Secured Obligations (as so defined) including,
INTER ALIA, obligations of JCI and JNI under an Amendment and Restatement dated
as of December 17, 1996 of Credit Agreement dated as of December 21, 1994 (the
"1994 CREDIT AGREEMENT") with the Banks and the Agent (as heretofore modified
and supplemented and in effect on the date of this Agreement, the "EXISTING
CREDIT AGREEMENT"). Substantially concurrently herewith, Journal Register
Company, LLC, a limited liability company duly organized and validly existing
under the laws of the State of New York, is merging with and into the Borrower,
with the Borrower being the surviving entity of such merger. As of the date
hereof, the Borrower shall become a party to the Existing Credit Agreement as
borrower and to assume all of the obligations of JCI and JNI under or in respect
of the Existing Credit Agreement, and in that connection the parties to the
Existing Credit Agreement shall amend in certain respects and restate in its
entirety the Existing Credit Agreement pursuant to a Credit Agreement dated as
of May 2, 1997 (as modified and in effect from time to time, the CREDIT
AGREEMENT").
To induce the Banks to amend and restate the Existing Credit
Agreement pursuant to the Credit Agreement, and to extend credit thereunder, the
parties hereto wish to amend the Security in certain respects, and accordingly,
the parties hereto hereby agree as follows:
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
- 2 -
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment, terms used herein and not defined herein shall have the respective
meanings assigned thereto in the Security Agreement (or, if not defined in the
Security Agreement, in the Credit Agreement).
Section 2. AMENDMENTS. Upon the execution and delivery of this
Amendment by the parties hereto, the Security Agreement shall be amended as
follows:
(A) References in the Security Agreement to "this Agreement" shall
be deemed to be references to the Security Agreement as amended hereby.
(B) References in the Security Agreement to the "Credit Agreement"
shall be deemed to be references to the Credit Agreement;
(C) References in the Security Agreement to a "Borrower" and the
"Borrowers" shall be deemed to be references to JCI or JNI or JCI and JNI,
respectively;
(D) Section 1 of the Security Agreement is hereby amended by
amending in their entirety the following definitions:
"OTHER INDEBTEDNESS" shall mean all obligations of the
Borrower and/or its Subsidiaries in respect of any Interest Rate
Protection Agreement entered into by such Borrower and/or its
Subsidiaries and such Bank pursuant to Section 8.21 of the Credit
Agreement and all obligations of the Borrower to any Bank in respect
of Indebtedness of the Borrower incurred as permitted by Section
8.07(e) of the Credit Agreement.
"SECURED OBLIGATIONS" shall mean, collectively, (a) the
obligations of the Borrower to pay the principal of and interest on
the Loans made by the Banks to, and the Notes held by each Bank of,
the Borrower and all other amounts from time to time owing to the
Banks or the Agent by the Borrower under the Credit Documents and
interest thereon, (b) the obligations of the Borrower to pay all
amounts from time to time owing to any Bank by the Borrower in
respect of any Interest Rate Protection Agreement entered into by
the Borrower and such Bank pursuant to Section 8.21 of the Credit
Agreement, (c) the obligations of the Borrower to pay all amounts
from time to time owing to any Bank by the Borrower in respect of
Indebtedness of the Borrower to such Bank incurred as permitted by
Section 8.07(e) of the Credit
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
- 3 -
Agreement and (d) all obligations of any Obligor to the Banks and
the Agent hereunder and under the other Credit Documents to which
such Obligor is a party.
(E) The following phrase in Section 5.07 of the Security Agreement
is hereby deleted:
"at the address indicated beneath the respective signatures of the
Borrowers to the Credit Agreement or"
(F) Section 5 of the Security Agreement is hereby amended by adding
the following at the end thereof:
"5.16 RELEASE OF COLLATERAL. So long as no Default shall have
occurred and be continuing, upon the request of an Obligor, the
Agent shall execute and deliver to such Obligor such instruments as
such Obligor shall reasonably request to release any Collateral that
is the subject of a Disposition that is permitted by the Credit
Agreement or to which the Required Lenders have consented."
(G) The words "at its address" in line 3 of Section 6.04 of the
Security Agreement is hereby amended to read "at the Borrower's address".
Section 3. CONSENT. Each Obligor hereby consents to the amendment
and restatement of Existing Credit Agreement pursuant to the Credit Agreement
and confirms its obligations under the Security Agreement as amended hereby.
Section 4. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby
represents and warrants to the Banks and the Agent that all representations and
warranties set forth in Section 2 of the Security Agreement are true and
complete on the date hereof as if made on and as of the date hereof and as if
each reference in said Section 2 to "the Credit Agreement" were deemed to be a
reference to the Credit Agreement.
Section 5. MISCELLANEOUS. Except as herein provided, the Security
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, each of which shall be an
original and all of which, when taken together, shall constitute one Agreement.
This Amendment No. 1 shall be governed by, and construed in accordance with, the
law of the State of New York.
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
- 4 -
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment No. 1 to Security Agreement as of the day and year first written
above.
JOURNAL NEWS, INC. JOURNAL COMPANY, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
THE LORAIN JOURNAL COMPANY MANSFIELD JOURNAL COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
MISSISSIPPI VALLEY OFFSET NEW HAVEN REGISTER, INC.
COMPANY, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
NHR HOLDING COMPANY, INC. NH ACQUISITION CORP.
By____________________________ By____________________________
Name: Name:
Title: Title:
COUNTY KIDS, INC. (formerly TORRINGTON ACQUISITION CORP.
known as Register Magazine
Network Inc.)
By____________________________ By____________________________
Name: Name:
Title: Title:
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
- 5 -
XXXXX TELEGRAPH PRINTING CAPITOL CITY PUBLISHING
CO. CO., INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
BRISTOL ACQUISITION CORP. THE EVENING CALL PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
EMPIRE STATE HOLDINGS NORTHEAST PUBLISHING INC.
CORPORATION
By____________________________ By____________________________
Name: Name:
Title: Title:
NEW ENGLAND NEWSPAPERS, INC. ST. LOUIS SUN PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
NORTHGATE COMMERCIAL SUBURBAN NEWSPAPERS OF
PRINTING COMPANY GREATER ST. LOUIS, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
AMENDMENT XX. 0 XX XXX/XXX XXXXXXXX XXXXXXXXX
- 0 -
XXXXXXXX XXXXX MARKETING, INC. TIMES HERALD PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
SUNRISE INDUSTRIES, INC. XXXX PUBLISHING CO., INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
NEW BRITAIN PUBLISHING COMPANY THE HERALD PUBLISHING COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
THE HERALD PUBLISHING COMPANY, THE NEW BRITAIN HERALD REALTY
EAST COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
MIDDLETOWN ACQUISITION CORP. NEW ENGLAND ACQUISITION CORP.
By____________________________ By____________________________
Name: Name:
Title: Title:
TAUNTON ACQUISITION CORP.
By____________________________
Name:
Title:
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
- 7 -
THE CHASE MANHATTAN BANK, as
Agent
By___________________________
Name:
Title:
AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT
EXHIBIT B-2
[Form of Amendment No. 1 to Guarantee Agreement]
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
AMENDMENT NO. 1 dated as of _______, 1997 between JOURNAL NEWS,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware ("JNI"); JOURNAL COMPANY, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware ("JCI); each of the
other Subsidiaries of Journal Register Company, a corporation duly organized and
validly existing under the laws of the State of Delaware (the "BORROWER")
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereof (individually a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS" and, together with JCI and JNI, the "OBLIGORS"); and THE CHASE
MANHATTAN BANK, as agent for the banks and other financial institutions party to
the Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "AGENT").
The Subsidiary Guarantors are parties to a Guarantee Agreement dated
as of December 21, 1994 (as heretofore modified and supplemented and in effect
on the date hereof, the "GUARANTEE AGREEMENT"), pursuant to which the Subsidiary
Guarantors have agreed to guarantee the Guaranteed Obligations (as defined
therein) including, INTER ALIA, obligations of JCI and JNI under an Amendment
and Restatement dated as of December 17, 1996 of Credit Agreement dated as of
December 21, 1994 (the "1994 CREDIT AGREEMENT") with the Banks and the Agent (as
heretofore modified and supplemented and in effect on the date of this
Agreement, the "EXISTING CREDIT AGREEMENT"). Substantially concurrently
herewith, Journal Register Company, LLC, a limited liability company duly
organized and validly existing under the laws of the State of New York, is
merging with and into the Borrower, with the Borrower being the surviving entity
of such merger. As of the date hereof, the Borrower shall become a party to the
Existing Credit Agreement as borrower and to assume all of the obligations of
JCI and JNI under or in respect of the Existing Credit Agreement, and in that
connection the parties to the Existing Credit Agreement shall amend in certain
respects and restate in its entirety the Existing Credit Agreement pursuant to a
Credit Agreement dated as of May 2, 1997 (as modified and in effect from time to
time, the CREDIT AGREEMENT").
To induce the Banks to amend and restate the Existing Credit
Agreement pursuant to the Credit Agreement, and to extend credit thereunder, the
parties hereto wish to amend the Guarantee Agreement in certain respects, and
accordingly, the parties hereto hereby agree as follows:
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
- 2 -
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment, terms used herein and not defined herein shall have the respective
meanings assigned thereto in the Guarantee Agreement (or, if not defined in the
Guarantee Agreement, in the Credit Agreement).
Section 2. AMENDMENTS. Upon the execution and delivery of this
Amendment by the parties hereto, the Guarantee Agreement shall be amended as
follows:
(A) References in the Guarantee Agreement to "this Agreement"
shall be deemed to be references to the Guarantee Agreement as amended
hereby.
(B) References in the Guarantee Agreement to the "Credit
Agreement" shall be deemed to be references to the Credit Agreement;
(C) References in the Guarantee Agreement to a "Borrower", "each
Borrower", "such Borrower", "either or both Borrowers" and the
"Borrowers" shall be deemed to be references to the Borrower;
(D) The second sentence of Section 1 of the Guarantee Agreement
is hereby amended in its entirety to read as follows:
"In addition, as used herein, the term "OTHER INDEBTEDNESS"
shall mean all obligations of the Borrower and/or its
Subsidiaries to any Bank in respect of any Interest Rate
Protection Agreement entered into by the Borrower and/or its
Subsidiaries and such Bank pursuant to Section 8.21 of the Credit
Agreement and all obligations of the Borrower to any Bank in
respect of Indebtedness of the Borrowers incurred as permitted by
Section 8.07(e) of the Credit Agreement."
(E) The reference in Section 4.01 of the Guarantee Agreement
to "Section 8.23 of the Credit Agreement" is hereby amended to
read "Section 8.22 of the Credit Agreement".
(F) The words "JNI's if it is a Subsidiary of JNI or JCI's
if it is a Subsidiary of JCI" in Section 4.03 of the Guarantee
Agreement is hereby amended to read "the Borrower's".
Section 3. CONSENT. Each Obligor hereby consents to the amendment
and restatement of Existing Credit Agreement pursuant to the Credit Agreement
and each Subsidiary Guarantor
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
- 3 -
confirms its obligations under the Guarantee Agreement as amended hereby.
Section 4. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby
represents and warrants to the Banks and the Agent that all representations and
warranties set forth in Section 2 of the Guarantee Agreement are true and
complete on the date hereof as if made on and as of the date hereof and as if
each reference in said Section 2 to "the Credit Agreement" were deemed to be a
reference to the Credit Agreement.
Section 5. GUARANTEE. By their execution and delivery of this
Amendment No. 1, JNI and JCI each hereby jointly and severally, together with
the other Subsidiary Guarantors, guarantees to each Bank and the Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Banks to, and the Note(s) held by each Bank
of, the Borrower and all other amounts from time to time owing to the Banks or
the Agent by the Borrower under the Credit Agreement and under the Notes and all
Other Indebtedness and interest thereon, in each case strictly in accordance
with the terms thereof, all as more particularly provided in Section 2 of the
Guarantee Agreement, and also agrees to be bound by, and becomes a party to, the
Guarantee Agreement as a Subsidiary Guarantor for all purposes thereunder and
the Guarantee Agreement is hereby amended to add JNI and JCI as Subsidiary
Guarantors party thereto.
Section 6. MISCELLANEOUS. Except as herein provided, the Security
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, each of which shall be an
original and all of which, when taken together, shall constitute one Agreement.
This Amendment No. 1 shall be governed by, and construed in accordance with, the
law of the State of New York.
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
- 4 -
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment No. 1 to Guarantee Agreement as of the day and year first written
above.
JOURNAL NEWS, INC. JOURNAL COMPANY, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
THE LORAIN JOURNAL COMPANY MANSFIELD JOURNAL COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
MISSISSIPPI VALLEY OFFSET NEW HAVEN REGISTER, INC.
COMPANY, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
NHR HOLDING COMPANY, INC. NH ACQUISITION CORP.
By____________________________ By____________________________
Name: Name:
Title: Title:
COUNTY KIDS, INK. (formerly TORRINGTON ACQUISITION CORP.
known as Register Magazine
Network Inc.)
By____________________________ By____________________________
Name: Name:
Title: Title:
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
- 5 -
XXXXX TELEGRAPH PRINTING CAPITOL CITY PUBLISHING
CO. CO., INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
BRISTOL ACQUISITION CORP. THE EVENING CALL PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
EMPIRE STATE HOLDINGS NORTHEAST PUBLISHING INC.
CORPORATION
By____________________________ By____________________________
Name: Name:
Title: Title:
NEW ENGLAND NEWSPAPERS, INC. ST. LOUIS SUN PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
NORTHGATE COMMERCIAL SUBURBAN NEWSPAPERS OF
PRINTING COMPANY GREATER ST. LOUIS, INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
AMENDMENT XX. 0 XX XXXXXXXXX XXXXXXXXX
- 0 -
XXXXXXXX XXXXX MARKETING, INC. TIMES HERALD PUBLISHING
COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
SUNRISE INDUSTRIES, INC. XXXX PUBLISHING CO., INC.
By____________________________ By____________________________
Name: Name:
Title: Title:
NEW BRITAIN PUBLISHING COMPANY THE HERALD PUBLISHING COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
THE HERALD PUBLISHING COMPANY, THE NEW BRITAIN HERALD REALTY
EAST COMPANY
By____________________________ By____________________________
Name: Name:
Title: Title:
MIDDLETOWN ACQUISITION CORP. NEW ENGLAND ACQUISITION CORP.
By____________________________ By____________________________
Name: Name:
Title: Title:
TAUNTON ACQUISITION CORP.
By____________________________
Name:
Title:
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
- 7 -
THE CHASE MANHATTAN BANK, as
Agent
By___________________________
Name:
Title:
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
EXHIBIT C
[FORM OF COMPLIANCE CERTIFICATE]
CERTIFICATE OF COMPLIANCE WITH CREDIT AGREEMENT
DATED AS OF _______, 1997
JOURNAL REGISTER COMPANY
This Compliance Certificate is delivered pursuant to Section 8.01 of
the Credit Agreement dated as of May 2, 1997 (as amended, supplemented or
otherwise modified and in effect from time to time, the "CREDIT AGREEMENT")
between Journal Register Company (the "BORROWER"), the Banks party thereto and
The Chase Manhattan Bank, as Agent. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings assigned them in the Credit Agreement.
Entries on Annex A hereto shall relate to the periods referred to in the Credit
Agreement for determination thereof and represent descriptive references only to
the corresponding components set forth in the relevant sections of the Credit
Agreement (and the definitions therein ancillary thereto). This Compliance
Certificate relates to the fiscal [QUARTER/YEAR] of the Borrower ended
___________, 1997.
I, _____________________, the __________________ of the Borrower,
hereby certify that (a) no Default has occurred and is continuing; (b) the
financial statements annexed hereto fairly present the financial condition and
results of operations of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles, consistently applied, as at the end of
[THE RELEVANT PERIOD] [(SUBJECT TO NORMAL YEAR-END AUDIT ADJUSTMENTS)] and (c)
the information contained in Annex A hereto is true and correct.
JOURNAL REGISTER COMPANY
By__________________________
Name:
Title:
Date:____________________
COMPLIANCE CERTIFICATE
ANNEX A
COMPLIANCE CERTIFICATE
For the fiscal [QUARTER/YEAR]
ended on ________, 199_ (the "CALCULATION PERIOD")
SECTION 8.05(c)(ii)
The fair market value of the property,
tools or equipment of the Borrower and
its Subsidiaries disposed of pursuant
to Section 8.05(c)(ii) during the
Calculation Period is $--------
Aggregate year to date $--------
MAXIMUM in any fiscal year $1,000,000
----------
SECTION 8.05(c)(iii)
The aggregate fair market value of the
assets of the Borrower and its
Subsidiaries sold for cash pursuant to
Section 8.05(c)(iii) during the
Calculation Period is $--------
Aggregate year to date $--------
MAXIMUM in any fiscal year $5,000,000
----------
SECTION 8.05(c)(vi)
The aggregate fair market value of the
assets heretofore acquired as part of the
NEN Acquisition and identified on Annex 3
to the Credit Agreement sold for cash
pursuant to Section 8.05(c)(vi) is $--------
MAXIMUM $750,000
---------
ANNEX A TO COMPLIANCE CERTIFICATE
- 2 -
SECTION 8.06(h)
The maximum aggregate outstanding amount
of Indebtedness of the Borrower and its
Subsidiaries incurred at any time during
the Calculation Period secured by Liens
permitted by Section 8.06(h) is $---------
MAXIMUM at any time $4,000,000
----------
SECTION 8.06(i)
The maximum aggregate outstanding amount
of Indebtedness of the Borrower and its
Subsidiaries incurred at any time
during the Calculation Period and other
obligations of the Borrower and its
Subsidiaries as at the last day of the
Calculation Period secured by Liens
permitted by Section 8.06(i) is $---------
MAXIMUM at any time $400,000
----------
SECTION 8.07(e)
Permitted Additional Debt is $---------
MAXIMUM at any time $125,000,000
------------
SECTION 8.07(f)
The maximum aggregate outstanding
principal or face amount of Indebtedness
of the Borrower and its Subsidiaries
incurred during the Calculation Period
pursuant to Section 8.07(f) is $
MAXIMUM at any time $25,000,000
-----------
ANNEX A TO COMPLIANCE CERTIFICATE
- 3 -
SECTION 8.08(e)
The aggregate amount of Investments
made by the Borrowers and its Subsidiaries
during the Calculation Period pursuant
to Section 8.08(e) equal $---------
MAXIMUM $2,000,000
----------
SECTION 8.09(a)
50% of the cumulative Excess Cash Flow
that remains after giving effect to any
Acquisitions made as permitted by Section
8.05(b)(iv) equals $--------
The Total Debt Ratio as at the last day
of the Calculation Period (as determined
in Section 8.11 below) is ______:1
SECTION 8.09(b)
The amount of cash dividends paid by the
Borrower on its common stock during the
Calculation Period pursuant to Section
8.09(b) is $--------
MAXIMUM $2,000,000
----------
SECTION 8.09(c)
The amount of cash payments in respect of
promissory notes in respect of common
stock or options of the Borrower repurchased
from any management official upon his death
or termination or in respect of promissory
notes pursuant to Section 8.09(c) is $--------
MAXIMUM $5,000,000
----------
ANNEX A TO COMPLIANCE CERTIFICATE
- 4 -
SECTION 8.10
(a) aggregate Capital Expenditures made
by the Borrower and its
Subsidiaries during the Calculation
Period $---------
(b) aggregate amount of proceeds from
sales of assets in the ordinary
course of business pursuant to
Section 8.05(c)(i) or from
insurance in respect of any capital
asset subject to a Casualty Event
applied or to be applied or
committed to be applied to the
purchase of like assets within 180
days of such sale or Casualty Event $---------
(c) Total Capital Expenditures ((a)
MINUS (b)) $---------
(d) Cash Flow for the period of twelve
complete consecutive months ended on,
or most recently ended prior to, the
last day of the Calculation Period
(as determined in item (b) in Section
8.11 below) $---------
(e) Capital Expenditures made during the
period of twelve complete consecutive
months ended on, or most recently
ended prior to, the last day of the
Calculation Period $---------
(f) Cash Flow (as determined in item
(d) above) MINUS Capital
Expenditures (as determined in item
(e) above) $---------
MAXIMUM (the greater of (i)
$20,000,000 and (ii) the result of
item (f) above PLUS $[INSERT APPROPRIATE
AMOUNT FROM SECTION 8.10 OF THE CREDIT
AGREEMENT] during [INSERT APPROPRIATE
YEAR FROM THE CREDIT AGREEMENT] $---------
ANNEX A TO COMPLIANCE CERTIFICATE
- 5 -
SECTION 8.10(z)
Capital Expenditures made in respect of
a printing facility in the area in and
surrounding Philadelphia, Pennsylvania
in excess of the amounts set forth above $---------
MAXIMUM $25,000,000
-----------
SECTION 8.11
(a) Total Debt (as defined in the
Credit Agreement) of the Borrower
and its Subsidiaries as at the last
day of the Calculation Period $---------
(b) Cash Flow of the Borrower and its
Subsidiaries for the 12 months most
recently ended on or prior to the last
day of the Calculation Period:
(i) operating income before taxes,
Interest Expense, amortization
and depreciation and
extraordinary gains and losses $---------
(ii) other non-cash subtractions
from net operating income and
all other non-cash items of
income are $---------
(iii) amount specified for the
relevant period in Annex 2 to
the Credit Agreement $---------
(iv) Additions (or subtractions
for) Acquisitions (other than
the Taunton Acquisition) or
Dispositions during the
Calculation Period $---------
(v) Adjustments for Acquisitions
(other than the Taunton
Acquisition) or Dispositions $---------
ANNEX A TO COMPLIANCE CERTIFICATE
- 6 -
(vi) reserves for additional
litigation and receivables
reserves of up to $2,500,000
for any period during the
fiscal year ended December 31,
1996 $---------
(vii) capitalized expenses in
respect of the Borrower's and
its Subsidiaries' development
and implementation of their
on-line services of up to (x)
$750,000 for any period during
the fiscal year ended December
31, 1996 and (y) $500,000 for
any period during the fiscal
year ended December 31, 1997 $---------
(viii) payments under the Management
Bonus Plan and accrued expenses
relating to the discontinuance
of the JRN's StarShare Plan not
exceedinG $35,000,000 $---------
(c) Cash Flow ((i) MINUS (ii) plus the
sum of (iii), (iv), (v), (vi),
(vii) and (viii)) is $---------
(d) The ratio of (a) to (c) is _____:1
MAXIMUM shall be [INSERT APPROPRIATE
RATIO FROM SECTION 8.11 OF THE CREDIT
AGREEMENT] during [INSERT APPROPRIATE
YEAR FROM THE CREDIT AGREEMENT]
SECTION 8.12
(a) Cash Flow of the Borrower and its
Subsidiaries (as determined in item
(b) of Section 8.11 above) for the 12
months most recently ended on or prior
to the last day of the Calculation
Period is $---------
- 7 -
(b) Total Debt Service of the Borrower
and its Subsidiaries for the
Calculation Period:
(i) Scheduled Payments and other
regularly scheduled payments
of principal of Indebtedness
which Indebtedness is included
in Total Debt; PLUS $----------
(ii) Interest Expense; PLUS $----------
(iii) payments of principal and interest
on Warburg Subordinated Debt (as
calculated in accordance with the
definition of "Total Debt Service"
in the Credit Agreement); $----------
equals $----------
(c) Capital Expenditures made during
such Calculation Period $----------
(d) taxes (other than deferred taxes and
excluding taxes paid or payable in
cash in respect of income or activities
during periods prior to December 31, 1994); $----------
The ratio of (a) to ((b) PLUS (c) PLUS
(d)) is _____:1
MINIMUM 1:1
ANNEX A TO COMPLIANCE CERTIFICATE
- 8 -
SECTION 8.13
(a) Cash Flow of the Borrower and its
Subsidiaries (as determined in item (b)
in Section 8.11 above) for the 12
months most recently ended on or prior
to the last day of the Calculation Period is $---------
(b) cash Interest Expense of the Borrowers
and its Subsidiaries for the 12
months most recently ended on or
prior to the last day of the Calculation
Period is $---------
The Interest Coverage Ratio ((a) to (b))
is _____:1
MINIMUM 2:1
SECTION 8.14
The Working Capital of the Borrower and
its Subsidiaries as at the last day of
the Calculation Period is $---------
MINIMUM $0.00
SECTION 8.20
(a) The aggregate face amount of
accounts receivable sold by the
Borrower and its Subsidiaries
for less than the face value
during the Calculation Period $---------
(b) Aggregate year to date (less
applicable reserves) $---------
MAXIMUM for any fiscal year $500,000
----------
ANNEX A TO COMPLIANCE CERTIFICATE
EXHIBIT D
[FORM OF CONFIDENTIALITY AGREEMENT]
[DATE]
CONFIDENTIALITY AGREEMENT
[INSERT NAME AND
ADDRESS OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
Re: Credit Agreement dated as of May 2, 1997 between Journal
Register Company (the "BORROWER"), each of the banks and other
financial institutions party thereto and The Chase Manhattan
Bank, as Agent (the "CREDIT AGREEMENT"; terms defined therein
being used herein as so defined, unless otherwise provided
herein).
Dear __________:
As a Bank party to the above-referenced Credit Agreement, we have
agreed with the Borrower pursuant to Section 11.12 of the Credit Agreement to
use reasonable precautions to keep confidential, except as otherwise provided
therein, all non-public information identified by the Borrower as being
confidential at the time the same is delivered to us pursuant to the Credit
Agreement.
As provided in said Section 11.12, we are permitted to provide you,
as a prospective [HOLDER OF A PARTICIPATION IN THE [REVOLVING CREDIT/TERM/PAD]
LOANS] [ASSIGNEE BANK], with certain of such non-public information subject to
the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your affiliates, directors, officers, employees and
representatives) that (a) such information will not be used by you except in
connection with the proposed [PARTICIPATION] [ASSIGNMENT] mentioned above and
(b) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such
CONFIDENTIALITY AGREEMENT
- 2 -
information confidential, provided that you may disclose such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
your counsel, (iii) to bank examiners, auditors or accountants, (iv) to the
Agent or any [OTHER] Bank (or to Chase Securities Inc.), (v) in connection with
any litigation to which any one or more of the Banks or the Agent is a party,
(vi) to your subsidiary or affiliate or a subsidiary or affiliate of any [OTHER]
Bank or the Agent, (vii) to any assignee or [SUB]participant (or prospective
assignee or [SUB]participant) of or in any Loans so long as such assignee or
[SUB]participant (or prospective assignee or [SUB]participant) first executes
and delivers to you a Confidentiality Agreement substantially in the form
hereof, (viii) to any other Person in the course of the enforcement of your, any
[OTHER] Bank's or the Agent's rights or remedies hereunder or under any Credit
Document, (ix) to any other creditor of any Obligor at any time during the
continuance of an Event of Default or (x) to any other Person if such
information becomes publicly available (other than by reason of a breach by you
of your obligations hereunder).
Please indicate your agreement to the foregoing by signing at the
place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
[INSERT NAME OF BANK]
By_________________________
Name:
Title:
The foregoing is agreed to AS OF THE DATE OF THIS LETTER.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By_________________________
Name:
Title:
CONFIDENTIALITY AGREEMENT
EXHIBIT E-1
[Form of Term Note]
TERM NOTE
$[____________] [____________], 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of [_____________________]
(the "BANK"), for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of The
Chase Manhattan Bank at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal
sum of [_______________] Dollars, in lawful money of the United States of
America and in immediately available funds, in the respective principal amounts
payable on the Principal Payment Dates, and to pay interest on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the Term Loan made by the Bank to the Borrower under
the Credit Agreement, and the date such Term Loan is Converted from a Loan of
one Type into a Loan of another Type, and the amount of each payment or
prepayment made on account of the principal of such Term Loan, shall be recorded
by the Bank on its books and, prior to any transfer of this Note, endorsed by
the Bank on the schedule attached hereto or any continuation thereof, PROVIDED
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect of the Term Loan
made by the Bank.
This Note is one of the Notes under the Credit Agreement dated as of
May 2, 1997 (as at any time amended or otherwise modified, the "CREDIT
AGREEMENT") between the Borrower, the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences the Term Loan made by the
Bank thereunder. Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Term
Loans upon the terms and conditions specified therein.
TERM NOTE
- 2 -
Except as permitted by Section 11.06 of the Credit Agreement, this
Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
JOURNAL REGISTER COMPANY
By_________________________
Name:
Title:
TERM NOTE
TERM LOAN
This Term Note evidences the Term Loan made, Continued or Converted
under the within-described Credit Agreement to the Borrower of the Type, bearing
interest at the rates and having Interest Periods (if applicable) of the
duration set forth below, subject to the payments, prepayments, Continuations
and Conversions of principal set forth below:
AMOUNT
PAID,
DATE DURATION PREPAID,
CONTINUED TYPE OF CONTINUED UNPAID
OR OF INTEREST INTEREST OR PRINCIPAL NOTATION
CONVERTED LOAN RATE PERIOD CONVERTED AMOUNT MADE BY
--------- ---- -------- -------- --------- --------- -------
TERM NOTE
EXHIBIT E-2
[Form of Revolving Credit Note]
REVOLVING CREDIT NOTE
$[____________] [____________], 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of
[_______________________________] (the "BANK"), for account of its respective
Applicable Lending Office provided for by the Credit Agreement referred to
below, at the principal office of The Chase Manhattan Bank at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, the principal sum of [_______________] Dollars (or
such lesser amount as shall equal the aggregate unpaid principal amount of the
Revolving Credit Loans made by the Bank to the Borrower under the Credit
Agreement), in lawful money of the United States of America and in immediately
available funds on the Revolving Credit Commitment Termination Date, and to pay
interest on the unpaid principal amount of each such Revolving Credit Loan, at
such office, in like money and funds, for the period commencing on the date of
such Revolving Credit Loan until such Revolving Credit Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest Period
(if applicable) of each Revolving Credit Loan made by the Bank to the Borrowers
under the Credit Agreement, and the date such Revolving Credit Loan is Converted
from a Loan of one Type into a Loan of another Type, and the amount of each
payment or prepayment made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of this Note,
endorsed by the Bank on the schedule attached hereto or any continuation
thereof, PROVIDED that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Revolving Credit Loans made by the Bank.
This Note is one of the Notes under the Credit Agreement dated as of
May 2, 1997 (as at any time amended or otherwise modified, the "CREDIT
AGREEMENT") between the Borrower, the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences Revolving Credit Loans
made by the Bank thereunder. Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.
REVOLVING CREDIT NOTE
- 2 -
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 11.06 of the Credit Agreement, this Note
may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
JOURNAL REGISTER COMPANY
By_________________________
Name:
Title:
REVOLVING CREDIT NOTE
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made, Continued or Converted
under the within-described Credit Agreement to the Borrower, on the dates, in
the principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the duration set forth below, subject to the
payments, prepayments, Continuations and Conversions of principal set forth
below:
AMOUNT
DATE PAID,
MADE, PRINCIPAL DURATION PREPAID,
CONTINUED AMOUNT TYPE OF CONTINUED UNPAID
OR OF OF INTEREST INTEREST OR PRINCIPAL NOTATION
CONVERTED LOAN LOAN RATE PERIOD CONVERTED AMOUNT MADE BY
--------- -------- ---- -------- -------- --------- --------- -------
REVOLVING CREDIT NOTE
EXHIBIT E-3
[Form of NEN Acquisition Note]
NEN ACQUISITION NOTE
$[____________] [____________], 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of [_____________________]
(the "BANK"), for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of The
Chase Manhattan Bank at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal
sum of [_______________] Dollars, in lawful money of the United States of
America and in immediately available funds, in the respective principal amounts
payable on the Principal Payment Dates, and to pay interest on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the NEN Acquisition Loan made by the Bank to the
Borrower under the Credit Agreement, and the date such NEN Acquisition Loan is
Converted from a Loan of one Type into a Loan of another Type, and the amount of
each payment or prepayment made on account of the principal of such NEN
Acquisition Loan, shall be recorded by the Bank on its books and, prior to any
transfer of this Note, endorsed by the Bank on the schedule attached hereto or
any continuation thereof, PROVIDED that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing under the Credit Agreement or
hereunder in respect of the NEN Acquisition Loan made by the Bank.
This Note is one of the Notes under the Credit Agreement dated as of
May 2, 1997 (as at any time amended or otherwise modified, the "CREDIT
AGREEMENT") between the Borrower, the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences the NEN Acquisition Loan
made by the Bank thereunder. Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events
NEN ACQUISITION NOTE
- 2 -
and for prepayments of NEN Acquisition Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06 of the Credit Agreement, this
Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
JOURNAL REGISTER COMPANY
By_________________________
Name:
Title:
NEN ACQUISITION NOTE
NEN ACQUISITION LOAN
This NEN Acquisition Note evidences the NEN Acquisition Loan made,
Continued or Converted under the within-described Credit Agreement to the
Borrower of the Type, bearing interest at the rates and having Interest Periods
(if applicable) of the duration set forth below, subject to the payments,
prepayments, Continuations and Conversions of principal set forth below:
AMOUNT
PAID,
DATE DURATION PREPAID,
CONTINUED TYPE OF CONTINUED UNPAID
OR OF INTEREST INTEREST OR PRINCIPAL NOTATION
CONVERTED LOAN RATE PERIOD CONVERTED AMOUNT MADE BY
--------- ---- -------- -------- --------- --------- -------
NEN ACQUISITION NOTE
EXHIBIT E-4
[Form of New Britain Acquisition Note]
NEN BRITAIN ACQUISITION NOTE
$[____________] [____________], 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of [_____________________]
(the "BANK"), for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of The
Chase Manhattan Bank at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal
sum of [_______________] Dollars, in lawful money of the United States of
America and in immediately available funds, in the respective principal amounts
payable on the Principal Payment Dates, and to pay interest on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the New Britain Acquisition Loan made by the Bank to
the Borrower under the Credit Agreement, and the date such New Britain
Acquisition Loan is Converted from a Loan of one Type into a Loan of another
Type, and the amount of each payment or prepayment made on account of the
principal of such New Britain Acquisition Loan, shall be recorded by the Bank on
its books and, prior to any transfer of this Note, endorsed by the Bank on the
schedule attached hereto or any continuation thereof, PROVIDED that the failure
of the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the New Britain Acquisition Loan
made by the Bank.
This Note is one of the Notes under the Credit Agreement dated as of
May 2, 1997 (as at any time amended or otherwise modified, the "CREDIT
AGREEMENT") between the Borrower, the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences the New Britain
Acquisition Loan made by the Bank thereunder. Capitalized terms used in this
Note have the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events
NEW BRITAIN ACQUISITION NOTE
- 2 -
and for prepayments of New Britain Acquisition Loans upon the terms and
conditions specified therein.
Except as permitted by Section 11.06 of the Credit Agreement, this
Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
JOURNAL REGISTER COMPANY
By_________________________
Name:
Title:
NEW BRITAIN ACQUISITION NOTE
NEW BRITAIN ACQUISITION LOAN
This New Britain Acquisition Note evidences the New Britain
Acquisition Loan made, Continued or Converted under the within-described Credit
Agreement to the Borrower of the Type, bearing interest at the rates and having
Interest Periods (if applicable) of the duration set forth below, subject to the
payments, prepayments, Continuations and Conversions of principal set forth
below:
AMOUNT
PAID,
DATE DURATION PREPAID,
CONTINUED TYPE OF CONTINUED UNPAID
OR OF INTEREST INTEREST OR PRINCIPAL NOTATION
CONVERTED LOAN RATE PERIOD CONVERTED AMOUNT MADE BY
--------- ---- -------- -------- --------- --------- -------
NEW BRITAIN ACQUISITION NOTE
EXHIBIT E-5
[Form of PAD Loan Note]
PAD LOAN NOTE
$[____________] [____________], 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, each of JOURNAL REGISTER COMPANY, a Delaware
corporation (the "BORROWER") hereby promise to pay to the order of
[_______________________________] (the "BANK"), for account of its respective
Applicable Lending Offices provided for by the Credit Agreement referred to
below, at the principal office of The Chase Manhattan Bank at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, the principal sum of [_______________] Dollars (or
such lesser amount as shall equal the aggregate unpaid principal amount of the
PAD Loans made by the Bank to the Borrower under the Credit Agreement), in
lawful money of the United States of America and in immediately available funds
on such days and on such dates as has been agreed by the Bank and the Borrower,
and to pay interest on the unpaid principal amount of each such PAD Loan, at
such office, in like money and funds, for the period commencing on the date of
such PAD Loan until such PAD Loan shall be paid in full, at the rates per annum
and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the PAD Loan made by the Bank to the Borrower under
the Credit Agreement, and the date such PAD Loan is Converted from a Loan of one
Type into a Loan of another Type, and the amount of each payment or prepayment
made on account of the principal of such PAD Loan, shall be recorded by the Bank
on its books and, prior to any transfer of this Note, endorsed by the Bank on
the schedule attached hereto or any continuation thereof, PROVIDED that the
failure of the Bank to make any such recordation or endorsement shall not affect
the obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the PAD Loan made by the
Bank.
This Note is one of the Notes under the Credit Agreement dated as of
May 2, 1997 (as at any time amended or otherwise modified, the "CREDIT
AGREEMENT") between the Borrower, the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences the PAD Loans made by the
Bank thereunder. Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
PAD NOTE
- 2 -
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of PAD
Loans upon the terms and conditions specified therein.
Except as permitted by Section 11.06 of the Credit Agreement, this
Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
JOURNAL REGISTER COMPANY
By_________________________
Name:
Title:
PAD NOTE
PAD LOAN
This PAD Note evidences the PAD Loan made, Continued or Converted
under the within-described Credit Agreement to the Borrower of the Type, bearing
interest at the rates and having Interest Periods (if applicable) of the
duration set forth below, subject to the payments, prepayments, Continuations
and Conversions of principal set forth below:
AMOUNT
PAID,
DATE DURATION PREPAID,
CONTINUED TYPE OF CONTINUED UNPAID
OR OF INTEREST INTEREST OR PRINCIPAL NOTATION
CONVERTED LOAN RATE PERIOD CONVERTED AMOUNT MADE BY
--------- ---- -------- -------- --------- --------- -------
PAD NOTE
