EXECUTION COPY
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CREDIT AGREEMENT
Dated as of March 24, 1998,
among
JEFFERSON SMURFIT CORPORATION,
JEFFERSON SMURFIT CORPORATION (U.S.),
JSCE, INC.,
THE LENDERS AND FRONTING BANKS NAMED HEREIN,
THE MANAGING AGENTS NAMED HEREIN,
BANKERS TRUST COMPANY,
as Senior Managing Agent
and
THE CHASE MANHATTAN BANK,
as Administrative Agent and Senior Managing Agent
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BT ALEX. ▇▇▇▇▇ INCORPORATED,
as Arranger and Syndication Agent
and
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
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I. DEFINITIONS 2
SECTION 1.01. Defined Terms 2
SECTION 1.02. Terms Generally 29
II. THE CREDITS 30
SECTION 2.01. Commitments 30
SECTION 2.02. Loans 30
SECTION 2.03. Notice of Borrowings 32
SECTION 2.04. Repayment of Loans; Evidence of Debt 33
SECTION 2.05. Fees 33
SECTION 2.06. Interest on Loans 34
SECTION 2.07. Default Interest 36
SECTION 2.08. Alternate Rate of Interest 36
SECTION 2.09. Termination and Reduction of Commitments 37
SECTION 2.10. Conversion and Continuation of Borrowings 37
SECTION 2.11. Repayment of Term Borrowings 39
SECTION 2.12. Optional Prepayments 41
SECTION 2.13. Mandatory Prepayments 41
SECTION 2.14. Reserve Requirements; Change in
Circumstances; Increased Costs 44
SECTION 2.15. Change in Legality 47
SECTION 2.16. Indemnity 47
SECTION 2.17. Pro Rata Treatment 48
SECTION 2.18. Sharing of Setoffs 48
SECTION 2.19. Payments 49
SECTION 2.20. Taxes 49
SECTION 2.21. Duty to Mitigate; Assignment of
Commitments under Certain
Circumstances 53
SECTION 2.22. Swingline Loans 53
III. LETTERS OF CREDIT 55
SECTION 3.01. Issuance of Letters of Credit 55
SECTION 3.02. Participations; Unconditional Obligations 56
SECTION 3.03. LC Fee 57
SECTION 3.04. Agreement to Repay LC Disbursements 57
SECTION 3.05. Letter of Credit Operations 58
SECTION 3.06. Termination of LC Commitment 58
SECTION 3.07. Fronting Bank Fees 59
SECTION 3.08. Resignation or Removal of the Fronting
Bank 59
SECTION 3.09. Cash Collateralization 60
SECTION 3.10. Additional Fronting Banks 60
IV. REPRESENTATIONS AND WARRANTIES 60
SECTION 4.01. Organization; Powers 60
SECTION 4.02. Authorization 61
SECTION 4.03. Enforceability 61
SECTION 4.04. Governmental Approvals 61
SECTION 4.05. Financial Statements 62
SECTION 4.06. No Material Adverse Change 62
SECTION 4.07. Title to Properties; Possession Under
Leases 62
SECTION 4.08. Subsidiaries 63
SECTION 4.09. Litigation; Compliance with Laws 63
SECTION 4.10. Agreements 63
SECTION 4.11. Federal Reserve Regulations 63
SECTION 4.12. Investment Company Act; Public Utility
Holding Company Act 63
SECTION 4.13. Use of Proceeds 64
SECTION 4.14. Tax Returns 64
SECTION 4.15. No Material Misstatements 64
SECTION 4.16. Employee Benefit Plans 64
SECTION 4.17. Environmental and Safety Matters 65
SECTION 4.18. Solvency 66
SECTION 4.19. Security Documents 67
SECTION 4.20. Labor Matters 68
SECTION 4.21. Location of Real Property 68
SECTION 4.22 Patents, Trademarks, etc. 69
V. CONDITIONS 69
SECTION 5.01. All Credit Events 69
SECTION 5.02. Closing Date 70
VI. AFFIRMATIVE COVENANTS 74
SECTION 6.01. Existence; Businesses and Properties 74
SECTION 6.02. Insurance 74
SECTION 6.03. Obligations and Taxes 74
SECTION 6.04. Financial Statements, Reports, etc. 75
SECTION 6.05. Litigation and Other Notices 77
SECTION 6.06. ERISA 77
SECTION 6.07. Maintaining Records; Access to
Properties and Inspections 78
SECTION 6.08. Use of Proceeds 78
SECTION 6.09. Compliance with Law 78
SECTION 6.10. Further Assurances 78
SECTION 6.11. Material Contracts 80
SECTION 6.12. Environmental Matters 81
SECTION 6.13. Distribution of Gross Export Revenues 81
VII. NEGATIVE COVENANTS 81
SECTION 7.01. Indebtedness 81
SECTION 7.02. Liens 83
SECTION 7.03. Sale/Leaseback Transactions 84
SECTION 7.04. Investments, Loans and Advances 84
SECTION 7.05. Mergers, Consolidations, Sales of
Assets and Acquisitions 85
SECTION 7.06. Restricted Junior Payments 86
SECTION 7.07. Transactions with Stockholders and
Affiliates 86
SECTION 7.08. Business 87
SECTION 7.09. Limitations on Debt Prepayments 87
SECTION 7.10. Amendment of Certain Documents 88
SECTION 7.11. Limitation on Dispositions of Subsidiary
Stock; Creation of Subsidiaries 89
SECTION 7.12. Restrictions on Ability of Subsidiaries
to Pay Dividends 89
SECTION 7.13. Capital Expenditures 90
SECTION 7.14. Consolidated EBITDA 90
SECTION 7.15. Interest Coverage Ratio 90
SECTION 7.16. Disposition of Collateral and other
Assets 91
SECTION 7.17. Disposition of Mortgaged Property 92
SECTION 7.18. Fiscal Year 93
VIII. EVENTS OF DEFAULT 94
IX. THE ADMINISTRATIVE AGENT, THE COLLATERAL
AGENT, THE SENIOR MANAGING AGENTS AND
THE FRONTING BANK 98
X. MISCELLANEOUS 101
SECTION 10.01. Notices 101
SECTION 10.02. Survival of Agreement 102
SECTION 10.03. Binding Effect 102
SECTION 10.04. Successors and Assigns 102
SECTION 10.05. Expenses; Indemnity 106
SECTION 10.06. Right of Setoff 107
SECTION 10.07. Applicable Law 107
SECTION 10.08. Waivers; Amendment 107
SECTION 10.09. Interest Rate Limitation 109
SECTION 10.10. Entire Agreement 109
SECTION 10.11. Waiver of Jury Trial 109
SECTION 10.12. Severability 109
SECTION 10.13. Counterparts 110
SECTION 10.14. Headings 110
SECTION 10.15. Confidentiality 110
SECTION 10.16. Jurisdiction; Consent to Service of
Process 111
SECTION 10.17. Receivables Program 111
SECTION 10.18. Florida Real Property 111
EXHIBITS
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Exhibit A Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Guarantee Agreement
Exhibit D Form of Mortgage
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Patent, Trademark and Copyright Security Agreement
Exhibit H Form of SNC Security Agreement
Exhibit I-1 Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Exhibit I-2 Form of Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Exhibit I-3 Form of Opinion of Local Counsel
SCHEDULES
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Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Material Contracts
Schedule 1.01(c) Material Subsidiaries
Schedule 1.01(d) ▇▇▇▇▇
Schedule 1.01(e) Mortgaged Property
Schedule 1.01(f) Receivables Program Documents
Schedule 2.01 Commitments
Schedule 4.04 Governmental Approvals
Schedule 4.08 Subsidiaries
Schedule 4.09 Litigation
Schedule 4.17 Environmental Matters
Schedule 4.19(b) UCC Filing Offices
Schedule 4.19(c) Mortgage Filing Offices
Schedule 4.19(d) Trademark Filing Offices
Schedule 4.19(e) UCC Filing Offices (SNC)
Schedule 4.20 Labor Matters
Schedule 4.21(a) Owned Real Properties
Schedule 4.21(b) Leased Real Properties
Schedule 4.21(c) Timberland
Schedule 5.02(a) Local Counsel
Schedule 7.01(a) Certain Existing Indebtedness
Schedule 7.04 Existing Investments
CREDIT AGREEMENT dated as of March 24, 1998,
among JEFFERSON SMURFIT CORPORATION, a Delaware
corporation ("JSC"); JSCE, INC., a Delaware
corporation ("JSCE"); JEFFERSON SMURFIT
CORPORATION (U.S.), a Delaware corporation (the
"Borrower"); the Lenders (as defined in Article I
the Managing Agents (as defined in Article I); the
Fronting Banks (as defined in Article I); BANKERS
TRUST COMPANY, a New York banking corporation
("BTCo"), and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase"), as senior managing
agents (in such capacity, each a "Senior Managing
Agent") for the Lenders; and Chase, as
administrative agent (in such capacity, the
"Administrative Agent") and collateral agent (in
such capacity, the "Collateral Agent") for the
Lenders, and as swingline lender (in such
capacity, the "Swingline Lender").
The Borrower has requested the Lenders to extend credit in the form of (a)
Tranche A Term Loans (such term and each other capitalized term used but not
defined in this introductory statement having the meaning assigned to it in
Article I) on the Closing Date, in an aggregate principal amount not in excess
of $400,000,000, (b) Tranche B Term Loans on the Closing Date in an aggregate
principal amount not in excess of $350,000,000 and (c) Revolving Loans at any
time and from time to time prior to the Revolving Credit Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$550,000,000. The Borrower has requested the Swingline Lender to extend credit,
at any time and prior to the Revolving Credit Maturity Date, in the form of
Swingline Loans. The Borrower has requested the Fronting Bank to issue letters
of credit, in an aggregate face amount at any time outstanding not in excess of
$150,000,000.
The proceeds of the Term Loans, together with a portion of the Revolving
Loans to be made on the Closing Date, will be used by the Borrower solely to (a)
repay in full all principal outstanding, and interest, fees, costs and other
amounts due, under the Existing Credit Agreement and (b) pay related fees and
expenses. The proceeds of the Revolving Loans (other than the Revolving Loans
used for the purposes specified in the preceding sentence) and the Swingline
Loans are to be used for the sole purpose of providing working capital for the
Borrower and its Subsidiaries and for other general corporate purposes,
including the repurchase or refinancing of other Indebtedness, to the extent
permitted hereunder. Letters of Credit will be used to support obligations of
the Borrower and its Subsidiaries incurred in the ordinary course of their
business.
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Accordingly, JSC, JSCE, the Borrower, the Lenders, the Managing Agents, the
Senior Managing Agents, the Fronting Bank, the Swingline Lender, the
Administrative Agent and the Collateral Agent agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Borrowing" shall mean a Borrowing comprised of ABR
RevolvingLoans.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Spread" shall mean (a) with respect to Tranche A Term Loans and
Revolving Loans, 0.50% per annum, subject to adjustment pursuant to Section
2.06(c) and (b) with respect to Tranche B Term Loans, 1.00% per annum, subject
to adjustment pursuant to Section 2.06(c).
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves. For purposes hereof,
the term "LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days
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prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
average of the respective rates per annum at which dollar deposits approximately
equal in principal amount to the Administrative Agent's portion of such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Administrative Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified. For purposes of this definition, neither any Lender nor any Affiliate
of a Lender shall be deemed to be an Affiliate of JSC or any of its Subsidiaries
solely by reason of its ownership of or right to vote any Indebtedness of JSC or
any of its Subsidiaries.
"After-Acquired Mortgage Property" shall have the meaning assigned to such
term in Section 6.05(d).
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof, the term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective on the date such change is publicly
announced as being effective. The term "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves
and (b) the Assessment Rate. The term "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day) or, if such
rate shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New
4
York City received at approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding Business
Day) by the Administrative Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) or (c), or both, of the first sentence
of this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Percentage" of any Participating Lender shall mean the
percentage of the aggregate Revolving Credit Commitments represented by such
Participating Lender's Revolving Credit Commitment.
"Assessment Rate" shall mean for any date the annual rate (rounded upwards,
if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then-current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Asset Sale" shall mean the sale, transfer or other disposition by any Loan
Party or any of its Subsidiaries to any Person other than any Loan Party of (a)
any capital stock other than Margin Stock; (b) substantially all the assets of
any geographic or other division or line of business of any Loan Party or any of
its Subsidiaries; or (c) any Real Property or a portion of any Real Property or
any other asset or assets (excluding any assets manufactured, constructed or
otherwise produced or purchased for sale to others in the ordinary course of
business and any Program Receivables) of any Loan Party or any of its
Subsidiaries, provided that (i) any asset sale or series of related asset sales
described in clause (c) above having a value not in excess of $1,000,000 shall
not be deemed an "Asset Sale" for purposes of this Agreement and (ii) the term
"Asset Sale" shall not include any sale of assets in connection with any
Permitted Equipment Financing or any Permitted Timber Financing.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee and, to the extent required by Section
10.04(b), accepted by the Borrower, the Administrative Agent, the Swingline
Lender and the Fronting Bank, in the form of Exhibit B or such other form as
shall be approved by the Administrative Agent.
5
"Basic Agreements" shall mean the SIBV Agreement, the Financial Services
Agreement, the 1992 Holdings Agreement, the Registration Rights Agreement, the
Stockholders' Agreement and the 1992 Stock Option Plan.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower's Portion of Excess Cash Flow" shall mean, at any date of
determination, the cumulative amount of Excess Cash Flow for each full fiscal
year of JSC commencing on or after January 1, 1998, and ending prior to the date
of determination that (a) was not or is not required to be applied to the
prepayment of Loans or the reduction of Commitments, in each case as described
in Section 2.13(c), and (b) has not been utilized on or prior to the date of
determination (i) to make Consolidated Capital Expenditures pursuant to the
proviso in the first sentence of Section 7.13, (ii) to pay dividends pursuant to
Section 7.06(b) or (iii) to prepay Indebtedness pursuant to Section 2.12(a) or
7.09(a).
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Business Day" shall mean any day (other than a Saturday, Sunday or legal
holiday in the State of New York) on which banks are open for business in New
York City; provided, however, that, when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Lease" shall have the meaning given such term in the definition of
the term "Capital Lease Obligations".
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof (each, a "Capital Lease"), which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Cash Proceeds" shall mean, with respect to any Asset Sale, cash payments
received from such Asset Sale, including any cash received by way of deferred
payment pursuant to a note receivable or otherwise (other than the portion of
such deferred payment constituting interest, which shall be deemed not to
constitute Cash Proceeds).
A "Change in Control" shall be deemed to have occurred if (a) JSG and its
Affiliates shall cease to own or control shares representing at least 35% of the
aggregate ordinary
6
voting power represented by the issued and outstanding capital stock of JSC; (b)
any person or group (within the meaning of Rule 13d-5 of the Securities and
Exchange Act of 1934, as in effect on the date hereof) other than JSG and MS
Group and their respective Affiliates shall own, directly or indirectly,
beneficially or of record, shares representing more than 20% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
JSC; or (c) JSC shall cease to own, directly or indirectly, beneficially and of
record, 100% of the issued and outstanding capital stock of the Borrower.
"Change of Law" shall have the meaning given such term in Section 2.20(f).
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, or any successor
statute thereto, as the same may be amended from time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Commitment" shall mean, with respect to each Lender, such Lender's
Revolving Credit Commitment, Tranche A Commitment or Tranche B Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Commitment Fee Percentage" shall mean 0.375% per annum, subject to
adjustment in accordance with Section 2.06(c).
"Common Stock" shall mean the common stock, par value $0.01 per share, of
JSC.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated February 1998.
"Consolidated Capital Expenditures" shall mean, for any period, the sum of
(a) all amounts that would be included as additions to property, plant and
equipment and other capital expenditures on a consolidated statement of cash
flows for JSC and its Subsidiaries during such period in accordance with GAAP
and (b) all amounts in respect of additions to Timberland Property during such
period identified as investment activities in accordance with GAAP (in each
case, excluding capitalized interest and Permitted Acquisitions but including
the amount of assets leased under any Capital Lease).
"Consolidated Current Assets" shall mean, as at any date of determination,
the total assets (other than cash and cash equivalents) of JSC and its
Subsidiaries on a consolidated basis that may properly be classified as current
assets in conformity with GAAP.
7
"Consolidated Current Liabilities" shall mean, as at any date of
determination, the total liabilities of JSC and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, provided that the current maturities of long-term
Indebtedness for money borrowed of JSC and its Subsidiaries, any Indebtedness
permitted under Section 7.01 that is classified as a current liability in
conformity with GAAP and any taxes payable solely as a result of Asset Sales
shall be excluded from the definition of Consolidated Current Liabilities.
"Consolidated EBITDA" for any period shall mean (a) the sum of (i)
Consolidated Net Income for such period, (ii) all Federal, state, local and
foreign taxes deducted in determining such Consolidated Net Income, (iii) total
interest expense deducted in determining such Consolidated Net Income and (iv)
depreciation, depletion, amortization of intangibles and other non-cash charges
or non-cash losses deducted in determining such Consolidated Net Income, less
(b) any non-cash income or non-cash gains included in determining such
Consolidated Net Income.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of JSC and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, excluding any fees and expenses
payable or amortized during such period by JSC and its consolidated Subsidiaries
in connection with the amortization of deferred debt issuance costs. For
purposes of the foregoing, gross interest expense shall be determined after
giving effect to any net payments made or received by JSC and its consolidated
Subsidiaries with respect to Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) of JSC and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP, provided that
the net income (or loss) of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded.
"Control" of a Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Article V.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement entered into in the
ordinary course of business by the Borrower designed to protect the Borrower or
any of its Subsidiaries against fluctuations in currency values.
8
"Default" shall mean any event or condition that upon notice, lapse of time
or both would constitute an Event of Default.
"Default Rate" shall have the meaning assigned to such term in Section
2.07.
"dollars" or "$" shall mean lawful money of the United States.
"Domestic Subsidiary" shall mean any Subsidiary organized under the laws of
the United States or any political subdivision thereof.
"8-Year Senior Note Indenture" shall mean the Indenture dated as of May 1,
1994, among the Borrower, as issuer, JSCE, as guarantor, and The Bank of New
York, as trustee, relating to the 8-Year Senior Notes.
"8-Year Senior Notes" shall mean the Borrower's 10-3/4% Senior Notes Due
2002, in an aggregate principal amount outstanding on the date hereof of
$100,000,000.
"Environmental Laws" shall mean all current and future Federal, state,
local and foreign laws, rules or regulations, codes, ordinances, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder or other requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances, or wastes into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"Equity Fund II" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II L.P., a
Delaware limited partnership.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, or
any successor statute, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that (a) is a member of a group of which JSC, JSCE or the Borrower
is a member and (b) is treated as a single employer under Section 414 of the
Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Term Loan or Eurodollar
Revolving Loan.
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"Eurodollar Revolving Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VIII.
"Excess Cash Flow" shall mean, for any period, the excess of (a) the sum,
without duplication, of (i) Consolidated Net Income during such period, (ii) the
amount of depreciation, depletion, amortization of intangibles, deferred taxes,
accreted and zero coupon bond interest and other non-cash expenses, losses or
other charges that, pursuant to GAAP, were deducted in determining such
Consolidated Net Income, (iii) the proceeds of any Capital Leases of the
Borrower and its Subsidiaries on a consolidated basis, (iv) reductions, other
than reductions attributable solely to Asset Sales, to working capital for such
period (i.e., the decrease in Consolidated Current Assets minus Consolidated
Current Liabilities from the beginning to the end of such period), (v)
Indebtedness of the Borrower and its consolidated Subsidiaries created, incurred
or assumed in respect of the purchase or construction of property and (vi) the
net increase, if any, in the aggregate amount of borrowings by JSF in connection
with the Receivables Program during such period, over (b) the sum, without
duplication, of (i) the amount of all non-cash gains, income or other credits
included in determining Consolidated Net Income, (ii) additions to working
capital for such period (i.e., the increase in Consolidated Current Assets minus
Consolidated Current Liabilities from the beginning to the end of such period),
(iii) the Term Loan Repayment Amounts paid during such period, (iv) optional
prepayments of Term Loans described in Section 2.12(b) during such period, (v)
scheduled and optional payments or prepayments of the principal of permitted
Indebtedness other than the Loans (except to the extent financed with the
proceeds of additional permitted Indebtedness), but only to the extent that such
payments or prepayments cannot by their terms be reborrowed or redrawn and do
not occur in connection with a refinancing of all or any portion of such
permitted Indebtedness and are otherwise permitted hereby, (vi) Consolidated
Capital Expenditures for such period, (vii) cash payments made during such
period of expenses relating to the Borrower's 1993 operational restructuring
(including employee severance, manufacturing facility consolidation,
environmental and litigation expense) that were previously accrued as a non-cash
charge in
10
fiscal 1993, (viii) Restricted Junior Payments not prohibited hereunder made
during such period and (ix) the net decrease, if any, in the aggregate amount of
borrowings by JSF in connection with the Receivables Program during such period;
provided, however, that none of the following shall be included in a
determination of Excess Cash Flow: (x) amounts expended for any Investments
permitted under Section 7.04 and any proceeds from the subsequent sale or other
disposition of any such Investments and (y) the proceeds of any issuance of debt
or equity securities not otherwise prohibited hereunder.
"Existing Credit Agreement" shall mean the Credit Agreement dated as of May
11, 1994, as amended and restated as of May 17, 1996, as further amended as of
September 30, 1996 and June 15, 1997, among JSC, JSCE, the Borrower and the
lenders, the managing agents, the senior managing agents, the fronting banks,
the administrative agent, the collateral agent and the swingline lender named
therein.
"Existing Letter of Credit" shall mean each standby letter of credit that
(a) was issued under the Existing Credit Agreement for the account of the
Borrower, (b) is outstanding on the Closing Date and (c) is listed on Schedule
1.01(a).
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it.
"Fees" shall mean the Administrative Fees, the Commitment Fees, the LC
Fees, the fees specified in Section 2.05 and the fees specified in Section 3.07.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or assistant treasurer of such
corporation.
"Financial Services Agreement" shall mean the Financial Advisory Services
Agreement dated September 12, 1989, by and among MSI, SIBV and JSC, as amended
to the date hereof and as the same may be further amended or modified in
accordance with the terms thereof and hereof.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Fronting Bank" shall mean, as the context may require, (a) (i) BTCo, with
respect to Letters of Credit issued by BTCo, (ii) with respect to each Existing
Letter of Credit, the issuer thereof, and (ii) any other Lender that may become
a Fronting Bank pursuant to Section 3.08 or 3.10, with respect to Letters of
Credit issued by such Lender, or (b) collectively, all the foregoing.
11
"GAAP" shall mean generally accepted accounting principles in the United
States, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any Person shall mean any obligation, contingent or
otherwise (whether or not denominated as a guarantee), of such Person
guaranteeing any Indebtedness or any other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness (or
other obligation) or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness (or other obligation), (b)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness (or other obligation) of the payment of such
Indebtedness (or other obligation) or (c) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (or other
obligation); provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Guarantee Agreement" shall mean the Guarantee Agreement, substantially in
the form of Exhibit C, made by the Guarantors in favor of the Collateral Agent
for the benefit of the Secured Parties.
"Guarantors" shall mean JSC, JSCE and each Material Subsidiary.
"Hazardous Materials" shall have the meaning assigned to such term in
Section 4.17(d).
"Inactive Subsidiary" at any time shall mean any Subsidiary of JSC that (a)
has assets with a total market value not in excess of $1,000 and (b) has not
conducted any business or other operations during the prior 12-month period.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, other than deposits or advances in the ordinary course of
business, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to assets
purchased by such Person, (d) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (excluding trade accounts
payable and accrued expenses arising in the ordinary course of business), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
12
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed by such Person, (f) all Guarantees
by such Person, (g) all Capital Lease Obligations of such Person, (h) all
obligations of such Person in respect of Rate Protection Agreements, Currency
Agreements or other interest or exchange rate hedging arrangements (such
obligations to be equal at any time to the termination value of such Agreements
or other arrangements that would be payable by such Person at such time) and (i)
all obligations of such Person as an account party to reimburse any bank or any
other Person in respect of letters of credit. The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner, except to the extent such Indebtedness is expressly
non-recourse to such Person.
"Indemnitee" shall have the meaning assigned to such term in Section
10.05(b).
"Intercompany Indebtedness" shall mean any Indebtedness of any of JSC, JSCE
or the Borrower or any of their respective Subsidiaries that is owing to any
Loan Party.
"Intercompany Note" shall mean a promissory note evidencing Intercompany
Indebtedness pledged to the Collateral Agent pursuant to the Pledge Agreement
and which, unless otherwise provided herein or in any of the Receivables Program
Documents, shall be a senior obligation of the obligor thereon, payable on
demand to the obligee and in form and substance satisfactory to the Senior
Managing Agents.
"Interest Payment Date" shall mean (a) with respect to any Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part, (b) with respect to any Swingline Loan, the last day of the Interest
Period applicable to such Swingline Loan and (c) with respect to any Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Borrowing.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as the case may be, and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as the Borrower thereof may elect, (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the earlier of (i) the next succeeding March
31, June 30, September 30 or December 31, and (ii) the Revolving Credit Maturity
Date, the Tranche A Maturity Date or the Tranche B Maturity Date, as applicable,
and (c) as to any Swingline Loan, the period commencing on the date such
Swingline Loan is made or on the last day of the immediately preceding Interest
Period applicable to such Swingline Loan, as the case may be, and ending on the
earlier of (i) the next succeeding March 31, June 30, September 30 or December
31, and (ii) the Revolving Credit Maturity Date; provided, however, that, if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be
13
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"Investment" shall mean, as applied to any Person (the "Investor"), any
direct or indirect purchase or other acquisition by the Investor of, or a
beneficial interest in, stock or other securities of any other Person other than
a wholly owned Domestic Subsidiary of the Investor, including any exchange of
equity securities for Indebtedness, or any direct or indirect loan, advance
(other than advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by the Investor to any other Person other than a wholly owned
Domestic Subsidiary of the Investor, including all Indebtedness and accounts
receivable owing to the Investor from that other Person that did not arise from
sales or services rendered to that other Person in the ordinary course of the
Investor's business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment minus any amounts (a) realized upon the
disposition of assets comprising an Investment or (b) constituting repayments of
Investments that are loans or advances; provided, however, that the term
"Investment" shall not include the purchase in the open market of shares of JSG
in an aggregate amount which, together with the aggregate purchase price of all
MIP Shares and all MIP Options (each as defined in Section 7.06(d)) purchased
pursuant to Section 7.06(d) in any fiscal year, does not exceed $15,000,000 in
such fiscal year of the Borrower, purchased exclusively for subsequent
distribution as additional compensation to employees of the Borrower pursuant to
its management incentive program.
"Investor" shall have the meaning given such term in the definition of the
term "Investment".
"JSC International" shall mean JSC International Sales, Inc., a corporation
formed under the laws of Barbados and a wholly owned Subsidiary of the Borrower.
"JSF" shall mean Jefferson Smurfit Finance Corporation, a Delaware
corporation and a wholly owned Subsidiary of the Borrower, formed in connection
with the Receivables Program.
"JSG" shall mean Jefferson Smurfit Group plc, a corporation organized and
existing under the laws of the Republic of Ireland.
"LC Commitment" shall mean at any time an amount equal to the lesser of (a)
$150,000,000, as the same may be reduced from time to time pursuant to Section
3.06, and (b) the Revolving Credit Commitment at such time.
14
"LC Disbursement" shall mean any payment or disbursement made by the
Fronting Bank under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time of determination, the sum of (a) the
Trade LC Exposure and (b) the Standby LC Exposure.
"LC Fee" shall have the meaning given such term in Section 3.03.
"LC Maturity Date" shall mean the 30th Business Day prior to the Revolving
Credit Maturity Date.
"Lenders" shall mean the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context clearly indicates otherwise,
the term "Lenders" shall include the Swingline Lender.
"Letter of Credit Application" shall mean a commercial or standby letter of
credit application, as applicable, in the Fronting Bank's customary form, as
such form may be modified from time to time by the Fronting Bank.
"Letters of Credit" shall mean Trade Letters of Credit and Standby Letters
of Credit.
"LIBOR Spread" shall mean (a) with respect to Tranche A Term Loans and
Revolving Loans, 1.50% per annum, subject to adjustment pursuant to Section
2.06(c), and (b) with respect to Tranche B Term Loans, 2.00% per annum, subject
to adjustment pursuant to Section 2.06(c).
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, assignment for security (whether collateral or otherwise),
hypothecation, encumbrance, lease, sublease, charge or security interest in or
on such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, Capital Lease or title retention agreement relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Security Documents and the Guarantee Agreement, and each amendment, restatement,
supplement, modification or waiver of, to or in respect of any such document.
"Loan Parties" shall mean JSC, JSCE, the Borrower and each Material
Subsidiary.
"Loans" shall mean the Revolving Loans and the Term Loans.
15
"Machine No. 2" shall mean the No. 2 linerboard machine and related
structures, equipment and other property located at the Fernandina Beach,
Florida Mill and owned by SPI.
"Managing Agents" shall mean the Lenders whose names appear as managing
agents on the signature pages to this Agreement.
"Margin Stock" shall have the meaning given such term under Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, operations, properties, prospects or condition (financial or
otherwise) of JSC and its Subsidiaries, taken as a whole, (b) material
impairment of the ability of JSC or any Material Subsidiary to perform any of
its obligations under any Loan Document to which it is or will be a party or (c)
material impairment of the rights of or benefits available to the Administrative
Agent, the Collateral Agent, the Fronting Bank, the Swingline Lender or the
Lenders under any Loan Document.
"Material Contracts" shall mean the contracts set forth on Schedule 1.01(b)
and any future contracts to which JSCE or the Borrower or any of their
respective Subsidiaries becomes a party providing for payments by or to JSCE or
the Borrower or any of their Subsidiaries in excess of $50,000,000 per year and
the duration of which shall be in excess of twelve months.
"Material Investments" shall mean all Investments by JSC or any of its
Subsidiaries having a value in excess of $1,000,000.
"Material Subsidiary" means each Domestic Subsidiary of JSC, JSCE, the
Borrower or their successors now existing or hereafter acquired or formed by
JSC, JSCE, the Borrower or such successors that (a) for the most recent fiscal
year of JSC, JSCE, the Borrower or such successors, accounted for more than 10%
of the consolidated revenues of JSC, JSCE, the Borrower or such successors, as
the case may be, (b) as at the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of JSC, JSCE, the Borrower or such
successors as shown on the consolidated financial statements of JSC, JSCE, the
Borrower or such successors, as the case may be, for such fiscal year or (c) is
designated as a Material Subsidiary on Schedule 1.01(c) or is otherwise
irrevocably designated as a Material Subsidiary in a writing by a Loan Party to
the Administrative Agent. Notwithstanding the foregoing, JSF shall not be a
Material Subsidiary for purposes hereof.
"▇▇▇▇▇" shall mean the paper product manufacturing facilities identified on
Schedule 1.01(d).
16
"Mortgaged Properties" shall mean the owned real properties of the Borrower
specified on Schedule 1.01(e).
"Mortgages" shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to Section 6.10 or Section 7.11, each substantially in the
form of Exhibit D, as the same may be amended, restated, supplemented, modified
or waived from time to time.
"MS Group" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Discover & Co., a Delaware
corporation.
"MSI" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, a Delaware corporation.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale or
Permitted Timber Financing, the Cash Proceeds, net of (i) costs of sale
(including payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than Loans) required to be
repaid under the terms thereof as a result of such Asset Sale), (ii) taxes paid
or payable in the year such Asset Sale occurs or in the following year as a
result thereof and (iii) amounts provided as a reserve, in accordance with GAAP,
against any liabilities under any indemnification obligations associated with
such Asset Sale (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds); provided, however, that, with respect to any Asset Sale or Permitted
Timber Financing, if the Borrower shall deliver a certificate of a Financial
Officer to the Administrative Agent at the time of such Asset Sale or Permitted
Timber Financing, as the case may be, setting forth the Borrower's intent to
reinvest up to $250,000,000 of the proceeds of any such Asset Sale and up to
$250,000,000 of the proceeds of any such Permitted Timber Financing, as the case
may be, in other productive assets to be used in the business of the Borrower
and the Subsidiaries within 360 days of receipt of such proceeds and no Default
shall have occurred and shall be continuing at the time of such certificate or
at the proposed time of the application of such proceeds, such proceeds shall
not constitute Net Cash Proceeds, except to the extent not so used within such
360-day period, at which time such proceeds shall be deemed to constitute Net
Cash Proceeds, (b) with respect to any issuance of debt securities, the cash
proceeds thereof, net of underwriting commissions or placement fees and expenses
directly incurred in connection therewith and (c) with respect to any Taking or
Destruction (as such terms are defined in the Mortgages), the Net Proceeds or
Net Award (as such terms are defined in the Mortgages).
17
"1992 Holdings Agreement" shall mean the 1992 Agreement dated as of August
26, 1992, among JSC, Equity Fund II and SIBV, as amended to the date hereof and
as the same may be further amended or modified in accordance with the terms
thereof and hereof.
"1992 Stock Option Plan" shall mean the JSC 1992 Stock Option Plan, as
amended to the date hereof and as the same may be further amended or modified in
accordance with the terms thereof and hereof.
"1993 Senior Note Indenture" shall mean the Indenture dated as of April 15,
1993, among the Borrower, as issuer, JSCE, as guarantor, and The Bank of New
York, as trustee, relating to the 1993 Senior Notes, as amended by the
Supplemental Indenture dated as of April 8, 1994, and as the same may from time
to time be further amended or modified in accordance with the terms thereof and
hereof.
"1993 Senior Notes" shall mean the Borrower's 9-3/4% Senior Notes due 2003.
"Obligations" shall mean all obligations of every nature, including amounts
drawn under outstanding Letters of Credit, of Loan Parties from time to time
owed to the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Swingline Lender, the Fronting Bank and the Lenders, or any of them,
under the Loan Documents.
"Operating Agreement" shall mean the Operating Agreement dated as of April
30, 1992, by and between SPI and the Borrower relating to the operation of
Machine No. 2, all schedules and exhibits thereto and all agreements executed in
connection therewith, as amended as of May 11, 1994, and as of February 1, 1998,
and as such documents may be further modified or supplemented from time to time
in accordance with the terms thereof and hereof.
"Outstanding Letters of Credit" shall mean at any time the Letters of
Credit outstanding at such time.
"Outstanding Standby Letters of Credit" shall mean at any time the Standby
Letters of Credit outstanding at such time.
"Outstanding Trade Letters of Credit" shall mean at any time the Trade
Letters of Credit outstanding at such time.
"Participating Lender" shall mean at any time any Lender with a Revolving
Credit Commitment at such time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
18
"Perfection Certificate" shall mean the Perfection Certificate,
substantially in the form of Annex 1 to the Security Agreement.
"Permitted Acquisition" shall mean any non-hostile acquisition of all or
substantially all the assets of, or 100% of the capital stock or other equity
interests in, any Person so long as (a) in the case of any acquisition of
capital stock of other equity interests in any Person, such Person is organized
under the laws of, and has its principal place of business in, the United States
or any political subdivision thereof, (b) in the case of an acquisition of
assets, all or substantially all such assets are to be located in the United
States, (c) the assets to be acquired are to be used, or the Person so acquired
is engaged, in the same line of business as the Borrower, (d) the Borrower shall
have delivered to the Administrative Agent a certificate of a Financial Officer
certifying that at the time of and immediately after giving effect to such
Permitted Acquisition, no Default or Event of Default shall have occurred and be
continuing, (e) none of the Loan Parties or any of their respective Subsidiaries
shall assume or otherwise become liable for any Indebtedness in connection with
such acquisition, except for Indebtedness permitted by Section 7.01, and (f)
simultaneously with any such acquisition and subject to the provisions of
Section 6.10, the Collateral Agent, for the benefit of the Secured Parties,
shall be granted a first-priority security interest in all real and personal
property (including capital stock and other securities or interests, subject to
customary and reasonable permitted encumbrances) acquired by the Borrower as
part of such acquisition, and the Borrower shall, and shall cause any applicable
subsidiary to, execute any documents (including supplements to the Guarantee
Agreement, the Security Agreement and the Pledge Agreement, as applicable),
financing statements, agreements and instruments, and take all action (including
filing financing statements and obtaining and providing consents, title
insurance, surveys and legal opinions) that may be required under applicable law
or as the Collateral Agent may request, in order to grant, preserve, protect and
perfect such security interest.
"Permitted Equipment Financing" shall mean any financing transaction by the
Borrower or any of its Material Subsidiaries secured by equipment, or a
Sale/Leaseback Transaction in which the subject property consists of equipment,
in each case owned or leased by such Person for more than 90 days prior to such
financing transaction or Sale/Leaseback Transaction, so long as such financing
transaction or Sale/Leaseback Transaction (a) (x) in the case of any such
transaction entered into by the Borrower or any of its Material Subsidiaries on
or prior to the second anniversary of the Closing Date, does not have a final
maturity or final payment date in respect thereof on or prior to the seventh
anniversary of the date of such transaction and (y) in the case of any such
transaction entered into by the Borrower or any of its Material Subsidiaries
after the second anniversary of the Closing Date, does not have a final maturity
or final payment date in respect thereof on or prior to the Tranche B Maturity
Date or a weighted average life to stated maturity shorter than the
then-outstanding Term Loans, (b) results in net cash proceeds to the Borrower or
one of its Material Subsidiaries in excess of 60% of the fair market value
(determined, on the basis of an assumed arms-length sale of such property, by a
nationally recognized appraisal or
19
valuation firm experienced in valuing equipment) at the date of such
financing transaction or sale/leaseback of the equipment that is the subject
property of such financing transaction or Sale/Leaseback Transaction, and (c)
contains covenants no more restrictive than those contained in this Agreement
(except that covenants that relate solely to the subject property may be more
restrictive).
"Permitted Investments" shall mean (a) any evidence of indebtedness,
maturing not more than one year after the acquisition thereof, issued by the
United States of America, or any instrumentality or agency thereof and
guaranteed fully as to principal, interest and premium, if any, by the United
States of America, (b) any certificate of deposit, maturing not more than one
year after the date of purchase, issued by a commercial banking institution that
has long-term debt rated "A" or higher by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Services and which has a combined capital and surplus
and undivided profits of not less than $500,000,000, (c) commercial paper (i)
maturing not more than 270 days after the date of purchase and (ii) issued by
(x) a corporation (other than a Loan Party or any Affiliate of a Loan Party)
with a rating, at the time as of which any determination thereof is to be made,
of "P-1" or higher by ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" or higher by
Standard & Poor's Ratings Services or (y) either Senior Managing Agent, (d)
demand deposits with any bank or trust company, (e) any Investments consisting
of (i) any contract pursuant to which a Loan Party obtains the right to cut,
harvest or otherwise acquire timber on property owned by any other Person,
whether or not the Loan Party's obligations under such contract are evidenced by
a note or other instrument, or (ii) loans or advances to customers of a Loan
Party, including leases of personal property of such Loan Party to such
customers, provided that the contracts, loans and advances constituting
Permitted Investments pursuant to this clause (e) shall not exceed $10,000,000
at any time outstanding, (f) any Investment consisting of an exchange of equity
securities of any Loan Party for Indebtedness of any other Loan Party and (g)
Guarantees of a Person or Persons other than a Loan Party consisting of
tax-exempt industrial development or pollution control revenue bonds (either
through Capital Lease Obligations or installment purchase obligations in respect
of facilities to be acquired by a Loan Party and to be financed by such bonds,
and including a direct Guarantee of such bonds) to the extent any such
Indebtedness of a Loan Party or such Person and any Lien arising in connection
therewith are not prohibited by Section 7.01 or 7.02, as applicable.
"Permitted Liens" shall mean:
(a) the Liens arising under this Agreement or the Security Documents
in favor of the Collateral Agent;
(b) with respect to any Person, Liens for taxes not yet due and
payable or which are being contested in good faith by appropriate
proceedings diligently pursued, provided that (i) any proceedings commenced
for the enforcement of such Liens shall have been duly suspended and (ii)
full provision for the payment of all such taxes
20
known to such Person has been made on the books of such Person if and
to the extent required by GAAP;
(c) with respect to any Person, mechanics', materialmen's, carriers',
warehousemen's and similar Liens arising by operation of law and in the
ordinary course of business and securing obligations of such Person that
are not overdue for a period of more than 60 days or are being contested in
good faith by appropriate proceedings diligently pursued, provided that in
the case of any such contest (i) any proceedings commenced for the
enforcement of such Liens shall have been duly suspended and (ii) full
provision for the payment of such Liens has been made on the books of such
Person if and to the extent required by GAAP;
(d) with respect to any Person, Liens arising in connection with
worker's compensation, unemployment insurance, old age pensions and social
security benefits that are not overdue or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the case of
any such contest (i) any proceedings commenced for the enforcement of such
Liens shall have been duly suspended and (ii) full provision for the
payment of such Liens has been made on the books of such Person if and to
the extent required by GAAP;
(e) with respect to any Person, (i) Liens incurred or deposits made in
the ordinary course of business to secure the performance of bids, tenders,
statutory obligations, fee and expense arrangements with trustees and
fiscal agents (exclusive of obligations incurred in connection with the
borrowing of money or the payment of the deferred purchase price of
property) and (ii) Liens securing surety, indemnity, performance, appeal
and release bonds, in the case of either clause (i) or clause (ii),
securing such bonds in an amount not to exceed individually or in the
aggregate $25,000,000 at any time outstanding, provided that full provision
for the payment of all such obligations has been made on the books of such
Person if and to the extent required by GAAP;
(f) imperfections of title, covenants, restrictions, easements and
other encumbrances on real property that (i) do not arise out of the
incurrence of any Indebtedness for money borrowed and (ii) do not interfere
with or impair in any material respect the utility, operation, value or
marketability of the real property on which such Lien is imposed;
(g) Liens upon real and/or tangible personal property acquired by
purchase, construction or otherwise by a Person, each of which Liens was
created solely for the purpose of securing Indebtedness permitted by
Section 7.01 representing, or incurred to finance, the cost (including the
cost of construction) of the respective property, provided that (i) no such
Lien shall extend to or cover any property of such Person other than the
respective property so acquired and improvements thereon and (ii) the
21
principal amount of Indebtedness secured by any such Lien shall at no time
exceed 100% of the fair value (as determined in good faith by the board of
directors of such Person) of the respective property at the time it was so
acquired;
(h) any Lien renewing, extending or refunding any Lien permitted by
clause (g) above, provided that the principal amount of Indebtedness
secured by such Lien immediately prior thereto is not increased and such
Lien is not extended to any other property;
(i) any Lien specifically permitted to be suffered or incurred under
any applicable Security Document;
(j) any Lien consisting of a lease of personal property of such Person
to customers of such Person, if such lease constitutes a Permitted
Investment under clause (e)(ii) of the definition of Permitted Investments;
and
(k) any Lien consisting of a lease of real property (including
buildings), and subleases thereof, to Persons for the purpose of placing
cellular antenna towers (and/or similar antenna equipment) on such
property, provided that such Liens do not interfere with or impair in any
material respect, the utility, operation, value or marketability of the
property on which such Lien is imposed.
"Permitted Timber Financing" means any financing transaction by the
Borrower or any of its Material Subsidiaries secured by timber or timberland, or
a Sale/Leaseback Transaction in which the subject property consists of timber or
timberland, in each case owned or leased by such Person for more than 90 days
prior to such financing transaction or Sale/Leaseback Transaction, so long as
such financing transaction or Sale/Leaseback Transaction (a) does not have a
final maturity or final payment date in respect thereof on or prior to the
latest of the Tranche A Maturity Date, the Tranche B Maturity Date and the
Revolving Credit Maturity Date, (b) results in net cash proceeds to the Borrower
or one of its Material Subsidiaries in excess of 60% of the fair market value
(determined, on the basis of an assumed arms-length sale of such property, by a
nationally recognized appraisal or valuation firm experienced in valuing timber
or timberland) at the date of such financing transaction or sale/leaseback of
the timber or timberland that is the subject property of such financing
transaction or Sale/Leaseback Transaction, (c) has at the time of incurrence a
weighted average life to stated maturity at least one year longer than the
blended weighted average life to stated maturity of the then-outstanding Term
Loans and (d) contains covenants no more restrictive than those contained in
this Agreement (except that covenants that relate solely to the subject property
may be more restrictive).
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
22
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code that
is maintained for employees of JSC, JSCE, the Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit E, among JSC, JSCE, the Borrower, the Subsidiaries party thereto
and the Collateral Agent for the benefit of the Secured Parties.
"Program Receivables" shall mean all trade receivables and related contract
and other rights and property (including all general intangibles, collections
and other proceeds relating thereto, all security therefor and any goods that
have been repossessed in connection with any thereof) sold or contributed by the
Borrower to JSF prior to the commencement of a Liquidation Period (as defined in
the Receivables Program Documents) pursuant to the Receivables Program Documents
(including property of SNC sold to the Borrower for sale or contribution by the
Borrower to JSF pursuant to the Receivables Program Documents).
"P.U.I." shall mean Packaging Unlimited, Inc., a corporation organized
under the laws of the State of Delaware and qualified to do business in the
Commonwealth of Puerto Rico.
"Rate Protection Agreements" shall mean interest rate cap agreements,
interest rate swap agreements and other agreements or arrangements entered into
in the ordinary course of business by the Borrower or its Subsidiaries and
designed to protect the Borrower or its Subsidiaries against fluctuations in
interest rates or to obtain the benefit of floating interest rates.
"Real Properties" shall mean each parcel of real property (including any
Timberland Property), including any Mill or converting facility thereon and any
leasehold interest therein, identified on Schedule 4.21(a), together with all
fixtures thereon.
"Receivables Program" shall mean that certain trade receivables
securitization program conducted pursuant to the Receivables Program Documents.
"Receivables Program Documents" shall mean the documents listed on Schedule
1.01(f), and all non-material documentation entered into pursuant to such
documentation, as such documents may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"Registration Rights Agreement" shall mean that certain Registration Rights
Agreement dated as of May 3, 1994, by and among Equity Fund II, SIBV, JSC, and
the other parties identified on the signature pages thereto, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.
23
"Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Reportable Event" shall mean any reportable event as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than a Plan maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).
"Required Lenders" shall mean, at any time, Lenders holding Loans, a share
of the used LC Commitments and unused Commitments representing greater than 50%
of the sum of (a) the aggregate principal amount of the Loans at such time, (b)
the LC Exposure at such time and (c) the aggregate unused Commitments at such
time.
"Responsible Officer" of any corporation shall mean any executive officer
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"Restricted Junior Payment" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of JSC, JSCE or the Borrower or any of their respective Subsidiaries, now or
hereafter outstanding, except a dividend payable solely in shares of that class
of stock to the holders of that class, (b) any redemption, retirement, sinking
fund or similar payment, purchase, exchange or other acquisition for value,
direct or indirect, of any shares of any class of stock of JSC, JSCE or the
Borrower or any of their respective Subsidiaries, now or hereafter outstanding,
and (c) whether in cash or additional securities, any payment or prepayment of
principal of, premium, if any, or interest on, redemption, purchase, exchange,
retirement, defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness, provided that the term "Restricted Junior Payment"
shall not include any mandatory payments of principal, premium, if any, or
interest with respect to Subordinated Indebtedness.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
24
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 10.04.
"Revolving Credit Maturity Date" shall mean March 31, 2005.
"Revolving Credit Utilization" shall mean, at any time of determination,
the sum of (a) the aggregate principal amount of Revolving Loans outstanding at
such time, (b) the aggregate principal amount of Swingline Loans outstanding at
such time and (c) the LC Exposure at such time.
"Revolving Loans" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to Section 2.01(c). Each Revolving Loan shall be a Eurodollar
Revolving Loan or an ABR Revolving Loan.
"Rights Agreement" shall mean the Rights Agreement dated as of April 30,
1992, by and among SPI, the Borrower and the Collateral Agent relating to
Machine No. 2, as amended on May 11, 1994, and on March 24, 1998, and as the
same may be further amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
"Sale/Leaseback Transaction" shall mean an arrangement, direct or indirect,
whereby JSC, JSCE or the Borrower or any of their respective Subsidiaries shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred.
"Secured Obligations" shall have the meaning assigned to such term in the
Mortgages.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Security Agreement, substantially in
the form of Exhibit F, among JSC, JSCE, the Borrower, the other guarantors and
grantors party thereto and the Collateral Agent for the Secured Parties
"Security Documents" shall mean the Mortgages, the Security Agreement, the
SNC Security Agreement, the Trademark Security Agreement, the Pledge Agreement
and each of the security agreements, mortgages and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant
to Section 6.10 or 7.11.
25
"Senior Note Indentures" shall mean the 8-Year Senior Note Indenture and
the 10-Year Senior Note Indenture.
"Senior Notes" shall mean the 8-Year Senior Notes and the 10-Year Senior
Notes.
"SIBV" shall mean Smurfit International B.V., a Netherlands corporation.
"SIBV Agreement" shall mean that certain SIBV Agreement dated as of
September 12, 1989, and amended as of October 22, 1989 and as of December 11,
1989, between JSC and SIBV, and as the same may be further amended or modified
in accordance with the terms thereof and hereof.
"SNC" shall mean Smurfit Newsprint Corporation, a Delaware corporation and
a direct wholly owned Subsidiary of the Borrower.
"SNC Security Agreement" shall mean the SNC Security Agreement,
substantially in the form of Exhibit H, between SNC and the Collateral Agent for
the Secured Parties.
"SPI" shall mean Smurfit Paperboard Inc., a Delaware corporation and an
indirect wholly owned Subsidiary of JSG.
"Standby LC Exposure" shall mean, at any time of determination, the sum of
(a) the aggregate undrawn amount of all Outstanding Standby Letters of Credit
and (b) the aggregate amount that has been drawn under any Standby Letters of
Credit but for which the Fronting Bank or the Lenders, as the case may be, have
not been reimbursed by the Borrower at such time.
"Standby Letter of Credit" shall mean (a) each irrevocable letter of credit
issued pursuant to Section 3.01(a) under which the Fronting Bank agrees to make
payments for the account of the Borrower, on behalf of the Borrower, in respect
of obligations of the Borrower incurred pursuant to contracts made or
performances undertaken or to be undertaken or like matters relating to
contracts to which the Borrower is or proposes to become a party in the ordinary
course of the Borrower's business and (b) each Existing Letter of Credit.
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum applicable reserve percentages, including
any marginal, special, emergency or supplemental reserves (expressed as a
decimal) established by the Board and any other banking authority to which the
Administrative Agent is subject (a) with respect to the Base CD Rate (as such
term is used in the definition of the term "Alternate Base Rate") for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for
26
Eurocurrency Liabilities (as defined in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to Regulation D of the Board.
Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stockholders' Agreement" shall mean the Stockholders' Agreement dated as
of May 3, 1994, among SIBV, Equity Fund II, JSC, and the other parties
identified on the signature pages thereto, as such Stockholders' Agreement may
be amended or modified from time to time in accordance with the terms thereof
and hereof.
"Subordinated Indebtedness" shall mean Indebtedness of the Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material terms
in form and substance satisfactory to the Required Lenders.
"Subsidiary" shall mean, with respect to any Person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by, or otherwise Controlled by, the parent or
one or more Subsidiaries of the parent or by the parent and one or more
Subsidiaries of the parent; provided, however, that the term "Subsidiary" shall
not include any Inactive Subsidiary.
"Substitute Parcel" shall mean those parcels of real property that the
Borrower may, from time to time, acquire in exchange for a parcel of Timberland
Property in accordance with the provisions of Section 7.16(b).
"Swingline Loans" shall mean the swingline loans made by the Swingline
Lender pursuant to Section 2.22.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement dated as of
November 9, 1989, among JSC, JSCE and the Borrower, as the same may be amended
from time to time pursuant to the terms thereof and hereof.
"10-Year Senior Note Indenture" shall mean the Indenture dated as of May 1,
1994, among the Borrower, as issuer, JSCE, as guarantor, and The Bank of New
York, as trustee, relating to the 10-Year Senior Notes.
27
"10-Year Senior Notes" shall mean the Borrower's 11-1/4% Senior Notes Due
2004, in an aggregate principal amount outstanding on the date hereof of
$300,000,000.
"Term Borrowing" shall mean a Borrowing comprised of Tranche A Term Loans
or Tranche B Term Loans.
"Term Loan Commitments" shall mean the Tranche A Commitments and the
Tranche B Commitments.
"Term Loan Repayment Amounts" shall mean, for any period, the aggregate of
all Tranche A Term Loan Repayment Amounts and Tranche B Term Loan Repayment
Amounts payable during such period.
"Term Loan Repayment Dates" shall mean the Tranche A Term Loan Repayment
Dates and the Tranche B Term Loan Repayment Dates.
"Term Loans" shall mean Tranche A Term Loans and Tranche B Term Loans.
"Timber" shall have the meaning assigned to such term in the Mortgages.
"Timberland Property" shall mean each parcel of realty identified as such
on Schedule 4.21(c).
"Trade LC Exposure" shall mean, at any time of determination, the sum of
(a) the aggregate undrawn amount of all Outstanding Trade Letters of Credit and
(b) the aggregate amount that has been drawn under any Trade Letters of Credit
but for which the Fronting Bank or the Lenders, as the case may be, have not
been reimbursed by the Borrower at such time.
"Trade Letter of Credit" shall mean each commercial documentary letter of
credit issued by the Fronting Bank for the account of the Borrower pursuant to
Section 3.01(a) for the purchase of goods in the ordinary course of business.
"Trademark Security Agreement" shall mean the Patent, Trademark and
Copyright Security Agreement, substantially in the form of Exhibit G, among the
grantors named therein and the Collateral Agent for the benefit of the Secured
Parties.
"Tranche A Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche A Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Term Loan Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04.
28
"Tranche A Maturity Date" shall mean March 31, 2005.
"Tranche A Term Borrowing" shall mean a Borrowing comprised of Tranche A
Term Loans.
"Tranche A Term Loan Repayment Amount" shall have the meaning set forth in
Section 2.11(a)(i).
"Tranche A Term Loan Repayment Date" shall have the meaning set forth in
Section 2.11(a)(i).
"Tranche A Term Loans" shall mean the term loans made by the Lenders to the
Borrower pursuant to Section 2.01(a). Each Tranche A Term Loan shall be either a
Eurodollar Term Loan or an ABR Term Loan.
"Tranche B Commitment" shall mean with respect to each Lender, the
commitment of such Lender to make Tranche B Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Term Loan Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04.
"Tranche B Lenders" shall mean Lenders having Tranche B Commitments or
outstanding Tranche B Term Loans.
"Tranche B Maturity Date" shall mean March 31, 2006.
"Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche B
Term Loans.
"Tranche B Term Loan Repayment Amount" shall have the meaning set forth in
Section 2.11(a)(ii).
"Tranche B Term Loan Repayment Date" shall have the meaning set forth in
Section 2.11(a)(ii).
"Tranche B Term Loans" shall mean the term loans made by the Lenders to the
Borrower pursuant to Section 2.01(b). Each Tranche B Term Loan shall be either a
Eurodollar Term Loan or an ABR Term Loan.
"Transactions" shall have the meaning assigned to such term in Section
4.02.
29
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Domestic Subsidiary" shall mean any wholly owned Subsidiary
that is a Domestic Subsidiary.
"wholly owned Subsidiary" of a Person shall mean any Subsidiary of such
Person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such Person or one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed to be
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP as in effect
from time to time, applied on a basis consistent with the application used in
the financial statements referred to in Section 4.05; provided, however, that
for purposes of making any determination required by Section 2.06(c), 2.13(c) or
Article VII, all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in the financial statements referred to in Section 4.05.
30
ARTICLE II
The Credits
SECTION 2.01. Commitments. On the terms and subject to the conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees severally and not jointly (a) to make Tranche A Term Loans to the
Borrower on the Closing Date in a principal amount not to exceed its Tranche A
Commitment, (b) to make Tranche B Term Loans to the Borrower on the Closing Date
in a principal amount not to exceed its Tranche B Commitment and (c) to make
Revolving Loans to the Borrower, at any time and from time to time on or after
the Closing Date and prior the earlier of the Revolving Credit Maturity Date and
the termination of the Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
not to exceed (after giving effect to all Revolving Loans repaid, and all
reimbursements of LC Disbursements made, concurrently with the making of any
Revolving Loans) an amount equal to the difference between (i) the Revolving
Credit Commitment set forth opposite such Lender's name on Schedule 2.01, as the
same may be reduced from time to time pursuant to Section 2.09, and (ii) such
Lender's Applicable Percentage of the sum of (A) the aggregate principal amount
of Swingline Loans outstanding at such time and (B) the LC Exposure at such
time. Within the limits set forth in clause (c) of the preceding sentence, the
Borrower may borrow, pay or prepay and reborrow Revolving Loans on or after the
Closing Date and prior to the Revolving Credit Maturity Date, on the terms and
subject to the conditions and limitations set forth herein. Amounts paid or
prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Tranche A Commitments, Tranche B Commitments or Revolving Credit
Commitments, as the case may be; provided, however, that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $500,000 and, in
the case of a Eurodollar Borrowing, not less than $1,000,000 or (ii) an
aggregate principal amount equal to the remaining available balance of the
applicable Commitments.
(b) Each Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans, as the Borrower may request pursuant to Section 2.03. Each Lender may at
its option fulfill its Commitment with respect to any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan,
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that the Borrower shall not be entitled to request any Borrowing that,
if made, would result in an aggregate of more than ten separate Eurodollar
31
Loans of any Lender being outstanding hereunder at any one time. For purposes of
the foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a Loan in the
amount of its pro rata portion, as determined under Section 2.17, of each
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in New York, New York, not later
than 2:00 p.m., New York City time, and the Administrative Agent shall by 3:00
p.m., New York City time, credit the amounts so received to the general deposit
account of the Borrower or, if a Borrowing shall not occur on such date because
any condition precedent specified herein shall not have been met, return the
amounts so received to the respective Lenders. Unless the Administrative Agent
shall have received notice from a Lender prior to the date of any Borrowing (or,
in the case of an ABR Revolving Borrowing, prior to 2:00 p.m., New York City
time on the date of such Borrowing) that such Lender will not make available to
the Administrative Agent such Lender's portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
this paragraph (c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have made such portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
be deemed to constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Interest Period with respect to a Revolving
Credit Borrowing, Tranche A Term Borrowing or Tranche B Term Borrowing that
would end after the Revolving Credit Maturity Date, the Tranche A Maturity Date
or the Tranche B Maturity Date, respectively.
(e) If the Fronting Bank has not received from the Borrower the payment
required by Section 3.04(a) within two hours after the Borrower shall have
received notice from the Fronting Bank that payment of a draft presented under
any Letter of Credit will be made or, if the Borrower shall have received such
notice later than 10:00 a.m., New York City time, on any Business Day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day,
as provided in Section 3.04(a), the Fronting Bank will promptly notify the
Administrative Agent of the LC Disbursement and the Administrative Agent will
promptly notify each Participating Lender of such LC Disbursement and its
Applicable
32
Percentage thereof. Each Participating Lender will pay to the Administrative
Agent not later than 4:00 p.m., New York City time, on such date (or, if the
Participating Lenders shall have received such notice later than 2:00 p.m., New
York City time, on any day, not later than 10:00 a.m., New York City time, on
the immediately following Business Day) an amount equal to such Participating
Lender's Applicable Percentage of such LC Disbursement (it being understood that
such amount shall be deemed to constitute an ABR Revolving Loan of such
Participating Lender), and the Administrative Agent will promptly pay such
amount to the Fronting Bank. The Administrative Agent will promptly remit to
each Participating Lender its Applicable Percentage of any amounts subsequently
received by the Administrative Agent from the Borrower in respect of such LC
Disbursement. If any Lender shall not have made its Applicable Percentage of
such LC Disbursement available to the Fronting Bank as provided above, such
Lender agrees to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this subsection
to but excluding the date an amount equal to such amount is paid to the
Administrative Agent for prompt payment to the Fronting Bank at, for the first
such day, the Federal Funds Effective Rate, and for each day thereafter, the
Alternate Base Rate.
(f) Notwithstanding any other provision of this Agreement, all Borrowings
made on the Closing Date and during the period ending 90 days thereafter shall
be made as (i) Eurodollar Borrowings with Interest Periods of one month's
duration or (ii) ABR Borrowings.
SECTION 2.03. Notice of Borrowings. The Borrower shall give the
Administrative Agent written or telecopy notice (or telephone notice promptly
confirmed in writing or by telecopy) (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before a
proposed borrowing, (b) in the case of an ABR Term Borrowing, not later than
11:00 a.m., New York City time, one Business Day before a proposed borrowing and
(c) in the case of an ABR Revolving Borrowing, not later than 11:00 a.m., New
York City time, on the day of a proposed borrowing. Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify the
following information: (i) whether the Borrowing then being requested is to be a
Term Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to
be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing
(which shall be a Business Day) and the amount thereof; (iii) if such Borrowing
is to be a Eurodollar Borrowing, the Interest Period with respect thereto; and
(iv) the number and location of the account to which funds are to be disbursed;
provided, however, that, notwithstanding any contrary specification in any such
notice, each requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly advise
the Lenders of any notice given pursuant to this Section 2.03, and of each
Lender's portion of the requested Borrowing.
33
SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The outstanding
principal balance of each Loan or Swingline Loan shall be payable (i) in the
case of a Revolving Loan or Swingline Loan, on the Revolving Credit Maturity
Date, (ii) in the case of a Tranche A Term Loan, as provided in Section
2.11(a)(i) and (iii) in the case of a Tranche B Term Loan, as provided in
Section 2.11(a)(ii). Each Loan shall bear interest from and including the date
made on the outstanding principal balance thereof as set forth in Section 2.06.
(b) Each Lender and the Swingline Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness to such
Lender or the Swingline Lender resulting from each Loan or Swingline Loan,
respectively, from time to time, including the amounts of principal and interest
payable and paid such Lender or the Swingline Lender from time to time under
this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan and Swingline Loan made hereunder, the Type
of each Loan 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 Lender and the Swingline Lender hereunder and (iii) the amount
of any sum received by the Administrative Agent hereunder from the Borrower or
any Guarantor and each Lender's or the Swingline Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) of this Section 2.04 shall, to the extent permitted by applicable laws
be prima facie evidence of the existence and amounts of the obligations therein
recorded; provided, however, that the failure of any Lender, the Swingline
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans and the Swingline Loans in accordance with their terms.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on each March 31, June 30, September 30 and December
31 and on each date on which the Commitments of such Lender shall expire or be
terminated as provided herein, a commitment fee (a "Commitment Fee") equal to
the Commitment Fee Percentage on the average daily unused amount of the
Commitments of such Lender during the preceding quarter (or other period
commencing on the date hereof or ending with the Revolving Credit Maturity Date
or the date on which any of such Commitments of such Lender shall expire or be
terminated). The Commitment Fee due to each Lender shall commence to accrue on
and including the date hereof and shall cease to accrue on, but excluding, the
date on which such Commitments of such Lender shall expire or be terminated as
provided herein. For purposes of calculating Commitment Fees, any portion of the
Revolving Credit Commitments unavailable due to outstanding Swingline Loans or
due to outstanding or unreimbursed unsecured letters of credit permitted by
Section 7.01(g) shall be
34
deemed to be unused amounts of the Commitments. All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, administration fees (the "Administrative Fees") at the times and in the
amounts to be agreed upon between the Borrower and the Administrative Agent.
(c) The Borrower agrees to pay to the Fronting Bank, for its own account,
the fees specified in Section 3.07.
(d) All Fees (other than the fees payable to the Fronting Bank under
Section 3.07) shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any circumstances
(other than corrections of errors in payment).
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate plus the ABR Spread in effect at such
time with respect to such Loans. Swingline Loans shall bear interest at the rate
applicable to ABR Revolving Loans.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
LIBOR Spread in effect at such time with respect to such Loans.
(c) So long as no Event of Default shall have occurred and be continuing,
on each occasion that, as of the last day of any fiscal quarter ending after the
date that is six months after the Closing Date, the ratio (the "Consolidated
Leverage Ratio") of (i) the Indebtedness of JSC and its consolidated
Subsidiaries on such date to (ii) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on such date shall fall within one of the
Categories set forth on the table below, the Commitment Fee Percentage, the ABR
Spread and the LIBOR Spread in respect of Tranche A Term Loans, Tranche B Term
Loans and Revolving Loans shall be automatically changed, if necessary, to
reflect the percentages indicated for such Category on the table below under the
caption "Tranche A/Revolver ABR Spread", "Tranche A/Revolver LIBOR Spread",
"Tranche B ABR Spread", "Tranche B LIBOR Spread" or "Commitment Fee Percentage",
as the case may be, with any such change to be effective (x) in the case of the
Commitment Fee Percentage, with respect to the unused amounts of the Commitments
on and after the date of delivery to the Administrative Agent of the certificate
described in Section 6.04(d) relating to such fiscal quarter, (y) in the case
35
of the applicable ABR Spread, with respect to all ABR Loans outstanding on and
after the date of delivery to the Administrative Agent of such certificate and
(z) in the case of the applicable LIBOR Spread, with respect to all Loans made
on and after the date of delivery to the Administrative Agent of such
certificate.
Consolidated
Leverage Tranche A/ Tranche A/
Ratio Revolver Revolver Tranche B Tranche B Commitment
Category 1 ABR Spread LIBOR Spread ABR Spread LIBOR Spread Percentage
---------- ---------- ------------ ---------- ------------ ----------
Greater than or
equal to 4.50 to
1.00 0.75% 1.75% 1.25% 2.25% 0.500%
--------------------------------------------------------------------------------------
Category 2
Greater than or
equal to 4.25 to
1.00 but less than
4.50 to 1.00 0.50% 1.50% 1.00% 2.00% 0.375%
--------------------------------------------------------------------------------------
Category 3
Greater than or
equal to 4.00 to
1.00 but less than
4.25 to 1.00 0.25% 1.25% 0.75% 1.75% 0.375%
--------------------------------------------------------------------------------------
Category 4
Greater than or
equal to 3.25 to
1.00 but less than
4.00 to 1.00 0.25% 1.00% 0.75% 1.75% 0.250%
--------------------------------------------------------------------------------------
Category 5
Less than 3.25 to
1.00 0.00% 0.75% 0.50% 1.50% 0.250%
--------------------------------------------------------------------------------------
The applicable Category in the table above at any time will be the Category
with the lowest percentages for which the Consolidated Leverage Ratio is
satisfied at such time. In the event that any condition that gives rise to
any change in a Category pursuant to the first sentence of this Section
2.06(c) is no longer satisfied as of the end of any subsequent fiscal
quarter, on and after the date of delivery to the Administrative Agent of
the
36
certificate described in Section 6.04(d) relating to such subsequent fiscal
quarter, the Commitment Fee Percentage, the applicable ABR Spread and the
applicable LIBOR Spread shall be automatically changed to reflect the
Category indicated by such certificate, with any such change to be
effective (x) in the case of the Commitment Fee Percentage, with respect to
the unused amounts of the Commitments on and after the date of delivery to
the Administrative Agent of the certificate described in Section 6.04(d)
relating to such fiscal quarter, (y) in the case of the applicable ABR
Spread, with respect to all ABR Loans outstanding on and after the date of
delivery to the Administrative Agent of such certificate and (z) in the
case of the applicable LIBOR Spread, with respect to all Loans made on and
after the date of delivery to the Administrative Agent of such certificate.
Notwithstanding the foregoing, at any time during which JSC has failed to
deliver the certificate described in Section 6.04(d) with respect to a
fiscal quarter in accordance with the provisions thereof, or at any time
after the occurrence and during the continuance of an Event of Default, the
Consolidated Leverage Ratio shall be deemed to be in Category 1 for
purposes of determining the Commitment Fee Percentage, the applicable ABR
Spread and the applicable LIBOR Spread.
(d) Interest on each Loan and each Swingline Loan shall be payable on the
Interest Payment Dates applicable to such Loan or Swingline Loan, as the case
may be, except as otherwise provided in this Agreement. The applicable ABR
Spread or LIBOR Spread for each Interest Period or day within an Interest
Period, as the case may be, shall be determined by the Administrative Agent, and
such determination shall be presumptively correct absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or Swingline Loan or any
other amount becoming due hereunder or under any Security Document, by
acceleration or otherwise, the Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted amount to but
excluding the date of actual payment (after as well as before judgment or
bankruptcy) at a rate per annum (the "Default Rate") (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to (a) in the
case of any Loan or any Swingline Loan, the rate that would be applicable under
Section 2.06 to such Loan or Swingline Loan, plus 2% per annum, and (b) in the
case of any other amount, the rate that would be applicable under Section 2.06
to a Tranche B Term Loan that is an ABR Loan, plus 2% per annum.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to Lenders having Commitments
representing at least 20% of the total Commitments of making or maintaining
their Eurodollar Loans during such Interest Period, or that reasonable means do
not exist for ascertaining the Adjusted LIBO Rate, the
37
Administrative Agent shall, as soon as practicable thereafter, give written or
telecopy notice of such determination to the Borrower and the Lenders. In the
event of any such determination, any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.03 or 2.10 shall, until the Administrative Agent
shall have advised the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, be deemed to be a request for an ABR
Borrowing. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan
Commitments shall be automatically terminated at 5:00 p.m., New York City time,
on the Closing Date. The Revolving Credit Commitments and the LC Commitment
shall be automatically terminated at 5:00 p.m., New York City time, on the
Revolving Credit Maturity Date and the LC Maturity Date, respectively.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $5,000,000 and (ii) the Borrower shall not be permitted to
terminate or reduce the Revolving Credit Commitments if, as the result of such
termination or reduction, (A) the LC Commitment would exceed the aggregate
remaining Revolving Credit Commitments or (B) the Revolving Credit Utilization
would exceed the aggregate remaining Revolving Credit Commitments. The LC
Commitment may be voluntarily terminated or reduced by the Borrower, as provided
in Section 3.06.
(c) The Revolving Credit Commitments shall be permanently reduced by the
amount of any mandatory prepayments applied to Swingline Loans or Revolving
Credit Borrowings pursuant to Section 2.13(f).
(d) Each reduction in the Commitments hereunder shall be made ratably among
the applicable Lenders in accordance with their respective applicable
Commitments. The Borrower shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to, but excluding, the date of such termination or reduction.
(e) Nothing in this Section 2.09 shall prejudice any rights that the
Borrower may have against any Lender that fails to lend as required hereunder
prior to the date of termination of any Commitment.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall
have the right at any time upon prior irrevocable notice to the Administrative
Agent (i) not later than 11:00 a.m., New York City time, one Business Day prior
to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (ii)
not later than 11:00 a.m., New York City time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing
38
into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing for an additional Interest Period and (iii) not later than
11:00 a.m., New York City time, three Business Days prior to conversion, to
convert the Interest Period with respect to any Eurodollar Borrowing to another
permissible Interest Period, subject in each case to the following:
(a) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(b) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, the aggregate principal amount of such
Borrowing converted or continued shall be an integral multiple of
$1,000,000 and not less than $10,000,000;
(c) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of the
conversion;
(d) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.16;
(e) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(f) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of subparagraph (e)
above shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing; and
(g) no Interest Period may be selected for any Eurodollar Term
Borrowing comprised of Tranche A Term Loans or Tranche B Term Loans that
would end later than the Tranche A Term Loan Repayment Date or the Tranche
B Term Loan Repayment Date, as the case may be, occurring on or after the
first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (i) the Eurodollar Term
Borrowings comprised of Tranche A Term Loans or Tranche B Term Loans, as
the case may be, with Interest Periods ending on or prior to such Tranche A
Term Loan Repayment Date or Tranche B Term Loan Repayment Date,
respectively, and (ii) the ABR Term Borrowings comprised of Tranche A Term
Loans or Tranche B Term Loans, as the case may be, would not be at least
equal to the principal amount of Term Borrowings to be paid on such Term
Loan Repayment Date.
39
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
that the Borrower requests be converted or continued and whether such Borrowing
is comprised of Tranche A Term Loans, Tranche B Term Loans or Revolving Loans,
(ii) whether such Borrowing is to be converted to or continued as a Eurodollar
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period of
one month's duration. The Administrative Agent shall advise the other Lenders of
any notice given pursuant to this Section 2.10 and of each Lender's portion of
any converted or continued Borrowing. If the Borrower shall not have given
notice in accordance with this Section 2.10 to continue any Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The Borrower shall pay
to the Administrative Agent, for the account of the Lenders, on the dates set
forth below, or if any such date is not a Business Day, on the next succeeding
Business Day (each such date being a "Tranche A Term Loan Repayment Date"), a
principal amount of the Tranche A Term Loans (such amount, as adjusted from time
to time pursuant to Sections 2.12 and 2.13(f), being called the "Tranche A Term
Loan Repayment Amount") equal to the amount set forth below for such date,
together in each case with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of such payment:
Date Amount
---- ------
March 31, 1999 $ 12,500,000
September 30, 1999 12,500,000
March 31, 2000 25,000,000
September 30, 2000 25,000,000
March 31, 2001 25,000,000
September 30, 2001 25,000,000
March 31, 2002 25,000,000
September 30, 2002 25,000,000
March 31, 2003 25,000,000
September 30, 2003 25,000,000
March 31, 2004 37,500,000
September 30, 2004 37,500,000
40
Tranche A Maturity Date 100,000,000
On each Tranche A Term Loan Repayment Date, the Administrative Agent shall apply
the Tranche A Term Loan Repayment Amount paid to the Administrative Agent to pay
the Tranche A Term Loans in accordance with Section 2.19(a).
(ii) The Borrower shall pay to the Administrative Agent, for the account of
the Lenders, on the dates set forth below or, if any such date is not a Business
Day, on the next succeeding Business Day (each such date being a "Tranche B Term
Loan Repayment Date"), a principal amount of the Tranche B Term Loans (such
amount, as adjusted from time to time pursuant to Sections 2.12 and 2.13(f),
being called the "Tranche B Term Loan Repayment Amount") equal to the amount set
forth below for such date, together in each case with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of such
payment:
Date Amount
---- ------
March 31, 1999 $ 1,750,000
September 30, 1999 1,750,000
March 31, 2000 1,750,000
September 30, 2000 1,750,000
March 31, 2001 1,750,000
September 30, 2001 1,750,000
March 31, 2002 1,750,000
September 30, 2002 1,750,000
March 31, 2003 1,750,000
September 30, 2003 1,750,000
March 31, 2004 1,750,000
September 30, 2004 1,750,000
March 31, 2005 1,750,000
September 30, 2005 162,750,000
Tranche B Maturity Date 164,500,000
On each Tranche B Term Loan Repayment Date, the Administrative Agent shall apply
the Tranche B Term Loan Repayment Amount paid to the Administrative Agent to pay
the Tranche B Term Loans in accordance with Section 2.19(a).
(b) To the extent not previously paid, (i) all Tranche A Term Loans shall
be due and payable on the Tranche A Maturity Date and (ii) all Tranche B Term
Loans shall be due and payable on the Tranche B Maturity Date, in each case
together with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of payment.
41
(c) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Optional Prepayments. (a) The Borrower shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in part,
upon written or telecopy notice (or telephone notice promptly confirmed by
written or telecopy notice) delivered to the Administrative Agent (i) by 11:00
a.m., New York City time, at least three Business Days prior to the date
designated for such prepayment, in the case of any prepayment of a Eurodollar
Borrowing, or (ii) by 11:00 a.m., New York City time, on the date designated for
such prepayment in the case of any prepayment of an ABR Borrowing; provided,
however, that each partial payment shall be in an amount that is an integral
multiple of $1,000,000 and, in the case of a Eurodollar Borrowing, not less than
$10,000,000 (or, in each case, the entire amount of the Borrowing being
prepaid).
(b) Optional prepayments of Term Loans made by the Borrower pursuant to
paragraph (a) above shall be allocated among the Tranche A Term Loans and the
Tranche B Term Loans (and to the remaining scheduled installments of principal
with respect to any such Term Loans) in a manner determined at the discretion of
the Borrower.
(c) Each notice of prepayment shall specify the amount to be prepaid, the
prepayment date, whether the related prepayment relates to a Revolving Credit
Borrowing or a Term Borrowing and the principal amount of each Revolving Credit
Borrowing or Term Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such obligations by the
amount specified therein on the date specified therein. All prepayments pursuant
to this Section 2.12 shall be subject to Section 2.16, but shall otherwise be
without premium or penalty.
(d) No optional prepayment of Term Loans made by the Borrower pursuant to
this Section 2.12 shall reduce the Borrower's obligation to make mandatory
prepayments pursuant to Section 2.13(b), (c), (d) or (e).
SECTION 2.13. Mandatory Prepayments. (a) On the date of any termination or
reduction of the Revolving Credit Commitments pursuant to Section 2.09, the
Borrower shall pay or prepay so much of the then-outstanding Swingline Loans and
the then-outstanding Revolving Credit Borrowings as shall be necessary in order
that the aggregate principal amount of the Swingline Loans and Revolving Loans
outstanding at such time will not exceed the aggregate Revolving Credit
Commitments (after giving effect to such termination or reduction and after
giving effect to each deemed reduction to the Revolving Credit Commitments in
connection with the making of a Swingline Loan) less the aggregate LC Exposure
at such time.
(b) With respect to (i) any Asset Sale that is an Asset Sale at the time of
such sale or other disposition and (ii) any Asset Sale not described in clause
(i) that becomes an Asset Sale due to the operation of the first proviso
contained in the definition of the term "Asset Sale", the
42
Borrower shall apply not later than the third Business Day following the
determination of the amount of Net Cash Proceeds received in respect thereof
(but in no event later than 60 days after the initial receipt by any Loan Party
or any of their respective Subsidiaries of such Net Cash Proceeds) an amount
equal to 100% of the Net Cash Proceeds received therefrom to prepay outstanding
Loans and Swingline Loans in accordance with Section 2.13(f).
(c) No later than the earlier of (i) 90 days after the end of each fiscal
year of JSC, commencing with the fiscal year ending on December 31, 1998, and
(ii) the date on which the financial statements with respect to such period are
delivered pursuant to Section 6.04(a), the Borrower shall prepay outstanding
Loans and Swingline Loans in accordance with Section 2.13(f) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then
ended; provided, however, that the provisions of this Section 2.13(c) shall not
apply after the date that the Borrower shall have repaid or prepaid at least
$350,000,000 of the aggregate principal amount of the Term Loans.
(d) In the event that any Loan Party or any Subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any Subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to Section
7.01 (other than clause (k) thereof)), including pursuant to any Permitted
Equipment Financing or any Permitted Timber Financing, then the Borrower shall
substantially simultaneously with (and in any event not later than the third
Business Day next following) the receipt of such Net Cash Proceeds by such Loan
Party or Subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to
prepay outstanding Loans and Swingline Loans in accordance with Section 2.13(f).
(e) In the event that there shall occur any Taking or Destruction (as such
terms are defined in the Mortgages) of any Mortgaged Property and pursuant to
the provisions of the applicable Mortgage amounts payable with respect thereto
are to be applied to the Secured Obligations, the Borrower shall apply an amount
equal to 100% of the Net Cash Proceeds therefrom to prepay the outstanding Loans
and Swingline Loans in accordance with Section 2.13(f).
(f) Mandatory prepayments of outstanding obligations under this Agreement
made by the Borrower pursuant to paragraphs (b), (c), (d) and (e) above first,
shall be allocated pro rata between the then-outstanding Tranche A Term Loans
and Tranche B Term Loans and, subject to paragraph (i) below, applied pro rata
against the remaining scheduled installments of principal due in respect of
Tranche A Term Loans and Tranche B Term Loans under Sections 2.11(a)(i) and
(ii), respectively, and second, if the Term Loans shall have been repaid in
full, shall be applied to permanently reduce existing Revolving Credit
Commitments; provided, however, that (i) subject to paragraph (i) below, up to
$50,000,000, in the case of prepayments of the Tranche A Term Loans, of any
prepayment required to be made pursuant to Section 2.13(c) may be allocated
between the Tranche A Term Loans and the Tranche B Term Loans (and to the
remaining scheduled installments of principal with respect to any such Term
Loans) in a manner
43
determined at the discretion of the Borrower and (ii) subject to paragraph (i)
below, the amount of any such prepayment required to be made pursuant to Section
2.13(c) in excess of $50,000,000, together, in the case of prepayments of the
Tranche A Term Loans, with the amount of any prepayments rejected by Tranche B
Lenders pursuant to paragraph (i) below, may be applied by the Borrower against
the remaining scheduled installments of principal with respect to the Term Loans
required to be paid within 24 months of the date of such prepayment.
(g) The Borrower shall deliver to the Administrative Agent, (i) at the time
of each prepayment by the Borrower required under paragraph (b), (c), (d) or (e)
above, a certificate signed by a Financial Officer of the Borrower setting forth
in reasonable detail the calculation of the amount of such prepayment and (ii)
at least three Business Days prior to the time of each prepayment required under
this Section 2.13, a notice of such prepayment. Each notice of prepayment shall
specify the prepayment date, the Type of each Loan being prepaid and the
principal amount of each Loan or Swingline Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings and Swingline Loans under this Section
2.13 shall be subject to Section 2.16, but shall otherwise be without premium or
penalty.
(h) Amounts to be applied pursuant to this Section 2.13 to the prepayment
of Term Loans and Revolving Loans shall be applied, as applicable, first to
reduce outstanding ABR Term Loans and ABR Revolving Loans. Any amounts remaining
after each such application shall, at the option of the Borrower, be applied to
prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as the case may be,
immediately and/or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Loans to prepay Eurodollar Revolving Loans, in
each case on the last day of their respective Interest Periods (or, at the
direction of the Borrower, on any earlier date) until all outstanding Term Loans
or Revolving Loans, as the case may be, have been prepaid or until all the
allocable cash on deposit with respect to such Loans has been exhausted. For
purposes of this Agreement, the term "Prepayment Account" shall mean an account
established by the Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this paragraph
(h). The Administrative Agent will, at the request of the Borrower, invest
amounts on deposit in the Prepayment Account in Permitted Investments that are
described in clause (a), (b), (c) or (d) of the definition of such term and that
mature prior to the last day of the applicable Interest Periods of the
Eurodollar Term Borrowings or Eurodollar Revolving Borrowings to be prepaid, as
the case may be; provided, however, that (i) the Administrative Agent shall not
be required to make any investment that, in its sole judgment, would require or
cause the Administrative Agent to be in, or would result in any, violation of
any law, statute, rule or regulation and (ii) the Administrative Agent shall
have no obligation to invest amounts on deposit in the Prepayment Account if a
Default or Event of Default shall have occurred and be continuing. The Borrower
shall indemnify the Administrative Agent for any losses relating to the
investments so that the amount available to prepay Eurodollar Borrowings on the
last day of the applicable Interest Period is not less than the amount that
would have been available had no investments
44
been made pursuant thereto. Other than any interest earned on such investments,
the Prepayment Account shall not bear interest. Interest or profits, if any, on
such investments shall be deposited in the Prepayment Account and reinvested and
disbursed as specified above. If the maturity of the Loans has been accelerated
pursuant to Article VIII, the Administrative Agent may, in its sole discretion,
apply all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations. The Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Fronting Bank, the Swingline Lender and the
Lenders, a security interest in the Prepayment Account to secure the
Obligations.
(i) Notwithstanding paragraph (f) above, with respect to the amount of any
mandatory prepayment described therein that is allocated to the then-outstanding
Tranche B Term Loans (such amounts, the "Prepayment Amount"), the Borrower may,
not less than 10 nor more than 20 Business Days prior to the date specified
therein for such prepayment (the "Mandatory Prepayment Date"), provide to each
Tranche B Lender a written notice (each, a "Prepayment Option Notice"), which
shall refer to this Section 2.13(i) and shall (i) set forth the Prepayment
Amount and the portion thereof that the applicable Tranche B Lender (each, a
"Prepayment Lender") will be entitled to receive if it accepts such mandatory
prepayment in accordance with this paragraph (i), (ii) request such Prepayment
Lender to notify the Borrower and the Administrative Agent in writing no later
than the Business Day prior to the Mandatory Prepayment Date of such Prepayment
Lender's acceptance or rejection (in each case, in whole and not in part) of its
share of the Prepayment Amount and (iii) inform such Prepayment Lender that
failure by such Prepayment Lender to accept in writing its share of the
Prepayment Amount on or before the Business Day prior to the Mandatory
Prepayment Date shall be deemed a rejection of such amount. Each Prepayment
Option Notice shall be given by telecopy, confirmed by hand delivery, overnight
courier service or registered or certified mail, in each case addressed as
provided in Section 10.01. On the Mandatory Prepayment Date, the Borrower shall
apply the aggregate amount necessary to prepay that portion of the Prepayment
Amount in respect of which such Prepayment Lenders have accepted prepayment as
described above (such Prepayment Lenders, the "Accepting Lenders") pro rata
against the remaining installments of principal due in respect of the Tranche B
Term Loans of the Accepting Lenders under Section 2.11(a)(ii). The remaining
portion of the Prepayment Amount shall be applied (i) in the case of any
Prepayment Amount payable pursuant to Section 2.13(c), in accordance with
Section 2.13(f) and (ii) in all other cases, against the remaining scheduled
installments of principal due in respect of such Tranche A Term Loans under
Section 2.11(a)(i) in the order of maturity.
SECTION 2.14. Reserve Requirements; Change in Circumstances; Increased
Costs. (a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender, the Swingline
Lender or the Fronting Bank of the principal of or interest on any Eurodollar
Loan made by such Lender or any Letter of Credit obligations, Fees or other
amounts payable hereunder (other than changes in respect of income and franchise
taxes imposed on such Lender,
45
the Swingline Lender or the Fronting Bank by the jurisdiction in which such
Lender, the Swingline Lender or the Fronting Bank is organized or has its
principal or lending office or by any political subdivision or taxing authority
thereof or therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender, the Swingline Lender or the
Fronting Bank (except any such reserve requirement that is reflected in the
Adjusted LIBO Rate or in the Alternate Base Rate) or shall impose on such
Lender, the Swingline Lender or the Fronting Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or to reduce the amount
of any sum received or receivable by such Lender, the Swingline Lender or the
Fronting Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender, the Swingline Lender or the Fronting Bank to be
material, then the Borrower will pay to such Lender, the Swingline Lender or the
Fronting Bank following receipt of a certificate of such Lender, the Swingline
Lender or the Fronting Bank to such effect in accordance with Section 2.14(c)
such additional amount or amounts as will compensate such Lender, the Swingline
Lender or the Fronting Bank on an after-tax basis for such additional costs
incurred or reduction suffered. Notwithstanding any other provision in this
paragraph (a), none of any Lender, the Swingline Lender or the Fronting Bank
shall be entitled to demand compensation pursuant to this paragraph (a) if it
shall not be the general practice of such Lender, the Swingline Lender or the
Fronting Bank, as applicable, to demand such compensation in similar
circumstances under comparable provisions of other comparable credit agreements.
(b) If any Lender, the Swingline Lender or the Fronting Bank shall have
determined that the adoption after the date hereof of any law, rule, regulation,
agreement or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender), the Swingline Lender or the Fronting Bank or any
Lender's, the Swingline Lender's or the Fronting Bank's holding company, if any,
with any request or directive regarding capital adequacy issued under any law,
rule, regulation or guideline (whether or not having the force of law) of any
such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's, the Swingline
Lender's or the Fronting Bank's capital or on the capital of such Lender's, the
Swingline Lender's or the Fronting Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by such Lender, the Swingline
Loans made by the Swingline Lender or the Letters of Credit issued by the
Fronting Bank pursuant hereto to a level below that which such Lender, the
Swingline Lender or the Fronting Bank or such Lender's, the Swingline Lender's
or the Fronting Bank's holding company, if any, could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's, the Swingline Lender's or the Fronting Bank's policies and the
policies of such Lender's, the Swingline Lender's or the Fronting Bank's holding
company, if any, with respect to capital adequacy) by an amount deemed by such
Lender, the Swingline Lender or the Fronting Bank to be material, then from time
to time the Borrower
46
shall pay to such Lender, the Swingline Lender or the Fronting Bank following
receipt of a certificate of such Lender, the Swingline Lender or the Fronting
Bank to such effect in accordance with Section 2.14(c) such additional amount or
amounts as will compensate such Lender, the Swingline Lender or the Fronting
Bank or such Lender's, the Swingline Lender's or the Fronting Bank's holding
company, if any, on an after-tax basis for any such reduction suffered.
Notwithstanding any other provision in this paragraph (b), none of any Lender,
the Swingline Lender or the Fronting Bank shall be entitled to demand
compensation pursuant to this paragraph (b) if it shall not be the general
practice of such Lender, the Swingline Lender or the Fronting Bank, as
applicable, to demand such compensation in similar circumstances under
comparable provisions of other comparable credit agreements.
(c) A certificate of each Lender, the Swingline Lender or the Fronting Bank
setting forth such amount or amounts as shall be necessary to compensate such
Lender, the Swingline Lender or the Fronting Bank or its holding company, if
any, as specified in paragraph (a) or (b) above, as the case may be, and setting
forth in reasonable detail an explanation of the basis of requesting such
compensation in accordance with paragraph (a) or (b) above, including
calculations in reasonable detail, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay each Lender, the
Swingline Lender or the Fronting Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) Failure on the part of any Lender, the Swingline Lender or the Fronting
Bank to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to any
period shall not constitute a waiver of such Lender's, the Swingline Lender's or
the Fronting Bank's right to demand compensation with respect to such period or
any other period, except that none of any Lender, the Swingline Lender or the
Fronting Bank shall be entitled to compensation under this Section 2.14 for any
costs incurred or reduction suffered with respect to any date unless such
Lender, the Swingline Lender or the Fronting Bank, as applicable, shall have
notified the Borrower that it will demand compensation for such costs or
reductions under paragraph (c) above, not more than six months after the later
of (i) such date and (ii) the date on which such Lender, the Swingline Lender or
the Fronting Bank, as applicable, shall have become aware of such costs or
reductions. The protection of this Section 2.14 shall be available to each
Lender, the Swingline Lender or the Fronting Bank regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition that shall have occurred or been imposed.
47
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision
herein, if after the date hereof any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon any request by the Borrower for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR
Loan unless such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under subparagraph (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur with respect to
Eurodollar Loans as a consequence of (a) any failure by the Borrower to fulfill
on the date of any Borrowing hereunder the applicable conditions set forth in
Article V, (b) any failure by the Borrower to borrow or to refinance, convert or
continue any Loan hereunder after irrevocable notice of such borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03
or 2.10, (c) any payment, prepayment or conversion of a Eurodollar Loan required
or permitted by any other provision of this Agreement or otherwise, or any
assignment of a Eurodollar Loan required by Section 2.21(b), in each case made
or deemed made on a date other than the last day of the Interest Period
applicable thereto or (d) any default in payment or prepayment of the principal
amount of any Loan or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, whether at scheduled maturity, by
acceleration, irrevocable notice of prepayment or otherwise), including, in each
such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan. Such loss or reasonable expense shall be equal to the sum of (a) such
Lender's actual costs and expenses
48
incurred (other than any lost profits) in connection with, or by reason of, any
of the foregoing events and (b) an amount equal to the excess, if any, as
reasonably determined by such Lender of (i) its cost of obtaining the funds for
the Loan being paid, prepaid, converted or not borrowed, converted or continued
(assumed to be the Adjusted LIBO Rate applicable thereto) for the period from
and including the date of such payment, prepayment, conversion or failure to
borrow, convert or continue to but excluding the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow, convert or continue, the
Interest Period for such Loan that would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid, converted or not borrowed, converted or continued for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
any amount or amounts, including calculations in reasonable detail, that such
Lender is entitled to receive pursuant to this Section 2.16 shall be delivered
to the Borrower and shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under Section 2.15 or
permitted under Section 2.12(b) or Sections 2.13(f) and (i), each Borrowing,
each payment or prepayment of principal of any Borrowing, each payment of
interest on the Loans, each payment of the Commitment Fees, each payment of the
LC Fees, each reduction of the Commitments and each refinancing of any Borrowing
with, conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing, computed in accordance with Section 2.01, to the next higher or
lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Loan Party, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan or Loans or LC
Exposure as a result of which the unpaid principal portion of its Loans or its
LC Exposure shall be proportionately less than the unpaid principal portion of
the Loans of any other Lender or any other Lender's LC Exposure, such Lender
shall be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans of such other Lender or the LC Exposure of such other
Lender, so that the aggregate unpaid principal amount of the Loans, LC Exposure
and participations in Loans and LC Exposure held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans and LC
Exposure then outstanding as the principal amount of such Lender's Loans and LC
Exposure prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the principal amount of all Loans and LC Exposure outstanding
prior to
49
such exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. JSC, JSCE and the Borrower expressly
consent to the foregoing arrangements and agree that any Lender holding a
participation in a Loan or LC Exposure deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Loan Parties to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments. (a) Except as provided in Sections 2.05(d) and
3.04(a) and (b), the Loan Parties shall make each payment (including principal
of or interest on any Loan or Swingline Loan or any Fees or other amounts)
hereunder and under any other Loan Document not later than 12:00 noon, New York
City time, on the date when due in immediately available dollars, without
defense, setoff or counterclaim. Each such payment (other than (i) the payments
specified in Sections 3.04(a), 3.04(b) and 3.07, which shall be paid directly to
the Fronting Bank, and (ii) principal of and interest on Swingline Loans, which
shall be paid directly to the Swingline Lender) shall be made to the
Administrative Agent at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
Payments made directly to the Fronting Bank shall be made to such account of the
Fronting Bank as the Fronting Bank shall specify by notice to the Borrower.
Payments made directly to the Swingline Lender shall be made to such account of
the Swingline Lender as the Swingline Lender shall specify by notice to the
Borrower. Any payments received by the Administrative Agent, the Fronting Bank
or the Swingline Lender after the specified time for receipt of such payment on
any day shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute to the applicable Lenders all payments
received by the Administrative Agent for their respective accounts, promptly
following receipt thereof.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by the Loan Parties hereunder
shall be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of the Administrative Agent, the Collateral
Agent, the Fronting Bank or the Swingline Lender or any Lender (or any
transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes imposed on the
Administrative Agent, the Collateral Agent, the Fronting Bank or the Swingline
Lender or any Lender (or Transferee) by the United States or any jurisdiction
under the laws of which the Administrative Agent, the Collateral Agent, the
Fronting Bank, the
50
Swingline Lender or any such Lender (or Transferee) is organized or has its
principal office or lending office or any political subdivision or taxing
authority thereof or therein (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If any Taxes are required to be deducted from or in respect of any
sum payable hereunder to any Lender (or any Transferee), the Administrative
Agent, the Collateral Agent, the Swingline Lender or the Fronting Bank, (i) the
sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.20) such Lender (or Transferee), the Administrative Agent,
the Collateral Agent, the Swingline Lender or the Fronting Bank (as the case may
be) shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) JSC, JSCE or the Borrower, as applicable, shall make
such deductions and (iii) JSC, JSCE or the Borrower, as applicable, shall pay
the full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law; provided, however, that no
Transferee of any Lender shall be entitled to receive any greater payment under
this paragraph (a) than such Lender would have been entitled to receive with
respect to the rights assigned, participated or otherwise transferred unless (x)
such assignment, participation or transfer shall have been made at a time when
the circumstances (including a Change of Law) giving rise to such greater
payment did not exist or had not yet occurred or (y) such assignment,
participation or transfer shall have been at the request of the Borrower.
(b) The Borrower agrees to pay any current or future stamp, intangible or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes and similar
fees) that arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement, any Assignment
and Acceptance entered into at the request of the Borrower or any other Loan
Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender and the
Fronting Bank for the full amount of Taxes and Other Taxes (including any Taxes
or Other Taxes on amounts payable under this Section 2.20) paid by such Lender
(or Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee), the Administrative Agent, the Collateral Agent, the Swingline
51
Lender or the Fronting Bank, as the case may be, makes written demand therefor
(which demand shall identify the nature and amount of Taxes and Other Taxes for
which indemnification is being sought and shall include a copy of the relevant
portion of any written assessment from the relevant taxing authority demanding
payment of such Taxes or Other Taxes, unless the Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or the Fronting
Bank, as the case may be, determines, in its sole discretion, that such portion
of any such assessment is confidential). If a Lender (or Transferee), the
Administrative Agent, the Swingline Lender or the Fronting Bank shall become
aware that it is entitled to receive a refund in respect of Taxes or Other Taxes
as to which it has been indemnified by the Borrower pursuant to this Section
2.20, it shall promptly notify the Borrower of the availability of such refund
and shall, within 30 days after receipt of a request by the Borrower, apply for
such refund at the Borrower's expense. If any Lender (or Transferee), the
Administrative Agent, the Swingline Lender or the Fronting Bank receives a
refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.20, it shall promptly
notify the Borrower of such refund and shall, within 30 days of receipt, repay
such refund (to the extent of amounts that have been paid by the Borrower under
this Section 2.20 with respect to such refund and not previously reimbursed) to
the Borrower, net of all reasonable out-of-pocket expenses of such Lender, the
Administrative Agent, the Swingline Lender or the Fronting Bank and without
interest (other than the interest, if any, included in such refund net of any
Taxes payable with respect to receipt of such refund), provided that the
Borrower, upon the request of such Lender (or Transferee), the Administrative
Agent, the Swingline Lender or the Fronting Bank, agree to return such refund
(plus penalties, interest or other charges) to such Lender (or Transferee), the
Administrative Agent, the Swingline Lender or the Fronting Bank in the event
such Lender (or Transferee), the Administrative Agent, the Swingline Lender or
the Fronting Bank is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by JSC, JSCE or the Borrower in respect of any payment to any Lender
(or Transferee), the Administrative Agent, the Collateral Agent, the Swingline
Lender or the Fronting Bank, JSC, JSCE or the Borrower, as the case may be, will
furnish to the Administrative Agent, at its address referred to in Section
10.01, the original or a certified copy of a receipt evidencing payment thereof
or other evidence reasonably satisfactory to such Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or the Fronting
Bank, as the case may be.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each of the Administrative Agent, the Fronting Bank, the Swingline
Lender and any Lender (or Transferee) that is not incorporated or otherwise
formed under the laws of the United States of America or a state thereof (a
"Non-U.S. Person") agrees that it shall on the date it becomes a Lender (or
Transferee), the Administrative Agent, a Fronting Bank or Swingline Lender
hereunder, deliver to the Borrower and the Administrative Agent (i) one duly
completed copy of United States Internal Revenue Service Form 1001 or 4224, or
(ii) in the case of Lenders (or Transferees) exempt from United States Federal
withholding tax pursuant to Sections 871(h) or 881(c) of the Code, one duly
completed copy of a United States Internal Revenue Service Form W-8 and a
certificate representing that such Non-U.S. Person is not a bank for purposes of
Section 881(c) of the Code, or any successor applicable form of any thereof,
certifying in each case that such Lender (or Transferee), the Administrative
Agent, the Fronting Bank or the
52
Swingline Lender is entitled to receive payments hereunder payable to it without
deduction or withholding of any United States Federal income taxes, or subject
to a reduced rate thereof. Each of the Administrative Agent, the Fronting Bank
or the Swingline Lender or any Lender (or Transferee) that delivers to the
Borrower and the Administrative Agent any such form or certification further
undertakes to deliver to the Borrower and the Administrative Agent further
copies of any such form or certification or other manner of certification
reasonably satisfactory to the Borrower on or before the date that any such form
or certification expires or becomes obsolete or of the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it to the Borrower or the Administrative Agent, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or the
Administrative Agent, certifying that the Administrative Agent, Fronting Bank,
Swingline Lender or such Lender (or Transferee), as the case may be, is entitled
to receive payments hereunder without deduction or withholding of any United
States Federal income taxes, or subject to a reduced rate thereof. If at any
time there has occurred, on or prior to the date on which any delivery of any
such form or certification would otherwise be required, any change in law, rule,
regulation, treaty, convention or directive, or any change in the interpretation
or application of any thereof ("Change of Law"), that renders all such forms or
certification inapplicable or which would prevent the Administrative Agent,
Fronting Bank, Swingline Lender or such Lender (or Transferee), as the case may
be, from duly completing and delivering any such form or certification with
respect to it, the Administrative Agent, Fronting Bank, Swingline Lender or such
Lender (or Transferee), as the case may be, shall advise the Borrower that under
applicable law it shall be subject to withholding of United States Federal
income tax at the full statutory rate, a reduced rate of withholding or without
deduction or withholding. A Non-U.S. Person shall be required to furnish any
such form or certification only if it is entitled to claim an exemption from or
a reduced rate of withholding. Each of the Administrative Agent, the Fronting
Bank, the Swingline Lender and any Lender that is a Non-U.S. Person and that is
a party hereto as of the date hereof hereby represents and warrants that, as of
the date hereof, payments made to it hereunder are exempt from withholding of
United States Federal income taxes (i) because such payments are effectively
connected with a United States trade or business conducted by such Non-U.S.
Person; (ii) pursuant to the terms of an income tax treaty between the United
States and such Non-U.S. Person's country of residence; or (iii) because such
payments are portfolio interest exempt pursuant to Section 871(h) or 881(c) of
the Code. Notwithstanding any provision of paragraph (a) above to the contrary,
none of JSC, JSCE or the Borrower shall have any obligation to pay any Taxes or
Other Taxes or to indemnify any Lender (or Transferee), the Administrative
Agent, the Swingline Lender or the Fronting Bank for such Taxes or Other Taxes
pursuant to Section 2.20 to the extent that such Taxes or Other Taxes result
from (i) the failure of any Lender (or Transferee), the Administrative Agent,
the Fronting Bank or the Swingline Bank to comply with its obligations pursuant
to this paragraph (f) or (ii) any representation made on any such form or
certification (or successor applicable form or certification) by the Lender (or
Transferee), the Administrative Agent, the Fronting Bank, or the Swingline
Lender incurring such Taxes or Other Taxes proving to have been incorrect, false
or misleading in any material respect when so made or deemed to be made.
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SECTION 2.21. Duty to Mitigate; Assignment of Commitments under Certain
Circumstances. (a) Any of the Administrative Agent, the Fronting Bank, the
Swingline Lender or any Lender (or Transferee) claiming any additional amounts
payable pursuant to Section 2.14 or Section 2.20 or exercising its rights under
Section 2.15 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
to change the jurisdiction of its applicable lending office if the making of
such filing or change would avoid the need for or reduce the amount of any such
additional amounts that may thereafter accrue or avoid the circumstances giving
rise to such exercise and would not, in the sole determination of such Lender
(or Transferee), the Administrative Agent, the Fronting Bank or the Swingline
Lender, as the case may be, require it to incur additional costs or be otherwise
disadvantageous to such Lender (or Transferee), the Administrative Agent, the
Fronting Bank or the Swingline Lender.
(b) In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.14 or 2.15, or the Borrower shall be required
to make additional payments to any Lender under Section 2.20, the Borrower shall
have the right, but not the obligation, at its own expense (including with
respect to the processing and recordation fee referred to in Section 10.04(b)),
upon notice to such Lender and the Administrative Agent, to replace such Lender
with an assignee (in accordance with and subject to the restrictions contained
in Section 10.04(b)) approved by the Administrative Agent (which approval shall
not be unreasonably withheld), and such Lender hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in Section 10.04(b)) all its interests, rights and obligations under
this Agreement to such assignee; provided, however, that no Lender shall be
obligated to make any such assignment unless (i) such assignment shall not
conflict with any law or any rule, regulation or order of any Governmental
Authority, (ii) such assignee shall pay to the affected Lender in immediately
available funds on the date of such assignment the principal of the Loans made
by such Lender hereunder and (iii) the Borrower shall pay to the affected Lender
in immediately available funds on the date of such assignment the interest
accrued to the date of payment on the Loans made by such Lender hereunder and
all other amounts accrued for such Lender's account or owed to it hereunder.
SECTION 2.22. Swingline Loans. (a) On the terms and subject to the
conditions and relying upon the representations and warranties herein set forth,
the Swingline Lender agrees, at any time and from time to time from and
including the Closing Date to but excluding the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitments, in
accordance with the terms hereof, to make Swingline Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed the lesser of
(i) $25,000,000 and (ii) the difference between (x) the aggregate Revolving
Credit Commitments at such time and (y) the sum of (A) the aggregate principal
amount of Revolving Loans outstanding at such time and (B) the LC Exposure at
such time. Each Swingline Loan shall be in a principal amount that is an
integral multiple of $250,000. The Swingline Lender shall make each Swingline
Loan available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender by 3:00 p.m. on the date such
Swingline Loan is requested to be made pursuant to
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paragraph (b) below. Within the limits set forth in the first sentence of this
paragraph, the Borrower may borrow, pay or prepay and reborrow Swingline Loans
prior to the Revolving Credit Maturity Date on the terms and subject to the
conditions and limitations set forth herein.
(b) The Borrower shall give the Administrative Agent telephonic, written or
telecopy notice (in the case of telephonic notice, such notice shall be promptly
confirmed by telecopy) not later than 11:00 a.m., New York City time, on the day
of a proposed borrowing. Such notice shall be delivered on a Business Day, shall
be irrevocable and shall refer to this Agreement and shall specify the requested
date (which shall be a Business Day) and amount of such Swingline Loan. The
Administrative Agent shall promptly advise the Swingline Lender of any notice
received from the Borrower pursuant to this paragraph (b).
(c) The Swingline Lender may by written or telecopy notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to purchase all or any portion of the Swingline
Loans outstanding. Such notice shall specify the aggregate amount of Swingline
Loans to be purchased and the Administrative Agent shall promptly upon receipt
of such notice give notice to each Lender, specifying in such notice to each
Lender such Lender's pro rata percentage (based on the percentage that such
Lender's Revolving Credit Commitment bears to the aggregate amount of the
Revolving Credit Commitments on the date of such notice) of such Swingline Loan
or Swingline Loans. Each Lender shall pay to the Administrative Agent, not later
than 2:00 p.m., New York City time, on the date of such notice, such Lender's
pro rata percentage (determined as aforesaid) of the principal amount of such
Swingline Loan or Swingline Loans. Each such payment shall for all purposes
hereunder be deemed to be an ABR Revolving Loan (it being understood that (i)
each Lender's obligation to make such payment is absolute and unconditional and
shall not be affected by any event or circumstance whatsoever, including the
occurrence of any Default or Event of Default hereunder or the failure of any
condition precedent set forth in Article V to be satisfied, and (ii) each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever). The Administrative Agent shall promptly advise the Borrower of any
notice received from the Swingline Lender pursuant to this paragraph (c).
(d) The Borrower may prepay any Swingline Loan in whole or in part at any
time without premium or penalty, provided that the Borrower shall have given the
Administrative Agent written or telecopy notice (or telephone notice promptly
confirmed in writing or by telecopy) of such prepayment not later than 11:00
a.m., New York City time, on the Business Day designated by the Borrower for
such prepayment.
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ARTICLE III
Letters of Credit
SECTION 3.01. Issuance of Letters of Credit. (a) The Fronting Bank agrees,
upon the receipt of an appropriately completed and properly authorized Letter of
Credit Application, in a form and containing terms and conditions that are
reasonably acceptable to the Fronting Bank and consistent with the terms hereof,
and on the terms and subject to the conditions hereinafter set forth, to issue
Letters of Credit for the account of the Borrower, at any time and from time to
time on and after the Closing Date until the earlier of (i) the LC Maturity Date
and (ii) the termination of the LC Commitment in accordance with the terms
hereof; provided, however, that any Letter of Credit shall be issued only if,
and each request by the Borrower for the issuance of any Letter of Credit shall
be deemed a representation and warranty of the Borrower that, immediately
following the issuance of any such Letter of Credit, (x) the LC Exposure at such
time shall not exceed the LC Commitment in effect at such time and (y) the
aggregate principal amount of Revolving Loans and Swingline Loans outstanding at
such time plus the LC Exposure at such time shall not exceed the aggregate
Revolving Credit Commitments in effect at such time.
(b) No Letter of Credit shall be issued with a stated expiration date later
than the earlier of (i) the close of business on the LC Maturity Date and (ii)
the close of business on the date that is (x) 270 days after the date of
issuance of such Letter of Credit, in the case of a Trade Letter of Credit and
(y) 12 months after the date of issuance of such Letter of Credit, in the case
of a Standby Letter of Credit. Each Letter of Credit shall provide for payments
of drawings in dollars.
(c) Each Trade Letter of Credit shall, among other things, provide for the
payment of sight drafts when presented for honor thereunder, or of time drafts
with a maturity date occurring not later than the earlier of (i) 120 days after
the presentation thereof and (ii) the LC Maturity Date, in each case in
accordance with the terms thereof and when accompanied by the required documents
or when such documents are presented to the Fronting Bank.
(d) Each Standby Letter of Credit may, in the absolute discretion of the
Fronting Bank, include a provision whereby such Standby Letter of Credit shall
be renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the LC Maturity Date) unless the Fronting Bank notifies the
beneficiary thereof at least 60 days prior to the then-applicable expiry date
that such Standby Letter of Credit will not be renewed.
(e) The Borrower may request the extension or renewal of a Standby Letter
of Credit that is not automatically renewed in accordance with the terms
contained therein by giving written notice to the Fronting Bank at least three
Business Days prior to the then-current expiry date of such Standby Letter of
Credit (provided that the Fronting Bank may accommodate requests on shorter
notice in its sole discretion). If no Default or Event of Default has occurred
and is continuing, the Fronting Bank shall promptly issue such extension or
renewal; provided, however,
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that the Fronting Bank shall have no obligation to extend or renew any Standby
Letter of Credit (i) for a period in excess of 12 months or (ii) to an expiry
date beyond the LC Maturity Date.
(f) Each request for the issuance of a Letter of Credit shall be made by a
written or facsimile authenticated Letter of Credit Application from the
Borrower to the Fronting Bank specifying whether such Letter of Credit is to be
a Trade Letter of Credit or a Standby Letter of Credit (and if such Letter of
Credit is to be a Standby Letter of Credit, the date on which such Standby
Letter of Credit is to be issued), the date on which such Letter of Credit is to
expire, the amount of such Letter of Credit, the name and address of the
beneficiary of such Letter of Credit and such other information as may be
necessary or desirable to complete such Letter of Credit. The Fronting Bank will
provide the Administrative Agent on the first Business Day of each week (or on a
more frequent basis if reasonably requested by the Administrative Agent) a
statement setting forth the aggregate face amount of the Outstanding Standby
Letters of Credit issued by it and the aggregate face amount of the Outstanding
Trade Letters of Credit for each day since the end of the period covered by the
prior such statement, together with such other information regarding the
Outstanding Letters of Credit as may be reasonably requested by the
Administrative Agent.
SECTION 3.02. Participations; Unconditional Obligations. (a) By the
issuance of a Letter of Credit and without any further action on the part of the
Fronting Bank or the Participating Lenders in respect thereof, the Fronting Bank
hereby grants to each Participating Lender, and each Participating Lender hereby
agrees to acquire from the Fronting Bank, a participation in such Letter of
Credit equal to such Participating Lender's Applicable Percentage of the face
amount of such Letter of Credit effective upon the issuance of such Letter of
Credit. In addition, the Fronting Bank hereby grants to each Participating
Lender, and each Participating Lender hereby acquires from the Fronting Bank, a
participation in each Existing Letter of Credit equal to such Participating
Lender's Applicable Percentage of the face amount of such Existing Letter of
Credit, effective on the Closing Date. In consideration and in furtherance of
the foregoing, each Participating Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, on behalf of the Fronting Bank, in
accordance with Section 2.02(e), such Participating Lender's Applicable
Percentage of each LC Disbursement made by the Fronting Bank; provided, however,
that the Participating Lenders shall not be obligated to make any such payment
to the Fronting Bank with respect to any wrongful payment or disbursement made
under any Letter of Credit as a result of the gross negligence or wilful
misconduct of the Fronting Bank.
(b) Each Participating Lender acknowledges and agrees that its obligation
to acquire participations pursuant to paragraph (a) above in respect of Letters
of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or Event of Default hereunder or the termination of the LC Commitment or the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
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SECTION 3.03. LC Fee. The Borrower agrees to pay to the Administrative
Agent for the account of the Participating Lenders for each calendar quarter (or
shorter period commencing with the date hereof or ending with the first date on
which the LC Commitment shall have expired or been terminated and there shall be
no Outstanding Letters of Credit) a fee (the "LC Fee") on the average daily
amount of the aggregate Outstanding Letters of Credit issued for the account of
the Borrower during such quarter or shorter period at a rate per annum equal to
the higher of (i) the weighted average LIBOR Spread applicable to Eurodollar
Revolving Loans during such period minus 1/2 of 1% and (ii) 1%. The LC Fee shall
be computed on the basis of the actual number of days elapsed over a year of 360
days. The Administrative Agent agrees to disburse to each Participating Lender
its pro rata portion of such LC Fee promptly upon receipt. The LC Fee shall be
paid in arrears on each March 31, June 30, September 30 and December 31 and on
the LC Maturity Date (or the first date on which the LC Commitment shall have
expired or been terminated and there shall be no Outstanding Letters of Credit,
if earlier). Once paid, the LC Fee shall not be refundable in any circumstances
(other than corrections of error in payment).
SECTION 3.04. Agreement to Repay LC Disbursements. (a) If the Fronting Bank
shall pay any draft presented under a Letter of Credit, the Borrower shall pay
to the Fronting Bank an amount equal to the amount of such draft not later than
two hours after the Borrower shall have received notice from the Fronting Bank
that payment of such draft will be made or, if the Borrower shall have received
such notice later than 10:00 a.m., New York City time, on any Business Day, not
later than 10:00 a.m., New York City time, on the immediately following Business
Day.
(b) The Borrower's obligation to repay the Fronting Bank for LC
Disbursements made by the Fronting Bank under the Outstanding Letters of Credit
for the account of the Borrower shall be absolute, unconditional and irrevocable
under any and all circumstances and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right that
the Borrower or any other Person may at any time have against the
beneficiary under any Letter of Credit, the Fronting Bank, the
Administrative Agent, any Lender or any other Person (other than the
defense of payment in accordance with the terms of this Agreement or a
defense based on the gross negligence or wilful misconduct of the Fronting
Bank) in connection with this Agreement or any other agreement or
transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect, provided
that payment by the Fronting Bank under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or wilful misconduct of the Fronting Bank;
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(iv) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, provided that such payment shall not have
constituted gross negligence or wilful misconduct of the Fronting Bank; and
(v) any other circumstance or event whatsoever, whether or not similar
to any of the foregoing, provided that such circumstance or event shall not
have been the result of gross negligence or wilful misconduct of the
Fronting Bank.
It is understood that in making any payment under a Letter of Credit (i)
the Fronting Bank's exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary equals the amount of such draft
and whether or not any document presented pursuant to such Letter of Credit
proves to be insufficient in any respect, if such document on its face appears
to be in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in any respect
whatsoever, and (ii) any noncompliance in any immaterial respect of the
documents presented under a Letter of Credit with the terms thereof shall, in
each case, not be deemed wilful misconduct or gross negligence of the Fronting
Bank.
SECTION 3.05. Letter of Credit Operations. The Fronting Bank shall, within
a reasonable time after its receipt thereof, examine all documents purporting to
represent a demand for payment under an Outstanding Letter of Credit to
ascertain that the same appear on their face to be in conformity with the terms
and conditions of such Outstanding Letter of Credit. The Fronting Bank shall as
promptly as possible give electronic or facsimile notification or telephonic
notification, promptly confirmed by electronic or facsimile notice, to the
Borrower of such demand for payment and of the determination by the Fronting
Bank as to whether such demand for payment was in conformity with such terms and
conditions, and shall as promptly as possible give prior telephonic notification
to the Borrower of the determination by the Fronting Bank as to whether such
demand for payment was in accordance with the terms and conditions of such
Outstanding Letter of Credit and whether the Fronting Bank has made or will make
an LC Disbursement thereunder, provided that the failure to give such notice
shall not relieve the Borrower of its obligation to reimburse the Fronting Bank
with respect to any such LC Disbursement.
SECTION 3.06. Termination of LC Commitment. The Borrower may permanently
terminate, or from time to time in part permanently reduce, the LC Commitment,
in each case upon at least three Business Days' prior written or facsimile
notice to the Administrative Agent and the Fronting Bank, provided that, after
giving effect to such termination or reduction, the LC Commitment shall not be
less than the LC Exposure at such time or greater than the available Revolving
Credit Commitments at such time.
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SECTION 3.07. Fronting Bank Fees. (a) The Borrower shall pay to the
Fronting Bank, for its own account, such commissions, issuance fees, transfer
fees and other fees and charges in connection with the issuance or
administration of each Letter of Credit as the Borrower and the Fronting Bank
shall agree upon.
(b) The Borrower shall pay to the Fronting Bank, for its own account, a
fronting fee on the average daily aggregate maximum amount available to be drawn
(assuming compliance with all conditions to drawing) under all Outstanding
Letters of Credit issued by the Fronting Bank, at a rate per annum agreed upon
by the Borrower and the Fronting Bank, payable in arrears on each March 31, June
30, September 30 and December 31, and on the LC Maturity Date. Such fronting and
origination fees shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.
SECTION 3.08. Resignation or Removal of the Fronting Bank. (a) The Fronting
Bank may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Fronting Bank, the Administrative Agent
and the Lenders. Upon any such resignation or removal, the Borrower shall
(within 180 days after such notice of resignation or removal) either (i) appoint
a Lender (with the consent of such Lender) as successor or (ii) terminate the
unutilized LC Commitment; provided, however, that if the Borrower elects to
terminate the unutilized LC Commitment, the Borrower may at any time thereafter
that the Revolving Credit Commitments are in effect reinstate the LC Commitment,
by notice to the Administrative Agent and the Lenders, in connection with the
appointment of a Lender as successor Fronting Bank. Subject to paragraph (b)
below, upon the acceptance of any appointment as the Fronting Bank hereunder by
a successor Fronting Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Fronting Bank and
the retiring Fronting Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(c). The acceptance of any appointment as the Fronting
Bank hereunder by a successor Lender shall be evidenced by an agreement entered
into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Fronting Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term "Fronting
Bank" shall be deemed to refer to such successor or to any previous Fronting
Bank, or to such successor and all previous Fronting Banks, as the context shall
require.
(b) After the resignation or removal of the Fronting Bank hereunder, the
retiring Fronting Bank shall remain a party hereto and shall continue to have
all the rights and obligations of the Fronting Bank under this Agreement and the
other Loan Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue additional
Letters of Credit.
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SECTION 3.09. Cash Collateralization. If any Event of Default shall occur
and be continuing, the Borrower shall, on the Business Day it receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Participating Lenders holding participations in
Outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all Outstanding Letters of Credit) thereof and the amount to
be deposited, deposit in an account with the Collateral Agent, for the benefit
of the Participating Lenders, an amount in cash equal to the LC Exposure as of
such date. Such deposit shall be held by the Collateral Agent as collateral for
the payment and performance of the Obligations. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits in Permitted Investments, which investments shall be made at the option
and sole discretion of the Collateral Agent, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall (a) automatically be applied by the
Administrative Agent to reimburse the Fronting Bank for LC Disbursements for
which it has not been reimbursed, (b) be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time and
(c) if the maturity of the Loans has been accelerated (but subject to the
consent of Participating Lenders holding participations in Outstanding Letters
of Credit representing greater than 50% of the aggregate undrawn amount of all
Outstanding Letters of Credit), be applied to satisfy the Obligations. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.
SECTION 3.10. Additional Fronting Banks. The Borrower may, at any time and
from time to time with the consent of the Senior Managing Agents (which consent
shall not be unreasonably withheld) and such Lender, designate one or more
additional Lenders to act as a fronting bank under the terms of this Agreement.
Any Lender designated as a fronting bank pursuant to this Section 3.10 shall be
deemed to be the "Fronting Bank" (in addition to being a Lender) in respect of
Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the Fronting Bank
and such Lender.
ARTICLE IV
Representations and Warranties
Each of JSC, JSCE and the Borrower represents and warrants to each of the
Lenders, the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank and the Swingline Lender that:
SECTION 4.01. Organization; Powers. Each of the Loan Parties (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its
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organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted, (c) is qualified to do
business in every jurisdiction where such qualification is required by the
nature of its business, the character and location of its property, business or
customers, or the ownership or leasing of its properties, except for such
jurisdictions in which the failure so to qualify, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 4.02. Authorization. The execution, delivery and performance by
each of the Loan Parties of each of the Loan Documents to which it is a party,
the Borrowings hereunder, the issuance of the Letters of Credit, the use of the
proceeds of the Loans, the Swingline Loans and the Letters of Credit, the
creation of the security interests contemplated by the Security Documents and
the other transactions contemplated by the Loan Documents (all the foregoing,
collectively, the "Transactions") (a) have been duly authorized by all requisite
corporate and, if required, stockholder action and (b) will not (i) violate (A)
any provision of law, statute, rule or regulation, other than any law, statute,
rule or regulation the violation of which could not reasonably be expected to
result in a Material Adverse Effect, or of the certificate of incorporation or
other constitutive documents or by-laws of any Loan Party or any of their
respective Subsidiaries, (B) any order of any Governmental Authority or (C) any
provision of any indenture or other material agreement or other material
instrument to which any Loan Party or any of their respective Subsidiaries is a
party or by which any of them or any of their property is or may be bound, (ii)
constitute (alone or with notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or (iii) result in the creation or
imposition of any Lien (other than any Lien created hereunder or under the
Security Documents) upon or with respect to any property or assets now owned or
hereafter acquired by any Loan Party or any of their respective Subsidiaries.
SECTION 4.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower, JSC and JSCE and constitutes, and each other Loan
Document when executed and delivered by JSC, JSCE and the Borrower and each Loan
Party party thereto will constitute, a legal, valid and binding obligation of
JSC, JSCE, the Borrower and the Loan Parties, as applicable, enforceable against
each of them in accordance with its terms (a) except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) subject to general principles of equity.
SECTION 4.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright Office
to perfect the security interests that can be perfected by such filings, (b)
recordation of the Mortgages, (c) such actions, consents, approvals,
registrations and filings set
62
forth on Schedule 4.04 and (d) such actions, consents, approvals, registrations
and filings as have been made or obtained and are in full force and effect.
SECTION 4.05. Financial Statements. Each of JSC, JSCE and the Borrower has
delivered to the Lenders the audited financial statements of such Person for the
fiscal year ended December 31, 1997, together with such Person's annual report
on Form 10-K, if any, filed with the Securities and Exchange Commission. All
financial statements set forth or referred to in the materials specified in the
preceding sentence were prepared in conformity with GAAP. All such financial
statements fairly present the consolidated financial position of such Person and
its Subsidiaries as at the date thereof and the consolidated results of
operations and changes in financial position of such Person and its Subsidiaries
for each of the periods covered thereby. Except as disclosed in such financial
statements, none of JSC, JSCE or the Borrower or any of their respective
Subsidiaries had, at the date of such financial statements or on the Closing
Date, as the case may be, any material contingent obligation, material
contingent liability or material liability for taxes, long-term lease or unusual
forward or long-term commitment or obligations to retired employees for medical
or other employee benefits that is not reflected in the foregoing financial
statements or the notes thereto.
SECTION 4.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, properties, prospects or
condition (financial or otherwise) of JSC and its consolidated Subsidiaries,
taken as a whole, since December 31, 1997.
SECTION 4.07. Title to Properties; Possession Under Leases. (a) Each of
JSC, JSCE and the Borrower and their respective Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its material
properties and assets, except for minor defects in title that do not interfere
in any material respect with its ability to conduct its business as currently
conducted. All such title to, or leasehold interest in, material properties and
assets are free and clear of Liens, other than Liens expressly permitted by
Section 7.02 (none of which is superior to the Liens created hereunder or under
the Security Documents) and Liens with respect to which the Collateral Agent has
received on or prior to the Closing Date duly executed releases and termination
statements in connection therewith.
(b) Each of JSC, JSCE and the Borrower and their respective Subsidiaries
has complied with all obligations under all material leases to which it is a
party and enjoys peaceful and undisturbed possession under all such material
leases necessary in any material respect for the operation of their respective
properties and assets.
SECTION 4.08. Subsidiaries. Schedule 4.08 sets forth as of the date hereof
a list of all the Subsidiaries of JSC, JSCE and the Borrower, their jurisdiction
of organization and the percentage ownership interest of each of them and any
other Subsidiary therein. The capital stock of each of the Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and, except as set
forth on Schedule 4.08, is owned free and clear of all Liens other than
nonconsensual Permitted Liens arising other than as a result of a voluntary act
of JSC, JSCE or
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the Borrower. No authorized but unissued treasury shares of capital stock of the
Borrower or any such Subsidiary are subject to any option, warrant, right to
call or commitment of any kind or character except as set forth on Schedule
4.08.
SECTION 4.09. Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 4.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of JSC, JSCE or the Borrower, threatened against or affecting JSC,
JSCE or the Borrower or any of their respective Subsidiaries or any business or
property of any such Person that (i) involve any Loan Document or the
Transactions or (ii) could reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect.
(b) Neither JSC, JSCE, the Borrower and their respective Subsidiaries nor
any of their respective properties or assets is (i) in violation of, nor will
the continued operation of their properties and assets as currently conducted
violate, any law, rule, regulation, statute (including any zoning, building,
environmental and safety law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting the Mortgaged
Properties, where such violations could reasonably be expected to have a
material adverse effect on the value, use or operation of any such Mortgaged
Property or (ii) in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such defaults, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. The issuance of the Letters of Credit will not violate any
applicable law or regulation or violate or be prohibited by any judgment, writ,
injunction, decree or order of any Governmental Authority.
SECTION 4.10. Agreements. None of JSC, JSCE or the Borrower or any of their
respective Subsidiaries is in default under any provision of any indenture or
other agreement or instrument evidencing Indebtedness, or any other agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.11. Federal Reserve Regulations. (a) None of JSC, JSCE or the
Borrower or any of their respective Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock. (b) No part of the proceeds of
any Letter of Credit or any Loan or Swingline Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose or (ii) for any purpose that entails a violation of,
or is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, T, U or X.
SECTION 4.12. Investment Company Act; Public Utility Holding Company Act.
None of JSC, JSCE or the Borrower or any of their respective Subsidiaries (a) is
an "investment
64
company" as defined in, or is subject to regulation under, the
Investment Company Act of 1940 or (b) is a "holding company" as defined in, or
is subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 4.14. Tax Returns. Each of JSC, JSCE and the Borrower and their
respective Subsidiaries has filed or caused to be filed all Federal, state and
local income and other material tax returns required to have been filed by it or
with respect to it and has paid or caused to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it or with respect
to it, except taxes that are being contested in good faith by appropriate
proceedings and for which it has set aside on its books adequate reserves in
accordance with GAAP.
SECTION 4.15. No Material Misstatements. The information provided by or on
behalf of the Loan Parties and contained in the Confidential Information
Memorandum (including all attachments and exhibits thereto), as supplemented,
and as supplemented further by information heretofore provided in writing by or
on behalf of the Loan Parties to the Lenders and any other materials, documents
and information that the Loan Parties or any of their respective Affiliates may
have furnished to the Lenders, was as of the date of such Confidential
Information Memorandum, the dates otherwise specified therein or the dates upon
which such information was provided, accurate in all material respects and does
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, taken as a whole, not misleading,
provided that to the extent any such information therein was based upon or
constitutes a forecast or projection, JSC, JSCE and the Borrower represent only
that they acted in good faith and utilized reasonable assumptions, due and
careful consideration and the information actually known to Responsible Officers
at the time in the preparation of such information.
SECTION 4.16. Employee Benefit Plans. Each of JSC, JSCE and the Borrower
and their respective ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No Reportable Event has occurred in
respect of any Plan of JSC, JSCE or the Borrower or any ERISA Affiliate. The
present value of all benefit liabilities under each Plan (based on those
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed by more than $25,000,000 the value of the assets
of such Plan, and the present value of all benefit liabilities of all
underfunded Plans (based on those assumptions used to fund each such Plan) did
not, as of the last annual valuation dates applicable thereto, exceed by more
than $25,000,000 the value of the assets of all such underfunded Plans. None of
JSC, JSCE or the Borrower or any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Effect. None of JSC, JSCE or
the Borrower or any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization or has been terminated
65
within the meaning of Title IV of ERISA and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated where such reorganization
or termination has resulted or could reasonably be expected to result, through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect.
SECTION 4.17. Environmental and Safety Matters. Except as set forth on
Schedule 4.17:
(a) Each of JSC, JSCE and the Borrower and each of their respective
Subsidiaries has obtained all permits, licenses and other authorizations
that are required and material with respect to the operation of the
business of JSC and its Subsidiaries, taken as a whole, under any
Environmental Law, and each such permit, license and authorization is in
full force and effect.
(b) Each of JSC, JSCE and the Borrower and each of their respective
Subsidiaries is in compliance with all material terms and conditions of the
permits, licenses and authorizations specified in Section 4.17(a), and is
also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Law applicable to it and its
business, assets, operations and properties, including those arising under
the Resource Conservation and Recovery Act of 1976, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), the Federal Water Pollution Control Act, the Federal Clean
Air Act, and the Toxic Substances Control Act and any analogous or
comparable state laws, except for such instances of noncompliance that
could not reasonably be expected to result in a Material Adverse Effect.
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of JSC, JSCE or the Borrower or any of their respective
Subsidiaries, after inquiry, threatened against JSC, JSCE or the Borrower
or any of their respective Subsidiaries under any Environmental Law that
could reasonably be expected to result in a Material Adverse Effect.
(d) None of JSC, JSCE, the Borrower or any of their respective
Subsidiaries has received notice that it has been identified as a
potentially responsible party under CERCLA or any comparable state law, nor
has JSC, JSCE, the Borrower or any of their respective Subsidiaries
received any notification that any hazardous substances or any pollutant or
contaminant, as defined in CERCLA and its implementing regulations, or any
toxic substance, hazardous waste, hazardous constituents, hazardous
materials, asbestos or asbestos containing material, polychlorinated
biphenyls, petroleum, including crude oil and any fractions thereof, or
other wastes, chemicals, substances or materials regulated by any
Environmental Laws (collectively, "Hazardous Materials") that it or any of
their
66
respective predecessors in interest has used, generated, stored, tested,
handled, transported or disposed of, has been found at any site at
which any Governmental Authority or private party is conducting a remedial
investigation or other action pursuant to any Environmental Law, except in
each case for any such notices received after the date hereof that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(e) There have been no releases or threatened releases (in each case
as defined in CERCLA) of Hazardous Materials by JSC, JSCE, the Borrower or
any of their respective Subsidiaries on, upon, into or from any of the Real
Properties, which releases or threatened releases could reasonably be
expected to result in a Material Adverse Effect. To the best knowledge of
JSC, JSCE, the Borrower and each of their respective Subsidiaries, there
have been no such releases or threatened releases on, upon, under or into
any real property in the vicinity of any of the Real Properties that,
through soil, surface water or groundwater migration or contamination, may
be located on, in or under such Real Properties and which could reasonably
be expected to result in a Material Adverse Effect.
(f) To the best knowledge of JSC, JSCE, the Borrower or any of their
respective Subsidiaries, there is no asbestos in, on, or at any Real
Properties or any facility or equipment of JSC, JSCE, the Borrower, or any
of their respective Subsidiaries, except to the extent that the presence of
such material could not reasonably be expected to result in a Material
Adverse Effect.
(g) To the best knowledge of JSC, JSCE, the Borrower and each of their
respective Subsidiaries after due inquiry, none of the Real Properties of
JSC, JSCE, the Borrower or any of their respective Subsidiaries is (i)
listed or proposed for listing on the National Priorities List under CERCLA
or (ii) listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any Governmental Authority.
(h) There are no past or current events, conditions, circumstances,
activities, practices, incidents, actions or plans that could reasonably be
anticipated to interfere with or prevent compliance with any Environmental
Law, or which may give rise to liability under any Environmental Law, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing or notice of violation, study or investigation, based on or related
to the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport, shipping or handling, or the emission,
discharge, release or threatened release into the environment, of any
Hazardous Material that could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.18. Solvency. After giving effect to the Transactions to occur on
the Closing Date, (a) the fair salable value of the assets of JSC, JSCE and the
Borrower and their respective Subsidiaries, on a consolidated basis, will exceed
the amount that will be required to be paid on
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or in respect of the existing debts and other liabilities (including contingent
liabilities) of JSC, JSCE and the Borrower and their respective Subsidiaries, on
a consolidated basis, as they mature, (b) the assets of JSC, JSCE and the
Borrower and their respective Subsidiaries, on a consolidated basis, will not
constitute unreasonably small capital to carry out their businesses as conducted
or as proposed to be conducted, including the capital needs of JSC, JSCE and the
Borrower and their respective Subsidiaries, on a consolidated basis (taking into
account the particular capital requirements of the businesses conducted by such
entities and the projected capital requirements and capital availability of such
businesses) and (c) none of JSC, JSCE or the Borrower intend to, nor do they
intend to permit any of their respective Subsidiaries to, and do not believe
that any of them or any such Subsidiary will, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be received by each of them or any such Subsidiary and the amounts to be
payable on or in respect of its obligations).
SECTION 4.19. Security Documents. (a) The Pledge Agreement creates in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Pledge Agreement) and proceeds thereof and constitutes a fully perfected
first priority Lien on, and security interest in, all right, title and interest
of the Loan Parties party thereto, as applicable, in such Collateral and the
proceeds thereof, in each case prior and superior in right to any other Person.
(b) The Security Agreement creates in favor of the Collateral Agent, for
the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the Security Agreement) and
proceeds thereof, and assuming that financing statements in appropriate form
have been filed in the offices specified on Schedule 4.19(b), the Lien created
under the Security Agreement constitutes a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof (except insofar as the perfection of a Lien
on, and security interest in, such Collateral is obtained as described in
paragraph (d) below), in each case prior and superior in right to any other
Person.
(c) The Mortgages create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable Lien on all of
the Borrower's right, title and interest in and to the Mortgaged Properties
thereunder and the proceeds thereof, and when the Mortgages are filed in the
offices specified on Schedule 4.19(c), the Mortgages will constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Borrower in such Mortgaged Properties and the proceeds thereof, in each case
prior and superior in right to any other Person.
(d) The Trademark Security Agreement creates in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the Trademark
Security Agreement) and the proceeds thereof, and assuming the recordation of
such Trademark Security Agreement with the United States Patent and Trademark
Office and the United States Copyright Office, together with financing
statements in appropriate form filed in the offices specified on Schedule
4.19(d), the Liens created under the Trademark Security Agreement constitute a
fully perfected Lien on, and security interest in, all
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right title and interest of the Loan Parties in the Collateral and the proceeds
thereof in which a security interest may be perfected by filing in the United
States and its territories and possessions, in each case prior and superior in
right to any other Person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright Office
may be necessary to perfect a Lien on registered trademarks, trademark
applications and copyrights acquired by the Loan Parties after the date hereof).
(e) The SNC Security Agreement creates in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the SNC Security Agreement)
and proceeds thereof, and assuming that financing statements in appropriate form
have been filed in the offices specified on Schedule 4.19(e), the Lien created
under the SNC Security Agreement constitutes a fully perfected Lien on, and
security interest in, all right, title and interest of SNC in such Collateral,
in each case prior and superior in right to any other Person.
SECTION 4.20. Labor Matters. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against JSC, JSCE or the Borrower or
any of their respective Subsidiaries pending or, to the knowledge of JSC, JSCE
or the Borrower, threatened, except as set forth on Schedule 4.20. The hours
worked by and payment made to employees of JSC, JSCE or the Borrower have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, where such
violations could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. The consummation of the Transactions will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which JSC, JSCE or the
Borrower or any of their respective Subsidiaries is a party or by which JSC,
JSCE or the Borrower or any of their respective Subsidiaries is bound on the
Closing Date.
SECTION 4.21. Location of Real Property. (a) Schedule 4.21(a) sets forth
completely and correctly as of the date hereof and the Closing Date all material
real property owned by JSC, JSCE or the Borrower or any of their respective
Subsidiaries, the addresses thereof and the county or counties in which such
properties are situated. All the real property set forth on Schedule 4.21(a) is
owned in fee by JSC, JSCE or the Borrower or their respective Subsidiaries.
(b) Schedule 4.21(b) sets forth completely and correctly as of the date
hereof and the Closing Date all material real property leased by JSC, JSCE or
the Borrower or any of their respective Subsidiaries, the addresses thereof and
the county or counties in which such properties are situated. JSC, JSCE or the
Borrower or one of their respective Subsidiaries has a valid lease in all the
Real Property set forth on Schedule 4.21(b).
(c) Schedule 4.21(c) sets forth completely and correctly as of the date
hereof and the Closing Date all material Timberland, if any, owned by JSC, JSCE
or the Borrower or any of their respective Subsidiaries, the county or counties
in which such Timberland is situated and the approximate acreage of such
Timberland in such county or counties. All the Timberland set forth
69
on Schedule 4.21(c) is owned in fee by JSC, JSCE or the Borrower or their
respective Subsidiaries.
SECTION 4.22. Patents, Trademarks, etc. Each of JSC, JSCE and the Borrower
and each of their respective Subsidiaries owns, or is licensed to use, all
patents, trademarks, trade names, copyrights, technology, know-how and
processes, service marks and rights with respect to the foregoing that are (a)
used in or necessary for the conduct of their respective businesses as currently
conducted and (b) material to the business, assets, operations, properties,
prospects or condition (financial or otherwise) of such Person and its
Subsidiaries taken as a whole. The use of such patents, trademarks, trade names,
copyrights, technology, know-how, processes and rights with respect to the
foregoing by such Person and its Subsidiaries does not infringe on the rights of
any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of any such Person and its
respective Subsidiaries that is material to such Person and its Subsidiaries,
taken as a whole. To the best knowledge of each of JSC, JSCE and the Borrower,
its rights and the rights of its Subsidiaries to sell, franchise or license
under such brand names then being used may be transferred in connection with any
sale of assets or stock of the related business by such Person or any of its
Subsidiaries with only such exceptions as would not be material to the Borrower
and its Subsidiaries, in each case, taken as a whole.
ARTICLE V
Conditions
The obligation of each Lender to make Loans hereunder, the obligation of
the Swingline Lender to make Swingline Loans hereunder and the obligation of the
Fronting Bank to issue, amend, extend or renew any Letter of Credit hereunder
(each, a "Credit Event") is subject to the satisfaction of the following
conditions:
SECTION 5.01. All Credit Events. On the date of each Credit Event (other
than any Revolving Loan made pursuant to Section 2.02(e)):
(a) The Administrative Agent and, where applicable, the Fronting Bank
or the Swingline Lender shall have received a notice of such Credit Event
as required by Section 2.03, Section 3.01(f) and Section 2.22(b),
respectively.
(b) The representations and warranties set forth in Article IV hereof
shall be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such
date, except to the extent that such representations and warranties
expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Default
or Event of Default shall have occurred and be continuing.
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Each Credit Event shall be deemed to constitute a representation and warranty by
JSC, JSCE and the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 5.01.
SECTION 5.02. Closing Date. On the Closing Date:
(a) The Lenders shall have received a favorable written opinion of
each of (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President, Secretary and General Counsel
of JSC, JSCE, SNC and the Borrower, substantially in the form of Exhibit
I-1, (ii) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for JSC, JSCE,
SNC and the Borrower, substantially in the form of Exhibit I-2, and (iii)
each local counsel listed on Schedule 5.02(a), substantially in the form of
Exhibit I-3, in each case (A) dated the Closing Date, (B) addressed to the
Senior Managing Agents, the Administrative Agent, the Managing Agents, the
Fronting Bank, the Lenders, the Swingline Lender and the Collateral Agent
and (C) covering such other matters relating to the Loan Documents and the
Transactions as the Senior Managing Agents shall reasonably request. JSC,
JSCE and the Borrower hereby instruct such counsel to deliver such
opinions.
(b) All legal matters incident to this Agreement and the Borrowings
hereunder shall be satisfactory to the Lenders and to Cravath, Swaine &
▇▇▇▇▇, counsel for the Administrative Agent and the Senior Managing Agents.
(c) The Lenders shall have received (i) a copy of the certificate of
incorporation, including all amendments thereto, of each Loan Party,
certified as of a recent date by the Secretary of State of the state of its
organization, and a certificate as to the good standing of each Loan Party
as of a recent date, from such Secretary of State; (ii) a certificate of
the Secretary or Assistant Secretary of each Loan Party dated the Closing
Date and certifying (A) that attached thereto is a true and complete copy
of the by-laws of such Loan Party, as in effect on the Closing Date and at
all times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by such Loan Party, authorizing the execution,
delivery and performance of the Loan Documents to which such Loan Party is
or will be a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect as of the Closing Date, (C) that
the certificate of incorporation of such Loan Party has not been amended
since the date of the last amendment thereto shown on the certificate of
good standing furnished pursuant to clause (i) above and (D) as to the
incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf
of such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such
other
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documents as the Lenders or Cravath, Swaine & ▇▇▇▇▇, counsel for the
Administrative Agent and the Senior Managing Agents, may reasonably
request.
(d) The Lenders shall have received a certificate, dated the Closing
Date and signed by a Financial Officer of each of the Loan Parties,
confirming compliance with the conditions precedent set forth in paragraphs
(b) and (c) of Section 5.01.
(e) The Senior Managing Agents and the Administrative Agent shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date.
(f) The Guarantee Agreement shall have been duly executed by the
Guarantors and delivered to the Collateral Agent, and shall be in full
force and effect.
(g) The Pledge Agreement shall have been duly executed by the Loan
Parties and the Collateral Agent and shall be in full force and effect, all
the outstanding capital stock of JSCE, the Borrower and each other Material
Subsidiary of JSC shall have been duly and validly pledged thereunder to
the Collateral Agent for the ratable benefit of the Secured Parties and
certificates representing such shares, accompanied by stock powers endorsed
in blank, shall be in the actual possession of the Collateral Agent;
provided, however, that JSC need only pledge 65% of the capital stock of
JSC International and the Borrower need only pledge 65% of the capital
stock of CCA de Baja California SA de CV.
(h) Each of the Security Agreement, the SNC Security Agreement and the
Trademark Security Agreement shall have been duly executed by the Loan
Parties thereto and the Collateral Agent and shall be in full force and
effect, and each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the Collateral Agent
to be filed, registered or recorded in order to create in favor of the
Collateral Agent for the benefit of the Secured Parties a valid and
perfected first-priority security interest in or lien on the Collateral
described in each of such agreements shall have been delivered to the
Collateral Agent.
(i) The Collateral Agent shall have received the results of a search
of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) in which
the chief executive offices of such Persons are located and in the other
jurisdictions in which Uniform Commercial Code filings (or equivalent
filings) are to be made pursuant to Section 5.01(h), together with copies
of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Senior Managing
Agents that the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 7.02 or have been released.
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(j) The Collateral Agent shall have received a Perfection Certificate
with respect to each Loan Party dated the Closing Date and duly executed by
a Financial Officer and the chief legal officer of JSC, JSCE, SNC and the
Borrower.
(k) (i) Each of the Mortgages and the other Security Documents, in
form and substance satisfactory to the Lenders, relating to each of the
Mortgaged Properties shall have been duly executed by the parties thereto
and delivered to the Collateral Agent and shall be in full force and
effect, (ii) none of such Mortgaged Properties shall be subject to any Lien
other than those permitted under Section 7.02, (iii) each of such Security
Documents shall have been filed and recorded in the recording office as
specified on Schedule 4.19(b) (or a lender's title insurance policy, in
form and substance acceptable to the Senior Managing Agents, insuring such
Security Document as a first lien on such Mortgaged Property, shall have
been received by the Lenders) and, in connection therewith, the Senior
Managing Agents shall have received evidence satisfactory to them of each
such filing and recordation and (iv) the Collateral Agent shall have
received such other documents, including policies of title insurance issued
by nationally recognized title insurance companies, together with such
endorsements, coinsurance and reinsurance as may be requested by the Senior
Managing Agents and the other Lenders, insuring the Mortgages as valid
first liens on the Mortgaged Properties, free of Liens other than those
permitted under Section 7.02, together with such surveys, abstracts,
appraisals and legal opinions required to be furnished pursuant to the
terms of the Mortgages or as reasonably requested by the Senior Managing
Agents or the other Lenders.
(l) The Collateral Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies of the Loan
Parties and their respective Subsidiaries satisfying the requirements of
Section 6.02 and the applicable provisions of the Security Documents, each
of which shall be endorsed or otherwise amended to include a lender's loss
payable endorsement (except in the case of liability policies) and to name
the Collateral Agent as an additional insured, in form and substance
reasonably satisfactory to the Collateral Agent.
(m) The Borrower shall have repaid in full the principal of all loans
outstanding, and other amounts due under, the Existing Credit Agreement and
under each agreement related thereto (other than the Existing Letters of
Credit), all commitments to lend thereunder shall have been permanently
terminated, all security interests related thereto shall have been
discharged and the Senior Managing Agents shall have received duly executed
documentation either evidencing or necessary for such repayment,
termination and discharge, in form satisfactory to the Senior Managing
Agents.
(n) After giving effect to the Transactions on the Closing Date, no
Loan Party shall have any Indebtedness other than (i) Indebtedness under
the Loan Documents, (ii) the 1993 Senior Notes, (iii) the Senior Notes and
(iv) other Indebtedness permitted under Section 7.01.
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(o) The Lenders shall be satisfied as to the amount and nature of any
environmental and employee health and safety exposures to which any Loan
Party or any Subsidiary of a Loan Party may be subject and the plans of any
such Person with respect thereto.
(p) All requisite Governmental Authorities and third parties (in each
case to the extent required) shall have approved or consented to the
Transactions contemplated hereby to the extent required, and there shall be
no governmental or judicial action, actual or threatened, that has or would
have a reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the Transactions.
(q) There shall be no litigation or administrative proceedings or
other legal or regulatory developments, actual or threatened, that, in the
judgment of the Lenders, would reasonably to be expected to have a material
adverse effect on the business, assets, liabilities, operations,
properties, prospects or condition (financial or otherwise) of or relating
to (i) the Loan Parties and their respective Subsidiaries, taken as a
whole, (ii) the ability of the Loan Parties or any of their respective
Subsidiaries to perform their obligations under the Loan Documents, (iii)
the ability of the parties to consummate the Transactions or (iv) the
validity or enforceability of any of the Loan Documents or the rights,
remedies and benefits available to the Senior Managing Agents, the
Administrative Agent, the Managing Agents, the Fronting Bank, the Swingline
Lender, the Collateral Agent and the Lenders under the Loan Documents, or
which would be materially inconsistent with the assumptions underlying the
projections contained in the Confidential Information Memorandum.
(r) The consummation of the Transactions will not (i) violate any
applicable law, statute, rule or regulation or (ii) conflict with, or
result in a default or event of default under, (A) any indenture relating
to any existing Indebtedness of the Borrower or any of its Subsidiaries
that is not being repaid, repurchased or redeemed in full on or prior to
the Closing Date or (B) any other agreement of the Borrower or any of its
Subsidiaries and the Lenders shall have received one or more legal opinions
to such effect, on terms satisfactory to the Lenders, from counsel to the
Borrower.
(s) There shall not have occurred or become known to JSC, JSCE or the
Borrower any material adverse condition affecting, or material adverse
change with respect to, the condition (financial or otherwise), operations,
business, assets, liabilities (including contingent liabilities) or
prospects of the Borrower and its subsidiaries, taken as a whole, since
December 31, 1997.
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ARTICLE VI
Affirmative Covenants
Each of JSC, JSCE and the Borrower covenants and agrees with each Lender,
the Administrative Agent, each Senior Managing Agent and Managing Agent, the
Fronting Bank and the Swingline Lender that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or Swingline Loan or any LC Disbursement, Fees or any other
expenses or amounts payable under any Loan Document shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will, and will cause
each of its Subsidiaries to:
SECTION 6.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise permitted under Section 7.05.
(b) Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect the rights, licenses, permits, trademarks, trade names,
privileges and franchises necessary or desirable in the normal conduct of its
business, except for any trademarks, trade names or franchises that are not
material to the business of the Borrower and its Subsidiaries taken as a whole;
maintain and operate such business in substantially the manner in which it is
currently conducted and operated; and at all times keep all property useful and
necessary in its business in good, working order and condition to the extent
required by sound business practices.
SECTION 6.02. Insurance. Keep its insurable properties adequately insured
at all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies of
established repute in the same general area engaged in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it or the use of
any products sold by it; and maintain such other insurance as may be required by
law and, with respect to the Mortgaged Properties, as is required by the
Mortgages.
SECTION 6.03. Obligations and Taxes. Pay and discharge promptly when due
all taxes, assessments and governmental charges or levies imposed upon it or
upon or in respect of its property or assets, as well as all claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such obligation, tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books, in accordance with GAAP, adequate reserves with respect
thereto and such contest operates to suspend enforcement
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of a Lien and, in the case of a Mortgaged Property or other material property or
asset, there is no material risk of forfeiture of such property.
SECTION 6.04. Financial Statements, Reports, etc. Furnish to the
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender and each Lender:
(a) in the case of JSC, within 90 days after the end of each fiscal
year, its consolidated balance sheets and related statements of operations,
stockholders' equity and cash flows, showing the financial condition of
such Person and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, all audited by Ernst & Young LLP or other
independent auditors of recognized national standing acceptable to the
Required Lenders and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition
and results of operations of such Person on a consolidated basis in
accordance with GAAP;
(b) in the case of JSC, within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, (i) its consolidated
balance sheets and related statements of operations, stockholders' equity
and cash flows, showing the financial condition of such Person and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries during
such fiscal quarter and the then-elapsed portion of the fiscal year and
(ii) a narrative discussion of the results of operations of JSC in a form
reasonably satisfactory to the Senior Managing Agents (it being understood
that, in the case of clause (i) above, such information shall be in
reasonable detail and certified by a Financial Officer of JSC, as fairly
presenting the financial condition and results of operations of JSC on a
consolidated basis in accordance with GAAP, subject to normal year-end
audit adjustments);
(c) in the case of JSC, within 30 days after the end of each month
(other than the last month of any fiscal quarter), its consolidated balance
sheets and related statements of operations, stockholders' equity and cash
flows, showing the financial condition of such Person and its consolidated
Subsidiaries as of the close of such month and the results of its
operations and the operations of such Subsidiaries during such month and
the then-elapsed portion of the fiscal year;
(d) concurrently with any delivery of financial statements of JSC
under paragraph (a) or (b) above, a certificate of a Financial Officer of
such Person (i) certifying that, after due investigation and reasonable
inquiry, no Default or Event of Default has occurred or, if such a Default
or Event of Default has occurred, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail
satisfactory to the Senior
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Managing Agents of the ratios contemplated by Section 2.06(c) and
demonstrating compliance with the covenants contained in Sections 7.01,
7.02, 7.03, 7.04, 7.06, 7.13, 7.14 and 7.15;
(e) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm opining on such
statements (which certificate may be limited to accounting matters and
disclaim responsibility for legal interpretations) certifying (i) whether
in connection with its audit examination any Default or Event of Default
has come to its attention and, if such event has come to its attention, the
nature and extent thereof and (ii) that based on its audit examination,
nothing has come to its attention that leads it to believe that the
information contained in the certificate delivered therewith pursuant to
paragraph (d) above is not correct;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials (other
than (i) the exhibits to registration statements and (ii) any registration
statements on Form S-8 or its equivalent) filed by JSC, JSCE, the Borrower
or SNC or any of their respective Subsidiaries with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of or
all the functions of such Commission, or with any national securities
exchange, or distributed to any such Person's shareholders (other than JSC,
JSCE, or the Borrower), as the case may be;
(g) as soon as available, and in any event no later than 60 days after
each fiscal year, a consolidated annual plan, prepared in accordance with
JSC's normal accounting procedures applied on a consistent basis, for the
next fiscal year of JSC;
(h) upon the earlier of (i) 90 days after the end of each fiscal year
of JSC and (ii) the date on which the financial statements of JSC are
delivered pursuant to paragraph (a) above, a certificate of a Financial
Officer of JSC setting forth, in detail satisfactory to the Senior Managing
Agents, the amount of Excess Cash Flow, if any, for such fiscal year;
(i) promptly from time to time, such other information regarding the
operations, business affairs and financial condition of JSC, JSCE, the
Borrower or SNC, or compliance with the terms of any Loan Document, as the
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender or any Lender may reasonably request;
and
(j) a copy of all notices (other than notices regarding any scheduled
or mandatory repayments), certificates, financial statements and reports,
as and when delivered by or on behalf of the Borrower to the holders of any
Subordinated Indebtedness, Senior Notes or 1993 Senior Notes.
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SECTION 6.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender, the Collateral Agent and each Lender prompt
written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any notice to any Loan Party or
any Subsidiary thereof of the intention of any Person to file or commence,
any action, suit or proceeding (whether at law or in equity or by or before
any Governmental Authority or any arbitrator, against any Loan Party or any
Subsidiary thereof) that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect; and
(d) any transaction, event or development that results in any Loan
Party or any Subsidiary thereof owning a parcel (or adjoining parcels) of
real property or Timberland Property that (i) is not a Mortgaged Property
and (ii) has a fair market value, as reasonably determined in good faith by
the board of directors of such Loan Party (such property being referred to
herein as "After-Acquired Mortgage Property"), in excess of $500,000.
SECTION 6.06. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA and (b) furnish to the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the Swingline
Lender and each Lender (i) as soon as possible after, and in any event within 30
days after any Responsible Officer of JSC, JSCE or the Borrower or any ERISA
Affiliate either knows or has reason to know that any Reportable Event has
occurred that alone or together with any other Reportable Event could reasonably
be expected to result in liability of JSC, JSCE or the Borrower or any of their
respective Subsidiaries to the PBGC in an aggregate amount exceeding $5,000,000,
a copy of the notice of such event required to be given to the PBGC or, if
notice is not so required, a statement of a Financial Officer of JSC, JSCE or
the Borrower, as the case may be, setting forth in reasonable detail the nature
of such event and the action proposed to be taken with respect thereto, (ii)
promptly after receipt thereof, a copy of any notice JSC, JSCE or the Borrower
or any ERISA Affiliate may receive from the PBGC relating to the intention of
the PBGC to terminate any Plan or Plans (other than a Plan maintained by an
ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) or to appoint a trustee to
administer any Plan or Plans, (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code of a notice of failure to
make a required installment or other payment with respect to a Plan, a copy of
such notice and a statement of a Financial Officer of JSC, JSCE or the Borrower,
as the case may be, setting forth in reasonable detail the nature of such
failure and the action proposed to be taken with respect thereto and (iv)
promptly and in
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any event within 30 days after receipt thereof by JSC, JSCE or the Borrower or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each
notice received by JSC, JSCE or the Borrower or any ERISA Affiliate concerning
(A) the imposition of Withdrawal Liability or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in reorganization, in
each case within the meaning of Title IV of ERISA.
SECTION 6.07. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any
representatives designated by the Administrative Agent, the Senior Managing
Agents, the Managing Agents, the Fronting Bank, the Swingline Lender, the
Collateral Agent or any Lender to visit and inspect the properties and financial
records of the Loan Parties and any Subsidiary thereof at reasonable times and
upon reasonable notice and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender, the Collateral Agent or any
Lender to discuss at such reasonable times and at such reasonable intervals as
may be reasonably requested the affairs, finances and condition of any Loan
Party or any Subsidiary thereof or any properties of any Loan Party or any
Subsidiary thereof with the officers thereof and independent accountants
therefor.
SECTION 6.08. Use of Proceeds. Use the proceeds of the Loans and the
Letters of Credit solely for the purposes set forth in the introductory
statement to this Agreement.
SECTION 6.09. Compliance with Law. Comply with the requirements of all
applicable laws, rules, regulations, court orders and decrees, and orders of any
Governmental Authority, that are applicable to it or to any of its properties,
except where noncompliance could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 6.10. Further Assurances. (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust), that may be required under applicable
law or which the Required Lenders, the Administrative Agent, either Senior
Managing Agent or the Collateral Agent may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and in order to
grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security Documents.
(b) In addition, from time to time, the Loan Parties, at their cost and
expense, will promptly secure the Obligations by pledging or creating, or
causing to be pledged or created, perfected security interests with respect to
such of their assets and properties as the Administrative Agent, either Senior
Managing Agent or the Required Lenders shall designate (it being understood that
it is the intent of the parties that the Obligations shall be secured by, among
other things, substantially all the assets of the Loan Parties and their
respective Subsidiaries (including real and other properties acquired after the
date hereof, but excluding (i) Program
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Receivables and (ii) the real properties and fixtures owned on the date hereof
by SNC). Such security interests and Liens will be created under the Security
Documents or such other security agreements, mortgages, deeds of trust and other
instruments and documents as are satisfactory to the Required Lenders, and JSC,
JSCE or the Borrower shall deliver or cause to be delivered to the Lenders all
such instruments and documents (including legal opinions, title insurance
policies, surveys and lien searches) as the Administrative Agent, either Senior
Managing Agent or the Required Lenders shall reasonably request to evidence
compliance with this Section 6.10. JSC, JSCE or the Borrower agree to provide
such evidence as the Administrative Agent, either Senior Managing Agent or the
Required Lenders shall reasonably request as to the perfection and priority
status of each such security interest and Lien.
(c) Notwithstanding the provisions of paragraph (b) above, (i) no
After-Acquired Mortgage Property with a fair market value (as determined by the
Collateral Agent in its reasonable judgment, it being understood that the
purchase price shall be indicative thereof) (the "Fair Market Value") of less
than $1,000,000 shall be subject to the provisions of paragraph (b) above and
(ii) each item of After-Acquired Mortgage Property with a fair market value of
at least $1,000,000 but less than $10,000,000 shall not be subject to the
provisions of paragraph (b) above unless and until the aggregate Fair Market
Value of all items of After-Acquired Mortgage Property described in this clause
(ii) acquired after the Closing Date and not pledged to the Collateral Agent
pursuant to the next sentence equals or exceeds $50,000,000. On each occasion
that the Fair Market Value of all items of After-Acquired Mortgage Property
described in clause (ii) of the immediately preceding sentence shall equal or
exceed $50,000,000, all such property (and not merely the portion of the
property in excess of $50,000,000) shall be pledged to the Collateral Agent for
the benefit of the Secured Parties pursuant to paragraph (b) above and, after
such pledge, the provisions of such clause (ii) shall apply to subsequently
acquired After-Acquired Mortgage Property described in such clause.
(d) Except with respect to the Material Subsidiaries contemplated by
Section 7.11(d), cause (i) each Material Subsidiary organized under the laws of
the United States or any political subdivision thereof created or acquired by it
from time to time and (ii) each Subsidiary or Inactive Subsidiary prior to
becoming such a Material Subsidiary, to undertake the obligation of and to
become a Guarantor pursuant to the Guarantee Agreement and a party to the
applicable Security Documents to which it is not then a party pursuant to one or
more instruments or agreements satisfactory in form and substance to the
Collateral Agent. In addition, JSC, JSCE or the Borrower, shall, or shall cause
its Subsidiaries to, pledge the capital stock of any such Subsidiary to the
Collateral Agent for the benefit of the Secured Parties pursuant to a Pledge
Agreement (or supplement to a Pledge Agreement) satisfactory in form and
substance to the Collateral Agent. Furthermore, in the event that any Loan Party
makes a Material Investment, the Investor shall promptly pledge such Investment
to the Collateral Agent pursuant to a Pledge Agreement (or supplement to a
Pledge Agreement) satisfactory in form and substance to the Collateral Agent.
Notwithstanding the foregoing, no Person shall be obligated to pledge more than
65% of the capital stock of any Subsidiary that is organized outside the United
States or a political subdivision thereof.
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(e) In the event that any survey of Mortgaged Property discloses any matter
(including any encroachment or violation of an existing easement or restrictive
covenant) the effect of which is to detract materially from the value of the
property subject thereto or to interfere in any material respect with the
ordinary conduct of the business of any Loan Party or any of their respective
Subsidiaries, such Loan Party shall, upon request by the Administrative Agent,
use reasonable efforts (or cause its Subsidiary that is the user or owner of the
Mortgaged Property in question to use reasonable efforts) to cause such matter
to be corrected or otherwise resolved to the reasonable satisfaction of the
Administrative Agent.
(f) Within 90 days following the Closing Date, (i) each of the Security
Documents, in form and substance satisfactory to the Senior Managing Agents,
relating to the Mortgaged Properties located at (x) ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, (y) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇,
and (z) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, shall have been
duly executed by the parties thereto and delivered to the Collateral Agent and
shall be in full force and effect, (ii) each of such Mortgaged Properties shall
not be subject to any Lien other than those permitted under Section 7.02, (iii)
each of such Security Documents shall have been filed and recorded in the
recording office as specified on Schedule 4.19(c) (or a lender's title insurance
policy, in form and substance acceptable to the Collateral Agent, insuring such
Security Document as a first lien on such Mortgaged Property (subject to any
Lien permitted by Section 7.02) shall have been received by the Collateral
Agent) and, in connection therewith, the Collateral Agent shall have received
evidence satisfactory to it of each such filing and recordation, (iv) the
Collateral Agent shall have received such other documents, including a policy or
policies of title insurance issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and reinsurance as may be
requested by the Collateral Agent and the Lenders, insuring the Mortgages as
valid first liens on the Mortgaged Properties, free of Liens other than those
permitted under Section 7.02, together with such surveys, abstracts, appraisals,
environmental assessments and legal opinions required to be furnished pursuant
to the terms of the Mortgages or as reasonably requested by the Collateral Agent
or the Lenders and (v) the Administrative Agent shall have received, on behalf
of itself, the Senior Managing Agents, the Lenders, the Swingline Lender and the
Fronting Bank, a favorable written opinion of local counsel in each jurisdiction
in which any Mortgaged Property is located, substantially to the effect set
forth in Exhibit H-3, in each case addressed to the Senior Managing Agents, the
Administrative Agent, the Managing Agents, the Fronting Bank, the Lenders, the
Swingline Lender and the Collateral Agent.
SECTION 6.11. Material Contracts. Maintain in full force and effect
(including exercising any available renewal option), and without amendment or
modification, each Material Contract, unless the failure so to maintain any such
Material Contract (or any amendment or modification thereto) could not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
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SECTION 6.12. Environmental Matters. (a) Promptly give notice to the Senior
Managing Agents upon becoming aware of (i) any violation of any Environmental
Law, (ii) any claim, inquiry, proceeding, investigation or other action,
including a request for information or a notice of potential environmental
liability, by or from any Governmental Authority or any third party claimant or
(iii) the discovery of the release of any Hazardous Material at, on, under or
from any of the Real Properties or any facility or equipment thereat in excess
of reportable or allowable standards or levels under any Environmental Law, or
in a manner or amount that could reasonably be expected to result in liability
under any Environmental Law, in each case that could reasonably be expected to
result in a Material Adverse Effect.
(b) Upon discovery of the presence on any of the Real Properties of any
Hazardous Material that is in violation of, or that could reasonably be expected
to result in liability under, any Environmental Law, in each case that could
result in a Material Adverse Effect, take all necessary steps to initiate and
expeditiously complete all remedial, corrective and other action to eliminate
any such adverse effect, and keep the Senior Managing Agents informed of such
actions and the results thereof.
SECTION 6.13. Distribution of Gross Export Revenues. In the case of the
Borrower, cause JSC International to distribute the gross export revenues
received by JSC International from the Borrower (a) to the Borrower in an amount
equal to the portion of gross export revenues that is not tax-exempt under
Section 922 et seq. of the Code as a repayment of the Borrower's advance to JSC
International to the extent thereof, and as a dividend to the extent that such
non-tax-exempt gross export revenues exceed the Borrower's advance to JSC
International, and (b) to the Borrower, as a dividend, in an amount equal to the
portion of gross export revenues that is tax-exempt under the Code, in each case
on the same Business Day that such gross export revenues are received by JSC
International, and in no event later than the next Business Day.
ARTICLE VII
Negative Covenants
Each of JSC, JSCE and the Borrower covenants and agrees with each Lender,
the Administrative Agent, each Senior Managing Agent and Managing Agent, the
Fronting Bank and the Swingline Lender that, so long as this Agreement shall
remain in effect, the LC Exposure shall not equal zero or the principal of or
interest on any Loan or Swingline Loan or any LC Disbursement, Fees or any other
expenses or amounts payable under any Loan Document shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will not, and will not
cause or permit any of its Subsidiaries to:
SECTION 7.01. Indebtedness. Create, incur, assume or permit to exist any
Indebtedness, except, without duplication:
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(a) the 1993 Senior Notes, the Senior Notes and Guarantees in respect
of each thereof, the other Indebtedness existing on the date hereof and set
forth on Schedule 7.01(a) and Indebtedness of JSF incurred pursuant to the
Receivables Program Documents;
(b) in the case of the Borrower, Indebtedness created hereunder and
under the Loan Documents;
(c) in the case of each Guarantor, its Guarantee of the Obligations
pursuant to the Guarantee Agreement;
(d) Indebtedness the net proceeds of which are used substantially
concurrently to refinance Indebtedness described in paragraph (a) above so
long as (i) such refinancing Indebtedness is in an aggregate principal
amount not greater than the aggregate principal amount of the Indebtedness
being refinanced plus the amount of any premiums required to be paid
thereon, (ii) such Indebtedness has a later final maturity than the Tranche
B Maturity Date and a longer weighted average life than the Term Loans and
(iii) each of the covenants, events of default and other provisions thereof
(including any Guarantees thereof) shall be no more adverse to the Lenders
than those contained in the Indebtedness being refinanced unless each of
such provisions is approved in writing by the Required Lenders; provided,
however, that, if the proceeds of Revolving Loans are used to repurchase or
redeem any 10-Year Senior Notes, the Borrower may incur Indebtedness
otherwise meeting the requirements of this paragraph (d) (as if such
Indebtedness were used to refinance such 10-Year Senior Notes) to repay
such Revolving Loans;
(e) in the case of the Borrower and its Material Subsidiaries, Capital
Lease Obligations in an amount not to exceed $300,000,000 when added to the
amount of (i) all other Capital Lease Obligations then existing (other than
Capital Lease Obligations described in paragraph (a) above), (ii) all
outstanding Indebtedness (other than Indebtedness incurred under this
Agreement) created, incurred or assumed in respect of the purchase or
construction price of property and (iii) all outstanding bonds described in
paragraph (i) below;
(f) Indebtedness of the Borrower and the Subsidiaries created,
incurred or assumed in respect of the purchase or construction of property
of the Borrower and the Subsidiaries and any refinancings thereof, provided
that (i) the amount of such Indebtedness, when added to the amount of (x)
all other Indebtedness (other than Indebtedness incurred under this
Agreement) of the Borrower then existing that was created, incurred or
assumed in respect of the purchase or construction of property, (y) all
then-existing Capital Lease Obligations (other than Capital Lease
Obligations described in paragraph (a) above) and (z) all outstanding bonds
described in paragraph (i) below, does not exceed $300,000,000; (ii) such
Indebtedness to be created, incurred or assumed
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in respect of the purchase or construction price of property shall be
so created, incurred or assumed substantially contemporaneously with such
purchase or construction (and in any event not later than 90 days after the
earlier to occur of either the placement in service of, or the final
payment on, such property); and (iii) such Indebtedness is not secured by
any Lien other than a Lien permitted by Section 7.02(a)(vi);
(g) Indebtedness of the Borrower evidencing obligations to make
payments in respect of rights to cut, harvest or otherwise acquire timber
on property owned by any other Person, provided that the aggregate amount
of such Indebtedness shall not exceed $10,000,000 at any time outstanding;
(h) letters of credit that are not secured by any of the Collateral
not exceeding in the aggregate $25,000,000 at any time;
(i) Indebtedness of the Borrower consisting of industrial development
bonds and pollution control bonds, provided that the amount of any such
bonds shall not at any time exceed $300,000,000 when added to the amount of
(i) all other outstanding industrial development bonds and pollution
control bonds, (ii) all then-existing Capital Lease Obligations (other than
Capital Lease Obligations described in paragraph (a) above) and (iii) all
outstanding Indebtedness created, incurred or assumed in respect of the
purchase or construction price of property;
(j) Rate Protection Agreements and Currency Agreements;
(k) Indebtedness incurred in connection with (i) Permitted Equipment
Financings in an aggregate principal amount of up to $100,000,000 or (ii)
Permitted Timber Financings;
(l) Guarantees by JSCE of Indebtedness of the Borrower permitted under
this Section 7.01;
(m) Guarantees of obligations or Indebtedness not otherwise provided
for above, to the extent that such Indebtedness is incurred in the ordinary
course of business and does not exceed $25,000,000 in the aggregate at any
time outstanding;
(n) intercompany loans and advances permitted by Section 7.04; and
(o) Indebtedness of the Borrower to JSF arising because any sale or
purported sale of Program Receivables to JSF is required to be
recharacterized as a loan.
SECTION 7.02. Liens. (a) Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any Person)
now owned or hereafter acquired by it or on any income or revenues or rights in
respect of any thereof, except:
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(i) any Lien created under the Loan Documents;
(ii) Liens securing any Permitted Equipment Financing and any
Permitted Timber Financing;
(iii) the Liens granted pursuant to the Receivables Program Documents;
(iv) Liens securing Indebtedness of P.U.I. not in excess of
$15,000,000 at any time outstanding;
(v) Liens securing Capital Lease Obligations pursuant to Capital
Leases existing on the date hereof;
(vi) Permitted Liens; and
(vii) Liens securing Capital Lease Obligations permitted by Section
7.01(e); provided, however, that any such Lien shall only cover the
property subject to the applicable Capital Lease Obligation.
(b) Enter into any agreement prohibiting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired,
except (i) with respect to specific property encumbered to secure payment of
particular Indebtedness permitted hereunder and Margin Stock and (ii) the Senior
Note Indentures and the 1993 Senior Note Indenture.
SECTION 7.03. Sale/Leaseback Transactions. Enter into any Sale/Leaseback
Transaction other than (a) Permitted Equipment Financings in an aggregate
principal amount of up to $100,000,000 or (b) any Permitted Timber Financing.
SECTION 7.04. Investments, Loans and Advances. Have outstanding or make
any loan or advance to or have or make any Investment in any other Person or
suffer to exist any such loan or advance or Investment, except as set forth on
Schedule 7.04 and except:
(a) Permitted Investments;
(b) loans or advances made by the Borrower or any Subsidiary of the
Borrower to any Domestic Subsidiary of the Borrower and evidenced by an
Intercompany Note, or made by any Subsidiary of the Borrower to the
Borrower, in each case in the ordinary course of business and in an
aggregate amount not to exceed $25,000,000 at any time;
(c) any loans or advances to, or Investments in, any Foreign
Subsidiary and Guarantees provided by the Borrower of obligations of such
Foreign Subsidiary, in the case of this clause (c) in an aggregate amount
not to exceed $25,000,000 at any time;
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(d) loans or advances evidenced by an Intercompany Note and made by
any Loan Party to any other Loan Party;
(e) loans or advances made to each of the Material Subsidiaries
permitted to be created pursuant to Section 7.11(d), provided that (i)
neither of such Material Subsidiaries may hold cash or cash equivalents in
an aggregate amount exceeding $10,000,000 each at any time and (ii) all
such cash and cash equivalents of such Material Subsidiaries shall be
maintained in accounts with one or more Lenders;
(f) Investments consisting of non-cash consideration received in
connection with a sale of assets permitted under Sections 7.05 and 7.16;
and
(g) Investments not described in clauses (a) through (f) above and not
exceeding in the aggregate $200,000,000.
SECTION 7.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
Merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, assign, lease, sublease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all its assets, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other Person except:
(a) if at the time thereof and immediately after giving effect thereto
no Default or Event of Default shall have occurred and be continuing, (i)
any wholly owned Domestic Subsidiary of JSC may merge into or consolidate
with the Borrower in a transaction in which the Borrower is the surviving
corporation and (ii) any wholly owned Domestic Subsidiary of JSC (other
than JSCE or the Borrower) may merge into or consolidate with any other
wholly owned Domestic Subsidiary of JSC in a transaction in which the
surviving entity is a wholly owned Domestic Subsidiary of JSC, provided
that, in each case, (x) no Person other than JSC or a wholly owned Domestic
Subsidiary of JSC receives any consideration and (y) in the event that any
Loan Party is a party to such merger or consolidation and is not the
surviving entity, the surviving entity shall, simultaneously with such
merger or consolidation, assume all the obligations of such Loan Party
hereunder and under the other Loan Documents;
(b) purchases of inventory, equipment and real property in the
ordinary course of business;
(c) acquisitions constituting Consolidated Capital Expenditures
permitted by Section 7.13;
(d) acquisitions constituting Investments permitted by Section 7.04;
and
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(e) the acquisition of assets from, or capital stock or other equity
interests in, any Person (in each case, other than those permitted by
clauses (a) through (d) above) in connection with a Permitted Acquisition
for aggregate consideration of not more than $250,000,000 for all Permitted
Acquisitions made pursuant to this clause (e) during the term of this
Agreement.
SECTION 7.06. Restricted Junior Payments. (a) Declare or make, directly or
indirectly, any Restricted Junior Payment or set aside any amount for any such
purpose, except that any Subsidiary of a Loan Party may declare and pay
dividends or make other distributions to such Loan Party (other than JSC).
(b) Notwithstanding the provisions of Section 7.06(a), (i) JSCE may pay
dividends to JSC, if and to the extent permitted by applicable law, if, at the
time of such payment and immediately after giving effect thereto, (x) no Default
or Event of Default shall have occurred and be continuing and (y) the aggregate
amount of such dividends, together with the aggregate amount of all other cash
dividends paid by JSCE in the fiscal year in which the dividend is proposed to
be paid, shall not exceed the least of (A) the Borrower's Portion of Excess Cash
Flow, (B) 25% of Consolidated Net Income for the fiscal year preceding the year
in which the dividend is proposed to be paid and (C) $22,200,000 and (ii) JSC
may pay dividends to the holders of its Common Stock substantially
contemporaneously with the payment of and out of the proceeds of the dividends
referred to in clause (i) above. The limitations of this Section 7.06 shall not
prohibit JSCE or JSC from paying a dividend within 60 days after declaration
thereof if, on the declaration date, such dividend could have been paid in
compliance with this Section 7.06.
(c) Notwithstanding the provisions of Section 7.06(a), the Borrower may
purchase in the open market shares of Common Stock ("MIP Shares") or options to
purchase shares of Common Stock ("MIP Options"), provided that (i) the sum of
(x) the aggregate purchase price of all MIP Shares (whether purchased directly
in the open market or upon the exercise of MIP Options) and (y) the aggregate
purchase price of all MIP Options, together with the aggregate purchase price of
all shares of JSG purchased and excluded from the term "Investments", in each
case in such fiscal year shall not exceed $15,000,000, (ii) MIP Shares,
including those purchased upon the exercise of MIP Options, shall be purchased
exclusively for subsequent distribution as additional compensation to employees
of the Borrower pursuant to its management incentive program, (iii) the Borrower
shall not knowingly purchase any MIP Shares from any Affiliate (acting as
principal in such transaction) of the Borrower and (iv) at the time of any such
purchase and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.
SECTION 7.07. Transactions with Stockholders and Affiliates. Except to the
extent specifically permitted by the terms of this Agreement, directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity securities of such
Person or with any Affiliate of such Person or of any such holder, on terms that
are less favorable
87
to such Person than those that could be obtained at the time from Persons who
are not such a holder or Affiliate, provided that the foregoing restriction
shall not apply to (a) any transaction between such Person and any of its
Material Subsidiaries or between any of its Material Subsidiaries, (b) customary
fees paid to members of the Board of Directors of such Person and its
Subsidiaries, (c) customary compensation (including salaries and bonuses) paid
to officers and employees of such Person, (d) payments made pursuant to the Tax
Sharing Agreement, (e) management and financial services provided by the
Borrower to its Subsidiaries and other entities in which the Borrower has
Investments to the extent that such services are provided by the Borrower in the
ordinary course of its business and senior management of the Borrower has
determined that the providing of such services is in the best interests of the
Borrower, (f) the performance by the Borrower of the Operating Agreement and the
Rights Agreement and the transactions contemplated thereby, and (g) the
transactions contemplated by the Receivables Program Documents, the 1992
Holdings Agreement, the Registration Rights Agreement and the 1992 Stock Option
Plan.
SECTION 7.08. Business. (a) Engage at any time in any business or business
activity other than the business currently conducted by it and its Subsidiaries
and business activities reasonably related thereto. Without limiting the
foregoing, neither JSC nor JSCE shall engage in any business or conduct any
activity other than holding, directly or indirectly, the capital stock of its
Subsidiaries, and activities reasonably related thereto.
(b) In the case of JSC International, engage in any business or business
activity, have any liabilities or hold any assets except that JSC International
may (i) maintain a bank account with a banking institution reasonably acceptable
to the Administrative Agent, (ii) engage in activities consistent with its being
a "Foreign Sales Corporation" as such term is defined in Section 922 of the
Code, and the regulations promulgated thereunder and (iii) receive advances from
the Borrower equal to the gross export revenues of the Borrower.
SECTION 7.09. Limitations on Debt Prepayments. (a) Optionally prepay,
repurchase or redeem or otherwise defease or segregate funds with respect to any
Indebtedness for borrowed money (other than Indebtedness under the Loan
Documents) of JSC, JSCE, the Borrower or any of their respective Subsidiaries;
provided, however, that the foregoing shall not prevent the Borrower from (i)
making any payment pursuant to Section 2.12 or 2.13, (ii) refinancing all or any
portion of the 1993 Senior Notes, the 8-Year Senior Notes or the 10-Year Senior
Notes on terms permitted by Section 7.01(d), (iii) repurchasing all or any
portion of the 10-Year Senior Notes pursuant to the call provision of the
10-Year Senior Note Indenture or (iv) optionally prepaying, redeeming or
repurchasing in the open market any Indebtedness for borrowed money of the
Borrower or any of its Subsidiaries not otherwise permitted under clause (i),
(ii) or (iii) above in an aggregate amount not to exceed $200,000,000.
(b) Permit any amendment, waiver or modification to the terms of the Senior
Note Indentures, the 1993 Senior Note Indenture, the Senior Notes or the 1993
Senior Notes or any agreement of the Borrower entered into in connection with
the foregoing if the effect of such amendment or modification is to impose
additional or increased scheduled or mandatory
88
repayment, retirement, repurchase or redemption obligations in respect of such
Indebtedness or to require any scheduled or mandatory payment to be made in
respect of such Indebtedness prior to the date that such payment would otherwise
be due.
SECTION 7.10. Amendment of Certain Documents. (a) Amend, modify, cancel or
grant any waiver with respect to any indenture, note or any other instrument
evidencing Indebtedness for money borrowed or preferred or preference stock or
pursuant to which any Indebtedness for money borrowed or such stock was issued
or issue any securities in exchange for any Indebtedness for money borrowed or
any preferred or preference stock; provided, however, that such Person may
amend, modify or grant a waiver with respect to any such indenture, note or
other instrument if such amendment, modification or waiver does not have the
effect of (i) increasing the amounts due in respect of any such indenture, note
or other instrument or any interest rate thereunder, (ii) subjecting any
property of such Person or any property of any Subsidiary of such Person to any
Lien to which it was not so subject immediately prior to any such amendment,
modification or waiver, (iii) shortening the maturity or average life of any
such Indebtedness for borrowed money or (iv) creating or changing any covenant
or similar restriction or event of default having application to such Person to
make any such covenant or similar restriction more restrictive on such Person.
(b) Cause or suffer to exist any amendment or modification to or supplement
of the certificate of incorporation or by-laws of such Person, any Loan Document
or any Basic Agreement, without the prior written consent of the Required
Lenders, unless such amendment, modification or supplement is not adverse to the
interests of the Lenders hereunder or under the other Loan Documents.
(c) Permit, cause or suffer to exist any direct or indirect amendment,
modification or supplement to any of the Receivables Program Documents unless
such amendment, modification or supplement is in form and substance satisfactory
to the Senior Managing Agents, provided that (i) any proposed amendment,
modification or supplement to the Receivables Program Documents shall first be
submitted by the Borrower to the Senior Managing Agents in writing and no such
amendment, modification or supplement that, in the opinion of the Senior
Managing Agents, has an adverse effect on the Lenders shall be effected unless
the prior written consent of the Required Lenders shall have been obtained and
(ii) no consent of the Senior Managing Agents or the Required Lenders shall be
required for any waiver by the Receivables Program lenders of their rights under
the Receivables Program Documents that is not detrimental in any respect to the
Borrower or JSF and that is not more restrictive, in any respect, on the
Borrower or JSF than the Receivables Program Documents without giving effect to
such waiver.
(d) Permit or cause or suffer to exist any direct or indirect termination
or cancellation of, or amendment, modification or supplement to, any of the
Operating Agreement or the Rights Agreement unless such amendment, modification
or supplement is in form and substance satisfactory to the Required Lenders.
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SECTION 7.11. Limitation on Dispositions of Subsidiary Stock; Creation of
Subsidiaries. (a) Directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of, or permit any of its Subsidiaries to issue to any other
Person, any shares of capital stock or other equity securities of (or warrants,
rights or options to acquire shares or other equity securities of) any of its
Subsidiaries, except (i) to the extent permitted by the Security Documents and
(ii) to qualify directors if and to the extent required by applicable law.
(b) Subject to paragraphs (c) and (d) below, have or create any Subsidiary
not identified on Schedule 4.08; provided, however, that JSCE or the Borrower
may create one or more new Subsidiaries organized under the laws of the United
States or any political subdivision thereof if (i) each such Subsidiary is a
wholly owned Subsidiary and is designated by JSCE or the Borrower as a Material
Subsidiary and (ii) JSCE, the Borrower and each such Subsidiary complies with
the applicable provisions of Section 6.10.
(c) Notwithstanding paragraph (b) above, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, JSCE or the Borrower may create or cause to be
created one or more Foreign Subsidiaries provided that (i) each such Subsidiary
is a wholly owned Subsidiary and (ii) JSCE, the Borrower and each such
Subsidiary complies with the applicable provisions of Section 6.10 (it being
understood that (x) no Foreign Subsidiary shall be required to become a party to
the Guarantee Agreement or to any Security Document and (y) JSCE or the
Borrower, as the case may be, shall not be required to pledge more than 65% of
the capital stock of any Foreign Subsidiary pursuant to the Pledge Agreement).
(d) Notwithstanding paragraph (b) above, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, JSC may create or cause to be created a wholly
owned Subsidiary to be incorporated in the State of Indiana and/or a wholly
owned Subsidiary to be incorporated in the State of Alabama, in each case to own
and operate certain assets of the Loan Parties located in such states, so long
as, upon the incorporation of any such Subsidiary, (i) JSC shall designate or
shall cause to be designated each such Subsidiary as a Material Subsidiary and
shall cause each such Subsidiary to become a grantor party to the applicable
Security Documents with respect to all its assets, (ii) JSC shall pledge or
cause to be pledged to the Collateral Agent for the benefit of the Secured
Parties all the capital stock of each such Subsidiary pursuant to the Pledge
Agreement and (iii) JSC shall cause to be delivered to the Senior Managing
Agents and the Collateral Agent such documents and opinions of counsel in
connection with the foregoing as may be reasonably requested by the Senior
Managing Agents or the Collateral Agent or their counsel.
SECTION 7.12. Restrictions on Ability of Subsidiaries to Pay Dividends.
Permit their respective Subsidiaries to, directly or indirectly, voluntarily
create or otherwise voluntarily cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary of such Person to
(a) pay dividends or make any other distributions on its capital stock or any
other interest or (b) make or repay loans or advances to such Person except, in
each case,
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for encumbrances or restrictions under this Agreement, the 1993 Senior Note
Indenture, the Senior Note Indentures and, with respect to JSF, the Receivables
Program Documents.
SECTION 7.13. Capital Expenditures. Incur Consolidated Capital Expenditures
in any fiscal year in excess of $200,000,000; provided, however, that such
amount in respect of any fiscal year may be increased by an amount equal to the
Borrower's Portion of Excess Cash Flow. In addition, the amount of Consolidated
Capital Expenditures in any fiscal year may be further increased by an amount
equal to the excess of (a) $200,000,000 over (b) the amount of Consolidated
Capital Expenditures actually made in the immediately preceding fiscal year;
provided, however, that amounts so available under this sentence in any fiscal
year or years that are not so expended, up to a maximum of $75,000,000 on a
cumulative basis, shall be available for any subsequent fiscal year and the
amount of Consolidated Capital Expenditures made in any fiscal year shall first
be applied against the $200,000,000 amount permitted for such year and
thereafter applied to the amount available from prior years. The parties agree
that, for purposes of the preceding sentence, the Borrower shall be deemed on
the Closing Date to have $75,000,000 in unused Consolidated Capital Expenditures
from prior years available for use on and after the Closing Date.
SECTION 7.14. Consolidated EBITDA. Permit Consolidated EBITDA for any four
fiscal quarter period ending during any period set forth below to be less than
the amount set forth opposite such period:
Period Amount
------ ------
From and including the Closing Date through
and including June 30, 1998 $235,000,000
From and including September 30, 1998
through and including December 31, 1998 $285,000,000
From and including March 31, 1999
through and including December 31, 1999 $375,000,000
Thereafter $425,000,000
SECTION 7.15. Interest Coverage Ratio. Permit the ratio of (a) Consolidated
EBITDA to (b) Consolidated Interest Expense for any four fiscal quarter period
ending during any period set forth below to be less than the ratio set forth
opposite such period:
Period Ratio
------ -----
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From and including the Closing Date through
and including June 30, 1998 1.25 to 1
From and including September 30, 1998
through and including December 31, 1998 1.50 to 1
From and including March 31, 1999 through
and including December 31, 1999 2.00 to 1
Thereafter 2.25 to 1
SECTION 7.16. Disposition of Collateral and other Assets. (a) Sell, lease,
assign, transfer or otherwise dispose of any asset or assets constituting all or
substantially all the Collateral.
(b) Sell, lease, assign, transfer or otherwise dispose of any portion of a
discrete parcel of Timberland Property (other than pursuant to any Permitted
Equipment Financing or any Permitted Timber Financing or to any Material
Subsidiary), unless (i) the fair market value of such parcel of Timberland
Property is less than $10,000,000 and (ii) the aggregate fair market value of
all Timberland Property previously disposed of pursuant to this Section 7.16(b)
is less than $50,000,000; provided, however, that the Borrower may exchange any
portion of a discrete parcel of Timberland Property for a Substitute Parcel if
(A) the fair market value of the Substitute Parcel is at least as great as the
fair market value of the parcel of Timberland Property so exchanged, (B) the
release of such exchanged Timberland Property complies in all respects with the
provisions of Section 7.17 and (C) the Borrower complies in all respects with
the applicable provisions of Section 6.10 with respect to the Substitute Parcel.
(c) Permit any third parties the privilege of entry upon the Mortgaged
Property for cutting and removal of Timber, except under contracts pursuant to
which such third parties are granted the privilege of cutting or removing Timber
for sale, consumption or processing at commercially reasonable rates, provided
that (i) as to any single contract, the gross proceeds to be paid in any
calendar year shall not exceed $10,000,000, (ii) as to the aggregate of all such
contracts from time to time in effect, such gross proceeds shall not exceed
$50,000,000 in any calendar year, and (iii) the Borrower may exchange Timber for
other timber ("Substitute Timber") if (x) the fair market value of the
Substitute Timber is at least as great as the fair market value of the Timber so
exchanged, (y) the release of such Timber complies in all respects with the
provisions of Section 7.17 and (z) the Borrower complies in all respects with
the applicable provisions of Section 6.10 with respect to the Substitute Timber.
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(d) Except for the sale of Program Receivables as permitted by the
Receivables Program Documents, sell, lease, assign, transfer or otherwise
dispose of any asset or assets (other than to a Material Subsidiary), in a
single transaction or a series of related transactions, having a fair market
value in excess of $5,000,000 unless (i) at least 80% of the consideration
received by JSC and its Subsidiaries in connection therewith shall be in cash or
cash equivalents and readily marketable securities, (ii) any non-cash
consideration shall consist of debt obligations of the purchaser and (iii) if
any consideration to be received consists of a note or other debt obligation,
such note or other debt obligation shall, either (x) (A) be senior and secured
by a first priority security interest in the asset so sold and (B) shall be
pledged to the Collateral Agent for the benefit of the Lenders to secure the
Obligations pursuant to a written instrument satisfactory to the Collateral
Agent or (y) in the case of any portion of any such consideration consisting of
readily marketable securities, be sold within 30 days of receipt thereof.
SECTION 7.17. Disposition of Mortgaged Property. (a) Sell, lease, assign,
transfer or otherwise dispose of (other than to a Material Subsidiary) any
interest in any Mortgaged Property, including any interest in any Timberland
Property (each, a "Release Transaction"), except (i) in compliance with this
Section 7.17, Section 7.05 and Section 7.16 and (ii) in connection with any
Permitted Equipment Financing or any Permitted Timber Financing. Upon such
compliance, the Borrower shall be entitled to receive from the Collateral Agent
an instrument, in form and substance satisfactory to the Collateral Agent (each,
a "Release"), releasing (or, at the option of the Borrower assigning) the Lien
of any applicable Mortgaged Property. The Borrower shall exercise its rights
under this Section 7.17 by delivery to the Collateral Agent of a notice (each, a
"Release Notice"), which shall refer to this Section 7.17, describe with
particularity the items of property proposed to be covered by the Release and be
accompanied by a counterpart of the release fully executed and acknowledged by
all parties thereto other than the Collateral Agent and be in form for execution
by the Collateral Agent, and a certificate of a Responsible Officer of the
Borrower certifying as to the satisfaction of the Release Conditions. The
Collateral Agent shall execute, acknowledge (if applicable) and deliver to the
Borrower such counterpart within a reasonable time after receipt by the
Collateral Agent of a Release Notice and the satisfaction of the Release
Conditions. The obligation of the Collateral Agent to deliver any Release, and
the Borrower's rights to consummate any sale, lease, assignment, transfer or
other disposition of any interest in Mortgaged Property, shall be subject to the
following conditions (collectively, the "Release Conditions"):
(i) no Default or Event of Default shall have occurred and be
continuing;
(ii) if such Release relates to only a portion of a discrete parcel of
Mortgaged Property, following such sale, transfer or other disposition and
release of the Lien of any applicable Mortgage with respect thereto, the
affected Mortgaged Property shall have sufficient utility services and
sufficient access to public roads, rail spurs, harbors, canals, terminal
and other transportation structures for the continued use of such
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Mortgaged Property in substantially the manner carried on by the Borrower
prior to such Release;
(iii) if such Release relates to only a portion of a discrete parcel
of Mortgaged Property, following such sale, transfer or other disposition,
the affected Mortgaged Property shall comply in all material respects with
applicable laws, rules, regulations and ordinances relating to
environmental protection, zoning, land use and building and work place
safety;
(iv) if such Release relates to only a portion of a discrete parcel of
Mortgaged Property, following such sale, transfer or other disposition, the
value of the affected Mortgaged Property following such Release (exclusive
of the value of the released Mortgaged Property) plus the value of the
proceeds received for such released Mortgaged Property shall not be less
than the value of such Mortgaged Property prior to such Release;
(v) if such Release relates to only a portion of a discrete parcel of
Mortgaged Property (other than Timberland Property), the title insurance
company that issued the title insurance relating to the affected Mortgaged
Property shall have committed to issue an endorsement to such title
insurance policy confirming that after such Release the Lien of the
applicable Mortgage continues unimpaired as a first priority Lien upon the
remaining Mortgaged Property, subject only to Liens permitted by the terms
of the applicable Mortgage to be prior thereto; and
(vi) except with respect to Timberland Property, the Borrower shall
have delivered to the Collateral Agent a survey showing the property
proposed to be released.
(b) In connection with any Release Transaction, the Borrower shall (i)
execute, deliver and cause to be recorded, and obtain and deliver, such
instruments as the Collateral Agent may reasonably request, including amendments
to the Security Documents and this Agreement, and (ii) deliver to the Collateral
Agent such evidence of the satisfaction of the Release Conditions as the
Collateral Agent may reasonably require. Without limiting the provisions of
Section 10.05, the Borrower shall reimburse the Collateral Agent, the
Administrative Agent and the Lenders upon demand for all costs or expenses,
including attorneys' fees and disbursements, incurred by each of them in
connection with any action contemplated by this Section 7.17.
SECTION 7.18. Fiscal Year. Cause its fiscal year to end on a date other
than December 31.
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ARTICLE VIII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in any Loan
Document, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished pursuant to any Loan Document, shall prove to have
been false or misleading in any material respect when so made, deemed made
or furnished;
(b) default shall be made in the payment of any principal of any Loan
or Swingline Loan or LC Disbursement when and as the same shall become due
and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or Swingline Loan or any Fee or any other amount (other than an amount
referred to in paragraph (b) above) due under any Loan Document, when and
as the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance by JSC,
JSCE or the Borrower of any covenant, condition or agreement contained in
Section 6.01, 6.05(a), 6.08 or in Article VII;
(e) default shall be made in the due observance or performance by any
Loan Party or any of their respective Subsidiaries of any covenant,
condition or agreement contained in any Loan Document (other than those
defaults specified in paragraph (b), (c) or (d) above) and such default
shall continue unremedied for a period of 30 days after written notice
thereof from the Administrative Agent or any Lender to the Borrower;
(f) any Loan Party or any of their respective Subsidiaries shall (i)
fail to pay any principal or interest, regardless of amount, due in respect
of any Indebtedness in a principal amount in excess of $5,000,000, when and
as the same shall become due and payable (after giving effect to any
applicable grace period), or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness (after giving
effect to any applicable grace period), if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a
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trustee on its or their behalf to cause, such Indebtedness to become due
prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of JSC, JSCE or the Borrower or any of their respective
Material Subsidiaries, or of a substantial part of the property or assets
of JSC, JSCE or the Borrower or any such Material Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for JSC, JSCE or the Borrower
or any such Material Subsidiary or for a substantial part of the property
or assets of JSC, JSCE or the Borrower or any such Material Subsidiary or
(iii) the winding-up or liquidation of JSC, JSCE or the Borrower or any
such Material Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;
(h) JSC, JSCE or the Borrower or any of their respective Material
Subsidiaries shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for JSC, JSCE or
the Borrower or any such Material Subsidiary or for a substantial part of
the property or assets of JSC, JSCE or the Borrower or any such Material
Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due
or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 in any one case or $15,000,000 in the
aggregate in all such cases (in each case to the extent not adequately
covered by insurance as to which the insurance company has acknowledged
coverage pursuant to a writing reasonably satisfactory to the Collateral
Agent) shall be rendered against JSC, JSCE or the Borrower or any of their
respective Subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 10 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to levy upon assets or properties of JSC, JSCE
or the Borrower or any Subsidiary to enforce any such judgment;
96
(j) a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section
412(n)(l) of the Code), shall have occurred with respect to any Plan or
Plans that reasonably could be expected to result in liability of JSC, JSCE
or the Borrower or any of their respective Subsidiaries to the PBGC or to a
Plan in an aggregate amount exceeding $25,000,000 and, within 30 days after
the reporting of any such Reportable Event to the Administrative Agent
pursuant to Section 6.06(b)(i)(A) or after the receipt by the
Administrative Agent of the statement required pursuant to Section
6.06(b)(iii), the Administrative Agent shall have notified the Borrower in
writing that (i) the Required Lenders have reasonably determined that, on
the basis of such Reportable Event or Reportable Events or the failure to
make a required payment, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for the appointment by
the appropriate United States District Court of a trustee to administer
such Plan or Plans or (C) for the imposition of a lien in favor of a Plan
and (ii) as a result thereof an Event of Default exists hereunder; or a
trustee shall be appointed by a United States District Court to administer
any such Plan or Plans; or the PBGC shall institute proceedings to
terminate any Plan or Plans;
(k) (i) JSC, JSCE or the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) JSC, JSCE or the
Borrower or such ERISA Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability or is not in fact contesting such
Withdrawal Liability in a timely and appropriate manner and (iii) the
amount of the Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities (determined as of the date
or dates of such notification), exceeds $25,000,000;
(l) JSC, JSCE or the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if solely as a result of such reorganization or
termination the aggregate contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
have been or are being terminated have been or will be increased over the
amounts required to be contributed to such Multiemployer Plans for their
most recently completed plan years by an amount exceeding $25,000,000;
(m) there shall have occurred a Change in Control;
(n) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by JSC, JSCE or the
Borrower or any Guarantor not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement or such Security
Document) security interest in Collateral with a fair market value or book
value (whichever is greater) in excess, individually or in the
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aggregate, of $35,000,000, except to the extent that any such loss of
perfection or priority results from the failure of the Collateral Agent to
maintain possession of certificates representing securities pledged under
the Pledge Agreement or otherwise take any action within its control
(including the filing of Uniform Commercial Code continuation statements);
(o) any Loan Document shall not be for any reason, or shall be
asserted by the Loan Party or any Guarantor party thereto (except as
otherwise expressly provided in this Agreement or such Loan Document) not
to be, in full force and effect and enforceable in all material respects in
accordance with its terms;
(p) the Obligations and the Guarantees thereof pursuant to the
Guarantee Agreement shall cease to constitute, or shall be asserted by any
Loan Party (except as otherwise expressly provided in this Agreement or
such Loan Document) not to constitute, senior indebtedness under the
subordination provisions of any Subordinated Indebtedness, or any such
subordination provisions shall be invalidated or otherwise cease to be a
legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms; or
(q) there shall be present on, at, or under any of the Mortgaged
Properties any Hazardous Materials that could reasonably be expected to
result in any liability or obligation under any Environmental Laws,
including costs of remediation, fines, penalties, natural resource damages
or other damages, in an aggregate amount in excess of $50,000,000;
then, and in every such event (other than an event with respect to the Borrower
or any Guarantor described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may
and, at the request of the Required Lenders, shall, by notice to the Borrower,
take any of or all the following actions, at the same or different times: (i)
terminate forthwith the Commitments and the LC Commitment, (ii) declare the
Loans and the Swingline Loans then outstanding to be forthwith due and payable
in whole or in part, whereupon the principal of the Loans and the Swingline
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Loan Parties
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by JSC, JSCE and the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding and (iii) exercise any remedies available under any Loan
Document or otherwise; and in any event with respect to the Borrower or a
Guarantor described in paragraph (g) or (h) above, the Commitments and the LC
Commitment shall automatically terminate and the principal of the Loans and the
Swingline Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Loan Parties accrued
hereunder and under any other Loan Document, shall
98
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by JSC,
JSCE and the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding.
ARTICLE IX
The Administrative Agent, the Collateral Agent,
the Senior Managing Agents and the Fronting Bank
In order to expedite the transactions contemplated by this Agreement, (a)
The Chase Manhattan Bank is hereby appointed to act as Administrative Agent and
Collateral Agent for the Fronting Bank, the Swingline Lender and the Lenders and
(b) Bankers Trust Company and The Chase Manhattan Bank are hereby appointed to
act as Senior Managing Agents on behalf of the Managing Agents and the Lenders
(the Administrative Agent, the Collateral Agent, the Senior Managing Agents and
the Managing Agents for purposes of this Article are collectively referred to as
the "Agents"). Each of the Lenders, the Fronting Bank and the Swingline Lender
hereby irrevocably authorizes each Agent to take such actions on their behalf
and to exercise such powers as are specifically delegated to such Agent by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, the Fronting Bank and the
Swingline Lender, without hereby limiting any implied authority, (a) to receive
all Loan Documents on the Closing Date, (b) to receive on behalf of the Lenders,
the Fronting Bank and the Swingline Lender all payments of principal of and
interest on the Loans and the Swingline Loans, all payments in respect of LC
Disbursements and all other amounts due to the Lenders, the Fronting Bank and
the Swingline Lender hereunder, and promptly to distribute to each Lender, the
Fronting Bank and the Swingline Lender its proper share of each payment so
received, (c) to give notice on behalf of each of the Lenders to the Borrower of
any Event of Default specified in this Agreement of which the Administrative
Agent has actual knowledge acquired in connection with its agency hereunder and
(d) to distribute to each Lender, the Fronting Bank and the Swingline Lender
copies of all notices, financial statements and other materials delivered by the
Loan Parties pursuant to this Agreement as received by the Administrative Agent
(including notices of an occurrence of any Event of Default). The Administrative
Agent and the Collateral Agent are hereby expressly authorized to execute any
and all documents (including releases) with respect to the Collateral and the
Program Receivables and the rights of the Secured Parties with respect thereto,
in each case as contemplated by and in accordance with the terms and provisions
of this Agreement and the Security Documents.
None of the Agents or the Fronting Bank or any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its, his or her own gross negligence
or wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in
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connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Loan Parties or any Guarantor of
any of the terms, conditions, covenants or agreements contained in any Loan
Document. The Agents shall not be responsible to the Lenders or the Fronting
Bank or the Swingline Lender for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, any other Loan Document or
any other instruments or agreements. The Administrative Agent and the Collateral
Agent shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
(and the Fronting Bank, with respect to Letters of Credit) and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders, the Fronting Bank
and the Swingline Lender. The Administrative Agent and the Collateral Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by them in good faith to be genuine and correct
and to have been signed or sent by the proper Person or Persons. None of the
Agents or the Fronting Bank or any of their respective directors, officers,
employees or agents shall have any responsibility to the Loan Parties on account
of the failure of or delay in performance or breach by any Lender (or, in the
case of the Agents, by the Fronting Bank or the Swingline Lender) of any of its
obligations hereunder or to any Lender (or, in the case of the Agents, the
Fronting Bank or the Swingline Lender) on account of the failure of or delay in
performance or breach by any other Lender (or, in the case of the Agents, the
Fronting Bank or the Swingline Lender) or the Loan Parties or any Guarantor of
any of their respective obligations hereunder or under any other Loan Document
or in connection herewith or therewith. Each Agent and the Fronting Bank may
execute any and all duties hereunder by or through agents or employees and shall
be entitled to rely upon the advice of legal counsel selected by any of them
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by any of them in accordance with the
advice of such counsel.
The Lenders, the Fronting Bank and the Swingline Lender hereby acknowledge
that none of the Agents or the Fronting Bank shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do so by the Required
Lenders.
Subject to the appointment and acceptance of a successor Agent as provided
below, any Agent may resign at any time by notifying the Lenders, the Fronting
Bank, the Swingline Lender and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a Lender as the successor. If
no successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders and
the Fronting Bank, appoint a successor Agent, which shall be a bank with an
office in New York, New York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent
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shall be discharged from its duties and obligations hereunder. After any
Agent's resignation hereunder, the provisions of this Article and Section 10.05
shall continue in effect for its benefit in respect of any actions taken or
omited to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent and the Fronting
Bank, in its individual capacity and not as Agent or Fronting Bank, as the case
may be, shall have the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent or the Fronting Bank, as the
case may be, and each Agent and its Affiliates and the Fronting Bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Loan Parties or any of their respective Subsidiaries
or other Affiliates as if it were not an Agent or the Fronting Bank, as the case
may be.
Each Lender agrees (a) to reimburse each Agent and the Fronting Bank, on
demand, in the amount of such Lender's pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by such Agent
or the Fronting Bank, including fees, disbursements and other charges of counsel
and compensation of agents paid for services rendered on behalf of the Lenders,
that shall not have been reimbursed by the Loan Parties and (b) to indemnify and
hold harmless each Agent and the Fronting Bank and any of their respective
directors, officers, employees or agents, on demand, in the amount of such pro
rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by or asserted against it in its capacity as an Agent or the Fronting Bank, as
the case may be, or any of them in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Loan Parties, provided that (i) no Lender
shall be liable to any Agent or the Fronting Bank for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or wilful
misconduct of such Agent or the Fronting Bank, as the case may be, or any of
their respective directors, officers, employees or agents and (ii) each Lender
that does not have a Revolving Credit Commitment (other than through the
termination thereof) shall be under no obligation to reimburse or indemnify the
Fronting Bank under clauses (a) and (b) above.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents, any other Lender, the Fronting Bank or the Swingline Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents,
any other Lender, the Fronting Bank or the Swingline Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
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None of the Managing Agents shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders in such capacity. Without limiting the foregoing, none
of the Managing Agents shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, upon any of the Managing Agents in deciding to enter into
this Agreement or in taking or not taking action hereunder or under any other
Loan Document.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Except as otherwise expressly permitted herein,
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed or sent by
telecopy, as follows:
(a) If to either JSC or JSCE, to it in care of Jefferson Smurfit
Corporation (U.S.), Jefferson Smurfit Centre, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Treasurer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); with
a copy to Jefferson Smurfit Group plc, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇, Attention of Treasurer (Telecopy No. (▇▇▇-▇▇▇) ▇▇▇▇-▇▇▇▇);
(b) If to the Borrower, to it at Jefferson Smurfit Centre, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Treasurer (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇);
(c) If to BTCo, as Senior Managing Agent, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(d) If to Chase, as Administrative Agent, Collateral Agent, Swingline
Lender or Senior Managing Agent, to it at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇
▇▇▇▇▇), ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇); with a copy to The Chase Manhattan Bank, Loan and
Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(e) If to the Fronting Bank, at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto; and
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(f) If to a Lender, at its address (or telecopy number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such
Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 10.01. The Administrative Agent shall deliver to the Borrower a copy of
each Administrative Questionnaire received by it.
SECTION 10.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Loan Party herein and by the Loan
Parties and the Guarantors in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders, the
Fronting Bank and the Swingline Lender and shall survive the making by the
Lenders of the Loans, the making by the Swingline Lender of the Swingline Loans
and the issuance of Letters of Credit by the Fronting Bank, regardless of any
investigation made by the Lenders, the Fronting Bank or the Swingline Lender or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or Swingline Loan or any Fee or
any other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments and the LC Commitment have not been terminated.
SECTION 10.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Senior Managing Agents and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of JSC, JSCE and the
Borrower, the Administrative Agent, the Senior Managing Agents, the Fronting
Bank, the Swingline Lender and each Managing Agent and Lender and their
respective successors and assigns, except that none of JSC, JSCE or the Borrower
shall have the right to assign its rights hereunder or any interest herein
without the prior consent of all the Lenders (and any attempted assignment by
any such Person shall be void).
SECTION 10.04. Successors and Assigns. (a) Subject to Section 10.03,
whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of JSC, JSCE and the
Borrower, the Senior Managing Agents, the Administrative Agent, the Fronting
Bank, the Swingline Lender, the Managing Agents or the Lenders that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
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(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and LC Commitment, the outstanding Letters of Credit
and the Loans at the time owing to it); provided, however, that (i) except in
the case of an assignment to a Lender or an Affiliate of a Lender, each of the
Administrative Agent and the Borrower (and, in the case of an assignment of a
Lender's Revolving Credit Commitment, the Swingline Lender and the Fronting
Bank) must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld) and the Administrative Agent must give
notice to BTCo of any such assignment; provided further, however, that (A) the
consent of the Borrower shall not be required if a Default or an Event of
Default under paragraph (b), (c), (g) or (h) of Article VIII has occurred and is
continuing on the date of the Assignment and Acceptance and (B) the failure of
the Administrative Agent to give notice to BTCo of any such assignment shall not
affect the validity of such assignment, (ii) the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or an amount equal to
the remaining balance of such Lender's Commitment), (iii) the parties to each
such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, and a processing and recordation fee of $3,500 and
(iv) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 10.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof and in no event
shall precede the date of such recording, (i) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto, but shall continue to be entitled to the benefits of Sections 2.14,
2.16, 2.20 and 10.05, as well as to any Fees accrued for its account and not yet
paid).
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment and LC Commitment, and the outstanding balances of its Term Loans and
Revolving Loans, in each case without giving effect to assignments thereof that
have not become effective, are as set forth in such Assignment and Acceptance;
(ii) except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
104
the Loan Parties or the performance or observance by the Loan Parties of any of
their obligations under this Agreement or under any other Loan Document or any
other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Acceptance and copies of
the most recent financial statements delivered pursuant to Section 6.04 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (v)
such assignee will independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent, the Senior Managing
Agents, the Managing Agents and the Collateral Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent, the Senior Managing Agent, the Managing
Agents and the Collateral Agent by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations that by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments and
LC Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and JSC, JSCE
and the Borrower, the Administrative Agent, the Fronting Bank, the Swingline
Lender and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by JSC, JSCE, the Borrower, the Fronting Bank, the
Swingline Lender and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and the written consent (to the extent required under
paragraph (b) above), of the Administrative Agent, the Borrower and/or the
Swingline Lender and the Fronting Bank to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders, the Fronting Bank and the Swingline Lender. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
105
(f) Each Lender may, without the consent of JSC, JSCE, the Borrower, the
Administrative Agent, the Fronting Bank or the Swingline Lender, sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16, 2.20 and 10.05 to the same extent as if they were Lenders, provided
that, except as expressly provided in Section 2.20(a), the Borrower shall not be
required to reimburse the participating lenders or other entities pursuant to
Section 2.14, 2.16, 2.20 or 10.05 in an amount in excess of the amount that
would have been payable thereunder to such Lender had such Lender not sold such
participation, and (iv) JSC, JSCE, the Borrower, the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the Swingline
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Loan Parties under the Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement (provided
that the participating bank or other entity may be provided with the right to
approve amendments, modifications or waivers affecting it with respect to (w)
any decrease in the Fees payable hereunder with respect to Loans in which the
participating bank or other entity has purchased a participation, (x) any change
in the amount of principal of, or decrease in the rate at which interest is
payable on, the Loans in which the participating bank or other entity has
purchased a participation, (y) any extension of the final scheduled maturity of
any Loan in which the participating bank or other entity has purchased a
participation or (z) any release of all or substantially all the Collateral).
(g) Notwithstanding the limitations set forth in paragraph (b) above, any
Lender may at any time assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank without the prior written consent of the
Borrower, the Administrative Agent, the Fronting Bank or the Swingline Lender,
provided that no such assignment shall release a Lender from any of its
obligations hereunder or substitute any such Bank for such Lender as a party
hereto. In order to facilitate such an assignment to a Federal Reserve Bank, the
Borrower shall, at the request of the assigning Lender, duly execute and deliver
to the assigning Lender a promissory note or notes evidencing the Loans made to
the Borrower by the assigning Lender hereunder.
(h) Except as provided in Section 3.10 and Section 2.22, respectively,
neither the Fronting Bank nor the Swingline Lender may assign or delegate any of
its respective rights and duties hereunder without the prior written consent of
the Borrower and the Senior Managing Agents.
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SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket expenses incurred by the Administrative Agent, the Senior Managing
Agents, the Fronting Bank, the Swingline Lender and the Collateral Agent in
connection with the preparation of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Senior Managing
Agents, the Managing Agents, the Fronting Bank, the Swingline Lender, the
Collateral Agent or any Lender in connection with the enforcement or protection
of their rights in connection with this Agreement and the other Loan Documents
or in connection with the Loans made or the Letters of Credit issued hereunder,
including the reasonable fees, disbursements and other charges of Cravath,
Swaine & ▇▇▇▇▇, counsel for the Administrative Agent, the Collateral Agent and
the Senior Managing Agents, and, in connection with any such enforcement or
protection, the reasonable fees, disbursements and other charges of any other
counsel (including allocated costs of internal counsel) for the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Swingline Lender, the Collateral Agent or any Lender. The Borrower further
agrees to indemnify the Administrative Agent, the Senior Managing Agents, the
Managing Agents, the Fronting Bank, the Swingline Lender, the Collateral Agent
and the Lenders from, and hold them harmless against, any documentary taxes,
assessments or similar charges made by any Governmental Authority by reason of
the execution and delivery of this Agreement or any of the other Loan Documents.
(b) The Borrower agrees to indemnify the Administrative Agent, the Senior
Managing Agents, the Managing Agents, the Collateral Agent, the Fronting Bank,
the Swingline Lender and each Lender and each of their respective directors,
officers, employees and agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
disbursements and other charges, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
or thereto of their respective obligations hereunder or thereunder or the
consummation of the Transactions and the other transactions contemplated hereby
or thereby, (ii) the use of the Letters of Credit or the proceeds of the Loans
and the Swingline Loans or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or wilful misconduct of
such Indemnitee.
(c) The provisions of this Section 10.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans or the Swingline Loans, the invalidity or unenforceability of any term
or provision of this Agreement or any other
107
Loan Document, or any investigation made by or on behalf of the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Collateral Agent, the Swingline Lender or any Lender. All amounts due under this
Section 10.05 shall be payable on written demand therefor.
SECTION 10.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized, in addition to any other
right or remedy that any Lender may have by operation of law or otherwise, at
any time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower), to exercise its banker's lien or right
of setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Loan Party against any
of and all the obligations of the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
such Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured.
SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN THE MORTGAGES) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay on the part of
the Administrative Agent, either Senior Managing Agent, the Managing Agents, the
Fronting Bank, the Swingline Lender, the Collateral Agent or any Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Senior
Managing Agents, the Managing Agents, the Fronting Bank, the Swingline Lender,
the Collateral Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Loan Parties therefrom
shall in any event be effective unless the same shall be permitted by paragraphs
(b) or (c) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
the Loan Parties in any case shall entitle the Loan Parties to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement or any of the other Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by JSC, JSCE, the Borrower and the Required Lenders, (ii) in the
case of the Guarantee Agreement,
108
pursuant to an agreement or agreements in writing entered into by the Guarantors
and the Collateral Agent and consented to by the Required Lenders, (iii) in the
case of any of the Security Documents, pursuant to an agreement or agreements in
writing entered into by the parties thereto and consented to by the Required
Lenders or (iv) in the case of a Letter of Credit, pursuant to an agreement or
agreements entered into by the Borrower and the Fronting Bank; provided,
however, that no such agreement shall (A) change the principal amount of any
Loan, extend the final scheduled maturity of any Loan, extend the scheduled date
for payment of interest on any Loan, forgive any such payment or any part
thereof or reduce the rate of interest on any Loan, in each case without the
prior written consent of each Lender affected thereby, (B) increase the amount
or extend the termination date of the Commitment or the LC Commitment or reduce
or extend the date for payment of the Fees of any Lender, in each case without
the prior written consent of such Lender, (C) amend or modify the pro rata
requirements of Section 2.17, the provisions of Section 10.03, the provisions of
this Section 10.08(b) or the definition of the term "Required Lenders" without
the prior written consent of each Lender, (D) release all or substantially all
the Collateral, except as expressly permitted by the Security Documents or this
Agreement, without the prior written consent of each Lender, (E) reduce any
Tranche A Term Loan Repayment Amount or extend any Tranche A Term Loan Repayment
Date (other than the Tranche A Maturity Date), in each case without the prior
written consent of Lenders holding Tranche A Term Loans representing at least
75% of the aggregate outstanding principal amount of the Tranche A Term Loans,
(F) reduce any Tranche B Term Loan Repayment Amount or extend any Tranche B Term
Loan Repayment Date (other than the Tranche B Maturity Date), in each case
without the prior written consent of Lenders holding at least 75% of the
aggregate outstanding principal amount of the Tranche B Term Loans, (G) change
the allocation of prepayments to be made pursuant to Section 2.12(b) or 2.13(d)
or (i) without the prior written consent of (1) Lenders holding more than 50% of
the aggregate outstanding principal amount of the Tranche A Term Loans and (2)
Lenders holding more than 50% of the aggregate outstanding principal amount of
the Tranche B Term Loans, (H) change the application of prepayments of Tranche A
Term Loans pursuant to Section 2.12(b) or 2.13(d) or (i) without the prior
written consent of Lenders holding Tranche A Term Loans representing more than
50% of the aggregate outstanding principal amount of the Tranche A Term Loans or
(I) change the application of prepayments of Tranche B Term Loans pursuant to
Section 2.12(b) or 2.13(d) or (i) without the prior written consent of Lenders
holding more than 50% of the aggregate outstanding principal amount of the
Tranche B Term Loans; and provided further, that (I) no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, the Fronting Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Collateral
Agent, the Fronting Bank or the Swingline Lender, respectively, (II) any
agreement described in clause (E), (F), (G), (H) or (I) above that is consented
to by the requisite Lenders as provided therein shall be effective as to the
matters described in such clauses even if it shall not have been consented to by
the Required Lenders and (III) no such agreement shall release any Guarantor
from its obligations under the Guarantee Agreement, without the prior written
consent of Lenders holding Loans, a share of the used LC
109
Commitments and unused Commitments representing at least 75% of the sum of (x)
the aggregate principal amount of the Loans, (y) the LC Exposure and (z) the
aggregate unused Commitments.
SECTION 10.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender or the Swingline Lender, shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
taken, received or reserved by such Lender or the Swingline Lender in accordance
with applicable law, the rate of interest payable to such Lender or the
Swingline Lender hereunder, together with all Charges payable to such Lender or
the Swingline Lender, shall be limited to the Maximum Rate.
SECTION 10.10. Entire Agreement. This Agreement, the other Loan Documents
and any separate letter agreements with respect to fees payable to the
Administrative Agent or the Senior Managing Agents constitute the entire
contract between the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 10.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.
SECTION 10.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
110
SECTION 10.13. Counterparts. This Agreement may be executed in two or more
counterparts or counterpart signature pages, each of which shall constitute an
original but all of which when taken together shall constitute but one contract,
and shall become effective as provided in Section 10.03.
SECTION 10.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 10.15. Confidentiality. (a) Each Lender agrees not to disclose to
any Person the Information (as defined below) in accordance with such Lender's
customary procedures for non-disclosure of confidential information of third
parties of this nature and in accordance with safe and sound lending practices
without the prior written consent of the Borrower, which consent shall not be
unreasonably withheld, except that any Lender shall be permitted to disclose
Information (i) to its and its Affiliates' officers, directors, employees,
agents and representatives (including its auditors and counsel) or to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees in writing to be
bound by the provisions of this Section 10.15); (ii) to the extent (A) required
by applicable laws and regulations or by any subpoena or similar legal process
or (B) requested or required by any regulatory authority or The National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Agreement, (B)
becomes available to such Lender on a non-confidential basis from a source other
than a Loan Party or its Affiliates or (C) was available to such Lender on a
non-confidential basis prior to its disclosure to such Lender by a Loan Party or
its Affiliates; (iv) to any actual or prospective assignee of, or prospective
purchaser of a participation in, the rights of such Lender hereunder, in each
case subject to paragraph (c) below; or (v) in connection with any suit, action
or proceeding relating to the enforcement of rights hereunder or under any other
Loan Document or in connection with the transactions contemplated hereby. As
used in this Section 10.15, as to any Lender, the term "Information" shall mean
the Confidential Information Memorandum and any other materials, documents and
information that JSC, JSCE or the Borrower, or any of their Affiliates may have
furnished or may hereafter furnish to any Lender in connection with this
Agreement.
(b) Each Lender agrees that it will use the Information only for purposes
related to the transactions contemplated hereby and by the other Loan Documents,
provided that (i) if the conditions referred to in any of subclauses (A) through
(C) of clause (iii) of paragraph (a) above are met, such Lender may otherwise
use the Information and (ii) if such Lender or any of its Affiliates is
otherwise a creditor of a Loan Party, such Lender or any such Affiliate may use
the Information in connection with its other credits to such Loan Party.
111
(c) Each Lender agrees that it will not disclose any of the Information to
any actual or prospective assignee of such Lender or participant in any rights
of such Lender under this Agreement unless such actual or prospective assignee
or participant first executes and delivers to such Lender or the Borrower a
confidentiality letter containing substantially the undertakings set forth in
this Section 10.15.
SECTION 10.16. Jurisdiction; Consent to Service of Process. (a) Each of
JSC, JSCE and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Loan Party or
its properties in the courts of any jurisdiction.
(b) Each of JSC, JSCE and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 10.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 10.17. Receivables Program. The Lenders hereby acknowledge and
agree that the transfer of Program Receivables by SNC to the Borrower, and the
transfer of Program Receivables by the Borrower to JSF pursuant to the
Receivables Program, constitute true and valid sales for consideration (or, in
the case of Program Receivables contributed by the Borrower to JSF,
contributions for consideration), and not a borrowing by the Borrower or SNC
from JSF secured by such Program Receivables.
SECTION 10.18. Florida Real Property. The parties hereto hereby acknowledge
that the Revolving Loans are secured by real and personal property located both
inside and outside the State of Florida and hereby agree that for purposes of
calculating intangible taxes due under Section 199.133, Florida Statutes, the
first amounts advanced under the Revolving Facility shall be deemed to be the
portion allocable to the Collateral consisting of Real
112
Property located in the State of Florida, and such portion allocable to such
Collateral shall also be deemed to be the last to be repaid under the terms
hereof. Nothing herein shall limit the Secured Parties' right to recover or
realize from the Collateral located in the State of Florida amounts in excess of
that allocated to the Revolving Loans or to apply amounts so recovered or
realized against the Secured Obligations in such order as the Collateral Agent
in its sole discretion shall determine.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
JEFFERSON SMURFIT CORPORATION,
by
----------------------------
Name:
Title:
JEFFERSON SMURFIT CORPORATION
(U.S.),
by
----------------------------
Name:
Title:
JSCE, INC.,
by
----------------------------
Name:
Title:
BANKERS TRUST COMPANY,
individually and as Fronting Bank and Senior
Managing Agent,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
Collateral Agent and Senior Managing Agent,
by /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
by /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA,
by /s/ F.C.H. ▇▇▇▇▇
-----------------------------------------
Name: F.C.H. ▇▇▇▇▇
Title: Senior Manager Loan Operation
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: First Vice President
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
by /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: First Vice President-Manager
GENERAL ELECTRIC CAPITAL CORPORATION,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Duly Authorized Signatory
NATIONSBANK N.A.,
by /s/ ▇▇▇▇▇▇▇ ▇. Short
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Short
Title: Senior Vice President
THE BANK OF NEW YORK,
by /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Agent
FIRST UNION NATIONAL BANK,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
SANWA BUSINESS CREDIT CORPORATION
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President & Manager
THE LONG TERM CREDIT BANK OF JAPAN, LTD.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
MEESPIERSON CAPITAL CORP,
by /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Managing Director
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
MERCANTILE BANK N.A.,
by /s/ ▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇
Title: Assistant Vice President
TORONTO DOMINION (TEXAS), INC.,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
by /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer
THE MITSUBISHI TRUST AND BANKING CORPORATION,
by /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
THE SAKURA BANK, LIMITED, NEW YORK
by /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK OF IRELAND,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND, INC.
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
KZH HOLDING CORPORATION III,
by /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
KEYPORT LIFE INSURANCE COMPANY,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
CRESCENT/MACH I PARTNERS, L.P.,
By: TCW Asset Management Company, its
Investment Manager
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
THE TRAVELERS INSURANCE COMPANY,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Investment Officer
PILGRIM AMERICA PRIME RATE TRUST,
By: PILGRIM AMERICA INVESTMENTS,
INC. AS ITS MANAGER
by /s/ ▇▇▇▇▇▇ Tiffen
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Name: ▇▇▇▇▇▇ Tiffen
Title: Senior Vice President
OSPREY INVESTMENTS PORTFOLIO,
By: CITIBANK, N.A., AS MANAGER
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President