AMENDMENT AND MODIFICATION TO
LOAN AGREEMENT
THIS AMENDMENT AND MODIFICATION TO LOAN AGREEMENT (the "Amendment") is made
effective the 17th day of December, 1998, among THE JPM COMPANY, a Pennsylvania
corporation ("Borrower"), FIRST UNION NATIONAL BANK (successor by merger to
CoreStates Bank, N.A.) in its capacity as agent ("Agent"), and the financial
institutions listed on Schedule B attached hereto and made a part of this
Amendment (each a "Lender" and collectively the "Lenders").
BACKGROUND
Pursuant to that certain Loan Agreement dated April 9, 1998 by and among
Borrower, Lenders and Agent (the "Loan Agreement"), Lenders agreed, inter alia,
to make available to Borrower a revolving credit facility in the Maximum Amount
of up to Sixty Million Dollars ($60,000,000.00).
Borrowers have requested that Lenders increase the Maximum Amount of the
Revolver to $70,000,000.00, which Lenders are willing to do on the terms set
forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS.
(1) Each of the following definitions contain in Section 1 of the Loan
Agreement is hereby amended and restated to be as follows:
"1.31 "Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (a) Adjusted EBITDA minus Unfunded Capital Expenditures
to (b) the sum of Interest Expense and current maturities of long term
Indebtedness for such period; all as determined on a Consolidated
Basis and in accordance with GAAP."
1.40. "Lender Indebtedness" shall mean all obligations and
Indebtedness of Borrower or any other Obligor to any Lender, whether
now or hereafter owing or existing, arising under or in connection
with the Revolver, the Swingline Loans or any other credit facility or
credit accommodation extended to any Obligor under this Agreement or
the Loan Documents, including without limitation, all obligations to
reimburse any Lender for payments made by any Lender pursuant to any
Letter of Credit or any other letter of credit issued for the account
or benefit of Borrower or any other Obligor by such Lender, principal,
interest and other sums at any time owing to CoreStates under or in
connection with the CoreStates Line, all obligations and Indebtedness
of any Obligor to CoreStates or any other Lender under the Hedge
Agreement or under any other swap, collar, cap or other interest rate
protection agreement entered into by any Obligor with any Lender in
connection with the Loan Documents, all other obligations or
undertakings now or hereafter made by or for the benefit of Borrower
or any other Obligor to or for the benefit of any Lender under any
other agreement, promissory note or undertaking now existing or
hereafter entered into by Borrower or any other Obligor with any
Lender based on or arising in connection with this Agreement, together
with all interest, fees, costs, expenses and other sums payable in
connection with any of the foregoing."
"1.47 "Maximum Amount" means Seventy Million Dollars
($70,000,000.00) ."
(1) The following definitions are hereby added to Section 1 of the Loan
Agreement:
"1.3A "Adjusted EBITDA" means, for any period on or after
September 30, 1998, EBITDA for such period calculated without
including the $1,400,000 in one-time charges incurred by Borrower
and/or its Subsidiaries in connection with the closing of Borrower's
former facility located in South Carolina."
"1.76 "Unfunded Capital Expenditures" means Capital Expenditures
other than (a) those funded by long term Indebtedness permitted under
Section 7.3(b) or (c) hereof; and (b) up to $5,500,000.00 in
expenditures to effect renovations/additions by Borrower and/or its
Subsidiaries to their existing plants located in Mexico and the Czech
Republic, respectively, provided that such expenditures are financed
on or before March 31, 1999 with purchase money Indebtedness on terms
and conditions acceptable to Agent and Lenders and any proceeds of
such Indebtedness not used to finance such expenditures are used to
reduce the outstanding principal balance of the Revolver."
2. PRO RATA SHARES. To evidence each Lender's increased Pro Rata Share of the
Revolver, Schedule B to the Loan Agreement is hereby deleted and replaced
with the revised Schedule B attached hereto.
3. AMENDED AND RESTATED NOTES. To further evidence the increase in the Maximum
Amount of the Revolver from $60,000,000.00 to $70,000,000.00, Borrower
shall execute and deliver to each Lender an Amended and Restated Revolver
Note in the form attached hereto as Schedule A (collectively, the "Amended
and Restated Revolver Notes"). The aggregate principal amount of all of the
Amended and Restated Revolver Notes shall equal $70,000,000.00. All
references in the Loan Agreement and in each of the other Loan Documents to
the "Revolver Notes" or a "Revolver Note" shall mean the Amended and
Restated Revolver Notes and each Amended and Restated Revolver Note, as
applicable. Neither the execution and delivery of the Amended and Restated
Revolver Notes nor this Amendment shall constitute a novation, release,
waiver, satisfaction, accord or accord and satisfaction of any of the
Indebtedness evidenced by the original Revolver Notes, which Indebtedness
shall be deemed advanced and outstanding under the Amended and Restated
Revolver Notes.
4. LIMITATIONS ON INDEBTEDNESS. The following is hereby added to Section 7.3
of the Loan Agreement as Subparagraph (f) thereof and shall constitute an
additional exception to the general prohibition on the creation by a
Covered Person of any Indebtedness as contained in such Section 7.3.
"(f) purchase money Indebtedness incurred by Borrower and/or any
of its Subsidiaries in the aggregate maximum principal amount of up to
$5,500,000.00 to finance renovations/additions to their existing
plants located in Mexico and the Czech Republic, respectively,
provided that (i) the terms and conditions of such Indebtedness are
acceptable to Agent and Lenders, and (ii) such Indebtedness is
effected on or before March 31, 1999, and (iii) the net proceeds of
such Indebtedness not used to complete such renovations/additions are
used to reduce the outstanding principal balance of the Revolver and
(iv) the security for such Indebtedness is limited to the property and
plants being improved and the Guaranty of Borrower."
5. INVESTMENTS AND LOANS. The following is hereby added to Section 7.4 of the
Loan Agreement as subparagraph (n) thereof and shall constitute an
additional exception to the general prohibition on the creation by Borrower
or any of its Subsidiaries of investments in or loans or extensions of
credit to any Person as contained in such Section 7.4, and which exception
was consented to by Agent and Lenders in that certain letter agreement
dated October 22, 1998:
"(n) Loans and advances to officers provided that (i) the total
principal amount of all such loans outstanding at any time, including
any of such loans outstanding on the date hereof, shall not exceed
$500,000.00, (ii) such loans shall be evidenced by promissory notes
payable to Borrower which are assigned to Agent as additional
collateral, and (iii) all such notes shall provide for repayment in
full upon the first to occur of (x) March 31, 1999 or (y) such date as
the closing price per share of Borrower's stock on the NASDAQ National
Market System (or if no such closing price is so reported, the closing
price or bid price on such exchange or market as Borrower's stock is
traded) equals or exceeds $10.00 per share for ten (10) consecutive
trading days."
6. GUARANTIES. Section 7.5 of the Loan Agreement is hereby amended to be as
follows:
"7.5 Guaranties. Except for the execution and delivery by
Borrower of an unsecured guaranty and/or unsecured suretyship
agreement for the Indebtedness permitted under Section 7.3(f) of this
Agreement, no Covered Person will directly or indirectly guarantee,
endorse (other than for collection or deposit in the ordinary course
of business), discount, sell with recourse or for less than the face
value or agree (contingently or otherwise) to purchase or repurchase
or otherwise acquire, or otherwise become directly or indirectly
liable for, or agree (contingently or otherwise) to supply or advance
funds (whether by loan, stock purchase, capital contribution or
otherwise) in respect of, any Indebtedness, obligations or liabilities
of any Person."
7. DISPOSITION OF ASSETS. Section 7.6 of the Loan Agreement is hereby amended
to be as follows: "7.6 Disposition of Assets. No Covered Person will sell,
lease, transfer or otherwise dispose of all, substantially all, or any
material portion of its property or assets, except for sales of inventory
in the ordinary course for fair consideration; provided, however, that a
Covered Person may, provided that no Event of Default exists, sell or
dispose of assets if (a) done so in the ordinary course of its business and
the aggregate value of all such assets does not exceed $250,000.00 in any
one fiscal year, or (b) the sale is of Borrower's real estate located in
South Carolina and in connection with the scheduled termination of
Borrower's operations at such property, or (c) the sale is of the
facilities owned by Borrower or its Subsidiaries located in Mexico and the
Czech Republic, respectively, and (i) the terms and conditions of such sale
(including a sale and lease back transaction) are acceptable to Agent and
Lenders, and (ii) the net proceeds of such sale/sale and leaseback are used
to reduce the outstanding principal balance of the Revolver."
8. TOTAL INDEBTEDNESS TO TOTAL CAPITAL. Section 8.1 of the Loan Agreement is
hereby amended to be as follows:
"8.1 Total Indebtedness to Total Capital. Borrower and its
Subsidiaries shall maintain a ratio of Total Indebtedness to Total
Capital of not more than (i) sixty-seven and one-half percent (67
1/2%) as of September 30, 1998 and as of the end of each fiscal
quarter thereafter through and including September 30, 1999; (ii)
sixty-five percent (65%) as of December 31, 1999 and as of the end of
each fiscal quarter thereafter through and including March 31, 2000;
and (iii) sixty percent (60%) as of June 30, 2000 and as of the end of
each fiscal quarter thereafter."
9. TOTAL INDEBTEDNESS TO ANNUALIZED EBITDA. Section 8.2 of the Loan Agreement
is hereby amended to be as follows:
"8.2 Total Indebtedness to Annualized EBITDA. Borrower and its
Subsidiaries shall maintain a ratio of Total Indebtedness to
Annualized EBITDA of not more than 3.50 to 1.0. For purposes of the
foregoing, Annualized EBITDA means Borrower's Adjusted EBITDA adjusted
to include newly acquired Subsidiaries or operations if Borrower has
delivered to Agent and Lenders audited financial statements for such
new Subsidiary or operations, together with projected statements for
such Subsidiary or operations for the four fiscal quarters following
consummation of the acquisition, all in form acceptable to Agent."
10. ADDITIONAL DOCUMENTS. Borrower covenants and agrees to execute and deliver,
and to cause to be executed and delivered to Agent any and all other
documents, agreements, corporate resolutions, certificates and opinions as
Bank shall request in connection with the execution and delivery of this
Amendment or any other documents in connection herewith.
11. CLARIFICATION Notwithstanding the addition to the Loan Agreement of a
definition of Adjusted EBITDA, the ratio of Funded Debt to EBITDA used to
determine the Applicable Base Rate Margin and the Applicable Libor Rate
Margin as described on Schedule A to the Loan Agreement shall continue to
utilize EBITDA in its calculations and not Adjusted EBITDA.
12. REFERENCES. All references in the Loan Documents to the "Loan Agreement"
shall mean the Loan Agreement as amended by this Amendment. All references
in the Loan Agreement and the other Loan Documents to the "Loan Documents"
shall include, without limitation, this Amendment, the Amended and Restated
Revolver Notes and any and all other instruments or agreements executed in
connection with or pursuant to this Amendment.
13. FURTHER AGREEMENTS AND REPRESENTATIONS. Borrower does hereby:
(1) ratify, confirm and acknowledge that the Loan Agreement, as amended hereby,
and the other Loan Documents are valid, binding and in full force and
effect;
(2) covenant and agree to perform all obligations of Borrower contained herein,
in the Amended and Restated Revolver Notes and under the Loan Agreement, as
amended, and the other Loan Documents;
(3) acknowledge and agree that Borrower has no defense, set-off, counterclaim
or challenge against the payment of any sums owing under Loan Documents or
the enforcement of any of the terms of the Loan Agreement, as amended, the
Amended and Restated Revolver Notes or the other Loan Documents;
(4) acknowledge and agree that all representations and warranties of Borrower
contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if
made on and as of the date hereof;
(5) represent and warrant that no Event of Default (as defined in the Loan
Agreement or any of the other Loan Documents) or event which with the
giving of notice or passage of time or both would constitute such an Event
of Default exists and all information described in the foregoing Background
is true, accurate and complete;
(6) acknowledge and agree that nothing contained herein and no actions taken
pursuant to the terms hereof is intended to constitute a novation of the
Loan Agreement or any of the other Loan Documents, and does not constitute
a release, termination or waiver of any existing Event of Default or of any
liens, security interests, suretyship obligations, pledges, rights or
remedies granted to the Agent and/or the Lenders therein, which liens,
security interests, suretyship obligations, pledges, rights and remedies
are hereby expressly ratified, confirmed, extended and continued as
security for all Lender Indebtedness, including, without limitation, all
obligations of Borrower to Agent and Lenders under the Loan Agreement, as
amended hereby, the Amended and Restated Revolver Notes and the other Loan
Documents, including, without limitation, this Amendment; and
(7) acknowledge and agree that Borrower's failure to comply with or perform any
of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of
the Loan Documents.
14. FEES. Upon execution of this Amendment, Borrower shall pay to Agent for the
pro rata benefit of Lenders the following fees, which fees are fully earned
by Lenders and are non refundable:
(1) Amendment Fee of $75,000.00 (.125% of the original Maximum Amount); and
(2) Closing Fee of $25,000.00 (.25% of the $10,000,000.00 increase in the
original Maximum Amount).
15. COSTS AND EXPENSES Expressly in addition to the fees payable under
Paragraph 14 above, Borrower shall pay all of Agent's costs and expenses in
connection with the review, negotiation, documentation and closing of this
Amendment and the consummation of the transactions contemplated herein,
including, without limitation, fees, disbursements and expenses of counsel
retained by Agent and all fees related to filings, recording of documents
and searches.
16. INCONSISTENCIES. To the extent of any inconsistency between the terms,
conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail. All terms,
conditions and provisions of the Loan Agreement and the other Loan
Documents not inconsistent herewith shall remain in full force and effect
and are hereby ratified and confirmed by Borrower.
17. NO WAIVER/COUNTERPARTS. Nothing contained herein and no actions taken
pursuant to the terms hereof are intended to nor shall they constitute a
waiver by the Agent or Lenders of any rights or remedies available to any
of them at law or in equity or as provided in the Loan Agreement or the
other Loan Documents. This Amendment may be executed in multiple
counterparts.
18. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
19. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
20. HEADINGS. The headings of the sections of this Amendment are inserted for
convenience only and shall not be deemed to constitute a part of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
THE JPM COMPANY
By: _____________________________________________
Name/Title:______________________________________
AGENT:
FIRST UNION NATIONAL BANK, as Agent
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President
ISSUING BANK:
FIRST UNION NATIONAL BANK, as Issuing Bank
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President
LENDERS:
FIRST UNION NATIONAL BANK, as Lender
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President
MELLON BANK, N.A.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
NATIONSBANK, N.A.
By:
Name/Title:
PNC BANK, NATIONAL ASSOCIATION
By: _
Name/Title:
ACKNOWLEDGMENT AND CONSENT
The undersigned Guarantors hereby acknowledge and consent to the foregoing
Amendment and Modification to Loan Agreements ("Amendment") and do further agree
that (i) all sums advanced under the Amended and Restated Revolver Notes
constitute "Guaranteed Obligations" under the terms of their respective Surety
Agreements dated April 9, 1998 in favor of Agent (the "Guarantees"); (ii) the
foregoing Amendment shall not constitute a release or waiver of any of the
obligations of the undersigned to the Agent and/or the Lenders under any of the
Guarantees, all of which are hereby ratified, confirmed and continued; and (iii)
any lien, security interest or assignment granted to Agent and/or Lenders by
Guarantors do and shall secure all obligations of Borrower under the Amended and
Restated Revolver Notes.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
have executed this Acknowledgment and Consent, effective as of the date of the
foregoing Amendment.
JPM TECHNOLOGY, INC.
By:
Name/Title:
THE JPM COMPANY OF DELAWARE, INC.
By:
Name/Title:
DENRON, INC.
By:
Name/Title:
SCHEDULE B
LENDER PRO RATA PERCENTAGE PRO RATA SHARE
First Union National Bank 37.5% $26,250,000.00
Mellon Bank, N. A. 25.0% $17,500,000.00
PNC Bank, National Association 16.67% $11,666,667.00
NationsBank, N. A. 20.83% $14,583,333.00
TOTAL 100.00% $70,000,000.00
LENDERS AND ADDRESSES
First Union National Bank (successor
by merger to CoreStates Bank, N.A.)
PA6464
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President
PH: 610/655-1195
FX: 610/655-1027
With a copy to :
Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇. ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
PH: 610/941-2454
FX: 610/238-0305/0374
Mellon Bank, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
PH: (▇▇▇) ▇▇▇-▇▇▇▇
FX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Reed, Smith, ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
PH: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
PNC Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Vice-President
FX: 717/730-2387
With a copy to:
PNC Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Counsel
FX: 215/585-8713
NationsBank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Vice-President
PH: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Nexsen, Pruet, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
PH: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
TO
AMENDMENT AND MODIFICATION OF LOAN AGREEMENT