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EXHIBIT 10.2
EXECUTION COPY
$135,000,000
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 24, 1994
among
JPS TEXTILE GROUP, INC.
JPS CARPET CORP.
JPS CONVERTER AND INDUSTRIAL CORP.
JPS ELASTOMERICS CORP.
THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF
and
CITIBANK, N.A.
as Agent and Administrative Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Co-Agent and Collateral Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I
Definitions
1.01 Certain Defined Terms ....................... 3
1.02 Computation of Time Periods ................. 38
1.03 Accounting Terms ............................ 38
1.04 Premises Incorporated by Reference .......... 38
1.05 Other Definitional Provisions ............... 38
ARTICLE II
Amounts And Terms of Loans
2.01 The Term Loans .............................. 38
2.02 Repayment of the Term Loans.................. 39
2.03 Revolving Credit Facility ................... 39
2.04 Interest on the Revolving Loans.............. 51
2.05 Fees ........................................ 54
2.06 Prepayments ................................. 56
2.07 Payments; Collection of Accounts ............ 59
2.08 Special Provisions Governing Eurodollar
Rate Loans ................................ 63
2.09 Increased Capital ........................... 67
2.10 Authorized Officers of the Borrowing
Subsidiaries............................... 67
ARTICLE III
Conditions to Loans and Letters of Credit
3.01 Conditions Precedent to the Effectiveness of
this Agreement ............................ 68
3.02 Conditions Precedent to All Revolving
Loans and Letters of Credit ............... 75
ARTICLE IV
Representations and Warranties
4.01 Representations and Warranties on the
Effective Date ............................ 76
4.02 Subsequent Funding Representations and
Warranties ................................ 87
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ARTICLE V
Reporting Covenants
5.01 Financial Statements ........................ 88
5.02 Environmental Notices ....................... 93
5.03 Shareholders ................................ 95
5.04 Appraisals................................... 95
ARTICLE VI
Affirmative Covenants
6.01 Corporate Existence, etc. ................... 95
6.02 Corporate Powers, etc. ...................... 95
6.03 Compliance with Laws, etc. .................. 96
6.04 Payment of Taxes and Claims ................. 96
6.05 Maintenance of Properties; Insurance ........ 96
6.06 Inspection of Property; Books and
Records; Discussions ...................... 97
6.07 Litigation, Claims, etc. .................... 97
6.08 Labor Disputes .............................. 97
6.09 Maintenance of Licenses, Permits, etc. ...... 98
6.10 Required Interest Rate Contracts ............ 98
6.11 Receipt of Certain Funds .................... 98
6.12 Landlord Waivers and Bailee Waivers; Notice.. 99
6.13 Liens on Assets After Payment of Permitted
Financings ................................ 99
ARTICLE VII
Negative Covenants
7.01 Indebtedness ................................ 99
7.02 Sales of Assets; Liens ...................... 101
7.03 Investments ................................. 103
7.04 Accommodation Obligations ................... 104
7.05 Restricted Junior Payments .................. 104
7.06 Transactions with Shareholders and
Affiliates ................................ 105
7.07 Restriction on Fundamental Changes .......... 105
7.08 ERISA ....................................... 106
7.09 Operating Leases ............................ 106
7.10 Sales and Leasebacks ........................ 107
7.11 Senior Notes; Subordinated Indebtedness;
Preferred Stock ........................... 107
7.12 Amendment of Charter or By-Laws ............. 107
7.13 Disposal of Subsidiary Stock ................ 107
7.14 Issuance of Additional Shares ............... 108
7.15 Margin Regulations .......................... 108
7.16 Amendment of Transaction Documents .......... 108
7.17 Cancellation of Debt; Prepayment ............ 109
7.18 Environmental Liabilities ................... 109
7.19 Covenant with Respect to Newsub.............. 109
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ARTICLE VIII
Financial Covenants
8.01 Minimum Net Worth ........................... 110
8.02 Minimum Total Interest Coverage Ratio ....... 111
8.03 Minimum Fixed Charge Coverage Ratio ......... 112
8.04 [Intentionally Omitted]...................... 114
8.05 Minimum Current Ratio ....................... 114
8.06 Maximum Capital Expenditures ................ 115
8.07 Maximum Cash Payments of
Warranty Liabilities ....................... 116
ARTICLE IX
Events of Default; Rights and Remedies
9.01 Events of Default ........................... 116
9.02 Rights and Remedies ......................... 121
ARTICLE X
The Agent; The Collateral Agent
10.01 Appointment ................................. 122
10.02 Nature of Duties ............................ 123
10.03 Rights, Exculpation, etc. ................... 124
10.04 Reliance .................................... 125
10.05 Indemnification ............................. 125
10.06 The Agent and the Collateral Agent
Individually................................. 126
10.07 Successor Agent; Resignation of Agent
and Collateral Agent......................... 126
10.08 Collateral Matters .......................... 127
10.09 Relations Among Senior Lenders .............. 130
ARTICLE XI
Miscellaneous
11.01 Concerning the Collateral and the
Collateral Documents ...................... 130
11.02 Assignments and Participations .............. 130
11.03 Expenses .................................... 133
11.04 Indemnity ................................... 134
11.05 Change in Accounting Principles ............. 135
11.06 Setoff ...................................... 136
11.07 Ratable Sharing ............................. 136
11.08 Amendments and Waivers ...................... 137
11.09 Independence of Covenants ................... 138
11.10 Notices ..................................... 138
11.11 Survival of Warranties and Agreements ....... 138
11.12 Failure or Indulgence Not Waiver;
Remedies Cumulative ....................... 138
11.13 Termination ................................. 139
11.14 Marshalling; Recourse to Security; Payments
Set Aside ................................. 139
11.15 Severability ................................ 139
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11.16 Headings .................................... 139
11.17 Governing Law ............................... 139
11.18 Limitation of Liability ..................... 139
11.19 Successors and Assigns ...................... 140
11.20 Consent to Jurisdiction and Service140
Process; Waiver of Jury Trial ............. 140
11.21 Counterparts; Effectiveness;
Inconsistencies ........................... 141
11.22 Performance of Obligations .................. 141
11.23 Company as Agent for Borrowing
Subsidiaries............................ 141
11.24 Construction................................. 142
11.25 Entire Agreement............................. 142
11.26 Releases .................................... 142
11.27 Consent of the Senior Lenders................ 142
Signature Pages........................................ S-1
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EXHIBITS
Exhibit 1 -- Form of Assignment and Acceptance
Exhibit 2 -- Form of Compliance Certificate
Exhibit 3 -- Form of Notice of Borrowing
Exhibit 4 -- Form of Notice of Conversion/Continuation
Exhibit 5 -- Form of Collection Account Agreement
Exhibit 6 -- [Intentionally Omitted]
Exhibit 7 -- Form of Officer's Solvency Certificate
Exhibit 8 -- Form of Officer's No Default Certificate
Exhibit 9 -- Form of Borrowing Base Certificate
Exhibit 10 -- Form of Request for Release of Receivables
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SCHEDULES
Schedule 1.01-A -- Senior Lender Commitments, Pro Rata Shares
Schedule 1.01-B -- Existing Accommodation Obligations
Schedule 1.01-C -- Permitted Existing Indebtedness
Schedule 1.01-D -- Existing Investments
Schedule 1.01-E -- Permitted Existing Liens
Schedule 2.03(d) -- Letters of Credit Providing Credit
Support for Operating Leases
Schedule 3.01(a)(v) -- Release Jurisdictions
Schedule 3.01(a)(ix)-- Real Property
Schedule 4.01(c) -- Subsidiaries of the Company
Schedule 4.01(e) -- Conflict with Contractual
Obligations or Requirements
of Law
Schedule 4.01(j)-1 -- Class B Common Stock and Junior
Preferred Shareholders
Schedule 4.01(j)-2 -- Class A Common Stock Shareholders;
Senior Preferred Stockholders
Schedule 4.01(k) -- Litigation
Schedule 4.01(t) -- Environmental Matters
Schedule 4.01(u) -- ERISA
Schedule 4.01(z) -- Joint Ventures
Schedule 4.01(cc) -- Bank Accounts
Schedule 6.05 -- Insurance Policies and Programs
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of
June 24, 1994 (as amended, supplemented or modified from time to time, this
"Agreement") among JPS TEXTILE GROUP, INC., a Delaware corporation (the
"Company"), JPS CARPET CORP., a Delaware corporation ("JCC"), JPS CONVERTER AND
INDUSTRIAL CORP., a Delaware corporation ("JCIC"), and JPS ELASTOMERICS CORP.,
a Delaware corporation ("JEC") (JCC, JCIC and JEC being collectively referred
to herein as the "Borrowing Subsidiaries"), the FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF (collectively referred to herein, together with
their respective successors and assigns, as the "Senior Lenders" and
individually as a "Senior Lender"), CITIBANK, N.A. ("Citibank"), in its
separate capacity as Agent and Administrative Agent for the Senior Lenders
hereunder (in such capacity, the "Agent"), GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation ("GE Capital"), in its separate capacity as
Co-Agent and Collateral Agent for the Senior Lenders hereunder (in such
capacity, the "Collateral Agent"), amends and restates that certain Third
Amended and Restated Credit Agreement dated as of March 18, 1993, as amended
(the "Existing Credit Agreement"), among the Company, the Borrowing
Subsidiaries, JPS Auto Inc., a Delaware corporation (formerly known as JPS
Automotive Products Corp., "JPS Auto"), the Senior Lenders, the Agent and the
Collateral Agent. By its signature below, JPS Auto agrees to perform the
covenants applicable to it from and after the date hereof through the Effective
Date (as defined below). Each of the parties hereto and, by its signature
below, JPS Auto agrees that from and after the Effective Date (as defined
below) JPS Auto shall cease to be a party to this Agreement.
W I T N E S S E T H:
WHEREAS, the Company, JPS Auto and JCIC have agreed to sell
and transfer the Automotive Assets (as defined below) to JPS Automotive
Products Corp., a newly-formed Delaware corporation which is indirectly wholly
owned by Foamex International Inc. and is unaffiliated with JPS Auto or JCIC
(such new corporation being "New Auto");
WHEREAS, contemporaneously with the proposed sale of the
Automotive Assets (as defined below), New Auto will offer for sale to the
public $180,000,000 aggregate principal amount of its Senior Notes (the "New
Auto Debt Offering");
WHEREAS, certain proceeds of the sale of the Automotive Assets
shall constitute "Net Cash Proceeds" and shall be applied as a mandatory
prepayment, first to the repayment of outstanding Revolving Loans (without a
corresponding reduction of the Commitments) and then to (x) the repayment in
full of the Term
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Loans and (y) the cash collateralization of the outstanding Letters of Credit;
WHEREAS, the Company has requested that the Senior Lenders
permit the Company to use such amount of the Net Cash Proceeds remaining after
the application set forth above as shall be required to make offers to redeem
the following Indebtedness of the Company: first, the Senior Subordinated Notes
and second, the Subordinated Discount Notes and the Subordinated Debentures, in
each case in accordance with the requirements of the indentures governing such
Indebtedness;
WHEREAS, the Company has requested that the Senior Lenders
permit the Company to use the proceeds of Revolving Loans to be made hereunder
after the Effective Date to redeem the Senior Notes at par in accordance with
the Senior Note Indenture;
WHEREAS, the Company, JPS Auto and JCIC have requested that
the Senior Lenders (x) permit the Agent and the Collateral Agent to release
their respective Liens on the Automotive Assets (including, without limitation,
any capital stock which is part of such Automotive Assets) and any Lien that
may attach to the stock of Newsub (as defined below) and (y) subordinate their
Lien on the Dunean plant located in Greenville County, South Carolina to the
Dunean Operating Agreement;
WHEREAS, the Company, JPS Auto and the Borrowing Subsidiaries
have requested the Senior Lenders to amend the Existing Credit Agreement to
provide, among other things, for (i) a decrease in the Revolving Credit
Facility from $152,300,000 to $135,000,000, (ii) an extension of the Revolving
Credit Termination Date from October 31, 1995 to December 1, 1996, (iii) the
repayment in full of the Term Loans, (iv) the creation of a subfacility under
the Revolving Credit Facility for the purpose of financing Capital Expenditures
and (v) other amendments, all as more fully described herein;
WHEREAS, the Company, the Borrowing Subsidiaries, the Senior
Lenders, the Agent and the Collateral Agent have agreed to amend and restate
the Existing Credit Agreement to provide for such amendments on the terms set
forth in this Agreement, which Agreement shall become effective upon
satisfaction of certain conditions precedent set forth herein; and
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or evidence payment of all or any of such
obligations and liabilities, that this Agreement amend and restate in its
entirety the Existing Credit Agreement, and that from and after the date hereof
the Existing Credit Agreement be of no further force or effect except as to
evidence the incurrence of the
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"Obligations" thereunder and the representations and warranties made
thereunder;
NOW, THEREFORE, in consideration of the above premises the
Company, the Borrowing Subsidiaries, the Senior Lenders, the Agent and the
Collateral Agent hereby agree as follows:
ARTICLE I
Definitions
1.01. Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings (such meanings to be applicable, except to the extent
otherwise indicated in a definition of a particular term, both to the singular
and the plural forms of the terms defined):
"Accommodation Obligation", as applied to any Person, shall
mean any contractual obligation, contingent or otherwise, of that Person with
respect to any Indebtedness or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
"Affiliate", as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to vote five percent (5%) or
more of the Securities having voting power for the election of directors of
such Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise.
"Agent" shall mean Citibank, in its capacity as agent and
administrative agent for the Senior Lenders hereunder and
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shall include any successor Agent appointed pursuant to Section 10.07.
"Agreement" shall have the meaning ascribed to such term in
the preamble hereto, including the Exhibits and Schedules, as the same may be
amended, supplemented or otherwise modified from time to time.
"Amendatory Agreement" shall mean the Amendatory Agreement
dated as of the Effective Date among the Company, JPS Auto, the Borrowing
Subsidiaries, International Fabrics, the Agent and the Collateral Agent, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Applicable Interest Rate" shall mean the applicable per annum
interest rate on each of the Revolving Loans determined pursuant to Section
2.04(a).
"APB 16" shall mean Accounting Principles Board Opinion No. 16
as in effect at the time that any adjustment required thereunder is to be made
on the balance sheet of a Person.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit 1 (with blanks appropriately filled in)
delivered to the Agent in connection with an assignment of a Senior Lender's
interest under this Agreement pursuant to Section 11.02.
"Assumed Liabilities" has the meaning ascribed to such term in
Section 2 of the Purchase Agreement.
"Auto Sale" shall mean the purchase by New Auto and sale by
JPS Auto and JCIC of, and the assumption by New Auto of certain liabilities
associated with, the Automotive Assets, all pursuant to and in accordance with
the terms of the New Auto Asset Purchase Agreement.
"Automotive Assets" shall mean the "Transferred Assets", as
defined in the New Auto Asset Purchase Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States
Code (11 U.S.C. Section 101 et seq.), as amended from time to time, or any
successor statute.
"Base Rate" shall mean, for any period, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate per annum
shall at all times be equal to the highest of:
(i) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as Citibank's base rate; and
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(ii) the sum (adjusted to the nearest one-quarter
of one percent (1/4 of 1%) or, if there is no nearest one- quarter of one
percent (1/4 of 1%), to the next higher one-quarter of one percent (1/4 of 1%))
of (A) one-half of one percent (1/2 of 1%) per annum, plus (B) the rate
obtained by dividing (I) the latest three-week moving average of secondary
market morning offering rates in the United States for three-month certificates
of deposit of major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 365 or 366 days, as the case may
be) being determined weekly by Citibank on the basis of such rates reported by
certificate of deposit dealers to, and published by, the Federal Reserve Bank
of New York, or, if such publication shall be suspended or terminated, on the
basis of quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by Citibank by
(II) a percentage equal to one hundred percent (100%) minus the average of the
daily percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any marginal
reserve requirement) for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar nonpersonal time
deposits in the United States, plus (C) the average during such three-week
period of the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. Dollar deposits of
Citibank in the United States; and
(iii) the sum of one-half of one percent (1/2 of
1%) plus the Federal Funds Rate then in effect.
"Base Rate Loans" shall mean all Revolving Loans outstanding
which bear interest at a rate determined by reference to the Base Rate as
provided in Section 2.04(a)(i).
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which
the Company or an ERISA Affiliate is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Blocked Accounts" shall mean, collectively, the lock box and
deposit accounts maintained by the Collateral Agent and the Borrowing
Subsidiaries at the Collecting Banks, to which proceeds of Collateral may be
deposited from time to time.
"Borrowing" shall mean, except as otherwise provided in
Section 2.08(e)(ii), a borrowing consisting of Loans of the same type made on
the same day by the Senior Lenders.
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"Borrowing Base" shall mean at any time, with respect to any
Borrowing Subsidiary, an amount equal to the sum of (i) up to eighty-five
percent (85%) of the Net Face Amount of Eligible Receivables of such Borrowing
Subsidiary at such time, (ii) up to fifty-five percent (55%) of Eligible Yarn
Inventory of such Borrowing Subsidiary at such time, (iii) up to fifty-five
percent (55%) of Eligible Raw Materials of such Borrowing Subsidiary at such
time, (iv) up to twenty-five percent (25%) of Eligible Work in Process of such
Borrowing Subsidiary at such time, and (v) up to fifty percent (50%) of
Eligible Finished Goods of such Borrowing Subsidiary at such time.
"Borrowing Subsidiary" shall have the meaning ascribed to such
term in the preamble hereto.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York, or is a day
on which banking institutions located in such state are required or authorized
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the
Eurodollar Rate, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in the London interbank
Eurodollar market.
"Capex Loan" shall mean, with respect to any Borrowing
Subsidiary, a Revolving Loan, (i) the proceeds of which are used solely for the
purpose of (x) purchasing property, plant, equipment and other fixed assets or
(y) financing or refinancing existing or future Capital Expenditures by such
Borrowing Subsidiary and existing and future Indebtedness of such Borrowing
Subsidiary incurred for the purpose of purchasing property, plant, equipment
and other fixed assets and (ii) which is identified as a Capex Loan on the
Notice of Borrowing delivered pursuant to Section 2.03(b) at the time of the
Borrowing of such Revolving Loan.
"Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
during that period and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of the Company and its
Subsidiaries) by the Company and its Subsidiaries during such period that, in
conformity with GAAP, are required to be included in or reflected by the
property, plant or equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Company and its Subsidiaries (including
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by the Company or its Subsidiaries to the extent of the gross
amount of such purchase price less the book value of the equipment being traded
in at such time), but excluding (except for the purpose of
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determining whether a Revolving Loan is a Capex Loan) expenditures made in
connection with the replacement or restoration of assets, to the extent
reimbursed or financed from insurance proceeds paid on account of the loss of
or damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation or eminent domain of such
assets being replaced.
"Capital Lease" as applied to any Person, shall mean any lease
of any property (whether real, personal, or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash Collateral Account" shall mean the interest bearing
account at Citibank's offices at 399 Park Avenue, New York, New York 10043,
Account No. 4060-4538 into which cash collateral shall be deposited. The Cash
Collateral Account shall be under the sole dominion and control of the Agent,
provided that all amounts deposited therein shall be held by the Agent for the
benefit of the Agent, the Collateral Agent, the Senior Lenders and the Issuing
Bank.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by an agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one (1) year after
the date of acquisition thereof; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within ninety (90)
days after the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc. (or, if at any time neither
Standard & Poor's Corporation nor Moody's Investors Service, Inc. shall be
rating such obligations, then from such other nationally recognized rating
services acceptable to the Agent and the Collateral Agent) and not listed in
Credit Watch published by Standard & Poor's Corporation; (iii) commercial
paper, other than commercial paper issued by the Company or any of its
Affiliates, maturing no more than ninety (90) days after the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 or P-1
from either Standard & Poor's Corporation or Moody's Investors Service, Inc.
(or, if at any time neither Standard & Poor's Corporation nor Moody's Investors
Service, Inc. shall be rating such obligations, then the highest rating from
such other nationally recognized rating services acceptable to the Agent and
the Collateral Agent); and (iv) domestic and Eurodollar certificates of deposit
or time deposits or bankers' acceptances maturing within ninety (90) days after
the date of acquisition thereof issued by any commercial bank organized under
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the laws of the United States of America or any state thereof or the District
of Columbia or Canada having combined capital and surplus of not less than
$250,000,000.
"Citibank" shall mean Citibank, N.A., a national banking
association.
"Citibank Account" of a Borrowing Subsidiary, shall mean the
account of such Borrowing Subsidiary at Citibank's office at 399 Park Avenue,
New York, New York 10043 into which each Revolving Loan made to such Borrowing
Subsidiary shall be disbursed.
"Claim" shall mean any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"Class A Common Stock" shall mean the Class A Common Stock of
the Company, $0.01 par value per share.
"Class B Common Stock" shall mean the Class B Common Stock of
the Company, $0.01 par value per share.
"Class B Investor Group" shall mean Odyssey, DLJ Capital Corp.
and Lincoln National Bank and Trust of Fort Wayne, as voting trustee.
"Class B Shareholders' Agreement" shall mean the Stockholders'
Agreement dated as of April 2, 1991 entered into by and among the members of
the Class B Investor Group, as such agreement may be amended, modified or
supplemented from time to time.
"Collateral" shall mean all property and interests in property
now owned or hereafter acquired by the Company or any Subsidiary of the Company
in or upon which a security interest, pledge, lien or mortgage is granted or of
which a collateral assignment is made under the Collateral Documents.
"Collateral Documents" shall mean the Company Guaranty, the
Company Security Agreement, the Company Pledge Agreement, the Subsidiary
Guaranties, the Subsidiary Security Agreements, the JPS Auto Guaranty, the JPS
Auto Security Agreement, the Real Property Collateral Documents, the Trademark
Security Agreements, the Deed of Charge, the International Fabrics Security
Agreement, the International Fabrics Guaranty, the Amendatory Agreement and all
other security agreements, mortgages, deeds of trust, collateral assignments
and other agreements or conveyances at any time delivered to the Agent and/or
the Collateral Agent to create or evidence Liens to secure the Obligations.
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"Collecting Banks" shall have the meaning ascribed to such
term in Section 2.07(e).
"Commission" shall mean the Securities and Exchange Commission.
"Commitment" shall mean, with respect to each Senior Lender,
at any time, the lesser of (i) such Senior Lender's Pro Rata Share of the
amount of the Revolving Credit Facility at such time and (ii) the amount set
forth opposite the name of such Senior Lender on Schedule 1.01-A under the
heading "Commitment", as adjusted from time to time to give effect to any
applicable Assignment and Acceptance. "Commitments" shall mean, at any time,
collectively, the aggregate amount of the Commitments of all the Senior Lenders
at such time.
"Common Stock" shall mean, collectively, the Class A Common
Stock and the Class B Common Stock.
"Company" shall mean the entity described in the preamble
hereto as JPS Textile Group, Inc.
"Company Guaranty" shall mean the Amended and Restated
Guaranty dated as of March 18, 1993 executed by the Company in favor of the
Agent, the Collateral Agent and the Senior Lenders, pursuant to which the
Company has guaranteed all of the Obligations of each of the Borrowing
Subsidiaries, as the same may be amended, supplemented or otherwise modified
from time to time.
"Company Pledge Agreement" shall mean the Second Amended and
Restated Pledge Agreement dated as of March 18, 1993 between the Company and
the Agent, as the same may be amended, supplemented or otherwise modified from
time to time.
"Company Security Agreement" shall mean the Second Amended and
Restated Security Agreement dated as of March 18, 1993 among the Company, the
Collateral Agent and the Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"Compliance Certificate" shall mean a certificate in the form
of Exhibit 2 delivered to the Agent and the Collateral Agent by the Loan
Parties pursuant to Section 5.01(d) and covering the Loan Parties' compliance
with the covenants contained in Articles VII and VIII.
"Concentration Account" shall mean the account of the Agent
(Account No. 3885-8061) at its office at 399 Park Avenue, New York, New York
10043 into which all funds from the Blocked Accounts shall be deposited.
-9-
17
"Consent Solicitation Statement" shall mean the Consent
Solicitation Statement dated November 12, 1992, as amended by Supplement No. 1
thereto dated December 1, 1992 and as further amended by Supplement No. 2
thereto dated December 18, 1992 delivered by the Company to the holders of the
Senior Notes.
"Consolidated Cash Interest Expense" means, for any period,
total interest expense, whether paid or accrued (including the interest
component of Capital Lease obligations), of the Company and its Subsidiaries on
a consolidated basis during such period, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to Letters
of Credit and net costs under Interest Rate Contracts, but excluding, however,
amortization of discount, interest paid in property other than cash or any
other interest expense not payable in cash, all as determined in conformity
with GAAP.
"Consolidated Fixed Charges" shall mean, for any period, the
amounts for such period of (i) Consolidated Cash Interest Expense, plus (ii)
scheduled payments of principal on Other Indebtedness (including the principal
component of Capital Lease obligations), plus (iii) Capital Expenditures, plus
(iv) cash dividends paid by the Company, plus (v) cash payments (other than any
such payments made (x) in connection with the Auto Sale or (y) by or on behalf
of Newsub) for income taxes.
"Consolidated Net Income" shall mean, for any period, the net
earnings (or loss) after taxes of the Company and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"Consolidated Operating Company Cash Interest Expense" means,
for any period, total interest expense, whether paid or accrued (including the
interest component of Capital Lease obligations), of the Borrowing
Subsidiaries, on a consolidated basis during such period, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to Letters of Credit and net costs under Interest Rate Contracts, but
excluding, however, amortization of discount, interest paid in property other
than cash or any other interest expense not payable in cash, all as determined
in conformity with GAAP.
"Consolidated Operating Company Fixed Charges" shall mean, for
any period, the amounts for such period of (i) Consolidated Operating Company
Cash Interest Expense, plus (ii) scheduled payments of principal on Other
Indebtedness of the Borrowing Subsidiaries (including the principal component
of Capital Lease obligations), plus (iii) Capital Expenditures, plus cash
dividends paid by any of the Borrowing Subsidiaries, plus (v) cash payments
(other than any such payments made (x) in
-10-
18
connection with the Auto Sale or (y) by or on behalf of Newsub) for income
taxes.
"Consolidated Rental Payments" shall mean, for any period, the
aggregate amount of all rents paid or, as used in Section 7.09, accrued under
all Operating Leases of the Company or any of its Subsidiaries as lessee (net
of sublease income), all as determined on a consolidated basis in conformity
with GAAP.
"Contaminant" shall mean any waste, pollutant (as that term is
defined in 42 U.S.C. 9601(33) or in 33 U.S.C. 1362(13)), hazardous substance
(as that term is defined in 42 U.S.C. 9601(14)), hazardous chemical (as that
term is defined by 29 CFR Section 1910.1200(c)), toxic substance, hazardous
waste (as that term is defined in 42 U.S.C. 6901), radioactive material,
special waste, petroleum, including crude oil or any petroleum-derived
substance, waste, or breakdown or decomposition product thereof, or any
constituent of any such substance or waste, including but not limited to
polychlorinated biphenyls, and asbestos.
"Contractual Obligation", as applied to any Person, shall mean
any provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement or instrument to which that Person is a party or by which it or any
of its properties is bound, or to which it or any of its properties is subject
(including, without limitation, any restrictive covenant affecting such Person
or any of its properties).
"Contribution Agreement" shall mean the Amended and Restated
Contribution Agreement dated as of the Effective Date entered into by and among
each Borrowing Subsidiary, which amends and restates the Contribution Agreement
dated as of March 18, 1993, as such agreement may be amended, modified or
supplemented from time to time with the consent of the Agent and the Collateral
Agent.
"Credit Insured Receivable" shall mean an account of a
Borrowing Subsidiary with respect to which the following statements are true:
(i) such Borrowing Subsidiary has obtained credit insurance or other form of
credit protection covering such account on terms and conditions and from a
financial institution satisfactory to the Agent and the Collateral Agent;
provided, however, that the factoring arrangements with Heller Financial, Inc.
and Congress Talcott as in effect on the Effective Date are deemed to be
satisfactory to the Agent and the Collateral Agent; and (ii) such credit
insurance or other form of credit protection is in full force and effect and
not in dispute.
"Current Assets" shall mean, as at any date of determination,
the total assets of the Company and its
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19
Subsidiaries on a consolidated basis which may properly be classified as
current assets in conformity with GAAP, except that there shall be excluded
from current assets, cash and Cash Equivalents and overdrafts.
"Current Liabilities" shall mean, as at any date of
determination, the current liabilities of the Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP (including, without limitation, the Obligations);
provided, however, there shall be excluded from Current Liabilities the
currently maturing portion of all long-term Indebtedness of the Company and its
Subsidiaries.
"Current Ratio" shall mean, at any time, the ratio of Current
Assets to Current Liabilities.
"Customary Permitted Liens" shall mean:
(i) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for taxes, assessments or charges of any Governmental
Authority or claims not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens (other than any
Lien imposed under ERISA) imposed by law, created in the ordinary course of
business and for amounts not yet due or which are being contested in good faith
by appropriate proceedings which are sufficient to prevent imminent foreclosure
of such Liens, are promptly instituted and diligently conducted and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iii) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business (including,
without limitation, surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social security
benefits or to secure the performance of tenders, bids, leases, contracts
(other than for the repayment of Indebtedness), statutory obligations and other
similar obligations or arising as a result of progress payments under
government contracts;
(iv) easements (including, without limitation,
reciprocal easement agreements and utility agreements), rights-of- way,
covenants, consents, reservations, encroachments, variations and other
restrictions, charges or encumbrances (whether or not recorded) affecting the
use of real property,
-12-
20
which do not materially detract from the value of such property or materially
impair the use thereof; and
(v) extensions, renewals or replacements of any
Lien referred to in paragraphs (i) through (iv) above, provided (A) that, in
the case of paragraphs (i) through (iii) above, the principal amount of the
obligation secured thereby is not increased and (B) that any such extension,
renewal or replacement is limited to the property originally encumbered
thereby;
provided, however, to the extent that the amount of obligations of the Loan
Parties arising from claims being contested in good faith secured by such Liens
in clauses (i) and (ii) above exceeds $2,000,000 in the aggregate, the Loan
Parties shall have set aside full cash reserves in the amount of such
obligations or there shall be availability under the Revolving Credit Facility
in such amount.
"Deed of Charge" shall mean the Deed of Charge, dated as of
December 30, 1993, executed by JCC in favor of the Agent evidencing the pledge
of 100% of the issued and outstanding capital stock of JPS-U.K., as the same
may be amended, supplemented or otherwise modified from time to time.
"Designated Prepayment" shall have the meaning ascribed to
such term in Section 2.06(b)(ii).
"Disproportionate Advance" shall have the meaning ascribed to
such term in Section 2.03(c)(i)(B).
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"Dunean Operating Agreement" shall mean the Dunean Reciprocal
Easement Agreement dated on or about the Effective Date entered into between
JCIC and New Auto, as the same may be amended, supplemented or otherwise
modified from time to time.
"EBITDA" shall mean, for any period, (i) the sum of the
amounts for such period of (A) Consolidated Net Income, (B) depreciation,
amortization expense and other non-cash charges, (C) consolidated interest
expense (including fees for Letters of Credit) and (D) Federal, state, local
and foreign income taxes; minus (ii) gains (or plus losses) from asset sales
calculated pursuant to GAAP for such period.
"Effective Date" shall mean the first date on which all the
conditions precedent set forth in Section 3.01 shall be satisfied or waived by
the Senior Lenders.
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21
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth of at least $50,000,000 calculated in
accordance with GAAP; (iii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation
and Development ("OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) any finance
company, insurance company or other financial institution which is approved by
the Agent and the Collateral Agent as an Eligible Assignee for purposes of this
Agreement.
"Eligible Finished Goods" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary which is classified, consistent with
past practice, on such Borrowing Subsidiary's accounting system as Finished
Goods, which is otherwise Eligible Inventory but not Eligible Yarn Inventory.
"Eligible Inventory" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary (i) with respect to which the Collateral
Agent has a valid and perfected first priority Lien, (ii) with respect to which
no warranty contained in any of the Loan Documents has been breached, (iii)
which is not in the reasonable opinion of either the Agent or the Collateral
Agent, obsolete or unmerchantable and (iv) which each of the Agent and the
Collateral Agent, in its reasonable credit judgment, deems to be Eligible
Inventory, based on such credit and collateral considerations as either the
Agent or the Collateral Agent may deem appropriate. Eligible Inventory shall
be valued at the lower of cost on a first-in, first-out basis or market.
"Eligible Raw Materials" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary which is classified, consistent with
past practice, on such Borrowing Subsidiary's accounting system as Raw
Materials, which is otherwise Eligible Inventory but not Eligible Yarn
Inventory.
"Eligible Receivables" shall mean only accounts arising out of
sales in the ordinary course of business, made by any Borrowing Subsidiary to a
person, firm or corporation which is neither an Affiliate of such Borrowing
Subsidiary nor controlled by such an Affiliate, and which are not in dispute.
No Receivable shall be an Eligible Receivable (i) if it is more than (A) ninety
(90) days past due, according to the original terms of
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sale, or (B) one hundred twenty (120) days past the original invoice date
thereof according to the original terms of sale or (ii) if, in the judgment of
either the Agent or the Collateral Agent any of the following is true with
respect to such Receivable;
(A) any warranty contained in this
Agreement with respect either to Eligible Receivables in general or to
such specific Receivable has been breached; or
(B) over fifty percent (50%) of the
Receivables owed by the account debtor are ineligible for any reason;
or
(C) the account debtor with respect to
such Receivable has filed a petition for bankruptcy or any other
relief under the Bankruptcy Code or any other law relating to
bankruptcy, insolvency, reorganization or relief of debtors; made an
assignment for the benefit of creditors; had filed against it any
petition or other application for relief under the Bankruptcy Code or
any such other law; has failed, suspended business operations, become
insolvent, called a meeting of its creditors for the purpose of
obtaining any financial concession or accommodation, or had or
suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(D) the account debtor with respect to
such Receivable is also a supplier to or creditor of any such
Borrowing Subsidiary unless such Borrowing Subsidiary has received a
no-setoff letter satisfactory to the Agent and the Collateral Agent;
or
(E) the sale represented by such
Receivable is to an account debtor outside the continental United
States, unless the sale is on letter of credit, acceptance or other
credit support terms acceptable to the Agent and the Collateral Agent
or such account is a Credit Insured Receivable; or
(F) the sale to such account debtor with
respect to such Receivable is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, or consignment basis, unless, with
respect to Receivables on a bill-and-hold basis, such Receivable is a
Credit Insured Receivable; or
(G) such Receivable is not subject to a
valid and perfected first priority Lien in favor of the Collateral
Agent or is subject to a Lien in favor of any Person other than the
Collateral Agent; or
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(H) such Receivable is subject to any
deduction, offset, counterclaim, return privilege or other condition;
or
(I) the account debtor with respect to
such Receivable is located in New Jersey, Indiana or Minnesota, unless
such Borrowing Subsidiary (a) has received a certificate of authority
to do business and is in good standing in such state, or (b) has filed
a "Notice of Business Activities Report" with the appropriate office
or agency of such state for the then current year; provided, however,
if such Receivable is a Credit Insured Receivable, the financial
institution providing such credit insurance shall have satisfied the
foregoing requirements in lieu of such Borrowing Subsidiary; or
(J) the account debtor with respect to
such Receivable is the United States of America or any department,
agency or instrumentality thereof, unless such Borrowing Subsidiary
has assigned its right to payment of such account to the Collateral
Agent pursuant to the Assignment of Claims Act of 1940, as amended,
and such assignment has been accepted and acknowledged by the
appropriate government officers; or
(K) either the Agent or the Collateral
Agent, in accordance with its customary criteria, deems such
Receivable ineligible.
"Eligible Work in Process" of a Borrowing Subsidiary shall
mean Inventory of such Borrowing Subsidiary which is classified, consistent
with past practice, on such Borrowing Subsidiary's accounting system as Work in
Process or Goods in Process, which is otherwise Eligible Inventory but not
Eligible Yarn Inventory.
"Eligible Yarn Inventory" of a Borrowing Subsidiary shall mean
Inventory of such Borrowing Subsidiary consisting of yarn on cones, spindles or
similar storage forms and which has not entered the initial stages for warp
preparation, which is otherwise Eligible Inventory.
"Engagement Letter" shall mean that certain engagement letter
dated as of April 2, 1991 entered into between the Company and Donaldson,
Lufkin & Jenrette Securities Corporation with respect to providing certain
exclusive financial advisory services to the Company, as such agreement may be
amended, modified or supplemented from time to time.
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under Federal or state
environmental laws or regulations, or (ii) damages arising
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from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment or
condition resulting from any such Release.
"Equipment" of any Person, shall mean and include all
"equipment", as such term is defined in section 9-109 of the UCC, of such
Person now owned and hereafter acquired including, without limitation, all
machinery, manufacturing, distribution, selling, data processing and office
equipment, all furniture, furnishings, appliances, fixtures and trade fixtures,
tools, toolings, molds, dies, vehicles, vessels, aircraft and all other goods
of every type and description (other than Inventory).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Internal Revenue Code) as the Company, and (ii)
partnership, trade or business (whether or not incorporated) which is under
common control (within the meaning of Section 414(c) of the Internal Revenue
Code) with the Company.
"Eurodollar Affiliate" shall mean, with respect to each Senior
Lender, the Affiliate of such Senior Lender, if any, set forth opposite such
Senior Lender's name under the heading "Eurodollar Affiliate" on Schedule
1.01-A.
"Eurodollar Interest Payment Date" shall mean, with respect to
any Eurodollar Rate Loan, the last day of each Eurodollar Interest Period
applicable to such Eurodollar Rate Loan.
"Eurodollar Interest Period" shall have the meaning ascribed
to such term in Section 2.08(b).
"Eurodollar Interest Rate Determination Date" shall mean the
date on which the Agent determines the Eurodollar Rate applicable to a
Borrowing, continuation or conversion of Eurodollar Rate Loans. The Eurodollar
Interest Rate Determination Date shall be the second Business Day prior to the
first day of the Eurodollar Interest Period applicable to such Borrowing,
continuation or conversion.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, an interest
rate per annum obtained by dividing (i) the rate of interest determined by the
Agent to be the average (rounded upward to the nearest whole multiple of one-
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sixteenth of one percent (1/16 of 1%) per annum if such average is not such a
multiple) of the rate per annum determined by the Agent to be the rate per
annum at which deposits in Dollars are offered by the Agent to major banks in
the London interbank Eurodollar market at approximately 11:00 a.m. (London
time) on the Eurodollar Interest Rate Determination Date for such Eurodollar
Interest Period for a period equal to such Eurodollar Interest Period and in an
amount substantially equal to the amount of the Eurodollar Rate Loan to be made
by the Agent, in its capacity as a Senior Lender, to be outstanding during such
Eurodollar Interest Period, by (ii) a percentage equal to 100% minus the
Eurodollar Reserve Percentage. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Eurodollar Rate Loans" shall mean those Loans outstanding
which bear interest at a rate determined by reference to the Eurodollar Rate as
provided in Section 2.04(a)(i).
"Eurodollar Rate Taxes" shall have the meaning ascribed to
such term in Section 2.08(g)(i).
"Eurodollar Reserve Percentage" shall mean for any date that
percentage (expressed as a decimal) which is in effect on such date, as
prescribed by the Federal Reserve Board, for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with deposits exceeding $5,000,000,000 in respect of
"Eurocurrency liabilities" having a term equal to the applicable Eurodollar
Interest Period (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on Eurodollar Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents).
"Event of Default" shall mean any of the occurrences set forth
in Section 9.01 after the expiration of any applicable grace period expressly
provided therein.
"Existing Accommodation Obligations" shall mean those
Accommodation Obligations of the Company and its Subsidiaries reflected on
Schedule 1.01-B.
"Existing Credit Agreement" shall have the meaning ascribed to
such term in the preamble hereto.
"Existing Indebtedness Permitted to be Secured" shall mean
that portion of the Permitted Existing Indebtedness reflected on Schedule
1.01-C.
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26
"Existing Investments" shall mean those Investments of the
Company and its Subsidiaries reflected on Schedule 1.01-D.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any successor thereto.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System or any governmental authority succeeding to its
functions.
"Fee Agreements" shall mean, collectively, (i) the Fee
Agreement dated as of March 18, 1993 addressed to Citibank and executed by the
Company and the Borrowing Subsidiaries and (ii) the Fee Agreement dated as of
March 18, 1993 addressed to GE Capital and executed by the Company and the
Borrowing Subsidiaries.
"First Supplemental Indenture" shall mean that certain First
Supplemental Indenture dated as of January 6, 1993 between the Company and
Shawmut Bank Connecticut, National Association (successor to The Connecticut
National Bank), as trustee.
"Fiscal Year" shall mean the fiscal year of the Company, which
shall be the fifty-two (52) or fifty-three (53) week period ending on the
Saturday closest to October 31 in each year or such other period as the Company
may designate and the Agent and the Collateral Agent may approve in writing.
"Fixed Asset Collateral" of a Borrowing Subsidiary shall mean
any Equipment of such Borrowing Subsidiary subject to a Lien granted to the
Collateral Agent pursuant to the Subsidiary Security Agreement to which such
Borrowing Subsidiary is a party.
"Fixed Asset Portion" shall mean at any time of determination
in any period, the amount of the Fixed Asset Portion set forth below opposite
such period:
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Period Fixed Asset Portion
------ -------------------
Effective Date through
June 30, 1995 $20,000,000
July 1, 1995 through
March 31, 1996 $15,000,000
April 1, 1996 through
the Revolving Credit
Termination Date $10,000,000
Notwithstanding the foregoing, the amount of the Fixed Asset Portion in effect
at any time shall be reduced by the aggregate amount of each of the following:
(i) the amount of any cash proceeds from sales of assets (other than Inventory)
sold in the ordinary course of business that exceed Two Million Dollars
($2,000,000) in the aggregate in any Fiscal Year, net of (A) the costs of sale,
lease, assignment or other disposition, (B) any income, franchise, transfer or
other tax liability arising from such transaction and (C) amounts applied to
the repayment of Indebtedness (other than the Obligations) secured by a Lien on
the asset disposed of; (ii) in the event of the sale of all or substantially
all of the capital stock or assets of any Borrowing Subsidiary (to the extent
otherwise permitted hereunder) (other than in connection with the Auto Sale),
the amount of the Fixed Asset Value of such Borrowing Subsidiary plus fifty
percent (50%) of the amount, if any, by which the Net Cash Proceeds from such
sale exceed such Fixed Asset Value; (iii) in the event of a Permitted
Disposition, an amount equal to fifty percent (50%) of the Net Cash Proceeds
from such disposition; and (iv) the amount of Net Cash Proceeds from sales of
assets (other than in connection with a Permitted Disposition or the Auto
Sale).
"Fixed Asset Value" shall mean with respect to JCC,
$1,920,904, with respect to JCIC, $16,723,164 and with respect to JEC,
$1,355,932.
"Fixed Charge Coverage Ratio" shall mean, with respect to any
period, the ratio of (i) cumulative EBITDA for such period to (ii) Consolidated
Fixed Charges for such period. For the purposes of this definition,
Consolidated Fixed Charges for any period shall not include Financed Capital
Expenditures (as defined in Section 8.06) made or incurred by the Company and
its Subsidiaries during such period.
"Funding Date" shall mean, with respect to any Revolving Loan,
the date of the funding of such Revolving Loan.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the
-20-
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Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession, which are
applicable to the circumstances as of the date of determination, subject to the
terms of Section 11.05.
"GE Capital" shall have the meaning ascribed to such term in
the preamble hereto.
"Governmental Acts" shall have the meaning ascribed to such
term in Section 2.03(g)(viii)(A).
"Governmental Authority" shall mean any nation or government,
any Federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indebtedness", as applied to any Person, shall mean (i) all
indebtedness, obligations or other liabilities of such Person for borrowed
money, (ii) all indebtedness, obligations or other liabilities of such Person
evidenced by Securities or other similar instruments, (iii) all reimbursement
obligations and other liabilities of such Person with respect to letters of
credit issued for such Person's account, (iv) all obligations of such Person to
pay the deferred purchase price of property or services, (v) all obligations in
respect of Capital Leases of such Person, (vi) all Accommodation Obligations of
such Person, (vii) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any asset of such Person, whether or not
such indebtedness, obligations or liabilities are assumed by or are a personal
liability of such Person, all as of such time, and (viii) all indebtedness,
obligations or other liabilities in respect of Interest Rate Contracts and
foreign currency exchange agreements.
"Intercreditor Agreement" shall mean the Intercreditor
Agreement dated as of April 2, 1991 between Shawmut Bank Connecticut, National
Association (successor to The Connecticut National Bank), as trustee under the
Senior Note Indenture, and the Agent.
"Interest Rate Contracts" shall mean interest rate exchange,
collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time hereafter, and any successor statute.
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"International Fabrics" shall mean International Fabrics,
Inc., a Delaware corporation and a wholly-owned Subsidiary of the Company.
"International Fabrics Guaranty" shall mean the Guaranty dated
as of July 21, 1993 executed by International Fabrics, pursuant to which
International Fabrics has guaranteed all of the Obligations of the Borrowing
Subsidiaries, as the same may be amended, supplemented or otherwise modified
from time to time.
"International Fabrics Security Agreement" shall mean the
Security Agreement dated as of July 21, 1993 executed by International Fabrics,
pursuant to which International Fabrics has granted a Lien to the Agent and the
Collateral Agent on all of its personal property as security for the
International Fabrics Guaranty, as the same may be amended, supplemented or
otherwise modified from time to time.
"Inventory" of any Person, shall mean and include all now
owned and hereafter acquired "inventory", as such term is defined in section
9-109 of the UCC, goods, materials, supplies, merchandise and other personal
property furnished under any contract of service or intended for sale or lease,
including, without limitation, all raw materials, work in process, finished
goods and materials, parts and supplies of any kind, nature or description
which are used or consumed in such Person's business, all returned or
repossessed goods now, or at any time or times hereafter, in the possession or
under the control of such Person or the Collateral Agent, and all documents of
title or documents representing the same, but excluding all goods not owned by
such Person which have been sold on consignment by such Person to the extent
included in the foregoing; together with all proceeds and products thereof.
"Investment" shall mean, as applied to any Person, any direct
or indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not
arise from sales of goods or services to that Person in the ordinary course of
business. The amount of any Investment shall be determined in conformity with
GAAP.
"IRS" shall mean the Internal Revenue Service and any Person
succeeding to the functions thereof.
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"Issuing Bank" shall mean Citibank.
"JPS Auto Guaranty" shall mean the Amended and Restated
Guaranty dated as of March 18, 1993 executed by JPS Auto, pursuant to which JPS
Auto has guaranteed all of the Obligations of each Borrowing Subsidiary, as the
same may be amended, supplemented or otherwise modified from time to time.
"JPS Auto Security Agreement" shall mean the Amended and
Restated Subsidiary Consolidated Security Agreement dated as of March 18, 1993
among JPS Auto, the Collateral Agent and the Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"Junior Pledge Agreement" shall mean the Subordinated Pledge
and Security Agreement dated as of April 2, 1991 between the Company and
Shawmut Bank Connecticut, National Association (successor to The Connecticut
National Bank), as trustee under the Senior Note Indenture, providing for the
grant of a Lien on the common stock of the Company's Subsidiaries for the
benefit of the holders of the Senior Notes, which Lien, pursuant to the terms
of the Intercreditor Agreement, is subordinated to the Lien granted to the
Agent under the Company Pledge Agreement.
"JPS-U.K." shall mean JPS (U.K.) Limited, a corporation
organized and existing under the laws of the United Kingdom and a wholly-owned
Subsidiary of JCC.
"Junior Preferred Investor Group" shall mean Odyssey, Grant M.
Wilson, William J. DeBrule and Yehochai Schneider.
"Junior Preferred Shareholders' Agreement" shall mean the
Agreement and Release dated March 21, 1991 entered into by and among the
members of the Junior Preferred Investor Group and acknowledged by the Company
and the JPS Bondholders Steering Committee, as such agreement may be amended,
modified or supplemented from time to time.
"Junior Preferred Stock" shall mean the Series B Junior
Preferred Stock, $0.01 par value per share, of the Company.
"Letter of Credit" shall mean any letter of credit issued by
the Issuing Bank for the account of a Borrowing Subsidiary pursuant to Section
2.03(g).
"Letter of Credit Obligations" shall mean, at any time, the
sum of (i) Reimbursement Obligations at such time and (ii) the aggregate
maximum amount then available for drawing under the Letters of Credit.
"Letter of Credit Reimbursement Agreement" shall mean, with
respect to a Letter of Credit, such form of application
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therefor and form of reimbursement agreement therefor (whether in a single or
several documents, taken together) as the Issuing Bank may employ in the
ordinary course of business for its own account.
"Letter of Credit Sublimit" shall mean Fifteen Million Dollars
($15,000,000).
"Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including, without limitation,
attorneys', experts' and consulting fees and costs of investigation and
feasibility studies), fines, penalties and monetary sanctions, interest, direct
or indirect, known or unknown, absolute or contingent, past, present or future.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights of way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same purpose or economic effect as any
of the foregoing, and the filing of any financing statement (other than a
financing statement filed by a "true" lessor pursuant to 9-408 of the UCC)
naming the owner of the asset to which such Lien relates as debtor, under the
UCC or other comparable law of any jurisdiction.
"Loan Account" shall have the meaning ascribed to such term in
Section 2.07(d).
"Loan Documents" shall mean this Agreement, the Notes, the
Collateral Documents, the Fee Agreements, the Undertakings, and all other
security agreements, mortgages, deeds of trust, financing statements, patent
and trademark security agreements, lease assignments, guaranties, Interest Rate
Contracts and other agreements, instruments and written indicia of Contractual
Obligations between or among the Company or any of its Subsidiaries and the
Agent, the Collateral Agent or any Senior Lender delivered to the Agent, the
Collateral Agent or such Senior Lender by or on behalf of the Company or any of
its Subsidiaries pursuant to or in connection with the transactions
contemplated hereby, as any such agreement, instrument or written indicia may
be amended, supplemented or otherwise modified from time to time.
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"Loan Party" shall mean the Company or any of the Borrowing
Subsidiaries, and "Loan Parties" shall mean, collectively, the Company and the
Borrowing Subsidiaries.
"Margin Stock" shall have the meaning ascribed to such term in
Regulation G and Regulation U.
"Material Adverse Effect" shall mean, with respect to the
Company or any of its Subsidiaries, a material adverse effect upon the
condition (financial or otherwise), operations, performance, properties or
prospects of the Company or such Subsidiary, individually, or the Company and
its Subsidiaries, taken as a whole, or the ability of the Company or any of its
Subsidiaries to perform under the Loan Documents.
"Maximum Amount of Obligations" shall mean, at any time, the
lesser of (i) the Commitments and (ii) the aggregate Borrowing Base of the
Borrowing Subsidiaries at such time, plus the Fixed Asset Portion, in effect at
such time, less the reserves contemplated by Section 2.03(f), and less such
other reserves as each of the Agent and the Collateral Agent, in its sole
discretion, may establish from time to time, including, without limitation,
reserves against Collateral located on leased premises for which no landlord
waiver in form and substance satisfactory to the Agent and the Collateral Agent
has been obtained.
"Maximum Amount of Revolving Loans" shall mean, at any time,
(i) the aggregate Borrowing Base of the Borrowing Subsidiaries at such time,
less the reserves contemplated by Section 2.03(f), and less such other reserves
as each of the Agent and the Collateral Agent, in its sole discretion, may
establish from time to time, including, without limitation, reserves against
Collateral located on leased premises for which no landlord waiver in form and
substance satisfactory to the Agent and the Collateral Agent has been obtained,
minus (ii) the amount of the Letter of Credit Obligations at such time.
"Multiemployer Plan" shall mean an employee benefit plan
defined in Section 4001(a)(3) of ERISA which is, or within the immediately
preceding six (6) years was, contributed to by the Company or an ERISA
Affiliate.
"Net Cash Proceeds" shall mean (A) proceeds received on or
after March 18, 1993 by any of the Loan Parties in cash or Cash Equivalents
from (x) the issuance of any common or preferred stock by the Company, any
other additions to equity of the Company (other than retained earnings) or any
contributions to capital of the Company or (y) the issuance of Subordinated
Indebtedness, in each case net of reasonable costs incurred in connection with
such transaction and any income, franchise, transfer or other tax liability
arising from such transaction and
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(B) proceeds received by the Company or any of its Subsidiaries in cash or Cash
Equivalents from the sale, lease, assignment or other disposition, or financing
or refinancing (including, without limitation, Permitted Financings), of any
asset or property outside of the ordinary course of business, excluding, in
each case, proceeds permitted under this Agreement to be used for replacement
assets (provided the Agent and the Collateral Agent have received notice from
the Company or such Subsidiary pursuant to Section 6.11 of its intention to use
such proceeds at the time of such disposition, such proceeds are in fact so
used within thirty (30) days after such disposition and the application of such
proceeds for such use would not cause a default under the Senior Note Indenture
or any indenture governing Subordinated Indebtedness), in the case of each of
clauses (A) and (B) above, net of (i) the costs of sale, lease, assignment or
other disposition, (ii) any income, franchise, transfer or other tax liability
arising from such transaction and (iii) amounts applied to the repayment of
Indebtedness (other than the Obligations) secured by a Lien on the asset
disposed of. For this purpose, all proceeds of insurance paid on account of
the loss of or damage to any such asset or property, or group of assets or
properties, and awards of compensation for any such asset or property, or group
of assets or properties, taken by condemnation or eminent domain shall be
deemed to be Net Cash Proceeds after giving effect to the netting provisions
set forth in clauses (i), (ii) and (iii) of the preceding sentence. The
proceeds of the sale of any past-due Receivable permitted to be sold in
accordance with the terms of Section 7.02(a) shall not constitute Net Cash
Proceeds.
"Net Face Amount" shall mean, with respect to any Eligible
Receivable, the invoice amount of such Eligible Receivable less the amount of
all discounts pertaining thereto.
"Net Worth" shall mean, at any time, (i) total consolidated
assets; minus (ii) total consolidated liabilities; plus (iii) Subordinated
Indebtedness and Indebtedness in respect of the Senior Notes; minus (iv)
cumulative gains from asset sales (other than the Auto Sale) and; minus (v)
cumulative extraordinary gains; plus (vi) charges for post retirement benefit
liabilities accrued in accordance with the requirements of Financial Accounting
Standards 106 and 112; minus (vii) total assets of Newsub.
"New Auto" shall mean JPS Automotive Products Corp., a
Delaware corporation.
"New Auto Asset Purchase Agreement" shall mean the Asset
Purchase Agreement dated as of May 25, 1994 entered into among JPS Auto, JCIC,
the Company, New Auto and Foamex International Inc., as the same may be
amended, supplemented or otherwise modified from time to time.
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"New Auto Debt Offering" shall have the meaning ascribed to
such term in the preamble hereto.
"New Auto Sublease Agreement" shall mean the Sublease
Agreement dated on or about the Effective Date entered into by New Auto, the
Company and JCIC, as the same may be amended, supplemented or otherwise
modified from time to time.
"New Auto Transaction Documents" shall mean, collectively, (i)
the New Auto Asset Purchase Agreement; (ii) the New Auto Sublease Agreement, if
any; and (iii) the Dunean Operating Agreement.
"Newsub" shall mean JPS Capital Corp., a Delaware corporation
formed by the Company for purposes previously disclosed to the Senior Lenders,
and its successors.
"Newsub Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by an agency thereof and backed by the full faith and
credit of the United States, with average maturities of three (3) years after
the date of acquisition thereof; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within ninety (90)
days after the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc. (or, if at any time neither
Standard & Poor's Corporation nor Moody's Investors Service, Inc. shall be
rating such obligations, then from such other nationally recognized rating
services acceptable to the Agent and the Collateral Agent) and not listed in
Credit Watch published by Standard & Poor's Corporation; (iii) commercial
paper, other than commercial paper issued by the Company or any of its
Affiliates, maturing no more than ninety (90) days after the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 or P-1
from either Standard & Poor's Corporation or Moody's Investors Service, Inc.
(or, if at any time neither Standard & Poor's Corporation nor Moody's Investors
Service, Inc. shall be rating such obligations, then the highest rating from
such other nationally recognized rating services acceptable to the Agent and
the Collateral Agent); and (iv) domestic and Eurodollar certificates of deposit
or time deposits or bankers' acceptances maturing within ninety (90) days after
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia or Canada having combined capital and surplus of not less than
$250,000,000.
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"Note" shall have the meaning ascribed to such term in Section
2.02.
"Notice of Borrowing" shall mean, with respect to a proposed
Borrowing pursuant to Section 2.03(b), a notice substantially in the form of
Exhibit 3.
"Notice of Conversion/Continuation" shall mean, with respect
to a proposed conversion or continuation of a Revolving Loan pursuant to
Section 2.04(c), a notice substantially in the form of Exhibit 4.
"Obligations" shall mean all present and future Indebtedness
and other liabilities of any Loan Party owing to the Agent, the Collateral
Agent, any Senior Lender, the Issuing Bank or any Person entitled to
indemnification pursuant to Section 11.04, or any of their respective
successors, transferees or assigns, of every type and description, whether or
not evidenced by any note, guaranty or other instrument, arising under or in
connection with this Agreement, the Notes or any other Loan Document, whether
or not for the payment of money, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all Reimbursement Obligations, all interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum chargeable to any
Loan Party under this Agreement or any other Loan Document.
"Odyssey" shall mean Odyssey Partners, L.P., a Delaware
limited partnership.
"Officers' Certificate" shall mean, as to a corporation, a
certificate executed on behalf of such corporation by (i) its chairman or
vice-chairman of the board (if an officer) or its president or any
vice-president and (ii) by its chief financial officer, its controller or its
treasurer.
"Operating Company Fixed Charge Coverage Ratio" shall mean,
with respect to any period, the ratio of (i) cumulative EBITDA for such period
to (ii) Consolidated Operating Company Fixed Charges for such period. For the
purposes of this definition, Consolidated Operating Company Fixed Charges for
any period shall not include Financed Capital Expenditures (as defined in
Section 8.06) made or incurred by the Company and its Subsidiaries during such
period.
"Operating Lease" shall mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) by that Person as
lessee which is not a Capital Lease.
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"Other Indebtedness" shall mean all of the Indebtedness of the
Company and its Subsidiaries other than the Obligations.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Permits" shall mean any permit, approval, authorization,
license, variance, or permission required from a Governmental Authority under
an applicable Requirement of Law.
"Permitted Dispositions" shall mean (i) Permitted Financings
and (ii) sales of fixed assets other than in the ordinary course of business
permitted pursuant to the first sentence of Section 7.02(a), including sales
that occur in connection with sale and leaseback transactions; provided,
however, the Net Cash Proceeds of the transactions in both clauses (i) and (ii)
above collectively shall not exceed Thirty Five Million Dollars ($35,000,000)
in the aggregate since March 18, 1993 without the prior written consent of the
Requisite Senior Lenders; provided, further, a Permitted Disposition shall not
include the Auto Sale or any transaction prohibited by Section 7.07(a) and
shall only include those dispositions with respect to which each of the
following conditions shall have been met: (A) the Agent and the Collateral
Agent shall have received such landlord or mortgagee waivers, documents and
agreements as the Agent and the Collateral Agent have reasonably deemed
necessary to permit the Agent and the Collateral Agent to protect and enforce
their respective Liens on Collateral; (B) all representation and warranties set
forth in subsection (a) through (dd) of Section 4.01 ((I) except to the extent
such statements expressly are made only as of the Effective Date or (II) other
than for changes permitted or contemplated by this Agreement), shall have been
true, correct and complete in all material respects as of the date of such
disposition; (C) on the date of such disposition, no Event of Default or
Potential Event of Default shall have occurred and be continuing or would
result from the consummation of such disposition; and (D) the Net Cash Proceeds
of such disposition shall have been applied to the repayment of the Obligations
pursuant to Section 2.06(b); provided, further, (a) in the event any Loan Party
would receive Net Cash Proceeds in excess of an aggregate amount of Ten Million
Dollars ($10,000,000) from the sale of any fixed assets pursuant to the first
sentence of Section 7.02(a) (other than in connection with a sale and leaseback
transaction) in a single transaction or series of related transactions, such
Loan Party shall have submitted the documentation for such disposition to the
Senior Lenders and shall have obtained the prior written consent of the
Requisite Senior Lenders to such disposition and (b) in the event of a
Permitted Financing or a sale of fixed assets in connection with a sale and
leaseback transaction by a Borrowing Subsidiary, such Borrowing Subsidiary
shall have submitted the documentation for such disposition to the Senior
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Lenders and shall have obtained the prior written consent of the Requisite
Senior Lenders to such disposition, but only if the Net Cash Proceeds of such
disposition and all prior dispositions of such type (other than the Auto Sale)
received by such Borrowing Subsidiary since March 18, 1993 exceed in the
aggregate (I) for each of JCC and JEC, Ten Million Dollars ($10,000,000) and
(II) for JCIC, Twenty-Five Million Dollars ($25,000,000).
"Permitted Existing Indebtedness" shall mean the Indebtedness
of the Company and its Subsidiaries reflected on Schedule 1.01-C.
"Permitted Existing Liens" shall mean the Liens on assets of
the Company and its Subsidiaries, other than any Environmental Liens, reflected
on Schedule 1.01-E.
"Permitted Financings" shall mean any financing or refinancing
(excluding Indebtedness permitted under Section 7.01(v)) of fixed assets owned
by the Company or any of its Subsidiaries, including mortgages of real
property; provided, however, (i) the terms of such financing or refinancing
shall meet the requirements for Permitted Dispositions set forth in the
definition of Permitted Dispositions (other than those requirements set forth
in clause (a) of the third proviso of such definition); (ii) the loan proceeds
received by such Loan Party from the financing or refinancing of any fixed
asset or group of fixed assets shall have been in the aggregate (net of
borrowing costs) at least sixty percent (60%) of the fair market value of such
fixed assets; (iii) the maturity date of the Indebtedness incurred in
connection with such financing or refinancing shall be a date more than six
months after the Revolving Credit Termination Date and (iv) the aggregate
principal amount of Indebtedness incurred in connection with such financing or
refinancing shall not exceed $20,000,000.
"Person" shall mean any natural person, employee, corporation,
limited partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or
other organization, whether or not a legal entity, or any other
non-governmental entity, or any Governmental Authority.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA (other than a Multiemployer Plan) in respect of which either the
Company or an ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Plan of Reorganization" shall mean the Plan of Reorganization
for the Company as confirmed on March 21, 1991.
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"Pledgor" shall mean, with respect to any time of
determination, any Person (other than a Loan Party) that is then party to any
Collateral Document.
"Potential Event of Default" shall mean an event which, with
the giving of notice or the lapse of time, or both, would constitute an Event
of Default.
"Preferred Stock" shall mean the Senior Preferred Stock and
the Junior Preferred Stock.
"Pro Rata Share" shall mean, with respect to any Senior
Lender, a fraction (expressed as a percentage), the numerator of which shall be
the amount of such Senior Lender's Commitment and the denominator of which
shall be the aggregate amount of all of the Senior Lenders' Commitments, as
adjusted from time to time to give effect to any applicable Assignment and
Acceptance.
"Property" shall mean any real or personal property, plant,
building, facility, structure, underground storage tank, equipment or unit, or
other asset owned, leased or operated by the Company or any of its
Subsidiaries.
"Purchase" shall mean the purchase of the (i) Carpet, (ii)
Converter and Yarn, (iii) Industrial Fabrics, (iv) Automotive Products and (v)
Elastomerics operating divisions of J.P. Stevens & Co., Inc. by the Company and
the Borrowing Subsidiaries from Stevens pursuant to the Purchase Agreement.
"Purchase Agreement" shall mean the Agreement dated as of
April 24, 1988, among JPS Holding Corp., the Company, Odyssey, West
Point-Pepperell, Inc., STN Holdings Inc., Magnolia Partners, L.P. and J.P.
Stevens & Co., Inc., as the same may be amended, supplemented or otherwise
modified from time to time with the consent of the Agent and the Collateral
Agent.
"Purchase Documents" shall mean the Purchase Agreement, the
Settlement Agreement and any and all other agreements and instruments
effectuating the Purchase.
"RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq., and any successor statute, and regulations
promulgated thereunder.
"Real Property Collateral Documents" shall mean any mortgages,
deeds of trust, leasehold mortgages or other such documents executed by each
Borrowing Subsidiary in favor of the Agent for the benefit of the Senior
Lenders relating to such Borrowing Subsidiary's real property, as the same may
be amended, supplemented or otherwise modified from time to time.
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"Receivables" shall mean all present and future "accounts", as
such term is defined in section 9-106 of the UCC, and shall include, without
limitation, all accounts receivable, related contract rights and all forms of
obligations whatsoever owing, whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance;
together with all promissory notes, instruments and documents of title
representing any of the foregoing, all rights in merchandise or goods
(including returned goods) which any of the same may represent, all right,
title, security and guaranties with respect to any of the foregoing, including
any right of stoppage in transit and all insurance proceeds and corporate and
other business records relating to any of the foregoing; together, with all
proceeds thereof.
"Regulation A" shall mean Regulation A of the Federal Reserve
Board as in effect from time to time.
"Regulation D" shall mean Regulation D of the Federal Reserve
Board as in effect from time to time.
"Regulation G" shall mean Regulation G of the Federal Reserve
Board as in effect from time to time.
"Regulation U" shall mean Regulation U of the Federal Reserve
Board as in effect from time to time.
"Regulation X" shall mean Regulation X of the Federal Reserve
Board as in effect from time to time.
"Reimbursement Obligations" shall mean the unpaid
reimbursement or repayment obligations of the Borrowing Subsidiaries to the
Issuing Bank pursuant to Letter of Credit Reimbursement Agreements with respect
to Letters of Credit for amounts paid out thereunder.
"Release" shall mean any past or present release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment or into or out of
any Property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or Property.
"Remedial Action" shall mean actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
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"Reportable Event" shall have the meaning ascribed to such
term in Section 4043 of ERISA or regulations promulgated thereunder.
"Request for Release of Receivables" shall have the meaning
ascribed to such term in Section 7.02(a).
"Requirements of Law" shall mean, as to any Person, the
charter and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject, including, without limitation, the
Securities Act, the Securities Exchange Act, Regulations G, U and X and other
securities credit margin regulations of the Federal Reserve Board, and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.
"Requisite Senior Lenders" shall mean, at any time, Senior
Lenders holding, in the aggregate, more than fifty percent (50%) of the then
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing more than fifty percent (50%) of the then
aggregate unpaid principal amount of the Revolving Loans.
"Restricted Junior Payment" shall mean (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class
of capital stock (or equivalent partnership interest) of the Company or any of
its Subsidiaries now or hereafter outstanding, except a dividend payable solely
in shares of that class of stock or in any junior class of stock to the holders
of that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of capital stock of the Company or any of its Subsidiaries
now or hereafter outstanding, (iii) any payment or prepayment of principal of,
premium, if any, or interest on, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Subordinated
Indebtedness, and (iv) any payment made to purchase, repurchase, retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of the Company or any of its
Subsidiaries now or hereafter outstanding.
"Revolving Credit Accommodations" shall mean, at any time, the
sum of (i) all Revolving Loans outstanding at such time and (ii) all Letter of
Credit Obligations outstanding at such time.
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"Revolving Credit Facility" shall mean the revolving credit
facility provided for in Section 2.03 not to exceed, in the aggregate at any
time outstanding, One Hundred Thirty-Five Million Dollars ($135,000,000), less
all reductions in such amount effected pursuant to Sections 2.03 and 2.06.
"Revolving Credit Termination Date" shall mean the earliest of
(i) December 1, 1996 or (ii) the date of termination of the Commitments
pursuant to Section 9.02(a) or Section 11.13.
"Revolving Loan" shall have the meaning ascribed to such term
in Section 2.03(a)(i).
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities", or any certificates of interest,
shares, or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended to the date hereof and from time to time hereafter, and
any successor statute.
"Senior Lender" shall have the meaning ascribed to such term
in the preamble hereto and shall include the Agent and the Collateral Agent, in
each case in such Person's capacity as a Senior Lender hereunder, and the
Issuing Bank in its capacity as issuer of Letters of Credit.
"Senior Note Indenture" shall mean that certain Indenture
dated as of April 2, 1991 between the Company and Shawmut Bank Connecticut,
National Association (successor to The Connecticut National Bank), as trustee,
as amended by the First Supplemental Indenture.
"Senior Notes" shall mean the Company's Senior Secured Notes
due June 1, 1995, or, in the case of the holders thereof who tendered valid
consents under the Consent Solicitation Statement, June 1, 1996, in the
aggregate principal amount of $100,000,000, governed by the terms of the Senior
Note Indenture.
"Senior Preferred Stock" shall mean the Series A Senior
Preferred Stock, $0.01 par value per share, of the Company.
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"Senior Subordinated Discount Note Indenture" shall mean that
certain Indenture dated as of April 2, 1991 between the Company and First Trust
National Association, as trustee.
"Senior Subordinated Discount Notes" shall mean the Company's
Senior Subordinated Discount Notes due June 1, 1999, in the aggregate face
amount not exceeding $154,000,000, governed by the terms of the Senior
Subordinated Discount Note Indenture.
"Senior Subordinated Note Indenture" shall mean that certain
Indenture dated as of April 2, 1991 between the Company and First Trust
National Association, as trustee.
"Senior Subordinated Notes" shall mean the Company's Senior
Subordinated Notes due June 1, 1999, in the aggregate principal amount of
$125,000,000, governed by the terms of the Senior Subordinated Note Indenture.
"Settlement Agreement" shall have the meaning ascribed to such
term in the Purchase Agreement.
"Shareholders' Agreements" shall mean the Class B
Shareholders' Agreement and the Junior Preferred Shareholders' Agreement.
"Solvent" shall mean, when used with respect to any Person,
that at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value) is in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities; and
(ii) it is then able to pay its debts as they
mature; and
(iii) it owns property having a value (both at fair
valuation and at present fair saleable value) in excess of the total amount
required to pay its debts; and
(iv) it has capital sufficient to carry on its
business.
"Subordinated Debenture Indenture" shall mean that certain
Indenture dated as of April 2, 1991 between the Company and First Bank National
Association, as trustee.
"Subordinated Debentures" shall mean the Company's
Subordinated Debentures due May 15, 2000 in the aggregate principal amount of
$75,000,000, governed by the terms of the Subordinated Debenture Indenture.
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"Subordinated Indebtedness" shall mean the Indebtedness
evidenced by, or in respect of, (i) the Senior Subordinated Notes in an
aggregate outstanding principal amount not exceeding $125,000,000; (ii) the
Senior Subordinated Discount Notes, the aggregate principal amount of which
would not accrete to a principal amount in excess of $154,000,000 at maturity;
(iii) the Subordinated Debentures in the aggregate principal amount not
exceeding $75,000,000; and (iv) any additional indebtedness incurred by the
Company with the prior written consent of the Requisite Senior Lenders
subordinated in right of payment to the Obligations on the terms approved in
writing by the Requisite Senior Lenders.
"Subsidiary" of a Person shall mean any corporation,
partnership (limited or general), trust or other entity of which a majority of
the stock (or equivalent ownership or controlling interest) having voting power
to elect a majority of the Board of Directors (if a corporation) or to select
the trustee or equivalent controlling interest, shall, at the time such
reference becomes operative, be directly or indirectly owned or (except with
respect to the determination of whether or not New Auto is a Subsidiary of such
Person) controlled by such Person or one or more of the other subsidiaries of
such Person or any combination thereof.
"Subsidiary Guaranties" shall mean the Amended and Restated
Guaranties dated as of March 18, 1993 executed by each Borrowing Subsidiary,
pursuant to which each such Borrowing Subsidiary has guaranteed all of the
Obligations of each other Borrowing Subsidiary, as each may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary Security Agreements" shall mean the Amended and
Restated Subsidiary Consolidated Security Agreements dated as of March 18, 1993
among each Borrowing Subsidiary, the Collateral Agent and the Agent, as each
may be amended, supplemented or otherwise modified from time to time.
"Term Loans" shall mean the term loans of the Borrowing
Subsidiaries and JPS Auto assumed by the Borrowing Subsidiaries from the
Company pursuant to Section 2.01(a) of the Existing Credit Agreement.
"Termination Event" shall mean (i) any Reportable Event with
respect to any Benefit Plan described in Section 4043 of ERISA and the
regulations issued thereunder for which the thirty (30) day notice has not been
waived, (ii) the withdrawal of the Company, or an ERISA Affiliate from a
Benefit Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the occurrence of an obligation
arising under Section 4041 of ERISA of either the Company or an ERISA Affiliate
to provide affected parties with a
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written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (iv) the institution by the
PBGC of proceedings to terminate any Benefit Plan, (v) any event or condition
which constitutes grounds under Section 4042 of ERISA for the appointment of a
Trustee to administer a Benefit Plan, or (vi) the partial or complete
withdrawal of the Company or any ERISA Affiliate from a Multiemployer Plan.
"Total Interest Coverage Ratio" shall mean, with respect to
any period, the ratio of (i) cumulative EBITDA for such period to (ii)
Consolidated Cash Interest Expense for such period.
"Total Operating Company Interest Coverage Ratio" shall mean,
with respect to any period, the ratio of (i) cumulative EBITDA for such period
to (ii) Consolidated Operating Company Cash Interest Expense for such period.
"Trademark Security Agreements" shall mean the Amended and
Restated Trademark and License Security Agreements dated as of March 18, 1993
among each Borrowing Subsidiary, the Collateral Agent and the Agent, as each
may be amended, supplemented or otherwise modified from time to time.
"Transaction Costs" shall mean the fees, costs and expenses
payable by the Company or any Borrowing Subsidiary on or prior to the Effective
Date pursuant hereto or in connection herewith.
"Transaction Documents" shall mean the Loan Documents, the
Purchase Documents, the Senior Notes, the Senior Note Indenture, the Senior
Subordinated Notes, the Senior Subordinated Note Indenture, the Senior
Subordinated Discount Notes, the Senior Subordinated Discount Note Indenture,
the Subordinated Debentures, the Subordinated Debenture Indenture, the
Intercreditor Agreement, the Junior Pledge Agreement, the Shareholders'
Agreements, the Contribution Agreement, the New Auto Transaction Documents, any
subscription agreements, stock or note purchase agreements or other agreements
or documents relating to the issuance and sale of the Senior Notes, the
Subordinated Indebtedness, the Preferred Stock and the Common Stock and all
other agreements or instruments executed and delivered or to be executed and
delivered pursuant hereto or thereto or in connection herewith or therewith or
any of the transactions contemplated hereby or thereby.
"UCC" means the Uniform Commercial Code as enacted and in
effect in the State of New York, as it may be amended from time to time.
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"Undertakings" shall mean the agreement of undertakings, dated
as of April 2, 1991, executed by each member of the Junior Preferred Investor
Group with respect to the Junior Preferred Stock.
"Voting Trust Agreement" shall mean that certain voting trust
agreement dated as of April 2, 1991 between DLJ Capital Corp., a Delaware
corporation, and Lincoln National Bank and Trust of Fort Wayne, as trustee, as
such agreement may be amended, modified or supplemented from time to time.
"Warranty Liabilities" shall mean the liabilities the Company
and its Subsidiaries have accrued for the estimated future costs associated
with warranties for certain defective roofing products sold by J.P. Stevens &
Co., Inc.
"Weekly Settlement Date" shall have the meaning ascribed to
such term in Section 2.07(a).
"Working Capital" shall mean, at any time, Current Assets
minus Current Liabilities.
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall
be counted in calendar days unless Business Days are expressly prescribed.
1.03. Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.04. Premises Incorporated by Reference. The premises set
forth in the preamble hereto are incorporated into this Agreement by this
reference thereto and are made a part hereof.
1.05. Other Definitional Provisions. References herein to
"Articles", "Sections", "subsections", "paragraphs", "clauses", "Exhibits", and
"Schedules", shall be to Articles, Sections, subsections, paragraphs, clauses,
Exhibits and Schedules of this Agreement.
ARTICLE II
Amounts and Terms of Loans
2.01. The Term Loans. As of the date hereof, the outstanding
principal balance of the Term Loans of the Borrowing Subsidiaries and JPS Auto
under the Existing Credit Agreement is $17,700,000. As a condition precedent
to the effectiveness of
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this Agreement, each Borrowing Subsidiary and JPS Auto agrees to prepay in full
the Term Loans outstanding under the Existing Credit Agreement from the
proceeds of the Auto Sale so that on the Effective Date there will be no Term
Loans outstanding under the Existing Credit Agreement. There shall be no Term
Loans made under this Agreement.
2.02. Promise to Repay; Evidence of Indebtedness. Each
Borrowing Subsidiary hereby agrees to pay when due the principal amount of each
Revolving Loan which is made to it, and further agrees to pay all unpaid
interest accrued thereon, in accordance with the terms hereof and of the Notes.
Each of the Borrowing Subsidiaries shall execute and deliver to each Senior
Lender as applicable on the Effective Date, a Note, each in the principal
amount equal to such Senior Lender's Commitment and otherwise in form and
substance acceptable to the Agent, the Collateral Agent and such Senior Lender,
evidencing the Revolving Loans and thereafter shall execute and deliver such
other promissory notes as are necessary to evidence the Revolving Loans owing
to the Senior Lenders after giving effect to any assignment thereof pursuant to
Section 11.02, all in form and substance acceptable to the Agent and the
parties to such assignment (all such promissory notes and all amendments
thereto, replacements thereof and substitutions therefor being collectively
referred to as the "Notes"; and "Note" means any one of the Notes).
2.03. Revolving Credit Facility.
(a) Availability; Capex Subfacility. (i) Subject to the
terms and conditions set forth in this Agreement, each Senior Lender hereby
severally and not jointly agrees to make to any Borrowing Subsidiary from time
to time during the period from the Effective Date to the Business Day next
preceding the Revolving Credit Termination Date, revolving loans (each
individually, a "Revolving Loan" and collectively, the "Revolving Loans"), in
an amount which shall not exceed, in the aggregate at any time outstanding,
such Senior Lender's Pro Rata Share of the Commitments in effect at such time;
provided, however, that at no time shall the aggregate principal amount of all
Revolving Loans outstanding at any time less the principal amount of Capex
Loans outstanding at such time exceed the Maximum Amount of Revolving Loans at
such time; provided, further, that at no time shall the aggregate principal or
face amount of all Revolving Credit Accommodations outstanding at any time for
the account of any Borrowing Subsidiary less the principal amount of Capex
Loans outstanding at such time made to such Borrowing Subsidiary exceed its
Borrowing Base at such time, less such reserves as each of the Agent and the
Collateral Agent, in its sole discretion, may deem appropriate; provided,
further, that at no time shall the aggregate principal or face amount of all
outstanding Revolving Credit Accommodations exceed the Maximum Amount of
Obligations in effect at such time; and provided, further, that at no time
shall
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the aggregate principal amount of all outstanding Capex Loans exceed
$20,000,000. As a condition precedent to the effectiveness of this Agreement,
each Borrowing Subsidiary and JPS Auto agrees to repay in full the Revolving
Loans outstanding under the Existing Credit Agreement from the proceeds of the
Auto Sale (it being understood and agreed that, notwithstanding anything
contained in this Agreement to the contrary, including, without limitation, the
issuance of the Notes, such prepayment shall not reduce or terminate or be
deemed to have reduced or terminated the Commitments hereunder).
(ii) All Revolving Loans under this Agreement
shall be made by the Senior Lenders simultaneously and proportionately to their
respective Pro Rata Shares. It shall be understood that no Senior Lender shall
be responsible for any failure by any other Senior Lender to perform its
obligation to make a Revolving Loan hereunder and that the Commitment of any
Senior Lender shall not be increased or decreased as a result of the failure by
any other Senior Lender to perform its obligation to make a Revolving Loan.
(iii) Revolving Loans may be voluntarily prepaid
pursuant to Section 2.06(a) and, subject to the provisions of this Agreement,
any amounts so prepaid may be reborrowed, up to the amount available under this
Section 2.03(a) at the time of such Borrowing, until the Business Day next
preceding the Revolving Credit Termination Date. Each Senior Lender's
Commitment shall expire, and each Revolving Loan then outstanding shall be
repaid by the Borrowing Subsidiary that borrowed such Revolving Loan, on the
Revolving Credit Termination Date.
(b) Notice of Borrowing. Whenever any Borrowing
Subsidiary desires to borrow under this Section 2.03, such Borrowing Subsidiary
shall deliver to the Agent a Notice of Borrowing (i) no later than 11:00 a.m.
(New York time) at least two (2) Business Days in advance of the proposed
Funding Date, in the case of a Borrowing of $20,000,000 or more and (ii) no
later than 11:00 a.m. (New York time) at least one (1) Business Day in advance
of the proposed Funding Date in the case of a Borrowing of less than
$20,000,000; provided, however, that such Borrowing Subsidiary may deliver to
the Agent a Notice of Borrowing no later than 11:00 a.m. (New York City time)
on the proposed Funding Date if in connection with such Borrowing the Agent
would be required to comply with paragraph (B) of Section 2.03(c). The Notice
of Borrowing shall specify (i) the Borrowing Subsidiary requesting the
Revolving Loan, (ii) the Funding Date (which shall be a Business Day) in
respect of the Revolving Loan, (iii) the amount of the proposed Borrowing, (iv)
whether the proposed Revolving Loan will be a Base Rate Loan or a Eurodollar
Rate Loan and if a Eurodollar Rate Loan, the Eurodollar Interest Period for
such Loan and (v) the intended use of proceeds of such Borrowing and whether or
not such Loan is a Capex Loan. In lieu of
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delivering the above-described Notice of Borrowing, the Borrowing Subsidiary
requesting the Revolving Loan may give the Agent telephonic notice of any
proposed Borrowing by the time required under this Section 2.03(b); provided,
however, that such notice shall be confirmed in writing by delivery to the
Agent promptly (but in no event later than the Funding Date of the requested
Revolving Loan) of a Notice of Borrowing. Any Notice of Borrowing (or
telephonic notice in lieu thereof) pursuant to this Section 2.03(b) shall be
irrevocable.
(c) Making of Revolving Loans. (i) Promptly after
receipt of a Notice of Borrowing under Section 2.03(b) (or telephonic notice in
lieu thereof), the Agent, at its option and in its sole discretion, shall do
either of the following; provided, however, in the case of a Borrowing of less
than the amount of Citibank's unused Commitment at the time of such Borrowing,
the Agent shall act only in accordance with paragraph (B) below:
(A) The Agent shall notify each Senior
Lender by telex or telecopy or other similar form of teletransmission,
of the proposed Borrowing. Each Senior Lender shall make the amount
of its Revolving Loan available to the Agent in Dollars and in
immediately available funds, to such bank and account, in New York,
New York, as the Agent may designate, not later than 11:00 a.m. (New
York time) on the Funding Date. After the Agent's receipt of the
proceeds of such Revolving Loans, the Agent shall make the proceeds of
such Revolving Loans available to the Borrowing Subsidiary named in
the Notice of Borrowing in New York, New York on such Funding Date and
shall disburse such funds in Dollars and in immediately available
funds to the Citibank Account of such Borrowing Subsidiary and
thereafter to an account, designated in writing by such Borrowing
Subsidiary in the Notice of Borrowing; or
(B) The Agent shall first advance the
amount of the proposed Borrowing (including Borrowings for Revolving
Loans deemed made with respect to Reimbursement Obligations) to the
Borrowing Subsidiary out of the funds, if any, such Borrowing
Subsidiary has in its Citibank Account at the time of such Borrowing
and then, to the extent additional funds are needed, the Agent shall
advance such additional funds disproportionately (a "Disproportionate
Advance") out of the Agent's own funds. The Agent shall request
settlement with the Senior Lenders on a weekly or more frequent basis
as necessary to conform each Senior Lender's Revolving Credit
Accommodations outstanding at such time, to its Pro Rata Share. In
the event of such Disproportionate Advances, each Senior Lender's
share of the interest paid by the Borrowing Subsidiary shall be
adjusted as necessary to account for the
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disproportion. The Agent's request for funding by the Senior Lenders
of their Revolving Loans or for settlement to conform the Senior
Lenders' Pro Rata Shares may be made by telex or telecopy or other
similar form of teletransmission. Each Senior Lender shall make the
amount of its Revolving Loan or settlement available to the Agent in
Dollars and in immediately available funds, to such bank and account,
in New York, New York as the Agent may designate, not later than 2:00
p.m. (New York time) on the day such request was made, or, if such
request is made after 11:00 a.m. on such day, no later than 11:00 a.m.
(New York time) on the next following Business Day. Notwithstanding
the foregoing, the Agent will not at any time make any
Disproportionate Advance if and to the extent that such
Disproportionate Advance, when aggregated with all other
Disproportionate Advances that have not yet been repaid by any
Borrowing Subsidiary or by the Senior Lenders exceeds the amount of
Citibank's unused Commitment, in which case the Agent shall act only
in accordance with subsection (A) above. If a Senior Lender does not
reimburse the Agent for its Pro Rata Share of any Disproportionate
Advance as required by this subsection (B), such Senior Lender agrees
to pay to the Agent forthwith on demand the amount of its Pro Rata
Share of such Disproportionate Advance together with interest thereon,
for each day such share remains unpaid until the date such amount is
paid or repaid to the Agent at the Federal Funds Rate.
(ii) In connection with Revolving Loans funded
pursuant to Section 2.03(c)(i)(A), unless the Agent shall have been notified by
any Senior Lender prior to any Funding Date in respect of any Borrowing of
Revolving Loans that such Senior Lender does not intend to make available to
the Agent such Senior Lender's Revolving Loan on such Funding Date, the Agent
may assume that such Senior Lender has made such amount available to the Agent
on such Funding Date and the Agent in its sole discretion may, but shall not be
obligated to, make available to the Borrowing Subsidiary requesting such
Borrowing a corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to the Agent by such Senior Lender on or
prior to a Funding Date, such Senior Lender agrees to pay and such Borrowing
Subsidiary agrees to repay severally to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to such Borrowing Subsidiary until the date such
amount is paid or repaid to the Agent, at (A) in the case of such Senior
Lender, the Federal Funds Rate and (B) in the case of such Borrowing
Subsidiary, the interest rate applicable at the time to a Borrowing of Base
Rate Loans made on such Funding Date. If such Senior Lender shall pay to the
Agent such corresponding amount, such amount so paid shall constitute such
Senior Lender's Revolving Loan, and if both such Senior Lender and such
Borrowing Subsidiary shall have paid and repaid, respectively, such
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corresponding amount, the Agent shall promptly return to such Borrowing
Subsidiary such corresponding amount in same day funds. Nothing in this
Section 2.03(c) shall be deemed to relieve any Senior Lender of its obligation
hereunder to make its Revolving Loan on any Funding Date.
(d) Use of Proceeds of Revolving Loans and Use of Letters
of Credit. The proceeds of the Revolving Loans shall be used by each Borrowing
Subsidiary for the payment of dividends to the Company in such aggregate amount
as may be necessary to redeem the $100,000,000 aggregate outstanding principal
amount of Senior Notes and pay accrued interest thereon in accordance with the
Senior Note Indenture, for the payment of all Transaction Costs, for working
capital in the ordinary course of business and for other lawful and permitted
corporate purposes to the extent not otherwise prohibited hereunder. Letters
of Credit may be used for the purpose of supporting certain Permitted Existing
Indebtedness and in support of working capital in the ordinary course of
business and for other lawful and permitted corporate purposes to the extent
not otherwise prohibited hereunder; provided, however, Letters of Credit shall
not be used for the purpose of providing credit support for Operating Leases of
the Company and its Subsidiaries other than those Letters of Credit set forth
on Schedule 2.03(d). The proceeds of Capex Loans shall be used solely for the
purposes specified in the definition of "Capex Loan".
(e) Reduction of Commitments; Revolving Credit
Termination Date. (i) The Borrowing Subsidiaries shall have the right, at any
time and from time to time, to terminate in whole or permanently reduce in
part, without premium or penalty, the Commitments in an amount up to the amount
of (A) the aggregate Commitments in effect at such time, less (B) the aggregate
principal amount of the Revolving Credit Accommodations then outstanding. The
Borrowing Subsidiaries shall give not less than two (2) Business Days' prior
written notice to the Agent and the Collateral Agent designating the date
(which shall be a Business Day) of such termination or reduction and the amount
of any partial reduction. Promptly after receipt of a notice of such
termination or reduction, the Agent shall notify each Senior Lender of the
proposed termination or reduction. Such termination or partial reduction of
the Commitments shall be effective on the date specified in the Borrowing
Subsidiaries' notice and shall reduce the Commitment of each Senior Lender
proportionately in accordance with its Pro Rata Share. Any such partial
reduction of the Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount.
(ii) The Commitments shall be permanently reduced on a
Dollar for Dollar basis by the amount of any Designated Prepayment in respect
of Net Cash Proceeds applied to the
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Revolving Loans pursuant to Section 2.06(b) except as provided in the proviso
of the first sentence of Section 2.06(b)(iii). Each such reduction shall
reduce the Commitment of each Senior Lender proportionately in accordance with
its Pro Rata Share. Notwithstanding the foregoing, all proceeds of any
insurance, condemnation awards or eminent domain proceeds relating to any
assets or property shall not permanently reduce the Commitments if such
proceeds (A) are at such time placed in reserve in accordance with Section
2.03(f)(i), (B) are to be applied to the replacement or restoration of such
assets or property in accordance with the terms of Section 6.11, (C) are
received in connection with assets or property sold pursuant to a Permitted
Disposition or (D) are subject to Liens permitted under Section 7.02(b)(vi).
(iii) Each Senior Lender's Commitment shall expire without
further action on the part of the Senior Lenders, and all then outstanding
Revolving Loans shall be paid in full on the Revolving Credit Termination Date.
(f) Revolving Credit Facility Reserves. Upon
notification to the Agent and the Collateral Agent pursuant to Section 6.11 of
the receipt by any Loan Party of any Net Cash Proceeds constituting insurance
proceeds, condemnation awards or eminent domain proceeds, a reserve against the
Revolving Credit Facility shall be automatically and immediately created in the
aggregate amount of such Net Cash Proceeds. Each such reserve shall abate to
the extent that (i) the Loan Party whose property is damaged, lost or taken
uses such proceeds to restore, repair or replace such property and/or (ii) such
Loan Party makes a mandatory prepayment required pursuant to Section 2.06(b) as
a result of the receipt by such Loan Party of such Net Cash Proceeds.
(g) Issuance of Letters of Credit. (i) Subject to the
terms and conditions set forth in this Agreement, the Issuing Bank agrees to
issue for the account of any Borrowing Subsidiary one or more Letters of
Credit, up to an aggregate face amount at any one time outstanding equal to the
Letter of Credit Sublimit, from time to time during the period commencing on
the Effective Date and ending on a Business Day at least two (2) Business Days
preceding the Revolving Credit Termination Date. The Letter of Credit
Obligations shall constitute financial accommodations under the Revolving
Credit Facility and shall reduce availability under the Commitments by the
amount of such Letter of Credit Obligations.
(ii) In addition to being subject to the
satisfaction of the conditions precedent contained in Section 3.02, the
obligation of the Issuing Bank to issue any Letter of Credit is subject to the
satisfaction in full of the following conditions:
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(A) the Borrowing Subsidiary requesting
the Letter of Credit shall have delivered to the Issuing Bank and the
Agent at such times and in such manner as the Issuing Bank may
prescribe, a Letter of Credit Reimbursement Agreement and such other
documents and materials as may be required pursuant to the terms
thereof and the terms of the proposed Letter of Credit shall be
satisfactory to the issuer thereof;
(B) immediately after the issuance of
such Letter of Credit, the aggregate principal amount of Letter of
Credit Obligations then existing with respect to Letters of Credit
issued by the Issuing Bank, shall not exceed the Letter of Credit
Sublimit and no mandatory repayment of the Obligations would be
required underSections 2.06(b)(iv) and (v) as a result of such
issuance;
(C) such Letter of Credit shall have a
tenor of no longer than one (1) year and the expiration date of such
Letter of Credit shall be no later than the Business Day immediately
preceding the Revolving Credit Termination Date; and
(D) as of the date of issuance, no
order, judgment or decree of any court, arbitrator or Governmental
Authority shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing the Letter of Credit and no law, rule or regulation
applicable to the Issuing Bank and no request or directive (whether or
not having the force of law and whether or not the failure to comply
therewith would be unlawful) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit or request that the
Issuing Bank refrain from the issuance of letters of credit generally
or the issuance of such Letter of Credit.
(iii) To open a Letter of Credit, the Borrowing
Subsidiary requesting the same shall give the Issuing Bank and the Agent
written notice not later than 11:00 a.m. (New York time) on the third Business
Day preceding the requested issuance date thereof under this Agreement. Such
notice shall be irrevocable and shall specify (A) the stated amount of the
Letter of Credit requested, (B) the effective date (which day shall be a
Business Day) of issuance of such requested Letter of Credit, (C) the date on
which such requested Letter of Credit is to expire (which date shall be a
Business Day and shall in no event be later than the Business Day immediately
preceding the Revolving Credit Termination Date), (D) the Person for whose
benefit the requested Letter of Credit is to be issued, and (E) the amount of
then outstanding Letter of Credit Obligations. A copy of such notice shall be
delivered to the Agent contemporaneously therewith.
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(iv) Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement:
(A) the Borrowing Subsidiary for whose
account a Letter of Credit has been issued shall unconditionally
reimburse the Issuing Bank for drawings under such Letter of Credit no
later than the earlier of (I) the time specified in such Letter of
Credit Reimbursement Agreement, and (II) one (1) Business Day after
the payment by the Issuing Bank; and
(B) In connection with a Letter of Credit
issued by the Issuing Bank, to the extent any Reimbursement Obligation
is not paid when due, such Reimbursement Obligation shall be deemed to
be a Revolving Loan payable to the Senior Lenders in the amount of
such Reimbursement Obligation made in accordance with Section 2.03(a);
(C) any Reimbursement Obligation with
respect to any Letter of Credit shall bear interest from the date of
the relevant drawing under the pertinent Letter of Credit at the
interest rate applicable to Base Rate Loans until paid in full.
(v) No action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit (except in
connection with its gross negligence or willful misconduct) shall put the
Issuing Bank under any resulting liability to any Senior Lender or, subject to
paragraph (ii) above, relieve any such Senior Lender of its obligations
hereunder to the Issuing Bank. In the event this Agreement and any Letter of
Credit Reimbursement Agreement are inconsistent, the terms of this Agreement
shall prevail. In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation to the Senior Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear on their face to comply with
the requirements of such Letter of Credit.
(vi) (A) Immediately upon issuance by the Issuing
Bank of any Letter of Credit for the account of a Borrowing Subsidiary
in accordance with the procedures set forth in thisSection 2.03(g),
each Senior Lender (other than the Issuing Bank) shall be deemed to
have irrevocably and unconditionally purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest in
the amount of such Senior Lender's Pro Rata Share in such Letter of
Credit (including, without limitation, all obligations of such
Borrowing Subsidiary with respect thereto other than amounts owing to
the Issuing Bank under the last
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sentence of Section 2.05(c)(ii)) and any security therefor or
guaranty pertaining thereto.
(B) If the Issuing Bank makes any
payment under any Letter of Credit and the Borrowing Subsidiary does
not repay such amount to the Issuing Bank pursuant to paragraph (iv)
above or paragraph (vii) below or effect a Borrowing as provided in
paragraph(iv)(B) above, the Agent shall promptly notify each Senior
Lender of such failure, and each Senior Lender (other than the Issuing
Bank) shall promptly and unconditionally pay to the Agent for the
account of the Issuing Bank the amount of such Senior Lender's Pro
Rata Share of such payment, in Dollars and in immediately available
funds, and the Agent shall promptly pay such amount, and any other
amounts received by the Agent for the Issuing Bank's account pursuant
to thisparagraph (vi), to the Issuing Bank. All such payments,
including Borrowings effected pursuant toparagraph (iv)(B) above,
shall constitute Revolving Loans by such Borrowing Subsidiary made
pursuant toSection 2.03(a) and Section 2.03(c) (irrespective of the
satisfaction of the conditions specified in Section 3.02or the
requirement in Section 2.03(b) to deliver a Notice of Borrowing, which
condition and requirement, for the purpose of funding any
Reimbursement Obligation owing to any Issuing Bank, the Senior Lenders
hereby irrevocably waive). If the Agent so notifies a Senior Lender
prior to 11:00 a.m. (New York time) on any Business Day, such Senior
Lender shall make available to the Agent for the account of the
Issuing Bank its Pro Rata Share of the amount of such payment on such
Business Day in Dollars and in immediately available funds in New
York, New York. If and to the extent such Senior Lender shall not
have so made its Pro Rata Share of the amount of such payment
available to the Agent for the account of the Issuing Bank, such
Senior Lender agrees to pay to the Agent for the account of the
Issuing Bank forthwith on demand such amount together with interest
thereon, for each day from the date such payment was first due until
the date such amount is paid to the Agent for the account of the
Issuing Bank, at the Federal Funds Rate for three (3) Business Days
and then at the Base Rate. The failure of any Senior Lender (other
than the Issuing Bank) to make available to the Agent for the account
of the Issuing Bank its Pro Rata Share of any such payment shall not
relieve any other Senior Lender (other than the Issuing Bank) of its
obligation hereunder to make available to the Agent for the account of
the Issuing Bank its Pro Rata Share of any payment on the date such
payment is to be made.
(C) Whenever the Issuing Bank receives a
payment on account of a Reimbursement Obligation, including any
interest thereon, as to which the Agent has previously
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received payments from the Senior Lenders (other than the Issuing
Bank) for the account of the Issuing Bank pursuant to this paragraph
(vi), it shall promptly pay to the Agent and the Agent shall promptly
pay to each Senior Lender which has funded its participating interest
therein, in New York, New York, in Dollars and in the kind of funds so
received, an amount equal to such Senior Lender's Pro Rata Share
thereof. Each such payment shall be made by the Issuing Bank or the
Agent, as the case may be, on the Business Day on which such Person
receives the funds paid to such Person pursuant to the preceding
sentence, if received prior to 11:00 a.m. (New York time) on such
Business Day, and otherwise on the next succeeding Business Day.
(D) Upon the request of any Senior
Lender, the Issuing Bank shall furnish to such Senior Lender copies of
any Letter of Credit or Letter of Credit Reimbursement Agreement to
which the Issuing Bank is party and such other documentation as may
reasonably be requested by such Senior Lender.
(E) The obligations of a Senior Lender
(other than the Issuing Bank) to make payments to the Agent for the
account of the Issuing Bank with respect to a Letter of Credit issued
on behalf of a Borrowing Subsidiary by such Issuing Bank shall be
irrevocable, shall not be subject to any qualification or exception
whatsoever, and shall be honored in accordance with the terms and
conditions of this Agreement under all circumstances (subject
toparagraph (ii) above), including, without limitation, any of the
following circumstances (except in connection with the gross
negligence or willful misconduct of the Issuing Bank):
(I) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents;
(II) the existence of any claim, set-off,
defense or other right which a Borrowing Subsidiary may have
at any time against a beneficiary named in a Letter of Credit
or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, the
Collateral Agent, the Issuing Bank, any Senior Lender, or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between such Borrowing Subsidiary and the beneficiary named in
any Letter of Credit);
(III) any draft, certificate of any other
document presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in
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any respect or any statement therein being untrue or
inaccurate in any respect;
(IV) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(V) any failure by the Agent or the Issuing
Bank to make any reports required pursuant to paragraph (viii)
below; or
(VI) the occurrence of any Event of Default or
Potential Event of Default.
(vii) (A) Each Borrowing Subsidiary unconditionally
agrees to pay to the issuer of any Letter of Credit the amount of all
Reimbursement Obligations, interest and other amounts payable to such
issuers under or in connection with any Letter of Credit issued on
behalf of such Borrowing Subsidiary immediately when due, irrespective
of any claim, setoff, defense or other right which such Borrowing
Subsidiary may have at any time against the Issuing Bank or any other
Person.
(B) In the event any payment by a Borrowing
Subsidiary received by the Issuing Bank with respect to such
Letter of Credit and distributed by the Agent to the Senior Lenders on
account of their participations is thereafter set aside, avoided or
recovered from the Issuing Bank in connection with any receivership,
liquidation or bankruptcy proceeding or otherwise, each Senior Lender
which received such distribution shall, upon demand by the Issuing
Bank, contribute such Senior Lender's Pro Rata Share of the amount set
aside, avoided or recovered together with interest at the rate
required to be paid by the Issuing Bank upon the amount required to be
repaid by it.
(viii) (A) In addition to amounts payable as elsewhere
provided in this Section 2.03(g), each Borrowing Subsidiary hereby
agrees to protect, indemnify, pay and save the Agent, the Collateral
Agent, the Issuing Bank and each Senior Lender harmless from and
against any and all Liabilities and Costs which the Agent or the
Collateral Agent or the Issuing Bank or any Senior Lender may incur or
be subject to as a consequence, direct or indirect, of (I) the
issuance of a Letter of Credit for the account of such Borrowing
Subsidiary other than, in the case of the Issuing Bank, as a result of
its gross negligence or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction or (II) the failure of
the Issuing Bank to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful,
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of any present or future de jure or de facto Governmental Authority
(all such acts or omissions herein called "Governmental Acts").
(B) As between the Borrowing Subsidiary
for whose account a Letter of Credit has been issued, the Senior
Lenders, the Agent, the Collateral Agent or the Issuing Bank, such
Borrowing Subsidiary assumes all risks of the acts and omissions of,
or misuse of such Letter of Credit by, the beneficiary of such Letter
of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the Letter of Credit Reimbursement
Agreements, the Agent, the Collateral Agent, the Issuing Bank and the
Senior Lenders shall not be responsible: (I) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (II) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid
or ineffective for any reason; (III) for failure of the beneficiary of
a Letter of Credit to comply duly with conditions required in order to
draw upon such Letter of Credit; (IV) for errors, omissions,
interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise, whether or not they be in cipher; (V)
for errors in interpretation of technical terms; (VI) for any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the proceeds
thereof; (VII) for the misapplication by the beneficiary of a Letter
of Credit of the proceeds of any drawing under such Letter of Credit;
and (VIII) for any consequences arising from causes beyond the control
of the Agent, the Collateral Agent, the Issuing Bank and any Senior
Lender including, without limitation, any Governmental Acts. None of
the above shall affect, impair, or prevent the vesting of any of the
rights or powers of the Issuing Bank under thisparagraph (viii).
(C) In furtherance and extension and not
in limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Issuing Bank under or in connection
with Letters of Credit issued on behalf of a Borrowing Subsidiary or
any related certificates, if taken or omitted in good faith, shall
not, in the absence of gross negligence or willful misconduct, put the
Issuing Bank, the Agent, the Collateral Agent or any Senior Lender
under any
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resulting liability to such Borrowing Subsidiary or relieve such
Borrowing Subsidiary of any of its obligations hereunder to any such
Person.
2.04. Interest on the Revolving Loans.
(a) Rate of Interest. (i) All Loans shall bear interest
on the unpaid principal amount thereof from the date made until paid in full at
a fluctuating rate determined from time to time by reference to the Base Rate
or the Eurodollar Rate. The applicable basis for determining the rate of
interest on the Loans shall be selected by the Borrowing Subsidiary at the time
a Notice of Conversion/Continuation is delivered by such Borrowing Subsidiary
pursuant to Section 2.04(c); provided, however, that such Borrowing Subsidiary
may not select the Eurodollar Rate as the applicable basis for determining the
rate of interest on any Revolving Loan if at the time of such selection an
Event of Default or a Potential Event of Default has occurred and is
continuing. If on any day a Revolving Loan is outstanding with respect to
which notice has not been delivered to the Agent in accordance with the terms
of this Agreement specifying the basis for determining the rate of interest,
then for such day such Loan shall be a Base Rate Loan. The Loans shall bear
interest, subject to Section 2.04(d) and paragraph (ii) below, as follows:
(A) If a Base Rate Loan, then at a rate
per annum equal to the sum of (I) 1.50% plus (II) the Base Rate as in
effect from time to time as interest accrues; and
(B) If a Eurodollar Rate Loan, then at a
rate per annum equal to the sum of (I) 3.0% plus (II) the Eurodollar
Rate determined for the applicable Eurodollar Interest Period.
(ii) Notwithstanding paragraph (i) above, interest
in respect of any Revolving Loan shall not exceed the maximum rate permitted by
applicable law.
(b) Interest Payments. Subject to Section 2.04(d),
interest accrued on all Base Rate Loans in any calendar quarter shall be
payable by each Borrowing Subsidiary borrowing such Base Rate Loan in arrears
(i) on the first Business Day of the month following each January 31, April 30,
July 31 and October 31 during the term of this Agreement, commencing on the
first such day following the making of each such Base Rate Loan, (ii) upon the
prepayment thereof in full and (iii) at maturity. Interest accrued on each
Eurodollar Rate Loan shall be payable by each Borrowing Subsidiary borrowing
such Eurodollar Rate Loan in arrears (A) on each Eurodollar Interest Payment
Date applicable to that Loan, (B) upon prepayment thereof in full and (C) at
maturity.
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(c) Conversion or Continuation. (i) Subject to the
provisions of Section 2.08, a Borrowing Subsidiary shall have the option (A) to
convert at any time all or any part of outstanding Loans which comprise part of
the same Borrowing and which, in the aggregate, equal $5,000,000 or an integral
multiple of $5,000,000 in excess of that amount from Base Rate Loans to
Eurodollar Rate Loans; or (B) to convert all or any part of outstanding Loans
which, in the aggregate, equal $5,000,000 or an integral multiple of $5,000,000
in excess of that amount from Eurodollar Rate Loans to Base Rate Loans on the
expiration date of any Eurodollar Interest Period applicable thereto; or (C)
upon the expiration of any Eurodollar Interest Period applicable to a Borrowing
of Eurodollar Rate Loans, to continue all or any portion of such Loans equal to
$5,000,000 or an integral multiple of $5,000,000 in excess of that amount as
Eurodollar Rate Loans of the same type, and the succeeding Eurodollar Interest
Period of such continued Loans shall commence on the expiration date of the
Eurodollar Interest Period applicable thereto; provided, however, that no
outstanding Loan may be continued as, or be converted into, a Eurodollar Rate
Loan when any Event of Default or Potential Event of Default has occurred and
is continuing.
(ii) In the event a Borrowing Subsidiary shall
elect to convert or continue a Revolving Loan under this Section 2.04(c), such
Borrowing Subsidiary shall deliver a Notice of Conversion/ Continuation to the
Agent no later than 11:00 a.m. (New York time) at least one (1) Business Day in
advance of the proposed conversion date in the case of a conversion to a Base
Rate Loan, and no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed conversion/continuation date in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan. A
Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the amount of
the Loan to be converted/continued, (C) the nature of the proposed conversion/
continuation, and (D) in the case of a conversion to, or continuation of, a
Eurodollar Rate Loan, the requested Eurodollar Interest Period. In lieu of
delivering the above-described Notice of Conversion/Continuation, such
Borrowing Subsidiary may give the Agent telephonic notice of any proposed
conversion/ continuation by the time required under this Section 2.04(c);
provided, however, that such notice shall be confirmed in writing by delivery
to the Agent promptly (but in no event later than the proposed
conversion/continuation date) of a Notice of Conversion/ Continuation.
Promptly after receipt of a Notice of Conversion/ Continuation under this
Section 2.04(c) (or telephonic notice in lieu thereof), the Agent shall notify
each Senior Lender by telex, telecopy, telegram, telephone or other similar
form of transmission, of the proposed conversion/continuation.
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(iii) Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Revolving Loan (or telephonic notice in
lieu thereof) shall be irrevocable and the Borrowing Subsidiary delivering such
notice shall be bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of
interest specified in Section 2.04(a) and the payment dates specified in
Section 2.04(b), effective immediately upon the occurrence of any Event of
Default (except for Events of Default arising from any Loan Party's failure to
comply with Sections 6.01 through 6.03, 6.05 through 6.08, 6.11, 7.08, 7.12,
7.15, 7.16, and 7.18) and for as long thereafter as any such Event of Default
shall be continuing, (i) the principal balance of all Loans then outstanding
and, to the extent permitted by applicable law, any interest payments on the
Loans not paid when due, shall bear interest payable upon demand at a rate
which is two percent (2%) per annum in excess of the rate of interest otherwise
payable under this Agreement and (ii) any letter of credit fee payable pursuant
to Section 2.05(c) shall be increased by two percent (2%) per annum in excess
of the per annum rate specified for such fee.
(e) Computation of Interest. Interest on Base Rate Loans
and Eurodollar Rate Loans shall be computed on the basis of the actual number
of days elapsed in the period during which interest accrues and a year of 360
days. In computing interest on any Revolving Loan, the date of the making of
the Loan or the first day of a Eurodollar Interest Period, as the case may be,
shall be included and the date of payment or the expiration date of a
Eurodollar Interest Period, as the case may be, shall be excluded.
(f) Changes; Legal Restrictions. Except as provided in
Section 2.08(d) with respect to certain determinations on Eurodollar Interest
Rate Determination Dates, in the event that after the date hereof (a) the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of a court or Governmental Authority or any change in the
interpretation or application thereof by a court or Governmental Authority, or
(b) compliance by any Senior Lender with any request or directive (whether or
not having the force of law and whether or not the failure to comply therewith
would be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
(i) subjects a Senior Lender (or its applicable
lending office or Eurodollar Affiliate) to any tax, duty or other charge of any
kind which such Senior Lender determines to be applicable to this Agreement,
the Commitments, the Loans, the Letters of Credit or change in the basis of
taxation of payments to such Senior Lender of principal, fees, interest, or any
other
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amount payable hereunder, except for net income or franchise taxes imposed by
any jurisdiction (all such non-excepted taxes, duties and other charges being
hereinafter referred to as "Taxes"); or
(ii) does or may impose, modify, or hold
applicable, in the determination of a Senior Lender, any reserve, special
deposit, compulsory loan, FDIC insurance, capital allocation or similar
requirement against assets held by, or deposits or other liabilities (including
those pertaining to Letters of Credit) in or for the account of, advances or
loans by, Commitments made, or other credit extended by, or any other
acquisition of funds by, a Senior Lender or any applicable lending office or
Eurodollar Affiliate of such Senior Lender (except, with respect to Base Rate
Loans, to the extent that the reserve and FDIC insurance requirements are
reflected in the definition of "Base Rate" and, with respect to Eurodollar Rate
Loans, to the extent that the reserve requirements are reflected in the
definition of "Eurodollar Rate"); or
(iii) does or is reasonably likely to impose on
such Senior Lender any other condition materially more burdensome in nature,
extent or consequence than those in existence as of the Effective Date;
and the result of any of the foregoing is to increase the cost to such Senior
Lender of making, renewing or maintaining the Loans or its Commitment to any
Borrowing Subsidiary or issuing to any Borrowing Subsidiary any Letter of
Credit or to reduce any amount receivable thereunder, then, in any such case,
such Borrowing Subsidiary shall promptly pay to such Senior Lender, upon
demand, such amount or amounts (based upon an allocation thereof by such Senior
Lender to the financing transactions contemplated by this Agreement and
affected by this Section 2.04(f)) as may be necessary to compensate that Senior
Lender for any such additional cost incurred or reduced amount received. Such
Senior Lender shall deliver to such Borrowing Subsidiary a written statement of
the costs or reductions claimed and the basis therefor, and the allocation made
by such Senior Lender of such costs and reductions shall be conclusive, absent
manifest error. If a Senior Lender subsequently recovers any amount of Taxes
previously paid by such Borrowing Subsidiary pursuant to this Section 2.04(f),
such Senior Lender shall, within thirty (30) days after receipt of such refund
and to the extent permitted by applicable law, pay to such Borrowing Subsidiary
the amount of any such recovery.
2.05. Fees.
(a) Fee Agreements. The Company and the Borrowing
Subsidiaries shall pay to the Agent, solely for its own account, the fees
specified in the Fee Agreement among Citibank and the
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Loan Parties, on the dates specified therein. The Company and the Borrowing
Subsidiaries shall pay to the Collateral Agent, solely for its own account, the
fees specified in the Fee Agreement among GE Capital and the Loan Parties, on
the dates specified therein. No Person other than Citibank or GE Capital, as
the case may be, shall have any interest in such fees. Each Loan Party hereby
agrees, jointly and severally, to pay or cause to be paid to the Agent for the
benefit of the Senior Lenders an amendment fee (the "Amendment Fee") equal to
one and one-half percent (1.50%) of the Commitments provided by each Senior
Lender, payable on the Effective Date. Each Senior Lender shall receive from
the Agent the percentage of the Amendment Fee that is equal to such Senior
Lender's Pro Rata Share.
(b) Unused Commitment Fee. The Borrowing Subsidiaries
shall pay to the Agent, for the account of each Senior Lender, an unused
commitment fee accruing at the rate of one-half of one percent (1/2 of 1%) per
annum from and after the Effective Date until the Obligations are paid in full
and the Commitments are terminated, upon the average daily amount of the excess
of such Senior Lender's Pro Rata Share of the Commitments over such Senior
Lender's Pro Rata Share of all Revolving Loans and Letter of Credit Obligations
outstanding from time to time. All such commitment fees payable under this
paragraph (b) shall be payable quarterly in arrears on the first Business Day
in each fiscal quarter beginning after the Effective Date.
(c) Letter of Credit Fees. (i) Each Borrowing Subsidiary
requesting the issuance of a Letter of Credit shall pay to the Agent, for the
benefit of the Senior Lenders, on the date each such Letter of Credit first is
issued and thereafter quarterly in advance, commencing three (3) months after
the date such Letter of Credit was issued, a letter of credit fee equal to two
and one-half percent (2-1/2%) per annum applied to the maximum amount available
to be drawn under such Letter of Credit. Each Senior Lender shall receive from
the Agent the percentage of such fee that is equal to such Senior Lender's Pro
Rata Share. Such Borrowing Subsidiary shall pay to the Agent, solely for the
account of the Issuing Bank, on the date each such Letter of Credit is issued
and thereafter quarterly in advance, commencing three (3) months after the date
such Letter of Credit was issued, an issuing fee equal to a rate per annum to
be agreed upon between the Issuing Bank and such Borrowing Subsidiary applied
to the maximum amount available to be drawn under such Letter of Credit.
(ii) Each such Borrowing Subsidiary shall also pay to the
Agent, for the account of the Issuing Bank, the standard charges assessed by
such Person in connection with the issuance, administration, amendment and
payment or cancellation of such Letter of Credit.
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(d) Payment of Fees. The fees described in this Section
2.05 represent compensation for services rendered and to be rendered separate
and apart from the lending of money or the provision of credit and do not
constitute compensation for the use, detention or forbearance of money, and the
obligation of the Company or any Borrowing Subsidiary to pay each fee described
herein shall be in addition to, and not in lieu of, the obligation of the
Company or such Borrowing Subsidiary to pay interest, other fees and expenses
otherwise described in this Agreement or the Fee Agreements. Fees shall be
payable when due in New York, New York in immediately available funds. All
fees shall be non-refundable when paid. All fees and expenses specified or
referred to in this Agreement due to the Agent, the Collateral Agent or a
Senior Lender, including, without limitation, those referred to in this Section
2.05, in Section 11.03 and in the Fee Agreements, shall bear interest, if not
paid when due, at the rate then applicable to past due Base Rate Loans (but not
to exceed the maximum rate permitted by applicable law), shall constitute
Obligations and shall be secured by all of the Collateral. All fees described
in this Section 2.05 and the Fee Agreements, which are expressed as a per annum
charge shall be calculated on the basis of the actual number of days elapsed in
a 360-day year.
2.06. Prepayments.
(a) Voluntary Prepayments. Any Borrowing Subsidiary may,
upon not less than two (2) Business Days' prior written or telephonic notice
confirmed promptly in writing to the Agent and the Collateral Agent (which
notice the Agent shall promptly transmit by telegram, telex or telephone to
each Senior Lender), at any time and from time to time, prepay any Base Rate
Loan in whole or in part, without premium or penalty, in an aggregate minimum
amount of $5,000,000 and integral multiples of $5,000,000 in excess of that
amount; provided, however, that (i) such Borrowing Subsidiary may prepay such
Loans in full without regard to such minimum amount and (ii) the Borrowing
Subsidiaries may prepay Revolving Loans in an aggregate amount less than the
amount of Citibank's Revolving Loans outstanding at such time without any such
prior written notice pursuant to Section 2.07(a). Eurodollar Rate Loans may be
prepaid in whole or in part, without premium or penalty, on the expiration date
of the Eurodollar Interest Period applicable thereto and otherwise only upon
payment of the amounts described in Section 2.08(f). Prepayments of Revolving
Loans under this clause (a) shall not reduce the Commitments. Notwithstanding
the foregoing, in the event that any prepayment is made in connection with the
termination of this Agreement, such prepayment shall be made only upon ten (10)
Business Days' prior written notice to the Agent and the Collateral Agent. Any
notice of prepayment given to the Agent and the Collateral Agent under this
Section 2.06(a) shall specify the date of prepayment and the aggregate
principal amount
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of the prepayment. Prepayments of Revolving Loans under this clause (a) and
clause (b) below shall be applied first to all Revolving Loans (other than
Capex Loans), and then to all Capex Loans. If a notice of prepayment has been
delivered as provided herein, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date specified in
such notice.
(b) Mandatory Prepayments. (i) If after the Effective
Date any Loan Party receives any Net Cash Proceeds (other than Net Cash
Proceeds of the Auto Sale), the Obligations shall be mandatorily prepaid,
without premium or penalty, by an amount equal to such Net Cash Proceeds.
Notwithstanding anything contained in this Agreement to the contrary, it is
understood and agreed that the gross proceeds of the Auto Sale shall be applied
to make the Investment referred to in clause (vi) of Section 7.03 and that the
Net Cash Proceeds of the Auto Sale shall be applied as follows: (x) first, on
the Effective Date, as contemplated by the final sentence of Section
2.03(a)(i), and (y) second, to the redemption of Subordinated Indebtedness to
the extent required pursuant to the terms of the indentures governing the
Subordinated Indebtedness. If, after the Effective Date, any Net Cash Proceeds
of the Auto Sale are retained by or on behalf of any Loan Party after (1) the
repayment in full of all amounts outstanding under the Existing Credit
Agreement on the Effective Date, (2) the offers to redeem the Subordinated
Indebtedness contemplated by clause (y) of the immediately preceding sentence
and (3) offers to redeem Subordinated Indebtedness to the extent required
pursuant to the terms of the indentures governing the Subordinated Indebtedness
with amounts received by any Loan Party from Newsub, the Obligations shall be
mandatorily prepaid without premium or penalty by the amount so retained.
(ii) Each mandatory prepayment described in the first or
third sentence of clause (i) of this Section 2.06(b) shall be referred to
herein as a "Designated Prepayment". A Loan Party shall give the Agent and the
Collateral Agent not less than two (2) Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of the circumstances giving
rise to such Designated Prepayment and of the date on which such Designated
Prepayment will be made (which date shall be no later than the date on which
such Designated Prepayment becomes due and payable pursuant to this Section
2.06(b).
(iii) Designated Prepayments shall be applied to
the repayment of the Revolving Loans then outstanding and, to the extent
applied to the Revolving Loans, the Commitments shall be permanently reduced by
the amount of any such Designated Prepayment; provided, however, that the
Commitments shall not be permanently reduced by the amount of Designated
Prepayments of Net Cash Proceeds from the Auto Sale, from Permitted
Dispositions or financings or refinancings pursuant to which Indebtedness
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permitted by Section 7.01 (other than Indebtedness permitted under clauses (iv)
and (vi) of Section 7.01) is incurred, or by the amount of Designated
Prepayments made in accordance with the third sentence of clause (i) of this
Section 2.06(b). Each Designated Prepayment shall be apportioned among the
Senior Lenders in accordance with their respective Pro Rata Shares of Revolving
Loans being prepaid. The Borrowing Subsidiaries shall be obligated to pay as a
mandatory prepayment of their Obligations the amount of each Designated
Prepayment required to be applied to the Revolving Loans.
(iv) Each Borrowing Subsidiary shall make prepayments of
the Obligations to the extent necessary to assure that the aggregate principal
or face amount of the sum of all Revolving Credit Accommodations outstanding at
any time does not exceed the Maximum Amount of Obligations then in effect.
(v) Each Borrowing Subsidiary shall make prepayments of
Revolving Loans made to it to the extent necessary to assure that (A) the
aggregate principal amount of the Revolving Loans outstanding at any time less
the aggregate principal amount of Capex Loans outstanding at such time does not
exceed at such time the Maximum Amount of Revolving Loans then in effect and
(B) the aggregate principal amount of all Revolving Credit Accommodations
outstanding at any time less the aggregate principal amount of Capex Loans
outstanding at such time made to such Borrowing Subsidiary does not exceed at
such time its Borrowing Base then in effect, less such reserves as either the
Collateral Agent or the Agent, in its sole discretion, may deem appropriate.
To the extent the Commitments at any time are less than the amount of Letter of
Credit Obligations outstanding at such time, each Borrowing Subsidiary with
outstanding Letter of Credit Obligations shall deposit in the Cash Collateral
Account cash (proportionately based on the relative amount of the Letter of
Credit Obligations of each such Borrowing Subsidiary) in the amount by which
such Letter of Credit Obligations exceed such Commitments. To the extent that
any Borrowing Subsidiary's outstanding Letter of Credit Obligations exceed its
Borrowing Base at such time, less such reserves as each of the Collateral Agent
or the Agent, in its sole discretion, may deem appropriate, then such Borrowing
Subsidiary shall deposit in the Cash Collateral Account cash in the amount of
such excess. Each Borrowing Subsidiary hereby grants the Agent a security
interest for the benefit of the Agent, the Collateral Agent, the Senior Lenders
and the Issuing Bank in the Cash Collateral Account and all funds from time to
time deposited in the Cash Collateral Account as security for, and to provide
for the payment of, the Letter of Credit Obligations.
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2.07. Payments; Collection of Accounts.
(a) Manner and Time of Payment. All payments of
principal, interest, Reimbursement Obligations and fees hereunder or under any
Letter of Credit payable to the Senior Lenders shall be made without condition
or reservation of right, in Dollars and in immediately available funds,
delivered to the Agent not later than 11:00 a.m. (New York time) on the date
due, to such account of the Agent in New York, New York, as the Agent may
designate, for the account of the Senior Lenders; and funds received by the
Agent after that time and date shall be deemed to have been paid on the next
succeeding Business Day. Payments actually received by the Agent for the
account of the Senior Lenders shall be paid to them promptly after receipt
thereof by the Agent; provided, however, that the Agent shall pay to such
Senior Lenders interest thereon, at the lesser of (i) Federal Funds Rate and
(ii) the rate of interest applicable to Base Rate Loans, from the Business Day
following receipt of such funds by the Agent until such funds are paid to such
Senior Lenders. Notwithstanding the foregoing, all funds received or on
deposit in the Citibank Accounts by 3:00 p.m. on any Business Day shall be
applied to repay first any Disproportionate Advance and then any of Citibank's
Revolving Loans outstanding at such time. To the extent all Disproportionate
Advances and Citibank's Revolving Loans are paid in full, all funds remaining
in the Citibank Accounts, which are not otherwise applied to the Obligations
pursuant to any notice of prepayment received by the Agent in accordance with
Section 2.06, shall be retained by the Agent in the Citibank Accounts and
invested as provided in paragraph (e) below and shall be paid to the Senior
Lenders by the Agent on a weekly basis, on a settlement date to be selected
each week by the Agent (the "Weekly Settlement Date"). Such payments shall be
applied to the Obligations as provided in paragraph (b) below. Such
Obligations shall be deemed not to have been repaid until the next Weekly
Settlement Date and interest on such Obligations will continue to accrue at the
rates set forth herein for such Obligations up to but not including such Weekly
Settlement Date. On the Weekly Settlement Date, if any Revolving Loans of
Citibank have been repaid, Citibank shall purchase, without recourse or
warranty, an undivided interest and participation in that portion of the
Revolving Loans so that, after such purchase, each Senior Lender (including
Citibank) will have Revolving Credit Accommodations outstanding (subject to
Section 2.03(a)(ii)) in the amount of its Pro Rata Share.
(b) Apportionment of Payments. So long as there does not
exist an Event of Default, all payments of principal and interest in respect of
outstanding Loans, all payments of the fees described herein and in the Fee
Agreements, and all payments in respect of any other Obligations shall be
allocated among such of the Agent, the Collateral Agent and the Senior Lenders
as are entitled thereto as provided herein. After the occurrence and
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during the continuance of an Event of Default, and unless providing notice to
the Loan Parties that payments and proceeds shall be otherwise applied, the
Agent or the Collateral Agent, as the case may be, may, and upon the direction
of the Requisite Senior Lenders shall, apply all payments remitted to the Agent
and all amounts and proceeds of Collateral received by the Agent or the
Collateral Agent, subject to the provisions of this Agreement, (i) first, to
pay Obligations in respect of any fees, expense reimbursements or indemnities
then due to the Agent or the Collateral Agent from any Loan Party (including,
without limitation, any Disproportionate Advance by the Agent); (ii) second, to
pay Obligations in respect of any fees, expense reimbursements or indemnities
then due to the Senior Lenders from any Loan Party; (iii) third, to pay
interest due in respect of Loans and Reimbursement Obligations; (iv) fourth, to
pay or prepay principal of Loans and Reimbursement Obligations, and to pay (or
to the extent such Obligations are contingent, prepay or provide cash
collateral in respect of) Letter of Credit Obligations; (v) fifth, to pay or
prepay Obligations due or to become due in respect of Interest Rate Contracts
to which any Senior Lender is a party; and (vi) sixth, to the ratable payment
of all other Obligations; provided, however, that if sufficient funds are not
available to fund all payments to be made in respect of the Obligations owing
by the Loan Parties described in any of the foregoing clauses (i) through (v),
the available funds shall be allocated to the payment of such Obligations
ratably, based on the proportion of the Agent's, the Collateral Agent's and
each Senior Lender's interest in the aggregate outstanding Obligations
described in such clause; provided, further, that in the event any
Disproportionate Advance is outstanding at such time the available funds first
shall be allocated so as to conform each Senior Lender's Revolving Credit
Accommodations outstanding at such time to its Pro Rata Share.
The Agent or the Collateral Agent, as the case may be, shall
promptly distribute to each Senior Lender at its primary address set forth on
the appropriate signature page hereof, or at such other address as a Senior
Lender may request in writing, such funds as it may be entitled to receive,
provided that neither the Collateral Agent nor the Agent shall in any event be
bound to inquire into or determine the validity, scope or priority of any
interest or entitlement of any Senior Lender and may suspend all payments or
seek appropriate relief (including, without limitation, instructions from the
Requisite Senior Lenders or an action in the nature of interpleader) in the
event of any doubt or dispute as to any apportionment or distribution
contemplated hereby. The order of priority herein is set forth solely to
determine the rights and priorities of the Senior Lenders as among themselves
and may at any time or from time to time be changed by the Senior Lenders as
they may elect, in writing in accordance with Section 11.08, without necessity
of
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notice to or consent of or approval by any Loan Party or any other Person.
(c) Payments on Non-Business Days. Whenever any payment
to be made by any Loan Party hereunder shall be stated to be due on a day which
is not a Business Day, payments shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest hereunder and of any of the fees specified in Section 2.05,
as the case may be.
(d) Agent's or Senior Lender's Accounting. (i) The
Agent shall maintain a loan account (the "Loan Account") on its books in which
shall be recorded (x) the names and addresses of the Senior Lenders and the
Commitments of, and principal amount of Loans and Letter of Credit Obligations
owing to, each Senior Lender from time to time; (y) all other appropriate
debits and credits as provided in this Agreement, including, without
limitation, all interest fees (including attorneys' fees and disbursements),
expenses, charges and other Obligations; (z) all payments of Obligations made
by any Borrowing Subsidiary, or for such Borrowing Subsidiary's account. All
entries in the Loan Account shall be made in accordance with the Agent's
customary accounting practices as in effect from time to time. The Agent will
render a statement of the Loan Account monthly to each Borrowing Subsidiary and
will deliver a copy thereof to each Senior Lender. The Agent will notify each
Senior Lender on each Weekly Settlement Date, if any Letter of Credit
Obligations with respect to Letters of Credit issued by the Issuing Bank are
outstanding on such date, and the principal amount of such Letter of Credit
Obligations owing to each Senior Lender on such date. Each and every such
statement shall be deemed final, binding and conclusive upon such Borrowing
Subsidiary in all respects as to all matters reflected therein (absent manifest
error), unless such Borrowing Subsidiary, within fifteen (15) days after the
date such statement is rendered, delivers to the Agent written notice of any
objections which such Borrowing Subsidiary may have to any such statement. In
that event, only those items expressly objected to in such notice shall be
deemed to be disputed by such Borrowing Subsidiary. Notwithstanding the
foregoing, the Agent's entries in the Loan Account evidencing Loans and other
financial accommodations made from time to time shall be final, binding and
conclusive upon such Borrowing Subsidiary (absent manifest error) as to the
existence and amount of the Obligations recorded in the Loan Account. The
Agent may, in its discretion, and will at the request of the Collateral Agent,
charge to the Loan Account any or all interest, fees and expenses incurred by
any Borrowing Subsidiary hereunder or under the other Loan Documents.
(ii) Each Senior Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the Indebtedness of the
Borrowing Subsidiaries to such Senior Lender
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resulting from each Revolving Loan owing to such Senior Lender from time to
time, including the amount of principal and interest payable and paid to such
Senior Lender from time to time hereunder and under each of the Notes; provided
that the failure of any Senior Lender to so maintain such account or accounts
shall not affect the Obligations of the Company or the Borrowing Subsidiaries.
(e) Collection of Accounts and Payments. (i) Each Borrowing
Subsidiary shall maintain Blocked Accounts in the name of such Borrowing
Subsidiary and the Collateral Agent with such banks selected by such Borrowing
Subsidiary in the ordinary course of business that (A) have executed a
Collection Account Agreement in form and substance satisfactory to the Agent
and the Collateral Agent and in substantially the form of Exhibit 5 and (B)
have been confirmed by the Agent and the Collateral Agent not to be in
uncertain financial condition (the "Collecting Banks") and such Borrowing
Subsidiary shall, promptly upon receipt thereof, immediately deposit in its
respective Blocked Accounts, all monies, checks, notes, drafts or funds
received by it and including, without limitation, all proceeds of Collateral,
Net Cash Proceeds and other cash proceeds of operations whether arising in the
ordinary course of business or otherwise.
(ii) Funds on deposit in a Blocked Account of a
Borrowing Subsidiary on each Business Day shall be wire-transferred to the
Concentration Account in accordance with the Collection Account Agreements
referred to in Section 2.07(e) and shall be applied to such Borrowing
Subsidiary's Obligations to the extent and at the times provided in Sections
2.06 and 2.07(a). The Agent shall use its best efforts to invest all funds, if
any, on deposit in the Citibank Accounts at 3:00 p.m. on any Business Day which
are not applied to the Obligations on such Business Day pursuant to Section
2.06 or 2.07(a), in an overnight investment at the best rate of return
available for such investment for the benefit of such Borrowing Subsidiary at
the time such investment is made. Each Borrowing Subsidiary hereby grants to
the Agent a security interest for the benefit of the Agent, the Collateral
Agent, the Senior Lenders and the Issuing Bank in the Concentration Account and
all funds from time to time deposited in the Concentration Account as security
for the Obligations. All interest or other income on such funds resulting from
overnight investments shall be held in the Concentration Account as additional
cash collateral constituting additional security for the Obligations.
(iii) Each Borrowing Subsidiary agrees to pay to the
Agent and the Collateral Agent any and all reasonable fees, costs and expenses
which the Agent or the Collateral Agent incurs in connection with opening and
maintaining the Blocked Accounts, lock box or other similar payment collection
mechanism for such Borrowing Subsidiary and depositing for collection any check
or
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item of payment received by and/or delivered to the Collecting Banks, the Agent
or the Collateral Agent on account of the Obligations of such Borrowing
Subsidiary. Each Borrowing Subsidiary agrees to reimburse the Agent and the
Collateral Agent for any amounts paid to any Collecting Bank arising out of any
required indemnification by the Agent or the Collateral Agent of such
Collecting Bank against damages incurred by the Collecting Bank in the
operation of a Blocked Account for such Borrowing Subsidiary.
2.08. Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to Eurodollar Rate Loans as to the matters covered:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar
Rate Loan shall be for a minimum amount of $5,000,000 and in integral multiples
of $5,000,000 in excess of that amount. At least $10,000,000 in principal
amount of the Revolving Loans shall be Base Rate Loans at the time any
Eurodollar Rate Loan is requested to be made, any Base Rate Loan is requested
to be converted into a Eurodollar Rate Loan or any Eurodollar Rate Loan is
requested to be continued.
(b) Determination of Eurodollar Interest Period. By
giving notice as set forth in Section 2.04(c) (with respect to a conversion
into or continuation of Eurodollar Rate Loans), the Borrowing Subsidiary giving
such notice shall have the option, subject to the other provisions of this
Section 2.08, to specify an interest period (each, a "Eurodollar Interest
Period") to apply to the Borrowing of Eurodollar Rate Loans described in such
notice, which Eurodollar Interest Period shall be either a one, two or three
month period. The determination of Eurodollar Interest Periods shall be
subject to the following provisions:
(i) In the case of immediately successive
Eurodollar Interest Periods applicable to a Borrowing of Eurodollar Rate Loans,
each successive Eurodollar Interest Period shall commence on the day on which
the next preceding Eurodollar Interest Period expires;
(ii) If any Eurodollar Interest Period would
otherwise expire on a day which is not a Business Day, the Eurodollar Interest
Period shall be extended to expire on the next succeeding Business Day;
provided, however, that if any such Eurodollar Interest Period applicable to a
Borrowing of Eurodollar Rate Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business Day
occurs in that month, that Eurodollar Interest Period shall expire on the
immediately preceding Business Day;
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(iii) Such Borrowing Subsidiary may not select a
Eurodollar Interest Period for any Revolving Loan which terminates later than
the Revolving Credit Termination Date; and
(iv) There shall be no more than three (3)
Eurodollar Interest Periods under this Agreement in effect at any one time.
(c) Determination of Interest Rate. As soon as
practicable after 11:00 a.m. (New York time) on the Eurodollar Interest Rate
Determination Date, the Agent shall determine (which determination shall,
absent manifest error, be presumptively correct) the interest rate which shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Eurodollar Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to the
Borrowing Subsidiaries and to each Senior Lender.
(d) Interest Rate Unascertainable, Inadequate or Unfair.
If, with respect to any Eurodollar Interest Period, the Agent determines that
deposits in Dollars (in the applicable amounts) are not being offered by
Citibank in the relevant market for such Eurodollar Interest Period, the Agent
shall forthwith give notice thereof to the Borrowing Subsidiaries, whereupon
until the Agent notifies the Borrowing Subsidiaries that the circumstances
giving rise to such suspension no longer exist, (a) the right of the Borrowing
Subsidiaries to elect to have Loans bear interest based upon the Eurodollar
Rate shall be suspended, and (b) each outstanding Eurodollar Rate Loan shall be
converted into a Base Rate Loan on the last day of the then current Eurodollar
Interest Period therefor, notwithstanding any prior election by the Borrowing
Subsidiaries to the contrary.
(e) Illegality. (i) In the event that on any date any
Senior Lender shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties) that the making or
continuation of any Eurodollar Rate Loan has become unlawful by compliance by
that Senior Lender in good faith with any law, governmental rule, regulation or
order of any Governmental Authority (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, and in any
such event, such Senior Lender shall promptly give notice (by telephone
promptly confirmed in writing) to the Borrowing Subsidiaries and the Agent
(which notice the Agent shall promptly transmit to each Senior Lender) of that
determination.
(ii) Upon the giving of the notice referred to in
Section 2.08(e)(i), (A) the Borrowing Subsidiaries' right to request of such
Senior Lender and such Senior Lender's obligation to make Eurodollar Rate Loans
shall be immediately suspended, and
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such Senior Lender shall make each Revolving Loan, as part of any requested
Borrowing of Eurodollar Rate Loans, as a Base Rate Loan, which Base Rate Loan
shall, for all purposes, be considered a part of such Borrowing, and (B) if the
affected Eurodollar Rate Loan or Loans are then outstanding, the Borrowing
Subsidiaries owing such Loans shall immediately (or, if permitted by applicable
law, no later than the date permitted thereby, upon at least one (1) Business
Day's written notice to the Agent and the affected Senior Lender) convert each
such Loan into a Base Rate Loan.
(iii) In the event that such Senior Lender
determines at any time following its giving of the notice referred to in
Section 2.08(e)(i) that such Senior Lender may lawfully make Eurodollar Rate
Loans of the type referred to in such notice, such Senior Lender shall promptly
give notice (by telephone confirmed in writing) to the Borrowing Subsidiaries
and the Agent (which notice the Agent shall promptly transmit to each Senior
Lender) of that determination, whereupon the Borrowing Subsidiaries' right to
request of such Senior Lender, and such Senior Lender's obligation to make,
Eurodollar Rate Loans shall be restored.
(f) Compensation. In addition to such amounts as are
required to be paid by any Borrowing Subsidiary pursuant to Sections 2.04(a),
2.04(d) and 2.04(f), each Borrowing Subsidiary shall compensate each Senior
Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Senior Lender to
fund or maintain such Senior Lender's Eurodollar Rate Loans to such Borrowing
Subsidiary) which such Senior Lender may sustain (i) if for any reason a
Borrowing, conversion or continuation of Eurodollar Rate Loans does not occur
on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation or in a telephonic request for borrowing or
conversion/continuation or a successive Eurodollar Interest Period does not
commence after notice therefor is given pursuant to Section 2.04(c), (ii) if
any prepayment of any Eurodollar Rate Loan (including, without limitation, any
prepayment pursuant to Section 2.06) occurs for any reason on a date which is
not the last day of the applicable Eurodollar Interest Period, (iii) as a
consequence of any required conversion of a Eurodollar Rate Loan to a Base Rate
Loan as a result of any of the events indicated in Section 2.08(e), or (iv) as
a consequence of any other failure by such Borrowing Subsidiary to repay
Eurodollar Rate Loans when required by the terms of this Agreement. Such
Senior Lender shall deliver to such Borrowing Subsidiary a written statement as
to such losses, expenses and liabilities which statement shall be conclusive as
to such amounts in the absence of manifest error.
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(g) Eurodollar Rate Taxes. Each Borrowing Subsidiary
agrees that:
(i) such Borrowing Subsidiary will pay, prior to
the date on which penalties attach thereto, all present and future income,
stamp and other taxes, levies, or costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of a Revolving Loan solely as a
result of the interest rate being determined by reference to the Eurodollar
Rate or the provisions of this Agreement relating to the Eurodollar Rate or the
recording, registration, notarization or other formalization of any thereof or
any payments of principal, interest or other amounts made on or in respect of a
Revolving Loan made to such Borrowing Subsidiary when the interest rate is
determined by reference to the Eurodollar Rate (all such taxes, levies, costs
and charges being herein collectively called "Eurodollar Rate Taxes");
provided, however, that Eurodollar Rate Taxes shall not include net income,
franchise or similar taxes imposed by any jurisdiction. Such Borrowing
Subsidiary shall also pay such additional amounts equal to increases in net
income or franchise taxes attributable to payments made by such Borrowing
Subsidiary pursuant to this clause (i). Promptly after the date on which
payment of any such Eurodollar Rate Tax is due pursuant to applicable law, such
Borrowing Subsidiary will, at the request of such Senior Lender, furnish to
such Senior Lender evidence, in form and substance satisfactory to such Senior
Lender, that such Borrowing Subsidiary has met its obligation under this
Section 2.08(g); and
(ii) such Borrowing Subsidiary will indemnify each
Senior Lender against, and reimburse each Senior Lender on demand for, any
Eurodollar Rate Taxes paid by such Senior Lender in respect of a Revolving Loan
made to such Borrowing Subsidiary or in respect of any Note, as determined by
such Senior Lender in its sole discretion. That Senior Lender shall provide
such Borrowing Subsidiary with (A) appropriate receipts for any payments or
reimbursements made by such Borrowing Subsidiary pursuant to this clause (ii)
and (B) such information as may reasonably be required to indicate the basis
for such Eurodollar Rate Taxes; provided, however, that if a Senior Lender
subsequently recovers, or receives a net tax benefit with respect to, any
amount of Eurodollar Rate Taxes previously paid by such Borrowing Subsidiary
pursuant to this Section 2.08(g)(ii), such Senior Lender shall, within thirty
(30) days after receipt of such refund, and to the extent permitted by
applicable law, pay to such Borrowing Subsidiary the amount of any such
recovery or permanent net tax benefit.
(h) Booking of Eurodollar Rate Loans. Any Senior Lender
may make, carry or transfer Eurodollar Rate Loans at, to, or for the account
of, any of its branch offices, agencies or the office of an Affiliate of that
Senior Lender; provided, however,
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no such Senior Lender shall be entitled to receive any greater amount under
Section 2.04(f) or 2.08(g) as a result of the transfer of any such Loan than
such Senior Lender would be entitled to immediately prior thereto unless (i)
such transfer occurred at a time when circumstances giving rise to the claim
for such greater amount did not exist and were not reasonably foreseeable in
the view of such Senior Lender and (ii) such claim would have arisen even if
such transfer had not occurred.
(i) Affiliates Not Obligated. No Eurodollar Affiliate or
other Affiliate of any Senior Lender shall be deemed a party to this Agreement
or shall have any rights, liability or obligation under this Agreement.
2.09. Increased Capital. If either (a) the introduction of
or any change in or in the interpretation of any law or regulation or (b)
compliance by any Senior Lender with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law
and whether or not the failure to comply therewith would be unlawful) affects
or would affect the amount of capital required or expected to be maintained by
such Senior Lender or any corporation controlling such Senior Lender and such
Senior Lender determines that the amount of such capital is increased by or
based upon the existence of such Senior Lender's Commitment and other
commitments of this type or upon the existence of letters of credit (or similar
contingent obligations), then, upon demand by such Senior Lender, each
Borrowing Subsidiary shall immediately pay to such Senior Lender, from time to
time as specified by such Senior Lender, additional amounts sufficient to
compensate such Senior Lender in the light of such circumstances, to the extent
that such Senior Lender determines such increase in capital to be allocable to
the existence of such Senior Lender's Commitment or to the issuance or
maintenance of any Letter of Credit for the account of such Borrowing
Subsidiary. A certificate as to such amounts submitted to the Borrowing
Subsidiaries by such Senior Lender, shall, in the absence of manifest error, be
conclusive and binding for all purposes.
2.10. Authorized Officers of the Borrowing Subsidiaries.
Each Borrowing Subsidiary shall notify the Agent in writing of the names of the
officers and employees authorized to request Revolving Loans and Letters of
Credit and to request a conversion/continuation of any Revolving Loan and shall
provide the Agent with a specimen signature of each such officer or employee.
The Agent shall be entitled to rely conclusively on such officer's or
employee's authority to request such Loan or Letter of Credit or such
conversion/continuation until the Agent receives written notice to the
contrary. The Agent shall have no duty to verify the authenticity of the
signature appearing on any written Notice of Borrowing or Notice of
Conversion/Continuation and, with respect to an oral request for such a
Revolving Loan or
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Letter of Credit or such conversion/continuation, the Agent shall have no duty
to verify the identity of any person representing himself as one of the
officers or employees authorized to make such request on behalf of such
Borrowing Subsidiary. None of the Agent, the Collateral Agent or any Senior
Lender shall incur any liability to such Borrowing Subsidiary in acting upon
any telephonic notice referred to above which the Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
borrow on behalf of such Borrowing Subsidiary or for otherwise acting in good
faith under this Section 2.10.
ARTICLE III
Conditions to Loans and Letters of Credit
3.01. Conditions Precedent to the Effectiveness of this
Agreement. This Agreement shall become effective on the date (the "Effective
Date") when the following conditions precedent have been satisfied (unless
waived by the Requisite Senior Lenders or unless the deadline for delivery has
been extended by the Agent and the Collateral Agent):
(a) Certain Documents. The Agent shall have received on
or before the Effective Date all of the following, all of which, except as
otherwise specifically described below, shall be in form and substance
satisfactory to the Requisite Senior Lenders and in sufficient copies for each
of the Senior Lenders:
(i) This Agreement, executed by the Company, JPS
Auto and each Borrowing Subsidiary, each Senior Lender, the Agent and the
Collateral Agent, together with all Exhibits and Schedules, and the Notes;
(ii) A Notice of Borrowing with respect to the
Revolving Loans in an amount sufficient (when added to other funds available to
the Company) to redeem the outstanding Senior Notes in accordance with the
Senior Note Indenture, dated the Effective Date but requesting a Borrowing to
be made no later than the third Business Day immediately succeeding the
Effective Date;
(iii) The Amendatory Agreement, the Contribution
Agreement, an appropriate amendment to the Company Pledge Agreement and an
appropriate amendment to JCIC's Trademark Security Agreement;
(iv) Amendments to the Real Property Collateral
Documents, as may be required as a result of the transactions contemplated by
this Agreement, for each parcel of real property set forth on Schedule
3.01(a)(iv), together with endorsements to
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the title insurance policies relating to each of the parcels purported to be
encumbered thereby;
(v) Executed copies of (1) each UCC-3 release or
partial release signed by JPS Auto and the Agent and the Collateral Agent, as
appropriate, and (2) each UCC-3 partial release signed by JCIC and the Agent
and the Collateral Agent, as appropriate, to be filed (in the case of each of
clauses (1) and (2)) in each jurisdiction set forth on Schedule 3.01(a)(v);
(vi) Certificates representing the shares of
Newsub to be pledged under the Company Pledge Agreement (with stock powers duly
executed in blank);
(vii) A favorable opinion of Weil, Gotshal &
Manges, counsel to the Loan Parties, JPS Auto and Newsub, in form and substance
satisfactory to the Requisite Senior Lenders, and a letter entitling the Agent,
the Collateral Agent and the Senior Lenders to rely on any opinion or opinions
delivered by Weil, Gotshal & Manges in connection with the New Auto Transaction
Documents;
(viii) An opinion of such South Carolina counsel to
the Loan Parties, JPS Auto and Newsub as may be reasonably satisfactory to the
Requisite Senior Lenders, addressing such matters as the Agent and the
Collateral Agent may reasonably require, including, without limitation, matters
relating to the Dunean Operating Agreement;
(ix) [intentionally omitted];
(x) A copy of each of the New Auto Transaction
Documents, certified as of the Effective Date by the Secretary or an Assistant
Secretary of the Company (A) to be a true, correct and complete copy of each
such document and (B) not to have been amended or rescinded;
(xi) A certificate of the Secretary or Assistant
Secretary of the Company dated the Effective Date certifying (A) the names and
true signatures of the incumbent officers of the Company authorized to sign
this Agreement and all other Transaction Documents executed by the Company in
connection with this Agreement, (B) the By-Laws of the Company as in effect on
the date of such certification, (C) the resolutions of the Company's Board of
Directors approving and authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents executed in connection with
this Agreement to which it is a party and (D) that there have been no changes
in the Certificate of Incorporation of the Company since the date of the most
recent certification thereof by the Secretary of State of Delaware delivered to
the Agent;
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(xii) A certificate of the Secretary or Assistant
Secretary of each Borrowing Subsidiary dated the Effective Date certifying (A)
the names and true signatures of the incumbent officers of each such Borrowing
Subsidiary authorized to sign this Agreement and the other Transaction
Documents executed in connection with this Agreement to which it is a party,
(B) the By-laws of each Borrowing Subsidiary as in effect on the date of such
certification, (C) the resolutions of each such Subsidiary's Board of Directors
approving and authorizing the execution, delivery and performance of this
Agreement and the other Transaction Documents executed in connection with this
Agreement to which it is a party and (D) that there have been no changes in the
Certificate of Incorporation of such Borrowing Subsidiary since the date of the
most recent certification thereof by the Secretary of State of Delaware
delivered to the Agent;
(xiii) A certificate of the Secretary or Assistant
Secretary of JPS Auto dated the Effective Date certifying (A) the names and
true signatures of the incumbent officers of JPS Auto authorized to sign this
Agreement and the other Transaction Documents executed in connection with this
Agreement to which it is a party, (B) the By-laws of JPS Auto as in effect on
the date of such certification, (C) the resolutions of JPS Auto's Board of
Directors approving and authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents executed in connection with
this Agreement to which it is a party and (D) that there have been no changes
in the Certificate of Incorporation of JPS Auto since the date of the most
recent certification thereof by the Secretary of State of Delaware delivered to
the Agent;
(xiv) A certificate of the Secretary or Assistant
Secretary of Newsub dated the Effective Date certifying (A) the By-laws of
Newsub as in effect on the date of such certification and (B) that there have
been no changes in the Certificate of Incorporation of Newsub since the date of
the most recent certification thereof by the Secretary of State of Delaware
delivered to the Agent;
(xv) A certificate of the Secretary or Assistant
Secretary of International Fabrics dated the Effective Date certifying (A) the
names and true signatures of the incumbent officers of International Fabrics
authorized to sign the Amendatory Agreement and any other Transaction Documents
executed in connection with this Agreement to which it is a party, (B) the
By-laws of International Fabrics as in effect on the date of such
certification, (C) the resolutions of International Fabric's
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Board of Directors approving and authorizing the execution, delivery and
performance of the Amendatory Agreement and any other Transaction Documents
executed in connection with this Agreement to which it is a party and (D) that
there have been no changes in the Certificate of Incorporation of International
Fabrics since the date of the most recent certification thereof by the
Secretary of State of Delaware delivered to the Agent;
(xvi) The Certificate of Incorporation of the
Company and each Subsidiary of the Company, as amended, modified or
supplemented to the Effective Date, certified to be true, correct and complete
by the Secretary of State of Delaware on, or as of a recent date prior to, the
Effective Date;
(xvii) Good Standing Certificates certified by the
appropriate Secretaries of State (or equivalent) relating to the Company and
each Subsidiary of the Company for each of the states in which the Company or
such Subsidiary is qualified to do business;
(xviii) A certificate of the Chief Financial Officer
or Treasurer of the Company certifying (i) the most recent projected
consolidated and consolidating income statement, balance sheets and cash flow
statements (and any narrative or assumptions provided by the Company as a back
up to such projections as may be reasonably requested by the Senior Lenders)
for the Company and its Subsidiaries for the Fiscal Years 1994 through 1996,
(ii) a statement of sources and uses with respect to the Auto Sale and the
transactions contemplated thereby and by this Agreement, in form and substance
satisfactory to each Senior Lender, (iii) a business plan of the Company and
its Subsidiaries, in form and substance satisfactory to each Senior Lender;
(iv) copies of the most recent year-to-date consolidated and consolidating
financial statements of the Company and its Subsidiaries, setting forth in
comparative form the figures for the comparable year- to-date period of the
immediately preceding Fiscal Year; (v) a pro forma borrowing base certificate
(after giving effect to the Auto Sale), in the form contemplated by Section
5.01(r), as of the latest available date (it being understood and agreed that
such date shall be no earlier than May 28, 1994) and that, to the best of such
officer's knowledge, the information set forth on such borrowing base
certificate has not materially changed since the date of such borrowing base
certificate; and (vi) such other financial information (including any annual or
quarterly financial statements of the Company and its Subsidiaries) as the
Agent, the Collateral Agent or any Senior Lender may reasonably request;
(xix) A certificate of the Chief Executive Officer
and Chief Financial Officer of each of JPS Auto and each Borrowing Subsidiary
substantially in the form of Exhibit 7 dated the Effective Date certifying that
after giving effect to
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the transactions contemplated by this Agreement (including, without limitation,
the dividends contemplated by Section 2.03(d) and the repayment in full of the
Senior Notes and the Subordinated Indebtedness and the Borrowing of Revolving
Loans to be made pursuant to the Notice of Borrowing referred to in clause (ii)
above), such Person is Solvent;
(xx) Copies of the Registration Statements on
Form S-1 filed in connection with the New Auto Debt Offering, and all other
documents filed with the Commission in connection therewith;
(xxi) Certificates from the Loan Parties' insurance
brokers to the effect that the insurance policies set forth on Schedule 6.05
with respect to the Loan Parties are in full force and effect, including the
endorsements designating the Agent and the Collateral Agent as additional
insureds or loss payees;
(xxii) Copies of the items delivered pursuant to
Sections 7.4, 7.7, 7.8 and 8.5 of the New Auto Asset Purchase Agreement; and
(xxiii) Such additional documentation as the Agent,
the Collateral Agent or the Requisite Senior Lenders may reasonably require.
(b) Obligations Paid. The Loan Parties and JPS Auto
shall have used the proceeds of the Auto Sale (i) to pay each of Citibank and
GE Capital, for the account of each Senior Lender, the principal amount of the
Term Loans and the Revolving Loans which would otherwise have been outstanding
under the Existing Credit Agreement on the Effective Date and (ii) to cash
collateralize in the manner contemplated by Section 9.02(b) all of the Letters
of Credit which are outstanding under the Existing Credit Agreement on the
Effective Date (the "Existing Letters of Credit", and each an "Existing Letter
of Credit"), or provision satisfactory to the Agent and the Collateral Agent
shall have been made for the payment of such Obligations and for such cash
collateralization. It is understood and agreed that any such cash collateral
shall be deposited in the Concentration Account to be applied to the relevant
Borrowing Subsidiary's Obligations to the extent and at the times provided in
Sections 2.06 and 2.07(a) promptly upon the earlier to occur of (x) the
termination of the relevant Existing Letter of Credit and (y) such time as the
relevant Borrowing Subsidiary would be entitled to open a Letter of Credit in a
like amount pursuant to the terms of this Agreement (it being understood and
agreed that if the cash collateral with respect to any Existing Letter of
Credit is so returned in accordance with clause (y) and the relevant Borrowing
Subsidiary would be entitled to issue a Letter of Credit under the terms of
this Agreement, such Existing Letter of Credit shall be deemed to be a Letter
of Credit issued under this Agreement
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(in a face amount equal to the stated face amount of such Existing Letter of
Credit) for the account of the relevant Borrowing Subsidiary).
(c) The Auto Sale. The Agent, the Collateral Agent and the
Requisite Senior Lenders shall be satisfied that: (i) the New Auto Asset
Purchase Agreement and all other New Auto Transaction Documents shall have been
duly approved and executed and delivered by the parties thereto in form and
substance satisfactory to the Agent, the Collateral Agent and the Senior
Lenders, (ii) all conditions precedent to closing under the New Auto Asset
Purchase Agreement and the other New Auto Transaction Documents have been met
(and no modification or waiver of any such condition shall have been made
without the consent of the Agent and the Collateral Agent) and such documents
are, or simultaneously with the execution hereof, will be in full force and
effect, (iii) the sum received by the Company, JPS Auto and/or JCIC of (x)
proceeds of the Auto Sale to be paid to Newsub as contemplated by clause (vi)
of Section 7.03 hereof and (y) Net Cash Proceeds from the Auto Sale shall equal
at least $225,000,000, (iv) the Auto Sale and the transactions contemplated
thereby and by this Agreement (including, without limitation, the application
of the gross proceeds and Net Cash Proceeds of the Auto Sale, and the
application of the proceeds of the Revolving Loans) do not and will not
contravene or constitute a default under or in respect of the Senior Notes, any
Subordinated Indebtedness or any other Indebtedness of JPS Auto or any of the
Loan Parties, (v) the Loan Parties and the other parties to the Loan Documents
and the New Auto Transaction Documents are (and, after giving effect to the
Auto Sale and the transactions contemplated thereby and by this Agreement, will
be) in compliance with all Requirements of Law and all material Contractual
Obligations, (vi) the Company and its Subsidiaries have made adequate provision
for the payment of all fees, expenses, indemnities and other liabilities to be
incurred by the Company and its Subsidiaries in connection with the Auto Sale
and the transactions contemplated thereby and by this Agreement and (vii) after
giving effect to the Auto Sale and the transactions contemplated thereby and by
this Agreement (including, without limitation, the redemption of the Senior
Notes in accordance with the proviso to clause (vi) of Section 7.01 and the
Borrowing of Revolving Loans to be made pursuant to the Notice of Borrowing
referred to in clause (ii) of Section 3.01(a)), the sum of (x) the aggregate
Borrowing Base of the Borrowing Subsidiaries plus (y) the Fixed Asset Portion
will exceed the aggregate principal or face amount of all outstanding Revolving
Credit Accommodations by no less than $20,000,000.
(d) Representations and Warranties. All of the
representations and warranties of the Loan Parties contained in subsections (a)
through (dd) of Section 4.01 and in any other Loan Document (other than for
changes permitted or contemplated
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by this Agreement) shall be true and correct in all material respects on and as
of the Effective Date as though made on and as of that date (except any such
representations and warranties stated to be given on a specific date other than
the Effective Date).
(e) No Default. No Event of Default or Potential Event
of Default hereunder or under the Existing Credit Agreement (as such terms are
defined thereunder) shall have occurred and be continuing on the Effective
Date.
(f) No Injunction. No law or regulation shall prohibit,
and no order, judgment or decree of any Governmental Authority shall and,
except as set forth on Schedule 4.01(k), no litigation shall be pending or
threatened which in the judgment of the Agent, the Collateral Agent or
Requisite Senior Lenders (i) could have a Material Adverse Effect or (ii)
purports to affect the transactions contemplated hereby.
(g) Collateral Information. The Agent and the Collateral
Agent shall have received complete and accurate information from each Loan
Party and each Pledgor with respect to the name and the location of the
principal place of business and chief executive office for such Person; all UCC
financing statements and other documents deemed by the Agent or the Collateral
Agent to be necessary or desirable shall have been duly filed, registered or
recorded in the appropriate jurisdictions to perfect or maintain perfected
Liens on the Collateral created by the Collateral Documents and to partially
release certain of such Liens, as contemplated by the New Auto Transaction
Documents; and the Collateral Agent shall have received evidence to the
satisfaction of the Requisite Senior Lenders that all Liens granted to the
Agent or the Collateral Agent, as the case may be, with respect to all
Collateral are and/or continue to be perfected and of first priority, except as
otherwise permitted under this Agreement.
(h) Consents. Each of the Company, JPS Auto, Newsub and
the Borrowing Subsidiaries shall have received all consents and authorizations
required pursuant to any material Contractual Obligation with any other Person
and shall have obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority, in each case, as may
be necessary to allow each of the Company, JPS Auto and the Borrowing
Subsidiaries lawfully (A) to execute, deliver and perform, in all material
respects, its obligations under this Agreement, the other Loan Documents and
the Transaction Documents to which it is, or is to be, a party and each other
agreement or instrument to be executed and delivered by it pursuant thereto or
in connection therewith and (B) to create and perfect or continue the
perfection of the Liens on the Collateral to be owned by it
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in the manner and for the purpose contemplated by the Collateral Documents.
(i) No Material Adverse Change. No adverse change deemed
material by either the Agent or the Collateral Agent, in its sole opinion, or
by the Requisite Senior Lenders, in their opinion, shall have occurred from the
date of the most recent audited financial reports delivered under the Existing
Credit Agreement through the Effective Date, as to the condition (financial or
otherwise), operations, performance, properties or prospects of the Company and
its Subsidiaries, individually or taken as a whole.
(j) Exhibits and Schedules. All Exhibits and Schedules
to this Agreement shall have been completed and submitted to the Agent and the
Collateral Agent prior to the funding of the initial Revolving Loans to be made
hereunder, shall be in form and substance satisfactory to the Senior Lenders
and shall contain no facts or information which the Agent, the Collateral Agent
or any Senior Lender, in its sole judgment, determines to be unacceptable.
3.02. Conditions Precedent to All Revolving Loans and Letters
of Credit. The obligation of each Senior Lender to make any Revolving Loan
requested to be made by it, and of the Issuing Bank to issue any Letter of
Credit, on any date (including the Effective Date), is subject to the following
conditions precedent as of such date:
(a) Notice of Borrowing. With respect to a request for a
Revolving Loan, the Agent shall have received in accordance with the provisions
of Section 2.03(b), on or before any Funding Date, an original and duly
executed Notice of Borrowing.
(b) Additional Matters. As of the Funding Date for any
Revolving Loan or the date of issuance of any Letter of Credit:
(i) Representations and Warranties. All of the
representations and warranties of the Loan Parties contained in subsections (a)
through (dd) of Section 4.01 and in any other Loan Document (other than
representations and warranties which expressly speak only as of a different
date and other than for changes permitted or contemplated by this Agreement)
shall be true and correct in all material respects on and as of such Funding
Date or date of issuance, as though made on and as of such date;
(ii) No Default. No Event of Default or Potential
Event of Default shall have occurred and be continuing or would result from the
making of the requested Revolving Loan or the issuance of the requested Letter
of Credit;
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(iii) No Injunction. No law or regulation shall
prohibit, and no order, judgment or decree of any Governmental Authority shall,
and, except as set forth on Schedule 4.01(k), no litigation shall be pending or
threatened which in the judgment of the Agent, the Collateral Agent or the
Requisite Senior Lenders would, enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, (A) any Senior
Lender from making the Revolving Loan requested to be made on the Funding Date
or (B) the Issuing Bank from issuing the Letter of Credit requested to be
issued on any date of issuance; and
(iv) No Material Adverse Change. No adverse
change deemed material by either the Agent or the Collateral Agent, in its sole
opinion, or by the Requisite Senior Lenders, in their opinion, shall have
occurred after the Effective Date as to the condition (financial or otherwise),
operations, performance, properties or prospects of the Company and its
Subsidiaries, taken as a whole.
Each submission by a Borrowing Subsidiary to the Agent of a
Notice of Borrowing with respect to a Revolving Loan and the acceptance by such
Borrowing Subsidiary of the proceeds of each such Loan made hereunder, or the
request for the issuance of a Letter of Credit and the issuance of such Letter
of Credit, shall constitute a representation and warranty by such Borrowing
Subsidiary as of the Funding Date in respect of such Revolving Loan or the date
of issuance in respect of such Letter of Credit that all the conditions
contained in this Section 3.02 have been satisfied.
ARTICLE IV
Representations and Warranties
4.01. Representations and Warranties on the Effective Date.
In order to induce the Senior Lenders to enter into this Agreement each Loan
Party hereby represents and warrants to each Senior Lender, the Agent and the
Collateral Agent that the following statements are true, correct and complete:
(a) Organization; Corporate Powers. Each of the Company
and its Subsidiaries (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (ii)
is duly qualified to do business as a foreign corporation and in good standing
under the laws of each jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, except for
those jurisdictions (other than Alabama and Vermont) where failure to so
qualify and be in good standing does not have a Material Adverse Effect and
(iii) has all requisite corporate power and authority to own, operate and
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encumber its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by the Transaction Documents.
(b) Authority. (i) Each of the Company and each
Subsidiary of the Company has the requisite corporate power and authority (A)
to execute, deliver and perform each of the Transaction Documents executed by
it, or to be executed by it, and (B) to file the Transaction Documents filed by
it, or to be filed by it, with the appropriate Governmental Authority.
(ii) The execution, delivery and performance (or
filing, as the case may be) of each of the Transaction Documents to which it is
party and the consummation of the transactions contemplated thereby, have been
duly authorized by the Board of Directors of the Company and of each Subsidiary
of the Company and no other corporate or stockholder proceedings on the part of
the Company, any Subsidiary of the Company or any of their respective
stockholders are necessary to consummate such transactions, other than those
which have been obtained.
(iii) Each of the Transaction Documents to which it
is party has been duly executed and delivered (or filed, as the case may be) by
the Company and each Subsidiary of the Company and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms, is
in full force and effect and no term or condition thereof has been amended,
modified or waived from the terms and conditions contained in the Transaction
Documents delivered to the Agent or the Collateral Agent pursuant to this
Agreement without the prior written consent of the Requisite Senior Lenders,
and the Company and its Subsidiaries, Odyssey and, to the best knowledge of the
Loan Parties, the other parties thereto have performed and complied in all
material respects with all the terms, provisions, agreements and conditions set
forth therein and required to be performed or complied with by such parties on
or before the Effective Date, and no default by any of the Company or its
Subsidiaries, Odyssey, or, to the best knowledge of the Loan Parties, the other
parties thereto exists thereunder.
(c) Subsidiaries and Ownership of Capital Stock. Except
as otherwise permitted in Section 7.07, (i) Schedule 4.01(c) sets forth all of
the Subsidiaries of the Company; (ii) Schedule 4.01(c) also sets forth (A) the
number of issued and authorized shares of each class of capital stock of each
Subsidiary of the Company and (B) the identity of the holders of all shares of
each class of capital stock of each such Subsidiary; and (iii) no capital stock
(or any securities, instruments, warrants, option or purchase rights,
conversion or exchange rights, calls, commitments or claims of any character
convertible into or exercisable for capital stock) of the
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Company, any Subsidiary of the Company is subject to issuance under any
security, instrument, warrant, option or purchase rights, conversion or
exchange rights, call, commitment or claim of any right, title or interest
therein or thereto, except for the Shareholders' Agreements and the letter
dated as of April 2, 1991 addressed to the holders of Class A Common Stock from
the holders of Class B Common Stock. The outstanding capital stock of the
Company and each Subsidiary of the Company is duly authorized, validly issued,
fully paid and nonassessable and is not Margin Stock.
(d) Purchase Agreement; Purchase; New Auto Asset Purchase
Agreement. (i) The Purchase Agreement is in full force and effect and no
material breach or default of any term or provision of any Purchase Document by
any of the Company and its Subsidiaries or (to the best knowledge of the Loan
Parties) by Odyssey or any other party thereto has occurred (except for such
breaches or defaults thereunder that have been waived by the parties thereto
not in default with the prior consent in writing by the Agent and the
Collateral Agent (which consent shall not have been unreasonably withheld)).
No provision of the Purchase Agreement or the Settlement Agreement has been
waived and neither the Purchase Agreement nor the Settlement Agreement has been
amended, supplemented or otherwise modified without the prior written consent
of the Agent and the Collateral Agent.
(ii) The New Auto Asset Purchase Agreement is in full force
and effect and no material breach or default of any term or provision of any
New Auto Transaction Document by any of the Company and its Subsidiaries or (to
the best knowledge of the Loan Parties) by any other party thereto has occurred
(except for such breaches or defaults thereunder that have been waived by the
parties thereto not in default with the prior consent in writing by the Agent
and the Collateral Agent (which consent shall not have been unreasonably
withheld)). Except as permitted by Section 7.16, no provision of any New Auto
Transaction Documents has been waived and no New Auto Transaction Documents has
been amended, supplemented or otherwise modified.
(e) No Conflict. The execution, delivery and performance
of each Transaction Document to which it is party by each of the Company and
any Subsidiary of the Company and each of the transactions contemplated thereby
do not and will not (i) to the best knowledge of the Loan Parties and except as
set forth on Schedule 4.01(e), constitute a tortious interference with any
Contractual Obligation of any Person, or (ii) conflict with or violate such
Person's Certificate of Incorporation or By-Laws, or other organizational
documents, as the case may be, or (iii) except as set forth on Schedule
4.01(e), conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law or,
subject to clause (i) above, Contractual Obligation of the Company or any
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Subsidiary of the Company, or require termination of any Contractual
Obligation, the consequences of which conflict or default or termination would
have or is reasonably likely to have a Material Adverse Effect, after taking
into account any indemnity therefor provided to the Company pursuant to the
Purchase Agreement or (iv) except as set forth on Schedule 4.01(e), result in
or require the creation or imposition of any Lien whatsoever upon any of the
properties or assets of the Company or of any Subsidiary of the Company (other
than Liens in favor of the Agent or the Collateral Agent arising pursuant to
the Loan Documents or Liens permitted pursuant to Section 7.02(b)), or (v)
require any approval of stockholders.
(f) Governmental Consents. The execution, delivery and
performance of each Transaction Document to which it is party by the Company
and each Subsidiary of the Company and the transactions contemplated thereby do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by any Governmental Authority, except
filings, consents or notices which have been, or will in due course, be made,
obtained or given.
(g) Governmental Regulation. Neither the Company nor any
Subsidiary of the Company is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce
Act, the Investment Company Act of 1940 or any other federal or state statute
or regulation such that its ability to incur Indebtedness is limited or its
ability to consummate the transactions contemplated hereby or by the
Transaction Documents is materially impaired.
(h) Restricted Junior Payments. Since the date hereof,
neither the Company nor any Subsidiary of the Company has directly or
indirectly declared, ordered, paid or made or set apart any sum or property for
any Restricted Junior Payment or agreed to do so, except to the extent
permitted pursuant to Section 7.05.
(i) Plan of Reorganization. The Company was discharged
as trustee of the Company's chapter 11 estate in connection with the Case (as
defined in the Plan of Reorganization) and the Case was closed by a final
decree ordered by the United States Bankruptcy Court for the Southern District
of New York dated July 8, 1992. Since such date no bankruptcy court has
reasserted jurisdiction over the Company for the purpose of amending or
modifying, in any material, non-technical manner, the Plan of Reorganization.
(j) Capitalization. (i) There are outstanding no shares
of any class of capital stock of the Company other than the Common Stock and
the Preferred Stock, and none of such capital stock is subject to issuance upon
the exercise of
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outstanding options, warrants or other similar rights to acquire shares of such
stock, except for the Shareholders' Agreements and the letter dated as of April
2, 1991 addressed to the holders of Class A Common Stock from the holders of
Class B Common Stock. Schedule 4.01(j)-1 sets forth, as of the Effective Date,
the number of shares and the relevant percentages of the Class B Common Stock
held by each member of the Class B Investor Group and the Junior Preferred
Stock held by each member of the Junior Preferred Investor Group and Schedule
4.01(j)-2 sets forth, as of March 11, 1993, the number of shares and the
relevant percentages of Class A Common Stock held by each holder of Class A
Common Stock (to the extent known by the Loan Parties) and the Senior Preferred
Stock held by each holder of Senior Preferred Stock (to the extent known by the
Loan Parties). Schedule 4.01(j)-2, when delivered to the Agent and the
Collateral Agent pursuant to Section 5.03, sets forth, as of any date such
schedule is delivered, the number of shares and relevant percentages of Class A
Common Stock issued to and held by each holder of Class A Common Stock (to the
extent known by the Loan Parties on the date of such delivery) and the Senior
Preferred Stock held by each holder of Senior Preferred Stock (to the extent
known by the Loan Parties on the date of such delivery).
(ii) All of the Senior Notes, the Senior
Subordinated Notes, the Senior Subordinated Discount Notes and the Subordinated
Debentures are subscribed, distributed, paid for and issued in compliance with
all applicable Requirements of Law. Each of the Senior Subordinated Notes, the
Senior Subordinated Discount Notes and the Subordinated Debentures are
unsecured and subordinated to the prior payment in full of the Obligations in
accordance with the terms thereof. The only Liens securing the Senior Notes
are Liens permitted pursuant to Section 7.02(b)(xii).
(k) Litigation; Adverse Effects. (i) Except as set
forth in Schedule 4.01(k), (A) there is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or before or by
any Governmental Authority, pending, or to the knowledge of any Loan Party,
threatened against the Company or any Subsidiary of the Company or any property
of any of them which is reasonably likely to (A) result in any Material Adverse
Effect, (B) materially and adversely affect the ability of any party to any of
the Transaction Documents to perform its obligations thereunder or (C)
materially and adversely affect the ability of the Company or any Subsidiary of
the Company to perform their respective Obligations or the Senior Lenders'
ability to enforce such Obligations.
(ii) Neither the Company nor any of its
Subsidiaries is (A) in violation of any applicable law which violation has or
is reasonably likely to have a Material Adverse Effect or (B) subject to or in
default with respect to any final
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judgment, writ, injunction, decree, rule or regulation of any court or
Governmental Authority which has or is reasonably likely to have a Material
Adverse Effect. Except as set forth in Schedule 4.01(k), there is no action,
suit, proceeding or investigation pending or, to the best knowledge of any Loan
Party, threatened against or affecting the Company or any of its Subsidiaries
challenging the validity or the enforceability of any of the Transaction
Documents.
(l) No Material Adverse Change. Since the date of the
last audited financial statements delivered to the Agent and the Collateral
Agent pursuant to Section 5.01(c) of the Existing Credit Agreement, there has
occurred no event which materially and adversely affects, and no material
adverse change in, the condition (financial or otherwise), operations,
performance or prospects of the Company and its Subsidiaries taken as a whole,
or the ability of the Company and its Subsidiaries, taken as a whole, to
perform their obligations under the Transaction Documents to which they are a
party and the transactions contemplated thereby.
(m) Payment of Taxes. All tax returns and reports of
each of the Company and each Subsidiary of the Company required to be filed,
have been timely filed, and all taxes, assessments, fees and other governmental
charges thereupon and upon their respective properties, assets, income and
franchises which are shown on such returns as being due and payable, have been
paid when due and payable, except such taxes, if any, that are reserved against
in accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect.
To the best knowledge of the Company, as of the Effective Date, there are no
tax examinations or audits in progress which have identified any potential tax
liability of the Company or any Subsidiary of the Company that is reasonably
likely to result in a material liability of the Company or such Subsidiary.
None of the Loan Parties has any knowledge of any proposed tax assessment
against the Company or any Subsidiary of the Company that is reasonably likely
to have a Material Adverse Effect, which is not being actively contested in
good faith by such Person.
(n) Material Adverse Agreements. Except as set forth in
Schedules 4.01(e) and 4.01(k), neither the Company nor any Subsidiary of the
Company is a party to or subject to any Contractual Obligation or other
restriction contained in their respective charters, By-laws or similar
governing documents which has or is reasonably likely to have a Material
Adverse Effect.
(o) Performance. Except as set forth in Schedule
4.01(e), neither the Company nor any Subsidiary of the Company is in default in
the performance, observance or fulfillment of any
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of the obligations, covenants or conditions contained in any Contractual
Obligation applicable to it, and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default under such
Contractual Obligation in each case, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have or are not
reasonably likely to have a Material Adverse Effect, after taking into account
any indemnity therefor provided to the Company pursuant to the Purchase
Agreement.
(p) Securities Activities. Neither the Company nor any
Subsidiary of the Company is engaged principally in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
(q) Disclosure. The representations and warranties of
the Company and its Subsidiaries contained in the Transaction Documents, and
all certificates and other documents delivered to the Agent or the Collateral
Agent, in connection therewith, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. None of the Loan Parties has
intentionally withheld any material fact from the Senior Lenders in regard to
any matter raised in the Transaction Documents.
(r) Requirements of Law. The Company, each Subsidiary of
the Company and each Person acting on behalf of any of them is in compliance
with all Requirements of Law (including, without limitation, the Securities Act
and the Securities Exchange Act, and the applicable rules and regulations
thereunder, state securities law and "Blue Sky" law) applicable to them and
their respective businesses, in each case, except where the failure to so
comply would not have or is not reasonably likely to have a Material Adverse
Effect.
(s) Patents, Trademarks, Permits, Etc. The Company and
each Subsidiary of the Company own, are licensed or otherwise have the lawful
right to use, or have all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know- how and processes used
in or necessary for the conduct of their businesses as currently conducted
which are material to their condition (financial or otherwise), operations,
performance and prospects, taken as a whole. The use of such permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes by the Company and each of its Subsidiaries
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of the Company or any of its Subsidiaries which has or is reasonably
likely to have a Material
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Adverse Effect, after taking into account any indemnity therefor provided to
the Company pursuant to the Purchase Agreement.
(t) Environmental Matters. Except as disclosed in
Schedule 4.01(t) or as reported to the Agent and the Collateral Agent pursuant
to Section 5.02, (i) the operations of the Company and each of its Subsidiaries
comply in all substantial respects with all applicable environmental, health
and safety Requirements of Law; (ii) the Company and each of its Subsidiaries
have obtained all environmental, health and safety permits necessary for their
respective operations, and all such permits are in good standing and the
Company and its Subsidiaries are in material compliance with all terms and
conditions of such permits; (iii) neither the Company nor any of its
Subsidiaries nor any of their present Property or operations, and to the best
of any Loan Party's knowledge, neither the Company's nor any of its
Subsidiary's past Property or operations, are the subject of any order from or
agreement with any Governmental Authority or private party or any judicial or
administrative proceeding or investigations respecting any environmental,
health or safety Requirements of Law, and is not the subject of any Remedial
Action or other Liabilities and Costs greater than Two Hundred Fifty Thousand
Dollars ($250,000) for any single event or in the aggregate for the Company and
its Subsidiaries Two Million Five Hundred Thousand Dollars ($2,500,000) arising
from the Release or threatened Release of a Contaminant into the environment;
(iv) neither the Company nor any of its Subsidiaries has filed any notice under
any Requirement of Law indicating past or present treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 CFR Part 261 or
any state equivalent; (v) neither the Company nor any of its Subsidiaries has
filed any notice under any applicable Requirement of Law reporting a Release of
a Contaminant into the environment; (vi) there is not now, nor has there ever
been, on or in the Property of the Company or on or in the Property of its
Subsidiaries: (A) any generation, treatment, recycling, storage or disposal of
any hazardous waste, as that term is defined under 40 CFR Part 261 or any state
equivalent, (B) any underground storage tanks or surface impoundments, (C) any
asbestos-containing material, or (D) any polychlorinated biphenyls (PCB's) used
in hydraulic oils, electrical transformers or other equipment; (vii) neither
the Company nor any of its Subsidiaries has received any notice or claim to the
effect that it is or may be liable to any Person as a result of the Release or
threatened Release of a Contaminant into the environment, or as a result of
exposure to asbestos or to cotton dust, which may result in liability in excess
of workers compensation in an amount in excess of Two Hundred Fifty Thousand
Dollars ($250,000) for each event, or in the aggregate for the Company and its
Subsidiaries Two Million Five Hundred Thousand Dollars ($2,500,000); (viii)
after due inquiry, no Environmental Lien has attached to any Property of the
Company or the Property of any of its Subsidiaries; (ix) to the best of any
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Loan Party's knowledge, after due inquiry, neither the Company nor any of its
Subsidiaries have entered into any negotiations or agreements with any Person
(including, without limitation, the prior owner(s) of any Property owned by the
Company or any of its Subsidiaries) relating to any Remedial Action or
environmentally-related Claim; (x) to the best of any Loan Party's knowledge,
after due inquiry, neither the Company nor any of its Subsidiaries have any
material contingent liability in connection with any Release or threatened
Release of any Contaminants into the environment; (xi) within the last
twenty-four months the Company or its Subsidiaries have inspected the Property
and, to the best of any Loan Party's knowledge, all asbestos-containing
material which is on or part of the Property (excluding any raw materials used
in the manufacture of products or products themselves) is in good repair
according to the current standards and practices governing such material, and
its presence or condition does not violate any applicable Requirement of Law;
and (xii) none of the products that the Company or any of its Subsidiaries
manufactures, distributes or sells, or, to the best of any Loan Party's
knowledge, ever has manufactured, distributed or sold, contains an
asbestos-containing material.
(u) ERISA. Neither the Company nor any of its
Subsidiaries maintains or contributes to any Plan other than a Plan listed on
Schedule 4.01(u). Neither the Company nor any ERISA Affiliate maintains or
contributes to any Benefit Plan or Multiemployer Plan other than the Benefit
Plans and Multiemployer Plans set forth on Schedule 4.01(u). Except as
otherwise provided on Schedule 4.01(u), each Plan which is intended to be a
qualified plan has been determined by the Internal Revenue Service to be
qualified under Section 401(a), and each trust related to any such Plan has
been so determined to be exempt from federal income tax under Section 501(a) of
the Internal Revenue Code prior to its amendment by the Tax Reform Act of 1986,
and such Plan and trust are being operated in all material respects in
compliance with and will be timely amended in accordance with the Tax Reform
Act of 1986 and the Omnibus Budget Reconciliation Act of 1987 as interpreted by
the regulations promulgated thereunder. Except as otherwise provided on
Schedule 4.01(u), neither the Company nor any of the Subsidiaries maintains or
contributes to any employee welfare benefit plan within the meaning of Section
3(1) of ERISA which provides lifetime benefits to retirees other than as may be
required by Part 6 of Title I of ERISA. The Company and all of its ERISA
Affiliates are in compliance in all material respects with the
responsibilities, obligations or duties imposed on it by ERISA or regulations
promulgated thereunder with respect to all Plans. No material accumulated
funding deficiency (as defined in Section 302(a)(2) of ERISA and Section 412(a)
of the Internal Revenue Code) exists in respect to any Benefit Plan. Neither
the Company nor any Subsidiary of the Company nor any fiduciary of any Plan has
engaged in a nonexempt "prohibited transaction" described in
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Section 406 of ERISA or Section 4975 of the Internal Revenue Code and neither
the Company nor any ERISA Affiliate has taken any action which would constitute
or result in a Termination Event with respect to any Plan, such that all such
actions, individually or collectively, would result in a material obligation to
pay money. Neither the Company nor any ERISA Affiliate has incurred any
material liability to the PBGC which remains outstanding other than the
liability to pay the PBGC insurance premiums for the current year. Schedule B
to the most recent annual report filed with the Internal Revenue Service with
respect to each Benefit Plan and furnished to the Agent and the Collateral
Agent is complete and accurate in all material respects. Except as provided on
Schedule 4.01(u), since the date of each such Schedule B, there has been no
material adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B which would result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has failed to make
a required installment under subsection (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment
which would in the aggregate have a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate is required to provide security to a Plan under
Section 401(a)(29) of the Internal Revenue Code due to a Plan amendment that
results in an increase in current liability for the plan year. Neither the
Company nor any ERISA Affiliate is now contributing or has ever contributed to
or been obligated to contribute to any Multiemployer Plan, and no employees or
former employees of the Company or any ERISA Affiliate has been covered by any
Multiemployer Plan in respect of their employment by the Company or any ERISA
Affiliate, and, accordingly, the representations and warranties in this Section
4.01(u) do not apply to Multiemployer Plans.
(v) Solvency. Each of the Borrowing Subsidiaries is
Solvent after giving effect to (x) the transactions contemplated by this
Agreement (including, without limitation, the dividends contemplated by Section
2.03(d), the Borrowing of Revolving Loans to be made pursuant to the Notice of
Borrowing referred to in clause (ii) of Section 3.01(a) and the repayment in
full of the Senior Notes and the Subordinated Indebtedness) and (y) the payment
and accrual of (1) all Transaction Costs payable on the Effective Date with
respect to any of the foregoing and (2) all obligations, if any, under any Plan
or the equivalent for unfunded past service liability and any other unfunded
medical (including post-retirement) and death benefits.
(w) Pledge of Collateral. (i) Each Pledgor has good and
marketable title to the Collateral pledged by it, and all such Collateral is
free and clear of all Liens except for Customary Permitted Liens and except as
specifically permitted or
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contemplated by the terms and provisions of the Dunean Operating Agreement and
the Collateral Document relating to such Collateral.
(ii) The granting and perfecting of the security interest
in the capital stock of JPS Auto and the Subsidiaries of the Company
constituting a portion of the Collateral for the benefit of the Senior Lenders,
as contemplated by the terms of the Collateral Documents, is not made in
violation of the registration provisions of the Securities Act, any other
applicable federal securities laws, applicable state securities or "Blue Sky"
law, any applicable provisions of the Delaware General Corporation Law or any
other Requirement of Law.
(x) Indenture Qualification. The offering and issuance
of the Senior Notes, the Senior Subordinated Discount Notes, the Senior
Subordinated Notes and the Subordinated Debentures pursuant to the terms of the
Plan of Reorganization were exempt from registration under Section 5 of the
Securities Act.
(y) Assets and Properties. Substantially all of the
assets and properties owned by, leased to or used by the Company and/or each
Subsidiary of the Company are in adequate operating condition and repair,
ordinary wear and tear excepted, are free and clear of any known defects except
such defects as do not substantially interfere with the continued use thereof
in the conduct of normal operations, and are able to serve the function for
which they are currently being used, in each case where the failure of such
asset to meet such requirements would not have or is not reasonably likely to
have a Material Adverse Effect. The Receivables of the Company and each
Subsidiary of the Company have arisen in the ordinary course of their
respective business and reflect bona fide obligations for the payment for goods
and services provided by the Company, such Subsidiary or the Company's or such
Subsidiary's predecessors, and the assets owned by, leased to or used by the
Company and/or each Subsidiary of the Company constitute all of the assets used
in the conduct of the Company's or such Subsidiary's business as presently
conducted, and, except during the continuance of an Event of Default or as set
forth on Schedule 4.01(e), neither this Agreement nor any other Transaction
Document, nor any transaction contemplated under any such agreement, will
affect any right, title or interest of the Company or such Subsidiary in and to
any of such assets in a manner that would have or is reasonably likely to have
a Material Adverse Effect.
(z) Joint Venture; Partnership. Except as set forth on Schedule
4.01(z), neither the Company nor any Subsidiary of the Company is engaged in
any joint venture or partnership with any other Person.
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(aa) Shareholders' Agreements. To the best knowledge of
the Company, neither Odyssey nor any other party is in default under the
Shareholders' Agreements or under any instrument or document to be delivered in
connection therewith. The Shareholders' Agreements have not been and, without
the prior written consent of the Agent and the Collateral Agent, will not be
terminated, rescinded, withdrawn, amended, supplemented or otherwise modified;
and no provision of the Shareholders' Agreements has been or, without the prior
written consent of the Requisite Senior Lenders, will be waived.
(bb) Consents and Authorizations. Except as set forth in
Schedule 4.01(e), the Company and each Subsidiary of the Company have obtained
all consents and authorizations required pursuant to any of their respective
Contractual Obligations with any other Person the failure of which to obtain
would have or is reasonably likely to have a Material Adverse Effect, after
taking into account any indemnity therefor provided to the Company pursuant to
the Purchase Agreement, and shall have obtained all consents and authorizations
of, and effected all notices to and filings with, any Governmental Authority,
as may be necessary to allow the Company and each Subsidiary of the Company
lawfully to execute, deliver and perform their respective obligations under the
Transaction Documents and each other agreement or instrument to be executed and
delivered by them pursuant thereto or in perfection of the Liens on the
Collateral owned by them in the manner and for the purpose contemplated by, and
to the extent required by, this Agreement and the Collateral Documents.
(cc) Bank Accounts. Set forth on Schedule 4.01(cc) is a
complete and accurate list of all financial institutions at which any Loan
Party maintains a deposit, checking or similar account, including each Citibank
Account and all lock boxes and blocked accounts with the Collecting Banks, and
the appropriate names and account numbers identifying each such account.
(dd) Subordination. The Obligations constitute "Senior
Indebtedness" pursuant to the "Credit Agreement" (as such terms are defined in
each of the indentures governing the Subordinated Indebtedness) and the holders
thereof are and shall be entitled to all of the rights of the holders of
"Senior Indebtedness" pursuant to the "Credit Agreement" (as so defined)
pursuant to Article 10 of such indentures and as otherwise set forth therein.
The Subordinated Indebtedness is unsecured.
4.02. Subsequent Funding Representations and Warranties. In
order to induce the Senior Lenders to enter into this Agreement and to make the
Revolving Loans, and to induce the Issuing Bank to issue any Letters of Credit,
each Loan Party hereby represents and warrants to each Senior Lender, the
Issuing Bank, the Agent and the Collateral Agent that the statements set forth
in subsections (a) through (dd) of Section 4.01 ((i) except
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to the extent that such statements expressly are made only as of the Effective
Date or (ii) other than for changes permitted or contemplated by this
Agreement) are true, correct and complete in all material respects on and as of
the Funding Date in respect of each Borrowing after the Effective Date and the
date of issuance of each Letter of Credit.
ARTICLE V
Reporting Covenants
On and after the Effective Date and so long as any Loan Party
shall have any Obligation or any Senior Lender shall have any Commitment
hereunder, unless the Requisite Senior Lenders (or, if applicable, the Agent
and the Collateral Agent) shall otherwise give prior written consent thereto:
5.01. Financial Statements. The Company and each of its
Subsidiaries shall maintain or cause to be maintained a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in conformity with GAAP, and each of
the financial statements described below shall be prepared from such system and
records. The Loan Parties shall deliver or cause to be delivered to the Agent
and the Collateral Agent (with copies to the Agent sufficient for each Senior
Lender):
(a) As soon as practicable, and in any event within
thirty (30) days after the end of each month (or up to an additional forty-five
(45) days if extended by the Agent and the Collateral Agent), a consolidated
balance sheet, income statement and cash flow statement of the Company and
unconsolidated balance sheets and income statements of each Subsidiary of the
Company, all prepared by the Company and certified by the Company's chief
financial officer;
(b) As soon as practicable, and in any event within
forty-five (45) days after the end of each of the Company's fiscal quarters
(including, without limitation, the fourth fiscal quarter of each Fiscal Year)
(or up to an additional thirty (30) days if extended by the Agent and the
Collateral Agent), balance sheets, income statements and cash flow statements
of the Company all prepared by the Company on a consolidated and (except for
the cash flow statements) consolidating basis certified by the Company's chief
financial officer;
(c) Within ninety (90) days after the close of each of
the Company's Fiscal Years (or up to an additional thirty (30) days if extended
by the Agent and the Collateral Agent or if the date of delivery of the same
information has been extended by the Commission in connection with the Senior
Note Indenture or any indenture governing Subordinated Indebtedness), annual
financial
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statements, consisting of balance sheets, income statements and cash flow
statements, all prepared on a consolidated and (except for cash flow
statements) consolidating basis and, with respect to the consolidated
statements, certified without qualification by the firm of independent
certified public accountants of recognized national standing regularly retained
by the Company and reasonably acceptable to the Agent and the Collateral Agent,
and accompanied by such firm's letter to the effect that, in the course of its
audit (conducted in accordance with generally accepted auditing standards), it
obtained no knowledge that an Event of Default or Potential Event of Default
has occurred;
(d) (i) Together with each delivery of any financial
statement pursuant to clauses (a), (b) and (c) above, an Officers' Certificate
of each Loan Party substantially in the form of Exhibit 8, stating that the
executive officers signatory thereto have reviewed the terms of this Agreement
and the principal Loan Documents, and have made, or caused to be made under
their supervision, a review in reasonable detail of the transactions and
condition of, in the case of the Company, the Company and its Subsidiaries
taken as a whole, and, in the case of each Borrowing Subsidiary, such Borrowing
Subsidiary, during the accounting period covered by such financial statements,
and that such review has not disclosed the existence during or at the end of
such accounting period, and that the signers do not have knowledge of the
existence as at the date of the Officers' Certificate, of any condition or
event which constitutes an Event of Default or Potential Event of Default, or,
if any such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Company or any Subsidiary has
taken, is taking and proposes to take with respect thereto; and (ii) together
with each delivery of any financial statement pursuant to clauses (b) and (c)
above, a Compliance Certificate of the Company demonstrating in reasonable
detail compliance during and at the end of such accounting periods with the
covenants contained in Article VII and Article VIII.
(e) Simultaneously with the delivery of the financial
statements referred to in clause (c) above, a statement of the firm of
independent certified public accountants which reported on the financial
statements included therein that nothing has come to their attention to cause
such independent certified public accountants to believe that calculations
contained in the Compliance Certificate are inaccurate, delivered
simultaneously therewith pursuant to clause (d) above.
(f) Promptly upon any Loan Party obtaining knowledge (i)
of any condition or event which constitutes an Event of Default or Potential
Event of Default, or becoming aware that any Senior Lender has given any notice
or taken any other action with respect to a claimed Event of Default or
Potential Event of Default under this Agreement or (ii) of any condition or
event
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which has or would be reasonably likely to have a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by such
Senior Lender and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action the Loan
Parties have taken, are taking and propose to take with respect thereto.
(g) Promptly upon any Loan Party obtaining knowledge of
(A) the institution of, or threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries not previously disclosed in writing by a Loan Party to the Senior
Lenders pursuant to this Section 5.01(g), or (B) any material development in
any action, suit, proceeding, governmental investigation or arbitration already
disclosed, which, in either case, has or is reasonably likely to have a
Material Adverse Effect, such Loan Party shall promptly give notice thereof to
the Agent and the Collateral Agent and provide such other information as may be
reasonably available to it to enable the Senior Lenders and their counsel to
evaluate such matters.
(h) No later than forty-five (45) days (or such shorter
period as may be agreed to by the Agent and the Collateral Agent) prior to the
beginning of each of the Company's Fiscal Years, consolidated and consolidating
annual business and financial plans for the Company and its Subsidiaries and
annual financial projections for the following Fiscal Year, prepared on a
monthly basis, and quarterly updates thereto in the event of any material
change to such plans, all in form satisfactory to the Agent and the Collateral
Agent, together with all supporting details reasonably requested by the Agent
or the Collateral Agent, and reported by the chief executive officer or chief
financial officer of the Company as being based, on the Company's best
estimates, information and assumptions at the time, and all such statements to
be in reasonable detail and supported by a schedule enumerating the assumptions
therein;
(i) As soon as possible, and in any event within ten (10)
days after either the Company or an ERISA Affiliate knows or has reason to know
that a Termination Event has occurred, a written statement of the chief
financial officer of the Company describing such Termination Event and the
action, if any, which the Company or an ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken or
threatened by the IRS, the DOL or PBGC with respect thereto;
(j) As soon as possible, and in any event within fifteen
(15) days, after either the Company or any of its
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Subsidiaries knows or has reason to know that a prohibited transaction (defined
in Section 406 of ERISA and Section 4975 of the Internal Revenue Code) has
occurred, a statement of the chief financial officer of the Company describing
such transaction;
(k) Within ten (10) days after the filing thereof with
the DOL, IRS or PBGC, copies of each annual report, including Schedule B
thereto, filed with respect to each Benefit Plan;
(l) Within ten (10) days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by either the Company or an ERISA
Affiliate with respect to such request;
(m) Within thirty (30) days upon the occurrence thereof,
the first to occur of an amendment of any existing Benefit Plan which will
result in an increase in the benefits under such Benefit Plan or a notification
to employees of the Company or any of its Subsidiaries of any such increase, or
the establishment of any new material Plan or the commencement of contributions
to any Plan to which either the Company or an ERISA Affiliate was not
previously contributing;
(n) Promptly upon, and in any event within ten (10)
Business Days after, receipt by either the Company or an ERISA Affiliate of the
PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(o) Promptly upon, and in any event within ten (10)
Business Days after, receipt by either the Company or any of its Subsidiaries
of an unfavorable determination letter from the IRS regarding the qualification
of a Plan under Section 401(a) of the Internal Revenue Code, copies of each
such letter;
(p) Promptly upon, and in any event within ten (10)
Business Days after receipt by either the Company or an ERISA Affiliate of a
notice from a Multiemployer Plan regarding the imposition of withdrawal
liability, copies of each such notice;
(q) Promptly upon, and in any event within fifteen (15)
Business Days after, either the Company or any ERISA Affiliate fails to make a
required installment under subsection (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or payment, a
notification of such failure;
(r) Monthly detailed information and documentation
relating to (i) the Receivables of the Company and each of its Subsidiaries
(including, without limitation, obligor, aging, amounts and concentration) and
(ii) the Inventory of the Company
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and each of its Subsidiaries (including all sales of or other reductions of and
all additions to such Inventory), and within ten (10) days after the end of
each month, a borrowing base certificate in the form of Exhibit 9 (or another
form acceptable to the Agent and the Collateral Agent and the Company) covering
all the Receivables and Inventory of the Company and each of its Subsidiaries
as at the end of the previous month; provided, however, the Company shall
deliver to the Agent or the Collateral Agent at the request of the Agent or the
Collateral Agent billing and collection information with respect to Receivables
on a weekly basis, if at any time the sum of (i) the Borrowing Base as reported
on the most recently received borrowing base certificate plus (ii) the Fixed
Asset Portion applicable at the time of such receipt does not exceed the
outstanding Revolving Credit Accommodations by at least $15,000,000;
(s) At least once each calendar quarter (and more often
if so requested by either the Agent or the Collateral Agent), a report for each
Borrowing Subsidiary, dated the last day of such quarter, and certified by such
Borrowing Subsidiary's chief financial officer, which report shall include a
schedule of any acquisition or disposition of Equipment with a value in excess
of $50,000, and shall cover the period since the last prior report delivered to
the Agent and the Collateral Agent;
(t) Such other information respecting (i) Receivables,
Inventory and Fixed Asset Collateral owned by the Company or any of its
Subsidiaries, including, without limitation reports identifying the Fixed Asset
Collateral by location and by Borrowing Subsidiary, and (ii) the Company's or
any such Subsidiary's business or condition (financial or otherwise),
operations, performance, properties or prospects as the Agent or the Collateral
Agent may, from time to time, reasonably request. Each Loan Party authorizes
the Agent and the Collateral Agent to communicate directly with its independent
certified public accountants and authorizes such accountants to disclose to the
Agent and the Collateral Agent any and all financial statements and other
information of any kind, including copies of any management letter or the
substance of any oral information, that such accountants may have with respect
to such Receivables, Inventory and Fixed Asset Collateral or the Company's or
any such Subsidiary's condition (financial or otherwise), operations,
properties, performance and prospects. The Agent, the Collateral Agent and
each Senior Lender shall treat any non-public information so obtained as
confidential and shall give the Company notice of any such communication. The
Company on or before the Effective Date, shall have delivered a letter
addressed to such accountants instructing them to disclose such information in
compliance with this subsection (t);
(u) Copies of all financial statements, reports and
notices, if any, sent or made available generally by the Company
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to the holders of its publicly-held Securities or to a trustee under the Senior
Note Indenture or any indenture governing Subordinated Indebtedness or filed
with the Commission, and of all press releases made available generally by the
Company or any of its Subsidiaries to the public concerning material
developments in the business of the Company or any such Subsidiary;
(v) Copies of any management reports prepared by the
Company's independent certified public accountants in connection with the
annual audit;
(w) Promptly upon the Company obtaining knowledge of any
sale, transfer or other disposition of the Class B Common Stock or the Junior
Preferred Stock, notice thereof to the Agent and the Collateral Agent with
copies of the documents or agreements by which the purchaser or other
transferee has agreed to be bound by the terms of the Class B Shareholders'
Agreement or the Junior Preferred Shareholders' Agreement, as the case may be;
(x) Within ninety (90) days after the Effective Date, pro
forma historical annual financial statements (after giving effect to the Auto
Sale) for Fiscal Years 1991, 1992 and 1993, in each case consisting of balance
sheets, income statements and cash flow statements, all prepared on a
consolidated and (except for cash flow statements) consolidating basis and
acceptable to the Senior Lenders;
(y) [Intentionally Omitted]; and
(z) Copies executed by the appropriate Person(s) of such
consents and notices as are to be delivered pursuant to the Senior Note
Indenture and the indentures governing the Subordinated Indebtedness in
connection with the redemptions of the Senior Notes and Subordinated
Indebtedness contemplated by this Agreement.
5.02. Environmental Notices. (a) Except as disclosed on
Schedule 4.01(t), each Loan Party shall notify the Agent and the Collateral
Agent in writing, promptly, and in any event within twenty (20) days after such
Loan Party's learning thereof, of any: (i) notice or claim to the effect that
the Company or any of its Subsidiaries is or may be liable to any Person as a
result of the Release or threatened Release of any Contaminant into the
environment; (ii) notice that the Company or any of its Subsidiaries is under
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment; (iii) notice that any Property of the Company
or its Subsidiaries is subject to an Environmental Lien; (iv) notice of
violation to the Company or any of its Subsidiaries or awareness by the Company
or any of its Subsidiaries of a condition which
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might reasonably result in a notice of violation of any environmental, health
or safety Requirement of Law, which could have a Material Adverse Effect; (v)
commencement or threat of any judicial or administrative proceeding alleging a
violation of any environmental, health or safety Requirement of Law; (vi) new
or proposed changes to any existing environmental, health or safety Requirement
of Law that could have a Material Adverse Effect on the operations of the
Company or its Subsidiaries; or (vii) any proposed acquisition of stock,
assets, real estate, or leasing of property, or any other action by the Company
or its Subsidiaries that could subject the Company or its Subsidiaries to
environmental, health or safety Liabilities and Costs that could have a
Material Adverse Effect. With respect to clauses (i) through (vii) above, such
notice shall be required only if the liability or potential liability which is
the subject matter of the notice is likely to exceed Two Hundred Fifty Thousand
Dollars ($250,000), or if such liability or potential liability, when added to
other liabilities of the Company and its Subsidiaries of the kind referred to
in clauses (i) through (vii) above, exceeds Two Million Five Hundred Thousand
Dollars ($2,500,000).
(b) On December 31 of each calendar year, the Loan
Parties shall submit to the Agent and the Collateral Agent a report prepared by
the appropriate officers of such Loan Parties providing an update of the status
of each material health or safety compliance hazard or liability issue
identified in (i) any notice or report required pursuant to Section 5.02(a) and
(ii) any other environmental, health and safety compliance obligation, remedial
obligation or liability.
(c) At any time upon the occurrence and during the
continuation of any Event of Default under Section 9.01(a) or after requesting,
and failing to receive within forty-five (45) days of such request, a waiver by
the Requisite Senior Lenders of an Event of Default that has occurred and is
continuing under Section 9.01(b) or (d), either the Agent or the Collateral
Agent, may, and is hereby authorized by the Loan Parties to, conduct at the
Loan Parties' expense, a "Phase I" environmental audit of all or some of the
Loan Parties' Properties, such audit to be conducted by an environmental
consulting firm designated by the Agent and the Collateral Agent; provided,
however, that only one such audit may be conducted. The Agent, the Collateral
Agent and each Senior Lender shall hold the results of such audit as
confidential information in accordance with such Person's customary procedures
for handling confidential information of this nature; provided, however, each
such Person shall be permitted to disclose such information to a proposed
assignee or participant, or as required by any Governmental Authority or
representative thereof, or as required or requested by any bank regulator or
examiner, or pursuant to legal process, or to its accountants, lawyers and
other advisors engaged in connection with the transactions contemplated by this
Agreement, and shall
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require any proposed assignee or participant or such accountants, lawyers or
other advisors to agree to comply with this provision.
5.03. Shareholders. The Company shall deliver or cause to be
delivered to the Agent and the Collateral Agent (with copies to the Agent
sufficient for each Senior Lender) updates of Schedule 4.01(j)-2, at such times
after the occurrence of an Event of Default, as the Agent, the Collateral Agent
or the Requisite Senior Lenders may reasonably request.
5.04. Appraisals. In the event that any Loan Party would
receive Net Cash Proceeds in excess of an aggregate amount of Ten Million
Dollars ($10,000,000) from any Permitted Financing of real property or any
Permitted Disposition made as part of sale and leaseback transaction in
connection with any single transaction or series of related transactions, the
Agent and Collateral Agent shall have the right to request, and receive prior
to such financing or disposition, an appraisal of such fixed assets by an
outside appraiser selected by the Agent and the Collateral Agent.
ARTICLE VI
Affirmative Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date and so long as any Senior Lender shall have any Commitment
hereunder and until payment in full of all of the Obligations, unless the
Requisite Senior Lenders (or, if applicable, the Agent and the Collateral
Agent) shall otherwise give prior written consent thereto:
6.01. Corporate Existence, etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, at all times maintain its corporate
existence and preserve and keep in full force and effect its rights and
franchises unless the failure to maintain such rights and franchises would not
have a Material Adverse Effect. The Company shall promptly provide each Senior
Lender with a complete list of the Subsidiaries of the Company upon the
occurrence of any change in the list of such Subsidiaries as set forth on
Schedule 4.01(c).
6.02. Corporate Powers, etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it
to be so qualified except for those jurisdictions (other than Alabama and
Vermont) where failure to so qualify does not have or is not reasonably likely
to have a Material Adverse Effect. Each of the Company and its Subsidiaries
will transact business in its own name and will invoice all accounts in its own
name.
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6.03. Compliance with Laws, etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, (a) comply with all Requirements of
Law, and all Contractual Obligations affecting such Person or the business,
properties, assets or operations of such Person, and (b) obtain as needed all
Permits necessary for its operations and maintain such in good standing, except
in the case of clauses (a) and (b) above, where the failure to comply with
which will not have or is not reasonably likely to have a Material Adverse
Effect.
6.04. Payment of Taxes and Claims. Each Loan Party shall pay
or cause to be paid, and shall cause each of its Subsidiaries to pay, (a) all
taxes, assessments and other governmental charges imposed upon it or on any of
its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have or is reasonably likely to have a Material
Adverse Effect, and (b) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
such Loan Party or any such Subsidiary, as the case may be, which have become
due and payable and which by law have or may become a Lien (other than a
Customary Permitted Lien) upon any of such Loan Party's or such Subsidiary's
properties or assets, prior to time when any penalty or fine shall be incurred
with respect thereto; provided, however, that no such taxes, assessments and
governmental charges referred to in clause (a) above or claims referred to in
clause (b) above need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if adequate
reserves shall have been set aside therefor in accordance with GAAP.
6.05. Maintenance of Properties; Insurance. Each Loan Party
shall, and shall cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty or condemnation, all of its properties
material to its operations and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, consistent with past practice.
Each Loan Party shall, and shall cause its Subsidiaries to, maintain or cause
to be maintained, with financially sound and reputable insurers reasonably
acceptable to the Agent and the Collateral Agent, the insurance policies and
programs listed on Schedule 6.05 or substantially similar programs or policies
and amounts or other programs, policies and amounts acceptable to the Agent and
the Collateral Agent; provided, however, the requirements of this sentence and
the next sentence shall not apply to any fixed assets that have been sold
pursuant to a Permitted Disposition or are subject to Liens permitted under
Section 7.02(b)(vi). Not later than thirty (30) days later than the renewal,
replacement or material modification of any policy or program, the Loan Parties
shall deliver or cause
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to be delivered to the Senior Lenders a certificate of insurance setting forth
for each such policy or program: (i) the amount of such policy, (ii) the risks
insured against by such policy, (iii) the name of the insurer and each insured
party under such policy, and (iv) the policy number of such policy.
6.06. Inspection of Property; Books and Records; Discussions.
Each Loan Party shall permit, and cause each of its Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or the Collateral
Agent to visit and inspect any of its properties or the properties of any of
its Subsidiaries, including their financial and accounting records, and to make
copies and take extracts therefrom, and to discuss their affairs, finances and
accounts with their officers, employees, representatives, agents or independent
certified public accountants, upon reasonable notice and during normal business
hours. Each such visitation and inspection by or on behalf of either the Agent
or the Collateral Agent shall be at such Loan Party's expense. Each Loan Party
shall, and shall cause each of its Subsidiaries to, keep proper books of record
and account in which entries in conformity with GAAP (and all Requirements of
Law) shall be made of all dealings and transactions in relation to their
businesses and activities and as otherwise required under Section 5.01. Such
books and records shall include true and complete records of all Indebtedness
of any Loan Party to any other Loan Party as permitted by Section 7.01(ix).
6.07. Litigation, Claims, etc. Each Loan Party shall, or
shall cause any of its Subsidiaries to, provide the Agent, the Collateral Agent
and the Senior Lenders with (a) a litigation status report with respect to any
suit at law or in equity asserted against it of the type referred to in Section
4.01(k)(i), in form and substance satisfactory to the Agent and the Collateral
Agent, promptly after the close of each calendar quarter; (b) notice of any
suit at law or in equity or claim brought or asserted against it promptly after
learning thereof with respect to any suit or claim involving money or property
valued in excess of Five Hundred Thousand Dollars ($500,000) or any such suits
or claims which in the aggregate involve money or property valued in excess of
One Million Dollars ($1,000,000), except, in each case, where the same is fully
covered by insurance (other than any applicable deductible); and (c) prompt
notice of any investigation or proceeding before or by any Governmental
Authority, the effect of which is reasonably likely to limit, prohibit or
restrict materially the manner in which it currently conducts its business or
to declare any substance contained in the products manufactured or distributed
by it to be dangerous.
6.08. Labor Disputes. Each Loan Party shall, and shall cause
each of its Subsidiaries to, notify the Agent and the
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Collateral Agent in writing, promptly, but in any event within two (2) Business
Days after learning thereof, of any material labor dispute to which it may
become a party, any strikes or walkouts relating to any of its plants or other
facilities and the expiration of any labor contract to which it is a party or
by which it is bound.
6.09. Maintenance of Licenses, Permits, etc. Each Loan Party
shall, and shall cause each of its Subsidiaries to, maintain in full force and
effect all licenses, permits, governmental approvals, franchises,
authorizations or other rights necessary for the operation of its business,
except where the failure to obtain any of the foregoing would not have or is
not reasonably likely to have a Material Adverse Effect; and notify the Agent
and the Collateral Agent in writing, promptly after learning thereof, of the
suspension, cancellation, revocation or discontinuance of or of any pending or
threatened action or proceeding seeking to suspend, cancel, revoke or
discontinue any such license, permit, governmental approval, franchise,
authorization or right.
6.10. Required Interest Rate Contracts. In the event the
Agent, the Collateral Agent or the Requisite Senior Lenders shall so request,
each Loan Party shall take all steps necessary to arrange that payments owing
to such Loan Party from any counterparty under any Interest Rate Contract shall
be paid directly to the Agent to be applied to the Obligations and to take all
such other action with respect to each such Interest Rate Contract as the
Requisite Senior Lenders may request, including, without limitation, executing
an assignment of each such Interest Rate Contract in a form satisfactory to the
Agent and the Collateral Agent.
6.11. Receipt of Certain Funds. From and after the Effective
Date, within three (3) Business Days after receipt by the Company or any
Subsidiary of the Company of any Net Cash Proceeds consisting of insurance
proceeds, a condemnation award or eminent domain proceeds in excess of Five
Hundred Thousand Dollars ($500,000), the Company or such Subsidiary shall
provide to the Agent and the Collateral Agent written notification (or
telephonic notice promptly confirmed in writing) thereof and a description of
the property damaged, lost or taken. The Company or such Subsidiary shall
specify in such notice whether or not the property damaged, lost or taken will
be restored or replaced, and if so, the Company or such Subsidiary shall
include a description of its plans to restore or replace such property. The
Company or any Subsidiary of the Company shall not be permitted to use
insurance proceeds or condemnation awards in an amount greater than Two Million
Five Hundred Thousand Dollars ($2,500,000) for the restoration, repair or
replacement of the damaged property without the prior written consent of the
Agent and the Collateral Agent. Notwithstanding the foregoing this
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Section 6.11 shall not apply to any insurance proceeds, condemnation award or
eminent domain proceeds received in connection with assets or property that
have been sold pursuant to a Permitted Disposition or are subject to Liens
permitted under Section 7.02(b)(vi).
6.12. Landlord Waivers and Bailee Waivers; Notice. Each Loan
Party shall use its best efforts (i) to obtain and deliver to the Collateral
Agent landlord waivers in form and substance satisfactory to the Agent and the
Collateral Agent for all properties leased by such Loan Party on which
Collateral is located and (ii) to obtain and deliver to the Collateral Agent
bailee waivers in form and substance satisfactory to the Agent and the
Collateral Agent for all bailment locations used by such Loan Party to store
Collateral on or after the Effective Date; provided, however, "best efforts"
shall not include the expenditure of money or the bringing of any action or
proceeding to induce any landlord or bailee to execute a landlord or bailee
waiver (as the case may be). Promptly upon the occurrence thereof, each Loan
Party shall provide the Agent and the Collateral Agent with notice of any
material default in such Loan Party's obligations under a lease which covers
property on which Collateral is located.
6.13. Liens on Assets After Payment of Permitted Financings.
In the event any Indebtedness for a Permitted Financing is paid in full prior
to the Revolving Credit Termination Date, the Loan Party prepaying such
Indebtedness shall take such actions and execute such agreements and documents
as the Agent and the Collateral Agent deem necessary to grant a Lien to the
Agent or the Collateral Agent, as the case may be, for the benefit of the
Agent, the Collateral Agent and the Senior Lenders, pursuant to the Collateral
Documents, on the fixed assets that had been subject to such Permitted
Financing; provided, however, nothing in this Section 6.13 shall be deemed to
permit any such repayment of Indebtedness.
ARTICLE VII
Negative Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date and so long as any Senior Lender shall have any obligation
hereunder and until payment in full of all of the Obligations, unless the
Requisite Senior Lenders (or, if applicable, the Agent and the Collateral
Agent) shall otherwise give prior written consent thereto:
7.01. Indebtedness. Neither the Company nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
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(i) the Obligations;
(ii) Indebtedness arising from current liabilities
for goods and services purchased in the normal course of business;
(iii) the Permitted Existing Indebtedness, and
extensions, renewals, replacements and refinancings thereof, not exceeding the
principal amount outstanding on the date of such extension, renewal,
replacement or refinancing;
(iv) the Subordinated Indebtedness;
(v) Indebtedness incurred by the Company or any
of its Subsidiaries for Capital Expenditures and Capital Lease obligations to
the extent permitted under the second proviso of Section 8.06 in an aggregate
amount not to exceed (when added to Indebtedness permitted to be outstanding
pursuant to clause (x) below) Twenty Million Dollars ($20,000,000) at any time
outstanding;
(vi) Indebtedness in respect of the Senior Notes
in an aggregate principal amount not exceeding One Hundred Million Dollars
($100,000,000) prior to June 1, 1994, and thereafter, Ninety Three Million Four
Hundred Seventy Thousand Dollars ($93,470,000); provided that as soon as
practicable after the Effective Date the Company shall redeem the Senior Notes
with the proceeds of the Revolving Loans as contemplated by Section 2.03(d);
(vii) Indebtedness in respect of Interest Rate
Contracts with respect to which the relevant Loan Party is in full compliance
with Section 6.10;
(viii) Indebtedness in respect of Accommodation
Obligations permitted by Section 7.04;
(ix) Indebtedness of any Loan Party to any other
Loan Party; provided, however, that (A) the maker of any loan resulting in the
incurrence of such Indebtedness shall not be insolvent at the time such loan
was made or rendered insolvent as a result of the making of such loan, (B) such
loan shall have been made in compliance with all Requirements of Law and (C)
the proceeds of such loan, if made to the Company, shall immediately thereafter
be invested by the Company in Subsidiaries of the Company, used to pay amounts
owing with respect to the Obligations or the Subordinated Indebtedness (to the
extent otherwise permitted to be paid hereunder) or be used for operating
expenses of the Company or the payment of taxes; and
(x) Indebtedness in respect of Permitted
Financings in an aggregate amount not to exceed Twenty Million
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Dollars ($20,000,000) in the aggregate incurred since the Effective Date.
7.02. Sales of Assets; Liens.
(a) Sales. Neither the Company nor any of its
Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose
of any properties or assets, whether now owned or hereafter acquired, or any
income or profits therefrom, except as part of a Permitted Disposition, without
the prior written consent of the Requisite Senior Lenders, and, in any event
(including in the case of a Permitted Disposition), for less than (i) the fair
market value of such assets as determined by the board of directors of the
Company or such Subsidiary in its reasonable discretion and (ii) ninety percent
(90%) of the net book value of such assets; provided, however, the foregoing
shall not prohibit (x) sales of Inventory occurring in the ordinary course of
business of the Company and its Subsidiaries and (y) sales of assets occurring
in the ordinary course of business of the Company and its Subsidiaries that do
not exceed in the aggregate Two Million Dollars ($2,000,000) in any Fiscal
Year; provided, further, to the extent any Loan Party would receive Net Cash
Proceeds in excess of an aggregate amount of Ten Million Dollars ($10,000,000)
from the sale of any assets in a single transaction or series of related
transactions (other than in connection with sale and leaseback transactions
constituting Permitted Dispositions) which would not otherwise require the
consent of the Requisite Senior Lenders hereunder, and such Net Cash Proceeds
would, upon receipt thereof by such Loan Party, be required to be applied to
any portion of the Revolving Loans pursuant to Section 2.06(b), then such Loan
Party shall obtain the prior written consent of the Requisite Senior Lenders to
such sale. Notwithstanding the foregoing, (A) any Loan Party shall be
permitted to sell to any institution in the business of receivables collection,
credit insurance or factoring (which may be a Senior Lender) any past-due
Receivable, and the Collateral Agent shall release its Lien thereon, so long as
the following conditions are met with respect to each such sale: (i) to the
extent that the aggregate face amount of all past-due Receivables sold pursuant
to this sentence in the twelve-month period preceding the date of such sale
plus the face amount of such past-due Receivable exceeds $1,000,000, the
Collateral Agent shall have indicated its consent to such sale by executing a
Request for Release of Receivables in the form of Exhibit 10 (the "Request for
Release of Receivables") specifically referring to such past-due Receivable
delivered by such Loan Party to the Collateral Agent (with a copy to the
Agent); and (ii) in all cases such Loan Party's grant of a Lien on such
past-due Receivable to such institution and the Collateral Agent's release of
such Receivable from the Collateral shall become effective only upon the
consummation of such sale to such institution and only upon such Loan Party's
receipt of the cash proceeds of such
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sale and (B) JPS-U.K. shall be permitted to sell its Receivables, including any
rejected or recovered goods, to any institution in the business of receivables
collection, credit insurance or factoring.
(b) Liens. Neither the Company nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their Property or assets (including
all Collateral) except:
(i) Liens securing the Obligations;
(ii) any interest or title of a lessor or secured
by a lessor's interest under any lease permitted by this Agreement;
(iii) Liens existing on the date of this Agreement
securing the Existing Indebtedness Permitted to be Secured;
(iv) Permitted Existing Liens;
(v) Customary Permitted Liens and Liens listed as
exceptions to title on the title insurance policies delivered pursuant to
Section 3.01(a)(ix);
(vi) purchase money Liens (including the interest
of a lessor under a Capital Lease), Liens on property existing at the time of
acquisition thereof by the Company or any of its Subsidiaries, Liens securing
Indebtedness permitted by clause (v) of Section 7.01 and Liens on fixed assets
securing Indebtedness permitted by clause (x) of Section 7.01;
(vii) Liens (other than Environmental Liens) with
respect to judgments or attachments which do not result in an Event of Default
or Potential Event of Default hereunder;
(viii) to the extent Indebtedness secured thereby is
permitted to be extended, renewed, replaced or refinanced pursuant to Section
7.01, a future Lien upon any property which is subject to a Lien described in
clauses (iii), (iv) and (vi) above, if such future Lien attaches only to the
same property, secures only such permitted extensions, renewals, replacements
or refinancings and is of like quality, character and extent;
(ix) Liens securing the Assumed Liabilities, Liens
resulting from the shared use of certain assets referred to in Section 2(g) of
the Purchase Agreement, Liens resulting from the shared use of certain assets
in accordance with the Dunean Conveyance Agreement and the Dunean Operating
Agreement and Liens securing liabilities (other than Assumed Liabilities)
referred to in the Purchase Agreement to the extent the Company is indemnified
therefor pursuant to the Purchase Agreement, in each
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case the existence of which do not or are not reasonably likely to have a
Material Adverse Effect;
(x) Liens arising under Section 302(f) of ERISA
or Section 412(n) of the Internal Revenue Code where the delinquent
contribution which gave rise to the Lien is paid within thirty (30) days of its
original due date;
(xi) Liens on past-due Receivables sold in
accordance with the terms and conditions of Section 7.02(a) in favor of the
purchasers thereof;
(xii) until such time as the Senior Notes or such
Subordinated Indebtedness, as the case may be, shall have been repaid in full,
Liens in favor of the holders of the Senior Notes or such Subordinated
Indebtedness, as the case may be, on amounts held in trust pending the
redemption, as contemplated by this Agreement, of the Senior Notes or any
Subordinated Indebtedness;
(xiii) until such time as the Senior Notes shall
have been paid in full, Liens securing the Senior Notes granted by the Company
under the Junior Pledge Agreement on the capital stock of the Company's
Subsidiaries to the extent required to be pledged under the terms thereof; and
(xiv) Liens on Receivables of JPS-U.K., including
any rejected or recovered goods, sold in accordance with the terms and
conditions of Sections 7.02(a) in favor of the purchaser thereof.
7.03. Investments. Neither the Company nor any of its
Subsidiaries shall directly or indirectly make or own any Investment in any
Person except:
(i) Investments in Cash Equivalents;
(ii) Existing Investments;
(iii) Investments by the Company in the Borrowing
Subsidiaries or by any Borrowing Subsidiary in any other Borrowing Subsidiary;
(iv) other Investments not in excess of One Hundred
Thousand Dollars ($100,000) in the aggregate at any one time outstanding;
(v) [intentionally omitted];
(vi) Investments made on the Effective Date by the
Company in Newsub, not to exceed in the aggregate Forty-Two Million Dollars
($42,000,000); provided, however, that the agreements and documents executed
and delivered by the Company
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and Newsub in connection with such Investments are in form and substance
acceptable to the Agent and the Collateral Agent;
(vii) Investments held by the Company on July 21,
1993 in the capital stock of International Fabrics, and Investments in the form
of intercompany loans and advances from the Company and/or JCIC to
International Fabrics not to exceed in the aggregate $2,000,000 at any time
outstanding; provided that any such loan and advances which exceed in the
aggregate $1,000,000 at any time outstanding shall be in form and substance
satisfactory to the Agent and the Collateral Agent; and
(viii) Investments held by JCC on July 21, 1993 in
the capital stock of JPS-U.K. and in the form of intercompany loans and
advances to JPS-U.K. not to exceed in the aggregate $1,000,000 at any time
outstanding.
7.04. Accommodation Obligations. Neither the Company nor any
of its Subsidiaries shall directly or indirectly create or become or be liable
with respect to any Accommodation Obligation except (i) guaranties resulting
from the endorsement of negotiable instruments for collection in the ordinary
course of business; (ii) any guaranty of the Obligations by the Company or by
any Subsidiary of the Company; (iii) any guaranty by the Company of the
obligations of any Subsidiary of the Company; (iv) obligations, warranties and
indemnities, not relating to Indebtedness of any Person, which have been or are
undertaken or made pursuant to the requirements of the Purchase Agreement or
any of the New Auto Transaction Documents or in the ordinary course of business
and not for the benefit or in favor of an Affiliate of the Company; (v)
Existing Accommodation Obligations and extensions and renewals thereof, and
substitutions therefor in the same or a lesser amount and in respect of the
same transaction; and (vi) Accommodation Obligations arising in connection with
the Transaction Documents, including, without limitation, (A) the Assumed
Liabilities, (B) obligations owing by the Company in connection with its
indemnification obligations under the Purchase Agreement or any of the New Auto
Transaction Documents and (C) any purchase price or tax adjustments payable by
the Company pursuant to the terms of the Purchase Agreement or any of the New
Auto Transaction Documents.
7.05. Restricted Junior Payments. Neither the Company nor
any of its Subsidiaries shall declare or make any Restricted Junior Payment,
except:
(i) scheduled payments (but not prepayments) of
interest due on Subordinated Indebtedness and permitted to be made pursuant to
the terms of such Subordinated Indebtedness;
(ii) as contemplated by clause (i) of Section
2.06(b); and
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(iii) any dividends or distributions to the Company
on the capital stock of any of its Subsidiaries (including, without limitation,
the dividends contemplated by Section 2.03(d)); provided, however, that (A)
such dividends or distributions shall not render such Subsidiary insolvent or
shall not be made if such Subsidiary is insolvent, (B) such dividends or
distributions shall have been made in compliance with all Requirements of Law
and with all corporate organizational documents of such Subsidiary and (C) such
dividends or distributions shall immediately (or as soon as practicable, in the
case of any payment of Indebtedness) thereafter be invested by the Company in
the Borrowing Subsidiaries, used to pay amounts owing with respect to the
Obligations, the Senior Notes or the Subordinated Indebtedness (to the extent
otherwise permitted to be paid hereunder), be used for operating expenses of
the Company or the payment of taxes (including interest, penalties and legal
expenses relating to such payment), or, in the case of the dividends
contemplated by Section 2.03(d), be used for the purposes contemplated by such
subsection.
7.06. Transactions with Shareholders and Affiliates. Neither
the Company nor any of its Subsidiaries shall directly or indirectly enter into
or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder or holders of more than five percent (5%) of any class
of equity securities of the Company, or with any Affiliate thereof or of any
such holder, on terms that are less favorable to the Company or such Subsidiary
than those that might be obtained in an arm's length transaction at the time
from Persons who are not such a holder or Affiliate; provided, however, the
Company shall be permitted to pay to (i) Odyssey Investors, Inc. and/or Odyssey
and their respective successors and assigns a management fee not to exceed One
Million Two Hundred Fifty Thousand Dollars ($1,250,000) for Fiscal Year 1994
and One Million Dollars ($1,000,000) for each Fiscal Year thereafter (prorated
for any portion of any Fiscal Year), payable annually in arrears, so long as at
the time of each such payment there exists no Event of Default or Potential
Event of Default and no Event of Default or Potential Event of Default would be
caused as a result of the making of such payment and (ii) Donaldson, Lufkin &
Jenrette Securities Corporation and its successors and assigns the fees
specified in the Engagement Letter. Nothing contained in this Section 7.06
shall prohibit any transaction expressly permitted by Section 7.05, or prohibit
the Junior Preferred Shareholders' Agreement, the Class B Shareholders'
Agreement or any New Auto Transaction Document.
7.07. Restriction on Fundamental Changes.
(a) Neither the Company nor any of its Subsidiaries shall
enter into any merger or consolidation, or liquidate, wind-
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up or dissolve (or suffer any liquidation or dissolution), or convey, lease,
sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business, property or assets,
whether now or hereafter acquired, except as permitted by Section 7.02(a).
(b) Neither the Company nor any of its Subsidiaries shall
(i) acquire by purchase or otherwise all or substantially all of the business,
property or assets of, or stock or other evidence of beneficial ownership of,
any Person or division or business of such Person or (ii) create any
Subsidiary;
(c) The Company and its Subsidiaries shall not change
their corporate, capital or legal structure. The Company agrees that JPS Auto
shall not engage in any business or own or acquire any assets.
7.08. ERISA. The Company shall not do any of the following
to the extent that such act or failure to act would result in the aggregate,
after taking into account any other such acts or failure to act, in a material
obligation to pay money:
(i) Engage, or permit an ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code for which a class exemption is not
available or a private exemption has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code), whether or not waived;
(iii) Fail, or permit an ERISA Affiliate to fail,
to pay timely required contributions or annual installments due with respect to
any waived funding deficiency to any Plan subject to Section 412 of the
Internal Revenue Code;
(iv) Terminate, or permit an ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of the Company
or an ERISA Affiliate under Title IV of ERISA; or
(v) Fail, or permit any ERISA Affiliate to fail,
to pay any required installment under section (m) of Section 412 of the
Internal Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment.
7.09. Operating Leases. During any Fiscal Year, neither the
Company nor any of its Subsidiaries shall become liable in any way, whether
directly or by assignment or by Accommodation Obligation, for the obligations
of the lessee under any Operating Lease unless, immediately after giving effect
to
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the incurrence of liability with respect to such Operating Lease, the aggregate
amount of all Consolidated Rental Payments for such Fiscal Year shall not
exceed Twenty Million Dollars ($20,000,000), without taking into account any
customary reimbursement for taxes, insurance, maintenance or other expenses.
7.10. Sales and Leasebacks. Neither the Company nor any of
its Subsidiaries shall become liable, directly or by way of Accommodation
Obligation, with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real or personal or mixed) whether now owned or
hereafter acquired, (i) which the Company or a Subsidiary of the Company has
sold or transferred or is to sell or transfer to any other Person and the Net
Cash Proceeds of which sales equal or exceed ninety percent (90%) of the net
book value of such assets, or (ii) which the Company or a Subsidiary of the
Company intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by that entity to any
other Person in connection with such lease; provided, however, such leases
shall be permitted in connection with fixed assets sold by the Company or any
of its Subsidiaries pursuant to a Permitted Disposition.
7.11. Senior Notes; Subordinated Indebtedness; Preferred
Stock.
(a) No Change. The Company shall not, and shall not
permit any of its Subsidiaries to, amend, supplement or otherwise change the
terms applicable to the Senior Notes, any Subordinated Indebtedness or the
Preferred Stock.
(b) Notices. The Company shall deliver to the Agent and
the Collateral Agent (i) a copy of each notice or other communication delivered
by or on behalf of the Company to the trustee under the Senior Note Indenture
or any indenture governing Subordinated Indebtedness, such delivery to be made
at the same time and by the same means as such notice or other communication is
delivered to such trustee, and (ii) a copy of each notice or other
communication received by the Company from the trustee under the Senior Note
Indenture or any indenture governing Subordinated Indebtedness, such delivery
to be made promptly after such notice or other communication is received by
such Person.
7.12. Amendment of Charter or By-Laws. Neither any Loan
Party nor any Pledgor shall amend its charter documents or By-Laws, except upon
at least ten (10) days' prior written notice to the Agent and the Collateral
Agent and then only with the prior written consent of the Requisite Senior
Lenders.
7.13. Disposal of Subsidiary Stock. Except as permitted by
Section 7.02 or Section 7.07, (i) the Company shall
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not directly or indirectly sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity securities of (or
warrants, rights or options to acquire shares or other equity securities of)
any of the Company's Subsidiaries, except to qualify directors if required by
applicable law, or (ii) none of the Company's Subsidiaries shall directly or
indirectly sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other securities of (or warrants, rights or options to
acquire shares or other securities of) such Subsidiary, or any other Subsidiary
of the Company, except to qualify directors if required by applicable law and
except that any Subsidiary of the Company may issue additional shares of its
capital stock to the Company if such shares are pledged pursuant to the Company
Pledge Agreement.
7.14. Issuance of Additional Shares. Neither the Company nor
any of its Subsidiaries shall issue or sell any additional shares of its
capital stock or any securities convertible into or exchangeable for any shares
of its capital stock, grant any rights (either preemptive or other) to
subscribe for or to purchase, or any options for the purchase of, enter into
any agreement providing for the issuance (contingent or otherwise) of, or
create calls, commitments or claims of any character relating to, any of its
capital stock or any stock or securities convertible into or exchangeable for
any of its capital stock, except for the issuance of Preferred Stock as payment
in kind dividends pursuant to the terms of the Preferred Stock.
7.15. Margin Regulations. No portion of the proceeds of any
credit extended under this Agreement shall be used in any manner which might
cause the extension of credit or the application of such proceeds to violate
Regulation G, Regulation U or Regulation X or any other regulation of the
Federal Reserve Board or to violate the Securities Exchange Act or the
Securities Act, in each case as in effect on the date or dates of such
Borrowing and such use of proceeds.
7.16. Amendment of Transaction Documents. Neither the
Company nor any of its Subsidiaries shall amend, modify, terminate or
supplement any of the Transaction Documents to which they are a party without
the prior written consent of the Requisite Senior Lenders or, as otherwise
provided in this Agreement, without the prior written consent of the Agent and
the Collateral Agent (which consent, with respect to the Purchase Agreement and
the New Auto Transaction Documents, shall not be unreasonably withheld);
provided that no such consent shall be required for any such amendment,
modification or supplement which affects solely a non-material provision or
non-material provisions of one or more New Auto Transaction Documents in a
manner which is not adverse to the Agent, the Collateral Agent or any of the
Senior Lenders.
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7.17. Cancellation of Debt; Prepayment. Except as
contemplated by the second sentence of Section 2.06(b)(i) and by the proviso to
clause (vi) of Section 7.01, neither the Company nor any of its Subsidiaries
shall cancel any claim or debt, except for adequate consideration and in the
ordinary course of its business, or voluntarily prepay, repurchase, redeem,
retire or defease any long-term Indebtedness; provided, however, that the
foregoing shall not prohibit the prepayment of Obligations to the extent
otherwise permitted by this Agreement.
7.18. Environmental Liabilities. Except as disclosed in
Schedule 4.01(t), neither the Company nor any of its Subsidiaries shall become
subject to any Liabilities and Costs which either the Agent or the Collateral
Agent deems has or is likely to have a Material Adverse Effect arising out of
or related to (a) the Release or threatened Release at any location of any
Contaminant into the environment, or any Remedial Action in response thereto,
or (b) any violation of any environmental, health or safety Requirement of Law;
provided, however, that this covenant shall not be violated so long as (i) the
Company or such Subsidiary shall have notified the Agent and the Collateral
Agent of the assertion of such liability or required expenditures promptly upon
receiving written notice of such assertion, (ii) the Company or such Subsidiary
shall have continued to furnish the Agent and the Collateral Agent with such
information concerning such asserted liability or required expenditure as
either the Agent or the Collateral Agent shall have reasonably requested, or is
otherwise provided herein, (iii) the Company or such Subsidiary shall be
diligently pursuing indemnification for such liability or required expenditures
from any Person which has an obligation to provide such indemnification, and
(iv) each of the Agent and the Collateral Agent is satisfied that the
imposition of such liability during the pendency of the Company's or such
Subsidiary's pursuit of indemnification will not materially impair the
Company's or such Subsidiary's ability to perform its financial obligations
under this Agreement.
7.19. Covenant with Respect to Newsub. Notwithstanding
anything to the contrary contained in this Agreement, for purposes of Article
VII (other than Sections 7.06, 7.12, 7.14, 7.16 and 7.18) and Article VIII of
this Agreement Newsub shall not be considered a Subsidiary of any of the Loan
Parties. The Company shall not permit Newsub (i) to create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, (ii) to own or lease any assets or property other than cash and
Newsub Cash Equivalents, or to sell, assign, transfer, lease, convey or
otherwise dispose of, or create, incur, assume or permit to exist any Lien on
or with respect to, any assets or property, provided that Newsub may from time
to time sell for fair market value in cash its Investments in Newsub Cash
Equivalents, (iii) to make or own any Investment except in cash and Newsub Cash
Equivalents or
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(iv) to engage in any business, except (in the case of clause (iv) above) to
the extent expressly contemplated by the By-Laws of Newsub as in effect on the
Effective Date. Notwithstanding anything to the contrary contained in this
Agreement, it is understood and agreed that Newsub may retain all interest
earned on its Newsub Cash Equivalents.
ARTICLE VIII
Financial Covenants
Each Loan Party covenants and agrees that, on and after the
Effective Date so long as any Senior Lender has any Commitment hereunder and
until payment in full of all the Obligations, unless the Requisite Senior
Lenders shall otherwise give prior written consent thereto:
8.01. Minimum Net Worth. The Net Worth of the Company and
its Subsidiaries on a consolidated basis on the last day of each month of each
fiscal quarter set forth below shall not be less than the minimum amount set
forth opposite such fiscal quarter:
Fiscal Quarter Minimum Amount
-------------- --------------
Effective Date through
the third fiscal quarter
of Fiscal Year 1994 $310,000,000
The fourth fiscal quarter
of Fiscal Year 1994 268,000,000
The first fiscal quarter
of Fiscal Year 1995 257,000,000
The second fiscal quarter
of Fiscal Year 1995 257,000,000
The third fiscal quarter
of Fiscal Year 1995 257,000,000
The fourth fiscal quarter
of Fiscal Year 1995 255,000,000
The first fiscal quarter
of Fiscal Year 1996 255,000,000
The second fiscal quarter
of Fiscal Year 1996 255,000,000
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The third fiscal quarter
of Fiscal Year 1996 255,000,000
The fourth fiscal quarter
of Fiscal Year 1996 255,000,000
8.02. Minimum Total Interest Coverage Ratio. (A) Total
Interest Coverage Ratio of the Company and its Subsidiaries on a consolidated
basis, as determined as of the last day of each fiscal quarter set forth below
for the twelve month period ending on such day (it being understood and agreed
that the Total Interest Coverage Ratio for the fourth fiscal quarter of 1993
and for the first and second fiscal quarters of 1994 shall mean the "Total
Interest Coverage Ratio" under and as defined in the Existing Credit
Agreement), shall not be less than the minimum ratio set forth opposite such
fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Effective Date through
the third fiscal quarter
of Fiscal Year 1994 1.55:1
The fourth fiscal quarter
of Fiscal Year 1994 1.60:1
The first fiscal quarter
of Fiscal Year 1995 1.65:1
The second fiscal quarter
of Fiscal Year 1995 1.55:1
The third fiscal quarter
of Fiscal Year 1995 1.60:1
The fourth fiscal quarter
of Fiscal Year 1995 1.70:1
The first fiscal quarter
of Fiscal Year 1996 1.70:1
The second fiscal quarter
of Fiscal Year 1996 1.75:1
The third fiscal quarter
of Fiscal Year 1996 1.80:1
The fourth fiscal quarter
of Fiscal Year 1996 1.80:1
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(B) Total Operating Company Interest Coverage Ratio of the
Borrowing Subsidiaries on a consolidated basis, as determined as of the last
day of each fiscal quarter set forth below for the twelve month period ending
on such day (it being understood and agreed that the Total Operating Company
Interest Coverage Ratio for the fourth fiscal quarter of 1993 and for the first
and second fiscal quarters of 1994 shall mean the "Total Operating Company
Interest Coverage Ratio" under and as defined in the Existing Credit
Agreement), shall not be less than the minimum ratio set forth opposite such
fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Effective Date through
the third fiscal quarter
of Fiscal Year 1994 8.80:1
The fourth fiscal quarter
of Fiscal Year 1994 10.00:1
The first fiscal quarter
of Fiscal Year 1995 10.00:1
The second fiscal quarter
of Fiscal Year 1995 9.90:1
The third fiscal quarter
of Fiscal Year 1995 9.80:1
The fourth fiscal quarter
of Fiscal Year 1995 9.00:1
The first fiscal quarter
of Fiscal Year 1996 8.90:1
The second fiscal quarter
of Fiscal Year 1996 8.90:1
The third fiscal quarter
of Fiscal Year 1996 8.90:1
The fourth fiscal quarter
of Fiscal Year 1996 8.60:1
8.03. Minimum Fixed Charge Coverage Ratio. (A) The Fixed
Charge Coverage Ratio of the Company and its Subsidiaries on a consolidated
basis, as determined as of the last day of each fiscal quarter set forth below
for the twelve month period ending on such day (it being understood and agreed
that the Fixed Charge Coverage Ratio for the fourth fiscal quarter of 1993 and
for the first and second fiscal quarters of 1994 shall mean the "Fixed Charge
Coverage Ratio" under and as defined in the Existing
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Credit Agreement), shall not be less than the minimum ratio set forth opposite
such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Effective Date through
the third fiscal quarter
of Fiscal Year 1994 0.80:1
The fourth fiscal quarter
of Fiscal Year 1994 0.85:1
The first fiscal quarter
of Fiscal Year 1995 0.85:1
The second fiscal quarter
of Fiscal Year 1995 0.80:1
The third fiscal quarter
of Fiscal Year 1995 0.95:1
The fourth fiscal quarter
of Fiscal Year 1995 1.00:1
The first fiscal quarter
of Fiscal Year 1996 1.00:1
The second fiscal quarter
of Fiscal Year 1996 1.00:1
The third fiscal quarter
of Fiscal Year 1996 1.00:1
The fourth fiscal quarter
of Fiscal Year 1996 1.00:1
(B) The Operating Company Fixed Charge Coverage Ratio of the
Borrowing Subsidiaries on a consolidated basis, as determined as of the last
day of each fiscal quarter set forth below for the twelve month period ending
on such day (it being understood and agreed that the Operating Company Fixed
Charge Coverage Ratio for the fourth fiscal quarter of 1993 and for the first
and second fiscal quarters of 1994 shall mean the "Operating Company Fixed
Charge Coverage Ratio" under and as defined in the Existing Credit Agreement),
shall not be less than the minimum ratio set forth opposite such fiscal
quarter:
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Fiscal Quarter Minimum Ratio
-------------- -------------
Effective Date through
the third fiscal quarter
of Fiscal Year 1994 1.50:1
The fourth fiscal quarter
of Fiscal Year 1994 1.70:1
The first fiscal quarter
of Fiscal Year 1995 1.75:1
The second fiscal quarter
of Fiscal Year 1995 1.67:1
The third fiscal quarter
of Fiscal Year 1995 1.90:1
The fourth fiscal quarter
of Fiscal Year 1995 1.90:1
The first fiscal quarter
of Fiscal Year 1996 1.90:1
The second fiscal quarter
of Fiscal Year 1996 1.80:1
The third fiscal quarter
of Fiscal Year 1996 1.75:1
The fourth fiscal quarter
of Fiscal Year 1996 1.70:1
8.04. [Intentionally Omitted]
8.05. Minimum Current Ratio. The Current Ratio of the
Company and its Subsidiaries on a consolidated basis shall not be less than (x)
1.00 to 1 on the last day of each month of each fiscal quarter through and
including the second fiscal quarter of Fiscal Year 1995 and (y) 1.05 to 1 on
the last day of each month of each fiscal quarter from and including the third
fiscal quarter of Fiscal Year 1995 to and including the fourth fiscal quarter
of Fiscal Year 1996.
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8.06. Maximum Capital Expenditures. Capital Expenditures
made or incurred by the Company and its Subsidiaries on a consolidated basis
for any Fiscal Year (it being understood and agreed that Capital Expenditures
made or incurred during the first and second fiscal quarters of Fiscal Year
1994 shall mean "Capital Expenditures" under and as defined in the Existing
Credit Agreement) shall not exceed in the aggregate the maximum amount set
forth below opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1994 $32,500,000
1995 21,000,000
1996 24,500,000
; provided, however, if the maximum amount set forth above opposite any Fiscal
Year exceeds the amount of Capital Expenditures made or incurred by the Company
and its Subsidiaries on a consolidated basis for such Fiscal Year, then Capital
Expenditures made or incurred by the Company and its Subsidiaries on a
consolidated basis for the next Fiscal Year may exceed the maximum amount set
forth above opposite such next Fiscal Year (but not subsequent Fiscal Years) by
the amount of such excess from the immediately preceding Fiscal Year; provided
further that, notwithstanding anything contained in this Agreement to the
contrary, in Fiscal Year 1994, 1995 and 1996 the Company and its Subsidiaries
shall not be permitted to make or incur Capital Expenditures which are financed
with the proceeds of external financing ("Financed Capital Expenditures") (x)
in an aggregate amount which exceeds $10,000,000 on a consolidated basis in any
such Fiscal Year or (y) if, after giving effect to such incurrence, the
aggregate amount of Financed Capital Expenditures made or incurred by the
Company and its Subsidiaries on a consolidated basis at any time on or after
January 1, 1994 would exceed an amount equal to (1) $25,000,000 minus (2) the
aggregate principal amount of external financing of the type specified in the
final proviso of this Section 8.06 which is outstanding on the Effective Date;
provided further that the applicable maximum amount set forth in the table
above with respect to any such Fiscal Year shall be increased by an amount
equal to the lesser of (x) the aggregate amount of Financed Capital
Expenditures made or incurred by the Company and its Subsidiaries in accordance
with the immediately preceding proviso on a consolidated basis in such Fiscal
Year and (y) $5,000,000; and provided further that the terms of any external
financing the proceeds of which are used by the Company and/or its Subsidiaries
to make or incur Capital Expenditures (other than the loan and security
agreement dated as of October 30, 1991, as amended through the Effective Date,
between The CIT Group/Equipment Financing, Inc. and JCIC)
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shall be in form and substance satisfactory to the Requisite Senior Lenders.
8.07. Maximum Cash Payments of Warranty Liabilities. Cash
payments for Warranty Liabilities made by the Company and its Subsidiaries on a
consolidated basis for any Fiscal Year shall not exceed in the aggregate the
maximum amount set forth below opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1994 $5,000,000
1995 4,000,000
1996 3,000,000
; provided, however, if the maximum amount set forth above opposite any Fiscal
Year exceeds the amount of cash payments for Warranty Liabilities made by the
Company and its Subsidiaries on a consolidated basis for such Fiscal Year, then
the maximum amount set forth above opposite the next Fiscal Year shall be
increased by the amount of such excess on a cumulative basis.
ARTICLE IX
Events of Default; Rights and Remedies
9.01. Events of Default. Each of the following occurrences
shall, from and after the Effective Date, constitute an Event of Default under
this Agreement:
(a) Failure to Make Payments When Due. Any Loan Party
or any Pledgor shall fail to pay when due any interest or principal on any
Revolving Loan or any fee or other Obligation payable under any Loan Document.
(b) Breach of Certain Covenants. Any Loan Party or any
Pledgor shall fail duly and punctually to perform or observe any agreement,
covenant or obligation binding on such Loan Party under (i) Sections 6.09, 6.10
or 6.11, Article VII (except for Sections 7.04, 7.06, and 7.10) or Article VIII
or any section of the Collateral Documents (which failure continues after the
expiration of any grace period specified under such section); or (ii) Section
6.13, 7.04, 7.06 or 7.10 and such failure under this clause (ii) shall continue
for fifteen (15) days.
(c) Breach of Representation or Warranty. Any
representation or warranty made or deemed made by any Loan Party or any Pledgor
to the Agent, the Collateral Agent or any Senior Lender herein or in any of the
other Loan Documents or in any statement or certificate at any time given by
such Loan Party or
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any of its Subsidiaries pursuant to any of the Loan Documents shall be false or
misleading in any material respect on the date as of which made or deemed made.
(d) Other Defaults. Subject to any applicable notice
and cure periods set forth in the Collateral Documents, any Loan Party shall
default in the performance of or compliance with any term contained in this
Agreement or in any of the other Loan Documents or any default or event of
default shall occur under any of the Collateral Documents (other than as
covered by subsection (a) or (b) above), and such default or event of default
shall continue for thirty (30) days after such Loan Party knew or, in the
exercise of due care, had reason to know of such default.
(e) Default as to Other Indebtedness. Any Loan Party or
any Subsidiary of any Loan Party shall fail to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) on any Indebtedness, other than an Obligation, if the aggregate
amount of such Indebtedness is Five Million Dollars ($5,000,000) or more; or
any breach, default or event of default shall occur, or any other event shall
occur or condition shall exist, under any instrument, agreement or indenture
pertaining thereto, if the effect thereof (with or without the giving of notice
or lapse of time or both) is to accelerate, or permit the holder(s) of such
Indebtedness to accelerate, the maturity of any such Indebtedness; or any such
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment prior to the stated
maturity thereof), or the holder of any Lien (other than Liens upon property
leased to a Loan Party which were created by the landlord prior to the
commencement of the lease), in any amount, shall commence foreclosure of such
Lien upon property of such Loan Party or any such Subsidiary having a value in
excess of Five Million Dollars ($5,000,000).
(f) Involuntary Bankruptcy; Appointment of Receiver,
Etc. (i) An involuntary case shall be commenced against any Loan Party or any
of its Subsidiaries, and the petition shall not be dismissed within sixty (60)
days after commencement of the case, or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of such Loan Party
or any of its Subsidiaries, in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or
any other similar relief shall be granted under any applicable federal, state
or foreign law.
(ii) A decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
any Loan Party or any of its Subsidiaries, or over all or a substantial part of
the property of such Loan Party or any of its Subsidiaries, shall be entered;
or an interim receiver, trustee or other custodian of such Loan Party or any of
its
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Subsidiaries or of all or a substantial part of the property of such Loan
Party or any of its Subsidiaries, shall be appointed or a warrant of
attachment, execution or similar process against any substantial part of the
property of such Loan Party or any of its Subsidiaries, shall be issued and any
such event shall not be stayed, vacated, dismissed, bonded or discharged within
sixty (60) days of entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc.
Any Loan Party or any of Subsidiary of any Loan Party shall have an order for
relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking of possession by
a receiver, trustee or other custodian for all or a substantial part of its
property; any Loan Party or any Subsidiary of any Loan Party shall make any
assignment for the benefit of creditors or shall be unable or fail, or admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors (or any committee thereof) of such Loan Party or any such
Subsidiary adopts any resolution or otherwise authorizes any action to approve
any of the foregoing.
(h) Judgments and Attachments. (i) Any money judgment
(other than a money judgment covered by insurance, but only if the insurer has
admitted liability with respect to such money judgment), writ or warrant of
attachment, or similar process involving in any case an amount in excess of
Five Million Dollars ($5,000,000) shall be entered or filed against any Loan
Party or any Subsidiary of any Loan Party, or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
thirty (30) days, or (ii) any judgment or order of any court or administrative
agency awarding material damages shall be entered against any Loan Party or any
Subsidiary of any Loan Party, in any action under the Federal securities laws
seeking rescission of the purchase or sale of, or for damages arising from the
purchase or sale of, the Senior Notes or any Subordinated Indebtedness in
excess of $5,000,000 in the aggregate, and such judgment or order shall have
become final after exhaustion of all available appellate remedies.
(i) Dissolution. Any order, judgment or decree shall be
entered against any Loan Party or any Subsidiary of any Loan Party, decreeing
its involuntary dissolution or split up and such order shall remain
undischarged and unstayed for a period in
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excess of thirty (30) days; or any Loan Party or any Subsidiary of any Loan
Party shall otherwise dissolve or cease to exist.
(j) Collateral Documents; Failure of Security or
Subordination. For any reason any Collateral Document ceases to be in full
force and effect or any Lien intended to be created thereby ceases to be or is
not valid and perfected; or any Lien in favor of the Agent or the Collateral
Agent contemplated by this Agreement or any Collateral Document, or any of the
documents and instruments evidencing any Subordinated Indebtedness or (so long
as any Senior Note remains outstanding) the subordination provisions of the
Intercreditor Agreement shall, at any time, be invalidated or otherwise cease
to be in full force and effect; or any such Lien or any Obligation shall be
subordinated or shall not have the priority contemplated by this Agreement, the
Collateral Documents, the Intercreditor Agreement or such subordination
provisions, for any reason.
(k) Change in Control. (i)(A) Odyssey or any of its
Affiliates (as defined in the Class B Shareholders' Agreement) shall cease to
own, directly or indirectly, free and clear from any Liens (except for the
encumbrance of the Junior Preferred Shareholders' Agreement, Liens securing the
Obligations and other Liens approved by the Requisite Senior Lenders), at least
fifty percent (50%) of the issued and outstanding shares of Junior Preferred
Stock, or shall cease to have the right to vote or otherwise control (as
defined in Rule 12b-2 promulgated under the Exchange Act) all of the issued and
outstanding shares of the Junior Preferred Stock or (B) the members of the
Class B Investor Group and their Affiliates (as defined in the Class B
Shareholders' Agreement) shall cease to own, directly or indirectly, free and
clear from any Liens (except for the encumbrance of the Class B Shareholders'
Agreement, Liens securing the Obligations and other Liens approved by the
Requisite Senior Lenders), shares of Class B Common Stock in the amount
necessary at all times to entitle such holders (along with the holders of the
Preferred Stock) to elect members of the Company's Board of Directors meeting
the qualifications set forth in the third sentence of Article II, Section 2 of
the Company's By-laws constituting a majority of the Company's Board of
Directors or (C) any individual that meets the requirements set forth in the
third sentence of Article II, Section 2 of the Company's By-laws shall be
elected to the Company's Board of Directors by the holders of the Preferred
Stock, other than a general partner, principal or associate of Odyssey or any
individual that meets such requirements as a result of its relationship with
Odyssey or an Affiliate (as defined in the Class B Shareholders' Agreement) of
Odyssey, and such individual shall not resign or be removed as a director
within thirty (30) days of his or her election; or (ii) the Company shall cease
to beneficially own 100% of the capital stock of any Borrowing Subsidiary.
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(l) ERISA Liabilities. Any Termination Event occurs
which will or is reasonably likely to subject either the Company or an ERISA
Affiliate to a liability which the Agent and the Collateral Agent determine
will or is reasonably likely to have a Material Adverse Effect, or, the plan
administrator of any Benefit Plan applies for and receives approval under
Section 412(d) of the Internal Revenue Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and the Agent and the
Collateral Agent determine that the business hardship upon which the Section
412(d) waiver was based will or is reasonably likely to subject either the
Company or an ERISA Affiliate to a liability which the Agent and the Collateral
Agent determine will or is reasonably likely to have a Material Adverse Effect.
(m) Solvency. Any Borrowing Subsidiary shall cease to
be Solvent.
(n) Purchase Agreement; New Auto Asset Purchase
Agreement. The Purchase Agreement, the Settlement Agreement or the New Auto
Asset Purchase Agreement shall have been terminated by one or more of the
parties thereto or there shall have occurred any material breach or default
thereunder unless such breach or default has been waived by the parties thereto
not in default with the prior consent of the Agent and the Collateral Agent
(which consent shall not have been unreasonably withheld).
(o) Undertakings. Any Stock (as defined in any
Undertaking) shall be subjected to any Lien or transferred or otherwise
disposed of in violation of or without compliance with the procedures of the
Undertaking to which such Stock is subject.
(p) Other Agreements. The Shareholders' Agreements
(other than in connection with an initial public offering of the Company
consented to by the Requisite Senior Lenders), the Engagement Letter, the
Voting Trust Agreement or the Contribution Agreement shall be amended,
modified, terminated or revoked without the prior written consent of the Agent
and the Collateral Agent.
(q) Material Adverse Change. Since the Effective Date,
there shall have occurred any condition or event which the Agent and the
Collateral Agent determine has or might have a Material Adverse Effect.
(r) Plan of Reorganization. Any bankruptcy court shall
reassert jurisdiction over the Company for the purpose of amending or
modifying, in any material, non-technical manner, the Plan of Reorganization.
(s) Intercreditor Agreement. At a time when any Senior
Note remains outstanding, any of the parties to the
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Intercreditor Agreement (other than the Agent and the Senior Lenders) shall
fail to perform any covenant or obligation binding on such party or the
Intercreditor Agreement shall cease to be in full force and effect.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 11.08.
9.02. Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of
Default described in the foregoing Section 9.01(f) or 9.01(g) with respect to
any Person, the Commitments shall automatically and immediately terminate and
the unpaid principal amount of and any and all accrued interest on the Loans
and all Reimbursement Obligations shall automatically become immediately due
and payable, with all additional interest from time to time accrued thereon and
without presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration), all
of which are hereby expressly waived by the Loan Parties, and the obligation of
each Senior Lender to make any Revolving Loan hereunder or the Issuing Bank to
issue any Letter of Credit shall thereupon terminate; and upon the occurrence
and during the continuance of any other Event of Default, the Agent or the
Collateral Agent shall at the request, or may with the consent, of the
Requisite Senior Lenders, by written notice to the Loan Parties, (i) declare
that the Commitments are terminated, whereupon the Commitments and the
obligation of each Senior Lender to make any Revolving Loan hereunder or the
Issuing Bank to issue any Letter of Credit shall immediately terminate, and/or
(ii) declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and all Letter of Credit Obligations to be, and the same
shall thereupon be, immediately due and payable with all additional interest
from time to time accrued thereon and without presentment, demand, or protest
or other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the Loan
Parties.
(b) Deposit for Letters of Credit. Upon demand by the
Agent or the Issuing Bank after the occurrence and during the continuance of
any Event of Default, each Borrowing Subsidiary shall, promptly upon the demand
of the Agent, deposit in the Cash Collateral Account with respect to each
Letter of Credit then outstanding for the account of such Borrowing Subsidiary,
cash or Cash Equivalents in an amount equal to the greatest amount for which
such Letter of Credit may be drawn. Each Borrowing Subsidiary hereby grants to
the Agent for the benefit of the Agent, the Collateral Agent, the Issuing Bank
and the Senior
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Lenders, a security interest in the Cash Collateral Account and all funds from
time to time deposited in the Cash Collateral Account as security for, and to
provide for the payment of, the Reimbursement Obligations.
(c) Rescission. If at any time after acceleration of
the maturity of the Loans, the Loan Parties shall pay all arrears of interest
and all payments on account of principal of the Loans and Reimbursement
Obligations which shall have become due otherwise than by acceleration (with
interest on principal and, to the extent permitted by law, on overdue interest,
at the rates specified in this Agreement) and all Events of Default and
Potential Events of Default (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to Section 11.08, then by written notice to the
Loan Parties, the Requisite Senior Lenders may elect, in the sole discretion of
such Requisite Senior Lenders, to rescind and annul the acceleration and its
consequences; provided, however, that any such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Senior Lenders to a decision which may be made at
the election of the Requisite Senior Lenders; they are not intended to benefit
the Loan Parties and do not give the Loan Parties the right to require the
Senior Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE X
The Agent; The Collateral Agent
10.01. Appointment. (a) Each Senior Lender and the Issuing
Bank hereby designates and appoints GE Capital as the Collateral Agent of such
Senior Lender and the Issuing Bank under this Agreement and the other Loan
Documents and each Senior Lender and the Issuing Bank hereby designates and
appoints Citibank as the Agent of such Senior Lender and the Issuing Bank under
this Agreement and the other Loan Documents. Each Senior Lender and the
Issuing Bank hereby irrevocably authorizes the Agent and the Collateral Agent
to take such action on its behalf under the provisions of this Agreement and
the Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or the Obligations) or the
other Loan Documents, neither the Collateral Agent nor the Agent shall be
required to exercise any discretion or take any action. Notwithstanding the
foregoing, the Agent and the Collateral Agent shall be required to act or
refrain from acting (and shall be fully protected in so
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acting or refraining from acting) upon the instructions of the Requisite Senior
Lenders (unless the instructions or consent of all of the Senior Lenders is
required hereunder or thereunder) and such instructions shall be binding upon
all Senior Lenders and the Issuing Bank; provided, however, neither the
Collateral Agent nor the Agent shall be required to take any action which the
Agent or the Collateral Agent, respectively, reasonably believes (i) will
expose it to personal liability unless the Agent or the Collateral Agent
receives an indemnification satisfactory to it from the Senior Lenders with
respect to such action or (ii) is contrary to this Agreement, the other Loan
Documents or applicable law. The Agent and the Collateral Agent agrees to act
as such on the express conditions contained in this Article X.
(b) The provisions of this Article X are solely for the
benefit of the Collateral Agent, the Agent, the Issuing Bank and the Senior
Lenders, and neither the Company nor any Subsidiary of the Company shall have
any rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 10.07 or in Section 10.08). In performing its
functions and duties under this Agreement, the Collateral Agent and the Agent,
respectively, shall act solely as agent of the Senior Lenders and the Issuing
Bank and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for the Company or any
Subsidiary of the Company. The Agent and the Collateral Agent may perform any
of their respective duties hereunder or under the other Loan Documents by or
through their respective agents or employees.
10.02. Nature of Duties. Neither the Collateral Agent nor
the Agent shall have any duties or responsibilities except those expressly set
forth in this Agreement or in the Loan Documents. The duties of the Agent and
the Collateral Agent shall be mechanical and administrative in nature. Neither
the Collateral Agent nor the Agent shall have by reason of this Agreement a
fiduciary relationship in respect of any Senior Lender. Nothing in this
Agreement or any of the other Loan Documents, expressed or implied, is intended
to or shall be construed to impose upon the Agent or the Collateral Agent any
obligation in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein. If the Agent or the
Collateral Agent seeks the consent or approval of the Requisite Senior Lenders
to the taking or refraining from taking any action hereunder or under the other
Loan Documents, the Agent or the Collateral Agent, as the case may be, shall
send notice thereof to each Senior Lender. The Agent and the Collateral Agent
shall promptly notify each Senior Lender at any time that the Requisite Senior
Lenders have instructed the Agent or the Collateral Agent to act or refrain
from acting pursuant hereto. Each Senior Lender agrees that (i) the rights and
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responsibilities of Citibank as the Agent under this Agreement shall include,
without limitation, serving the Senior Lenders as administrative agent and
documentation agent and as collateral agent in connection with the Company
Pledge Agreement, the Real Property Collateral Documents and the Intercreditor
Agreement and (ii) the rights and responsibilities of GE Capital as the
Collateral Agent under this Agreement shall include, without limitation,
serving the Senior Lenders and the Issuing Bank as co-agent and collateral
agent in connection with the Company Security Agreement, the Subsidiary
Security Agreements and the Trademark Security Agreements.
10.03. Rights, Exculpation, etc. None of the Agent, the
Collateral Agent or any of their respective Affiliates, officers, directors,
employees, agents, attorneys or consultants, shall be liable to any Senior
Lender for any action taken or omitted by them hereunder or under any of the
Loan Documents, or in connection herewith or therewith, except that the Agent
and the Collateral Agent shall be obligated for its respective gross negligence
or willful misconduct in the performance of its express obligations hereunder.
The Agent shall not be liable for any apportionment or distribution of payments
made by it in good faith pursuant to Section 2.07(b), and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Person to whom payment was due, but not made,
shall be to recover from the recipients of such payments any payment in excess
of the amount to which they are determined to have been entitled. Each of the
Agent, the Collateral Agent, each Senior Lender and the Issuing Bank shall make
its own independent investigation of the financial condition and affairs of the
Company and its Subsidiaries in connection with the making and the continuance
of the Loans hereunder and shall make its own appraisal of the creditworthiness
of the Company and its Subsidiaries, and none of the Agent, the Collateral
Agent, any Senior Lender or the Issuing Bank shall have any duty or
responsibility, either initially or on a continuing basis, to provide any
Senior Lender or the Issuing Bank with any credit or other information with
respect thereto. None of the Agent, the Collateral Agent, any Senior Lender or
the Issuing Bank shall be responsible to any Senior Lender or the Issuing Bank
for any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability, legality,
collectibility, or sufficiency of this Agreement, any of the Collateral
Documents or any of the other Loan Documents, or any of the transactions
contemplated hereby and thereby; or of the Transaction Documents or any of the
transactions contemplated thereby, or for the financial condition of the
Company or any of its Subsidiaries. Neither the Collateral Agent nor the Agent
shall be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents or the financial condition of the
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Company or any of its Subsidiaries, or the existence or possible existence of
any Potential Event of Default or Event of Default. Either of the Agent or the
Collateral Agent may at any time request instructions from the Senior Lenders
with respect to any actions or approvals which by the terms of this Agreement
or of any of the Loan Documents the Agent or the Collateral Agent is permitted
or required to take or to grant, and if such instructions are promptly
requested, the Agent or the Collateral Agent, as the case may be, shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Requisite
Senior Lenders. Without limiting the foregoing, no Senior Lender shall have
any right of action whatsoever against the Agent or the Collateral Agent as a
result of the Agent or the Collateral Agent acting or refraining from acting
under this Agreement, the Collateral Documents or any of the other Loan
Documents in accordance with the instructions of the Requisite Senior Lenders.
10.04. Reliance. The Agent and the Collateral Agent shall
be entitled to rely upon any written notices, statements, certificates, orders
or other documents or any telephone message believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the Loan
Documents and its duties hereunder or thereunder, upon advice of legal counsel
(including counsel for the Loan Parties), independent public accountant and
other experts selected by it.
10.05. Indemnification. To the extent that either the Agent
or the Collateral Agent is not reimbursed and indemnified by the Loan Parties,
the Senior Lenders will reimburse and indemnify the Agent or the Collateral
Agent, as the case may be, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent or the Collateral Agent,
respectively, in any way relating to or arising out of this Agreement, the
Collateral Documents or any of the other Loan Documents or any action taken or
omitted by the Agent or the Collateral Agent, as the case may be, or under this
Agreement, the Collateral Documents or any of the other Loan Documents, in
proportion to each Senior Lender's Pro Rata Share; provided, however, that no
Senior Lender shall be liable to the Agent or the Collateral Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such party's
gross negligence or willful misconduct. The obligations of the Senior Lenders
under this
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Section 10.05 shall survive the payment in full of all Obligations and the
termination of this Agreement.
10.06. The Agent and the Collateral Agent Individually.
With respect to its Pro Rata Share of the Commitments hereunder and the Loans
made by it, the Agent and the Collateral Agent shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Senior Lender.
The terms "Senior Lenders" or "Requisite Senior Lenders" or any similar terms
shall include the Agent and the Collateral Agent in their individual capacities
as a Senior Lender or one of the Requisite Senior Lenders. The Agent and the
Collateral Agent may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or any other business with the Company or any of
its Subsidiaries as if it were not acting as the Agent or the Collateral Agent
pursuant hereto.
10.07. Successor Agent; Resignation of Agent and Collateral
Agent. (a) Each of the Agent and the Collateral Agent may resign from the
performance of all its functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Senior Lenders and
the Loan Parties. In the event of resignation by the Agent, such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided below. In the
event of resignation by the Collateral Agent, such resignation will be
effective at the end of such thirty (30) Business Day period, without necessity
of appointment of a successor Collateral Agent and the Agent shall succeed to
the rights, duties and obligations of the Collateral Agent hereunder. The
Collateral Agent agrees to take such action as may be reasonably necessary to
assign to the Agent its rights as Collateral Agent under the Loan Documents
prior to such resignation. Thereafter all references to the "Collateral Agent"
in the Loan Documents shall refer to the Agent.
(b) Upon any such notice of resignation by the Agent,
the Collateral Agent shall at its option succeed to the rights, duties and
obligations of the Agent under the Loan Documents, or if the Collateral Agent
chooses not to become the Agent, the Requisite Senior Lenders shall appoint a
successor Agent who shall be satisfactory to the Loan Parties (which may not be
unreasonably withheld, and shall not be required upon the occurrence and during
the continuance of an Event of Default).
(c) If in the event of the resignation of the Agent, the
Collateral Agent chooses not to become the Agent and a successor Agent shall
not have been appointed within the thirty (30) Business Day period provided in
paragraph (a) of this Section 10.07, the retiring Agent, with the consent of
the Loan
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Parties (which may not be unreasonably withheld, and shall not be required upon
the occurrence and during the continuance of an Event of Default), shall then
appoint a successor Agent who shall serve as Agent until such time, if any, as
the Requisite Senior Lenders appoint a successor Agent as provided above.
(d) Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article X shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was the Agent
under this Agreement. The Agent agrees to take such action as may be
reasonably necessary to assign to the successor Agent its rights as Agent under
the Loan Documents prior to such resignation. Thereafter all references to the
"Agent" in the Loan Documents shall refer to the successor Agent.
10.08. Collateral Matters.
(a) Each of the Agent and the Collateral Agent is hereby
authorized on behalf of all of the Senior Lenders, without the necessity of any
notice to or further consent from any Senior Lender, from time to time prior to
an Event of Default, to take any action with respect to any Collateral or
Collateral Documents to which they are a party which may be necessary to
perfect and maintain perfected the security interest in and the Liens upon the
Collateral granted pursuant to the Collateral Documents. Without limiting the
generality of the foregoing, each of the Agent and the Collateral Agent shall
have the sole and exclusive right and authority to (i) act as the disbursing
and collecting agent for the Senior Lenders and the Issuing Bank with respect
to all payments and collections arising in connection with this Agreement and
the other Loan Documents; (ii) execute and deliver each Loan Document to which
the Agent or the Collateral Agent is a party and accept delivery of each such
agreement delivered by any Loan Party or other Person; (iii) act as collateral
agent for the Senior Lenders and the Issuing Bank for purposes of the
perfection of all security interests and Liens created by such agreements and
all other purposes stated therein; provided, however, each of the Agent and the
Collateral Agent hereby appoints, authorizes and directs the Agent, the
Collateral Agent, the Senior Lenders and the Issuing Bank to act as collateral
sub-agent for the Agent, the Collateral Agent, the Senior Lenders and the
Issuing Bank for purposes of the perfection of all security interests and Liens
with respect to any deposit account of any Loan Party maintained with, and cash
and Cash Equivalents held by, such Senior Lender or the Issuing Bank; (iv)
manage, supervise and otherwise deal with the Collateral; (v) take such
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action as is necessary or desirable to maintain the perfection and priority of
the security interests and Liens created or purported to be created by the Loan
Documents; (vi) release any Lien upon Collateral that is a Contaminant or upon
which a Release has occurred or which has otherwise been affected by a Release
or Contaminant; provided, however, that upon the request of the Agent or the
Collateral Agent, as the case may be, such Person (the Agent or the Collateral
Agent) releasing such Lien shall assign such Lien to the requesting Person; and
(vii) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Loan Document, exercise all remedies given to the Agent,
the Collateral Agent, the Senior Lenders or the Issuing Bank with respect to
the Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(b) The Agent, the Collateral Agent, the Issuing Bank
and each Senior Lender hereby irrevocably authorize the Agent and the
Collateral Agent, at such party's option and in such party's discretion, to
release any Lien granted to or held, respectively, by the Agent or the
Collateral Agent upon any Collateral (i) upon termination of the Commitments
and payment and satisfaction in full of all Loans, Reimbursement Obligations
and all other Obligations which have matured and which the Agent has been
notified in writing are then due and payable; or (ii) constituting property
(including, without limitation, any past-due Receivable permitted to be sold
pursuant to Section 7.02(a)) being sold or disposed of if the Loan Party
selling or disposing of such property certifies to the Collateral Agent and the
Agent that the sale or disposition is being made in compliance with Section
7.02(a) (and the Collateral Agent and the Agent may rely conclusively on such
certificate without further inquiry, or in the case of a sale of past-due
Receivables, the Collateral Agent and the Agent may rely on the certification
of such Loan Party set forth in the Request for Release of Receivables,
delivered to the Collateral Agent and the Agent in connection with such sale,
without further inquiry); or (iii) constituting property in which the Loan
Parties owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) constituting Equipment that is refinanced by Capital
Expenditures permitted by the second proviso of Section 8.06; provided,
however, such Capital Expenditure occurs within twelve months after the initial
purchase of such Equipment by any Borrowing Subsidiary and the aggregate amount
of Capital Expenditures for such refinancing of Equipment does not exceed in
the aggregate Ten Million Dollars ($10,000,000) in any Fiscal Year; or (v)
constituting fixed assets that are sold or refinanced as party of a Permitted
Disposition; or (vi) if approved, authorized or ratified in writing by the
Agent and the Collateral Agent at the direction of the Requisite Senior
Lenders. Upon request by the Agent or the Collateral Agent at any time, the
Senior Lenders will confirm in writing the Agent's or the Collateral Agent's
authority, as the case may be, to release particular types or items of
Collateral
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pursuant to this Section 10.08(b). The Senior Lenders hereby authorize the
Collateral Agent to execute any Request for Release of Receivables delivered to
the Collateral Agent in connection with a sale of past-due Receivables made
pursuant to Section 7.02(a).
(c) Without in any manner limiting the Agent's or the
Collateral Agent's authority to act without any specific or further
authorization or consent by the Requisite Senior Lenders (as set forth in
Section 10.08(b)), each Senior Lender agrees to confirm in writing, upon
request by the Loan Parties, the authority to release Collateral conferred upon
the Agent or the Collateral Agent, as the case may be, under clauses (i)
through (v) of Section 10.08(b). So long as no Event of Default is then
continuing, upon receipt by the Agent or the Collateral Agent, as the case may
be, of any such written confirmation from the Requisite Senior Lenders of such
party's authority to release any particular items or types of Collateral, and
in any event upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, and upon at least five (5)
Business Days' prior written request by the Loan Parties, the Agent or the
Collateral Agent, as the case may be, shall (and is hereby irrevocably
authorized by the Senior Lenders to) execute such documents as may be necessary
to evidence the release of the Liens upon such Collateral granted to the Agent
or the Collateral Agent, as the case may be, for the benefit of the Senior
Lenders herein or pursuant hereto or any of the other Loan Documents; provided,
however, that (i) neither the Collateral Agent nor the Agent shall be required
to execute any such document on terms which, in the Agent's or the Collateral
Agent's respective opinion, would expose such party to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations
of the Loan Parties in respect of) all interests retained by the Loan Parties,
including (without limitation) the proceeds of any sale, all of which shall
continue to constitute part of the Collateral.
(d) Neither the Collateral Agent nor the Agent shall
have any obligation whatsoever to any Senior Lender or to any other Person to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Liens granted to
the Agent or the Collateral Agent herein or pursuant hereto have been properly
or sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent and the Collateral Agent in this Section 10.08 or in any of the
Collateral Documents, it being understood and agreed that in
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respect of the Collateral, or any act, omission or event related thereto, the
Agent and the Collateral Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's and the Collateral Agent's own
respective interests in the Collateral as one of the Senior Lenders and that
neither the Collateral Agent nor the Agent shall have any duty or liability
whatsoever to any Senior Lender.
10.09. Relations Among Senior Lenders. Each Senior Lender,
in its capacity as a Senior Lender, agrees that it will not take any action,
nor institute any actions or proceedings in connection with any of the Loan
Documents, against any Loan Party or any other obligor hereunder or with
respect to any Collateral, without the prior written consent of the Requisite
Senior Lenders.
ARTICLE XI
Miscellaneous
11.01. Concerning the Collateral and the Collateral
Documents. Each Senior Lender and the Issuing Bank authorizes and directs the
Agent and the Collateral Agent for the benefit of the Agent, the Collateral
Agent, the Issuing Bank and each Senior Lender, to enter into the Amendatory
Agreement and any amendments to the other Collateral Documents. Each Senior
Lender and the Issuing Bank agrees that any action taken by the Agent, the
Collateral Agent or the Requisite Senior Lenders, which such Persons reasonably
believe to be in accordance with the provisions of this Agreement or the
Collateral Documents, and the exercise by the Agent, the Collateral Agent or
the Requisite Senior Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Senior Lenders.
11.02. Assignments and Participations.
(a) Each Senior Lender may assign to one or more banks
or financial institutions all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Loans owing to it and the Notes payable to it); provided,
however, that (i) unless the Agent and the Collateral Agent otherwise consent,
each such assignment shall be of a constant, and not a varying, percentage of
the assigning Senior Lender's rights and obligations under this Agreement and
the assignment shall cover the same percentage of such Senior Lender's
Commitments and Revolving Loans, (ii) unless the Agent and the Collateral Agent
otherwise consents or unless as a result of such assignment the assigning
Senior Lender's rights and obligations under this Agreement in respect of
Loans, Letter of Credit Obligations and
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Commitments shall be reduced to zero, the aggregate amount of the Commitments
of the assigning Senior Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $10,000,000 (unless such
assignment is by one original signatory to this Agreement to another such
signatory) and shall be an integral multiple of $5,000,000, (iii) each such
assignment shall be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its approval, acceptance
and recording in the Register, an Assignment and Acceptance, together with
processing and recordation fee of Two Thousand Dollars ($2,000). Upon such
execution, delivery, approval acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Senior Lender hereunder and
(y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Senior Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Senior Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto; (ii) such assigning Senior Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 3.01(xxi) or delivered pursuant to
Article V and such other Loan Documents and other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, the Collateral Agent, such assigning Senior
Lender or any other Senior 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
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Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes each of the Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to each of
the Agent and the Collateral Agent, respectively, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Senior Lender.
(c) The Agent shall maintain at its address referred to
on the signature pages hereof a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in the Loan Account the names
and addresses of each Senior Lender and the Commitment of, and principal amount
of the Loans owing to, such Senior Lender from time to time. The Loan Parties,
the Agent, the Collateral Agent and the Senior Lenders may treat each Person
whose name is recorded in the Loan Account as a Senior Lender hereunder for all
purposes of this Agreement.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Senior Lender and an assignee representing that it is
an Eligible Assignee, the Agent shall, if such Assignment and Acceptance has
been properly completed and is in substantially the form of Exhibit 1, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Loan
Parties.
(e) Each Senior Lender may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments and the Loans and Letter of Credit Obligations owing
to it); provided, however, that (i) such Senior Lender's obligations under this
Agreement (including, without limitation, its Commitment, Loans and Letter of
Credit Obligations to the Borrowing Subsidiaries hereunder) shall remain
unchanged, (ii) such Senior Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Loan Parties,
the Agent, the Collateral Agent and the other Senior Lenders shall continue to
deal solely and directly with such Senior Lender in connection with such Senior
Lender's rights and obligations under this Agreement and with regard to any and
all payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement
except for voting rights with respect to the amendment or modification of those
provisions of this Agreement for which, pursuant to Section 11.08, the consent
of all the Senior Lenders would be required.
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(f) Notwithstanding anything contained in this Agreement to
the contrary, any Senior Lender may at any time (x) assign all or any portion
of its rights hereunder (including, without limitation, Obligations owing to it
and Notes held by it) to a Federal Reserve Bank and/or (y) create a security
interest in all or any portion of such rights in favor of any Federal Reserve
bank, in either case in accordance with Regulation A.
11.03. Expenses.
(a) Generally. The Loan Parties agree upon demand to
pay, or reimburse each of the Agent and the Collateral Agent for, all the
Agent's and the Collateral Agent's respective reasonable internal (except with
respect to legal costs and expenses) and external audit, legal, appraisal,
valuation and investigation expenses and for all other out-of-pocket costs and
expenses of every type and nature (including, without limitation, the
reasonable fees, expenses and disbursements of Sidley & Austin, King & Spalding
and any other attorneys retained by either the Agent or the Collateral Agent,
auditors, accountants, appraisers, investment bankers, printers, insurance
consultants, environmental advisers (including any environmental advisers
engaged pursuant to Section 5.02(c)), and other consultants and agents)
incurred by either the Agent or the Collateral Agent in connection with (A) the
Agent's or the Collateral Agent's own audit and investigation of the Company
and its Subsidiaries; (B) the negotiation, preparation and execution of this
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III), the Collateral
Documents and the other Loan Documents and the making of the Loans hereunder;
(C) the creation, perfection or protection of the Agent's and the Collateral
Agent's Liens on the Collateral (including, without limitation, any fees and
expenses for title and lien searches, local counsel in various jurisdictions,
filing and recording fees and taxes, duplication costs and corporate search
fees); (D) administration of this Agreement, the Loan Documents, the Loans and
the Collateral, including consultation with attorneys in connection therewith;
and (E) the protection, collection or enforcement of any of the Obligations or
the Collateral. The Agent and the Collateral Agent agree to make reasonable
efforts prior to the occurrence of an Event of Default to avoid duplication of
any of the costs and expenses set forth in this Section 11.03(a); provided,
however, that after the occurrence and during the continuance of an Event of
Default the Agent and the Collateral Agent may each engage separate external
attorneys, auditors, accountants, appraisers, investment bankers, printers,
insurance consultants, environmental advisers and other consultants, the costs
and expenses of which shall be reimbursed by the Loan Parties pursuant to this
Section 11.03(a).
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(b) After Default. The Loan Parties further agree to
pay, or reimburse each of the Agent, the Collateral Agent and each Senior
Lender for all out-of-pocket costs and expenses, including, without limitation,
attorneys' fees and disbursements, and costs of settlement incurred by each of
the Agent, the Collateral Agent or any Senior Lender after the occurrence of an
Event of Default (i) in enforcing any Obligation or in foreclosing against the
Collateral or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating
to the Loan Parties and related to or arising out of the transactions
contemplated hereby or by any of the Transaction Documents; (iv) in taking any
other action in or with respect to any suit or proceeding (whether in
bankruptcy or otherwise); (v) in protecting, preserving, collecting, leasing,
selling, taking possession of, or liquidating any of the Collateral; or (vi)
attempting to enforce or enforcing any security interest in any of the
Collateral or any other rights under the Collateral Documents.
11.04. Indemnity. The Loan Parties further agree to defend,
protect, indemnify, and hold harmless each of the Agent, the Collateral Agent,
each and all of the Senior Lenders, each of their respective Affiliates and
each of the respective officers, directors, employees, agents, attorneys and
consultants (including, without limitation, those retained in connection with
the satisfaction or attempted satisfaction of any of the conditions set forth
in Article III) of any of the foregoing (collectively called the "Indemnitees")
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees (whether direct, indirect or consequential
and whether based on any Federal or state laws or other statutory regulations,
including, without limitation, securities and commercial laws and regulations,
under common law or at equitable cause, or on contract or otherwise, including
any liability and costs under Federal, state or local environmental, health or
safety laws, regulations, or common law principles, arising from or in
connection with the past, present or future operations of any Loan Party or its
predecessors in interest, or the past, present or future environmental
condition of the Property, the presence of asbestos-containing materials at the
Property, or the Release or threatened Release of any Contaminant into the
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environment from the Property) in any manner relating to or arising out of this
Agreement (or any prior version of this Agreement), the Collateral Documents or
the other Loan Documents, or any act, event or transaction related or attendant
thereto, the Purchase, the First Supplemental Indenture, the New Auto
Transaction Documents, the filing, the soliciting of approvals or rejections,
and the confirmation of, the Plan of Reorganization and the implementation of
the terms thereof, the Senior Lenders' Commitments, the making of and
participation in the Loans and the management of such Loans, or the use or
intended use of the proceeds of the Loans hereunder (collectively, the
"Indemnified Matters"); provided, however, that the no Loan Party shall have
any obligation to an Indemnitee hereunder with respect to (i) matters for which
such Indemnitee has been compensated pursuant to or for which an exemption is
provided in Sections 2.04(f) and 2.08(g) or any other provision of this
Agreement and (ii) Indemnified Matters caused by or resulting from the willful
misconduct or gross negligence of that Indemnitee, as determined by a court of
competent jurisdiction. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, each Loan Party shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees.
11.05. Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to the Agent and
the Collateral Agent pursuant to the terms hereof are hereafter required or
permitted by the rules, regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions)
and are adopted by the Company with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, standards or terms found in
Article VII and Article VIII, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
changes with the desired result that the criteria for evaluating the financial
condition of the Company and its Subsidiaries shall be the same after such
changes as if such changes had not been made; provided, however, that no change
in generally accepted accounting principles that would affect the method of
calculation of any of the financial covenants, standards or terms shall be
given effect in such calculations until such provisions are amended, in a
manner satisfactory to the Requisite Senior Lenders and the Loan Parties, to so
reflect such change in accounting principles.
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11.06. Setoff. In addition to any Liens granted to the
Agent, the Collateral Agent or the Senior Lenders and any rights now or
hereafter granted under applicable law and not by way of limitation of any such
Lien or rights, upon the occurrence and during the continuance of any Event of
Default, each Senior Lender is hereby authorized by each Loan Party at any time
or from time to time, without notice to such Loan Party, or to any other Person
(any such notice being hereby expressly waived) to set off and to appropriate
and to apply any and all deposits (general or special, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured but not including trust accounts) and any other Indebtedness at
any time held or owing by that Senior Lender to or for the credit or the
account of any Loan Party against and on account of the Obligations of any Loan
Party to that Senior Lender including, but not limited to, all Loans and all
claims of any nature or description arising out of or connected with this
Agreement or any of the other Loan Documents, irrespective of whether or not
(i) that Senior Lender shall have made any demand hereunder or (ii) the Agent
shall have declared the principal of and interest on the Loans and other
amounts due hereunder to be due and payable as permitted by Article IX and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
11.07. Ratable Sharing. Subject to Sections 2.03(a)(ii),
2.03(c)(i)(B) and 2.07(b), the Senior Lenders agree among themselves that (i)
with respect to all amounts received by them which are applicable to the
payment of the Obligations (excluding the fees described in Section 2.05, but
including, without limitation, all amounts received by Citibank in respect of
its Revolving Loans pursuant to Section 2.07(a)), equitable adjustment will be
made so that, in effect, all such amounts will be shared among them ratably in
proportion to the respective principal amounts of the Loans then outstanding to
each Senior Lender (or if no Loans are outstanding, ratably according to the
respective amount of each Senior Lender's Commitment of all Senior Lenders'
Commitments), whether received by voluntary payment, by the exercise of the
right of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any or all of the Obligations (excluding the fees described in
Section 2.05) or the Collateral, (ii) if any of them shall by voluntary payment
or by the exercise of any right of counterclaim, setoff, banker's lien or
otherwise, receive payment of a proportion of the aggregate amount of the
Obligations held by it which is greater than its ratable share, determined in
proportion to the respective principal amounts of the Loans then outstanding to
each Senior Lender (or if no Loans are outstanding, ratably according to the
respective amount of each Senior Lender's Commitment of all Senior Lender
Commitments), of the payments on account of the Obligations (excluding the fees
described in Section 2.05), the one receiving such excess payment
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shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all
such recoveries with respect to such Obligations shall be applied ratably in
proportion to the respective principal amounts of the Loans then outstanding to
each Senior Lender (or if no Loans are outstanding, ratably according to the
respective amount of each Senior Lender's Commitment of all Senior Lender
Commitments); provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery.
Each Borrowing Subsidiary agrees that any Senior Lender so purchasing a
participation from another Senior Lender pursuant to this Section 11.07 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including, subject to Section 11.06, the right of setoff) with respect to such
participation as fully as if such Senior Lender were the direct creditor of
such Borrowing Subsidiary in the amount of such participation.
11.08. Amendments and Waivers. No amendment or modification
of any provision of this Agreement (including the Exhibits and Schedules) or
the other Loan Documents shall be effective without the written agreement of
the Requisite Senior Lenders and the Loan Parties, and no termination or waiver
of any provision of this Agreement or the other Loan Documents, or consent to
any departure by the Loan Parties therefrom, shall in any event be effective
without the written concurrence of the Requisite Senior Lenders, which the
Requisite Senior Lenders shall have the right to grant or withhold at their
sole discretion; except that any amendment, modification, or waiver of any
provision of Article II relating to any increase of the Commitments, to the
principal amount, the amortization and the final maturity of the Loans, to the
reduction of interest rates applicable to the Loans, to a decrease in the
amount of the fees payable pursuant hereto, to the definition of "Requisite
Senior Lenders" and "Pro Rata Share" and to the provisions contained in Section
2.03(e) and in this Section 11.08 shall be effective only if evidenced by a
writing signed by or on behalf of all Senior Lenders. No amendment,
modification, termination, or waiver of any provision of Article X or any other
provision referring to the Agent or the Collateral Agent shall be effective
without the written concurrence of the Agent or the Collateral Agent, as the
case may be. Each of the Agent or the Collateral Agent may, but shall have no
obligation to, with the concurrence of any Senior Lender, execute amendments,
modifications, waivers or consents in respect of the Loan Documents to which
the Agent or the Collateral Agent is a party on behalf of such Senior Lender.
Any
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waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on a Loan
Party in any case shall entitle such Loan Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 11.08
shall be binding on each assignee, transferee or recipient of a Senior Lender's
Commitment or Loans at the time outstanding, each future assignee, transferee
or recipient of a Senior Lender's Commitment or Loans, and, if signed by a Loan
Party, on such Loan Party.
11.09. Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of an Event of Default or Potential Event of
Default if such action is taken or condition exists.
11.10. Notices. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied, telexed or
sent by courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a
telecopy or telex or four (4) Business Days after deposit in the United States
mail (registered or certified, with postage prepaid and properly addressed).
Notices to the Agent and the Collateral Agent pursuant to Article II shall not
be effective until received by the Agent and the Collateral Agent, as the case
may be. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 11.10)
shall be as set forth below each party's name on the signature pages hereof,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties.
11.11. Survival of Warranties and Agreements. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement (or any prior version of this
Agreement) and the other Loan Documents and the making and repayment of the
Loans hereunder.
11.12. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of the Agent, the Collateral Agent
or any Senior Lender in the exercise of any power, right or privilege under any
of the Loan Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege
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preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under the Loan Documents are
cumulative to and not exclusive of any rights or remedies otherwise available.
11.13. Termination. Upon the termination in whole of the
Commitments pursuant to the terms of this Agreement, each Loan Party shall pay
to the Agent an amount equal to any and all Obligations then outstanding owing
by such Loan Party.
11.14. Marshalling; Recourse to Security; Payments Set
Aside. None of the Senior Lenders, the Agent or the Collateral Agent shall be
under any obligation to marshall any assets in favor of the Loan Parties or any
other party or against or in payment of any or all of the Obligations.
Recourse to security shall not be required at any time. To the extent that any
Loan Party makes a payment or payments to the Agent, the Collateral Agent or
the Senior Lenders or the Agent, the Collateral Agent or the Senior Lenders
enforce their security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, right and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
11.15. Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
11.16. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.
11.17. Governing Law. This Agreement shall be governed by,
and shall be construed and enforced in accordance with, the laws of the State
of New York.
11.18. Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by any Loan Party, any Senior Lender or
other Person against the Agent, the Collateral Agent or any Senior Lender or
their respective Affiliates,
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directors, officers, employees, attorneys or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and each Loan Party and
each Senior Lender hereby waives, releases and agrees not to sue upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
11.19. Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Senior Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any assignee or
transferee of the Loans and Commitments of any Senior Lender, and in the event
of such transfer or assignment, the rights and privileges herein conferred upon
Senior Lenders shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. No Loan Party's
rights or any interest therein hereunder, and no Loan Party's duties and
Obligations hereunder, may be assigned without the written consent of the
Requisite Senior Lenders.
11.20. Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, SUCH LOAN PARTY ACCEPTS, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES
TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FROM WHICH NO APPEAL HAS BEEN
TAKEN OR IS AVAILABLE. EACH LOAN PARTY IRREVOCABLY DESIGNATES AND APPOINTS THE
COMPANY, C/O ODYSSEY PARTNERS, L.P., 31 W. 52ND STREET, NEW YORK, NEW YORK,
10019, ATTENTION: ALAIN OBERROTMAN, AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. EACH LOAN PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
ITS RESPECTIVE NOTICE ADDRESSES SPECIFIED ON THE SIGNATURE PAGES HEREOF, SUCH
SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. EACH OF THE LOAN
PARTIES, THE COLLATERAL AGENT, THE AGENT AND THE SENIOR LENDERS IRREVOCABLY
WAIVES (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT
LIMITATION,
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ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
ANY SENIOR LENDER, THE AGENT OR THE COLLATERAL AGENT TO BRING PROCEEDINGS
AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
11.21. Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument. On the Effective Date the Existing Credit Agreement shall
be amended and restated in its entirety by this Agreement and the Existing
Credit Agreement shall thereafter be of no force and effect except as to
evidence the incurrence by the Loan Parties of the Obligations thereunder. The
terms and conditions of this Agreement, and the Agent's, the Collateral Agent's
and the Senior Lenders' rights and remedies under this Agreement, shall apply
to all of the Obligations incurred under the Existing Credit Agreement. It is
expressly understood and agreed by the parties hereto that this Agreement is in
no way intended to constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
of such obligations and liabilities. This Agreement and each of the other Loan
Documents shall be construed to the extent reasonable to be consistent one with
the other, but to the extent that the terms and conditions of this Agreement
are actually inconsistent with the terms and conditions of any other Loan
Document, this Agreement shall govern.
11.22. Performance of Obligations. Each Loan Party agrees
that each of the Agent and the Collateral Agent may, but shall have no
obligation to, make any payment or perform any act required of such Loan Party
under any Loan Document or take any other action which either the Agent or the
Collateral Agent in its sole discretion deems necessary or desirable to protect
or preserve the Collateral, including, without limitation, any action to (i)
pay or discharge taxes, liens, security interests or other encumbrances levied
or placed on or threatened against any Collateral and (ii) effect any repairs
or obtain any insurance called for by the terms of any of the Loan Documents
and to pay all or any part of the premiums therefor and the costs thereof.
11.23. Company as Agent for Borrowing Subsidiaries. Each
Borrowing Subsidiary hereby designates and appoints the Company as the agent of
such Borrowing Subsidiary, and each Borrowing Subsidiary irrevocably authorizes
the Company, to
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execute and deliver such Notices of Borrowing, Notices of
Conversion/Continuation or other notices required hereunder on behalf of such
Borrowing Subsidiary. Any notice required to be delivered to any Loan Party
hereunder shall be deemed delivered to each Loan Party if delivered to the
Company in accordance with the terms hereof. The Company hereby accepts such
designation as agent for the Borrowing Subsidiaries and agrees to act thereas
until all Obligations have been paid in full and this Agreement has been
terminated. Each Borrowing Subsidiary agrees not to revoke, modify or withdraw
such designation until all Obligations have been paid in full and this
Agreement has been terminated.
11.24. Construction. The parties acknowledge that each
party and its counsel have reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments or exhibits hereto.
11.25. Entire Agreement. This Agreement, taken together
with all of the other Loan Documents and all certificates and other documents
delivered by any Loan Party to the Agent, the Collateral Agent or the Senior
Lenders, embody the entire agreement and supersede all prior agreements,
written and oral, relating to the subject matter hereof.
11.26. Releases. In further consideration of the Senior
Lenders' execution of this Agreement, each of the Company and the Borrowing
Subsidiaries hereby releases each of the Agent, the Collateral Agent and each
Senior Lender and their respective affiliates, officers, employees, directors,
agents and attorneys (collectively, the "Releasees") from any and all claims,
demands, liabilities, responsibilities, disputes, causes of action (whether at
law or equity) and obligations of every nature whatsoever, whether liquidated
or unliquidated, known or unknown, matured or unmatured, fixed or contingent
that any of the Loan Parties may have against the Releasees which arise from or
relate to any actions, or inactions which the Releasees may have taken prior to
the date hereof with respect to the Obligations, any Collateral, the Credit
Agreement, any Loan Document and any third parties liable in whole or in part
for the Obligations.
11.27. Consent of the Senior Lenders. Notwithstanding
anything contained in this Agreement or any other Loan Document to the
contrary:
(a) The Senior Lenders hereby consent to the transactions
contemplated by the New Auto Transaction Documents, including, without
limitation, (i) the sale of substantially all of the assets of JPS Auto and
certain assets of JCIC, subject to certain liabilities, to New Auto pursuant to
the New Auto Asset Purchase Agreement, (ii) the conveyance of a fee interest in
a
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portion of the Dunean plant located in Greenville County, South Carolina from
JCIC to New Auto pursuant to the New Auto Asset Purchase Agreement, (iii) the
execution of the Dunean Operating Agreement and (iv) the subordination of the
Collateral Documents covering the Dunean plant referred to in clause (ii) above
to the Dunean Operating Agreement; provided, however, that the Net Cash
Proceeds received by JPS Auto or any Loan Party in connection with such
transactions shall be applied first to the repayment of the Obligations
pursuant to Section 2.06(b) of this Agreement.
(b) The Senior Lenders hereby consent to the formation of
Newsub.
(c) The Senior Lenders hereby instruct and direct the Agent
and the Collateral Agent, upon the consummation of the transactions
contemplated by the New Auto Asset Purchase Agreement, (x) to execute all
consents and other documents called for by the Senior Note Indenture or by the
indentures governing the Subordinated Indebtedness in connection with the
defeasance and redemption of the Senior Notes and the redemptions of the
Subordinated Indebtedness contemplated by this Agreement and (y) to release all
Liens made in favor of the Agent and/or the Collateral Agent on the Automotive
Assets, to release the Agent and the Collateral Agent as loss payee or
co-insured, as the case may be, on any insurance policies covering the
Automotive Assets, to subordinate the Collateral Documents covering the Dunean
plant referred to in subsection (a) above to the Dunean Operating Agreement and
to take all actions as may be appropriate (including, without limitation, the
filing of releases with respect to Uniform Commercial Code financing
statements) in connection therewith.
-143-
151
IN WITNESS WHEREOF, this Agreement has been duly executed on
the date set forth above.
JPS TEXTILE GROUP, INC.
By:________________________________
Title:
JPS CARPET CORP.
By:________________________________
Title:
JPS CONVERTER AND INDUSTRIAL CORP.
By:________________________________
Title:
JPS ELASTOMERICS CORP.
By:________________________________
Title:
Notice Address:
c/o JPS Textile Group, Inc.
555 North Pleasantburg Drive
Greenville, South Carolina 29607
Attention: David H. Taylor
Telecopy: (803) 271-9939
With copies to:
c/o Odyssey Partners, L.P.
31 W. 52nd Street
New York, New York 10019
Attention: Alain Oberrotman
Telecopy: (212) 708-0750
and
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Attention: Lois C. Rubin, Esq.
Telecopy: (212) 310-8007
152
CITIBANK, N.A., As Agent, and as a
Senior Lender
By:________________________________
Vice President
Notice Address:
If sent by mail to:
Citibank, N.A.
399 Park Avenue
Floor 6, Zone 4
New York, New York 10043
Attention: Peter A. Briggs
Vice President
Telecopy: (212) 793-1290
With a copy to:
Sidley & Austin
875 Third Avenue
New York, New York 10022
Attention: Daniel S. Dokos, Esq.
Telecopy: (212) 906-2021
S-2
153
GENERAL ELECTRIC CAPITAL CORPORATION,
As Collateral Agent and as
a Senior Lender
By:________________________________
Title:
Notice Address:
General Electric Capital
Corporation
501 Merritt Seven, 3rd Floor
Norwalk, Connecticut 06851
Attention: Rick Luck
Telecopy: (203) 840-4560
With copies to:
General Electric Capital
Corporation
501 Merritt Seven, 3rd Floor
Norwalk, Connecticut 06851
Attention: Preston H. Abbott, Esq.
Telecopy: (203) 840-4520
and
Sidley & Austin
875 Third Avenue
New York, New York 10022
Attention: Daniel S. Dokos, Esq.
Telecopy: (212) 906-2021
S-3
154
HELLER FINANCIAL, INC.
By:________________________________
Title:
Notice Address:
Heller Financial, Inc.
101 Park Avenue, 10th Floor
New York, New York 10178
Attention: Frank J. Ross
Telecopy: (212) 880-2057
S-4
155
THE BANK OF NEW YORK COMMERCIAL
CORPORATION
By:________________________________
Title:
Notice Address:
The Bank of New York Commercial
Corporation
530 Fifth Avenue, 3rd Floor
New York, New York 10036
Attention: Michael Lustbader
Telecopy: (212) 852-4013
S-5
156
NATIONSBANK OF GEORGIA, N.A.
By:________________________________
Title:
Notice Address:
If sent by mail to:
NationsBank of Georgia, N.A.
P.O. Box 3406
Atlanta, Georgia 30302
Attention: Elizabeth Mills
Or, if sent by courier, to:
NationsBank of Georgia, N.A.
600 Peachtree Street, N.E.
13th Floor
Atlanta, Georgia 30308
Attention: Elizabeth Mills
Telecopy: (404) 607-6439
S-6
157
SUN LIFE INSURANCE COMPANY OF AMERICA
By:________________________________
Title:
Notice Address:
Sun Life Insurance Company
of America
One Sun America Center
Century City
Los Angeles, California 90067
Attention: Michael J. Campbell
Telecopy: (310) 772-6078
S-7
158
Acknowledgment and agreement referred to
in the final sentence of the first paragraph of the
preceding Credit Agreement:
JPS AUTO INC.
By:______________________________
Title:
S-8