UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For Quarter Ended June 30, 1996
Commission File Number 0-23876
JEFFERSON SMURFIT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 43-1531401
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
8182 Maryland, St. Louis, Missouri 63105
(Address of principal executive offices) (Zip Code)
(314) 746-1100
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1996, the registrant had outstanding
110,989,156 shares of common stock, $.01 par value per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 844 $1,083 $ 1,760 $ 2,069
Costs and expenses
Cost of goods sold 689 855 1,400 1,654
Selling and administrative expenses 63 63 130 124
Income from operations 92 165 230 291
Other income (expense)
Interest expense (48) (59) (99) (122)
Other, net 2
Income before income taxes and
extraordinary item 44 106 131 171
Provision for income taxes 17 40 51 66
Income before extraordinary item 27 66 80 105
Extraordinary item
Loss from early extinguishment of debt,
net of income tax benefits (4) (4)
Net income $ 23 $ 66 $ 76 $ 105
Per share of common stock:
Income before extraordinary item $ .24 $ .60 $ .72 $ .95
Extraordinary item (.04) (.04)
Net income $ .20 $ .60 $ .68 $ .95
Weighted average shares outstanding 111 111 111 111
See note to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
<CAPTION>
June 30, December 31,
1996 1995
ASSETS (unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 12 $ 27
Receivables, less allowances of
$9 in 1996 and 1995 308 339
Inventories
Work-in-process and finished goods 87 85
Materials and supplies 108 139
195 224
Deferred income taxes 38 45
Prepaid expenses and other current assets 7 9
Total current assets 560 644
Net property, plant and equipment 1,457 1,456
Timberland, less timber depletion 260 258
Goodwill, less accumulated amortization of
$46 in 1996 and $42 in 1995 249 253
Other assets 169 172
$ 2,695 $ 2,783
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current maturities of long-term debt $ 21 $ 81
Accounts payable 289 290
Accrued compensation and payroll taxes 101 101
Interest payable 29 37
Other accrued liabilities 106 88
Total current liabilities 546 597
Long-term debt, less current maturities 2,002 2,111
Other long-term liabilities 225 234
Deferred income taxes 333 328
Stockholders' deficit
Preferred stock, par value $.01 per share;
50,000,000 shares authorized; none issued
and outstanding
Common stock, par value $.01 per share;
250,000,000 shares authorized; 110,989,156
issued and outstanding in 1996 and 1995 1 1
Additional paid-in capital 1,168 1,168
Retained earnings (deficit) (1,580) (1,656)
Total stockholders' deficit (411) (487)
$ 2,695 $ 2,783
</TABLE>
See note to consolidated financial statements.
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
<CAPTION>
Six months ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities
Net income $ 76 $ 105
Adjustments to reconcile net income to
net cash provided by operating activities
Extraordinary loss from early extinguishment of debt 7 1
Depreciation, depletion and amortization 67 69
Amortization of deferred debt issuance costs 7 7
Deferred income taxes 12 59
Non-cash employee benefit (income) expense 6 (4)
Change in current assets and liabilities,
net of effects from acquisitions
Receivables 31 (88)
Inventories 29 (51)
Prepaid expenses and other current assets 2 (2)
Accounts payable and accrued liabilities 5 41
Interest payable (7) (12)
Income taxes payable 1 (1)
Other, net (4) (3)
Net cash provided by operating activities 232 121
Cash flows from investing activities
Property additions (54) (73)
Timberland additions (11) (10)
Construction funds held in escrow (9)
Investment in affiliates and acquisitions (5)
Proceeds from property and timberland disposals 5 3
Net cash used for investing activities (69) (85)
Cash flows from financing activities
Proceeds from long-term borrowings 260 221
Repayment of long-term debt (432) (309)
Deferred debt issuance costs (6) (3)
Net cash used for financing activities (178) (91)
Decrease in cash and cash equivalents (15) (55)
Cash and cash equivalents
Beginning of period 27 62
End of period $ 12 $ 7
</TABLE>
See note to consolidated financial statements.
<PAGE>
JEFFERSON SMURFIT CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except share data)
(Unaudited)
1. -- Basis of Presentation
The accompanying consolidated financial statements of Jefferson
Smurfit Corporation ("JSC" or the "Company") have been prepared in
accordance with the instructions to Form 10-Q and reflect all
adjustments which management believes necessary (which include only
normal recurring accruals) to present fairly the financial position
and results of operations. These statements, however, do not
include all information and footnotes necessary for a complete
presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles.
Interim results may not necessarily be indicative of results which
may be expected for any other interim period or for the year as a
whole. For further information refer to the consolidated financial
statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed on March 8,
1996 with the Securities and Exchange Commission.
JSC owns 100% of the equity interest in JSCE, Inc. JSC has no
operations other than its investment in JSCE, Inc. JSCE, Inc. owns
100% of the equity interest in Jefferson Smurfit Corporation (U.S.)
("JSC (U.S.)"). JSC (U.S.) has extensive operations throughout the
United States. JSCE, Inc. has no operations other than its
investment in JSC (U.S.).
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<TABLE>
Results of Operations
<CAPTION>
(In millions) Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales
Paperboard/Packaging Products $ 770 $ 992 $1,591 $1,898
Newsprint 74 91 169 171
Total net sales $ 844 $1,083 $1,760 $2,069
Income from operations
Paperboard/Packaging Products $ 73 $ 158 $ 185 $ 281
Newsprint 19 7 45 10
Total income from operations $ 92 $ 165 $ 230 $ 291
</TABLE>
For the six months ended June 30, 1996, net sales of the Company
were $1,760 million, a decrease of 14.9% compared to the same
period last year. The decrease in net sales was due primarily to
lower prices for containerboard and reclamation products. Income
from operations was $230 million, a decrease of 21.0% compared to
last year. The decrease in income from operations was due
primarily to the lower prices for containerboard products. Lower
fiber cost at the Company's recycled paper mills partially offset
the lower pricing for containerboard products.
Increases (decreases) in sales for each of the Company's segments
are discussed below.
<TABLE>
<CAPTION>
(In millions) Change in net sales analysis
Three months Six months
1996 compared to 1995 1996 compared to 1995
<S> <C> <C>
Sales price and product mix
Paperboard/Packaging Products $(234) $(291)
Newsprint 4 31
(230) (260)
Sales volume
Paperboard/Packaging Products 27 10
Newsprint (21) (33)
6 (23)
Acquisitions and new facilities 1 2
Closed or sold facilities (16) (28)
Total net sales increase (decrease) $(239) $(309)
</TABLE>
Paperboard/Packaging Products Segment Sales
Net sales of the Paperboard/Packaging Products segment for the six
months ended June 30, 1996 were $1,591 million, a decrease of 16.2%
compared to last year. The decrease was due primarily to lower
prices for containerboard and reclamation products.
<PAGE>
Net sales of containerboard and corrugated shipping containers in
the first half of 1996 decreased 13.6% compared to 1995 due
primarily to lower prices resulting from weak market conditions.
Demand for containerboard declined compared to last year, and the
Company took downtime at a containerboard mill in order to reduce
excess inventories. Linerboard prices declined steadily from
approximately $490/ton at December 31, 1995 to approximately
$350/ton at June 30, 1996. The Company's shipments of corrugated
shipping containers in the first half of 1996 declined 1.6%
compared to the same period last year.
Net sales of reclamation products in the first half of 1996
decreased 55.7% compared to 1995, due primarily to sales prices.
The price of reclaimed fiber decreased significantly compared to
last year due to lower demand as a result of extensive mill
downtime taken by paper mills in the containerboard and newsprint
industries this year.
Net sales of the Company's other major products in the
Paperboard/Packaging Products segment in the first half of 1996
were comparable to last year.
Newsprint Segment Sales
Net sales of the Newsprint segment for the six months ended June
30, 1996 were $169 million, a decrease of 1.2% compared to last
year. The favorable impact of higher sales prices in 1996 was
offset by lower sales volume resulting from mill shutdowns. The
Company took downtime at its newsprint mills in response to reduced
demand in 1996.
Costs and Expenses
Cost of goods sold as a percent of net sales for the six months
ended June 30 declined from 80.8% in 1995 to 80.5% in 1996 for the
Paperboard/Packaging Products segment and declined from 90.5% in
1995 to 70.7% in 1996 for the Newsprint segment. The decrease in
the Newsprint segment was due primarily to higher sales prices.
Selling and administrative expenses as a percent of net sales for
the six months ended June 30 increased from 6.0% in 1995 to 7.4% in
1996. The increase was due primarily to overall lower sales
prices, higher personnel costs and inflationary increases in other
costs.
Interest expense for the six months ended June 30, 1996 declined
$23 million to $99 million primarily due to lower average debt
levels outstanding and lower effective interest rates.
The Company has evaluated the $25 million reserve, taken in the
fourth quarter of 1995, which related to quality issues in a non-
core product line. The Company has implemented a program of
corrective action to respond to these issues. Based on experience
to date, the Company believes the reserve is adequate.
In the first quarter of 1996, the Company adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", the effect of which was immaterial.
<PAGE>
<TABLE>
<CAPTION>
Statistical Data Three months ended Six months ended
(In thousands of tons, June 30, June 30,
except as noted) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Mill production:
Containerboard 480 476 953 953
Recycled boxboard and
solid bleached sulfate 185 195 381 391
Newsprint 123 151 275 307
Corrugated shipping containers
sold (billion square feet) 7.5 7.4 14.7 14.9
Folding cartons sold 111 115 232 233
Fiber reclaimed and brokered 1,056 1,123 2,135 2,195
</TABLE>
Liquidity and Capital Resources
Operating activities have historically been the major source of
cash to fund the Company's capital expenditures and debt payments.
Net cash provided by operating activities for the six months ended
June 30, 1996 of $232 million and excess cash at the end of 1995
were used primarily to fund capital investments of $65 million and
to reduce debt by $172 million.
In May 1996 Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)")
amended its bank credit facility (the "1994 Credit Agreement") to
allow an additional $100 million borrowing under the Tranche B Term
Loan and $150 million borrowing under a newly created Tranche C
Term Loan. The $250 million in new proceeds of these term loans was
used to reduce scheduled installment payments of the Tranche A Term
Loan. After application of such proceeds, the principal amounts
remaining outstanding under the 1994 Credit Agreement for the years
1997, 1998 and 1999 are approximately $20 million, $19 million and
$100 million, respectively. JSC (U.S.) has prepaid its 1996
principal obligations under the 1994 Credit Agreement. JSC (U.S.)
expects its annual interest cost to increase by approximately $4
million as a result of the new borrowings. The refinancing will
provide additional financial flexibility to JSC (U.S.) by extending
maturities.
The 1994 Credit Agreement includes a $450 million revolving credit
facility, a Tranche A Term Loan, a Tranche B Term Loan and a
Tranche C Term Loan. The 1994 Credit Agreement contains various
business and financial covenants including, among other things, (i)
limitations on dividends, redemptions and repurchases of capital
stock, (ii) limitations on the incurrence of indebtedness, liens,
leases and sale-leaseback transactions, (iii) limitations on
capital expenditures, (iv) maintenance of minimum levels of
consolidated earnings before depreciation, interest, taxes and
amortization, and (v) maintenance of minimum interest coverage
ratios. Such restrictions, together with the highly leveraged
position of the Company, could restrict corporate activities,
including the Company's ability to respond to market conditions, to
provide for unanticipated capital expenditures or to take advantage
of business opportunities.
At June 30, 1996, JSC (U.S.) had $338 million in unused borrowing
capacity pursuant to the revolving credit facility under the 1994
Credit Agreement. In addition, Jefferson Smurfit Finance
Corporation ("JSFC") had borrowing capacity of $109 million under
its accounts receivable securitization program, subject to JSC
(U.S.)'s level of eligible accounts receivable. The Company
believes that cash provided by operating activities and available
financing sources will be sufficient for the next several years to
pay interest on the Company's obligations, amortize its term loans
and fund anticipated capital expenditures.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Registrant's Annual Meeting of Stockholders was held on
May 9, 1996. At the meeting, stockholders voted on (i) the
election of three directors for terms of office expiring at
the annual meeting of stockholders in 1999; (ii) the
ratification of the appointment of Ernst & Young LLP as
independent auditors of the Company for 1996 and (iii) the
adoption of the Company's Management Incentive Plan
("MIP"). Voting on each matter was as follows:
<TABLE>
<CAPTION>
Votes Votes Withheld/ Broker
For Against Abstentions Non-Votes
<S> <C> <C> <C> <C>
1. Election of Directors
Alan E. Goldberg 104,222,507 378,357
Howard E. Kilroy 104,224,737 376,127
James R. Thompson 104,221,607 379,257
2. Ratification of Auditors 104,542,748 17,626 40,490
3. Adoption of MIP 102,103,130 183,601 65,341 2,248,792
</TABLE>
Item 5. Other Information
Mr. James E. Terrill, President and Chief Executive Officer
of the Company since 1994, will retire at the end of 1996.
He will afterwards serve as Vice Chairman of the Board of
Directors.
Mr. Richard W. Graham has been promoted from Senior Vice
President to President of the Company effective July 1,
1996. Upon Mr. Terrill's retirement at year-end, Mr.
Graham will assume the additional role of Chief Executive
Officer.
Mr. Eric Priestley, formerly President and Chief Executive
Officer of Rexam, Inc., a U.S. producer of packaging, print
and coated products and a subsidiary of Rexam plc, will
join the Company effective August 1, 1996, as Executive
Vice President - Chief Operating Officer.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) The following exhibits are included in this Form 10-Q.
10.1 Credit Agreement, amended and restated as of May 17, 1996,
among Jefferson Smurfit Corporation ("JSC"), JSCE, Inc.
("JSCE"), JSC (U.S.) and the banks parties thereto.
10.2 Amendment Agreement dated as of May 17, 1996 among JSC,
JSCE, JSC (U.S.), Smurfit Newsprint Corporation ("SNC")
and the banks parties thereto.
10.3 First Omnibus Amendment dated as of March 31, 1996 among
JSC (U.S.), JSFC and the banks parties thereto.
10.4 Affiliate Receivables Sale Agreement dated as of March 31,
1996 between SNC and JSC.
11.1 Calculation of Per Share Earnings.
27.1 Financial Data Schedule.
b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the three months ended June 30, 1996.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JEFFERSON SMURFIT CORPORATION
(Registrant)
Date July 31, 1996 /s/ John R. Funke
John R. Funke
Vice President
and Chief Financial Officer
Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000919226
<NAME> JEFFERSON SMURFIT CORPORATION
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 12
<SECURITIES> 0
<RECEIVABLES> 317
<ALLOWANCES> 9
<INVENTORY> 195
<CURRENT-ASSETS> 560
<PP&E> 2259
<DEPRECIATION> 802
<TOTAL-ASSETS> 2695
<CURRENT-LIABILITIES> 546
<BONDS> 2002
1
0
<COMMON> 0
<OTHER-SE> (411)
<TOTAL-LIABILITY-AND-EQUITY> 2695
<SALES> 1760
<TOTAL-REVENUES> 1760
<CGS> 1400
<TOTAL-COSTS> 1400
<OTHER-EXPENSES> 130
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99
<INCOME-PRETAX> 131
<INCOME-TAX> 51
<INCOME-CONTINUING> 80
<DISCONTINUED> 0
<EXTRAORDINARY> (4)
<CHANGES> 0
<NET-INCOME> 76
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
</TABLE>
EXHIBIT 11.1
<TABLE>
JEFFERSON SMURFIT CORPORATION
CALCULATION OF PER SHARE EARNINGS
(In millions, except per share data)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary earnings per share <fn1>
Weighted average shares outstanding 111 111 111 111
Income applicable to common shares
before extraordinary item $ 27 $ 66 $ 80 $ 105
Extraordinary item (4) (4)
Net income applicable to common shares $ 23 $ 66 $ 76 $ 105
Per share amounts
Income before extraordinary item $ .24 $ .60 $ .72 $ .95
Extraordinary item (.04) (.04)
Net income applicable to common shares $ .20 $ .60 $ .68 $ .95
Fully diluted earnings per share <fn1>
Weighted average shares outstanding 111 111 111 111
Income applicable to common shares
before extraordinary item $ 27 $ 66 $ 80 $ 105
Extraordinary item (4) (4)
Net income applicable to common shares $ 23 $ 66 $ 76 $ 105
Per share amounts
Income before extraordinary item $ .24 $ .60 $ .72 $ .95
Extraordinary item (.04) (.04)
Net income applicable to common shares $ .20 $ .60 $ .68 $ .95
<FN>
<fn1>The computations do not include common stock equivalents associated
with stock options since the dilutive effect on earnings per share
is not material.
</FN>
</TABLE>
CREDIT AGREEMENT dated as of May 11, 1994, as amended and
restated as of May 17, 1996, among JEFFERSON SMURFIT
CORPORATION, a Delaware corporation ("JSC"); JSCE, INC., a
Delaware corporation ("JSCE"); JEFFERSON SMURFIT CORPORATION
(U.S.), a Delaware corporation (formerly named Container
Corporation of America ("CCA")); the Lenders (as defined in
Article I); the Managing Agents (as defined in Article I);
CHEMICAL BANK, a New York banking corporation ("Chemical
Bank"), and BANKERS TRUST COMPANY, a New York banking
corporation ("BTCo"), as senior managing agents (in such
capacity, each a "Senior Managing Agent") for the Lenders;
BTCo and the other Lenders identified herein as fronting
banks; Chemical Bank, as swingline lender (in such capacity,
the "Swingline Lender"); and Chemical Bank, as administrative
agent (in such capacity, the "Administrative Agent") and
collateral agent (in such capacity, the "Collateral Agent")
for the Lenders, the Fronting Bank (as defined below) and the
Swingline Lender.
JSC, its direct wholly owned Subsidiary formerly named
Jefferson Smurfit Corporation (U.S.) ("Old JSCUS"), CCA, the
lenders party thereto (the "Original Lenders"), the Senior Managing
Agents, the Swingline Lender, the Fronting Bank, the Administrative
Agent and the Collateral Agent executed and delivered a Credit
Agreement dated as of May 11, 1994 (as heretofore amended, the
"1994 Credit Agreement"), pursuant to which the Original Lenders,
the Swingline Lender and the Fronting Bank extended and agreed to
extend credit to Old JSCUS and CCA. Pursuant to the 1994 Credit
Agreement, (a) certain of the Original Lenders (i) made Tranche A
Term Loans (such term and each other capitalized term used but not
defined in this introductory statement having the meaning assigned
to it in Article I) to CCA in the aggregate principal amount of
$900,000,000, (ii) made Tranche B Term Loans to CCA in the
aggregate principal amount of $300,000,000 and (iii) agreed to make
Revolving Loans to Old JSCUS and CCA at any time and from time to
time prior to the Revolving Credit Maturity Date, in an aggregate
principal amount at any time outstanding not to exceed the excess
of $450,000,000 over the sum of (A) the aggregate principal amount
of the Swingline Loans outstanding at such time, (B) the LC
Exposure at such time and (C) the Unsecured LC Exposure at such
time, (b) the Swingline Lender agreed to make, on a revolving
basis, at any time and from time to time prior to the Revolving
Credit Maturity Date, Swingline Loans in an aggregate principal
amount at any time outstanding not to exceed $25,000,000 and
(c) the Fronting Bank agreed to issue Letters of Credit, on the
terms and subject to the conditions thereof, in an aggregate face
amount at any time outstanding not in excess of $150,000,000.
As of December 31, 1994, (i) pursuant to Section 7.12 of the
1994 Credit Agreement, JSCE assumed all the obligations of Old
JSCUS under the Loan Documents; (ii) pursuant to Section 7.05 of
the 1994 Credit Agreement, Old JSCUS merged with and into CCA, with
CCA surviving such merger, and (iii) CCA changed its name to
Jefferson Smurfit Corporation (U.S.) (referred to in this Agreement
as the "Borrower").
Pursuant to the Amendment Agreement, the Borrower has
requested that the Additional Lenders agree, on the terms and
subject to the conditions of the Amendment Agreement and this
Agreement, to make Additional Tranche B Term Loans in an aggregate
principal amount not to exceed $100,000,000 and Tranche C Term
Loans (together with the Additional Tranche B Term Loans, the
"Additional Term Loans") in an aggregate principal amount not to
exceed $150,000,000.
The Borrower has also requested that the 1994 Credit Agreement
be amended and restated in the form hereof.
On the Restatement Closing Date, the Borrower will use the
entire amount of the proceeds of the Additional Term Loans to
prepay a portion of the Tranche A Term Loans outstanding on such
date in accordance with the Amendment Agreement. The proceeds of
Revolving Credit Borrowings and Swingline Loans will be used for
the general corporate purposes of the Borrower and its
Subsidiaries. Letters of Credit will be used to support obligations
of the Borrower and its Subsidiaries incurred in the ordinary
course of their business.
Accordingly, JSC, JSCE, the Borrower, the Lenders, the
Managing Agents, the Senior Managing Agents, the Fronting Bank, the
Swingline Lender, the Administrative Agent and the Collateral Agent
agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Borrowing" shall mean a Borrowing comprised
of ABR Revolving Loans.
"ABR Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base
Rate in accordance with the provisions of Article II.
"ABR Spread" shall mean (a) with respect to Tranche A Term
Loans and Revolving Loans, 1-1/2% per annum, subject to
adjustment pursuant to Section 2.06(c), (b) with respect to
Tranche B Term Loans and Additional Tranche B Term Loans, 2% per
annum, and (c) with respect to Tranche C Term Loans, 2-1/4% per
annum.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR
Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Additional Lenders" shall mean the Additional Tranche B
Lenders and the Tranche C Lenders.
"Additional Mortgages" shall mean the mortgages, deeds of
trust, leasehold mortgages, assignments of leases and rents,
modifications and other security documents delivered pursuant to
Section 9(h) of the Amendment Agreement or pursuant to Section 6.10
or Section 7.12, each substantially in the form of Exhibit F, as
the same may be amended, restated, supplemented, modified or waived
from time to time.
"Additional Term Loans" shall have the meaning assigned to
such term in the introductory statement.
"Additional Tranche B Commitment" shall mean, with respect to
each Additional Lender, the commitment of such Additional Lender to
make Additional Tranche B Term Loans to the Borrower as set forth
in Section 3(a) of the Amendment Agreement, as the same may be
reduced from time to time pursuant to Section 2.09.
"Additional Tranche B Lenders" shall mean the Lenders having
Additional Tranche B Commitments or outstanding Additional Tranche
B Term Loans.
"Additional Tranche B Term Loan Repayment Date" shall have the
meaning set forth in Section 2.11(a)(iii).
"Additional Tranche B Maturity Date" shall mean April 30,
2002.
"Additional Tranche B Term Loans" shall mean the term loans
made by the Lenders to the Borrower pursuant to Section 3(a) of the
Amendment Agreement. Each Additional Tranche B Term Loan shall be
either a Eurodollar Term Loan or an ABR Term Loan.
"Adjusted LIBO Rate" shall mean, with respect to any Euro-
dollar Borrowing for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the product of (a) the LIBO Rate in effect for such Interest
Period and (b) Statutory Reserves. For purposes hereof, the term
"LIBO Rate" shall mean the average of the respective rates per
annum at which dollar deposits approximately equal in principal
amount to the Administrative Agent's portion of such Eurodollar
Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent
in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period.
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B.
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. For purposes of this
definition, neither any Lender nor any Affiliate of a Lender shall
be deemed to be an Affiliate of JSC or any of its Subsidiaries
solely by reason of its ownership of or right to vote any
Indebtedness of JSC or any of its Subsidiaries.
"After-Acquired Mortgage Property" shall have the meaning
assigned to such term in Section 6.05(d).
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof, the term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being
effective. The term "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) Statutory
Reserves and (b) the Assessment Rate. The term "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during
the week following such day) or, if such rate shall not be so
reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New
York City negotiable certificate of deposit dealers of recognized
standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms thereof,
the Alternate Base Rate shall be determined without regard to
clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate, the Three-
Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Amendment Agreement" shall mean the Amendment Agreement dated
as of May 17, 1996, effecting the amendment and restatement of this
Agreement.
"Applicable Percentage" of any Participating Lender shall mean
the percentage of the aggregate Revolving Credit Commitments
represented by such Participating Lender's Revolving Credit
Commitment.
"Approved Currency Agreement" shall mean any Currency
Agreement entered into by the Borrower or any of its Subsidiaries
with a Lender pursuant to one or more hedging plans of the Borrower
and its Subsidiaries approved by the Administrative Agent after
consultation with the Borrower.
"Approved Rate Protection Agreement" shall mean any Rate
Protection Agreement entered into by the Borrower or any of its
Subsidiaries with a Lender pursuant to one or more hedging plans of
the Borrower and its Subsidiaries approved by the Administrative
Agent after consultation with the Borrower.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Administrative Agent as the then-current
net annual assessment rate that will be employed in determining
amounts payable by the Administrative Agent to the Federal Deposit
Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in dollars at
the Administrative Agent's domestic offices.
"Asset Sale" shall mean the sale, transfer or other
disposition by any Loan Party or any of its Subsidiaries to any
Person other than any Loan Party of (a) any capital stock other
than Margin Stock; (b) substantially all the assets of any
geographic or other division or line of business of any Loan Party
or any of its Subsidiaries; or (c) any Real Property or a portion
of any Real Property or any other asset or assets (excluding any
assets manufactured, constructed or otherwise produced or purchased
for sale to others in the ordinary course of business and any
Program Receivables) of any Loan Party or any of its Subsidiaries,
provided that (i) any asset sale described in clause (c) above
shall be deemed not to be an "Asset Sale" until the aggregate
amount of all such sales after the 1994 Closing Date by all the
Loan Parties and their respective Subsidiaries, taken together,
that have not previously become Asset Sales under this Agreement
equals or exceeds $10,000,000, (ii) any asset sale or series of
related asset sales described in clause (c) above having a value
not in excess of $250,000 shall not be deemed an "Asset Sale" for
purposes of this Agreement and (iii) the term "Asset Sale" shall
not include any sale of assets in connection with any Permitted
Equipment Financing or any Permitted Timber Financing.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee and, to the
extent required by Section 10.04(b), accepted by the Borrower, the
Administrative Agent, the Swingline Lender and the Fronting Bank,
in the form of Exhibit A or such other form as shall be approved by
the Administrative Agent.
"Basic Agreements" shall mean the SIBV Agreement, the
Financial Services Agreement, the 1992 Holdings Agreement, the
Registration Rights Agreement, the Stockholders' Agreement and the
1992 Stock Option Plan.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning assigned to such term in the
introductory statement.
"Borrower's Portion of Excess Cash Flow" shall mean, at any
date of determination, the cumulative amount of Excess Cash Flow
for each full fiscal year of JSC commencing on or after January 1,
1994, and ending prior to the date of determination that (a) was
not or is not required to be applied to the prepayment of Loans or
the reduction of Commitments, in each case as described in
Section 2.13(e), and (b) has not been utilized on or prior to the
date of determination (i) to make Consolidated Capital Expenditures
pursuant to the proviso in the first sentence of Section 7.14,
(ii) to pay dividends pursuant to Section 7.06(b), (iii) to make
Investments pursuant to Section 7.04(h) or (iv) to prepay
Indebtedness pursuant to Section 2.12(a) or 7.09(a).
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest
Period is in effect.
"Business Day" shall mean any day (other than a Saturday,
Sunday or legal holiday in the State of New York) on which banks
are open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the term "Business
Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Lease" shall have the meaning given such term in the
definition of the term "Capital Lease Obligations".
"Capital Lease Obligations" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof (each, a "Capital
Lease"), which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
cash payments (including any cash received by way of deferred
payment pursuant to a note receivable or otherwise (other than the
portion of such deferred payment constituting interest, which shall
be deemed not to constitute Cash Proceeds), but only as and when so
received) received from such Asset Sale.
"CCA" shall have the meaning assigned to such term in the
introductory statement.
A "Change in Control" shall be deemed to have occurred if (a)
JSG and its Affiliates shall cease to own or control shares
representing at least 35% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of JSC; (b)
any person or group (within the meaning of Rule 13d-5 of the
Securities and Exchange Act of 1934, as in effect on the date
hereof) other than JSG and MS Group and their respective Affiliates
shall own, directly or indirectly, beneficially or of record,
shares representing more than 20% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of
JSC; or (c) JSC shall cease to own, directly or indirectly,
beneficially and of record, 100% of the issued and outstanding
capital stock of the Borrower.
"Change of Law" shall have the meaning given such term in
Section 2.20(f).
"Code" shall mean the Internal Revenue Code of 1986, or any
successor statute thereto, as the same may be amended from time to
time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document and shall also include the Mortgaged Properties.
"Commitment" shall mean, with respect to each Lender, such
Lender's Revolving Credit Commitment, Additional Tranche B
Commitment or Tranche C Commitment.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Commitment Fee Percentage" shall mean 0.50% per annum,
subject to adjustment in accordance with Section 2.06(c).
"Common Stock" shall mean the common stock, par value $.01 per
share, of JSC.
"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum of the Borrower dated April
1996.
"Consolidated Capital Expenditures" shall mean, for any
period, the sum of (a) all amounts that would be included as
additions to property, plant and equipment and other capital
expenditures on a consolidated statement of cash flows for JSC and
its Subsidiaries during such period in accordance with GAAP and
(b) all amounts in respect of additions to Timberland Property
during such period (in each case, excluding capitalized interest
but including the amount of assets leased under any Capital Lease).
"Consolidated Current Assets" shall mean, as at any date of
determination, the total assets (other than cash and cash
equivalents) of JSC and its Subsidiaries on a consolidated basis
that may properly be classified as current assets in conformity
with GAAP.
"Consolidated Current Liabilities" shall mean, as at any date
of determination, the total liabilities of JSC and its Subsidiaries
on a consolidated basis that may properly be classified as current
liabilities in conformity with GAAP, provided that the current
maturities of long-term Indebtedness for money borrowed of JSC and
its Subsidiaries, any Indebtedness permitted under Section 7.01
that is classified as a current liability in conformity with GAAP
and any taxes payable solely as a result of Asset Sales shall be
excluded from the definition of Consolidated Current Liabilities.
"Consolidated EBITDA" for any period shall mean (a) the sum
of (i) Consolidated Net Income for such period, (ii) all Federal,
state, local and foreign taxes deducted in determining such
Consolidated Net Income, (iii) total interest expense deducted in
determining such Consolidated Net Income and (iv) depreciation,
depletion, amortization of intangibles and other non-cash charges
or non-cash losses deducted in determining such Consolidated Net
Income, less (b) any non-cash income or non-cash gains included in
determining such Consolidated Net Income.
"Consolidated Interest Expense" shall mean, for any period,
the gross interest expense of JSC and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP,
excluding any fees and expenses payable or amortized during such
period by JSC and its consolidated Subsidiaries in connection with
the amortization of deferred debt issuance costs. For purposes of
the foregoing, gross interest expense shall be determined after
giving effect to any net payments made or received by JSC and its
consolidated Subsidiaries with respect to Approved Rate Protection
Agreements.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of JSC and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period
determined in conformity with GAAP, provided that the net income
(or loss) of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded. For this purpose, net income for any period
excludes all gains and losses in connection with the
Recapitalization in respect of such period that must be treated as
an extraordinary item under GAAP.
"Control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the owner-
ship of voting securities, by contract or otherwise, and the terms
"Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term
in Article V.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
entered into in the ordinary course of business by the Borrower
designed to protect the Borrower or any of its Subsidiaries
against fluctuations in currency values.
"Default" shall mean any event or condition that upon notice,
lapse of time or both would constitute an Event of Default.
"Default Rate" shall have the meaning assigned to such term
in Section 2.07.
"dollars" or "$" shall mean lawful money of the United States.
"8-Year Senior Note Indenture" shall mean the Indenture dated
as of May 1, 1994, among CCA, as issuer, JSCE (as successor to the
obligations of Old JSCUS), as guarantor, and The Bank of New York,
as trustee, relating to the 8-Year Senior Notes.
"8-Year Senior Notes" shall mean the Borrower's 10-3/4% Senior
Notes Due 2002, in an aggregate principal amount outstanding on the
Restatement Closing Date of $100,000,000.
"Environmental Laws" shall mean all current and future
Federal, state, local and foreign laws, rules or regulations,
codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other
requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or wastes
into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances, or wastes, or underground storage tanks and
emissions therefrom.
"Equity Fund II" shall mean The Morgan Stanley Leveraged
Equity Fund II, L.P., a Delaware limited partnership.
"Equity Issuance" shall mean any issuance or sale by a Loan
Party or any Subsidiary of a Loan Party of any shares of capital
stock or other equity securities of a Loan Party or any Subsidiary
of a Loan Party, or any obligations convertible into or
exchangeable for, or giving any Person a right, option or warrant
to acquire such securities or such convertible or exchangeable
obligations, other than (a) issuances or sales of Common Stock to
any Loan Party and (b) sales or issuances of Common Stock to
management or key employees of JSC or any of its Subsidiaries under
any employee stock option or stock purchase plan in existence from
time to time, so long as the proceeds of all sales and issuances
described in this clause (b) do not exceed in the aggregate
$5,000,000 in any fiscal year.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, or any successor statute, as the same may be amended from
time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that (a) is a member of a group of which JSC,
JSCE or the Borrower is a member and (b) is treated as a single
employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Eurodollar Term Loan or
Eurodollar Revolving Loan.
"Eurodollar Revolving Borrowing" shall mean a Borrowing
comprised of Eurodollar Revolving Loans.
"Eurodollar Revolving Loan" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the Adjusted
LIBO Rate in accordance with the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised
of Eurodollar Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing
interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VIII.
"Excess Cash Flow" shall mean, for any period, the excess of
(a) the sum, without duplication, of (i) Consolidated Net Income
during such period, (ii) the amount of depreciation, depletion,
amortization of intangibles, deferred taxes, accreted and zero
coupon bond interest and other non-cash expenses, losses or other
charges that, pursuant to GAAP, were deducted in determining such
Consolidated Net Income, (iii) the proceeds of any Capital Leases
of the Borrower and its Subsidiaries on a consolidated basis, (iv)
reductions, other than reductions attributable solely to Asset
Sales, to working capital for such period (i.e., the decrease in
Consolidated Current Assets minus Consolidated Current Liabilities
from the beginning to the end of such period), (v) Indebtedness of
the Borrower and its consolidated Subsidiaries created, incurred or
assumed in respect of the purchase or construction of property and
(vi) the net increase, if any, in the aggregate amount of
borrowings by JSFin in connection with the Receivables Program
during such period, over (b) the sum, without duplication, of (i)
the amount of all non-cash gains, income or other credits included
in determining Consolidated Net Income, (ii) additions to working
capital for such period (i.e., the increase in Consolidated Current
Assets minus Consolidated Current Liabilities from the beginning to
the end of such period), (iii) the Term Loan Repayment Amounts paid
during such period, (iv) optional prepayments of Term Loans
described in Section 2.12(c) during such period, (v) scheduled and
optional payments or prepayments of the principal of permitted
Indebtedness other than the Loans, but only to the extent that such
payments or prepayments cannot by their terms be reborrowed or
redrawn and do not occur in connection with a refinancing of all or
any portion of such permitted Indebtedness and are otherwise
permitted hereby, (vi) Consolidated Capital Expenditures for such
period, (vii) cash payments made during such period of expenses
relating to Old JSCUS's and CCA's 1993 operational restructuring
(including employee severance and manufacturing facility
consolidation expense) that were previously accrued as a non-cash
charge in fiscal 1993, (viii) Restricted Junior Payments not
prohibited hereunder made during such period and (ix) the net
decrease, if any, in the aggregate amount of borrowings by JSFin in
connection with the Receivables Program during such period;
provided, however, that none of the following shall be included in
a determination of Excess Cash Flow: (A) amounts expended for any
Investments permitted under Section 7.04 and any proceeds from the
subsequent sale or other disposition of any such Investments and
(B) the proceeds of any issuance of debt or equity securities not
otherwise prohibited hereunder.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York or, if such rate is not
so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fees" shall mean the Administrative Fees, the Commitment
Fees, the LC Fees, the fees specified in Section 2.05(c) and the
fees specified in Section 3.07.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer or
assistant treasurer of such corporation.
"Financial Services Agreement" shall mean the Financial
Advisory Services Agreement dated September 12, 1989, by and among
MSI, SIBV and JSC, as amended to the date hereof and as the same
may be further amended or modified in accordance with the terms
thereof and hereof.
"Fronting Bank" shall mean, as the context may require, (a)
(i) BTCo, with respect to Letters of Credit issued by BTCo and (ii)
any other Lender that may become a Fronting Bank pursuant to
Section 3.08 or 3.10, with respect to Letters of Credit issued by
such Lender, or (b) collectively, all the foregoing.
"GAAP" shall mean generally accepted accounting principles in
the United States, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality
or regulatory body.
"Guarantee" of or by any Person shall mean any obligation,
contingent or otherwise (whether or not denominated as a
guarantee), of such Person guaranteeing any Indebtedness or any
other obligation of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (a) to purchase or
pay (or advance or supply funds for the purchase or payment of)
such Indebtedness (or other obligation) or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Indebtedness (or other obligation), (b) to purchase
property, securities or services for the purpose of assuring the
owner of such Indebtedness (or other obligation) of the payment of
such Indebtedness (or other obligation) or (c) to maintain working
capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness (or other obligation); provided,
however, that the term "Guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of
business.
"Guarantee Agreement" shall mean the Guarantee Agreement dated
as of May 11, 1994, among the Guarantors and the Collateral Agent,
as the same may be amended, restated, supplemented, modified or
waived from time to time.
"Guarantors" shall mean JSC, JSCE and each Material
Subsidiary.
"Hazardous Materials" shall have the meaning assigned to such
term in Section 4.17(d).
"Inactive Subsidiary" at any time shall mean any Subsidiary
of JSC that (a) has assets with a total market value not in excess
of $1,000 and (b) has not conducted any business or other
operations during the prior 12-month period.
"Indebtedness" of any Person shall mean, without duplication,
(a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, other than deposits or
advances in the ordinary course of business, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to assets
purchased by such Person, (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued expenses arising in
the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed by such Person,
(f) all Guarantees by such Person, (g) all Capital Lease
Obligations of such Person, (h) all obligations of such Person in
respect of Rate Protection Agreements, Currency Agreements or other
interest or exchange rate hedging arrangements (such obligations to
be equal at any time to the termination value of such Agreements or
other arrangements that would be payable by such Person at such
time) and (i) all obligations of such Person as an account party to
reimburse any bank or any other Person in respect of letters of
credit. The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such Person is a general
partner, except to the extent such Indebtedness is expressly non-
recourse to such Person.
"Indemnitee" shall have the meaning assigned to such term in
Section 10.05(b).
"Intercompany Indebtedness" shall mean any Indebtedness of any
of JSC, JSCE or the Borrower or any of their respective
Subsidiaries that is owing to any Loan Party.
"Intercompany Note" shall mean a promissory note evidencing
Intercompany Indebtedness pledged to the Collateral Agent pursuant
to the Pledge Agreement and which, unless otherwise provided herein
or in any of the Receivables Program Documents, shall be a senior
obligation of the obligor thereon, payable on demand to the obligee
and in form and substance satisfactory to the Senior Managing
Agents.
"Interest Payment Date" shall mean (a) with respect to any
Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part, (b) with respect to any
Swingline Loan, the last day of the Interest Period applicable to
such Swingline Loan and (c) with respect to any Eurodollar
Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date
had successive Interest Periods of three months' duration been
applicable to such Borrowing.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing or
on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is
1, 2, 3 or 6 months thereafter, as the Borrower thereof may elect,
(b) as to any ABR Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately preceding
Interest Period applicable to such Borrowing, as the case may be,
and ending on the earlier of (i) the next succeeding March 31,
June 30, September 30 or December 31, and (ii) the Revolving Credit
Maturity Date, the Tranche A Maturity Date, the Tranche B Maturity
Date, the Additional Tranche B Maturity Date or the Tranche C
Maturity Date, as applicable, and (c) as to any Swingline Loan, the
period commencing on the date such Swingline Loan is made or on the
last day of the immediately preceding Interest Period applicable to
such Swingline Loan, as the case may be, and ending on the earlier
of (i) the next succeeding March 31, June 30, September 30 or
December 31, and (ii) the Revolving Credit Maturity Date; provided,
however, that, if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Bor-
rowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end
on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the
last day of such Interest Period.
"Investment" shall mean, as applied to any Person (the
"Investor"), any direct or indirect purchase or other acquisition
by the Investor of, or a beneficial interest in, stock or other
securities of any other Person other than a wholly owned Subsidiary
of the Investor, including any exchange of equity securities for
Indebtedness, or any direct or indirect loan, advance (other than
advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of
business) or capital contribution by the Investor to any other
Person other than a wholly owned Subsidiary of the Investor,
including all Indebtedness and accounts receivable owing to the
Investor from that other Person that did not arise from sales or
services rendered to that other Person in the ordinary course of
the Investor's business. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such
Investment minus any amounts (a) realized upon the disposition of
assets comprising an Investment or (b) constituting repayments of
Investments that are loans or advances provided, however, that the
term "Investment" shall not include the purchase in the open market
of shares of JSG in an aggregate amount which, together with the
aggregate purchase price of all MIP Shares and all MIP Options
(each as defined in Section 7.06(d)) purchased pursuant to
Section 7.06(d) in any fiscal year, does not exceed $15,000,000 in
such fiscal year of the Borrower, purchased exclusively for
subsequent distribution as additional compensation to employees of
the Borrower pursuant to its management incentive program.
"Investor" shall have the meaning given such term in the
definition of the term "Investment".
"JSC International" shall mean JSC International Sales, Inc.,
a corporation formed under the laws of Barbados and a wholly owned
Subsidiary of the Borrower.
"JSFin" shall mean Jefferson Smurfit Finance Corporation, a
Delaware corporation and a wholly owned Subsidiary of the Borrower,
formed by Old JSCUS in connection with the Receivables Program.
"JSG" shall mean Jefferson Smurfit Group plc, a corporation
organized and existing under the laws of the Republic of Ireland.
"LC Commitment" shall mean at any time an amount equal to the
lesser of (a) $150,000,000, as the same may be reduced from time to
time pursuant to Section 3.06, and (b) the Revolving Credit
Commitment at such time.
"LC Disbursement" shall mean any payment or disbursement made
by the Fronting Bank under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time of determination, the
sum of (a) the Trade LC Exposure and (b) the Standby LC Exposure.
"LC Fee" shall have the meaning given such term in
Section 3.03.
"LC Maturity Date" shall mean the 30th Business Day prior to
the Revolving Credit Maturity Date.
"Lenders" shall have the meaning given to such term in the
Amendment Agreement.
"Letter of Credit Application" shall mean a commercial or
standby letter of credit application, as applicable, in the
Fronting Bank's customary form, as such form may be modified from
time to time by the Fronting Bank.
"Letters of Credit" shall mean Trade Letters of Credit and
Standby Letters of Credit.
"LIBOR Spread" shall mean (a) with respect to Tranche A Term
Loans and Revolving Loans, 2-1/2% per annum, subject to adjustment
pursuant to Section 2.06(c), (b) with respect to Tranche B Term
Loans and Additional Tranche B Term Loans, 3% per annum, and
(c) with respect to Tranche C Term Loans, 3-1/4% per annum.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, assignment for security
(whether collateral or otherwise), hypothecation, encumbrance,
lease, sublease, charge or security interest in or on such asset,
(b) the interest of a vendor or a lessor under any conditional sale
agreement, Capital Lease or title retention agreement relating to
such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Security Documents, the Guarantee Agreement and the SNC
Guarantee Agreement, and each amendment, restatement, supplement,
modification or waiver of, to or in respect of any such document.
"Loan Parties" shall mean JSC, JSCE, the Borrower and each
Material Subsidiary.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Machine No. 2" shall mean the No. 2 linerboard machine and
related structures, equipment and other property located at the
Fernandina Beach, Florida Mill and owned by SPI.
"Managing Agents" shall mean the Lenders whose names appear
as managing agents on the signature pages to the Amendment
Agreement.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the business, assets, operations, properties, prospects
or condition (financial or otherwise) of JSC and its Subsidiaries,
taken as a whole, (b) material impairment of the ability of JSC or
any Material Subsidiary to perform any of its obligations under any
Loan Document to which it is or will be a party or (c) material
impairment of the rights of or benefits available to the
Administrative Agent, the Collateral Agent, the Fronting Bank, the
Swingline Lender or the Lenders under any Loan Document.
"Material Contracts" shall mean the contracts set forth on
Schedule 1.01(b) and any future contracts to which JSCE or the
Borrower or any of their respective Subsidiaries becomes a party
providing for payments by or to JSCE or the Borrower or any of
their Subsidiaries in excess of $50,000,000 per year and the
duration of which shall be in excess of twelve months.
"Material Investments" shall mean all Investments by JSC or
any of its Subsidiaries having a value in excess of $1,000,000.
"Material Subsidiary" means each Subsidiary of JSC, JSCE, the
Borrower or their successors now existing or hereafter acquired or
formed by JSC, JSCE, the Borrower or such successors that (a) for
the most recent fiscal year of JSC, JSCE, the Borrower or such
successors, accounted for more than 10% of the consolidated
revenues of JSC, JSCE, the Borrower or such successors, as the case
may be, (b) as at the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of JSC, JSCE, the Borrower
or such successors as shown on the consolidated financial
statements of JSC, JSCE, the Borrower or such successors, as the
case may be, for such fiscal year or (c) is designated as a
Material Subsidiary on Schedule 1.01(c) or is otherwise irrevocably
designated as a Material Subsidiary in a writing by a Loan Party to
the Administrative Agent. Notwithstanding the foregoing, JSFin
shall not be a Material Subsidiary for purposes hereof.
"Mills" shall mean the paper product manufacturing facilities
identified on Schedule 1.01(d).
"Mortgaged Properties" shall mean the owned real properties
of the Borrower specified on Schedule 1.01(e).
"Mortgages" shall mean the Additional Mortgages and the
mortgages, deeds of trust, leasehold mortgages, assignments of
leases and rents, modifications and other security documents
delivered pursuant to Section 5.02(l) of the 1994 Credit Agreement
or Section 6.10 or Section 7.12, each substantially in the form of
Exhibit F, as the same may be amended, restated, supplemented,
modified or waived from time to time.
"MS Group" shall mean Morgan Stanley Group Inc., a Delaware
corporation.
"MSI" shall mean Morgan Stanley & Co. Incorporated, a Delaware
corporation.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which any Loan Party or
any ERISA Affiliate (other than one considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the Code)
is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Net Cash Proceeds" shall mean (a) with respect to any Asset
Sale, the Cash Proceeds, net of (i) costs of sale (including
payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than Loans)
required to be repaid under the terms thereof as a result of such
Asset Sale), (ii) taxes paid or payable in the year such Asset Sale
occurs or in the following year as a result thereof and (iii)
amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations associated with
such Asset Sale (provided that, to the extent and at the time any
such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds), (b) with respect to any Equity
Issuance or any issuance of debt securities, the cash proceeds
thereof, net of underwriting commissions or placement fees and
expenses directly incurred in connection therewith and (c) with
respect to any Taking or Destruction (as such terms are defined in
the Mortgages), the Net Proceeds or Net Award (as such terms are
defined in the Mortgages).
"1992 Holdings Agreement" shall mean the 1992 Agreement dated
as of August 26, 1992, among JSC, Equity Fund II and SIBV, as
amended to the date hereof and as the same may be further amended
or modified in accordance with the terms thereof and hereof.
"1992 Stock Option Plan" shall mean the JSC 1992 Stock Option
Plan, as amended to the date hereof and as the same may be further
amended or modified in accordance with the terms thereof and
hereof.
"1993 Senior Note Indenture" shall mean the Indenture dated
as of April 15, 1993, among CCA, as issuer, JSCE (as successor to
the obligations of Old JSCUS), as guarantor, and The Bank of New
York, as trustee, relating to the 1993 Senior Notes, as amended by
the Supplemental Indenture dated as of April 8, 1994, and as the
same may from time to time be further amended or modified in
accordance with the terms thereof and hereof.
"1993 Senior Notes" shall mean the Borrower's 9-3/4% Senior
Notes due 2003.
"1994 Closing Date" shall mean May 11, 1994.
"1994 Credit Agreement" shall have the meaning assigned to
such term in the introductory statement.
"Obligations" shall mean all obligations of every nature,
including amounts drawn under outstanding Letters of Credit, of
Loan Parties from time to time owed to the Administrative Agent,
the Senior Managing Agents, the Managing Agents, the Swingline
Lender, the Fronting Bank and the Lenders, or any of them, under
the Loan Documents.
"Old JSCUS" shall have the meaning assigned to such term in
the introductory statement.
"Operating Agreement" shall mean the Operating Agreement dated
as of April 30, 1992, by and between SPI and the Borrower relating
to the operation of Machine No. 2, all schedules and exhibits
thereto and all agreements executed in connection therewith, as
amended on or prior to the 1994 Closing Date, and as such documents
may be further amended, modified or supplemented from time to time
in accordance with the terms thereof and hereof.
"Operating Lease" shall mean, as applied to any Person, any
lease (including any lease that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under
which that Person is a lessee, other than any Capital Lease.
"Outstanding Letters of Credit" shall mean at any time the
Letters of Credit outstanding at such time.
"Outstanding Standby Letters of Credit" shall mean at any time
the Standby Letters of Credit outstanding at such time.
"Outstanding Trade Letters of Credit" shall mean at any time
the Trade Letters of Credit outstanding at such time.
"Participating Lender" shall mean at any time any Lender with
a Revolving Credit Commitment at such time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Perfection Certificate" shall mean the Perfection
Certificate, substantially in the form of Annex 1 to the Security
Agreement, prepared by JSC, JSCE and the Borrower.
"Permitted Equipment Financing" shall mean any financing
transaction by the Borrower or any of its Material Subsidiaries
secured by equipment, or a Sale/Leaseback Transaction in which the
subject property consists of equipment, in each case owned or
leased by such Person for more than 90 days prior to such financing
transaction or Sale/Leaseback Transaction, so long as such
financing transaction or Sale/Leaseback Transaction (a) does not
have a final maturity or final payment date in respect thereof on
or prior to the latest of the Tranche A Maturity Date, the
Tranche B Maturity Date, the Additional Tranche B Maturity Date,
the Tranche C Maturity Date and the Revolving Credit Maturity Date,
(b) results in net cash proceeds to the Borrower or one of its
Material Subsidiaries in excess of 60% of the fair market value
(determined, on the basis of an assumed arms-length sale of such
property, by a nationally recognized appraisal or valuation firm
experienced in valuing equipment) at the date of such financing
transaction or sale/leaseback of the equipment that is the subject
property of such financing transaction or Sale/Leaseback
Transaction, (c) has at the time of incurrence a weighted average
life to stated maturity at least one year longer than the blended
weighted average life to stated maturity of the then-outstanding
Term Loans and (d) contains covenants no more restrictive than
those contained in this Agreement (except that covenants that
relate solely to the subject property may be more restrictive).
"Permitted Investments" shall mean (a) any evidence of
indebtedness, maturing not more than one year after the acquisition
thereof, issued by the United States of America, or any
instrumentality or agency thereof and guaranteed fully as to
principal, interest and premium, if any, by the United States of
America, (b) any certificate of deposit, maturing not more than one
year after the date of purchase, issued by a commercial banking
institution that has long-term debt rated "A" or higher by Moody's
Investors Service, Inc. or Standard & Poor's Corporation and which
has a combined capital and surplus and undivided profits of not
less than $500,000,000, (c) commercial paper (i) maturing not more
than 270 days after the date of purchase and (ii) issued by (A) a
corporation (other than a Loan Party or any Affiliate of a Loan
Party) with a rating, at the time as of which any determination
thereof is to be made, of "P-1" or higher by Moody's Investors
Service, Inc. or "A-1" or higher by Standard & Poor's Corporation
or (B) either Senior Managing Agent, (d) demand deposits with any
bank or trust company, (e) any Investments consisting of (i) any
contract pursuant to which a Loan Party obtains the right to cut,
harvest or otherwise acquire timber on property owned by any other
Person, whether or not the Loan Party's obligations under such
contract are evidenced by a note or other instrument, or (ii) loans
or advances to customers of a Loan Party, including leases of
personal property of such Loan Party to such customers, provided
that the contracts, loans and advances constituting Permitted
Investments pursuant to this clause (e) shall not exceed
$10,000,000 at any time outstanding, (f) any Investment consisting
of an exchange of equity securities of any Loan Party for
Indebtedness of any other Loan Party and (g) Guarantees of a Person
or Persons other than a Loan Party consisting of tax-exempt
industrial development or pollution control revenue bonds (either
through Capital Lease Obligations or installment purchase
obligations in respect of facilities to be acquired by a Loan Party
and to be financed by such bonds, and including a direct Guarantee
of such bonds) to the extent any such Indebtedness of a Loan Party
or such Person and any Lien arising in connection therewith are not
prohibited by Section 7.01 or 7.02, as applicable.
"Permitted Liens" shall mean:
(a) the Liens arising under this Agreement or the Security
Documents in favor of the Collateral Agent;
(b) with respect to any Person, Liens for taxes not yet
due and payable or which are being contested in good faith by
appropriate proceedings diligently pursued, provided that (i)
any proceedings commenced for the enforcement of such Liens
shall have been duly suspended and (ii) full provision for
the payment of all such taxes known to such Person has been
made on the books of such Person if and to the extent
required by GAAP;
(c) with respect to any Person, mechanics', materialmen's,
carriers', warehousemen's and similar Liens arising by
operation of law and in the ordinary course of business and
securing obligations of such Person that are not overdue for
a period of more than 60 days or are being contested in good
faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings
commenced for the enforcement of such Liens shall have been
duly suspended and (ii) full provision for the payment of
such Liens has been made on the books of such Person if and
to the extent required by GAAP;
(d) with respect to any Person, Liens arising in
connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits that
are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in
the case of any such contest (i) any proceedings commenced
for the enforcement of such Liens shall have been duly
suspended and (ii) full provision for the payment of such
Liens has been made on the books of such Person if and to the
extent required by GAAP;
(e) with respect to any Person, (i) Liens incurred or
deposits made in the ordinary course of business to secure
the performance of bids, tenders, statutory obligations, fee
and expense arrangements with trustees and fiscal agents
(exclusive of obligations incurred in connection with the
borrowing of money or the payment of the deferred purchase
price of property) and (ii) Liens securing surety, indemnity,
performance, appeal and release bonds, in the case of either
clause (i) or clause (ii), securing such bonds in an amount
not to exceed individually or in the aggregate $25,000,000 at
any time outstanding, provided that full provision for the
payment of all such obligations has been made on the books of
such Person if and to the extent required by GAAP;
(f) imperfections of title, covenants, restrictions,
easements and other encumbrances on real property that (i) do
not arise out of the incurrence of any Indebtedness for money
borrowed and (ii) do not interfere with or impair in any
material respect the utility, operation, value or
marketability of the real property on which such Lien is
imposed;
(g) Liens upon real and/or tangible personal property
acquired by purchase, construction or otherwise by a Person,
each of which Liens was created solely for the purpose of
securing Indebtedness permitted by Section 7.01 representing,
or incurred to finance, the cost (including the cost of
construction) of the respective property, provided that (i)
no such Lien shall extend to or cover any property of such
Person other than the respective property so acquired and
improvements thereon and (ii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed
100% of the fair value (as determined in good faith by the
board of directors of such Person) of the respective property
at the time it was so acquired;
(h) any Lien renewing, extending or refunding any Lien
permitted by clause (g) above, provided that the principal
amount of Indebtedness secured by such Lien immediately prior
thereto is not increased and such Lien is not extended to any
other property;
(i) any Lien specifically permitted to be suffered or
incurred under any applicable Security Document;
(j) any Lien consisting of a lease of personal property of
such Person to customers of such Person, if such lease
constitutes a Permitted Investment under clause (e)(ii) of
the definition of Permitted Investments; and
(k) any Lien consisting of a lease of real property
(including buildings), and subleases thereof, to Persons for
the purpose of placing cellular antenna towers (and/or
similar antenna equipment) on such property, provided that
such Liens do not interfere with or impair in any material
respect, the utility, operation, value or marketability of
the property on which such Lien is imposed.
"Permitted Timber Financing" means any financing transaction
by the Borrower or any of its Material Subsidiaries secured by
timber or timberland, or a Sale/Leaseback Transaction in which the
subject property consists of timber or timberland, in each case
owned or leased by such Person for more than 90 days prior to such
financing transaction or Sale/Leaseback Transaction, so long as
such financing transaction or Sale/Leaseback Transaction (a) does
not have a final maturity or final payment date in respect thereof
on or prior to the latest of the Tranche A Maturity Date, the
Tranche B Maturity Date, the Additional Tranche B Maturity Date,
the Tranche C Maturity Date and the Revolving Credit Maturity Date,
(b) results in net cash proceeds to the Borrower or one of its
Material Subsidiaries in excess of 60% of the fair market value
(determined, on the basis of an assumed arms-length sale of such
property, by a nationally recognized appraisal or valuation firm
experienced in valuing timber or timberland) at the date of such
financing transaction or sale/leaseback of the timber or timberland
that is the subject property of such financing transaction or
Sale/Leaseback Transaction, (c) has at the time of incurrence a
weighted average life to stated maturity at least one year longer
than the blended weighted average life to stated maturity of the
then-outstanding Term Loans and (d) contains covenants no more
restrictive than those contained in this Agreement (except that
covenants that relate solely to the subject property may be more
restrictive).
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability
company, partnership or government, or any agency or political sub-
division thereof.
"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code that is maintained for employees of JSC, JSCE, the
Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement dated as
of May 11, 1994, as supplemented by Supplement No. 1 dated
December 31, 1994, among JSC, JSCE, the Borrower, the other
pledgors party thereto and the Collateral Agent, as the same may be
amended, restated, supplemented, modified or waived from time to
time.
"Program Receivables" shall mean all trade receivables and
related contract and other rights and property (including all
general intangibles, collections and other proceeds relating
thereto, all security therefor and any goods that have been
repossessed in connection with any thereof) sold or contributed by
the Borrower to JSFin prior to the commencement of a Liquidation
Period (as defined in the Receivables Program Documents) pursuant
to the Receivables Program Documents (including property of SNC
sold to the Borrower for sale or contribution by the Borrower to
JSFin pursuant to the Receivables Program Documents).
"P.U.I". shall mean Packaging Unlimited, Inc., a corporation
organized under the laws of the State of Delaware and qualified to
do business in the Commonwealth of Puerto Rico.
"Rate Protection Agreements" shall mean interest rate cap
agreements, interest rate swap agreements and other agreements or
arrangements entered into in the ordinary course of business by the
Borrower or its Subsidiaries and designed to protect the Borrower
or its Subsidiaries against fluctuations in interest rates or to
obtain the benefit of floating interest rates.
"Real Properties" shall mean each parcel of real property
(including any Timberland Property), including any Mill or
converting facility thereon and any leasehold interest therein,
identified on Schedule 4.21(a), together with all fixtures thereon.
"Receivables Program" shall mean that certain trade
receivables securitization program conducted pursuant to the
Receivables Program Documents.
"Receivables Program Documents" shall mean the documents
listed on Schedule 1.01(f), and all non-material documentation
entered into pursuant to such documentation, as such documents may
be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Registration Rights Agreement" shall mean that certain
Registration Rights Agreement dated as of May 3, 1994, by and among
Equity Fund II, SIBV, JSC, and the other parties identified on the
signature pages thereto, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA
Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code).
"Required Lenders" shall mean, at any time, Lenders holding
Loans, a share of the used LC Commitments and unused Commitments
representing greater than 50% of the sum of (a) the aggregate
principal amount of the Loans at such time, (b) the LC Exposure at
such time and (c) the aggregate unused Commitments at such time.
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any
other officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect of
this Agreement.
"Restatement Closing Date" shall mean May 17, 1996.
"Restricted Junior Payment" shall mean (a) any dividend or
other distribution, direct or indirect, on account of any shares of
any class of stock of JSC, JSCE or the Borrower or any of their
respective Subsidiaries, now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the
holders of that class, (b) any redemption, retirement, sinking fund
or similar payment, purchase, exchange or other acquisition for
value, direct or indirect, of any shares of any class of stock of
JSC, JSCE or the Borrower or any of their respective Subsidiaries,
now or hereafter outstanding, and (c) whether in cash or additional
securities, any payment or prepayment of principal of, premium, if
any, or interest on, redemption, purchase, exchange, retirement,
defeasance, sinking fund or similar payment with respect to, any
Subordinated Indebtedness, provided that the term "Restricted
Junior Payment" shall not include any mandatory payments of
principal, premium, if any, or interest with respect to
Subordinated Indebtedness.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans
hereunder as set forth in Section 2.01, as the same may be reduced
from time to time pursuant to Section 2.09.
"Revolving Credit Maturity Date" shall mean April 30, 2001.
"Revolving Credit Utilization" shall mean, at any time of
determination, the sum of (a) the aggregate principal amount of
Revolving Loans outstanding at such time, (b) the aggregate
principal amount of Swingline Loans outstanding at such time and
(c) the LC Exposure at such time.
"Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01. Each Revolving
Loan shall be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Rights Agreement" shall mean the Rights Agreement dated as
of April 30, 1992, by and among SPI, CCA and the Collateral Agent
relating to Machine No. 2, as amended on or prior to the 1994
Closing Date, and as the same may be further amended, modified or
supplemented from time to time in accordance with the terms thereof
and hereof.
"Sale/Leaseback Transaction" shall mean an arrangement, direct
or indirect, whereby JSC, JSCE or the Borrower or any of their
respective Subsidiaries shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred.
"Secured Obligations" shall have the meaning assigned to such
term in the Mortgages.
"Secured Parties" shall have the meaning assigned to such term
in the Security Agreement.
"Security Agreement" shall mean the Security Agreement, dated
as of May 11, 1994, as supplemented by Supplement No. 1 dated
December 31, 1994, among JSC, the Borrower, the other Guarantors
and grantors party thereto and the Collateral Agent, as the same
may be amended, restated, supplemented, modified or waived from
time to time.
"Security Documents" shall mean the Mortgages, the Security
Agreement, the Trademark Security Agreement, the Pledge Agreement,
the SNC Security Agreement, and each of the security agreements,
mortgages and other instruments and documents executed and
delivered pursuant to any of the foregoing or pursuant to Sec-
tion 6.10 or 7.12.
"Senior Note Indentures" shall mean the 8-Year Senior Note
Indenture and the 10-Year Senior Note Indenture.
"Senior Notes" shall mean the 8-Year Senior Notes and the
10-Year Senior Notes.
"SIBV" shall mean Smurfit International B.V., a Netherlands
corporation.
"SIBV Agreement" shall mean that certain SIBV Agreement dated
as of September 12, 1989, and amended as of October 22, 1989 and as
of December 11, 1989, between JSC and SIBV, and as the same may be
further amended or modified in accordance with the terms thereof
and hereof.
"SNC" shall mean Smurfit Newsprint Corporation, a Delaware
corporation.
"SNC Guarantee Agreement" shall mean the SNC Guarantee
Agreement dated as of May 11, 1994, as amended and restated as of
July 14, 1995, between SNC and the Collateral Agent, as the same
may be further amended, restated, supplemented, modified or waived
from time to time.
"SNC Security Agreement" shall mean the SNC Security
Agreement, dated as of May 11, 1994, as amended and restated as of
July 14, 1995, between SNC and the Collateral Agent, as the same
may be further amended, restated, supplemented, modified or waived
from time to time.
"SPI" shall mean Smurfit Paperboard Inc., a Delaware
corporation and an indirect wholly owned Subsidiary of JSG.
"Standby LC Exposure" shall mean, at any time of
determination, the sum of (a) the aggregate undrawn amount of all
Outstanding Standby Letters of Credit and (b) the aggregate amount
that has been drawn under any Standby Letters of Credit but for
which the Fronting Bank or the Lenders, as the case may be, have
not been reimbursed by the Borrower at such time.
"Standby Letter of Credit" shall mean each irrevocable letter
of credit issued pursuant to Section 3.01(a) under which the
Fronting Bank agrees to make payments for the account of the
Borrower, on behalf of the Borrower, in respect of obligations of
the Borrower incurred pursuant to contracts made or performances
undertaken or to be undertaken or like matters relating to
contracts to which the Borrower is or proposes to become a party in
the ordinary course of the Borrower's business.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum applicable reserve percentages, including any marginal,
special, emergency or supplemental reserves (expressed as a
decimal) established by the Board and any other banking authority
to which the Administrative Agent is subject (a) with respect to
the Base CD Rate (as such term is used in the definition of the
term "Alternate Base Rate") for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately
equal to three months and (b) with respect to the Adjusted LIBO
Rate, for Eurocurrency Liabilities (as defined in Regulation D of
the Board). Such reserve percentages shall include those imposed
pursuant to Regulation D of the Board. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to
such reserve requirements without benefit of or credit for pro-
ration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Stockholders' Agreement" shall mean the Stockholders'
Agreement dated as of May 3, 1994, among SIBV, Equity Fund II, JSC,
and the other parties identified on the signature pages thereto, as
such Stockholders' Agreement may be amended or modified from time
to time in accordance with the terms thereof and hereof.
"Subordinated Indebtedness" shall mean Indebtedness of the
Borrower subordinated in right of payment to the Obligations
pursuant to documentation containing interest rates, payment terms,
maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and
substance satisfactory to the Required Lenders.
"Subsidiary" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership,
association or other business entity of which securities or other
ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is
being made, owned, controlled or held by, or otherwise Controlled
by, the parent or one or more Subsidiaries of the parent or by the
parent and one or more Subsidiaries of the parent; provided,
however, that the term "Subsidiary" shall not include any Inactive
Subsidiary.
"Substitute Parcel" shall mean those parcels of real property
that the Borrower may, from time to time, acquire in exchange for
a parcel of Timberland Property in accordance with the provisions
of Section 7.17(c).
"Swingline Loans" shall mean the swingline loans made by the
Swingline Lender pursuant to Section 2.22.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement
dated as of November 9, 1989, among JSC, JSCE and the Borrower, as
the same may be amended from time to time pursuant to the terms
thereof and hereof.
"10-Year Senior Note Indenture" shall mean the Indenture dated
as of May 1, 1994, among CCA, as issuer, JSCE (as successor to the
obligations of Old JSCUS), as guarantor, and The Bank of New York,
as trustee, relating to the 10-Year Senior Notes.
"10-Year Senior Notes" shall mean the Borrower's 11-1/4%
Senior Notes Due 2004, in an aggregate principal amount outstanding
on the Restatement Closing Date of $300,000,000.
"Term Borrowing" shall mean a Borrowing comprised of Tranche A
Term Loans, Tranche B Term Loans, Additional Tranche B Term Loans
or Tranche C Term Loans.
"Term Loan Repayment Amounts" shall mean, for any period, the
aggregate of all Tranche A Term Loan Repayment Amounts, Tranche B
Term Loan Repayment Amounts, Additional Tranche B Term Loan
Repayment Amounts and Tranche C Term Loan Repayment Amounts payable
during such period.
"Term Loan Repayment Dates" shall mean the Tranche A Term Loan
Repayment Dates, the Tranche B Term Loan Repayment Dates, the
Additional Tranche B Term Loan Repayment Dates and the Tranche C
Term Loan Repayment Dates.
"Term Loans" shall mean Tranche A Term Loans, Tranche B Term
Loans, the Additional Tranche B Term Loans and Tranche C Term
Loans.
"Timber" shall have the meaning assigned to such term in the
Mortgages.
"Timberland Property" shall mean each parcel of realty
identified as such on Schedule 4.21(c).
"Trade LC Exposure" shall mean, at any time of determination,
the sum of (a) the aggregate undrawn amount of all Outstanding
Trade Letters of Credit and (b) the aggregate amount that has been
drawn under any Trade Letters of Credit but for which the Fronting
Bank or the Lenders, as the case may be, have not been reimbursed
by the Borrower at such time.
"Trade Letter of Credit" shall mean each commercial
documentary letter of credit issued by the Fronting Bank for the
account of the Borrower pursuant to Section 3.01(a) for the
purchase of goods in the ordinary course of business.
"Trademark Security Agreement" shall mean the Patent,
Trademark and Copyright Security Agreement dated as of May 11,
1994, as supplemented by Supplement No. 1 dated December 31, 1994,
and Supplement No. 2 dated July 14, 1995, among the grantors named
therein and the Collateral Agent, as the same may be further
amended, restated, supplemented, modified or waived from time to
time.
"Tranche A Maturity Date" shall mean April 30, 2001.
"Tranche A Term Loan Repayment Amount" shall have the meaning
set forth in Section 2.11(a)(i).
"Tranche A Term Loan Repayment Date" shall have the meaning
set forth in Section 2.11(a)(i).
"Tranche A Term Loans" shall mean the $900,000,000 of term
loans made by the Lenders to the Borrower pursuant to clause (a) of
Section 2.01 of the 1994 Credit Agreement.
"Tranche B Lenders" shall mean Lenders having outstanding
Tranche B Term Loans.
"Tranche B Maturity Date" shall mean April 30, 2002.
"Tranche B Term Loan Repayment Amount" shall have the meaning
set forth in Section 2.11(a)(ii).
"Tranche B Term Loan Repayment Date" shall have the meaning
set forth in Section 2.11(a)(ii).
"Tranche B Term Loans" shall mean the $300,000,000 of term
loans made by the Lenders to the Borrower pursuant to clause (b) of
Section 2.01 of the 1994 Credit Agreement.
"Tranche C Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Tranche C Term Loans
to the Borrower as set forth in Section 3(b) of the Amendment
Agreement, as the same may be reduced from time to time pursuant to
Section 2.09.
"Tranche C Lenders" shall mean Lenders having Tranche C
Commitments or outstanding Tranche C Term Loans.
"Tranche C Maturity Date" shall mean October 31, 2002.
"Tranche C Term Loan Repayment Amounts" shall have the meaning
set forth in Section 2.11(a)(iv).
"Tranche C Term Loan Repayment Date" shall have the meaning
set forth in Section 2.11(a)(iv).
"Tranche C Term Loans" shall mean the term loans made by the
Lenders to the Borrower pursuant to Section 3(b) of the Amendment
Agreement. Each Tranche C Term Loan shall be either a Eurodollar
Term Loan or an ABR Term Loan.
"Transactions" shall have the meaning assigned to such term
in Section 4.02.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on
the Loans comprising such Borrowing is determined. For purposes
hereof, the term "Rate" shall include the Adjusted LIBO Rate and
the Alternate Base Rate.
"Unsecured LC Exposure" shall mean, at any time of
determination, the sum of (a) the aggregate undrawn amount of all
unsecured letters of credit permitted by Section 7.01(h)
outstanding at such time and (b) the aggregate amount that has been
drawn under such letters of credit and paid by the issuers thereof
and unreimbursed at such date.
"wholly owned Subsidiary" of a Person shall mean any
Subsidiary of such Person of which securities (except for
directors' qualifying shares) or other ownership interests
representing 100% of the equity or 100% of the ordinary voting
power or 100% of the general partnership interests are, at the time
any determination is being made, owned, controlled or held by such
Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Sub-
title E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed to be
references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall
be made and all financial statements required to be delivered here-
under shall be prepared in accordance with GAAP as in effect from
time to time, applied on a basis consistent with the application
used in the financial statements referred to in Section 4.05;
provided, however, that for purposes of making any determination
required by Section 2.06(c), 2.13(e) or Article VII, all accounting
terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as
in effect on the date of this Agreement applied on a basis
consistent with the application used in the financial statements
referred to in Section 4.05.
ARTICLE II
The Credits
SECTION 2.01. Commitments. (a) On the terms and subject to the
conditions and relying upon the representations and warranties
herein set forth, each Lender having a Revolving Credit Commitment
agrees severally and not jointly to make Revolving Loans to the
Borrower, at any time and from time to time on or after the 1994
Closing Date and prior to the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commit-
ment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding not to exceed
(after giving effect to all Revolving Loans repaid, and all reim-
bursements of LC Disbursements made, concurrently with the making
of any Revolving Loans) an amount equal to the difference between
(i) the Revolving Credit Commitment set forth opposite such
Lender's name on Schedule 2.01, as the same may be reduced from
time to time pursuant to Section 2.09, and (ii) such Lender's
Applicable Percentage of the sum of (A) the aggregate principal
amount of Swingline Loans outstanding at such time, (B) the LC
Exposure at such time and (C) the Unsecured LC Exposure at such
time. Within the limits set forth in the preceding sentence, the
Borrower may borrow, pay or prepay and reborrow Revolving Loans on
or after the 1994 Closing Date and prior to the Revolving Credit
Maturity Date, on the terms and subject to the conditions and
limitations set forth herein.
(b) Amounts paid or prepaid in respect of Term Loans may not
be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Additional Tranche B Commitments,
Tranche C Commitments or Revolving Credit Commitments, as the case
may be; provided, however, that the failure of any Lender to make
any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no
Lender shall be responsible for the failure of any other Lender to
make any Loan required to be made by such other Lender). Each
Revolving Credit Borrowing shall be in an aggregate principal
amount that is an integral multiple of $1,000,000 and, in the case
of a Eurodollar Borrowing, not less than $10,000,000 (or an
aggregate principal amount equal to the remaining balance of the
Revolving Credit Commitments).
(b) Each Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans, as the Borrower may request pursuant to
Section 2.03. Each Lender may at its option fulfill its Commitment
with respect to any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan,
provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement. Borrowings of more than one Type may
be outstanding at the same time; provided, however, that the
Borrowers shall not be entitled to request any Borrowing that, if
made, would result in an aggregate of more than ten separate Euro-
dollar Loans of any Lender being outstanding hereunder at any one
time. For purposes of the foregoing, Loans having different
Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a
Loan in the amount of its pro rata portion, as determined under
Section 2.17, of each Borrowing hereunder on the proposed date
thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than
2:00 p.m., New York City time, and the Administrative Agent shall
by 3:00 p.m., New York City time, credit the amounts so received to
the general deposit account of the Borrower or, if a Borrowing
shall not occur on such date because any condition precedent
specified herein or in the Amendment Agreement shall not have been
met, return the amounts so received to the respective Lenders.
Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing (or, in the case of an
ABR Revolving Borrowing, prior to 2:00 p.m., New York City time on
the date of such Borrowing) that such Lender will not make
available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date
of such Borrowing in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If
and to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative
Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Effective Rate.
If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall be deemed to constitute
such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Revolving Credit
Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Credit Maturity Date.
(e) The Borrower may refinance all or any part of any
Revolving Credit Borrowing with a Revolving Credit Borrowing of the
same or a different Type, subject to the conditions and limitations
set forth in this Agreement. Any Revolving Credit Borrowing or part
thereof so refinanced shall be deemed to be repaid or prepaid in
accordance with Section 2.04 or 2.12, as applicable, with the
proceeds of a new Revolving Credit Borrowing, and the proceeds of
the new Revolving Credit Borrowing, to the extent they do not
exceed the principal amount of the Revolving Credit Borrowing being
refinanced, shall not be paid by the Lenders to the Administrative
Agent or by the Administrative Agent to the Borrower, pursuant to
paragraph (c) above.
(f) If the Fronting Bank has not received from the Borrower
the payment required by Section 3.04(a) within two hours after the
Borrower shall have received notice from the Fronting Bank that
payment of a draft presented under any Letter of Credit will be
made or, if the Borrower shall have received such notice later than
10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following
Business Day, as provided in Section 3.04(a), the Fronting Bank
will promptly notify the Administrative Agent of the LC
Disbursement and the Administrative Agent will promptly notify each
Participating Lender of such LC Disbursement and its Applicable
Percentage thereof. Each Participating Lender will pay to the
Administrative Agent not later than 4:00 p.m., New York City time,
on such date (or, if the Participating Lenders shall have received
such notice later than 2:00 p.m., New York City time, on any day,
not later than 10:00 a.m., New York City time, on the immediately
following Business Day) an amount equal to such Participating
Lender's Applicable Percentage of such LC Disbursement (it being
understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Participating Lender), and the
Administrative Agent will promptly pay such amount to the Fronting
Bank. The Administrative Agent will promptly remit to each
Participating Lender its Applicable Percentage of any amounts
subsequently received by the Administrative Agent from the Borrower
in respect of such LC Disbursement. If any Lender shall not have
made its Applicable Percentage of such LC Disbursement available to
the Fronting Bank as provided above, such Lender agrees to pay
interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with this
subsection to but excluding the date an amount equal to such amount
is paid to the Administrative Agent for prompt payment to the
Fronting Bank at, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Alternate Base
Rate.
(g) Notwithstanding any other provision of this Agreement or
the Amendment Agreement, all Borrowings of Additional Term Loans
made at the Restatement Closing Date and during the period ending
90 days thereafter shall be made as (i) Eurodollar Borrowings with
Interest Periods of one month's duration or (ii) ABR Borrowings.
SECTION 2.03. Notice of Borrowings. The Borrower shall give
the Administrative Agent written or telecopy notice (or telephone
notice promptly confirmed in writing or by telecopy) (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before a proposed borrowing, (b) in
the case of an ABR Term Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before a proposed borrowing and
(c) in the case of an ABR Revolving Borrowing, not later than
11:00 a.m., New York City time, on the day of a proposed borrowing.
Such notice shall be irrevocable and shall in each case refer to
this Agreement and specify (a) whether the Borrowing then being
requested is to be a Term Borrowing or a Revolving Credit
Borrowing, and whether such Borrowing is to be a Eurodollar
Borrowing or an ABR Borrowing; (b) the date of such Borrowing
(which shall be a Business Day) and the amount thereof; and (c) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period with respect to any Euro-
dollar Borrowing is specified in any such notice, then the Borrower
shall be deemed to have selected an Interest Period of one month's
duration. If the Borrower shall not have given notice in accordance
with this Section 2.03 of its election to refinance a Revolving
Credit Borrowing prior to the end of the Interest Period in effect
for such Borrowing (unless such Borrowing is repaid at the end of
such Interest Period), then the Borrower shall be deemed to have
given notice of an election to refinance such Borrowing with an ABR
Borrowing. The Administrative Agent shall promptly advise the
Lenders of any notice given pursuant to this Section 2.03 and of
each Lender's portion of the requested Borrowing.
SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The
outstanding principal balance of each Loan or Swingline Loan shall
be payable (i) in the case of a Revolving Loan or Swingline Loan,
on the Revolving Credit Maturity Date, (ii) in the case of a
Tranche A Term Loan, as provided in Section 2.11(a)(i), (iii) in
the case of a Tranche B Term Loan, as provided in
Section 2.11(a)(ii), (iv) in the case of an Additional Tranche B
Term Loan, as provided in Section 2.11(a)(iii) and (v) in the case
of a Tranche C Term Loan, as provided in Section 2.11(a)(iv). Each
Loan shall bear interest from and including the date made on the
outstanding principal balance thereof as set forth in Section 2.06.
(b) Each Lender and the Swingline Lender shall maintain in
accordance with its usual practice an account or accounts
evidencing the indebtedness to such Lender or the Swingline Lender
resulting from each Loan or Swingline Loan, respectively, from time
to time, including the amounts of principal and interest payable
and paid such Lender or the Swingline Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it will record (i) the amount of each Loan and Swingline Loan made
hereunder, the Type of each Loan and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each
Lender and the Swingline Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's or the Swingline Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.04 shall, to the extent
permitted by applicable laws be prima facie evidence of the
existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender, the Swingline
Lender or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans and the Swingline Loans in accordance
with their terms.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on each March 31,
June 30, September 30 and December 31 and on each date on which the
Commitments of such Lender shall expire or be terminated as
provided herein, a commitment fee (a "Commitment Fee") equal to the
Commitment Fee Percentage on the average daily unused amount of the
Commitments of such Lender during the preceding quarter (or other
period commencing with the date upon which such Lender's
Commitments were accepted or ending with the date on which any of
such Commitments of such Lender shall expire or be terminated).
The Commitment Fee due to each Lender shall commence to accrue on
and including the date upon which such Commitments of such Lender
were accepted and shall cease to accrue on, but excluding, the date
on which such Commitments of such Lender shall expire or be
terminated as provided herein. For purposes of calculating
Commitment Fees, any portion of the Revolving Credit Commitments
unavailable due to outstanding Swingline Loans or due to
outstanding or unreimbursed unsecured letters of credit permitted
by Section 7.01(h) shall be deemed to be unused amounts of the
Commitments. All Commitment Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days.
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, administration fees (the "Administrative
Fees") at the times and in the amounts agreed upon in the amended
and restated fee letter agreement dated February 10, 1994, among
the Borrower, the Senior Managing Agents, Chemical Securities Inc.
and BT Securities Corporation.
(c) [Intentionally Omitted].
(d) The Borrower agrees to pay to the Fronting Bank, for its
own account, the fees specified in Section 3.07.
(e) All Fees (other than the fees payable to the Fronting Bank
under Section 3.07) shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders. Once paid, none of the Fees
shall be refundable under any circumstances (other than corrections
of errors in payment).
SECTION 2.06. Interest on Loans. (a) Subject to the provisions
of Section 2.07, the Loans comprising each ABR Borrowing shall bear
interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when
the Alternate Base Rate is determined by reference to the Prime
Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate plus the ABR Spread in
effect at such time with respect to such Loans. Swingline Loans
shall bear interest at the rate applicable to ABR Revolving Loans.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed
on the basis of the actual number of days elapsed over a year of
360 days) at a rate per annum equal to the Adjusted LIBO Rate for
the Interest Period in effect for such Borrowing plus the LIBOR
Spread in effect at such time with respect to such Loans.
(c) So long as no Event of Default shall have occurred and be
continuing, on each occasion that, as of the last day of any fiscal
quarter ending on or after September 30, 1995, the ratio of (i) the
Indebtedness of JSC and its consolidated Subsidiaries on such date
to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters ending on such date (such ratio being referred to
herein as the "Consolidated Leverage Ratio") shall fall within one
of the Categories set forth on the table below, the Commitment Fee
Percentage, the ABR Spread and the LIBOR Spread in respect of
Tranche A Term Loans and Revolving Loans shall be automatically
changed, if necessary, to reflect the percentages indicated for
such Category on the table below, with any such change to be
effective (x) in the case of the Commitment Fee Percentage, with
respect to the unused amounts of the Commitments on and after the
date of delivery to the Administrative Agent of the certificate
described in Section 6.04(d) relating to such fiscal quarter,
(y) in the case of the ABR Spread, with respect to all ABR Loans
outstanding on and after the date of delivery to the Administrative
Agent of such certificate and (z) in the case of the LIBOR Spread,
with respect to all Loans made on and after the date of delivery to
the Administrative Agent of such certificate.
Commitment Fee
Category 1 ABR Spread LIBOR Spread Percentage
When none of the 1.50% 2.50% 0.50%
Categories below
is acceptable
Category 2
4.25 to 1 or lower 1.25% 2.25% 0.50%
Category 3
4.00 to 1 or lower 1.00% 2.00% 0.50%
Category 4
3.50 to 1 or lower 0.75% 1.75% 0.375%
Category 5
3.00 to 1 or lower 0.50% 1.50% 0.375%
Category 6
2.50 to 1 or lower 0.25% 1.25% 0.375%
Category 7
2.25 to 1 or lower 0.00% 1.00% 0.25%
The applicable Category in the table above at any time will be
the Category with the lowest percentages for which the Consolidated
Leverage Ratio is satisfied at such time. In the event that any
condition that gives rise to any change in a Category pursuant to
the first sentence of this Section 2.06(c) is no longer satisfied
as of the end of any subsequent fiscal quarter, on and after the
date of delivery to the Administrative Agent of the certificate
described in Section 6.04(d) relating to such subsequent fiscal
quarter, the Commitment Fee Percentage, the ABR Spread and the
LIBOR Spread shall be automatically changed to reflect the Category
indicated by such certificate, with any such change to be effective
(x) in the case of the Commitment Fee Percentage, with respect to
the unused amounts of the Commitments on and after the date of
delivery to the Administrative Agent of the certificate described
in Section 6.04(d) relating to such fiscal quarter, (y) in the case
of the ABR Spread, with respect to all ABR Loans outstanding on and
after the date of delivery to the Administrative Agent of such
certificate and (z) in the case of the LIBOR Spread, with respect
to all Loans made on and after the date of delivery to the
Administrative Agent of such certificate. Notwithstanding the fore-
going, at any time during which JSC has failed to deliver the
certificate described in Section 6.04(d) with respect to a fiscal
quarter in accordance with the provisions thereof, or at any time
that an Event of Default shall have occurred and shall be
continuing, the Commitment Fee Percentage shall be reset, if
necessary, to be 1/2 of 1%, the ABR Spread shall be reset, if
necessary, to be 1-1/2% and the LIBOR Spread shall be reset, if
necessary, to be 2-1/2% until such time as JSC shall deliver such
certificate in accordance with the provisions of Section 6.04(d) or
such Event of Default shall be cured or waived.
(d) Interest on each Loan and each Swingline Loan shall be
payable on the Interest Payment Dates applicable to such Loan or
Swingline Loan, as the case may be, except as otherwise provided in
this Agreement. The applicable ABR Spread or LIBOR Spread for each
Interest Period or day within an Interest Period, as the case may
be, shall be determined by the Administrative Agent, and such
determination shall be presumptively correct absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default
in the payment of the principal of or interest on any Loan or
Swingline Loan or any other amount becoming due hereunder or under
any Security Document, by acceleration or otherwise, the Borrower
shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the
date of actual payment (after as well as before judgment or
bankruptcy) at a rate per annum (the "Default Rate")(computed on
the basis of the actual number of days elapsed over a year of
360 days) equal to (a) in the case of any Loan or any Swingline
Loan, the rate that would be applicable under Section 2.06 to such
Loan or Swingline Loan, plus 2% per annum, and (b) in the case of
any other amount, the rate that would be applicable under
Section 2.06 to a Tranche C Term Loan that is an ABR Loan, plus 2%
per annum.
SECTION 2.08. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that dollar deposits in
the principal amounts of the Loans comprising such Borrowing are
not generally available in the London interbank market, or that the
rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to Lenders having
Commitments representing at least 20% of the total Commitments of
making or maintaining their Eurodollar Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the
Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such
determination to the Borrowers and the Lenders. In the event of any
such determination, any request by a Borrower for a Eurodollar
Borrowing pursuant to Section 2.03 or 2.10 shall, until the
Administrative Agent shall have advised the Borrowers and the
Lenders that the circumstances giving rise to such notice no longer
exist, be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The
Additional Tranche B Commitments and the Tranche C Commitments
shall be automatically terminated at 5:00 p.m., New York City time,
on the Restatement Closing Date. The Revolving Credit Commitments
and the LC Commitment shall be automatically terminated at
5:00 p.m., New York City time, on the Revolving Credit Maturity
Date and the LC Maturity Date, respectively.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the
Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Commitments; provided,
however, that (i) each partial reduction of the Commitments shall
be in an integral multiple of $1,000,000 and in a minimum principal
amount of $10,000,000 and (ii) the Borrower shall not be permitted
to terminate or reduce the Revolving Credit Commitments if, as the
result of such termination or reduction, (A) the LC Commitment
would exceed the aggregate remaining Revolving Credit Commitments
or (B) the Revolving Credit Utilization would exceed the aggregate
remaining Revolving Credit Commitments. The LC Commitment may be
voluntarily terminated or reduced by the Borrower, as provided in
Section 3.06.
(c) The Revolving Credit Commitments shall be permanently
reduced by the amount of any mandatory prepayments applied to
Swingline Loans or Revolving Credit Borrowings pursuant to
Section 2.13(h).
(d) [Intentionally Omitted].
(e) Each reduction in the Commitments hereunder shall be made
ratably among the applicable Lenders in accordance with their
respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders, on
the date of each termination or reduction, the Commitment Fees on
the amount of the Commitments so terminated or reduced accrued to,
but excluding, the date of such termination or reduction.
(f) Nothing in this Section 2.09 shall prejudice any rights
that the Borrower may have against any Lender that fails to lend as
required hereunder prior to the date of termination of any
Commitment.
SECTION 2.10. Conversion and Continuation of Term Borrowings.
The Borrower shall have the right at any time upon prior
irrevocable notice to the Administrative Agent (i) not later than
11:00 a.m., New York City time, one Business Day prior to
conversion, to convert any Eurodollar Term Borrowing into an
ABR Term Borrowing, (ii) not later than 11:00 a.m., New York City
time, three Business Days prior to conversion or continuation, to
convert any ABR Term Borrowing into a Eurodollar Term Borrowing or
to continue any Eurodollar Term Borrowing as a Eurodollar Term
Borrowing for an additional Interest Period and (iii) not later
than 11:00 a.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any
Eurodollar Term Borrowing to another permissible Interest Period,
subject in each case to the following:
(a) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued Term
Borrowing;
(b) if less than all the outstanding principal amount of any
Term Borrowing shall be converted or continued, the aggregate
principal amount of such Term Borrowing converted or continued
shall be an integral multiple of $1,000,000 and not less than
$10,000,000;
(c) each conversion shall be effected by each Lender by
applying the proceeds of the new Term Loan of such Lender
resulting from such conversion to the Term Loan (or portion
thereof) of such Lender being converted;
(d) if any Eurodollar Term Borrowing is converted at a time
other than the end of the Interest Period applicable thereto,
the Borrower shall pay, upon demand, any amounts due to the
Lenders pursuant to Section 2.16;
(e) any portion of a Term Borrowing maturing or required to
be repaid in less than one month may not be converted into or
continued as a Eurodollar Term Borrowing;
(f) any portion of a Eurodollar Term Borrowing that cannot
be converted into or continued as a Eurodollar Term Borrowing
by reason of subparagraph (e) above shall be automatically
converted at the end of the Interest Period in effect for such
Borrowing into an ABR Term Borrowing; and
(g) no Interest Period may be selected for any Eurodollar
Term Borrowing comprised of Tranche A Term Loans, Tranche B
Term Loans, Additional Tranche B Term Loans or Tranche C Term
Loans that would end later than a Term Loan Repayment Date in
respect of Tranche A Term Loans,Tranche B Term Loans,
Additional Tranche B Term Loans or Tranche C Term Loans, as the
case may be, occurring on or after the first day of such
Interest Period if, after giving effect to such selection, the
aggregate outstanding amount of (i) the Eurodollar Term
Borrowings comprised of Tranche A Term Loans, Tranche B Term
Loans, Additional Tranche B Term Loans or Tranche C Term Loans,
as the case may be, with Interest Periods ending on or prior to
such Term Loan Repayment Date and (ii) the ABR Term Borrowings
comprised of Tranche A Term Loans, Tranche B Term Loans,
Additional Tranche B Term Loans or Tranche C Term Loans, as the
case may be, would not be at least equal to the principal
amount of Term Borrowings to be paid on such Term Loan
Repayment Date.
Each notice pursuant to this Section 2.10 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and
amount of the Term Borrowing that the Borrower requests be
converted or continued and whether such Term Borrowing is comprised
of Tranche A Term Loans, Tranche B Term Loans, Additional Tranche B
Term Loans or Tranche C Term Loans, (ii) whether such Term
Borrowing is to be converted to or continued as a Eurodollar Term
Borrowing or an ABR Term Borrowing, (iii) if such notice requests
a conversion, the date of such conversion (which shall be a
Business Day) and (iv) if such Term Borrowing is to be converted to
or continued as a Eurodollar Term Borrowing, the Interest Period
with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a
Eurodollar Term Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The
Administrative Agent shall advise the other Lenders of any notice
given pursuant to this Section 2.10 and of each Lender's portion of
any converted or continued Term Borrowing. If the Borrower shall
not have given notice in accordance with this Section 2.10 to
continue any Term Borrowing into a subsequent Interest Period (and
shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Term Borrowing), such Term Borrowing
shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued
into a new Interest Period as an ABR Term Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The
Borrower shall pay to the Administrative Agent, for the account of
the Lenders, on the dates set forth below, or if any such date is
not a Business Day, on the next succeeding Business Day (each such
date being a "Tranche A Term Loan Repayment Date"), a principal
amount of the Tranche A Term Loans (such amount, as adjusted from
time to time pursuant to Sections 2.11(b), 2.12 and 2.13(h), being
called the "Tranche A Term Loan Repayment Amount") equal to the
amount set forth below for such date, together in each case with
accrued and unpaid interest on the principal amount to be paid to
but excluding the date of such payment:
Date Amount
April 30, 1997 $ 14,155,404
October 31, 1997 3,391,892
April 30, 1998 7,891,892
October 31, 1998 7,891,892
April 30, 1999 19,891,892
October 31, 1999 69,891,892
April 30, 2000 69,891,892
October 31, 2000 82,996,622
Tranche A Maturity Date 82,996,622
On each Tranche A Term Loan Repayment Date, the Administrative
Agent shall apply the Tranche A Term Loan Repayment Amount paid to
the Administrative Agent to pay the Tranche A Term Loans in
accordance with Section 2.19(a).
(ii) The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, on the dates set forth below or, if any
such date is not a Business Day, on the next succeeding Business
Day (each such date being a "Tranche B Term Loan Repayment Date"),
a principal amount of the Tranche B Term Loans (such amount, as
adjusted from time to time pursuant to Sections 2.12 and 2.13(h),
being called the "Tranche B Term Loan Repayment Amount") equal to
the amount set forth below for such date, together in each case
with accrued and unpaid interest on the principal amount to be paid
to but excluding the date of such payment:
Date Amount
October 31, 1997 $ 685,809
April 30, 1998 685,811
October 31, 1998 685,811
April 30, 1999 685,811
October 31, 1999 7,543,919
April 30, 2000 7,543,919
October 31, 2000 10,287,163
April 30, 2001 10,287,163
October 31, 2001 82,297,297
Tranche B Maturity Date 82,297,297
On each Tranche B Term Loan Repayment Date, the Administrative
Agent shall apply the Tranche B Term Loan Repayment Amount paid to
the Administrative Agent to pay the Tranche B Term Loans in
accordance with Section 2.19(a).
(iii) The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, on the dates set forth below or, if any
such date is not a Business Day, on the next succeeding Business
Day (each such date being an "Additional Tranche B Term Loan
Repayment Date"), a principal amount of the Additional Tranche B
Term Loans (such amount, as adjusted from time to time pursuant to
Sections 2.12 and 2.13(h), being called the "Additional Tranche B
Term Loan Repayment Amount") equal to the amount set forth below
for such date, together in each case with accrued and unpaid
interest on the principal amount to be paid to but excluding the
date of such payment:
Date Amount
April 30, 1997 $ 750,000
October 31, 1997 750,000
April 30, 1998 750,000
October 31, 1998 750,000
April 30, 1999 750,000
October 31, 1999 750,000
April 30, 2000 750,000
October 31, 2000 750,000
April 30, 2001 24,000,000
October 31, 2001 35,000,000
Additional Tranche B Maturity Date 35,000,000
On each Additional Tranche B Term Loan Repayment Date, the
Administrative Agent shall apply the Additional Tranche B Term Loan
Repayment Amount paid to the Administrative Agent to pay the
Additional Tranche B Term Loans in accordance with Section 2.19(a).
(iv) The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, on the dates set forth below or, if any
such date is not a Business Day, on the next succeeding Business
Day (each such date being a "Tranche C Term Loan Repayment Date"),
a principal amount of the Tranche C Term Loans (such amount, as
adjusted from time to time pursuant to Sections 2.12 and 2.13(h),
being called the "Tranche C Term Loan Repayment Amount") equal to
the amount set forth below for such date, together in each case
with accrued and unpaid interest on the principal amount to be paid
to but excluding the date of such payment:
Date Amount
April 30, 1997 $ 250,000
October 31, 1997 250,000
April 30, 1998 250,000
October 31, 1998 250,000
April 30, 1999 250,000
October 31, 1999 250,000
April 30, 2000 250,000
October 31, 2000 250,000
April 30, 2001 500,000
October 31, 2001 500,000
April 30, 2002 73,500,000
Tranche C Maturity Date 73,500,000
On each Tranche C Term Loan Repayment Date, the Administrative
Agent shall apply the Tranche C Term Loan Repayment Amount paid to
the Administrative Agent to pay the Tranche C Term Loans in
accordance with Section 2.19(a).
(b) [Intentionally Omitted.]
(c) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Maturity Date,
(ii) all Tranche B Term Loans shall be due and payable on the
Tranche B Maturity Date, (iii) all Additional Tranche B Term Loans
shall be due and payable on the Additional Tranche B Maturity Date
and (iv) all Tranche C Term Loans shall be due and payable on the
Tranche C Maturity Date, in each case together with accrued and
unpaid interest on the principal amount to be paid to but excluding
the date of payment.
(d) All repayments pursuant to this Section 2.11 shall be
subject to Section 2.16, but shall otherwise be without premium or
penalty.
SECTION 2.12. Optional Prepayments. (a) The Borrower shall
have the right at any time and from time to time to prepay any
Borrowing in whole or in part, upon written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice)
delivered to the Administrative Agent (i) at least three Business
Days prior to the date designated for such prepayment, in the case
of any prepayment of a Eurodollar Borrowing, or (ii) by 11:00 a.m.,
New York City time, on the date designated for such prepayment in
the case of any prepayment of an ABR Borrowing; provided, however,
that each partial payment shall be in an amount that is an integral
multiple of $1,000,000 and, in the case of a Eurodollar Borrowing,
not less than $10,000,000 (or, in each case, the entire amount of
the Borrowing being prepaid).
(b) Optional prepayments of Term Loans made by the Borrower
pursuant to paragraph (a) above (i) out of the Borrowers' Portion
of Excess Cash Flow, (ii) out of the Net Cash Proceeds of any
Equity Issuance not required to be paid to the Lenders pursuant to
Section 2.13(c) or (iii) in an amount not to exceed $25,000,000 per
annum shall be allocated among the Tranche A Term Loans, the
Tranche B Term Loans, the Additional Tranche B Term Loans and the
Tranche C Term Loans (and to the scheduled installments of
principal with respect to any such Term Loans) in a manner
determined at the discretion of the Borrower.
(c) Optional prepayments of Term Loans made by the Borrower
pursuant to paragraph (a) above and not pursuant to paragraph (b)
above shall first, be allocated pro rata among (i) the Tranche A
Term Loans, (ii) the Tranche B Term Loans, (iii) the Additional
Tranche B Term Loans and (iv) the Tranche C Term Loans, second
applied against the scheduled installments of principal, if any, of
any Term Loans due on any Term Loan Repayment Date occurring within
twelve months of the date of such prepayment and third, applied
pro rata against the remaining scheduled installments of principal
due in respect of the Term Loans under Sections 2.11(a)(i), (ii),
(iii) and (iv), respectively.
(d) Each notice of prepayment shall specify the amount to be
prepaid, the prepayment date, whether the related prepayment
relates to a Revolving Credit Borrowing or a Term Borrowing and the
principal amount of each Revolving Credit Borrowing or Term
Borrowing (or portion thereof) to be prepaid, shall be irrevocable
and shall commit the Borrower to prepay such obligations by the
amount specified therein on the date specified therein.
(e) No optional prepayment of Term Loans made by the Borrower
pursuant to this Section 2.12 shall reduce the Borrower's obli-
gation to make mandatory prepayments pursuant to paragraph (b),
(c), (d), (e) or (f) of Section 2.13.
SECTION 2.13. Mandatory Prepayments. (a) On the date of any
termination or reduction of the Revolving Credit Commitments
pursuant to Section 2.09, the Borrower shall pay or prepay so much
of the then-outstanding Swingline Loans and the then-outstanding
Revolving Credit Borrowings as shall be necessary in order that the
aggregate principal amount of the Swingline Loans and Revolving
Loans outstanding at such time will not exceed the aggregate
Revolving Credit Commitments (after giving effect to such
termination or reduction and after giving effect to each deemed
reduction to the Revolving Credit Commitments in connection with
the making of a Swingline Loan) less the aggregate LC Exposure and
the aggregate Unsecured LC Exposure at such time.
(b) With respect to (i) any Asset Sale that is an Asset Sale
at the time of such sale or other disposition and (ii) any Asset
Sale not described in clause (i) that becomes an Asset Sale due to
the operation of the first proviso contained in the definition of
the term "Asset Sale", the Borrower shall apply not later than the
third Business Day following the determination of the amount of Net
Cash Proceeds received in respect thereof (but in no event later
than 60 days after the initial receipt by any Loan Party or any of
their respective Subsidiaries of such Net Cash Proceeds) an amount
equal to 100% of the Net Cash Proceeds received therefrom to prepay
outstanding Loans and Swingline Loans in accordance with
Section 2.13(h).
(c) In the event and on each occasion that an Equity Issuance
occurs, the Borrower shall, substantially simultaneously with (and
in any event not later than the third Business Day next following)
the occurrence of such Equity Issuance, apply an aggregate amount
equal to 25% of the Net Cash Proceeds therefrom to prepay
outstanding Loans and Swingline Loans in accordance with
Section 2.13(h).
(d) [Intentionally Omitted].
(e) No later than the earlier of (i) 90 days after the end of
each fiscal year of JSC, commencing with the fiscal year ending on
December 31, 1994, and (ii) the date on which the financial
statements with respect to such period are delivered pursuant to
Section 6.04(a), the Borrower shall prepay outstanding Loans and
Swingline Loans in accordance with Section 2.13(h) in an aggregate
principal amount equal to 75% of Excess Cash Flow for the fiscal
year then ended; provided, however, that if for any fiscal year the
ratio of (x) Consolidated EBITDA minus Consolidated Capital
Expenditures to (y) Consolidated Interest Expense is 2.5 to 1 or
greater, the amount of Excess Cash Flow for such year required to
be used to prepay the Loans and Swingline Loans under this
Section 2.13(e) shall be reduced to 50%.
(f) In the event that any Loan Party or any Subsidiary of a
Loan Party shall receive Net Cash Proceeds from the issuance or
other disposition of Indebtedness for money borrowed of any Loan
Party or any Subsidiary of a Loan Party (other than Indebtedness
for money borrowed permitted pursuant to Section 7.01 (other than
clause (k) thereof)), including pursuant to any Permitted Equipment
Financing or any Permitted Timber Financing, then the Borrower
shall substantially simultaneously with (and in any event not later
than the third Business Day next following) the receipt of such Net
Cash Proceeds by such Loan Party or Subsidiary, apply an amount
equal to 100% of such Net Cash Proceeds to prepay outstanding Loans
and Swingline Loans in accordance with Section 2.13(h).
(g) In the event that there shall occur any Taking or
Destruction (as such terms are defined in the Mortgages) of any
Mortgaged Property and pursuant to the provisions of the applicable
Mortgage amounts payable with respect thereto are to be applied to
the Secured Obligations, the Borrower shall apply an amount equal
to 100% of the Net Cash Proceeds therefrom to prepay the
outstanding Loans and Swingline Loans in accordance with
Section 2.13(h).
(h) Mandatory prepayments of outstanding obligations under
this Agreement made by the Borrower pursuant to paragraphs (b),
(c), (e), (f) and (g) above first, shall be allocated pro rata
among the then-outstanding (i) Tranche A Term Loans,
(ii) Tranche B Term Loans, (iii) Additional Tranche B Term Loans
and (iv) Tranche C Term Loans and, subject to paragraph (k) below,
applied pro rata against the remaining scheduled installments of
principal due in respect of Tranche A Term Loans, Tranche B Term
Loans, Additional Tranche B Term Loans and Tranche C Term Loans
under Sections 2.11(a)(i), (ii), (iii) and (iv), respectively, and
second, shall be applied to prepay Swingline Loans and then
Revolving Credit Borrowings.
(i) The Borrower shall deliver to the Administrative Agent,
(i) at the time of each prepayment by the Borrower required under
paragraph (b), (c), (e), (f) or (g) above, a certificate signed by
a Financial Officer of the Borrower setting forth in reasonable
detail the calculation of the amount of such prepayment and (ii) at
least three Business Days prior to the time of each prepayment
required under this Section 2.13, a notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of
each Loan being prepaid and the principal amount of each Loan or
Swingline Loan (or portion thereof) to be prepaid. All prepayments
of Borrowings and Swingline Loans under this Section 2.13 shall be
subject to Section 2.16, but shall otherwise be without premium or
penalty.
(j) Amounts to be applied pursuant to this Section 2.13 to the
prepayment of Term Loans and Revolving Loans shall be applied, as
applicable, first to reduce outstanding ABR Term Loans and ABR
Revolving Loans. Any amounts remaining after each such application
shall, at the option of the Borrower, be applied to prepay Euro-
dollar Term Loans or Eurodollar Revolving Loans, as the case may
be, immediately and/or shall be deposited in the Prepayment Account
(as defined below). The Administrative Agent shall apply any cash
deposited in the Prepayment Account (i) allocable to Term Loans to
prepay Eurodollar Term Loans and (ii) allocable to Revolving Loans
to prepay Eurodollar Revolving Loans, in each case on the last day
of their respective Interest Periods (or, at the direction of the
Borrower, on any earlier date) until all outstanding Term Loans or
Revolving Loans, as the case may be, have been prepaid or until all
the allocable cash on deposit with respect to such Loans has been
exhausted. For purposes of this Agreement, the term "Prepayment
Account" shall mean an account established by the Borrower with the
Administrative Agent and over which the Administrative Agent shall
have exclusive dominion and control, including the exclusive right
of withdrawal for application in accordance with this
paragraph (j). The Administrative Agent will, at the request of the
Borrower, invest amounts on deposit in the Prepayment Account in
Permitted Investments that are described in clause (a), (b), (c) or
(d) of the definition of such term and that mature prior to the
last day of the applicable Interest Periods of the Eurodollar Term
Borrowings or Eurodollar Revolving Borrowings to be prepaid, as the
case may be; provided, however, that (i) the Administrative Agent
shall not be required to make any investment that, in its sole
judgment, would require or cause the Administrative Agent to be in,
or would result in any, violation of any law, statute, rule or
regulation and (ii) the Administrative Agent shall have no
obligation to invest amounts on deposit in the Prepayment Account
if a Default or Event of Default shall have occurred and be
continuing. The Borrower shall indemnify the Administrative Agent
for any losses relating to the investments so that the amount
available to prepay Eurodollar Borrowings on the last day of the
applicable Interest Period is not less than the amount that would
have been available had no investments been made pursuant thereto.
Other than any interest earned on such investments, the Prepayment
Account shall not bear interest. Interest or profits, if any, on
such investments shall be deposited in the Prepayment Account and
reinvested and disbursed as specified above. If the maturity of the
Loans has been accelerated pursuant to Article VIII, the
Administrative Agent may, in its sole discretion, apply all amounts
on deposit in the Prepayment Account to satisfy any of the Obli-
gations. The Borrower hereby grants to the Administrative Agent,
for its benefit and the benefit of the Fronting Bank, the Swingline
Lender and the Lenders, a security interest in the Prepayment
Account to secure the Obligations.
(k) Notwithstanding paragraph (h) above, with respect to the
amount of any mandatory prepayment described therein that is
allocated to the then-outstanding Tranche B Term Loans, Additional
Tranche B Term Loans and Tranche C Term Loans (such amounts, the
"Prepayment Amount"), the Borrower may, in lieu of applying such
amount to the prepayment of such Term Loans as provided in
paragraph (h) above, at least one Business Day prior to the date
specified therein for such prepayment, (i) deposit in the Escrow
Account (as defined below) the Prepayment Amount and (ii) provide
to each Tranche B Lender, Additional Tranche B Lender and Tranche C
Lender a notice (each, a "Prepayment Option Notice") as described
below. Each Prepayment Option Notice shall be in writing, shall
refer to this Section 2.13(k) and shall (i) set forth the
Prepayment Amount and the portion thereof that the applicable
Tranche B Lender, Additional Tranche B Lender or Tranche C Lender
(each, a "Prepayment Lender") will be entitled to receive if it
accepts such mandatory prepayment in accordance with this
paragraph (k), (ii) offer to prepay on a specified date (each, a
"Mandatory Prepayment Date"), which shall be not less than 20 days
or more than 25 days after the date of the Prepayment Option
Notice, the Tranche B Term Loans, Additional Tranche B Term Loans
and Tranche C Term Loans of such Prepayment Lender by an amount
equal to the portion of the Prepayment Amount indicated in such
Prepayment Lender's Prepayment Option Notice as being applicable to
such Prepayment Lender, (iii) request such Prepayment Lender to
notify the Borrower and the Administrative Agent in writing, no
later than the fifth day prior to the Mandatory Prepayment Date, of
such Prepayment Lender's acceptance or rejection (in each case, in
whole and not in part) of such offer of prepayment and (iv) inform
such Prepayment Lender that failure by such Prepayment Lender to
accept such offer in writing on or before the fifth day prior to
the Mandatory Prepayment Date shall be deemed a rejection of such
prepayment offer. Each Prepayment Option Notice shall be given by
telecopy, confirmed by hand delivery, overnight courier service or
registered or certified mail, in each case addressed as provided in
Section 10.01. On the Mandatory Prepayment Date, the Administrative
Agent shall withdraw from the Escrow Account the aggregate amount
necessary to prepay that portion of the Prepayment Amount in
respect of which such Prepayment Lenders have accepted prepayment
as described above (such Prepayment Lenders, the "Accepting
Lenders"), and shall apply such amount on behalf of the Borrower
pro rata against the remaining installments of principal due in
respect of the Term Loans of the Accepting Lenders under
Section 2.11(a)(ii), (iii) and (iv), as applicable. The amount
remaining in the Escrow Account after the payment described in the
immediately preceding sentence shall be allocated pro rata among
the then-outstanding (i) Tranche A Term Loans, (ii) Tranche B
Term Loans of the Accepting Lenders, (iii) Additional Tranche B
Term Loans of the Accepting Lenders and (iv) Tranche C Term Loans
of the Accepting Lenders and applied against the remaining
scheduled installments of principal due in respect of such Term
Loans of the Accepting Lenders under Sections 2.11(a)(i), (ii),
(iii) and (iv), as applicable, in the order of maturity. For
purposes of this Agreement, the term "Escrow Account" shall mean an
account established by the Borrower with the Administrative Agent
and over which the Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal
for application in accordance with this paragraph (k). The
Administrative Agent will, at the request of the Borrower, invest
amounts on deposit in the Escrow Account in Permitted Investments
that are described in clause (a), (b), (c) or (d) of the definition
of such term and that mature prior to the Mandatory Prepayment
Date; provided, however, that (i) the Administrative Agent shall
not be required to make any investment that, in its sole judgment,
would require or cause the Administrative Agent to be in, or would
result in any, violation of any law, statute, rule or regulation
and (ii) the Administrative Agent shall have no obligation to
invest amounts on deposit in the Escrow Account if a Default or
Event of Default shall have occurred and be continuing. The
Borrower shall indemnify the Administrative Agent for any losses
relating to the investments so that the amount available to prepay
the Tranche B Term Loans, Additional Tranche B Term Loans and
Tranche C Term Loans of the Accepting Lenders on the Mandatory
Prepayment Date is not less than the amount that would have been
available had no investments been made pursuant to this paragraph
(k). Other than any interest earned on such investments, the Escrow
Account shall not bear interest. Interest or profits, if any, on
such investments shall be deposited in the Escrow Account and
reinvested and disbursed as specified above. If the maturity of the
Loans has been accelerated pursuant to Article VIII, the
Administrative Agent may, in its sole discretion, apply all amounts
on deposit in the Escrow Account to satisfy any of the Obligations.
The Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Fronting Bank, the Swingline Lender
and the Lenders, a security interest in the Escrow Account to
secure the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances;
Increased Costs. (a) Notwithstanding any other provision herein, if
after the date of this Agreement any change in applicable law or
regulation or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law)
shall change the basis of taxation of payments to any Lender, the
Swingline Lender or the Fronting Bank of the principal of or
interest on any Eurodollar Loan made by such Lender or any Letter
of Credit obligations, Fees or other amounts payable hereunder
(other than changes in respect of income and franchise taxes
imposed on such Lender, the Swingline Lender or the Fronting Bank
by the jurisdiction in which such Lender, the Swingline Lender or
the Fronting Bank is organized or has its principal or lending
office or by any political subdivision or taxing authority thereof
or therein), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of,
deposits with or for the account of or credit extended by such
Lender, the Swingline Lender or the Fronting Bank (except any such
reserve requirement that is reflected in the Adjusted LIBO Rate or
in the Alternate Base Rate) or shall impose on such Lender, the
Swingline Lender or the Fronting Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or main-
taining any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Lender, the Swingline Lender or the
Fronting Bank hereunder (whether of principal, interest or other-
wise) by an amount deemed by such Lender, the Swingline Lender or
the Fronting Bank to be material, then the Borrower will pay to
such Lender, the Swingline Lender or the Fronting Bank following
receipt of a certificate of such Lender, the Swingline Lender or
the Fronting Bank to such effect in accordance with Section 2.14(c)
such additional amount or amounts as will compensate such Lender,
the Swingline Lender or the Fronting Bank on an after-tax basis for
such additional costs incurred or reduction suffered.
Notwithstanding any other provision in this paragraph (a), none of
any Lender, the Swingline Lender or the Fronting Bank shall be
entitled to demand compensation pursuant to this paragraph (a) if
it shall not be the general practice of such Lender, the Swingline
Lender or the Fronting Bank, as applicable, to demand such compen-
sation in similar circumstances under comparable provisions of
other comparable credit agreements.
(b) If any Lender, the Swingline Lender or the Fronting Bank
shall have determined that the adoption after the date hereof of
any law, rule, regulation, agreement or guideline regarding capital
adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
any Lender (or any lending office of such Lender), the Swingline
Lender or the Fronting Bank or any Lender's, the Swingline Lender's
or the Fronting Bank's holding company, if any, with any request
or directive regarding capital adequacy issued under any law, rule,
regulation or guideline (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such
Lender's, the Swingline Lender's or the Fronting Bank's capital or
on the capital of such Lender's, the Swingline Lender's or the
Fronting Bank's holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender, the Swingline Loans
made by the Swingline Lender or the Letters of Credit issued by the
Fronting Bank pursuant hereto to a level below that which such
Lender, the Swingline Lender or the Fronting Bank or such Lender's,
the Swingline Lender's or the Fronting Bank's holding company, if
any, could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such Lender's, the
Swingline Lender's or the Fronting Bank's policies and the policies
of such Lender's, the Swingline Lender's or the Fronting Bank's
holding company, if any, with respect to capital adequacy) by an
amount deemed by such Lender, the Swingline Lender or the Fronting
Bank to be material, then from time to time the Borrower shall pay
to such Lender, the Swingline Lender or the Fronting Bank following
receipt of a certificate of such Lender, the Swingline Lender or
the Fronting Bank to such effect in accordance with Section 2.14(c)
such additional amount or amounts as will compensate such Lender,
the Swingline Lender or the Fronting Bank or such Lender's, the
Swingline Lender's or the Fronting Bank's holding company, if any,
on an after-tax basis for any such reduction suffered.
Notwithstanding any other provision in this paragraph (b), none of
any Lender, the Swingline Lender or the Fronting Bank shall be
entitled to demand compensation pursuant to this paragraph (b) if
it shall not be the general practice of such Lender, the Swingline
Lender or the Fronting Bank, as applicable, to demand such compen-
sation in similar circumstances under comparable provisions of
other comparable credit agreements.
(c) A certificate of each Lender, the Swingline Lender or the
Fronting Bank setting forth such amount or amounts as shall be
necessary to compensate such Lender, the Swingline Lender or the
Fronting Bank or its holding company, if any, as specified in
paragraph (a) or (b) above, as the case may be, and setting forth
in reasonable detail an explanation of the basis of requesting such
compensation in accordance with paragraph (a) or (b) above,
including calculations in reasonable detail, shall be delivered to
the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Lender, the Swingline Lender or the
Fronting Bank the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure on the part of any Lender, the Swingline Lender or
the Fronting Bank to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return
on capital with respect to any period shall not constitute a waiver
of such Lender's, the Swingline Lender's or the Fronting Bank's
right to demand compensation with respect to such period or any
other period, except that none of any Lender, the Swingline Lender
or the Fronting Bank shall be entitled to compensation under this
Section 2.14 for any costs incurred or reduction suffered with
respect to any date unless such Lender, the Swingline Lender or the
Fronting Bank, as applicable, shall have notified the Borrower that
it will demand compensation for such costs or reductions under
paragraph (c) above, not more than six months after the later of
(i) such date and (ii) the date on which such Lender, the Swingline
Lender or the Fronting Bank, as applicable, shall have become aware
of such costs or reductions. The protection of this Section 2.14
shall be available to each Lender, the Swingline Lender or the
Fronting Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition that shall have occurred or
been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any
other provision herein, if after the date hereof any change in any
law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrowers and to the
Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon any request by the
Borrower for a Eurodollar Borrowing shall, as to such Lender
only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by
it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans
as of the effective date of such notice as provided in para-
graph (b) below.
In the event any Lender shall exercise its rights under
subparagraph (i) or (ii) above, all payments and prepayments of
principal that would otherwise have been applied to repay the Euro-
dollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar
Loan, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such notice
shall be effective on the date of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender may sustain or
incur with respect to Eurodollar Loans as a consequence of (a) any
failure by the Borrower to fulfill on the date of any Borrowing
hereunder the applicable conditions set forth in Article V (or, in
the case of the Borrowings to occur on the Restatement Closing
Date, Section 9 of the Amendment Agreement), (b) any failure by the
Borrower to borrow or to refinance, convert or continue any Loan
hereunder after irrevocable notice of such borrowing, refinancing,
conversion or continuation has been given pursuant to Section 2.03
or 2.10, (c) any payment, prepayment or conversion of a Eurodollar
Loan required or permitted by any other provision of this Agreement
or otherwise, or any assignment of a Eurodollar Loan required by
Section 2.21(b), in each case made or deemed made on a date other
than the last day of the Interest Period applicable thereto or
(d) any default in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as and
when due and payable (at the due date thereof, whether at scheduled
maturity, by acceleration, irrevocable notice of prepayment or
otherwise), including, in each such case, any loss or reasonable
expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar
Loan. Such loss or reasonable expense shall be equal to the sum of
(a) such Lender's actual costs and expenses incurred (other than
any lost profits) in connection with, or by reason of, any of the
foregoing events and (b) an amount equal to the excess, if any, as
reasonably determined by such Lender of (i) its cost of obtaining
the funds for the Loan being paid, prepaid, converted or not
borrowed, converted or continued (assumed to be the Adjusted LIBO
Rate applicable thereto) for the period from and including the date
of such payment, prepayment, conversion or failure to borrow,
convert or continue to but excluding the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, con-
vert or continue, the Interest Period for such Loan that would have
commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid,
converted or not borrowed, converted or continued for such period
or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts, including calculations in
reasonable detail, that such Lender is entitled to receive pursuant
to this Section 2.16 shall be delivered to the Borrower and shall
be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under
Section 2.15 or permitted under Section 2.12(b) or Sections 2.13(h)
and (k), each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment
of the Commitment Fees, each payment of the LC Fees, each reduction
of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as
a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments
(or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such
Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's
percentage of such Borrowing, computed in accordance with
Section 2.01, to the next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff
or counterclaim against any Loan Party, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect
of any Loan or Loans or LC Exposure as a result of which the unpaid
principal portion of its Loans or its LC Exposure shall be
proportionately less than the unpaid principal portion of the Loans
of any other Lender or any other Lender's LC Exposure, such Lender
shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender
the purchase price for, a participation in the Loans of such other
Lender or the LC Exposure of such other Lender, so that the
aggregate unpaid principal amount of the Loans, LC Exposure and
participations in Loans and LC Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal amount
of all Loans and LC Exposure then outstanding as the principal
amount of such Lender's Loans and LC Exposure prior to such
exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Loans and LC Exposure
outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this
Section 2.18 and the payment giving rise thereto shall thereafter
be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or
prices or adjustment restored without interest. JSC, JSCE and the
Borrower expressly consent to the foregoing arrangements and agree
that any Lender holding a participation in a Loan or LC Exposure
deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Loan Parties to such Lender by reason thereof
as fully as if such Lender had made a Loan directly to the Borrower
in the amount of such participation.
SECTION 2.19. Payments. (a) Except as provided in
Sections 2.05(d) and 3.04(a) and (b), the Loan Parties shall make
each payment (including principal of or interest on any Loan or
Swingline Loan or any Fees or other amounts) hereunder and under
any other Loan Document not later than 12:00 noon, New York City
time, on the date when due in immediately available dollars,
without defense, setoff or counterclaim. Each such payment (other
than (i) the payments specified in Sections 3.04(a), 3.04(b) and
3.07, which shall be paid directly to the Fronting Bank, and
(ii) principal of and interest on Swingline Loans, which shall be
paid directly to the Swingline Lender) shall be made to the
Administrative Agent at its office at 270 Park Avenue, New York,
New York. Payments made directly to the Fronting Bank shall be made
to such account of the Fronting Bank as the Fronting Bank shall
specify by notice to the Borrower. Payments made directly to the
Swingline Lender shall be made to such account of the Swingline
Lender as the Swingline Lender shall specify by notice to the
Borrower. Any payments received by the Administrative Agent, the
Fronting Bank or the Swingline Lender after the specified time for
receipt of such payment on any day shall be deemed to have been
received on the next Business Day. The Administrative Agent shall
distribute to the applicable Lenders all payments received by the
Administrative Agent for their respective accounts, promptly
following receipt thereof.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur,
on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.20. Taxes. (a) Any and all payments by the Loan
Parties hereunder shall be made, in accordance with Section 2.19,
free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed
on the net income of the Administrative Agent, the Collateral
Agent, the Fronting Bank or the Swingline Lender or any Lender (or
any transferee or assignee thereof, including a participation
holder (any such entity being called a "Transferee")) and franchise
taxes imposed on the Administrative Agent, the Collateral Agent,
the Fronting Bank or the Swingline Lender or any Lender (or Trans-
feree) by the United States or any jurisdiction under the laws of
which the Administrative Agent, the Collateral Agent, the Fronting
Bank, the Swingline Lender or any such Lender (or Transferee) is
organized or has its principal office or lending office or any
political subdivision or taxing authority thereof or therein (all
such nonexcluded taxes, levies, imposts, deductions, charges, with-
holdings and liabilities being hereinafter referred to as "Taxes").
If any Taxes are required to be deducted from or in respect of any
sum payable hereunder to any Lender (or any Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or
the Fronting Bank, (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.20) such Lender (or Transferee), the Administrative
Agent, the Collateral Agent, the Swingline Lender or the Fronting
Bank (as the case may be) shall receive an amount equal to the sum
it would have received had no such deductions been made, (ii) JSC,
JSCE or the Borrower, as applicable, shall make such deductions and
(iii) JSC, JSCE or the Borrower, as applicable, shall pay the full
amount deducted to the relevant taxing authority or other Govern-
mental Authority in accordance with applicable law; provided,
however, that no Transferee of any Lender shall be entitled to
receive any greater payment under this paragraph (a) than such
Lender would have been entitled to receive with respect to the
rights assigned, participated or otherwise transferred unless
(x) such assignment, participation or transfer shall have been made
at a time when the circumstances (including a Change of Law) giving
rise to such greater payment did not exist or had not yet occurred
or (y) such assignment, participation or transfer shall have been
at the request of the Borrower.
(b) The Borrower agrees to pay any current or future stamp,
intangible or documentary taxes or any other excise or property
taxes, charges or similar levies (including, without limitation,
mortgage recording taxes and similar fees) that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, any
Assignment and Acceptance entered into at the request of the
Borrower or any other Loan Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee),
the Administrative Agent, the Collateral Agent, the Swingline
Lender and the Fronting Bank for the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes on amounts payable under
this Section 2.20) paid by such Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or
the Fronting Bank, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant taxing authority or
other Governmental Authority. Such indemnification shall be made
within 30 days after the date any Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or
the Fronting Bank, as the case may be, makes written demand
therefor (which demand shall identify the nature and amount of
Taxes and Other Taxes for which indemnification is being sought and
shall include a copy of the relevant portion of any written
assessment from the relevant taxing authority demanding payment of
such Taxes or Other Taxes, unless the Lender (or Transferee), the
Administrative Agent, the Collateral Agent, the Swingline Lender or
the Fronting Bank, as the case may be, determines, in its sole
discretion, that such portion of any such assessment is
confidential). If a Lender (or Transferee), the Administrative
Agent, the Swingline Lender or the Fronting Bank shall become aware
that it is entitled to receive a refund in respect of Taxes or
Other Taxes as to which it has been indemnified by the Borrower
pursuant to this Section 2.20, it shall promptly notify the
Borrower of the availability of such refund and shall, within
30 days after receipt of a request by the Borrower, apply for such
refund at the Borrower's expense. If any Lender (or Transferee),
the Administrative Agent, the Swingline Lender or the Fronting
Bank receives a refund in respect of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower pursuant to this
Section 2.20, it shall promptly notify the Borrower of such refund
and shall, within 30 days of receipt, repay such refund (to the
extent of amounts that have been paid by the Borrower under this
Section 2.20 with respect to such refund and not previously
reimbursed) to the Borrower, net of all reasonable out-of-pocket
expenses of such Lender, the Administrative Agent, the Swingline
Lender or the Fronting Bank and without interest (other than the
interest, if any, included in such refund net of any Taxes payable
with respect to receipt of such refund), provided that the
Borrower, upon the request of such Lender (or Transferee), the
Administrative Agent, the Swingline Lender or the Fronting Bank,
agree to return such refund (plus penalties, interest or other
charges) to such Lender (or Transferee), the Administrative Agent,
the Swingline Lender or the Fronting Bank in the event such Lender
(or Transferee), the Administrative Agent, the Swingline Lender or
the Fronting Bank is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by JSC, JSCE or the Borrower in respect of any
payment to any Lender (or Transferee), the Administrative Agent,
the Collateral Agent, the Swingline Lender or the Fronting Bank,
JSC, JSCE or the Borrower, as the case may be, will furnish to the
Administrative Agent, at its address referred to in Section 10.01,
the original or a certified copy of a receipt evidencing payment
thereof or other evidence reasonably satisfactory to such Lender
(or Transferee), the Administrative Agent, the Collateral Agent,
the Swingline Lender or the Fronting Bank, as the case may be.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 2.20 shall survive the payment in full of the principal of
and interest on all Loans made hereunder.
(f) Each of the Administrative Agent, the Fronting Bank, the
Swingline Lender and any Lender (or Transferee) that is not
incorporated or otherwise formed under the laws of the United
States of America or a state thereof (a "Non-U.S. Person") agrees
that it shall on the date it becomes a Lender (or Transferee), the
Administrative Agent, a Fronting Bank or Swingline Lender
hereunder, deliver to the Borrower and the Administrative Agent
(i) one duly completed copy of United States Internal Revenue
Service Form 1001 or 4224, or (ii) in the case of Lenders (or
Transferees) exempt from United States Federal withholding tax
pursuant to Sections 871(h) or 881(c) of the Code, one duly
completed copy of a United States Internal Revenue Service Form W-8
and a certificate representing that such Non-U.S. Person is not a
bank for purposes of Section 881(c) of the Code, or any successor
applicable form of any thereof, certifying in each case that such
Lender (or Transferee), the Administrative Agent, the Fronting Bank
or the Swingline Lender is entitled to receive payments hereunder
payable to it without deduction or withholding of any United States
Federal income taxes, or subject to a reduced rate thereof. Each of
the Administrative Agent, the Fronting Bank or the Swingline Lender
or any Lender (or Transferee) that delivers to the Borrower and the
Administrative Agent any such form or certification further under-
takes to deliver to the Borrower and the Administrative Agent
further copies of any such form or certification or other manner of
certification reasonably satisfactory to the Borrower on or before
the date that any such form or certification expires or becomes
obsolete or of the occurrence of any event requiring a change in
the most recent form or certification previously delivered by it to
the Borrower or the Administrative Agent, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or
the Administrative Agent, certifying that the Administrative Agent,
Fronting Bank, Swingline Lender or such Lender (or Transferee), as
the case may be, is entitled to receive payments hereunder without
deduction or withholding of any United States Federal income taxes,
or subject to a reduced rate thereof. If at any time there has
occurred, on or prior to the date on which any delivery of any such
form or certification would otherwise be required, any change in
law, rule, regulation, treaty, convention or directive, or any
change in the interpretation or application of any thereof ("Change
of Law"), that renders all such forms or certification inapplicable
or which would prevent the Administrative Agent, Fronting Bank,
Swingline Lender or such Lender (or Transferee), as the case may
be, from duly completing and delivering any such form or
certification with respect to it, the Administrative Agent,
Fronting Bank, Swingline Lender or such Lender (or Transferee), as
the case may be, shall advise the Borrower that under applicable
law it shall be subject to withholding of United States Federal
income tax at the full statutory rate, a reduced rate of
withholding or without deduction or withholding. A Non-U.S. Person
shall be required to furnish any such form or certification only if
it is entitled to claim an exemption from or a reduced rate of
withholding. Each of the Administrative Agent, the Fronting Bank,
the Swingline Lender and any Lender that is a Non-U.S. Person and
that is a party hereto as of the Restatement Closing Date hereby
represents and warrants that, as of the Restatement Closing Date,
payments made to it hereunder are exempt from withholding of United
States Federal income taxes (i) because such payments are
effectively connected with a United States trade or business
conducted by such Non-U.S. Person; (ii) pursuant to the terms of an
income tax treaty between the United States and such Non-U.S.
Person's country of residence; or (iii) because such payments are
portfolio interest exempt pursuant to Section 871(h) or 881(c) of
the Code. Notwithstanding any provision of paragraph (a) above to
the contrary, none of JSC, JSCE or the Borrower shall have any
obligation to pay any Taxes or Other Taxes or to indemnify any
Lender (or Transferee), the Administrative Agent, the Swingline
Lender or the Fronting Bank for such Taxes or Other Taxes pursuant
to Section 2.20 to the extent that such Taxes or Other Taxes result
from (i) the failure of any Lender (or Transferee), the
Administrative Agent, the Fronting Bank or the Swingline Bank to
comply with its obligations pursuant to this paragraph (f) or
(ii) any representation made on any such form or certification (or
successor applicable form or certification) by the Lender (or
Transferee), the Administrative Agent, the Fronting Bank, or the
Swingline Lender incurring such Taxes or Other Taxes proving to
have been incorrect, false or misleading in any material respect
when so made or deemed to be made.
SECTION 2.21. Duty to Mitigate; Assignment of Commitments
under Certain Circumstances. (a) Any of the Administrative Agent,
the Fronting Bank, the Swingline Lender or any Lender (or
Transferee) claiming any additional amounts payable pursuant to
Section 2.14 or Section 2.20 or exercising its rights under
Section 2.15 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of its
applicable lending office if the making of such filing or change
would avoid the need for or reduce the amount of any such addi-
tional amounts that may thereafter accrue or avoid the
circumstances giving rise to such exercise and would not, in the
sole determination of such Lender (or Transferee), the
Administrative Agent, the Fronting Bank or the Swingline Lender, as
the case may be, require it to incur additional costs or be
otherwise disadvantageous to such Lender (or Transferee), the
Administrative Agent, the Fronting Bank or the Swingline Lender.
(b) In the event that any Lender shall have delivered a notice
or certificate pursuant to Section 2.14 or 2.15, or the Borrower
shall be required to make additional payments to any Lender under
Section 2.20, the Borrower shall have the right, but not the
obligation, at its own expense (including with respect to the
processing and recordation fee referred to in Section 10.04(b)),
upon notice to such Lender and the Administrative Agent, to replace
such Lender with an assignee (in accordance with and subject to the
restrictions contained in Section 10.04(b)) approved by the
Administrative Agent (which approval shall not be unreasonably
withheld), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the
restrictions contained in Section 10.04(b)) all its interests,
rights and obligations under this Agreement to such assignee;
provided, however, that no Lender shall be obligated to make any
such assignment unless (i) such assignment shall not conflict with
any law or any rule, regulation or order of any Governmental
Authority, (ii) such assignee shall pay to the affected Lender in
immediately available funds on the date of such assignment the
principal of the Loans made by such Lender hereunder and (iii) the
Borrower shall pay to the affected Lender in immediately available
funds on the date of such assignment the interest accrued to the
date of payment on the Loans made by such Lender hereunder and all
other amounts accrued for such Lender's account or owed to it
hereunder.
SECTION 2.22. Swingline Loans. (a) On the terms and subject to
the conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees, at any time and from
time to time from and including the 1994 Closing Date to but
excluding the earlier of the Revolving Credit Maturity Date and the
termination of the Revolving Credit Commitments, in accordance with
the terms hereof, to make Swingline Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed
the lesser of (i) $25,000,000 and (ii) the difference between
(A) the aggregate Revolving Credit Commitments, as the same may
have been reduced from time to time pursuant to Section 2.09, at
such time and (B) the sum of (I) the aggregate principal amount of
Revolving Loans outstanding at such time, (II) the LC Exposure at
such time and (III) the Unsecured LC Exposure at such time. Each
Swingline Loan shall be in a principal amount that is an integral
multiple of $500,000. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to
the general deposit account of the Borrower with the Swingline
Lender by 3:00 p.m. on the date such Swingline Loan is requested to
be made pursuant to paragraph (b) below. Within the limits set
forth in the first sentence of this paragraph, the Borrower may
borrow, pay or prepay and reborrow Swingline Loans prior to the
Revolving Credit Maturity Date on the terms and subject to the
conditions and limitations set forth herein.
(b) The Borrower shall give the Administrative Agent
telephonic, written or telecopy notice (in the case of telephonic
notice, such notice shall be promptly confirmed by telecopy) not
later than 11:00 a.m., New York City time, on the day of a proposed
borrowing. Such notice shall be delivered on a Business Day, shall
be irrevocable and shall refer to this Agreement and shall specify
the requested date (which shall be a Business Day) and amount of
such Swingline Loan. The Administrative Agent shall promptly advise
the Swingline Lender of any notice received from the Borrower
pursuant to this paragraph (b).
(c) The Swingline Lender may by written or telecopy notice
given to the Administrative Agent not later than 10:00 a.m., New
York City time, on any Business Day require the Lenders to purchase
all or any portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans to be
purchased and the Administrative Agent shall promptly upon receipt
of such notice give notice to each Lender, specifying in such
notice to each Lender such Lender's pro rata percentage (based on
the percentage that such Lender's Revolving Credit Commitment bears
to the aggregate amount of the Revolving Credit Commitments on the
date of such notice) of such Swingline Loan or Swingline Loans.
Each Lender shall pay to the Administrative Agent, not later than
2:00 p.m., New York City time, on the date of such notice, such
Lender's pro rata percentage (determined as aforesaid) of the
principal amount of such Swingline Loan or Swingline Loans. Each
such payment shall for all purposes hereunder be deemed to be an
ABR Revolving Loan (it being understood that (i) each Lender's
obligation to make such payment is absolute and unconditional and
shall not be affected by any event or circumstance whatsoever,
including the occurrence of any Default or Event of Default
hereunder or the failure of any condition precedent set forth in
Article V to be satisfied, and (ii) each such payment shall be made
without any offset, abatement, withholding or reduction whatso-
ever). The Administrative Agent shall promptly advise the Borrower
of any notice received from the Swingline Lender pursuant to this
paragraph (c).
(d) The Borrower may prepay any Swingline Loan in whole or in
part at any time without premium or penalty, provided that the
Borrower shall have given the Administrative Agent written or
telecopy notice (or telephone notice promptly confirmed in writing
or by telecopy) of such prepayment not later than 11:00 a.m., New
York City time, on the Business Day designated by the Borrower for
such prepayment.
ARTICLE III
Letters of Credit
SECTION 3.01. Issuance of Letters of Credit. (a) The Fronting
Bank agrees, upon the receipt of an appropriately completed and
properly authorized Letter of Credit Application, in a form and
containing terms and conditions that are reasonably acceptable to
the Fronting Bank and consistent with the terms hereof, and on the
terms and subject to the conditions hereinafter set forth, to issue
Letters of Credit for the account of the Borrower, at any time and
from time to time on and after the 1994 Closing Date until the
earlier of (i) the LC Maturity Date and (ii) the termination of the
LC Commitment in accordance with the terms hereof; provided, how-
ever, that any Letter of Credit shall be issued only if, and each
request by the Borrower for the issuance of any Letter of Credit
shall be deemed a representation and warranty of the Borrower that,
immediately following the issuance of any such Letter of Credit,
the sum of the LC Exposure at such time and the Unsecured LC
Exposure at such time shall not exceed the LC Commitment in effect
at such time.
(b) No Letter of Credit shall be issued with a stated
expiration date later than the earlier of (i) the close of business
on the LC Maturity Date and (ii) the close of business on the date
that is (x) 270 days after the date of issuance of such Letter of
Credit, in the case of a Trade Letter of Credit and (y) 12 months
after the date of issuance of such Letter of Credit, in the case of
a Standby Letter of Credit. Each Letter of Credit shall provide for
payments of drawings in dollars.
(c) Each Trade Letter of Credit shall, among other things,
provide for the payment of sight drafts when presented for honor
thereunder, or of time drafts with a maturity date occurring not
later than the earlier of (i) 120 days after the presentation
thereof and (ii) the LC Maturity Date, in each case in accordance
with the terms thereof and when accompanied by the required
documents or when such documents are presented to the Fronting
Bank.
(d) Each Standby Letter of Credit may, in the absolute
discretion of the Fronting Bank, include a provision whereby such
Standby Letter of Credit shall be renewed automatically for
additional consecutive periods of 12 months or less (but not beyond
the LC Maturity Date) unless the Fronting Bank notifies the
beneficiary thereof at least 60 days prior to the then-applicable
expiry date that such Standby Letter of Credit will not be renewed.
(e) The Borrower may request the extension or renewal of a
Standby Letter of Credit that is not automatically renewed in
accordance with the terms contained therein by giving written
notice to the Fronting Bank at least three Business Days prior to
the then-current expiry date of such Standby Letter of Credit
(provided that the Fronting Bank may accommodate requests on
shorter notice in its sole discretion). If no Default or Event of
Default has occurred and is continuing, the Fronting Bank shall
promptly issue such extension or renewal; provided, however, that
the Fronting Bank shall have no obligation to extend or renew any
Standby Letter of Credit (i) for a period in excess of 12 months or
(ii) to an expiry date beyond the LC Maturity Date.
(f) Each request for the issuance of a Letter of Credit shall
be made by a written or facsimile authenticated Letter of Credit
Application from the Borrower to the Fronting Bank specifying
whether such Letter of Credit is to be a Trade Letter of Credit or
a Standby Letter of Credit (and if such Letter of Credit is to be
a Standby Letter of Credit, the date on which such Standby Letter
of Credit is to be issued), the date on which such Letter of Credit
is to expire, the amount of such Letter of Credit, the name and
address of the beneficiary of such Letter of Credit and such other
information as may be necessary or desirable to complete such
Letter of Credit. The Fronting Bank will provide the Administrative
Agent on the first Business Day of each week (or on a more frequent
basis if reasonably requested by the Administrative Agent) a
statement setting forth the aggregate face amount of the
Outstanding Standby Letters of Credit issued by it and the
aggregate face amount of the Outstanding Trade Letters of Credit
for each day since the end of the period covered by the prior such
statement, together with such other information regarding the
Outstanding Letters of Credit as may be reasonably requested by the
Administrative Agent.
SECTION 3.02. Participations; Unconditional Obligations. (a)
By the issuance of a Letter of Credit and without any further
action on the part of the Fronting Bank or the Participating
Lenders in respect thereof, the Fronting Bank hereby grants to each
Participating Lender, and each Participating Lender hereby agrees
to acquire from the Fronting Bank, a participation in such Letter
of Credit equal to such Participating Lender's Applicable
Percentage of the face amount of such Letter of Credit effective
upon the issuance of such Letter of Credit. In consideration and in
furtherance of the foregoing, each Participating Lender hereby
absolutely and unconditionally agrees to pay to the Administrative
Agent, on behalf of the Fronting Bank, in accordance with Sec-
tion 2.02(f), such Participating Lender's Applicable Percentage of
each LC Disbursement made by the Fronting Bank; provided, however,
that the Participating Lenders shall not be obligated to make any
such payment to the Fronting Bank with respect to any wrongful
payment or disbursement made under any Letter of Credit as a result
of the gross negligence or wilful misconduct of the Fronting Bank.
(b) Each Participating Lender acknowledges and agrees that its
obligation to acquire participations pursuant to paragraph (a)
above in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including
the occurrence and continuance of a Default or Event of Default
hereunder or the termination of the LC Commitment or the
Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
SECTION 3.03. LC Fee. The Borrower agrees to pay to the
Administrative Agent for the account of the Participating Lenders
for each calendar quarter (or shorter period commencing with the
date hereof or ending with the first date on which the LC Commitment-
shall have expired or been terminated and there shall be no
Outstanding Letters of Credit) a fee (the "LC Fee") on the average
daily amount of the aggregate Outstanding Letters of Credit issued
for the account of the Borrower during such quarter or shorter
period at a rate per annum equal to the higher of (i) the weighted
average LIBOR Spread applicable to Eurodollar Revolving Loans
during such period minus 1/2 of 1% and (ii) 1%. The LC Fee shall be
computed on the basis of the actual number of days elapsed over a
year of 360 days. The Administrative Agent agrees to disburse to
each Participating Lender its pro rata portion of such LC Fee
promptly upon receipt. The LC Fee shall be paid in arrears on each
March 31, June 30, September 30 and December 31 and on the LC
Maturity Date (or the first date on which the LC Commitment shall
have expired or been terminated and there shall be no Outstanding
Letters of Credit, if earlier). Once paid, the LC Fee shall not be
refundable in any circumstances (other than corrections of error in
payment).
SECTION 3.04. Agreement to Repay LC Disbursements. (a) If the
Fronting Bank shall pay any draft presented under a Letter of
Credit, the Borrower shall pay to the Fronting Bank an amount equal
to the amount of such draft not later than two hours after the
Borrower shall have received notice from the Fronting Bank that
payment of such draft will be made or, if the Borrower shall have
received such notice later than 10:00 a.m., New York City time, on
any Business Day, not later than 10:00 a.m., New York City time, on
the immediately following Business Day.
(b) The Borrower's obligation to repay the Fronting Bank for
LC Disbursements made by the Fronting Bank under the Outstanding
Letters of Credit for the account of the Borrower shall be
absolute, unconditional and irrevocable under any and all circum-
stances and irrespective of:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, setoff, defense or other
right that the Borrower or any other Person may at any time
have against the beneficiary under any Letter of Credit, the
Fronting Bank, the Administrative Agent, any Lender or any
other Person (other than the defense of payment in accordance
with the terms of this Agreement or a defense based on the
gross negligence or wilful misconduct of the Fronting Bank) in
connection with this Agreement or any other agreement or
transaction;
(iii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect, provided that payment by
the Fronting Bank under such Letter of Credit against
presentation of such draft or document shall not have
constituted gross negligence or wilful misconduct of the
Fronting Bank;
(iv) payment by the Fronting Bank under a Letter of
Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit,
provided that such payment shall not have constituted gross
negligence or wilful misconduct of the Fronting Bank; and
(v) any other circumstance or event whatsoever, whether
or not similar to any of the foregoing, provided that such
circumstance or event shall not have been the result of gross
negligence or wilful misconduct of the Fronting Bank.
It is understood that in making any payment under a Letter of
Credit (i) the Fronting Bank's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any
draft presented under such Letter of Credit, whether or not the
amount due to the beneficiary equals the amount of such draft and
whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document
on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter
of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and
(ii) any noncompliance in any immaterial respect of the documents
presented under a Letter of Credit with the terms thereof shall, in
each case, not be deemed wilful misconduct or gross negligence of
the Fronting Bank.
SECTION 3.05. Letter of Credit Operations. The Fronting Bank
shall, within a reasonable time after its receipt thereof, examine
all documents purporting to represent a demand for payment under an
Outstanding Letter of Credit to ascertain that the same appear on
their face to be in conformity with the terms and conditions of
such Outstanding Letter of Credit. The Fronting Bank shall as
promptly as possible give electronic or facsimile notification or
telephonic notification, promptly confirmed by electronic or
facsimile notice, to the Borrower of such demand for payment and of
the determination by the Fronting Bank as to whether such demand
for payment was in conformity with such terms and conditions, and
shall as promptly as possible give prior telephonic notification to
the Borrower of the determination by the Fronting Bank as to
whether such demand for payment was in accordance with the terms
and conditions of such Outstanding Letter of Credit and whether the
Fronting Bank has made or will make an LC Disbursement thereunder,
provided that the failure to give such notice shall not relieve the
Borrower of its obligation to reimburse the Fronting Bank with
respect to any such LC Disbursement.
SECTION 3.06. Termination of LC Commitment. The Borrower may
permanently terminate, or from time to time in part permanently
reduce, the LC Commitment, in each case upon at least three
Business Days' prior written or facsimile notice to the
Administrative Agent and the Fronting Bank, provided that, after
giving effect to such termination or reduction, the LC Commitment
shall not be less than the LC Exposure at such time or greater than
the available Revolving Credit Commitments at such time.
SECTION 3.07. Fronting Bank Fees. (a) The Borrower shall pay
to the Fronting Bank, for its own account, such commissions,
issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of
Credit as the Borrower and the Fronting Bank shall agree upon.
(b) The Borrower shall pay to the Fronting Bank, for its own
account, a fronting fee on the average daily aggregate maximum
amount available to be drawn (assuming compliance with all
conditions to drawing) under all Outstanding Letters of Credit
issued by the Fronting Bank, at a rate per annum agreed upon by the
Borrower and the Fronting Bank, payable in arrears on each
March 31, June 30, September 30 and December 31, and on the LC
Maturity Date. Such fronting and origination fees shall be computed
on the basis of the actual number of days elapsed over a year of
360 days.
SECTION 3.08. Resignation or Removal of the Fronting Bank. (a)
The Fronting Bank may resign at any time by giving 180 days' prior
written notice to the Administrative Agent, the Lenders and the
Borrower, and may be removed at any time by the Borrower by notice
to the Fronting Bank, the Administrative Agent and the Lenders.
Upon any such resignation or removal, the Borrower shall (within
180 days after such notice of resignation or removal) either
(i) appoint a Lender (with the consent of such Lender) as successor
or (ii) terminate the unutilized LC Commitment; provided, however,
that if the Borrower elects to terminate the unutilized LC
Commitment, the Borrower may at any time thereafter that the
Revolving Credit Commitments are in effect reinstate the LC
Commitment, by notice to the Administrative Agent and the Lenders,
in connection with the appointment of a Lender as successor
Fronting Bank. Subject to paragraph (b) below, upon the acceptance
of any appointment as the Fronting Bank hereunder by a successor
Fronting Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring
Fronting Bank and the retiring Fronting Bank shall be discharged
from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become
effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(d). The acceptance of any appointment as
the Fronting Bank hereunder by a successor Lender shall be evi-
denced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Administrative Agent, and,
from and after the effective date of such agreement, (i) such
successor Lender shall have all the rights and obligations of the
previous Fronting Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan
Documents to the term "Fronting Bank" shall be deemed to refer to
such successor or to any previous Fronting Bank, or to such
successor and all previous Fronting Banks, as the context shall
require.
(b) After the resignation or removal of the Fronting Bank
hereunder, the retiring Fronting Bank shall remain a party hereto
and shall continue to have all the rights and obligations of the
Fronting Bank under this Agreement and the other Loan Documents
with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue
additional Letters of Credit.
SECTION 3.09. Cash Collateralization. If any Event of Default
shall occur and be continuing, the Borrower shall, on the Business
Day it receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been
accelerated, Participating Lenders holding participations in
Outstanding Letters of Credit representing greater than 50% of the
aggregate undrawn amount of all Outstanding Letters of Credit)
thereof and the amount to be deposited, deposit in an account with
the Collateral Agent, for the benefit of the Participating Lenders,
an amount in cash equal to the LC Exposure as of such date. Such
deposit shall be held by the Collateral Agent as collateral for the
payment and performance of the Obligations. The Collateral Agent
shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits in Permitted Investments,
which investments shall be made at the option and sole discretion
of the Collateral Agent, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate
in such account. Moneys in such account shall (a) automatically be
applied by the Administrative Agent to reimburse the Fronting Bank
for LC Disbursements for which it has not been reimbursed, (b) be
held for the satisfaction of the reimbursement obligations of the
Borrower for the LC Exposure at such time and (c) if the maturity
of the Loans has been accelerated (but subject to the consent of
Participating Lenders holding participations in Outstanding Letters
of Credit representing greater than 50% of the aggregate undrawn
amount of all Outstanding Letters of Credit), be applied to satisfy
the Obligations. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an
Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.
SECTION 3.10. Additional Fronting Banks. The Borrower may, at
any time and from time to time with the consent of the
Administrative Agent (which consent shall not be unreasonably
withheld) and such Lender, designate one or more additional Lenders
to act as a fronting bank under the terms of this Agreement. Any
Lender designated as a fronting bank pursuant to this Section 3.10
shall be deemed to be the "Fronting Bank" (in addition to being a
Lender) in respect of Letters of Credit issued or to be issued by
such Lender, and, with respect to such Letters of Credit, such term
shall thereafter apply to the Fronting Bank and such Lender.
ARTICLE IV
Representations and Warranties
Each of JSC, JSCE and the Borrower represents and warrants to
each of the Lenders, the Administrative Agent, the Senior Managing
Agents, the Managing Agents, the Fronting Bank and the Swingline
Lender that:
SECTION 4.01. Organization; Powers. Each of the Loan Parties
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted, (c) is
qualified to do business in every jurisdiction where such
qualification is required by the nature of its business, the
character and location of its property, business or customers, or
the ownership or leasing of its properties, except for such
jurisdictions in which the failure so to qualify, in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect, and (d) has the corporate power and authority to execute,
deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 4.02. Authorization. The execution, delivery and
performance by each of the Loan Parties of each of the Loan
Documents to which it is a party, the Borrowings hereunder, the
issuance of the Letters of Credit, the use of the proceeds of the
Loans, the Swingline Loans and the Letters of Credit, the creation
of the security interests contemplated by the Security Documents
and the other transactions contemplated by the Loan Documents (all
the foregoing, collectively, the "Transactions") (a) have been duly
authorized by all requisite corporate and, if required, stockholder
action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, other than any law, statute, rule or
regulation the violation of which could not reasonably be expected
to result in a Material Adverse Effect, or of the certificate of
incorporation or other constitutive documents or by-laws of any
Loan Party or any of their respective Subsidiaries, (B) any order
of any Governmental Authority or (C) any provision of any indenture
or other material agreement or other material instrument to which
any Loan Party or any of their respective Subsidiaries is a party
or by which any of them or any of their property is or may be
bound, (ii) constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any
Lien (other than any Lien created hereunder or under the Security
Documents) upon or with respect to any property or assets now owned
or hereafter acquired by any Loan Party or any of their respective
Subsidiaries.
SECTION 4.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrower, JSC and JSCE and consti-
tutes, and each other Loan Document when executed and delivered by
JSC, JSCE and the Borrower and each Loan Party party thereto will
constitute, a legal, valid and binding obligation of JSC, JSCE, the
Borrower and the Loan Parties, as applicable, enforceable against
each of them in accordance with its terms (a) except as the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) subject
to general principles of equity.
SECTION 4.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required in connection with
the Transactions, except for (a) the filing of Uniform Commercial
Code financing statements and filings with the United States Patent
and Trademark Office and the United States Copyright Office to
perfect the security interests that can be perfected by such
filings, (b) recordation of the Mortgages, (c) such actions,
consents, approvals, registrations and filings set forth on
Schedule 4.04 and (d) such actions, consents, approvals,
registrations and filings as have been made or obtained and are in
full force and effect.
SECTION 4.05. Financial Statements. Each of JSC, JSCE and the
Borrower has delivered to the Lenders the audited financial
statements of such Person for the fiscal year ended December 31,
1995, together with such Person's annual report on Form 10-K, if
any, filed with the Securities and Exchange Commission. All
financial statements set forth or referred to in the materials
specified in the preceding sentence were prepared in conformity
with GAAP. All such financial statements fairly present the
consolidated financial position of such Person and its Subsidiaries
as at the date thereof and the consolidated results of operations
and changes in financial position of such Person and its
Subsidiaries for each of the periods covered thereby. Except as
disclosed in such financial statements, none of JSC, JSCE or the
Borrower or any of their respective Subsidiaries had, at the date
of such financial statements or on the Restatement Closing Date, as
the case may be, any material contingent obligation, material
contingent liability or material liability for taxes, long-term
lease or unusual forward or long-term commitment or obligations to
retired employees for medical or other employee benefits that is
not reflected in the foregoing financial statements or the notes
thereto.
SECTION 4.06. No Material Adverse Change. There has been no
material adverse change in the business, assets, operations,
properties, prospects or condition (financial or otherwise) of JSC
and its consolidated Subsidiaries, taken as a whole, since
December 31, 1995.
SECTION 4.07. Title to Properties; Possession Under Leases.
(a) Each of JSC, JSCE and the Borrower and their respective
Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material properties and assets, except for
minor defects in title that do not interfere in any material
respect with its ability to conduct its business as currently
conducted. All such title to, or leasehold interest in, material
properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 7.02 (none of which is superior to
the Liens created hereunder or under the Security Documents) and
Liens with respect to which the Collateral Agent has received on or
prior to the Restatement Closing Date duly executed releases and
termination statements in connection therewith.
(b) Each of JSC, JSCE and the Borrower and their respective
Subsidiaries has complied with all obligations under all material
leases to which it is a party and enjoys peaceful and undisturbed
possession under all such material leases necessary in any material
respect for the operation of their respective properties and
assets.
SECTION 4.08. Subsidiaries. Schedule 4.08 sets forth as of the
Restatement Closing Date a list of all the Subsidiaries of JSC,
JSCE and the Borrower, their jurisdiction of organization and the
percentage ownership interest of each of them and any other
Subsidiary therein. The capital stock of each of the Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable
and, except as set forth on Schedule 4.08, is owned free and clear
of all Liens other than nonconsensual Permitted Liens arising other
than as a result of a voluntary act of JSC, JSCE or the Borrower.
No authorized but unissued treasury shares of capital stock of the
Borrower or any such Subsidiary are subject to any option, warrant,
right to call or commitment of any kind or character except as set
forth on Schedule 4.08.
SECTION 4.09. Litigation; Compliance with Laws. (a) Except as
set forth in Schedule 4.09, there are not any actions, suits or
proceedings at law or in equity or by or before any Governmental
Authority now pending or, to the knowledge of JSC, JSCE or the
Borrower, threatened against or affecting JSC, JSCE or the Borrower
or any of their respective Subsidiaries or any business or property
of any such Person that (i) involve any Loan Document or the Trans-
actions or (ii) could reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect.
(b) Neither JSC, JSCE, the Borrower and their respective
Subsidiaries nor any of their respective properties or assets is
(i) in violation of, nor will the continued operation of their
properties and assets as currently conducted violate, any law,
rule, regulation, statute (including any zoning, building, environ-
mental and safety law, ordinance, code or approval or any building
permits) or any restrictions of record or agreements affecting the
Mortgaged Properties, where such violations could reasonably be
expected to have a material adverse effect on the value, use or
operation of any such Mortgaged Property or (ii) in default with
respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such defaults, individually or in the
aggregate, could reasonably be expected to result in a Material
Adverse Effect. The issuance of the Letters of Credit will not
violate any applicable law or regulation or violate or be
prohibited by any judgment, writ, injunction, decree or order of
any Governmental Authority.
SECTION 4.10. Agreements. None of JSC, JSCE or the Borrower or
any of their respective Subsidiaries is in default under any
provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other agreement or instrument to
which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.11. Federal Reserve Regulations. (a) None of JSC,
JSCE or the Borrower or any of their respective Subsidiaries is
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Letter of Credit or any
Loan or Swingline Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately,
(i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose or (ii) for any
purpose that entails a violation of, or is inconsistent with, the
provisions of the Regulations of the Board, including Regulation G,
U or X.
SECTION 4.12. Investment Company Act; Public Utility Holding
Company Act. None of JSC, JSCE or the Borrower or any of their
respective Subsidiaries (a) is an "investment company" as defined
in, or is subject to regulation under, the Investment Company Act
of 1940 or (b) is a "holding company" as defined in, or is subject
to regulation under, the Public Utility Holding Company Act of
1935.
SECTION 4.13. Use of Proceeds. The Letters of Credit issued,
and the proceeds of the Loans and Swingline Loans made, under the
1994 Credit Agreement were used only for the purposes specified in
the preamble to the 1994 Credit Agreement. The Borrower will use
the Letters of Credit and the proceeds of the Loans and any
Swingline Loans only for the purposes specified in the preamble to
this Agreement.
SECTION 4.14. Tax Returns. Each of JSC, JSCE and the Borrower
and their respective Subsidiaries has filed or caused to be filed
all Federal, state and local income and other material tax returns
required to have been filed by it or with respect to it and has
paid or caused to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it or with respect
to it, except taxes that are being contested in good faith by
appropriate proceedings and for which it has set aside on its books
adequate reserves in accordance with GAAP.
SECTION 4.15. No Material Misstatements. The information
provided by or on behalf of the Loan Parties and contained in the
Confidential Information Memorandum (including all attachments and
exhibits thereto), as supplemented, and as supplemented further by
information heretofore provided in writing by or on behalf of the
Loan Parties to the Lenders and any other materials, documents and
information that the Loan Parties or any of their respective
Affiliates may have furnished to the Lenders, was as of the date of
such Confidential Information Memorandum, the dates otherwise
specified therein or the dates upon which such information was
provided, accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading,provided that to the extent any such information therein
was based upon or constitutes a forecast or projection, JSC, JSCE
and the Borrower represent only that they acted in good faith and
utilized reasonable assumptions, due and careful consideration and
the information actually known to Responsible Officers at the time
in the preparation of such information.
SECTION 4.16. Employee Benefit Plans. Each of JSC, JSCE and
the Borrower and their respective ERISA Affiliates is in compliance
in all material respects with the applicable provisions of ERISA
and the Code and the regulations and published interpretations
thereunder. No Reportable Event has occurred in respect of any Plan
of JSC, JSCE or the Borrower or any ERISA Affiliate. The present
value of all benefit liabilities under each Plan (based on those
assumptions used to fund such Plan) did not, as of the last annual
valuation date applicable thereto, exceed by more than $25,000,000
the value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those
assumptions used to fund each such Plan) did not, as of the last
annual valuation dates applicable thereto, exceed by more than
$25,000,000 the value of the assets of all such underfunded Plans.
None of JSC, JSCE or the Borrower or any ERISA Affiliate has
incurred any Withdrawal Liability that could result in a Material
Adverse Effect. None of JSC, JSCE or the Borrower or any ERISA
Affiliate has received any notification that any Multiemployer Plan
is in reorganization or has been terminated within the meaning of
Title IV of ERISA and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated where such
reorganization or termination has resulted or could reasonably be
expected to result, through increases in the contributions required
to be made to such Plan or otherwise, in a Material Adverse Effect.
SECTION 4.17. Environmental and Safety Matters. Except as set
forth on Schedule 4.17 :
(a) Each of JSC, JSCE and the Borrower and each of their
respective Subsidiaries has obtained all permits, licenses and
other authorizations that are required and material with
respect to the operation of the business of JSC and its
Subsidiaries, taken as a whole, under any Environmental Law,
and each such permit, license and authorization is in full
force and effect.
(b) Each of JSC, JSCE and the Borrower and each of their
respective Subsidiaries is in compliance with all material
terms and conditions of the permits, licenses and
authorizations specified in Section 4.17(a), and is also in
compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any
Environmental Law applicable to it and its business, assets,
operations and properties, including those arising under the
Resource Conservation and Recovery Act of 1976, as amended,
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 ("CERCLA"), the Federal Water
Pollution Control Act, the Federal Clean Air Act, and the
Toxic Substances Control Act and any analogous or comparable
state laws, except for such instances of noncompliance that
could not reasonably be expected to result in a Material
Adverse Effect.
(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request
for information pending or, to the knowledge of JSC, JSCE or
the Borrower or any of their respective Subsidiaries, after
inquiry, threatened against JSC, JSCE or the Borrower or any
of their respective Subsidiaries under any Environmental Law
that could reasonably be expected to result in a Material
Adverse Effect.
(d) None of JSC, JSCE, the Borrower or any of their
respective Subsidiaries has received notice that it has been
identified as a potentially responsible party under CERCLA or
any comparable state law, nor has JSC, JSCE, the Borrower or
any of their respective Subsidiaries received any notification
that any hazardous substances or any pollutant or contaminant,
as defined in CERCLA and its implementing regulations, or any
toxic substance, hazardous waste, hazardous constituents,
hazardous materials, asbestos or asbestos containing material,
polychlorinated biphenyls, petroleum, including crude oil and
any fractions thereof, or other wastes, chemicals, substances
or materials regulated by any Environmental Laws (collectively
"Hazardous Materials") that it or any of their respective
predecessors in interest has used, generated, stored, tested,
handled, transported or disposed of, has been found at any
site at which any Governmental Authority or private party is
conducting a remedial investigation or other action pursuant
to any Environmental Law, except in each case for any such
notices received after the date hereof that, individually or
in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
(e) There have been no releases or threatened releases
(in each case as defined in CERCLA) of Hazardous Materials by
JSC, JSCE, the Borrower or any of their respective
Subsidiaries on, upon, into or from any of the Real
Properties, which releases or threatened releases could
reasonably be expected to result in a Material Adverse Effect.
To the best knowledge of JSC, JSCE, the Borrower and each of
their respective Subsidiaries, there have been no such
releases or threatened releases on, upon, under or into any
real property in the vicinity of any of the Real Properties
that, through soil, surface water or groundwater migration or
contamination, may be located on, in or under such Real
Properties and which could reasonably be expected to result in
a Material Adverse Effect.
(f) To the best knowledge of JSC, JSCE, the Borrower or
any of their respective Subsidiaries, there is no asbestos in,
on, or at any Real Properties or any facility or equipment of
JSC, JSCE, the Borrower, or any of their respective
Subsidiaries, except to the extent that the presence of such
material could not reasonably be expected to result in a
Material Adverse Effect.
(g) To the best knowledge of JSC, JSCE, the Borrower and
each of their respective Subsidiaries after due inquiry, none
of the Real Properties of JSC, JSCE, the Borrower or any of
their respective Subsidiaries is (i) listed or proposed for
listing on the National Priorities List under CERCLA or
(ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated
pursuant to CERCLA, or on any comparable list maintained by
any Governmental Authority.
(h) There are no past or current events, conditions,
circumstances, activities, practices, incidents, actions or
plans that could reasonably be anticipated to interfere with
or prevent compliance with any Environmental Law, or which may
give rise to liability under any Environmental Law, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing or notice of violation, study or
investigation, based on or related to the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport, shipping or handling, or the emission,
discharge, release or threatened release into the environment,
of any Hazardous Material that could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.18. Solvency. After giving effect to the
Transactions to occur on the Restatement Closing Date, (a) the fair
salable value of the assets of JSC, JSCE and the Borrower and their
respective Subsidiaries, on a consolidated basis, will exceed the
amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabili-
ties) of JSC, JSCE and the Borrower and their respective
Subsidiaries, on a consolidated basis, as they mature, (b) the
assets of JSC, JSCE and the Borrower and their respective
Subsidiaries, on a consolidated basis, will not constitute unrea-
sonably small capital to carry out their businesses as conducted or
as proposed to be conducted, including the capital needs of JSC,
JSCE and the Borrower and their respective Subsidiaries, on a con-
solidated basis (taking into account the particular capital
requirements of the businesses conducted by such entities and the
projected capital requirements and capital availability of such
businesses) and (c) none of JSC, JSCE or the Borrower intend to,
nor do they intend to permit any of their respective Subsidiaries
to, and do not believe that any of them or any such Subsidiary
will, incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be
received by each of them or any such Subsidiary and the amounts to
be payable on or in respect of its obligations).
SECTION 4.19. Security Documents. (a) The Pledge Agreement
creates in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and
proceeds thereof and constitutes a fully perfected first priority
Lien on, and security interest in, all right, title and interest of
the Loan Parties party thereto, as applicable, in such Collateral
and the proceeds thereof, in each case prior and superior in right
to any other Person.
(b) The Security Agreement creates in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as
defined in the Security Agreement) and proceeds thereof, and
assuming that financing statements in appropriate form have been
filed in the offices specified on Schedule 4.19(b), the Lien
created under the Security Agreement constitutes a fully perfected
Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof
(except insofar as the perfection of a Lien on, and security
interest in, such Collateral is obtained as described in
paragraph (d) below), in each case prior and superior in right to
any other Person.
(c) The Mortgages (other than the Additional Mortgages)
create, and the Additional Mortgages upon execution and delivery by
the parties thereto will create, in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Borrower's right, title and interest
in and to the Mortgaged Properties thereunder and the proceeds
thereof; the Mortgages (other than the Additional Mortgages)
constitute, and when the Additional Mortgages are filed in the
offices specified on Schedule 4.19(c), the Additional Mortgages
will constitute, a fully perfected Lien on, and security interest
in, all right, title and interest of the Borrower in such Mortgaged
Properties and the proceeds thereof, in each case prior and
superior in right to any other Person.
(d) The Trademark Security Agreement creates in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable security interest in the Collateral
(as defined in the Trademark Security Agreement) and the proceeds
thereof, and assuming the recordation of such Trademark Security
Agreement with the United States Patent and Trademark Office and
the United States Copyright Office, together with financing state-
ments in appropriate form filed in the offices specified on
Schedule 4.19(d), the Liens created under the Trademark Security
Agreement constitute a fully perfected Lien on, and security inter-
est in, all right title and interest of the Loan Parties in the
Collateral and the proceeds thereof in which a security interest
may be perfected by filing in the United States and its territories
and possessions, in each case prior and superior in right to any
other Person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the
Loan Parties after the date hereof).
(e) The SNC Security Agreement creates in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable security interest in the Collateral
(as defined in the SNC Security Agreement) and proceeds thereof,
and assuming that financing statements in appropriate form have
been filed in the offices specified on Schedule 4.19(e), the Lien
created under the SNC Security Agreement constitutes a fully
perfected Lien on, and security interest in, all right, title and
interest of SNC in such Collateral, in each case prior and superior
in right to any other Person.
SECTION 4.20. Labor Matters. As of the date hereof and the
Restatement Closing Date, there are no strikes, lockouts or slow-
downs against JSC, JSCE or the Borrower or any of their respective
Subsidiaries pending or, to the knowledge of JSC, JSCE or the
Borrower, threatened, except as set forth on Schedule 4.20. The
hours worked by and payment made to employees of JSC, JSCE or the
Borrower have not been in violation of the Fair Labor Standards Act
or any other applicable Federal, state, local or foreign law deal-
ing with such matters, where such violations could reasonably be
expected, individually or in the aggregate, to result in a Material
Adverse Effect. The consummation of the Transactions will not give
rise to a right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to
which JSC, JSCE or the Borrower or any of their respective
Subsidiaries is a party or by which JSC, JSCE or the Borrower or
any of their respective Subsidiaries is bound on the Restatement
Closing Date.
SECTION 4.21. Location of Real Property. (a) Schedule 4.21(a)
sets forth completely and correctly as of the date hereof and the
Restatement Closing Date all material real property owned by JSC,
JSCE or the Borrower or any of their respective Subsidiaries, the
addresses thereof and the county or counties in which such
properties are situated. All the real property set forth on
Schedule 4.21(a) is owned in fee by JSC, JSCE or the Borrower or
their respective Subsidiaries.
(b) Schedule 4.21(b) sets forth completely and correctly as of
the date hereof and the Restatement Closing Date all material real
property leased by JSC, JSCE or the Borrower or any of their
respective Subsidiaries, the addresses thereof and the county or
counties in which such properties are situated. JSC, JSCE or the
Borrower or one of their respective Subsidiaries has a valid lease
in all the Real Property set forth on Schedule 4.21(b).
(c) Schedule 4.21(c) sets forth completely and correctly as of
the date hereof and the Restatement Closing Date all material
Timberland, if any, owned by JSC, JSCE or the Borrower or any of
their respective Subsidiaries, the county or counties in which such
Timberland is situated and the approximate acreage of such
Timberland in such county or counties. All the Timberland set forth
on Schedule 4.21(c) is owned in fee by JSC, JSCE or the Borrower or
their respective Subsidiaries.
SECTION 4.22. Patents, Trademarks, etc. Each of JSC, JSCE and
the Borrower and each of their respective Subsidiaries owns, or is
licensed to use, all patents, trademarks, trade names, copyrights,
technology, know-how and processes, service marks and rights with
respect to the foregoing that are (a) used in or necessary for the
conduct of their respective businesses as currently conducted and
(b) material to the business, assets, operations, properties,
prospects or condition (financial or otherwise) of such Person and
its Subsidiaries taken as a whole. The use of such patents,
trademarks, trade names, copyrights, technology, know-how,
processes and rights with respect to the foregoing by such Person
and its Subsidiaries does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of any such
Person and its respective Subsidiaries that is material to such
Person and its Subsidiaries, taken as a whole. To the best
knowledge of each of JSC, JSCE and the Borrower, its rights and the
rights of its Subsidiaries to sell, franchise or license under such
brand names then being used may be transferred in connection with
any sale of assets or stock of the related business by such Person
or any of its Subsidiaries with only such exceptions as would not
be material to the Borrower and its Subsidiaries, in each case,
taken as a whole.
ARTICLE V
Conditions of Lending and Issuance of Letters of Credit
The obligations of each Lender to make Loans hereunder, the
obligation of the Swingline Lender to make Swingline Loans here-
under and the obligation of the Fronting Bank to issue any Letter
of Credit hereunder (each, a "Credit Event") are subject to the
satisfaction on the date of each Credit Event (other than (i) any
Revolving Loan made pursuant to Section 2.02(f), (ii) any
refinancing of a Revolving Credit Borrowing with a Revolving Credit
Borrowing that does not increase the aggregate principal amount of
the Revolving Loans outstanding and (iii) any conversion or
continuation of a Term Loan pursuant to Section 2.10) of the
following conditions:
(a) The Administrative Agent and, where applicable, the
Fronting Bank or the Swingline Lender shall have received a
notice of such Credit Event as required by Section 2.03,
Section 3.01(f) and Section 2.22(b), respectively.
(b) The representations and warranties set forth in
Article IV hereof shall be true and correct in all material
respects on and as of the date of such Credit Event with the
same effect as though made on and as of such date, except to
the extent that such representations and warranties expressly
relate to an earlier date.
(c) At the time of and immediately after such Credit
Event, no Default or Event of Default shall have occurred and
be continuing.
Each Credit Event shall be deemed to constitute a representation
and warranty by JSC, JSCE and the Borrower on the date of such
Credit Event as to the matters specified in paragraphs (b) and (c)
of this Article V.
ARTICLE VI
Affirmative Covenants
Each of JSC, JSCE and the Borrower covenants and agrees with
each Lender, the Administrative Agent, each Senior Managing Agent
and Managing Agent, the Fronting Bank and the Swingline Lender
that, so long as this Agreement shall remain in effect, the LC
Exposure shall not equal zero or the principal of or interest on
any Loan or Swingline Loan or any LC Disbursement, Fees or any
other expenses or amounts payable under any Loan Document shall be
unpaid, unless the Required Lenders shall otherwise consent in
writing, it will, and will cause each of its Subsidiaries to:
SECTION 6.01. Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence, except as otherwise
permitted under Section 7.05.
(b) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses,
permits, trademarks, trade names, privileges and franchises
necessary or desirable in the normal conduct of its business,
except for any trademarks, trade names or franchises that are not
material to the business of the Borrower and its Subsidiaries taken
as a whole; maintain and operate such business in substantially the
manner in which it is currently conducted and operated; and at all
times keep all property useful and necessary in its business in
good, working order and condition to the extent required by sound
business practices.
SECTION 6.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable
insurers; maintain such other insurance, to such extent and against
such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of established
repute in the same general area engaged in the same or similar
businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned,
occupied or controlled by it or the use of any products sold by it;
and maintain such other insurance as may be required by law and,
with respect to the Mortgaged Properties, as is required by the
Mortgages.
SECTION 6.03. Obligations and Taxes. Pay and discharge
promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon or in respect of its property or
assets, as well as all claims for labor, materials and supplies or
otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such
payment and discharge shall not be required with respect to any
such obligation, tax, assessment, charge, levy or claim so long as
the validity or amount thereof shall be contested in good faith by
appropriate proceedings and it shall have set aside on its books,
in accordance with GAAP, adequate reserves with respect thereto and
such contest operates to suspend enforcement of a Lien and, in the
case of a Mortgaged Property or other material property or asset,
there is no material risk of forfeiture of such property.
SECTION 6.04. Financial Statements, Reports, etc. Furnish to
the Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender and each Lender:
(a) in the case of JSC, within 90 days after the end of
each fiscal year, its consolidated balance sheets and related
statements of operations, stockholders' equity and cash flows,
showing the financial condition of such Person and its
consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such
Subsidiaries during such year, all audited by Ernst & Young or
other independent auditors of recognized national standing
acceptable to the Required Lenders and accompanied by an
opinion of such accountants (which shall not be qualified in
any material respect) to the effect that such consolidated
financial statements fairly present the financial condition
and results of operations of such Person on a consolidated
basis in accordance with GAAP;
(b) in the case of JSC, within 45 days after the end of
each of the first three fiscal quarters of each fiscal year,
(i) its consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows, showing the
financial condition of such Person and its consolidated
Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then-elapsed
portion of the fiscal year and (ii) a narrative discussion of
the results of operations of JSC in a form reasonably
satisfactory to the Senior Managing Agents (it being
understood that, in the case of clause (i) above, such
information shall be in reasonable detail and certified by a
Financial Officer JSC, as fairly presenting the financial
condition and results of operations of JSC on a consolidated
basis in accordance with GAAP, subject to normal year-end
audit adjustments);
(c) in the case of JSC, within 30 days after the end of
each month (other than the last month of any fiscal quarter),
its consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows, showing the
financial condition of such Person and its consolidated
Subsidiaries as of the close of such month and the results of
its operations and the operations of such Subsidiaries during
such month and the then-elapsed portion of the fiscal year;
(d) concurrently with any delivery of financial
statements of JSC under paragraph (a) or (b) above, a
certificate of a Financial Officer of such Person (i)
certifying that, after due investigation and reasonable
inquiry, no Default or Event of Default has occurred or, if
such a Default or Event of Default has occurred, specifying
the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the
Senior Managing Agents of the ratios contemplated by
Sections 2.06(c) and 2.13(e) and demonstrating compliance with
the covenants contained in Sections 7.01, 7.02, 7.03, 7.04,
7.06, 7.11, 7.14, 7.15 and 7.16;
(e) concurrently with any delivery of financial
statements under paragraph (a) above, a certificate of the
accounting firm opining on such statements (which certificate
may be limited to accounting matters and disclaim
responsibility for legal interpretations) certifying
(i) whether in connection with its audit examination any
Default or Event of Default has come to its attention and, if
such event has come to its attention, the nature and extent
thereof and (ii) that based on its audit examination, nothing
has come to its attention that leads it to believe that the
information contained in the certificate delivered therewith
pursuant to paragraph (d) above is not correct;
(f) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and
other materials (other than (i) the exhibits to registration
statements and (ii) any registration statements on Form S-8 or
its equivalent) filed by JSC, JSCE, the Borrower or SNC or any
of their respective Subsidiaries with the Securities and
Exchange Commission, or any Governmental Authority succeeding
to any of or all the functions of such Commission, or with any
national securities exchange, or distributed to any such
Person's shareholders (other than JSC, JSCE, or the Borrower),
as the case may be;
(g) as soon as available, and in any event no later than
60 days after each fiscal year, a consolidated quarterly plan,
prepared in accordance with JSC's normal accounting procedures
applied on a consistent basis, for the next fiscal year of
JSC;
(h) upon the earlier of (i) 90 days after the end of each
fiscal year of JSC and (ii) the date on which the financial
statements of JSC are delivered pursuant to paragraph (a)
above, a certificate of a Financial Officer of JSC setting
forth, in detail satisfactory to the Administrative Agent, the
amount of Excess Cash Flow, if any, for such fiscal year;
(i) promptly from time to time, such other information
regarding the operations, business affairs and financial
condition of JSC, JSCE, the Borrower or SNC, or compliance
with the terms of any Loan Document, as the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender or any Lender may
reasonably request; and
(j) a copy of all notices (other than notices regarding
any scheduled or mandatory repayments), certificates,
financial statements and reports, as and when delivered by or
on behalf of the Borrower to the holders of any Subordinated
Indebtedness, Senior Notes or 1993 Senior Notes.
SECTION 6.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender, the Collateral
Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the
nature and extent thereof and the corrective action (if any)
proposed to be taken with respect thereto;
(b) the filing or commencement of, or any notice to any
Loan Party or any Subsidiary thereof of the intention of any
Person to file or commence, any action, suit or proceeding
(whether at law or in equity or by or before any Governmental
Authority or any arbitrator, against any Loan Party or any
Subsidiary thereof) that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) any development that has resulted in, or could
reasonably be anticipated to result in, a Material Adverse
Effect; and
(d) any transaction, event or development that results in
any Loan Party or any Subsidiary thereof owning a parcel (or
adjoining parcels) of real property or Timberland Property
that (i) is not a Mortgaged Property and (ii) has a fair
market value, as reasonably determined in good faith by the
board of directors of such Loan Party (such property being
referred to herein as "After-Acquired Mortgage Property"), in
excess of $500,000.
SECTION 6.06. ERISA. (a) Comply in all material respects with
the applicable provisions of ERISA and (b) furnish to the
Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender and each Lender
(i) as soon as possible after, and in any event within 30 days
after any Responsible Officer of JSC, JSCE or the Borrower or any
ERISA Affiliate either knows or has reason to know that any
Reportable Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in
liability of JSC, JSCE or the Borrower or any of their respective
Subsidiaries to the PBGC in an aggregate amount exceeding
$5,000,000, a copy of the notice of such event required to be given
to the PBGC or, if notice is not so required, a statement of a
Financial Officer of JSC, JSCE or the Borrower, as the case may be,
setting forth in reasonable detail the nature of such event and the
action proposed to be taken with respect thereto, (ii) promptly
after receipt thereof, a copy of any notice JSC, JSCE or the
Borrower or any ERISA Affiliate may receive from the PBGC relating
to the intention of the PBGC to terminate any Plan or Plans (other
than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) or to appoint a trustee to administer any
Plan or Plans, (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code of a notice of
failure to make a required installment or other payment with
respect to a Plan, a copy of such notice and a statement of a
Financial Officer of JSC, JSCE or the Borrower, as the case may be,
setting forth in reasonable detail the nature of such failure and
the action proposed to be taken with respect thereto and (iv)
promptly and in any event within 30 days after receipt thereof by
JSC, JSCE or the Borrower or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received by JSC,
JSCE or the Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in
reorganization, in each case within the meaning of Title IV of
ERISA.
SECTION 6.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP
and permit any representatives designated by the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender, the Collateral Agent or any
Lender to visit and inspect the properties and financial records of
the Loan Parties and any Subsidiary thereof at reasonable times and
upon reasonable notice and as often as reasonably requested and to
make extracts from and copies of such financial records, and permit
any representatives designated by the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Swingline Lender, the Collateral Agent or any Lender to discuss at
such reasonable times and at such reasonable intervals as may be
reasonably requested the affairs, finances and condition of any
Loan Party or any Subsidiary thereof or any properties of any Loan
Party or any Subsidiary thereof with the officers thereof and
independent accountants therefor.
SECTION 6.08. Use of Proceeds. Use the proceeds of the Loans
and the Letters of Credit solely for the purposes set forth in the
introductory statement to this Agreement.
SECTION 6.09. Compliance with Law. Comply with the
requirements of all applicable laws, rules, regulations, court
orders and decrees, and orders of any Governmental Authority, that
are applicable to it or to any of its properties, except where
noncompliance could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 6.10. Further Assurances. (a) Execute any and all
further documents, financing statements, agreements and
instruments, and take all further action (including filing Uniform
Commercial Code and other financing statements, mortgages and deeds
of trust), that may be required under applicable law or which the
Required Lenders, the Administrative Agent, either Senior Managing
Agent or the Collateral Agent may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and
in order to grant, preserve, protect and perfect the validity and
first priority of the security interests created or intended to be
created by the Security Documents.
(b) In addition, from time to time, the Loan Parties, at their
cost and expense, will promptly secure the Obligations by pledging
or creating, or causing to be pledged or created, perfected
security interests with respect to such of their assets and proper-
ties as the Administrative Agent, either Senior Managing Agent or
the Required Lenders shall designate (it being understood that it
is the intent of the parties that the Obligations shall be secured
by, among other things, substantially all the assets of the Loan
Parties and their respective Subsidiaries (including real and other
properties acquired subsequent to the Restatement Closing Date, but
excluding (i) Program Receivables and (ii) the real properties and
fixtures owned on the Restatement Closing Date by SNC). Such secur-
ity interests and Liens will be created under the Security Docu-
ments or such other security agreements, mortgages, deeds of trust
and other instruments and documents as are satisfactory to the
Required Lenders, and JSC, JSCE or the Borrower shall deliver or
cause to be delivered to the Lenders all such instruments and docu-
ments (including legal opinions, title insurance policies, surveys
and lien searches) as the Administrative Agent, either Senior
Managing Agent or the Required Lenders shall reasonably request to
evidence compliance with this Section 6.10. JSC, JSCE or the
Borrower agree to provide such evidence as the Administrative
Agent, either Senior Managing Agent or the Required Lenders shall
reasonably request as to the perfection and priority status of each
such security interest and Lien.
(c) Notwithstanding the provisions of paragraph (b) above,
(i) no After-Acquired Mortgage Property with a fair market value
(as determined by the Collateral Agent in its reasonable judgment,
it being understood that the purchase price shall be indicative
thereof) (the "Fair Market Value") of less than $1,000,000 shall be
subject to the provisions of paragraph (b) above and (ii) each item
of After-Acquired Mortgage Property with a fair market value of at
least $1,000,000 but less than $10,000,000 shall not be subject to
the provisions of paragraph (b) above unless and until the
aggregate Fair Market Value of all items of After-Acquired Mortgage
Property described in this clause (ii) and not pledged to the
Collateral Agent pursuant to the next sentence equals or exceeds
$50,000,000. On each occasion that the Fair Market Value of all
items of After-Acquired Mortgage Property described in clause (ii)
of the immediately preceding sentence shall equal or exceed
$50,000,000, all such property (and not merely the portion of the
property in excess of $50,000,000) shall be pledged to the
Collateral Agent for the benefit of the Secured Parties pursuant to
paragraph (b) above and, after such pledge, the provisions of such
clause (ii) shall apply to subsequently acquired After-Acquired
Mortgage Property described in such clause.
(d) Except with respect to the Material Subsidiaries
contemplated by Section 7.12(d), cause (i) each Material
Subsidiary organized under the laws of the United States or any
political subdivision thereof created or acquired by it from time
to time and (ii) each Subsidiary or Inactive Subsidiary prior to
becoming such a Material Subsidiary, to undertake the obligation of
and to become a Guarantor pursuant to the Guarantee Agreement and
a party to the applicable Security Documents to which it is not
then a party pursuant to one or more instruments or agreements
satisfactory in form and substance to the Collateral Agent. In
addition, JSC, JSCE or the Borrower, shall, or shall cause its
Subsidiaries to, pledge the capital stock of any such Subsidiary to
the Collateral Agent for the benefit of the Secured Parties
pursuant to a Pledge Agreement (or supplement to a Pledge
Agreement) satisfactory in form and substance to the Collateral
Agent. Furthermore, in the event that any Loan Party makes a
Material Investment, the Investor shall promptly pledge such
Investment to the Collateral Agent pursuant to a Pledge Agreement
(or supplement to a Pledge Agreement) satisfactory in form and
substance to the Collateral Agent. Notwithstanding the foregoing,
no Person shall be obligated to pledge more than 65% of the capital
stock of any Subsidiary that is organized outside the United States
or a political subdivision thereof.
(e) In the event that any survey of Mortgaged Property
discloses any matter (including any encroachment or violation of an
existing easement or restrictive covenant) the effect of which is
to detract materially from the value of the property subject
thereto or to interfere in any material respect with the ordinary
conduct of the business of any Loan Party or any of their
respective Subsidiaries, such Loan Party shall, upon request by the
Administrative Agent, use reasonable efforts (or cause its
Subsidiary that is the user or owner of the Mortgaged Property in
question to use reasonable efforts) to cause such matter to be
corrected or otherwise resolved to the reasonable satisfaction of
the Administrative Agent.
SECTION 6.11. Material Contracts. Maintain in full force and
effect (including exercising any available renewal option), and
without amendment or modification, each Material Contract, unless
the failure so to maintain any such Material Contract (or any
amendment or modification thereto) could not, individually or in
the aggregate, be reasonably expected to have a Material Adverse
Effect.
SECTION 6.12. Environmental Matters. (a) Promptly give notice
to the Administrative Agent upon becoming aware of (i) any
violation of any Environmental Law, (ii) any claim, inquiry,
proceeding, investigation or other action, including a request for
information or a notice of potential environmental liability, by or
from any Governmental Authority or any third party claimant or
(iii) the discovery of the release of any Hazardous Material at,
on, under or from any of the Real Properties or any facility or
equipment thereat in excess of reportable or allowable standards or
levels under any Environmental Law, or in a manner or amount that
could reasonably be expected to result in liability under any
Environmental Law, in each case that could reasonably be expected
to result in a Material Adverse Effect.
(b) Upon discovery of the presence on any of the Real
Properties of any Hazardous Material that is in violation of, or
that could reasonably be expected to result in liability under, any
Environmental Law, in each case that could result in a Material
Adverse Effect, take all necessary steps to initiate and
expeditiously complete all remedial, corrective and other action to
eliminate any such adverse effect, and keep the Administrative
Agent informed of such actions and the results thereof.
SECTION 6.13. Distribution of Gross Export Revenues. In the
case of the Borrower, cause JSC International to distribute the
gross export revenues received by JSC International from the
Borrower (a) to the Borrower in an amount equal to the portion of
gross export revenues that is not tax-exempt under Section 922 et
seq. of the Code as a repayment of the Borrower's advance to JSC
International to the extent thereof, and as a dividend to the
extent that such non-tax-exempt gross export revenues exceed the
Borrower's advance to JSC International, and (b) to the Borrower,
as a dividend, in an amount equal to the portion of gross export
revenues that is tax-exempt under the Code, in each case on the
same Business Day that such gross export revenues are received by
JSC International, and in no event later than the next Business
Day.
ARTICLE VII
Negative Covenants
Each of JSC, JSCE and the Borrower covenants and agrees with
each Lender, the Administrative Agent, each Senior Managing Agent
and Managing Agent, the Fronting Bank and the Swingline Lender
that, so long as this Agreement shall remain in effect, the LC
Exposure shall not equal zero or the principal of or interest on
any Loan or Swingline Loan or any LC Disbursement, Fees or any
other expenses or amounts payable under any Loan Document shall be
unpaid, unless the Required Lenders shall otherwise consent in
writing, it will not, and will not cause or permit any of its
Subsidiaries to:
SECTION 7.01. Indebtedness. Create, incur, assume or permit to
exist any Indebtedness, except, without duplication:
(a) the 1993 Senior Notes, the Senior Notes and
Guarantees in respect of each thereof, the other Indebtedness
existing on the 1994 Closing Date and set forth on Schedule
7.01(a) and Indebtedness of JSFin incurred pursuant to the
Receivables Program Documents;
(b) in the case of the Borrower, Indebtedness represented
by the Loans;
(c) in the case of each Guarantor, its Guarantee of the
Obligations pursuant to the Guarantee Agreement;
(d) Indebtedness the net proceeds of which are used
substantially concurrently to refinance Indebtedness described
in paragraph (a) above so long as (i) such refinancing
Indebtedness is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being
refinanced plus the amount of any premiums required to be paid
thereon, (ii) such Indebtedness has a later final maturity and
a longer weighted average life than the Indebtedness being
refinanced and (iii) each of the covenants, events of default
and other provisions thereof (including any Guarantees
thereof) shall be no more adverse to the Lenders than those
contained in the Indebtedness being refinanced unless each of
such provisions is approved in writing by the Required
Lenders;
(e) in the case of the Borrower and its Material
Subsidiaries, Capital Lease Obligations in an amount not to
exceed $200,000,000 when added to the amount of (A) all other
Capital Lease Obligations then existing (other than Capital
Lease Obligations described in paragraph (a) above), (B) all
outstanding Indebtedness (other than Indebtedness incurred
under this Agreement) created, incurred or assumed in respect
of the purchase or construction price of property and (C) all
outstanding bonds described in paragraph (i) below;
(f) Indebtedness of the Borrower created, incurred or
assumed in respect of the purchase or construction of property
and any refinancings thereof, provided that (i) the amount of
such Indebtedness, when added to the amount of (A) all other
Indebtedness (other than Indebtedness incurred under this
Agreement) of the Borrower then existing that was created,
incurred or assumed in respect of the purchase or construction
of property, (B) all then-existing Capital Lease Obligations
(other than Capital Lease Obligations described in
paragraph (a) above) and (C) all outstanding bonds described
in paragraph (i) below, does not exceed $200,000,000; (ii)
such Indebtedness to be created, incurred or assumed in
respect of the purchase or construction price of property
shall be so created, incurred or assumed within 90 days of the
earlier to occur of either the placement in service of, or the
final payment on, such property; and (iii) such Indebtedness
is not secured by any Lien other than a Lien permitted by
Section 7.02(a)(vi);
(g) Indebtedness of the Borrower evidencing obligations
to make payments in respect of rights to cut, harvest or
otherwise acquire timber on property owned by any other
Person, provided that the aggregate amount of such
Indebtedness shall not exceed $10,000,000 at any time
outstanding;
(h) reimbursement obligations in connection with Letters
of Credit and unsecured letters of credit not exceeding in the
aggregate an amount equal to the LC Commitment at any time;
(i) Indebtedness of the Borrower consisting of industrial
development bonds and pollution control bonds, provided that
the amount of any such bonds shall not at any time exceed
$200,000,000 when added to the amount of (A) all other
outstanding industrial development bonds and pollution control
bonds, (B) all then-existing Capital Lease Obligations (other
than Capital Lease Obligations described in paragraph (a)
above) and (C) all outstanding Indebtedness created, incurred
or assumed in respect of the purchase or construction price of
property;
(j) Rate Protection Agreements and Currency Agreements;
(k) Indebtedness incurred in connection with
(i) Permitted Equipment Financings in an aggregate principal
amount of up to $100,000,000 or (ii) Permitted Timber
Financings;
(l) Guarantees by JSCE of Indebtedness of the Borrower
permitted under this Section 7.01;
(m) Guarantees of obligations or Indebtedness not
otherwise provided for above, to the extent that such
Indebtedness is incurred in the ordinary course of business
and does not exceed $10,000,000 in the aggregate at any time
outstanding;
(n) intercompany loans and advances permitted by
Section 7.04; and
(o) Indebtedness of the Borrower to JSFin (i) pursuant to
Section 7.04(g) or (ii) arising because any sale or purported
sale of Program Receivables to JSFin is required to be
recharacterized as a loan.
SECTION 7.02. Liens. (a) Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other
securities of any Person) now owned or hereafter acquired by it or
on any income or revenues or rights in respect of any thereof,
except (i) any Lien created under the Loan Documents, (ii) Liens
securing any Permitted Equipment Financing and any Permitted Timber
Financing, (iii) the Liens granted pursuant to the Receivables
Program Documents, (iv) Liens securing Indebtedness of P.U.I. not
in excess of $15,000,000 at any time outstanding, (v) Liens
securing Capital Lease Obligations pursuant to Capital Leases
existing on the 1994 Closing Date, (vi) Permitted Liens and
(vii) Liens securing Capital Lease Obligations permitted by
Section 7.01(e); provided, however, that any such Lien shall only
cover the property subject to the applicable Capital Lease
Obligation.
(b) Enter into any agreement prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, except (i) with respect to specific
property encumbered to secure payment of particular Indebtedness
permitted hereunder and Margin Stock and (ii) the Senior Note
Indentures and the 1993 Senior Note Indenture.
SECTION 7.03. Sale/Leaseback Transactions. Enter into any
Sale/Leaseback Transaction other than (a) Permitted Equipment
Financings in an aggregate principal amount of up to $100,000,000
or (b) any Permitted Timber Financing.
SECTION 7.04. Investments, Loans and Advances. Have
outstanding or make any loan or advance to or have or make any
Investment in any other Person or suffer to exist any such loan or
advance or Investment, except as set forth on Schedule 7.04 and
except:
(a) Permitted Investments;
(b) loans or advances made by the Borrower or any Subsidiary
of the Borrower to any Subsidiary of the Borrower and evidenced by
an Intercompany Note, or made by any Subsidiary of the Borrower to
the Borrower, in each case in the ordinary course of business and
in an aggregate amount not to exceed $25,000,000 at any time;
(c) [Intentionally Omitted.];
(d) loans or advances evidenced by an Intercompany Note and
made by any Loan Party to any other Loan Party;
(e) loans or advances made to each of the Material
Subsidiaries permitted to be created pursuant to Section 7.12(d),
provided that (i) neither of such Material Subsidiaries may hold
cash or cash equivalents in an aggregate amount exceeding
$10,000,000 each at any time and (ii) all such cash and cash
equivalents of such Material Subsidiaries shall be maintained in
accounts with one or more Lenders;
(f) Investments consisting of non-cash consideration received
in connection with a sale of assets permitted under Sections 7.05
and 7.17;
(g) [Intentionally Omitted.]; and
(h) loans, advances and Investments not described in
clauses (a) through (g) above and not exceeding in the aggregate
the sum of (i) $50,000,000, (ii) 50% of the Borrower's Portion of
Excess Cash Flow and (iii) the after-tax cash flow received by JSC,
JSCE, the Borrower and their respective Subsidiaries from
commissions, fees and dividends resulting from, or paid on, such
Investments or any Investments of JSG managed by the Borrower.
SECTION 7.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or
sell, transfer, assign, lease, sublease or otherwise dispose of (in
one transaction or in a series of transactions) all or
substantially all its assets, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person other than
purchases of inventory, equipment and real property in the ordinary
course of business; provided, however, that if at the time thereof
and immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (a) any wholly owned
Subsidiary of JSC may merge into or with the Borrower in a
transaction in which the Borrower is the surviving corporation, and
(b) any wholly owned Subsidiary of JSC (other than JSCE or the
Borrower) may merge into or with or consolidate with any other
wholly owned Subsidiary of JSC in a transaction in which the
surviving entity is a wholly owned Subsidiary of JSC, provided in
each case that (i) no Person other than JSC or a wholly owned
Subsidiary of JSC receives any consideration and (ii) in the event
that any Loan Party is a party to such merger or consolidation and
is not the surviving entity, the surviving entity shall,
simultaneously with such merger or consolidation, assume all the
obligations of such Loan Party hereunder and under the other Loan
Documents.
SECTION 7.06. Restricted Junior Payments. (a) Declare or make,
directly or indirectly, any Restricted Junior Payment or set aside
any amount for any such purpose, except that any Subsidiary of a
Loan Party may declare and pay dividends or make other
distributions to such Loan Party (other than JSC).
(b) Notwithstanding the provisions of Section 7.06(a),
(i) JSCE may pay dividends to JSC, if and to the extent permitted
by applicable law, if, at the time of such payment and immediately
after giving effect thereto, (A) no Default or Event of Default
shall have occurred and be continuing and (B) the aggregate amount
of such dividends, together with the aggregate amount of all other
cash dividends paid by JSCE in the fiscal year in which the
dividend is proposed to be paid, shall not exceed the least of
(x) the Borrower's Portion of Excess Cash Flow, (y) 25% of
Consolidated Net Income for the fiscal year preceding the year in
which the dividend is proposed to be paid and (z) $22,200,000 and
(ii) JSC may pay dividends to the holders of its Common Stock
substantially contemporaneously with the payment of and out of the
proceeds of the dividends referred to in clause (i) above. The
limitations of this Section 7.06 shall not prohibit JSCE or JSC
from paying a dividend within 60 days after declaration thereof if,
on the declaration date, such dividend could have been paid in
compliance with this Section 7.06.
(c)[Intentionally Omitted].
(d) Notwithstanding the provisions of Section 7.06(a), the
Borrower may purchase in the open market shares of Common Stock
("MIP Shares") or options to purchase shares of Common Stock ("MIP
Options"), provided, that (i) the sum of (x) the aggregate purchase
price of all MIP Shares (whether purchased directly in the open
market or upon the exercise of MIP Options) and (y) the aggregate
purchase price of all MIP Options, together with the aggregate
purchase price of all shares of JSG purchased and excluded from the
term "Investments", in each case in such fiscal year shall not
exceed $15,000,000, (ii) MIP Shares, including those purchased upon
the exercise of MIP Options, shall be purchased exclusively for
subsequent distribution as additional compensation to employees of
the Borrower pursuant to its management incentive program, (iii)
the Borrower shall not knowingly purchase any MIP Shares from any
Affiliate (acting as principal in such transaction) of the Borrower
and (iv) at the time of any such purchase and immediately after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing.
SECTION 7.07. Transactions with Stockholders and Affiliates.
Except to the extent specifically permitted by the terms of this
Agreement, directly or indirectly enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or
more of any class of equity securities of such Person or with any
Affiliate of such Person or of any such holder, on terms that are
less favorable to such Person than those that could be obtained at
the time from Persons who are not such a holder or Affiliate,
provided that the foregoing restriction shall not apply to (a) any
transaction between such Person and any of its Material
Subsidiaries or between any of its Material Subsidiaries,
(b) customary fees paid to members of the Board of Directors of
such Person and its Subsidiaries, (c) customary compensation
(including salaries and bonuses) paid to officers and employees of
such Person, (d) payments made pursuant to the Tax Sharing
Agreement, (e) management and financial services provided by the
Borrower to its Subsidiaries and other entities in which the
Borrower has Investments to the extent that such services are
provided by the Borrower in the ordinary course of its business and
senior management of the Borrower has determined that the providing
of such services is in the best interests of the Borrower, (f) the
performance by the Borrower of the Operating Agreement and the
Rights Agreement and the transactions contemplated thereby, and
(g) the transactions contemplated by the Receivables Program
Documents, the 1992 Holdings Agreement, the Registration Rights
Agreement and the 1992 Stock Option Plan.
SECTION 7.08. Business. (a) Engage at any time in any business
or business activity other than the business currently conducted by
it and its Subsidiaries and business activities reasonably related
thereto. Without limiting the foregoing, neither JSC nor JSCE shall
engage in any business or conduct any activity other than holding,
directly or indirectly, the capital stock of its Subsidiaries, and
activities reasonably related thereto.
(b) In the case of JSC International, engage in any business
or business activity, have any liabilities or hold any assets
except that JSC International may (i) maintain a bank account with
a banking institution reasonably acceptable to the Administrative
Agent, (ii) engage in activities consistent with its being a
"Foreign Sales Corporation" as such term is defined in Section 922
of the Code, and the regulations promulgated thereunder and (iii)
receive advances from the Borrower equal to the gross export
revenues of the Borrower.
SECTION 7.09. Limitations on Debt Prepayments. (a) Optionally
prepay, repurchase or redeem or otherwise defease or segregate
funds with respect to any Indebtedness for borrowed money of JSC,
JSCE, the Borrower or any of their respective Subsidiaries;
provided, however, that the foregoing shall not prevent the
Borrower from (i) making any payment pursuant to Section 2.12 or
2.13, (ii) refinancing all or any portion of the 1993 Senior
Notes, the 8-Year Senior Notes or the 10-Year Senior Notes on terms
permitted by Section 7.01(d), (iii) refinancing, redeeming or
prepaying all or any portion of the 1993 Senior Notes, the 8-Year
Senior Notes or the 10-Year Senior Notes with (A) the Borrowers'
Portion of Excess Cash Flow or (B) that portion of the Net Cash
Proceeds of any Equity Issuance not required to be used to prepay
the Loans in accordance with Section 2.13(c) or (iv) optionally
prepaying, repurchasing or redeeming any Indebtedness for borrowed
money of the Borrower or any of its Subsidiaries not otherwise
permitted under clause (i), (ii) or (iii) above in an aggregate
amount not to exceed $25,000,000 in any year.
(b) Permit any amendment, waiver or modification to the terms
of the Senior Note Indentures, the 1993 Senior Note Indenture, the
Senior Notes or the 1993 Senior Notes or any agreement of the
Borrower entered into in connection with the foregoing if the
effect of such amendment or modification is to impose additional or
increased scheduled or mandatory repayment, retirement, repurchase
or redemption obligations in respect of such Indebtedness or to
require any scheduled or mandatory payment to be made in respect of
such Indebtedness prior to the date that such payment would
otherwise be due.
SECTION 7.10. Amendment of Certain Documents. (a)
[Intentionally Omitted].
(b) Amend, modify, cancel or grant any waiver with respect to
any indenture, note or any other instrument evidencing Indebtedness
for money borrowed or preferred or preference stock or pursuant to
which any Indebtedness for money borrowed or such stock was issued
or issue any securities in exchange for any Indebtedness for money
borrowed or any preferred or preference stock; provided, however,
that such Person may amend, modify or grant a waiver with respect
to any such indenture, note or other instrument if such amendment,
modification or waiver does not have the effect of (i) increasing
the amounts due in respect of any such indenture, note or other
instrument or any interest rate thereunder, (ii) subjecting any
property of such Person or any property of any Subsidiary of such
Person to any Lien to which it was not so subject immediately prior
to any such amendment, modification or waiver, (iii) shortening the
maturity or average life of any such Indebtedness for borrowed
money or (iv) creating or changing any covenant or similar
restriction or event of default having application to such Person
to make any such covenant or similar restriction more restrictive
on such Person.
(c) Cause or suffer to exist any amendment or modification to
or supplement of the certificate of incorporation or by-laws of
such Person, any Loan Document or any Basic Agreement, without the
prior written consent of the Required Lenders, unless such
amendment, modification or supplement is not adverse to the
interests of the Lenders hereunder or under the other Loan
Documents.
(d) [Intentionally Omitted.]
(e) Permit, cause or suffer to exist any direct or indirect
amendment, modification or supplement to any of the Receivables
Program Documents unless such amendment, modification or supplement
is in form and substance satisfactory to the Senior Managing
Agents, provided that (i) any proposed amendment, modification or
supplement to the Receivables Program Documents shall first be
submitted by the Borrower to the Senior Managing Agents in writing
and no such amendment, modification or supplement that, in the
opinion of the Senior Managing Agents, has an adverse effect on the
Lenders shall be effected unless the prior written consent of the
Required Lenders shall have been obtained and (ii) no consent of
the Senior Managing Agents or the Required Lenders shall be
required for any waiver by the Receivables Program lenders of their
rights under the Receivables Program Documents that is not
detrimental in any respect to the Borrower, or JSFin and that is
not more restrictive, in any respect, on the Borrower, or JSFin
than the Receivables Program Documents without giving effect to
such waiver.
(f) Permit or cause or suffer to exist any direct or indirect
termination or cancellation of, or amendment, modification or
supplement to, any of the Operating Agreement or the Rights
Agreement unless such amendment, modification or supplement is in
form and substance satisfactory to the Required Lenders.
SECTION 7.11. Limitation on Operating Leases. Enter into,
assume or suffer to exist or become liable in any way, whether
directly or indirectly or by assignment or as guarantor or other
surety, for the obligations of the lessee under any Operating Lease
of assets (a) with respect to the Mortgaged Property, that violates
any provision of the Mortgages or the Security Documents and (b)
with respect to any other assets, having a book value individually
or when aggregated with all such leases described in clauses (a)
and (b), in excess of $30,000,000.
SECTION 7.12. Limitation on Dispositions of Subsidiary Stock;
Creation of Subsidiaries. (a) Directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of, or permit any of its
Subsidiaries to issue to any other Person, any shares of capital
stock or other equity securities of (or warrants, rights or options
to acquire shares or other equity securities of) any of its
Subsidiaries, except (i) to the extent permitted by the Security
Documents and (ii) to qualify directors if and to the extent
required by applicable law.
(b) Subject to paragraph (d) below, have or create any
Subsidiary not identified on Schedule 4.08; provided, however, that
JSCE or the Borrower may create one or more new Subsidiaries
organized under the laws of the United States or any political
subdivision thereof if (i) each such Subsidiary is a wholly owned
Subsidiary and is designated by JSCE or the Borrower as a Material
Subsidiary and (ii) JSCE, the Borrower and each such Subsidiary
complies with the applicable provisions of Section 6.10.
(c) [Intentionally Omitted.]
(d) Notwithstanding paragraph (b) above, if at the time
thereof and immediately after giving effect thereto no Default or
Event of Default shall have occurred and be continuing, JSC may
create or cause to be created a wholly owned Subsidiary to be
incorporated in the State of Indiana and/or a wholly owned
Subsidiary to be incorporated in the State of Alabama, in each case
to own and operate certain assets of the Loan Parties located in
such states, so long as, upon the incorporation of any such
Subsidiary, (i) JSC shall designate or shall cause to be designated
each such Subsidiary as a Material Subsidiary and shall cause each
such Subsidiary to become a grantor party to the applicable
Security Documents with respect to all its assets, (ii) JSC shall
pledge or cause to be pledged to the Collateral Agent for the
benefit of the Secured Parties all the capital stock of each such
Subsidiary pursuant to the Pledge Agreement and (iii) JSC shall
cause to be delivered to the Administrative Agent and the
Collateral Agent such documents and opinions of counsel in
connection with the foregoing as may be reasonably requested by the
Administrative Agent or the Collateral Agent or their counsel.
SECTION 7.13. Restrictions on Ability of Subsidiaries to Pay
Dividends. Permit their respective Subsidiaries to, directly or
indirectly, voluntarily create or otherwise voluntarily cause or
suffer to exist or become effective any encumbrance or restriction
on the ability of any Subsidiary of such Person to (a) pay
dividends or make any other distributions on its capital stock or
any other interest or (b) make or repay loans or advances to such
Person except, in each case, for encumbrances or restrictions under
this Agreement, the 1993 Senior Note Indenture, the Senior Note
Indentures and, with respect to JSFin, the Receivables Program
Documents.
SECTION 7.14. Capital Expenditures. Incur Consolidated
Capital Expenditures in any fiscal year in excess of $150,000,000;
provided, however, that such amount in respect of any fiscal year
may be increased by an amount equal to the Borrower's Portion of
Excess Cash Flow. In addition, the amount of Consolidated Capital
Expenditures in any fiscal year may be further increased by an
amount equal to the excess of (a) $150,000,000 over (b) the amount
of Consolidated Capital Expenditures actually made in the
immediately preceding fiscal year; provided, however, that amounts
so available under this sentence in any fiscal year or years that
are not so expended, up to a maximum of $75,000,000 on a cumulative
basis, shall be available for any subsequent fiscal year and the
amount of Consolidated Capital Expenditures made in any fiscal year
shall first be applied against the $150,000,000 amount permitted
for such year and thereafter applied to the amount available from
prior years. The parties agree that, for purposes of the preceding
sentence, the Borrower shall be deemed on the Restatement Closing
Date to have $75,000,000 in unused Consolidated Capital
Expenditures from prior years available for use on and after the
Restatement Closing Date.
SECTION 7.15. Consolidated EBITDA. Permit Consolidated EBITDA
for any four-quarter period ending during any period set forth
below to be less than the amount set forth opposite such period:
Period Amount
From and including June 30,
1996 through and including
December 31, 1998 $375,000,000
From and including March 31,
1999 through and including
December 31, 1999 $400,000,000
From and including March 31,
2000 through and including
December 31, 2000 $425,000,000
Thereafter $450,000,000
SECTION 7.16. Interest Coverage Ratio. Permit the ratio of
(a) Consolidated EBITDA to (b) Consolidated Interest Expense for
any four-quarter period ending during any period set forth below to
be less than the amount set forth opposite such period:
Date Ratio
From and including June 30,
1996 through and including
December 31, 1998 2.00 to 1
From and including March 31,
1999 through and including
December 31, 1999 2.50 to 1
Thereafter 3.00 to 1
SECTION 7.17. Disposition of Collateral and other Assets. (a)
Sell, lease, assign, transfer or otherwise dispose of any asset or
assets constituting all or substantially all the Collateral.
(b) Sell, lease, assign, transfer or otherwise dispose of any
asset or related group of assets (other than Timber or Timberland
Property) constituting less than substantially all the Collateral
(other than (i) sales of inventory in the ordinary course of
business, (ii) pursuant to any Permitted Equipment Financing or
Permitted Timber Financing or (iii) to any Material Subsidiary),
unless the book value of such asset or related group of assets is
less than $10,000,000 and the aggregate book value of all assets or
related groups of assets previously disposed of pursuant to this
Section 7.17(b) is less than $60,000,000.
(c) Sell, lease, assign, transfer or otherwise dispose of any
portion of a discrete parcel of Timberland Property (other than
pursuant to any Permitted Equipment Financing or any Permitted
Timber Financing or to any Material Subsidiary), unless (i) the
fair market value of such parcel of Timberland Property is less
than $10,000,000 and (ii) the aggregate fair market value of all
Timberland Property previously disposed of pursuant to this
Section 7.17(c) is less than $50,000,000; provided, however, that
the Borrower may exchange any portion of a discrete parcel of
Timberland Property for a Substitute Parcel if (A) the fair market
value of the Substitute Parcel is at least as great as the fair
market value of the parcel of Timberland Property so exchanged, (B)
the release of such exchanged Timberland Property complies in all
respects with the provisions of Section 7.18 and (C) the Borrower
complies in all respects with the applicable provisions of
Section 6.10 with respect to the Substitute Parcel.
(d) Permit any third parties the privilege of entry upon the
Mortgaged Property for cutting and removal of Timber, except under
contracts pursuant to which such third parties are granted the
privilege of cutting or removing Timber for sale, consumption or
processing at commercially reasonable rates, provided that (i) as
to any single contract, the gross proceeds to be paid in any
calendar year shall not exceed $10,000,000, (ii) as to the
aggregate of all such contracts from time to time in effect, such
gross proceeds shall not exceed $50,000,000 in any calendar year,
(iii) the Borrower may exchange Timber for other timber
("Substitute Timber") if (A) the fair market value of the
Substitute Timber is at least as great as the fair market value of
the Timber so exchanged, (B) the release of such Timber complies in
all respects with the provisions of Section 7.18 and (C) the
Borrower complies in all respects with the applicable provisions of
Section 6.10 with respect to the Substitute Timber.
(e) Except for the sale of Program Receivables as permitted by
the Receivables Program Documents, sell, lease, assign, transfer or
otherwise dispose of any asset or assets (other than to a Material
Subsidiary), in a single transaction or a series of related
transactions, having a fair market value in excess of $5,000,000
unless (i) at least 80% of the consideration received by JSC and
its Subsidiaries in connection therewith shall be in cash or cash
equivalents and readily marketable securities, (ii) any non-cash
consideration shall consist of debt obligations of the purchaser
and (iii) if any consideration to be received consists of a note or
other debt obligation, such note or other debt obligation shall,
either (A) (x) be senior and secured by a first priority security
interest in the asset so sold and (y) shall be pledged to the
Collateral Agent for the benefit of the Lenders to secure the
Obligations pursuant to a written instrument satisfactory to the
Collateral Agent or (B) in the case of any portion of any such
consideration consisting of readily marketable securities, be sold
within 30 days of receipt thereof.
SECTION 7.18. Disposition of Mortgaged Property. (a) Sell,
lease, assign, transfer or otherwise dispose of (other than to a
Material Subsidiary) any interest in any Mortgaged Property,
including any interest in any Timberland Property (each, a "Release
Transaction"), except (i) in compliance with this Section 7.18,
Section 7.05 and Section 7.17 and (ii) in connection with any
Permitted Equipment Financing or any Permitted Timber Financing.
Upon such compliance, the Borrower shall be entitled to receive
from the Collateral Agent an instrument, in form and substance
satisfactory to the Collateral Agent (each, a "Release"), releasing
(or, at the option of the Borrower assigning) the Lien of any
applicable Mortgaged Property. The Borrower shall exercise its
rights under this Section 7.18 by delivery to the Collateral Agent
of a notice (each, a "Release Notice"), which shall refer to this
Section 7.18, describe with particularity the items of property
proposed to be covered by the Release and be accompanied by a
counterpart of the release fully executed and acknowledged by all
parties thereto other than the Collateral Agent and be in form for
execution by the Collateral Agent, and a certificate of a
Responsible Officer of the Borrower certifying as to the
satisfaction of the Release Conditions. The Collateral Agent shall
execute, acknowledge (if applicable) and deliver to the Borrower
such counterpart within a reasonable time after receipt by the
Collateral Agent of a Release Notice and the satisfaction of the
Release Conditions. The obligation of the Collateral Agent to
deliver any Release, and the Borrower's rights to consummate any
sale, lease, assignment, transfer or other disposition of any
interest in Mortgaged Property, shall be subject to the following
conditions (collectively, the "Release Conditions"):
(i) no Default or Event of Default shall have occurred
and be continuing;
(ii) if such Release relates to only a portion of a
discrete parcel of Mortgaged Property, following such sale,
transfer or other disposition and release of the Lien of any
applicable Mortgage with respect thereto, the affected
Mortgaged Property shall have sufficient utility services and
sufficient access to public roads, rail spurs, harbors,
canals, terminal and other transportation structures for the
continued use of such Mortgaged Property in substantially the
manner carried on by the Borrower prior to such Release;
(iii) if such Release relates to only a portion of a
discrete parcel of Mortgaged Property, following such sale,
transfer or other disposition, the affected Mortgaged Property
shall comply in all material respects with applicable laws,
rules, regulations and ordinances relating to environmental
protection, zoning, land use and building and work place
safety;
(iv) if such Release relates to only a portion of a
discrete parcel of Mortgaged Property, following such sale,
transfer or other disposition, the value of the affected
Mortgaged Property following such Release (exclusive of the
value of the released Mortgaged Property) plus the value of
the proceeds received for such released Mortgaged Property
shall not be less than the value of such Mortgaged Property
prior to such Release;
(v) if such Release relates to only a portion of a
discrete parcel of Mortgaged Property (other than Timberland
Property), the title insurance company that issued the title
insurance relating to the affected Mortgaged Property shall
have committed to issue an endorsement to such title insurance
policy confirming that after such Release the Lien of the
applicable Mortgage continues unimpaired as a first priority
Lien upon the remaining Mortgaged Property, subject only to
Liens permitted by the terms of the applicable Mortgage to be
prior thereto; and
(vi) except with respect to Timberland Property, the
Borrower shall have delivered to the Collateral Agent a survey
showing the property proposed to be released.
(b) In connection with any Release Transaction, the Borrower
shall (i) execute, deliver and cause to be recorded, and obtain and
deliver, such instruments as the Collateral Agent may reasonably
request, including amendments to the Security Documents and this
Agreement, and (ii) deliver to the Collateral Agent such evidence
of the satisfaction of the Release Conditions as the Collateral
Agent may reasonably require. Without limiting the provisions of
Section 10.05, the Borrower shall reimburse the Collateral Agent,
the Administrative Agent and the Lenders upon demand for all costs
or expenses, including attorneys' fees and disbursements, incurred
by each of them in connection with any action contemplated by this
Section 7.18.
SECTION 7.19. Fiscal Year. Cause its fiscal year to end on a
date other than December 31.
ARTICLE VIII
Events of Default
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in
any Loan Document, or any representation, warranty, statement
or information contained in any report, certificate, financial
statement or other instrument furnished pursuant to any Loan
Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal
of any Loan or Swingline Loan or LC Disbursement when and as
the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest
on any Loan or Swingline Loan or any Fee or any other amount
(other than an amount referred to in paragraph (b) above) due
under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a
period of three Business Days;
(d) default shall be made in the due observance or per-
formance by JSC, JSCE or the Borrower of any covenant,
condition or agreement contained in Section 6.01, 6.05(a),
6.08 or in Article VII;
(e) default shall be made in the due observance or per-
formance by any Loan Party or any of their respective
Subsidiaries of any covenant, condition or agreement contained
in any Loan Document (other than those defaults specified in
paragraph (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after written
notice thereof from the Administrative Agent or any Lender to
the Borrower;
(f) any Loan Party or any of their respective
Subsidiaries shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness in a
principal amount in excess of $5,000,000, when and as the same
shall become due and payable (after giving effect to any
applicable grace period), or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in
any agreement or instrument evidencing or governing any such
Indebtedness (after giving effect to any applicable grace
period), if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of
such Indebtedness or a trustee on its or their behalf to
cause, such Indebtedness to become due prior to its stated
maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of JSC, JSCE or the
Borrower or any of their respective Material Subsidiaries, or
of a substantial part of the property or assets of JSC, JSCE
or the Borrower or any such Material Subsidiary, under
Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for JSC, JSCE or the Borrower
or any such Material Subsidiary or for a substantial part of
the property or assets of JSC, JSCE or the Borrower or any
such Material Subsidiary or (iii) the winding-up or
liquidation of JSC, JSCE or the Borrower or any such Material
Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(h) JSC, JSCE or the Borrower or any of their respective
Material Subsidiaries shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described
in paragraph (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for JSC, JSCE or the Borrower
or any such Material Subsidiary or for a substantial part of
the property or assets of JSC, JSCE or the Borrower or any
such Material Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any
of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 in any one case or
$15,000,000 in the aggregate in all such cases (in each case
to the extent not adequately covered by insurance as to which
the insurance company has acknowledged coverage pursuant to a
writing reasonably satisfactory to the Collateral Agent) shall
be rendered against JSC, JSCE or the Borrower or any of their
respective Subsidiaries or any combination thereof and the
same shall remain undischarged for a period of 10 consecutive
days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to
levy upon assets or properties of JSC, JSCE or the Borrower or
any Subsidiary to enforce any such judgment;
(j) a Reportable Event or Reportable Events, or a failure
to make a required installment or other payment (within the
meaning of Section 412(n)(l) of the Code), shall have
occurred with respect to any Plan or Plans that reasonably
could be expected to result in liability of JSC, JSCE or the
Borrower or any of their respective Subsidiaries to the PBGC
or to a Plan in an aggregate amount exceeding $25,000,000 and,
within 30 days after the reporting of any such Reportable
Event to the Administrative Agent pursuant to
Section 6.06(b)(i)(A) or after the receipt by the
Administrative Agent of the statement required pursuant to
Section 6.06(b)(iii), the Administrative Agent shall have
notified the Borrower in writing that (i) the Required Lenders
have reasonably determined that, on the basis of such Report-
able Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for the
appointment by the appropriate United States District Court of
a trustee to administer such Plan or Plans or (C) for the
imposition of a lien in favor of a Plan and (ii) as a result
thereof an Event of Default exists hereunder; or a trustee
shall be appointed by a United States District Court to admin-
ister any such Plan or Plans; or the PBGC shall institute pro-
ceedings to terminate any Plan or Plans;
(k) (i) JSC, JSCE or the Borrower or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred Withdrawal Liability to such Multi-
employer Plan, (ii) JSC, JSCE or the Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting such
Withdrawal Liability or is not in fact contesting such
Withdrawal Liability in a timely and appropriate manner and
(iii) the amount of the Withdrawal Liability specified in such
notice, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date or dates of such
notification), exceeds $25,000,000;
(l) JSC, JSCE or the Borrower or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if
solely as a result of such reorganization or termination the
aggregate contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been
or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$25,000,000;
(m) there shall have occurred a Change in Control;
(n) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by
JSC, JSCE or the Borrower or any Guarantor not to be, a valid,
perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security
interest in Collateral with a fair market value or book value
(whichever is greater) in excess, individually or in the
aggregate, of $35,000,000, except to the extent that any such
loss of perfection or priority results from the failure of the
Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement or
otherwise take any action within its control (including the
filing of Uniform Commercial Code continuation statements);
(o) any Loan Document shall not be for any reason, or
shall be asserted by the Loan Party or any Guarantor party
thereto (except as otherwise expressly provided in this
Agreement or such Loan Document) not to be, in full force and
effect and enforceable in all material respects in accordance
with its terms;
(p) the Obligations and the Guarantees thereof pursuant
to the Guarantee Agreement shall cease to constitute, or shall
be asserted by any Loan Party (except as otherwise expressly
provided in this Agreement or such Loan Document) not to
constitute, senior indebtedness under the subordination provi-
sions of any Subordinated Indebtedness, or any such subordina-
tion provisions shall be invalidated or otherwise cease to be
a legal, valid and binding obligation of the parties thereto,
enforceable in accordance with its terms; or
(q) there shall be present on, at, or under any of the
Mortgaged Properties any Hazardous Materials that could
reasonably be expected to result in any liability or
obligation under any Environmental Laws, including costs of
remediation, fines, penalties, natural resource damages or
other damages, in an aggregate amount in excess of
$50,000,000;
then, and in every such event (other than an event with respect to
the Borrower or any Guarantor described in paragraph (g) or (h)
above), and at any time thereafter during the continuance of such
event, the Administrative Agent may and, at the request of the
Required Lenders, shall, by notice to the Borrower, take any of or
all the following actions, at the same or different times:
(i) terminate forthwith the Commitments and the LC Commitment,
(ii) declare the Loans and the Swingline Loans then outstanding to
be forthwith due and payable in whole or in part, whereupon the
principal of the Loans and the Swingline Loans so declared to be
due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Loan Parties
accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly
waived by JSC, JSCE and the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding and
(iii) exercise any remedies available under any Loan Document or
otherwise; and in any event with respect to the Borrower or a
Guarantor described in paragraph (g) or (h) above, the Commitments
and the LC Commitment shall automatically terminate and the
principal of the Loans and the Swingline Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Loan Parties accrued hereunder and
under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by JSC, JSCE
and the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE IX
The Administrative Agent, the Collateral Agent, the Senior
Managing
Agents and the Fronting Bank
In order to expedite the transactions contemplated by this
Agreement, (a) Chemical Bank is hereby appointed to act as
Administrative Agent and Collateral Agent for the Fronting Bank,
the Swingline Lender and the Lenders and (b) Chemical Bank and BTCo
are hereby appointed to act as Senior Managing Agents on behalf of
the Managing Agents and the Lenders (the Administrative Agent, the
Collateral Agent, the Senior Managing Agents and the Managing
Agents for purposes of this Article are collectively referred to as
the "Agents"). Each of the Lenders, the Fronting Bank and the
Swingline Lender hereby irrevocably authorizes each Agent to take
such actions on their behalf and to exercise such powers as are
specifically delegated to such Agent by the terms and provisions
hereof and of the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, the Fronting
Bank and the Swingline Lender, without hereby limiting any implied
authority, (a) to receive all Loan Documents on the Restatement
Closing Date, (b) to receive on behalf of the Lenders, the Fronting
Bank and the Swingline Lender all payments of principal of and
interest on the Loans and the Swingline Loans, all payments in
respect of LC Disbursements and all other amounts due to the
Lenders, the Fronting Bank and the Swingline Lender hereunder, and
promptly to distribute to each Lender, the Fronting Bank and the
Swingline Lender its proper share of each payment so received,
(c) to give notice on behalf of each of the Lenders to the Borrower
of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection
with its agency hereunder and (d) to distribute to each Lender, the
Fronting Bank and the Swingline Lender copies of all notices,
financial statements and other materials delivered by the Loan
Parties pursuant to this Agreement as received by the
Administrative Agent (including notices of an occurrence of any
Event of Default). The Administrative Agent and the Collateral
Agent are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and
the Program Receivables and the rights of the Secured Parties with
respect thereto, in each case as contemplated by and in accordance
with the terms and provisions of this Agreement and the Security
Documents.
None of the Agents or the Fronting Bank or any of their
respective directors, officers, employees or agents shall be liable
as such for any action taken or omitted by any of them except for
its, his or her own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or
the contents of any document delivered in connection herewith, or
be required to ascertain or to make any inquiry concerning the
performance or observance by the Loan Parties or any Guarantor of
any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to the
Lenders or the Fronting Bank or the Swingline Lender for the due
execution, genuineness, validity, enforceability or effectiveness
of this Agreement, any other Loan Document or any other instruments
or agreements. The Administrative Agent and the Collateral Agent
shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the
Required Lenders (and the Fronting Bank, with respect to Letters of
Credit) and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders, the Fronting Bank and the Swingline
Lender. The Administrative Agent and the Collateral Agent shall, in
the absence of knowledge to the contrary, be entitled to rely on
any instrument or document believed by them in good faith to be
genuine and correct and to have been signed or sent by the proper
Person or Persons. None of the Agents or the Fronting Bank or any
of their respective directors, officers, employees or agents shall
have any responsibility to the Loan Parties on account of the
failure of or delay in performance or breach by any Lender (or, in
the case of the Agents, by the Fronting Bank or the Swingline
Lender) of any of its obligations hereunder or to any Lender (or,
in the case of the Agents, the Fronting Bank or the Swingline
Lender) on account of the failure of or delay in performance or
breach by any other Lender (or, in the case of the Agents, the
Fronting Bank or the Swingline Lender) or the Loan Parties or any
Guarantor of any of their respective obligations hereunder or under
any other Loan Document or in connection herewith or therewith.
Each Agent and the Fronting Bank may execute any and all duties
hereunder by or through agents or employees and shall be entitled
to rely upon the advice of legal counsel selected by any of them
with respect to all matters arising hereunder and shall not be
liable for any action taken or suffered in good faith by any of
them in accordance with the advice of such counsel.
The Lenders, the Fronting Bank and the Swingline Lender hereby
acknowledge that none of the Agents or the Fronting Bank shall be
under any duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement unless it
shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent
as provided below, any Agent may resign at any time by notifying
the Lenders, the Fronting Bank, the Swingline Lender and the
Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a Lender as the successor. If no
successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Fronting Bank, appoint
a successor Agent, which shall be a bank with an office in New
York, New York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any Agent's resignation hereunder, the provisions
of this Article and Section 10.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent and
the Fronting Bank, in its individual capacity and not as Agent or
Fronting Bank, as the case may be, shall have the same rights and
powers as any other Lender and may exercise the same as though it
were not an Agent or the Fronting Bank, as the case may be, and
each Agent and its Affiliates and the Fronting Bank and its
Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Loan Parties or any of
their respective Subsidiaries or other Affiliates as if it were not
an Agent or the Fronting Bank, as the case may be.
Each Lender agrees (a) to reimburse each Agent and the
Fronting Bank, on demand, in the amount of such Lender's pro rata
share (based on its Commitment hereunder) of any expenses incurred
for the benefit of the Lenders by such Agent or the Fronting Bank,
including fees, disbursements and other charges of counsel and
compensation of agents paid for services rendered on behalf of the
Lenders, that shall not have been reimbursed by the Loan Parties
and (b) to indemnify and hold harmless each Agent and the Fronting
Bank and any of their respective directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as an Agent
or the Fronting Bank, as the case may be, or any of them in any way
relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Loan Parties, provided that
(i) no Lender shall be liable to any Agent or the Fronting Bank for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful
misconduct of such Agent or the Fronting Bank, as the case may be,
or any of their respective directors, officers, employees or agents
and (ii) each Lender that does not have a Revolving Credit
Commitment (other than through the termination thereof) shall be
under no obligation to reimburse or indemnify the Fronting Bank
under clauses (a) and (b) above.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents, any other Lender, the Fronting
Bank or the Swingline Lender and based on such documents and infor-
mation as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
the Agents, any other Lender, the Fronting Bank or the Swingline
Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Except as otherwise expressly
permitted herein, notices and other communications provided for
herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) If to either JSC or JSCE, to it in care of Jefferson
Smurfit Corporation (U.S.), Jefferson Smurfit Centre, 8182
Maryland Avenue, St. Louis, MO 63105, Attention of Treasurer
(Telecopy No. (314) 746-1281); with a copy to Jefferson
Smurfit Group plc, Beech Hill, Clonskeagh, Dublin 4, Ireland,
Attention of Treasurer (Telecopy No. 351 353 1269 4481)
(b) If to the Borrower, to it at Jefferson Smurfit
Centre, 8182 Maryland Avenue, St. Louis, MO 63105, Attention
of Treasurer (Telecopy No. (314) 746-1281).
(c) If to the Administrative Agent or Chemical Bank, as
Swingline Lender or Senior Managing Agent, at 10 South LaSalle
Street (23rd Floor), Chicago, IL 60603-1907, Attention of
Jonathan Twichell (Telecopy No. (312) 346-9410); with a copy
to Chemical Bank Agency Services Corporation, Grand Central
Tower, 140 East 45th Street, New York, New York 10017,
Attention of Andrew Stasiw (Telecopy No. (212) 622-0122).
(d) If to BTCo, as Senior Managing Agent, at 233 South
Wacker Drive, Chicago, IL 60603, Attention of Loretta Summers
and Albert Chung (Telecopy No. (312) 993-8218).
(e) If to the Fronting Bank, at its address (or telecopy
number) set forth on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have become a
party hereto.
(f) If to a Lender, at its address (or telecopy number)
set forth on Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party
hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy, or on the date five
Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed)
to such party as provided in this Section 10.01 or in accordance
with the latest unrevoked direction from such party given in accor-
dance with this Section 10.01. The Administrative Agent shall
deliver to the Borrower a copy of each Administrative Questionnaire
received by it.
SECTION 10.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Loan Party
herein and by the Loan Parties and the Guarantors in the
certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the
Lenders, the Fronting Bank and the Swingline Lender and shall
survive the making by the Lenders of the Loans, the making by the
Swingline Lender of the Swingline Loans and the issuance of Letters
of Credit by the Fronting Bank, regardless of any investigation
made by the Lenders, the Fronting Bank or the Swingline Lender or
on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or
Swingline Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or
any Letter of Credit is outstanding and so long as the Commitments
and the LC Commitment have not been terminated.
SECTION 10.03. Binding Effect. This Agreement shall become
effective as provided in the Amendment Agreement, and thereafter
shall be binding upon and inure to the benefit of JSC, JSCE and the
Borrower, the Administrative Agent, the Senior Managing Agents, the
Fronting Bank, the Swingline Lender and each Managing Agent and
Lender and their respective successors and assigns, except that
none of JSC, JSCE or the Borrower shall have the right to assign
its rights hereunder or any interest herein without the prior
consent of all the Lenders (and any attempted assignment by any
such Person shall be void).
SECTION 10.04. Successors and Assigns. (a) Subject to
Section 10.03, whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of JSC, JSCE and the
Borrower, the Senior Managing Agents, the Administrative Agent, the
Fronting Bank, the Swingline Lender, the Managing Agents or the
Lenders that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitments and LC
Commitment, the outstanding Letters of Credit and the Loans at the
time owing to it); provided, however, that (i) except in the case
of an assignment to a Lender or an Affiliate of a Lender, each of
the Administrative Agent and the Borrower (and, in the case of an
assignment of a Lender's Revolving Credit Commitment, the Swingline
Lender and the Fronting Bank) must give its prior written consent
to such assignment (which consent shall not be unreasonably
withheld); provided further, however, the consent of the Borrower
shall not be required if a Default or an Event of Default under
paragraph (b), (c), (g) or (h) of Article VIII has occurred and is
continuing on the date of the Assignment and Acceptance, (ii) the
amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or an
amount equal to the remaining balance of such Lender's Commitment),
(iii) the parties to each such assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, and a
processing and recordation fee of $3,500 and (iv) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pur-
suant to paragraph (e) of this Section 10.04, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the
execution thereof and in no event shall precede the date of such
recording, (i) the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and
Acceptance, shall have the rights and obligations of a Lender under
this Agreement and (ii) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
party hereto, but shall continue to be entitled to the benefits of
Sections 2.14, 2.16, 2.20 and 10.05, as well as to any Fees accrued
for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and that its Commitment
and LC Commitment, and the outstanding balances of its Term Loans
and Revolving Loans, in each case without giving effect to
assignments thereof that have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth
in clause (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection
with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of
the Loan Parties or the performance or observance by the Loan
Parties of any of their obligations under this Agreement or under
any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of any
amendments or consents entered into prior to the date of such
Assignment and Acceptance and copies of the most recent financial
statements delivered pursuant to Section 6.04 and such other
documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or
any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(vi) such assignee appoints and authorizes the Administrative
Agent, the Senior Managing Agents, the Managing Agents and the
Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent, the Senior Managing Agent, the Managing
Agents and the Collateral Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms
all the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as agent
of the Borrower, shall maintain at one of its offices in The City
of New York a copy of each Assignment and Acceptance delivered to
it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments and LC Commitment of, and
principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive in the absence of manifest error and
JSC, JSCE and the Borrower, the Administrative Agent, the Fronting
Bank, the Swingline Lender and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be
available for inspection by JSC, JSCE, the Borrower, the Fronting
Bank, the Swingline Lender and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee,
together with an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
paragraph (b) above and the written consent (to the extent required
under paragraph (b) above), of the Administrative Agent, the
Borrower and/or the Swingline Lender and the Fronting Bank to such
assignment, the Administrative Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
Lenders, the Fronting Bank and the Swingline Lender. No assignment
shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may, without the consent of JSC, JSCE, the
Borrower, the Administrative Agent, the Fronting Bank or the
Swingline Lender, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and
the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16, 2.20
and 10.05 to the same extent as if they were Lenders, provided
that, except as expressly provided in Section 2.20(a), the
Borrower shall not be required to reimburse the participating
lenders or other entities pursuant to Section 2.14, 2.16, 2.20 or
10.05 in an amount in excess of the amount that would have been
payable thereunder to such Lender had such Lender not sold such
participation, and (iv) JSC, JSCE, the Borrower, the Administrative
Agent, the Senior Managing Agents, the Managing Agents, the
Fronting Bank, the Swingline Lender and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations
of the Loan Parties under the Loan Documents and to approve any
amendment, modification or waiver of any provision of this
Agreement (provided that the participating bank or other entity may
be provided with the right to approve amendments, modifications or
waivers affecting it with respect to (A) any decrease in the Fees
payable hereunder with respect to Loans in which the participating
bank or other entity has purchased a participation, (B) any change
in the amount of principal of, or decrease in the rate at which
interest is payable on, the Loans in which the participating bank
or other entity has purchased a participation, (C) any extension of
the final scheduled maturity of any Loan in which the participating
bank or other entity has purchased a participation or (D) any
release of all or substantially all the Collateral).
(g) Notwithstanding the limitations set forth in paragraph (b)
above, any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank without the
prior written consent of the Borrower, the Administrative Agent,
the Fronting Bank or the Swingline Lender, provided that no such
assignment shall release a Lender from any of its obligations
hereunder or substitute any such Bank for such Lender as a party
hereto. In order to facilitate such an assignment to a Federal
Reserve Bank, the Borrower shall, at the request of the assigning
Lender, duly execute and deliver to the assigning Lender a
promissory note or notes evidencing the Loans made to the Borrower
by the assigning Lender hereunder.
(h) Except as provided in Section 3.10 and Section 2.22,
respectively, neither the Fronting Bank nor the Swingline Lender
may assign or delegate any of its respective rights and duties
hereunder without the prior written consent of the Borrower and the
Senior Managing Agents.
SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees to
pay all out-of-pocket expenses incurred by the Administrative
Agent, the Senior Managing Agents, the Fronting Bank, the Swingline
Lender and the Collateral Agent in connection with the preparation
of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the
Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender, the Collateral
Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or
the Letters of Credit issued hereunder, including the reasonable
fees, disbursements and other charges of Cravath, Swaine & Moore,
counsel for the Administrative Agent, the Collateral Agent and the
Senior Managing Agents, and, in connection with any such enforce-
ment or protection, the reasonable fees, disbursements and other
charges of any other counsel (including allocated costs of internal
counsel) for the Administrative Agent, the Senior Managing Agents,
the Managing Agents, the Fronting Bank, the Swingline Lender, the
Collateral Agent or any Lender. The Borrower further agrees to
indemnify the Administrative Agent, the Senior Managing Agents, the
Managing Agents, the Fronting Bank, the Swingline Lender, the Col-
lateral Agent and the Lenders from, and hold them harmless against,
any documentary taxes, assessments or similar charges made by any
Governmental Authority by reason of the execution and delivery of
this Agreement or any of the other Loan Documents.
(b) The Borrower agrees to indemnify the Administrative Agent,
the Senior Managing Agents, the Managing Agents, the Collateral
Agent, the Fronting Bank, the Swingline Lender and each Lender and
each of their respective directors, officers, employees and agents
(each such person being called an "Indemnitee") against, and to
hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable
counsel fees, disbursements and other charges, incurred by or
asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of
this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder
or thereunder or the consummation of the Transactions and the other
transactions contemplated hereby or thereby, (ii) the use of the
Letters of Credit or the proceeds of the Loans and the Swingline
Loans or (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is
a party thereto, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses have resulted from the
gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 10.05 shall remain
operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans or the
Swingline Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the
Senior Managing Agents, the Managing Agents, the Fronting Bank, the
Collateral Agent, the Swingline Lender or any Lender. All amounts
due under this Section 10.05 shall be payable on written demand
therefor.
SECTION 10.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized,
in addition to any other right or remedy that any Lender may have
by operation of law or otherwise, at any time and from time to
time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), to exercise its banker's lien or
right of setoff and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit
or the account of any Loan Party against any of and all the
obligations of the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender,
irrespective of whether such Lender shall have made any demand
under this Agreement or such other Loan Document and although such
obligations may be unmatured.
SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN THE MORTGAGES ) SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay on
the part of the Administrative Agent, either Senior Managing Agent,
the Managing Agents, the Fronting Bank, the Swingline Lender, the
Collateral Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment
or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the
Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Swingline Lender, the Collateral
Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by
the Loan Parties therefrom shall in any event be effective unless
the same shall be permitted by paragraphs (b) or (c) below, and
then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand
on the Loan Parties in any case shall entitle the Loan Parties to
any other or further notice or demand in similar or other circum-
stances.
(b) Neither this Agreement or any of the other Loan Documents
nor any provision hereof or thereof may be waived, amended or
modified except (i) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by JSC, JSCE, the
Borrower and the Required Lenders, (ii) in the case of the
Guarantee Agreement, pursuant to an agreement or agreements in
writing entered into by the Guarantors and the Collateral Agent and
consented to by the Required Lenders, (iii) in the case of the SNC
Guarantee Agreement, pursuant to an agreement or agreements in
writing entered into by SNC and the Collateral Agent and consented
to by the Required Lenders, (iv) in the case of any of the Security
Documents, pursuant to an agreement or agreements in writing
entered into by the parties thereto and consented to by the
Required Lenders or (v) in the case of a Letter of Credit, pursuant
to an agreement or agreements entered into by the Borrower and the
Fronting Bank; provided, however, that no such agreement shall
(A) change the principal amount of any Loan, extend the final
scheduled maturity of any Loan, extend the scheduled date for
payment of interest on any Loan, forgive any such payment or any
part thereof or reduce the rate of interest on any Loan, in each
case without the prior written consent of each Lender affected
thereby, (B) increase the amount or extend the termination date of
the Commitment or the LC Commitment or reduce or extend the date
for payment of the Fees of any Lender, in each case without the
prior written consent of such Lender, (C) amend or modify the
provisions of Section 2.17, the provisions of Section 10.03, the
provisions of this Section 10.08(b) or the definition of the term
"Required Lenders" without the prior written consent of each
Lender, (D) release all or substantially all the Collateral, except
as expressly permitted by the Security Documents or this Agreement,
without the prior written consent of each Lender, (E) reduce any
Tranche A Term Loan Repayment Amount or extend any Tranche A Term
Loan Repayment Date (other than the Tranche A Maturity Date), in
each case without the prior written consent of Lenders holding
Tranche A Term Loans representing at least 75% of the aggregate
outstanding principal amount of the Tranche A Term Loans, (F)
reduce any Tranche B Term Loan Repayment Amount or extend any
Tranche B Term Loan Repayment Date (other than the Tranche B
Maturity Date), in each case without the prior written consent of
Lenders holding at least 75% of the aggregate outstanding principal
amount of the Tranche B Term Loans, (G) change the allocation of
prepayments to be made pursuant to Section 2.12(c) or 2.13(h) or
(k) without the prior written consent of (1) Lenders holding more
than 50% of the aggregate outstanding principal amount of the
Tranche A Term Loans and (2) Lenders holding more than 50% of the
aggregate outstanding principal amount of the Tranche B Term Loans,
(H) change the application of prepayments of Tranche A Term Loans
pursuant to Section 2.12(b) or (c) or 2.13(h) or (k) without the
prior written consent of Lenders holding Tranche A Term Loans
representing more than 50% of the aggregate outstanding principal
amount of the Tranche A Term Loans or (I) change the application of
prepayments of Tranche B Term Loans pursuant to Section 2.12(b) or
(c) or 2.13(h) or (k) without the prior written consent of Lenders
holding more than 50% of the aggregate outstanding principal amount
of the Tranche B Term Loans; and provided further, that (I) no such
agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the
Fronting Bank or the Swingline Lender hereunder without the prior
written consent of the Administrative Agent, the Collateral Agent,
the Fronting Bank or the Swingline Lender, respectively, (II) any
agreement described in clause (E), (F), (G), (H) or (I) above that
is consented to by the requisite Lenders as provided therein shall
be effective as to the matters described in such clauses even if it
shall not have been consented to by the Required Lenders and
(III) no such agreement shall release any Guarantor or SNC from its
obligations under the Guarantee Agreement or the SNC Guarantee
Agreement, respectively, without the prior written consent of
Lenders holding Loans, a share of the used LC Commitments and
unused Commitments representing at least 75% of the sum of (x) the
aggregate principal amount of the Loans, (y) the LC Exposure and
(z) the aggregate unused Commitments.
(c) In addition, no waiver, amendment or modification of this
Agreement shall (A) reduce any Additional Tranche B Term Loan
Repayment Amount or extend any Additional Tranche B Term Loan
Repayment Date (other than the Additional Tranche B Maturity Date),
in each case without the prior written consent of Lenders holding
at least 75% of the aggregate outstanding principal amount of the
Additional Tranche B Term Loans, (B) reduce any Tranche C Term Loan
Repayment Amount or extend any Tranche C Term Loan Repayment Date
(other than the Tranche C Maturity Date), in each case without the
prior written consent of Lenders holding at least 75% of the
aggregate outstanding principal amount of the Tranche C Term Loans,
(C) change the allocation of prepayments to be made pursuant to
Section 2.12(c) or 2.13(h) or (k) without the prior written
consent of (1) Lenders holding more than 50% of the aggregate
outstanding principal amount of the Additional Tranche B Term Loans
and (2) Lenders holding more than 50% of the aggregate outstanding
principal amount of the Tranche C Term Loans, (D) change the
application of prepayments of Additional Tranche B Term Loans
pursuant to Section 2.12(b) or (c) or 2.13(h) or (k) without the
prior written consent of Lenders holding more than 50% of the
aggregate outstanding principal amount of Additional Tranche B Term
Loans or (E) change the application of prepayments of Tranche C
Term Loans pursuant to Section 2.12(b) or (c) or 2.13(h) or
(k) without the prior written consent of Lenders holding more than
50% of the aggregate outstanding principal amount of the Tranche C
Term Loans; provided, however, that no such agreement shall amend
or modify the provisions of this Section 10.08(c) without the prior
written consent of each Additional Lender; and provided further,
that any agreement described in clause (A), (B), (C), (D) or (E)
above that is consented to by the requisite Lenders as provided
therein shall be effective as to the matters described in such
clauses even if it shall not have been consented to by the Required
Lenders.
SECTION 10.09. Interest Rate Limitation. Notwithstanding any-
thing herein to the contrary, if at any time the applicable
interest rate, together with all fees and charges that are treated
as interest under applicable law (collectively, the "Charges"), as
provided for herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received, taken or
reserved by any Lender or the Swingline Lender, shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted
for, charged, taken, received or reserved by such Lender or the
Swingline Lender in accordance with applicable law, the rate of
interest payable to such Lender or the Swingline Lender hereunder,
together with all Charges payable to such Lender or the Swingline
Lender, shall be limited to the Maximum Rate.
SECTION 10.10. Entire Agreement. This Agreement and the other
Loan Documents and the fee letter referred to in Section 2.05(c)
constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties
with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement
or in the other Loan Documents, expressed or implied, is intended
to confer upon any party other than the parties hereto and thereto
any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 10.11. Waiver of Jury Trial. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with
this Agreement or any of the other Loan Documents. Each party
hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce
the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and
the other Loan Documents, as applicable, by, among other things,
the mutual waivers and certifications in this Section 10.11.
SECTION 10.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan
Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-
faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 10.13. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but
one contract, and shall become effective as provided in Section
10.03.
SECTION 10.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 10.15. Confidentiality. (a) Each Lender agrees not to
disclose to any Person the Information (as defined below) without
the prior written consent of the Borrower, which consent shall not
be unreasonably withheld, except that any Lender shall be permitted
to disclose Information (i) to its officers, directors, employees,
agents and representatives (including its auditors and counsel);
(ii) to the extent (A) required by applicable laws and regulations
or by any subpoena or similar legal process or (B) requested by any
regulatory authority; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of
this Agreement, (B) becomes available to such Lender on a non-
confidential basis from a source other than a Loan Party or its
Affiliates or (C) was available to such Lender on a non-
confidential basis prior to its disclosure to such Lender by a Loan
Party or its Affiliates; (iv) to any actual or prospective assignee
of, or prospective purchaser of a participation in, the rights of
such Lender hereunder, in each case subject to paragraph (c) below;
or (v) in connection with any suit, action or proceeding relating
to the enforcement of rights hereunder or under any other Loan
Document or in connection with the transactions contemplated
hereby. As used in this Section 10.15, as to any Lender, the term
"Information" shall mean the Confidential Information Memorandum
and any other materials, documents and information that JSC, JSCE
or the Borrower, or any of their Affiliates may have furnished or
may hereafter furnish to any Lender in connection with this
Agreement.
(b) Each Lender agrees that it will use the Information only
for purposes related to the transactions contemplated hereby and by
the other Loan Documents, provided that (i) if the conditions
referred to in any of subclauses (A) through (C) of clause (iii) of
paragraph (a) above are met, such Lender may otherwise use the
Information and (ii) if such Lender is otherwise a creditor of a
Loan Party, such Lender may use the Information in connection with
its other credits to such Loan Party.
(c) Each Lender agrees that it will not disclose any of the
Information to any actual or prospective assignee of such Lender or
participant in any rights of such Lender under this Agreement
unless such actual or prospective assignee or participant first
executes and delivers to such Lender a confidentiality letter
containing substantially the undertakings set forth in this
Section 10.15.
SECTION 10.16. Jurisdiction; Consent to Service of Process.
(a) Each of JSC, JSCE and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right
that any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents
against any Loan Party or its properties in the courts of any
jurisdiction.
(b) Each of JSC, JSCE and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising
out of or relating to this agreement or the other Loan Documents in
any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 10.17. Receivables Program. The Lenders hereby
acknowledge and agree that the transfer of Program Receivables by
SNC to the Borrower, and the transfer of Program Receivables by the
Borrower to JSFin pursuant to the Receivables Program, constitute
true and valid sales for consideration (or, in the case of Program
Receivables contributed by the Borrower to JSFin, contributions for
consideration), and not a borrowing by the Borrower or SNC from
JSFin secured by such Program Receivables.
SECTION 10.18. Florida Real Property. The parties hereto hereby
acknowledge that the Revolving Loans are secured by real and personal
property located both inside and outside the State of Florida and
hereby agree that for purposes of calculating intangible taxes due
under Section 199.133, Florida Statutes, the first amounts advanced
under the Revolving Facility shall be deemed to be the portion
allocable to the Collateral consisting of Real Property located in
the State of Florida, and such portion allocable to such Collateral
shall also be deemed to be the last to be repaid under the terms
hereof. Nothing herein shall limit the Secured Parties' right to
recover or realize from the Collateral located in the State of
Florida amounts in excess of that allocated to the Revolving Loans or
to apply amounts so recovered or realized against the Secured
Obligations in such order as the Collateral Agent in its sole
discretion shall determine.
SECTION 10.19. Agreement to Share Collateral. The Lenders
hereby agree to share the aggregate proceeds of the Collateral on an
equal and ratable basis in accordance with the amounts of the
Obligations owed to them, notwithstanding the fact that the
Additional Mortgages shall have been recorded subsequent to the
recording of the Mortgages under the 1994 Credit Agreement and that
additional UCC-1 financing statements may be recorded in connection
with the transactions occurring on the Restatement Closing Date.
Accordingly, if the Collateral Agent determines that the proceeds of
the Collateral would be insufficient to repay all the Obligations,
the Collateral Agent shall, to the extent it deems necessary,
allocate and reallocate the proceeds of Collateral to ensure that
each Secured Party receives its pro rata share of the proceeds of all
the Collateral. If after giving effect to the allocations described
in the preceding sentence any Secured Party shall have received less
than its pro rata share of the aggregate proceeds of all the
Collateral, each Secured Party that received more than its pro rata
share of the aggregate proceeds of all the Collateral agrees to
deliver to the Collateral Agent, for reallocation to the Secured
Parties that received less than their pro rata share of the proceeds
of all the Collateral, the excess of the aggregate amount received by
such Secured Party over the amount that would have been such Secured
Party's pro rata share of the proceeds of the Collateral.
AMENDMENT AGREEMENT dated as of May 17 , 1996
(this "Amendment Agreement"), among JEFFERSON
SMURFIT CORPORATION, a Delaware corporation
("JSC"), JSCE, INC., a Delaware corporation
("JSCE"), JEFFERSON SMURFIT CORPORATION (U.S.), a
Delaware corporation (the "Borrower"), SMURFIT
NEWSPRINT CORPORATION, a Delaware corporation
("SNC"), the lenders listed on the signature pages
hereof as "Existing Lenders" (the "Existing
Lenders") and "Additional Lenders" (the "Additional
Lenders", and, together with the Existing Lenders,
the "Lenders"), CHEMICAL BANK, a New York banking
corporation, and BANKERS TRUST COMPANY, a New York
banking corporation, as senior managing agents (in
such capacity, the "Senior Managing Agents"),
BANKERS TRUST COMPANY, as fronting bank (in such
capacity, the "Fronting Bank"), and CHEMICAL BANK,
as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), as swingline
lender (in such capacity, the "Swingline Lender"),
and as collateral agent for the Lenders (in such
capacity, the "Collateral Agent").
A. The Borrower, JSC, JSCE, the Existing Lenders, the Senior
Managing Agents, the Fronting Bank, the Swingline Lender and the
Administrative Agent are parties to a Credit Agreement dated as of
May 11, 1994 (as amended prior to the date hereof, the "Existing
Credit Agreement"). JSC, JSCE and SNC also have guaranteed the
obligations of the Borrower under the Existing Credit Agreement and
have pledged certain of their assets as security therefor.
B. The Borrower has requested that the Additional Lenders
extend credit in the form of term loans (the "Additional Term
Loans") in an aggregate principal amount of $250,000,000, and the
Additional Lenders are willing to do so, upon the terms and subject
to the conditions set forth or referred to herein.
C. The Borrower has also requested that the Existing Credit
Agreement be amended and restated to, among other things, reflect
the terms and provisions of the Additional Term Loans and the use
of the proceeds thereof, all upon the terms and subject to the
conditions set forth or referred to herein.
D. Accordingly, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in
the Amended and Restated Credit Agreement set forth as Exhibit A
hereto (the "Restated Credit Agreement").
SECTION 2. Restatement Closing; Restatement Closing Date. The
transactions provided for in Sections 3, 4 and 5 hereof shall be
consummated at a closing to be held on the Restatement Closing Date
(as defined below) at the offices of Cravath, Swaine & Moore, 825
Eighth Avenue, New York, New York, or at such other time and place
as the parties shall agree. As used herein, the term "Restatement
Closing Date" shall mean the first date on which all the conditions
set forth in Section 9 hereof shall have been (or shall be)
satisfied and the Additional Term Loans shall be made. The Borrower
shall give written notice proposing a date as the Restatement
Closing Date at least three Business Days prior thereto to the
Administrative Agent, which shall send copies to the Lenders at
their addresses for notices set forth in the Restated Credit
Agreement. The Borrower shall also provide (a) the notice that
would be required pursuant to Section 2.03 of the Restated Credit
Agreement if the same were then effective for the Additional Term
Loans to be made on the Restatement Closing Date and (b) the notice
required by Section 2.12(a) of the Existing Credit Agreement with
respect to the prepayment of Tranche A Term Loans to be made on the
Restatement Closing Date.
SECTION 3. On the terms and subject to the conditions and
relying upon the representations and warranties set forth or
referred to herein:
(a) Each Additional Lender agrees, severally and not
jointly, to make Additional Tranche B Term Loans to the
Borrower on the Restatement Closing Date in an aggregate
principal amount not to exceed the amount set forth opposite
its name on the signature pages hereof under the caption
"Additional Tranche B Amount", if any; and
(b) each Additional Lender agrees, severally and not
jointly, to make Tranche C Term Loans to the Borrower on the
Restatement Closing Date in an aggregate principal amount not
to exceed the amount set forth opposite its name on the
signature pages hereof under the caption "Tranche C Amount",
if any.
SECTION 4. Prepayment of Tranche A Term Loans. On the
Restatement Closing Date, (i) each Additional Lender shall make its
Additional Term Loans by wire transfer of immediately available
funds to the Administrative Agent in New York, New York, not later
than 12:00 noon, New York City time, and (ii) the Administrative
Agent shall promptly apply the amounts so received by it to the
prepayment of outstanding Tranche A Term Loans. Notwithstanding any
provision to the contrary of Section 2.12 or 2.13 of the Existing
Credit Agreement or the Restated Credit Agreement, the proceeds of
the Additional Term Loans hereunder will be allocated entirely to
the prepayment of Tranche A Term Loans, and will be applied against
the scheduled installments of principal of the Tranche A Term Loans
as set forth in the table below:
Existing Resulting
Date Amortization Prepayment Amortization
4/30/96 -0-
10/31/96 -0-
4/30/97 $23,655,404 $ 9,500,000 $14,155,404
10/31/97 $69,891,892 $66,500,000 $ 3,391,892
4/30/98 $69,891,892 $62,000,000 $ 7,891,892
10/31/98 $69,891,892 $62,000,000 $ 7,891,892
4/30/99 $69,891,892 $50,000,000 $19,891,892
10/31/99 $69,891,892 -0- $69,891,892
4/30/00 $69,891,892 -0- $69,891,892
10/31/00 $82,996,622 -0- $82,996,622
4/30/01 $82,996,622 -0- $82,996,622
SECTION 5. Amendment and Restatement of the Existing Credit
Agreement. The Existing Credit Agreement (including all Exhibits
and Schedules thereto) is hereby amended and restated, effective as
of the Restatement Closing Date, to read in its entirety as set
forth in Exhibit A hereto. As used in the Restated Credit
Agreement, the terms "Agreement", "this Agreement", "herein",
"hereinafter", "hereto", "hereof" and words of similar import
shall, unless the context otherwise requires, mean the Existing
Credit Agreement as amended and restated by this Amendment
Agreement.
SECTION 6. Loans. The Borrower covenants and agrees that all
Tranche A Term Loans to be prepaid on the Restatement Closing Date
either (a) will be ABR Term Loans or (b) will be Eurodollar Term
Loans, and the Restatement Closing Date shall be the last day of
the Interest Period with respect to such Eurodollar Term Loans.
SECTION 7. Representations and Warranties. The Borrower, JSC
and JSCE hereby make to each of the other parties hereto, on the
Restatement Closing Date, each of the representations and
warranties contained in Article IV of the Restated Credit
Agreement, and each of such representations and warranties is
hereby incorporated by reference herein.
SECTION 8. Fees; Interest. (a) On the Restatement Closing
Date, the Borrower shall pay (i) to the Administrative Agent, for
the account of each Existing Lender that executes and delivers to
the Administrative Agent a counterpart hereof on or prior to the
Restatement Closing Date (each such Lender, an "Approving Lender"),
an amendment fee equal to 0.125% of the sum of (x) the aggregate
outstanding principal amount of the Term Loans of such Approving
Lender (excluding Tranche A Term Loans to be prepaid on the
Restatement Closing Date and Additional Term Loans) and (y) the
aggregate Revolving Credit Commitment (whether used or unused) of
such Approving Lender and (ii) to the Administrative Agent, for its
own account and the accounts of the Additional Lenders, the fees
referred to in the fee letter agreement dated April 9, 1996,
between the Borrower and Chemical Bank. The fees described in this
Section 8(a) shall be payable in immediately available funds. Once
paid, such fees shall not be refundable under any circumstances.
(b) On the Restatement Closing Date, the Borrower shall pay to
the Administrative Agent, for the accounts of the Lenders entitled
thereto, all unpaid interest accrued to but excluding the
Restatement Closing Date on the Tranche A Term Loans then being
prepaid.
SECTION 9. Conditions. The effectiveness of this Amendment and
the obligation of each Additional Lender to make the Additional
Term Loans to be made by it on the Restatement Closing Date shall
be subject to the satisfaction on or prior to June 30, 1996, of the
following conditions precedent:
(a) The Lenders shall have received a written opinion of
(i) Michael Tierney, Esq., Vice President, Secretary and
General Counsel of JSC, JSCE and the Borrower, substantially
to the effect set forth in Exhibit I-1 to the Restated Credit
Agreement, (ii) Skadden, Arps, Slate, Meagher & Flom, counsel
for JSC, JSCE and the Borrower, substantially to the effect
set forth in Exhibit I-2 to the Restated Credit Agreement and
(iii) each local counsel listed on Schedule 9(a) to the
Amendment Agreement, substantially to the effect set forth in
Exhibit I-3 to the Restated Credit Agreement, in each case
(A) dated the Restatement Closing Date, (B) addressed to the
Administrative Agent, the Senior Managing Agents, the Managing
Agents, the Fronting Bank, the Lenders, the Swingline Lender
and the Collateral Agent and (C) covering such other matters
relating to the Loan Documents and the Transactions as the
Senior Managing Agents shall reasonably request. JSC, JSCE and
the Borrower hereby request such counsel to deliver such
opinions.
(b) All legal matters incident to this Amendment
Agreement, the Restated Credit Agreement and the Borrowings
hereunder or thereunder shall be satisfactory to the Lenders
and to Cravath, Swaine & Moore, counsel for the Administrative
Agent and the Senior Managing Agents.
(c) The Lenders shall have received (i) a copy of the
certificate of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by
the Secretary of State of the state of its organization, and
a certificate as to the good standing of each Loan Party as of
a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each
Loan Party dated the Restatement Closing Date and certifying
(A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party, as in effect on the Restatement
Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions
duly adopted by such Loan Party, authorizing the execution,
delivery and performance of the Loan Documents to which such
Loan Party is or will be a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full
force and effect as of the Restatement Closing Date, (C) that
the certificate of incorporation of such Loan Party has not
been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant
to clause (i) above and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any
other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to
the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, counsel for the Administrative Agent
and the Senior Managing Agents, may reasonably request.
(d) The Lenders shall have received a certificate, dated
the Restatement Closing Date and signed by a Financial Officer
of JSC, JSCE and the Borrower, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c) of
Article V of the Restated Credit Agreement.
(e) The Administrative Agent shall have received all Fees
and other amounts due and payable on or prior to the
Restatement Closing Date.
(f) The Collateral Agent shall have received the results
of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Loan Parties in the states
(or other jurisdictions) in which the chief executive offices
of such Persons are located and in the other jurisdictions in
which Uniform Commercial Code (or equivalent) filings are to
be made, together with copies of the financing statements (or
similar documents) disclosed by such search, and accompanied
by evidence satisfactory to the Collateral Agent that the
Liens indicated in any such financing statement (or similar
document) would be permitted under Section 7.02 of the
Restated Credit Agreement or have been released.
(g) The Collateral Agent shall have received a Perfection
Certificate with respect to each Loan Party dated the
Restatement Closing Date and duly executed by a Financial
Officer and the chief legal officer of JSC, JSCE and the
Borrower (or such officers shall have certified the accuracy
and completeness of the Perfection Certificate previously
delivered under the Existing Credit Agreement).
(h) (i) Each of the Additional Mortgages, in form and
substance satisfactory to the Lenders, relating to each of the
Mortgaged Properties shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and
shall be in full force and effect, (ii) none of such Mortgaged
Properties shall be subject to any Lien other than those
permitted under Section 7.02 of the Restated Credit Agreement,
(iii) each of such Additional Mortgages (and any other related
Security Documents) shall have been filed and recorded in the
counties specified on Schedule 1.01(b) to the Restated Credit
Agreement and, in connection therewith, the Senior Managing
Agents shall have received evidence satisfactory to them of
each such filing and recordation (or a lender's title
insurance policy, in form and substance acceptable to the
Senior Managing Agents, insuring such Additional Mortgage as
a first lien on such Mortgaged Property (subject to the Lien
of the related Mortgage on such Mortgaged Property recorded
pursuant to the Existing Credit Agreement), shall have been
received by the Lenders) and (iv) the Collateral Agent shall
have received such other documents, including policies of
title insurance issued by nationally recognized title
insurance companies, together with such endorsements,
coinsurance and reinsurance as may be requested by the Senior
Managing Agents and the other Lenders, insuring the Additional
Mortgages as valid first liens on the Mortgaged Properties
(subject to the Lien of such related Mortgage), free of Liens
other than those permitted under Section 7.02 of the Restated
Credit Agreement.
SECTION 10. Applicable Law. THIS AMENDMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK.
SECTION 11. No Novation; Affirmation of Security and
Guarantees. Neither this Amendment Agreement nor the amendment and
restatement of the Existing Credit Agreement shall extinguish the
obligations for the payment of money outstanding under the Existing
Credit Agreement or discharge or release the Lien or priority of
any security agreement, any pledge agreement or any other security
therefor. Nothing herein contained shall be construed as a
substitution or novation of the Obligations outstanding under the
Existing Credit Agreement or instruments securing the same, which
shall remain in full force and effect, except as modified hereby or
by instruments executed concurrently herewith. Each Guarantor
consents to the execution, delivery and performance by the Borrower
of this Amendment Agreement and the Restated Credit Agreement and
the incurrence of the Additional Term Loans. Each Loan Party
hereby grants, regrants and confirms the security interests created
under the Security Documents as security for all the Obligations,
including the Additional Term Loans. Nothing expressed or implied
in this Amendment Agreement, the Restated Credit Agreement, or any
other document contemplated hereby or thereby shall be construed as
a release or other discharge of the Borrower or any other Loan
Party under the Existing Credit Agreement or any other Loan
Document to which such Person is a party from any of its
obligations and liabilities thereunder. Each of the Existing Credit
Agreement and the other Loan Documents shall remain in full force
and effect, until and except as modified hereby or in connection
herewith.
SECTION 12. Notices. All notices hereunder shall be given in
accordance with the provisions of Section 10.01 of the Restated
Credit Agreement.
SECTION 13. Counterparts. This Amendment Agreement may be
executed in counterparts, each of which when taken together shall
constitute but one contract, and shall become effective as provided
in Section 15 hereof. Delivery of an executed signature page of
this Amendment Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof.
SECTION 14. Headings. The headings of this Amendment Agreement
are for convenience of reference only, are not part of this
Amendment Agreement and are not to be taken into consideration in
interpreting this Amendment Agreement.
SECTION 15. Effectiveness; Amendment. This Amendment Agreement
shall become effective when copies hereof which, when taken
together, bear the signatures of (a) each of the Borrower, JSC,
JSCE and SNC, (b) each Additional Lender, (c) Chemical Bank and
Bankers Trust Company, (d) the Required Lenders, (e) Existing
Lenders holding a majority in principal amount of the Tranche A
Term Loans and (f) Existing Lenders holding a majority in principal
amount of the Tranche B Term Loans shall have been received by the
Administrative Agent and by the Borrower. The Restatement Closing
Date shall not occur until all the conditions precedent set forth
in Section 9 have been met. This Amendment Agreement may not be
amended nor may any provision hereof be waived except pursuant to
a writing signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment Agreement to be duly executed by their duly authorized
officers, all as of the date and year first above written.
JEFFERSON SMURFIT CORPORATION (U.S.),
by
/s/ Charles A. Hinrichs
Name: CHARLES A. HINRICHS
Title: VICE PRESIDENT AND TREASURER
JEFFERSON SMURFIT CORPORATION,
by
/s/ Charles A. Hinrichs
Name: CHARLES A. HINRICHS
Title: VICE PRESIDENT AND TREASURER
JSCE, INC.,
by
/s/ Charles A. Hinrichs
Name: CHARLES A. HINRICHS
Title: VICE PRESIDENT AND TREASURER
SMURFIT NEWSPRINT CORPORATION,
by
/s/ Charles A. Hinrichs
Name: CHARLES A. HINRICHS
Title: VICE PRESIDENT AND TREASURER
Additional Tranche B Amount: CHEMICAL BANK, individually as an
$21,200,000 Existing Lender
Tranche C Amount: Agent, Collateral Agent, Senior
$31,800,000 Managing Agent
by
/s/ Lisa D. Benitez
Name: LISA D. BENITEZ
Title: VICE PRESIDENT
Additional Tranche B Amount: BANKERS TRUST COMPANY, individually
$6,160,000 as an Existing Lender and an
Additional Lender, and as
Tranche C Amount: Fronting Bank and Senior Managing
$9,240,000 Agent,
by
/s/ Mary Zadroga
Name: Mary Zadroga
Title: Vice President
Managing Agents and Lenders
Additional Tranche B Amount: THE BANK OF NOVA SCOTIA,
$5,920,000 individually as an
Existing Lender and an Additional
Tranche C Amount: Lender, and as a Managing Agent,
$8,880,000
by
/s/ A. S. Norsworthy
Name: A. S. Norsworthy
Title: Assistant Agent
Additional Tranche B Amount: NATIONSBANK, N.A., individually as
$4,760,000 an Existing Lender and an
Additional Lender, and as a
Tranche C Amount: Managing Agent,
$7,140,000
by
/s/ Michael W. Colon
Name: Michael W. Colon
Title: Corporate Banking Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
individually as an
Existing Lender, and as a Managing
Agent,
by
/s/ Patricia DelGrande
Name: Patricia Del Grande
Title: Managing Director
<PAGE>
Additional Tranche B Amount: CITIBANK, N.A., individually as
$5,720,000 an Existing Lender and
an Additional Lender, and as a
Tranche C Amount: Managing Agent,
$8,580,000
by
/s/ Hans L. Christensen
Name: Hans L. Christensen
Title: Vice President
Additional Tranche B Amount: THE BANK OF NEW YORK,
$2,600,000 individually as an Existing
Lender and an Additional
Lender, and as a
Tranche C Amount: Managing Agent,
$3,900,000
by
/s/ William O'Daly
Name: William O'Daly
Title: Assistant Vice President
Additional Tranche B Amount: THE FIRST NATIONAL BANK OF CHICAGO,
$2,840,000 individually as an Existing
Lender and an Additional
Lender, and as a
Tranche C Amount: Managing Agent,
$4,260,000
by
/s/ Lynn R. Dillon
Name: Lynn R. Dillon
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED,
individually as an Existing
Lender and as a
Managing Agent,
by
/s/ Junri Oda
Name: Junri Oda
Title: Senior Vice President &
Senior Manager
DRESDNER BANK AG, individually as
an Existing Lender and as a
Managing Agent,
by
/s/ Elizabeth B. Holden
Name: Elizabeth B. Holden
Title: Vice President
by
/s/ Paul M. Casey
Name: Paul M. Casey
Title: Assistant Vice President
Additional Tranche B Amount: SOCIETE GENERALE, individually as
$1,200,000 an Existing Lender and an
Additional Lender, and as a
Tranche C Amount: Managing Agent,
$1,800,000
by
/s/ Richard Cuene-Grandidier
Name: Richard Cuene-Grandidier
Title: Vice President
Additional Tranche B Amount: THE NIPPON CREDIT BANK, LTD.,
$1,840,000 individually as an Existing
Lender and an Additional Lender,
and as
Tranche C Amount: a Managing Agent,
$2,760,000
by
/s/ Yasuhide Yahiro
Name: Yasuhide Yahiro
Title: Assistant Vice President
Lenders
Additional Tranche B Amount: MERRILL LYNCH SENIOR FLOATING RATE
$9,040,000
Tranche C Amount: Additional Lender,
$13,560,000
by
/s/ John W. Fraser
Name: John W. Fraser
Title: Authorized Signatory
<PAGE>
MERRILL LYNCH PRIME RATE PORTFOLIO,
as an Existing Lender,
by Merrill Lynch Asset Management,
L.P., as Investment Adviser
by
/s/ John W. Fraser
Name: John W. Fraser
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.,
as an Existing Lender,
by
/s/ John W. Fraser
Name: John W. Fraser
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.,
II, as an Existing Lender,
by
Name:
Title:
SENIOR STRATEGIC INCOME FUND, INC.,
as an Existing Lender,
by
Name:
Title:
CHASE MANHATTAN BANK, N.A.,
individually as an Existing Lender
and as a Managing Agent,
by
/s/ Hans H. Heinsen
Name: Hans H. Heinsen
Title: Managing Director
<PAGE>
Additional Tranche B Amount: VAN KAMPEN AMERICAN CAPITAL PRIME
$10,640,000 RATE INCOME TRUST, as an Existing
Lender and
Tranche C Amount: an Additional Lender,
$15,960,000
by
/s/ Jeffrey W. Maillet
Name: Jeffrey W. Maillet
Title: Senior Vice President -
Portfolio Manager.
CERES FINANCE, LTD., as an Existing
Lender,
by
/s/ Darren P. Riley
Name: Darren P. Riley
Title: Director
KEYPORT LIFE INSURANCE COMPANY, as
an Existing Lender,
by Chancellor Senior Secured
Management, Inc.
as Portfolio Advisor
by
/s/ Christopher A. Bond
Name: Christopher A. Bondy
Title: Vice President
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V., as an
Existing Lender,
by Chancellor Senior Secured
Management, Inc.
as Portfolio Advisor
by
/s/ Christopher A. Bond
Name: Christopher A. Bondy
Title: Vice President
STICHTING RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS2 (ROSA2),
as an Existing Lender,
by Chancellor Senior Secured
Management, Inc.
as Portfolio Advisor
by
/s/ Christopher A. Bondy
Name: Christopher A. Bondy
Title: Vice President
SENIOR DEBT PORTFOLIO, as an
Existing Lender,
by Boston Management and Research,
as Investment Advisor
by
/s/ Jeffrey S. Garner
Name: Jeffrey S. Garner
Title: Vice President
Additional Tranche B Amount: PEARL STREET L.P., as an Existing
$6,000,000 Lender and an Additional Lender
Tranche C Amount:
$9,000,000 by
/s/ John E. Urban
Name: John E. Urban
Title: Authorized Signer
Additional Tranche B Amount: CHRISTIANIA BANK OG KREDITKASSE,
$3,280,000 as an Existing Lender and an
Additional Lender,
Tranche C Amount:
$4,920,000 by
/s/ Carl-Petter Svendsen
Name: Carl-Petter Svendsen
Title: First Vice President
by
/s/ Justin F. McCarty, III
Name: Justin F. McCarty, III
Title: Vice President
Additional Tranche B Amount: BANK OF MONTREAL, as an Existing
$2,080,000 Lender and an Additional Lender
Tranche C Amount:
$3,120,000 by
/s/ Bill Grieve
Name: Bill Grieve
Title: Managing Director
Additional Tranche B Amount: COMPAGNIE FINANCIERE DE CIC ET DE
$2,080,000 L'UNION EUROPEENNE, as an
Existing Lender and an
Tranche C Amount: Additional Lender,
$3,120,000
by
/s/ Sean Mounier
Name: Sean Mounier
Title: First Vice President
by
/s/ Marcus Edward
Name: Marcus Edward
Title: Vice President
TRANSAMERICA BUSINESS CREDIT CORP.,
as an Existing Lender
by
/s/ Perry Vavoules
Name: Perry Vavoules
Title: Vice President
THE YASUDA TRUST & BANKING CO.,
LTD.,
as an Existing Lender,
by
/s/ Joseph C. Meek
Name: Joseph C. Meek
Title: First Vice President and
Manager
LONG TERM CREDIT BANK OF JAPAN, as
an Existing Lender,
by
/s/ Masaharu Kuhara
Name: Masaharu Kuhara
Title: General Manager
<PAGE>
Additional Tranche B Amount: THE MITSUBISHI TRUST AND BANKING
$1,680,000 CORPORATION, as an Existing
Lender and an Additional
Tranche C Amount: Lender,
$2,520,000
by
/s/ Patricia Loret de Mola
Name: Patricia Loret de Mola
Title: Senior Vice President
CREDIT LYONNAIS, as an Existing
Lender,
by
/s/ Attila Koc
Name: Attila Koc
Title: Vice President
THE TRAVELERS INDEMNITY COMPANY, as
an Existing Lender,
by
/s/ Robert M. Mills
Name: Robert M. Mills
Title: Assistant Investment
Officer
THE TRAVELERS INSURANCE COMPANY, as
an Existing Lender
by
/s/ Robert M. Mills
Name: Robert M. Mills
Title: Assistant Investment
Officer
BANQUE PARIBAS, as an Existing
Lender,
by
Name:
Title:
by
Name:
Title:
Additional Tranche B Amount: THE FUJI BANK, LIMITED, as an
$1,240,000 Existing Lender and an
Additional Lender,
Tranche C Amount:
$1,860,000 by
/s/ Katsunori Nozawa
Name: Katsunori Nozawa
Title: Vice President & Manager
THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS,
as an Existing Lender,
by
/s/ Kenneth J. Schult
Name: Kenneth J. Schult
Title: Vice President
FIRST AMERICAN NATIONAL BANK, as an
Existing Lender,
by
/s/ Katheryn A. Brothers
Name: Katheryn A. Brothers
Title: Vice President
Additional Tranche B Amount: INTERNATIONALE NEDERLANDEN (U.S.)
$1,600,000 CAPITAL CORPORATION, as an
Existing Lender
Tranche C Amount: and an Additional Lender,
$2,400,000
by
/s/ Joan M. Chiappe
Name: Joan M. Chiappe
Title: Vice President
BANK OF TOKYO TRUST - MITSUBISHI
TRUST COMPANY, successor to
merger to The Bank of Tokyo Trust
Company, as an Existing Lender,
by
/s/ Randy Szuch
Name: Randy Szuch
Title: Vice President
ARAB BANKING CORPORATION, as an
Existing Lender,
by
/s/ Grant E. McDonald
Name: Grant E. McDonald
Title: Vice President
BANK OF IRELAND, as an Existing
Lender,
by
/s/ John Cusack
Name: John Cusack
Title: Assistant Vice President
THE SAKURA BANK, LIMITED, as an
Existing Lender,
by
/s/ Masahiro Nakajo
Name: Masahiro Nakajo
Title: Senior Vice President &
Manager
Additional Tranche B Amount: MEESPIERSON N.V., as an Existing
$920,000 Lender and an Additional Lender,
Tranche C Amount:
$1,380,000 by
/s/ John O'Connor
Name: John O'Connor
Title: Senior Vice President
by
/s/ Hendrik J. Vroege
Name: Hendrik J. Vroege
Title: Vice President
Additional Tranche B Amount: BANQUE FRANCAISE DU COMMERCE
$1,160,000 EXTERIEUR, as an Existing Lender
and an Additional Lender,
Tranche C Amount:
$1,740,000
by
/s/ Peter Karl Harris
Name: Peter Karl Harris
Title: Vice President
by
/s/ William C. Maier
Name: William C. Maier
Title: VP-Group Manager
Additional Tranche B Amount: PROTECTIVE LIFE INSURANCE, as an
$1,040,000 Existing Lender and an
Additional Lender
Tranche C Amount:
$1,560,000 by
/s/ Mark K. Okada CFA
Name: Mark K. Okada CFA
Title: Principal, Protective
Asset Management Co.
MORGAN GUARANTY TRUST CO., as an
Existing Lender,
by
/s/ Kathleen Wells
Name: Kathleen Wells
Title: Vice President
MITSUI LEASING (USA) INC., as an
Existing Lender,
by
Name:
Title:
FIRST NATIONAL BANK OF BOSTON, as an
Existing Lender,
by
/s/ Gretchen Bergstreiser
Name: Gretchen Bergstreiser
Title: Vice President
CIT GROUP/BUSINESS CREDIT, INC., as
an Existing Lender,
by
/s/
Name:
Title:
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION,
as an Existing Lender,
by
/s/ Sean W. Lee
Name: Sean W. Lee
Title: Banking Officer
Additional Tranche B Amount: TORONTO DOMINION (TEXAS), INC.,
$2,000,000 as an Additional Lender,
Tranche C Amount:
$3,000,000 by
/s/ Lisa Allison
Name: Lisa Allison
Title: Vice President
FALCON '94, LIMITED, as an Existing
Lender,
by
/s/ John C.R. Collis
Name: John C.R. Collis
Title: Director
IMPERIAL BANK, as an Existing
Lender,
by
/s/ John F. Farrace
Name: John F. Farrace
Title: Assistant Vice President
CRESCENT/MACH I PARTNERS, L.P., as
an Existing Lender,
by TCW Investment Management
Company,
its Investment Advisor,
by
/s/ Mark L. Gold
Name: Mark L. Gold
Title: Managing Director
THE HOKKAIDO TAKUSHOKU BANK, LTD.,
as an Existing Lender,
by
/s/ Kathleen M. Sweeny
Name: Kathleen M. Sweeny
Title: S.V.P. & Manager
RYOSHIN LEASING (USA) INC., as an
Existing Lender,
by
/s/ S. Matsumura
Name: S. Matsumura
Title: President
AERIES FINANCE LTD., as an Existing
Lender,
by
/s/ Ian D. Moore
Name: Ian D. Moore
Title: Director
MEDICAL LIABILITY MUTUAL
INSURANCE, as an Existing Lender,
by
/s/ K. Wayne Kahle
Name: K. Wayne Kahle
Title: Vice President
<PAGE>
Additional Tranche B Amount: BANK OF AMERICA ILLINOIS , as an
$5,000,000 Additional Lender
Tranche C Amount:
$7,500,000
by
/s/ Patricia DelGrande
Name: Patricia DelGrande
Title: Managing Director
FIRST OMNIBUS AMENDMENT
THIS FIRST OMNIBUS AMENDMENT, dated as of March 31,
1996, is made and entered into among (i) Jefferson Smurfit
Corporation (U.S.), a Delaware Corporation ("JSC(US)"),(ii)
Jefferson Smurfit Finance Corporation, a Delaware corporation
("Finco"), (iii) the undersigned financial institutions,
including Bankers Trust Company, in their capacities as banks
under the Liquidity Agreement (collectively, the "Banks" and each
individually, a "Bank"), (iv) Bankers Trust Company, as Facility
Agent, and (v) Bank Brussels Lambert, New York Branch (the "Term
Bank").
W I T N E S E T H
WHEREAS, JSC(US) and Finco have entered into that
certain Receivables Purchase and Sale Agreement dated as of
February 23, 1995 (the "Receivables Purchase and Sale
Agreement"), and desire that the Receivables Purchase and Sale
Agreement be amended in the manner described herein;
WHEREAS, Finco, the financial institutions parties
thereto as Banks, Bankers Trust Company as Collateral Agent and
Bankers Trust Company as Facility Agent have entered into that
certain Liquidity Agreement dated as of February 23, 1995 (the
"Liquidity Agreement"), and desire that the Liquidity Agreement
be amended in the manner described herein;
WHEREAS, Finco and the Term Bank have entered into that
certain Term Loan Agreement dated as of February 23, 1995 (the
"Term Loan Agreement"), and desire that the Term Loan Agreement
be amended in the manner described herein;
NOW, THEREFORE, in consideration of the premises, the
Seller, the Servicer, Finco, the Facility Agent, the Majority
Banks and the Term Bank hereby agree as follows:
1. All terms used herein which are not otherwise defined
herein shall have the meanings given such terms in Annex I to the
Liquidity Agreement.
2. The definition of "Adjusted Required Reserve Ratio" in
Annex I to the Receivables Purchase and Sale Agreement, the
Liquidity Agreement and the Term Loan Agreement is amended to
read as follows:
"Adjusted Required Reserve Ratio" shall mean, as of any
date, (a) 1% plus (b) 20% of the sum of the Loss Reserve
Ratio (used in calculating the Base Amount) and the Dilution
Reserve Ratio (used in calculating the Base Amount) which
are then in effect.
3. The definition of "Applicable Reserve Ratio" in Annex I
to the Receivables Purchase and Sale Agreement, the Liquidity
Agreement and the Term Loan Agreement is amended to read as
follows:
"Applicable Reserve Ratio" shall mean, at any time, an
amount calculated in the then effective Settlement Statement
to be 1% plus the greatest of:
(a) the Minimum Required Reserve Ratio; or
(b) the sum of the Required Reserve Ratios
calculated in such Settlement Statement;
provided, however, that from and after any Settlement Date
until the next Settlement Date, the Applicable Reserve Ratio
shall mean the greater of the above percentage or the sum of
the Required Reserve Ratios as calculated in the most
recently delivered Settlement Statement.
4. Annex I to the Receivables Purchase and Sale Agreement,
the Liquidity Agreement and the Term Loan Agreement is amended by
inserting the following immediately after the definition of
"Approved Delegate":
"Approved Obligor" shall, subject to satisfaction of
the Rating Agency Condition, mean The Times Mirror Company
and its successors, so long as such Person has a short-term
senior debt rating from S&P of A-1 or better or a long-term
senior debt rating from S&P of A or better.
5. The definition of "Excess Concentration Balance" in
Annex I to the Receivables Purchase and Sale Agreement, the
Liquidity Agreement and the Term Loan Agreement is amended to
read as follows:
"Excess Concentration Balance" shall mean, on any day
and with respect to any Obligor and its consolidated
Affiliates, the aggregate Outstanding Balances of otherwise
Eligible Receivables due from such Obligor and (without
duplication) its consolidated Affiliates which, expressed as
a percentage of the aggregate Outstanding Balances of all
Eligible Receivables, exceeds (i) 4.5% with respect to
Obligors (other than the Approved Obligor) having a short-
term senior debt rating from S&P of A-3 or better or a long-
term senior debt rating from S&P of BBB- or better, (ii)
2.25% with respect to Obligors (other than the Approved
Obligor) not rated or having a short-term senior debt rating
from S&P of less than A-3 or a long-term senior debt rating
from S&P of less than BBB-, or (iii) 12.5% with respect to
the Approved Obligor. For purposes of the foregoing, the
rating to be associated with any Obligor shall be the lowest
short-term or actual or implied long-term senior debt rating
that is in effect for such Obligor or such Obligor's
corporate parent. Finco may, by notice thereof in any
Settlement Statement (and after satisfying the Rating Agency
Condition) increase or decrease any of the percentages above
(each of the percentages above being herein called a
"Benchmark Percentage") for all subsequent Collection
Periods (until further changed in accordance with the terms
hereof). Any such change to a Benchmark Percentage shall
result in a corresponding change to the Excess Concentration
Factor, and hence in the Minimum Required Reserve Ratio, as
set forth in the definitions thereof.
6. Annex I to the Receivables Purchase and Sale Agreement,
the Liquidity Agreement and the Term Loan Agreement is amended by
inserting the following immediately after the definition of
"Excess Foreign Obligor Balances":
"Excess Newsprint Balances" shall mean, as of any date,
the dollar amount by which the result of
(i) the aggregate Outstanding Balances of
Eligible Receivables that are Newsprint Receivables
(expressed as a percentage of the Outstanding Balances
of all Eligible Receivables), minus
(ii) the Excess Concentration Balances of the
related Obligors (expressed as a percentage of the
Outstanding Balances of all Eligible Receivables),
exceeds the twenty percent (20%) of the aggregate
Outstanding Balances of all Eligible Receivables as of such
date.
7. The definition of "Net Eligible Receivables" in Annex I
to the Receivables Purchase and Sale Agreement, the Liquidity
Agreement and the Term Loan Agreement is amended to read as
follows:
"Net Eligible Receivables" shall mean the aggregate
Outstanding Balances of Eligible Receivables as reported in
the most recent Daily Report minus the sum of (i) the
aggregate amount of the Excess Concentration Balances for
each Obligor and its Consolidated Affiliates then in effect,
(ii) the Excess Foreign Obligor Balances then in effect,
(iii) the Excess Canadian Obligor Balances then in effect,
(iv) the Excess Newsprint Balances then in effect, (v) if
the Rating Agency Condition shall have been satisfied with
respect to Receivables relating to goods that are being held
by the Seller or an Indirect Seller on a Bill and Hold
Basis, the Excess Bill and Hold Balance and (vi) the maximum
potential cash discount available to such Obligors in
accordance with the Credit and Collection Policy, as
reported in the most recent Daily Report.
8. Annex I to the Receivables Purchase and Sale Agreement,
the Liquidity Agreement and the Term Loan Agreement is amended by
inserting the following immediately after the definition of
"Newsprint":
"Newsprint Receivable" shall mean all indebtedness of
an Obligor (whether constituting an account, chattel paper,
or a general intangible) arising from the sale of goods,
merchandise or the furnishing of services by Newsprint,
including all interest or finance charges and other
obligations of such Obligor with respect thereto, but
excluding in any event any such indebtedness which is not
denominated in U.S. Dollars and all Excluded Receivables.
9. Section 4.02 of the Liquidity Agreement is amended to
read as follows:
Pursuant to Section 9.07 or Section 9.08, Finco shall direct
the Collateral Agent to pay to the Facility Agent, for the
benefit of the Banks, a facility fee (the "Facility Fee")
(i) for the period from and including the Effective Date
until the Termination Date, equal to three-eighths of one
percent (0.375%) per annum on any date prior to April 1,
1996 and one-quarter of one percent (0.25%) per annum on any
date on or after April 1, 1996 (in each case, the "Facility
Fee Rate") times the Facility Amount, computed on the basis
of the actual number of days elapsed (including the first
but excluding the day of payment) over a year of 365 or 366
days and (ii) for the period from the Termination Date until
the Collection Date, equal to the Facility Fee Rate
multiplied by the sum of the Aggregate Loan Amounts plus the
Aggregate CP Amount for each day during any Collection
Period for which the Facility Fee is being calculated,
divided by 365 or 366, as the case may be. The Facility Fee
shall be payable monthly in arrears on each Settlement Date
with respect to the prior Collection Period and shall be
forwarded by the Facility Agent to (i) the Series A Bank
based on the available Series A Commitment and the Facility
Fee Rate applicable to the Series A Bank's Commitment, and
(ii) ratably to the Series B Banks according to their Pro
Rata Shares of the available Series B Commitment and the
Facility Fee Rate applicable to each Series B Bank's
Commitment.
10. Section 2.02(b) of the Term Loan Agreement is amended
to read as follows:
(b) Subject to the provisions of Section 2.02(d), interest
shall accrue on the outstanding amount of the Term Loan, if
a Eurodollar Loan, at a rate per annum equal to the
Eurodollar Rate for the Interest Period relating to such
Eurodollar Loans plus the Applicable Margin (as defined
below). The "Applicable Margin" shall be 0.9% on any date
prior to April 1, 1996 and 0.625% on any date on or after
April 1, 1996, provided, that (i) at any time when any
Refunding Advances are outstanding and, with respect to
which interest thereon is accruing and is paid at a rate
greater than the rate applicable to Revolving Advances, the
Applicable Margin shall be 1.875%, and (ii) during the
Liquidation Period, the Applicable Margin shall be 2.375%.
Such rate shall be computed on the basis of the actual
number of days elapsed (including the first but excluding
the day of payment) over a year of 360 days.
11. Effectiveness of Amendment. Sections 2 though 8
inclusive of this Amendment shall become effective upon execution
of this Agreement by JSC(US), Finco, the Facility Agent, the
Required Banks and the Term Bank, and upon satisfaction of the
Rating Agency Condition with respect to (a) the designation of
Smurfit Newsprint Corporation as an Indirect Seller, (b) the
designation of The Times Mirror Company as the Approved Obligor
and (c) the amendments to the Receivables Purchase Agreement, the
Liquidity Agreement and the Term Loan Agreement effected thereby.
Section 9 of this Amendment shall become effective upon
execution of this Agreement by JSC(US), Finco, the Facility
Agent, each Bank and the Term Bank, and upon satisfaction of the
Rating Agency Condition with respect to the amendment to the
Liquidity Agreement effected thereby.
Section 10 of this Amendment shall become effective upon
execution of this Agreement by JSC(US), Finco and the Term Bank,
and upon satisfaction of the Rating Agency Condition with respect
to the amendment to the Term Loan Agreement effected thereby.
12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
13. Agreements Not Affected. Except as amended by this
Amendment, all the provisions of each of the Receivables Purchase
and Sale Agreement, the Liquidity Agreement and the Term Loan
Agreement shall remain in full force and effect, and from and
after the effective date of this Amendment, each such agreement
shall be amended in the manner set forth herein.
14. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
IN WITNESS WHEREOF, the parties hereto have caused this
First Omnibus Amendment to be duly executed by their respective
officers as of the day and year first above written.
Pursuant to Section 12.01(c) of the Liquidity
Agreement, the Term Bank hereby consents to the amendments to the
Receivables Purchase and Sale Agreement contained in the within
First Omnibus Amendment.
Pursuant to Section 12.01(c) of the Liquidity
Agreement, Series A Banks and Series B Banks comprising the
Majority Banks hereby consent to the amendments to the
Receivables Purchase and Sale Agreement, the Term Loan Agreement
and the Liquidity Agreement contained in the within First Omnibus
Amendment.
JEFFERSON SMURFIT CORPORATION (U.S.)
By: _______(sgd.) Richard P. Marra_____
Name: Richard P. Marra
Title: Assistant Treasurer
JEFFERSON SMURFIT FINANCE CORPORATION
By: _______(sgd.) Richard P. Marra_____
Name: Richard P. Marra
Title: Assistant Treasurer
BANK BRUSSELS LAMBERT, NEW YORK BRANCH,
as Term Bank
By: _______(sgd. Gerrit Verlodt_______
Name: Gerrit Verlodt
Title: Senior Vice President
By: ______(sgd. Dominick H.J. Vangae)_
Name: Dominick H.J. Vangae
Title: Vice President
Credit Department
BANKERS TRUST COMPANY,
as Facility Agent
By: _______(sgd.) Mary Zadroga_________
Name: Mary Zadroga
Title: Vice President
BANKERS TRUST COMPANY,
as the Series A Bank
By: _______(sgd.) Mary Zadroga_________
Name: Mary Zadroga
Title: Vice President
ABBEY NATIONAL TREASURY SERVICES plc,
as a Series B Bank
By: _______(sgd.) Paul Caldwell_______
Name: Paul Caldwell
Title: Head Op Asset Backed Securities
ABN AMRO BANK, as a Series B Bank
By: ______(sgd.) Frederick P. Engler___
Name: Frederick P. Engler
Title: Group Vice President
By: _______(sgd.) David C. Shapiro_____
Name: David C. Shapiro
Title: Vice President
BANK OF MONTREAL, as a Series B Bank
By: _______(sgd.) Bill Grieve________
Name: William R. Grieve
Title: Director
THE BANK OF NEW YORK,
as a Series B Bank
By: _______(sgd.) William O'Daly_______
Name: William O'Daly
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA,
as a Series B Bank
By: _______(sgd.) _D.C.B Ashby________
Name: D.C.B Ashby
Title: Senior Manager Loan Operations
CAISSE NATIONALE DE CREDIT AGRICOLE,
as a Series B Bank
By: _______(sgd.)Katherine L. Abbott
Name: Katherine L. Abbott
Title: First Vice President
THE CHASE MANHATTAN BANK, N.A.,
as a Series B Bank
By: _______(sgd.) Hans H. Heinson____
Name: Hans H. Heinson
Title: Managing Director
DRESDNER BANK AG CHICAGO AND GRAND
CAYMAN BRANCHES
as a Series B Bank
By: _______(sgd.) Elizabeth B. Holden__
Name: Elizabeth B. Holden
Title: Vice president
By: _______(sgd.) Paul Casey__________
Name: Paul Casey
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Series B Bank
By: ______(sgd.) Mark R. Matthews______
Name: Mark R. Matthews
Title: Authorized Agent
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH,
as a Series B Bank
By: ______(sgd.) Junri Oda_____________
Name: Junri Oda
Title: Senior Vice President &
Senior Manager
ING BANK N.V., DUBLIN BRANCH, as a
Series B Bank
By: ______(sgd.) E. Allen______________
Name: E. Allen
Title: Senior Manager
By: ______(sgd.) Richard O'Donoghue___
Name: Richard O'Donoghue
Title: Account Manager
THE TORONTO DOMINION BANK,
as a Series B Bank
By: _______(sgd.) Diane Bailey________
Name: Diane Bailey
Title: Mgr. - Cr. Adm.
WESTDEUTSCHE LANDESBANK
GIROZENTRALE-NEW YORK AND CAYMAN
ISLANDS BRANCHES,
as a Series B Bank
By: _____(sgd.) Michael F. MacWalters_
Name: Michael F. MacWalters
Title: Managing Director
By: _____(sgd.) Matthew F. Tallo_______
Name: Matthew F. Tallo
Title: Vice President
BANCO BILBAO VIZCAYA, S.A.,
as a Series B Bank
By: ____(sgd.) George Silva-Rozzi_
Name: George Silva-Rozzi
Title: Corporate Relarionship Manager
By: _____(sgd.) Paul Graham_________
Name: Paul Graham
Title: Legal Advisor
THE GOVERNOR & COMPANY OF THE BANK
OF IRELAND, as a Series B Bank
By: ________(sgd.) Niamm O'Flynn_______
Name: Niamm O'Flynn
Title: Manager
KREDIETBANK N.V., as a Series B Bank
By: ___________________________________
Name:
Title:
RAIFFEISEN ZENTRALBANK OESTERREICH
AG, as a Series B Bank
By: _______(sgd.) K. Bruckner__________
Name: K. Buckner
Title: A.V.P.
By: ________(sgd.) H. Kulterer_________
Name: H. Kulterer
Title: Manager
AFFILIATE RECEIVABLES SALE AGREEMENT
Dated as of March 31, 1996
between
SMURFIT NEWSPRINT CORPORATION,
as the Seller
and
JEFFERSON SMURFIT CORPORATION (U.S.),
as the Purchaser
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . .1
1.01. Certain Definitions . . . . . . . . . . . . . . . .1
1.02. Accounting Terms. . . . . . . . . . . . . . . . . .3
1.03. Other Terms.. . . . . . . . . . . . . . . . . . . .3
1.04. Computation of Time Periods . . . . . . . . . . . .4
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES . . . . . . . . .4
2.01. Agreement to Purchase . . . . . . . . . . . . . . .4
2.02. Transactions on the Date Hereof; Seller's
Representations; Payment for Purchases;
Adjustments to Purchase Price . . . . . . . . . . .5
2.03. Calculation of Purchase Price . . . . . . . . . . .7
2.04. Payments and Computations, Etc. . . . . . . . . . .7
2.05. Transfer of Records to JSC. . . . . . . . . . . . .7
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . .8
3.01. Representations and Warranties of the Seller. . . .8
3.02. Representations and Warranties of JSC . . . . . . 12
ARTICLE IV GENERAL COVENANTS. . . . . . . . . . . . . . . . . 13
4.01. Affirmative Covenants of the Seller . . . . . . . 13
4.02. General Reporting Requirements
of the Seller to JSC. . . . . . . . . . . . . . . 16
4.03. Negative Covenants of the Seller. . . . . . . . . 17
ARTICLE V ADMINISTRATION AND COLLECTION . . . . . . . . . . . 18
5.01. Collection of Receivables.. . . . . . . . . . . . 18
5.02. Designation of Servicer . . . . . . . . . . . . . 19
5.03. Duties of the Servicer; Daily Reports
and Settlement Statements; Servicer Fee . . . . . 19
5.04. Responsibilities of the Seller. . . . . . . . . . 19
5.05. Further Action Evidencing Purchases . . . . . . . 19
5.06. Application of Collections. . . . . . . . . . . . 20
5.07. Performance by JSC. . . . . . . . . . . . . . . . 20
ARTICLE VI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 21
6.01. Amendments, Etc . . . . . . . . . . . . . . . . . 21
6.02. Notices, Etc. . . . . . . . . . . . . . . . . . . 21
6.03. No Waiver; Remedies.. . . . . . . . . . . . . . . 21
6.04. Binding Effect; Assignability . . . . . . . . . . 21
6.05. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE;
WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . 22
6.06. Costs, Expenses and Taxes . . . . . . . . . . . . 23
6.07. Confidentiality . . . . . . . . . . . . . . . . . 23
6.08. Execution in Counterparts; Severability . . . . . 24
6.09. Termination Date. . . . . . . . . . . . . . . . . 24
6.10. No Proceedings. . . . . . . . . . . . . . . . . . 24
6.11. Entire Agreement. . . . . . . . . . . . . . . . . 25
6.12. Survival of Agreement . . . . . . . . . . . . . . 25
ANNEXES AND EXHIBITS
Annex I - Defined Terms
Exhibit A - Form of Short-Term Note
SCHEDULES
Schedule 3.01(h) - Location of Records and Computer
Software
Schedule 3.01(i) - List of Lock-Box Banks
Schedule 3.01(j) - List of Other Corporate Names
Schedule 3.01(k) - Litigation and Related Matters
Schedule 3.01(l) - List of Computer Programs
THIS AFFILIATE RECEIVABLES SALE AGREEMENT, dated as of March
31, 1996 (this "Agreement") between Smurfit Newsprint
Corporation, a Delaware corporation ("Seller"), and Jefferson
Smurfit Corporation (U.S.), as Purchaser ("JSC").
W I T N E S S E T H:
WHEREAS, JSC and Jefferson Smurfit Finance Corporation
("Finco") are party to that certain Receivables Purchase and Sale
Agreement dated as of February 23, 1995 by and between JSC, as
Seller and initial Servicer and Finco (the "Receivables Sale
Agreement");
WHEREAS, pursuant to Section 2.06 of the Receivables Sale
Agreement JSC may designate any Affiliate of JSC that is a
resident of, and incorporated in, the United States as an
"Indirect Seller" for purposes of the Receivables Sale Agreement
from which JSC will from time to time purchase Receivables;
WHEREAS, JSC has determined to designate Seller as an
Indirect Seller pursuant to the Receivables Sale Agreement, on
the terms, and subject to the conditions, more fully set forth
below.
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party
hereto, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of
this Agreement, except as otherwise specifically provided herein,
capitalized terms used in this Agreement without definition shall
have the meanings ascribed to such terms in Annex I to the
Receivables Sale Agreement.
"Dilution Adjustment" shall mean, on any date, amounts owed
by the Seller to JSC pursuant to Section 2.02(e) on account of
Dilution reported for such date with respect to the Receivables,
which payments shall equal the amount of such Dilution.
"Dilution Factors" shall mean any adjustments to the
Outstanding Balances of the Receivables other than adjustments
which arise as a result of Collections, Write-Offs or the taking
of any Receivable Notes. Dilution Factors shall include any
credits, rebates, sales or other similar taxes, volume discounts,
cooperative advertising expenses, allowances, disputes, billing
errors, charge backs, returned or repossessed goods, inventory
transfers, allowances for early payments and other allowances and
discounts that are made or coordinated with JSC's or the Seller's
usual practices (other than cash discounts), but shall not
include adjustments made on account of the applicable Obligor's
inability to pay the Outstanding Balance thereof. Dilution
Factors shall also include any payments made by the Seller to an
Obligor in connection with a volume discount, notwithstanding
that there has been no adjustment to the Outstanding Balance of
the Receivables in connection with such payment.
"Effective Date" shall mean the day following the date on
which Sections 2 through 8 of the First Omnibus Amendment dated
as of March 31, 1996 to the Receivables Sale Agreement, become
effective in accordance with section 9 thereof.
"Indebtedness" shall have the meaning ascribed to such term
in Annex I to the Receivables Sale Agreement, except that the
term "Permitted Lien" as used in such instance shall have the
meaning ascribed to such term in this Section 1.01.
"Invoice" shall mean an invoice issued by the Seller to an
Obligor pursuant to which such Obligor is obligated to pay for
the sale of goods, merchandise and/or services rendered by the
Seller.
"Lock-Box Agreement" shall mean any lock-box agreement
entered into from time to time among Seller, JSC, Finco, the
Collateral Agent and a Lock-Box Bank.
"Original Balance" shall mean, with respect to any
Receivable, the face amount of such Receivable on the date it was
purchased by JSC, which face amount shall be calculated net of
any credits issued on the date of Purchase (or, in the case of
Purchases on or before the Effective Date, accrued through the
Effective Date).
"Permitted Liens" shall have the meaning ascribed to such
term in Annex I to the Receivables Sale, and shall also include
(i) Liens on the Short-Term Note (as defined herein) and the
capital stock of Seller in favor of Persons who provide financing
to JSC and/or the Seller and (ii) Liens in favor of Chemical Bank
as Collateral Agent pursuant to the Credit Agreement dated as of
May 14, 1994, as amended, restated, supplemented, modified or
waived from time to time, among Jefferson Smurfit Corporation,
the Purchaser, Container Corporation of America, the financial
institutions party thereto as lenders and as managing agents,
Chemical Bank and Bankers Trust Company as senior managing
agents, Bankers Trust Company and the other lenders listed
therein as fronting banks, Chemical Bank as swingline lender, and
Chemical Bank as administrative agent and collateral agent.
"Purchase" shall mean a purchase by JSC of Receivables and
the Related Security from the Seller made pursuant to Article II.
"Purchase Price" shall mean, with respect to any Purchase,
the aggregate price to be paid by JSC to the Seller, which price
shall be computed as set forth in Section 2.03.
"Purchased Assets" shall mean, with respect to any Purchase,
(a) the Receivables sold to JSC by the Seller on the date
thereof, (b) all Related Security relating to such Receivables
and (c) all Collections with respect to, and other proceeds of,
such Receivables and such Related Security (including all
Receivable Notes received from time to time by the Seller in
respect thereof).
"Receivable" shall mean all indebtedness of an Obligor
(whether constituting an account, chattel paper, or a general
intangible) arising from the sale of goods, merchandise or the
furnishing of services by the Seller, including all interest or
finance charges and other obligations of such Obligor with
respect thereto, but excluding in any event any such indebtedness
which is not denominated in U.S. Dollars and all Excluded
Receivables.
"Receivables Sale Agreement" shall mean that certain
Receivables Purchase and Sale Agreement dated as of February 23,
1995 by and among JSC and Finco, as the same may be amended,
restated or otherwise modified from time to time.
"Short-Term Note" shall mean that certain Short-Term Note
issued by JSC in favor of the Seller pursuant to Section 2.02(d).
"Write-Off" shall mean all or a portion of a Receivable
that, consistent with the applicable Credit and Collection
Policy, has been or should be (i) specifically assigned to a
category reserved for doubtful Receivables or otherwise recorded
on the Seller's books as a Receivable the collectibility of which
is doubtful or (without duplication) (ii) written off the
Seller's books as uncollectible.
SECTION 1.02. Accounting Terms. Under this Agreement, all
accounting terms not specifically defined herein shall be
interpreted, all accounting determinations made and all financial
statements prepared in accordance with GAAP.
SECTION 1.03. Other Terms. Unless the context indicates
otherwise: (a) otherwise undefined terms used in this Agreement
have the meanings provided for by the UCC to the extent the same
are used or defined therein; (b) the words "herein," "hereof,"
and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules
hereto, as the same may from time to time be amended or
supplemented and not to any particular section, subsection, or
clause contained in this Agreement; (c) all references to
Sections, Exhibits and Schedules shall mean, unless the context
clearly indicates otherwise, the Sections hereof and the Exhibits
and Schedules attached hereto, the terms of which Exhibits and
Schedules are hereby incorporated into this Agreement; (d) the
word "including" means "including without limitation," and other
forms of the verb "to include" have correlative meanings; (e) any
reference to a Person includes reference to that Person's
successors and assigns; and (f) whenever appropriate, in the
context, terms used herein in the singular also include the
plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this
Agreement, in the computation of a period 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."
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Agreement to Purchase. (a) On the terms and
conditions hereinafter set forth, on each Business Day after the
Effective Date until the occurrence of the Termination Date, JSC
agrees (except as otherwise provided in Section 2.01(c)) to
purchase from the Seller, and the Seller agrees to sell to JSC,
all of the Seller's right, title and interest in and to all of
its Receivables outstanding as of the Business Day before such
date, which have not been previously purchased by JSC, together
with all of the Related Security relating to such Receivables and
all Collections with respect to and other proceeds of such
Receivables and Related Security (including all Receivables Notes
received in respect thereof). Until the Termination Date, each
Purchase described in the preceding sentence shall occur, and
title to the Purchased Assets included in such Purchase shall
vest in JSC, at the opening of Seller's business on the date of
such Purchase (or, in the case of the initial Purchase hereunder,
concurrently with the payment of the Purchase Price therefor and
the execution and delivery of the Short-Term Note described
herein).
(b) It is the intention of the parties hereto that each
Purchase of Receivables to be made hereunder shall constitute a
"sale of accounts," as such term is used in Article 9 of the UCC,
and not a loan secured by such accounts, and the Seller shall
have no rights or obligations hereunder to repurchase or
otherwise reacquire any of the Receivables. Except for Dilution
Adjustments, each sale of Receivables by the Seller to JSC is
made without recourse to the Seller; provided, however, that (i)
the Seller shall be liable to JSC for all representations,
warranties and covenants made by the Seller pursuant to the terms
of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by JSC or any assignee
thereof of any obligation of the Seller or any other Person
arising in connection with the Receivables, the Related Security
and the related Invoices (or contracts), or any other obligations
of the Seller. It is the intention of the parties hereto that
the Purchases of Receivables to be made hereunder shall
constitute a sale of such Receivables rather than a loan to the
Seller secured by such Receivables.
The parties hereto intend that if, and to the extent that,
any Purchase of Receivables made hereunder is not deemed to be a
"sale of accounts", as such term is used in Article 9 of the UCC,
the Seller shall be deemed hereunder to have granted, and such
Seller does hereby grant, to JSC a security interest in and Lien
on all of the Seller's right, title and interest in and to the
Purchased Assets and the related Invoices (or contracts), and all
substitutions for and any proceeds thereof, for the purposes of
securing the rights of JSC under this Agreement, and that this
Agreement shall constitute a security agreement (as defined in
the UCC as in effect in the States of New York and Missouri).
(c) Notwithstanding any other provision of this Article II,
JSC shall not purchase from the Seller, nor shall the Seller sell
to JSC, any Receivable on or after the earlier of (i) the
commencement and continuation of the Liquidation Period and (ii)
any other date Finco is not required to purchase from JSC (or
receive by way of contribution), and JSC is not required to sell
or contribute to Finco, any Receivable pursuant to Section
2.01(d) of the Receivables Sale Agreement.
(d) Prior to making any Purchase hereunder, JSC may request
from the Seller, and the Seller shall promptly deliver, such
approvals, opinions, information, reports or documents as JSC or
its assigns may reasonably request.
SECTION 2.02. Transactions on the Date Hereof; Seller's
Representations; Payment for Purchases; Adjustments to Purchase
Price. (a) On the Effective Date, JSC shall execute and deliver
to Seller a Short-Term Note substantially in the form of Exhibit
A, marking on the grid attached to such Short-Term Note as its
initial balance the portion (if any) of the Purchase Price for
Receivables arising on the Business Day prior to the date hereof
that is being paid with an advance represented by such Short-Term
Note.
If, on or after the date hereof, Seller elects to advance to
JSC, and JSC agrees to borrow from Seller, additional loans, then
Seller may make such additional loans under Seller's Short-Term
Note, the terms of which shall govern the repayment of such
loans. Seller may evidence the making of any such additional
loan or loans by recording the date and amount thereof on the
grid attached to Seller's Short-Term Note; provided that failure
to make any such recordation on such grid or any error in such
grid shall not adversely affect Seller's rights to recover the
outstanding amount of such loan. It is expressly acknowledged
and agreed that nothing in this Section 2.02(a) shall require
Seller to advance, or require JSC to borrow, any such additional
loans.
(b) The Purchase Price for each Purchase of Receivables
hereunder shall be paid on the date of purchase as provided in
Section 2.01 in cash (whether pursuant to an advance under the
Short-Term Note or otherwise), except (i) as otherwise provided
in Section 2.02(d), and (ii) that JSC may set off against the
amount of any such payment amounts then owing to JSC as Dilution
Adjustments as provided in Section 2.02(e) below and/or other
uncontested amounts owing to JSC under this Agreement.
(c) It shall be a condition precedent to JSC's obligation to
make each Purchase hereunder from the Seller that (i) the
representations and warranties of the Seller contained in Section
3.01 are correct in all material respects as to it and as to the
Receivables purchased from it in such Purchase on and as of such
day as though made on and as of such date (except for
representations and warranties which relate to a specific date
only), and (ii) no event has occurred and is continuing, or would
result from such Purchase, which constitutes a Liquidation Event.
The Seller shall be deemed to have certified to JSC the
satisfaction of the foregoing conditions precedent with respect
to each Purchase from it unless the Seller shall have given JSC
actual notice that any such condition is not satisfied prior to
the consummation of that Purchase; provided, however, that the
Seller shall not be deemed to have certified the non-existence of
a Liquidation Event of which it does not have knowledge, which
Liquidation Event may have arisen solely on account of a
condition existing with respect to, or actions or omissions of,
JSC or the Servicer (if JSC is not the Servicer).
(d) JSC may pay all or part of the applicable Purchase
Price to be made hereunder by borrowing under its Short-Term Note
in the form of Exhibit A and issued in favor of the Seller, and
the Seller shall have irrevocably agreed to advance, and shall be
deemed to have advanced, a revolving loan in the amount so
specified by JSC. Each such revolving loan shall be payable in
accordance with the terms and provisions of the Short-Term Note
and this Agreement. The Seller may evidence the making of each
revolving loan by recording the date and amount thereof on the
grid attached to its Short-Term Note; provided, that failure to
make any such recordation on such grid or any error in such grid
shall not adversely affect the Seller's rights to recover the
outstanding unpaid principal amount of the revolving loans made
under its Short-Term Note.
(e) On each Business Day after the date hereof, the Seller
shall (or shall cause the Servicer to) report the amount of
Dilution which occurred with respect to such Seller's Receivables
on the prior Business Day, and the Dilution Adjustment owing on
account of such Dilution and adjustments shall be deducted from
the applicable Purchase Price which would, but for this Section
2.02(e), otherwise be payable to such Seller on such date. If
any such Dilution relates to goods which are returned to the
Seller or repossessed by the Seller, then, concurrently with
payment of such Dilution Adjustment (whether through offset or
otherwise), JSC shall assign and transfer to the Seller, without
any further action or consideration, all of JSC's right, title
and interest in and to such returned or repossessed goods. If the
Dilution Adjustment payable by the Seller on any date exceeds the
applicable Purchase Price otherwise owing to the Seller, JSC
shall apply such excess to reduce the principal amount
outstanding under the applicable Short-Term Note and, in the
event the principal amount outstanding under such Short-Term Note
has been reduced to zero, as a credit against the Purchase Price
otherwise payable for future purchases of Receivables from the
Seller; provided, however, that if any such credit is not fully
utilized within five Business Days, the Seller shall pay to JSC
the remaining amount of any such credit on the next following
Business Day in cash.
SECTION 2.03. Calculation of Purchase Price. For purposes
of this Agreement, Purchase Price shall mean with respect to each
Purchase hereunder, the aggregate price to be paid by JSC to the
Seller, which price shall be equal to the aggregate Original
Balances of the Receivables included in such Purchase, subject to
adjustment as set forth in Section 2.02 hereof.
SECTION 2.04. Payments and Computations, Etc. All amounts
to be paid by JSC to the Seller or by the Seller to JSC hereunder
shall be paid in accordance with the terms hereof no later than
3:00 p.m. (New York City time) on the day when due in Dollars in
immediately available funds to (a) the Collection Account, in the
case of amounts to be paid to JSC, and (b) such account as the
Seller may from time to time specify in writing, in the case of
amounts to be paid to the Seller. Payments received by the
Seller or JSC after such time shall be deemed to have been
received on the next Business Day. In the event that any payment
becomes due on a day which is not a Business Day, then such
payment shall be made on the next succeeding Business Day. Each
party hereto shall, to the extent permitted by law, pay to the
other party interest on all amounts not paid when due hereunder,
from and after the Business Day following the Business Day when
such amounts were due hereunder at 2% per annum above the
Discount Rate in effect on the date such payment was due;
provided, however, that such interest rate shall not at any time
exceed the maximum rate permitted by applicable law. All
computations of interest payable hereunder shall be made on the
basis of a year of 365 or, as applicable, 366 days for the actual
number of days (including the first but excluding the last day)
elapsed.
SECTION 2.05. Transfer of Records to JSC. (a) Each
Purchase hereunder shall include the transfer to JSC of all of
the Seller's right and title to and interest in the Records
relating to such Receivables, and the Seller hereby agrees that
such transfer shall be effected automatically with each such
Purchase, without any further documentation. In connection with
such transfer, the Seller hereby grants to JSC an irrevocable,
non-exclusive license to use, without royalty or payment of any
kind to the Seller, all software used by the Seller to account
for the Receivables, to the extent necessary to administer and/or
recreate the Receivables, subject, however, in the case of any
software that is owned by others and used by the Seller under
license agreements with respect thereto, to any reasonable
restrictions set forth therein relating to the use of such
software by JSC. The license granted hereby shall be irrevocable
and shall terminate on the Collection Date.
(b) The Seller shall take such action requested by JSC,
from time to time hereafter, that may be necessary or appropriate
in the opinion of JSC on the part of the Seller, to ensure that
JSC has an enforceable ownership interest in the Records relating
to the Receivables purchased from the Seller hereunder.
(c) The Seller shall use its best efforts to take such
action requested by JSC, from time to time hereafter, that may be
necessary or appropriate in the opinion of JSC on the part of the
Seller to ensure that JSC has an enforceable right (whether by
license or sublicense or otherwise) to use all of the computer
software used by the Seller to account for the Receivables and/or
to recreate such Records, subject, however, in the case of any
software that is owned by a Person other than the Seller and used
by the Seller under license agreements with respect thereto, to
any reasonable restrictions set forth in any consent obtained by
the Seller from the licensor of such software relating to the use
of such software by JSC.
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Seller.
The Seller represents and warrants that as of the date hereof and
(except for representations and warranties which relate to a
specific date only) as of the date of each Purchase:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of
incorporation and has all governmental licenses, authorizations,
consents and approvals required to carry on its business, and is
in good standing in each jurisdiction in which its business is
now conducted, except where the absence of such licenses,
authorizations, consents, approvals or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by the Seller
of this Agreement, and all other agreements, instruments and
documents executed and delivered by the Seller hereunder and
thereunder, and the transactions contemplated hereby and thereby,
are within the Seller's corporate powers, have been duly
authorized by all necessary corporate action, and do not and will
not (i) result in or require the creation of any Lien upon or
with respect to any Purchased Asset, except as created in favor
of JSC hereunder, nor result in or require the creation of any
material Lien with respect to its other properties; (ii) violate,
conflict with or result in a breach or default under the Seller's
certificate of incorporation or by-laws; (iii) violate, conflict
with or result in a breach or default under any law, rule or
regulation applicable to the Seller or its property; (iv)
violate, conflict with or result in a breach or default under any
contractual restriction contained in any indenture, loan or
credit agreement, mortgage, security agreement, note, bond, lease
or other agreement or instrument binding on the Seller, or to
which its property is subject, which violation, conflict, breach
or default could reasonably be expected to have a Material
Adverse Effect; or (v) violate, conflict with or result in a
breach of or default under any order, writ, judgment, award,
injunction or decree binding on the Seller or to which its
property is subject. No transaction contemplated hereby requires
compliance by the Seller with any bulk sales act or similar law.
This Agreement has been duly executed and delivered on behalf of
the Seller.
(c) No authorization, consent, filing or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body, governmental agency or official or
other Person is required for the due execution, delivery and
performance by the Seller of this Agreement, or any other
agreement, document or instrument delivered hereunder or
thereunder, except (i) for the filing of UCC Financing Statements
to evidence JSC's ownership interests in the Receivables and
other Purchased Assets purchased from the Seller hereunder and
all proceeds thereof, which filings have been duly made and are,
and on or prior to each Purchase will be, in full force and
effect, and (ii) for consents which have been duly obtained.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Seller enforceable against the Seller in
accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at
law).
(e) Immediately prior to JSC's Purchase of each Purchased
Asset sold by the Seller hereunder, the Seller is or will be the
lawful owner of, and have good title to, such Purchased Asset,
free and clear of all Liens except Permitted Liens. Upon the
Purchase of each Receivable sold by the Seller hereunder, JSC
shall acquire all of the right and title to and interest of the
Seller in such Receivable and all other Purchased Assets relating
thereto, free and clear of any Liens (except Permitted Liens) and
shall have a perfected ownership interest in such Receivables,
subject only to Permitted Liens. The Purchases of the Purchased
Assets by JSC constitute true and valid sales and transfers for
consideration (and not merely a pledge of such Purchased Assets
for security purposes), enforceable against creditors of the
Seller, and no Purchased Assets shall constitute property of the
Seller. No effective financing statement or other instrument
similar in effect covering all or any part of such Purchased
Assets naming the Seller as assignor or debtor shall at such time
be on file in any filing or recording office, except as may be
filed in favor of JSC, the Collateral Agent or their assigns
pursuant to this Agreement.
(f) The use of all funds received by the Seller under this
Agreement will not violate Regulations G, T, U and X, as in
effect from time to time.
(g) No information, exhibit, financial statement, document,
book, record or report furnished or to be furnished by the Seller
to JSC hereunder is or shall be inaccurate in any material
respect, or contains or shall contain any material misstatement
of fact, or omits or shall omit to state a material fact or any
fact necessary to make the statements contained therein, taken as
a whole, not materially misleading in light of the circumstances
under which they were made, in each case, as of the date it is or
shall be dated or (except as otherwise disclosed to JSC or the
foregoing parties, as the case may be, at such time) as of the
date so furnished.
(h) As of the date hereof, the principal place of business
and chief executive office of the Seller is located at the
address of the Seller referred to in Section 6.02 hereof and
there were no other such locations during the four months
preceding the date hereof. As of the date hereof, the locations
of the offices where the Records and computer software are kept
are listed on Schedule 3.01(h) (or, as of any date after the date
hereof, at such other locations, notified to JSC, Finco and the
Agents in accordance with Section 4.01(d), in jurisdictions where
all action required by Section 5.05 has been taken and
completed).
(i) Each Obligor has been instructed to remit payments on
the Receivables sold by Seller to JSC hereunder either to (1) one
of the Lock-Box Accounts to be utilized by Finco or (2) via wire
transfer, directly to the Collection Account. From and after the
date hereof, the Seller will have no right, title and/or interest
to any of the Lock-Box Accounts and will maintain no lock-box
accounts in its own name for the collection of the Receivables.
The account numbers of all Lock-Box Accounts, together with the
names and addresses of all the Lock-Box Banks maintaining such
Lock-Box Accounts, are specified in Schedule 3.01(i).
(j) During the six-year period prior to the Effective Date,
the Seller has had no trade names, fictitious names, assumed
names or any other names under which it has done or is doing
business except as set forth in Schedule 3.01(j).
(k) Except for the matters disclosed on Schedule 3.01(k),
there are no actions, injunctions, writs, restraining orders,
suits or proceedings pending, or to the knowledge of the Seller,
threatened, against it or affecting it or its property in any
court, or before any arbitrator of any kind, or before or by any
governmental body, which (i) could be reasonably expected to
adversely affect the validity, legality or enforceability of this
Agreement, or (ii) could reasonably be expected to have a
Material Adverse Effect.
(l) All of the computer software used by the Seller to
account for the Receivables as of the Effective Date is set forth
in Schedule 3.01(l) hereto.
(m) The Seller is not an "investment company" registered or
required to be registered under the Investment Company Act of
1940, as amended.
(n) None of the inventory, the sale of which has given or
may hereafter give rise to a Receivable, is subject to any Lien
(other than Permitted Liens and Liens that, under the terms of
the related security agreement or a related intercreditor
agreement, do not extend to any Purchased Assets).
(o) As of the date hereof, the Seller is not in default,
and no event has occurred or condition exists under any indenture
or any loan, credit or other agreement with respect to
Indebtedness, the effect of which is to cause, or to permit (or
would, with the giving of notice or the lapse of time or both,
permit) the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity.
(p) As of the date hereof, the Seller maintains, and shall
continue to maintain, such liability and casualty insurance as
may be required by applicable law, as is necessary for the
continued operation of its businesses and as is customarily
maintained by companies engaged in similar businesses.
(q) Seller has filed or caused to be filed all foreign,
Federal, state and local tax returns which are required to be
filed by it, and has paid or caused to be paid all taxes shown to
be due and payable on such returns or in any assessments received
by it, other than taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with
respect to which Seller has set aside adequate reserves on its
books in accordance with GAAP and which proceedings could not
reasonably be expected to have a Material Adverse Effect.
(r) The transactions contemplated by this Agreement are
being consummated by the Seller in furtherance of the Seller's
ordinary business, with no contemplation of insolvency and with
no intent to hinder, delay or defraud any of its present or
future creditors. As of the date hereof, and as of each Purchase
Date, the Seller shall have received reasonably equivalent value
for the Receivables sold or otherwise conveyed to JSC under this
Agreement.
(s) The Seller is in compliance in all respects with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards with respect to it, its business and properties
and all of the Purchased Assets owned by it, including all
Receivables and related Invoices (and contracts) owned by it
included therein, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
(t) Any proceeds received by the Seller from the sale of
Receivables shall be used solely for current expenditures of such
Persons which qualify as current transactions, or arise out of
current transactions, within the meaning of Section 3(a)(3) of
the Securities Act.
(u) All of Seller's (and its consolidated subsidiaries')
pension or profit sharing plans have been fully funded on an
accrued benefit basis as of December 31, 1994 in accordance with
Seller's applicable obligations.
(v) The Seller has treated the sale of Receivables pursuant
hereto as a sale for Federal income tax, reporting and accounting
purposes.
SECTION 3.02. Representations and Warranties of JSC. JSC
represents and warrants that as of the date hereof and (except
for representations and warranties which relate to a specific
date only) as of the date of each Purchase:
(a) JSC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. JSC has all governmental licenses, authorizations,
consents and approvals required to carry on its business, is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which its business is now
conducted except where the absence of such licenses,
authorizations, consents, approvals or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by JSC of this
Agreement, and all other agreements, instruments and documents
delivered by JSC hereunder and thereunder, and the transactions
contemplated hereby and thereby, are within JSC's corporate
powers, and have been duly authorized by all necessary corporate
action, and do not and will not (i) result in or require the
creation of any Lien upon or with respect to any of its
properties, except as created in favor of the Collateral Agent
for the benefit of the Agents, the Banks, the holders of the
Commercial Paper and the holder of the Term Note; (ii) violate,
conflict with or result in a breach or default under JSC's
certificate of incorporation or by-laws; (iii) violate, conflict
with or result in a breach or default under any law, rule or
regulation applicable to JSC or its property; (iv) violate,
conflict with or result in a breach or default under any
contractual restriction contained in any indenture, loan or
credit agreement, mortgage, security agreement, bond, note, lease
or other agreement or instrument binding on JSC or to which its
property is subject, which violation, conflict, breach or default
could reasonably be expected to have a Material Adverse Effect;
or (v) violate, conflict with or result in a breach or default
under any order, writ, judgment, award, injunction or decree
binding on JSC or to which its property is subject. This
Agreement has been duly executed and delivered on behalf of JSC.
(c) No authorization or approval or other action by, and no
notice to or filing with, any government authority or regulatory
body or other Person is required for the due execution, delivery
and performance by JSC of this Agreement, or any other agreement,
document or instrument delivered hereunder or thereunder, except
(i) for the filing of UCC Financing Statements to evidence JSC's
ownership interests in the Receivables purchased hereunder and
all proceeds thereof and (ii) for consents which have been duly
obtained.
(d) This Agreement constitutes the legal, valid and binding
obligation of JSC enforceable against JSC in accordance with its
terms, except to the extent that the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is
sought in equity or at law).
(e) Any proceeds from the sale of Commercial Paper in
connection herewith shall be used solely for current expenditures
of JSC or its Subsidiaries which qualify as current transactions,
or arise out of current transactions, within the meaning of
Section 3(a)(3) of the Securities Act.
ARTICLE IV GENERAL COVENANTS
SECTION 4.01. Affirmative Covenants of the Seller. From
the date hereof (or, if stated otherwise in any covenant
contained in this Section 4.01, from the date stated therein)
until the Collection Date, the Seller will, unless JSC (or, to
the extent required under the Liquidity Agreement or the
Receivables Sale Agreement, Finco or its assigns) shall otherwise
consent in writing:
(a) Compliance with Laws, Etc. Comply in all respects with
all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards with respect to it, its business
and properties and all of the Purchased Assets sold by the Seller
hereunder, including all Receivables and related Invoices
included therein, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, good standing, rights,
franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing
as a foreign corporation in each jurisdiction in which its
business is conducted, except where the failure to preserve and
maintain such existence, good standing, rights, franchises,
privileges and qualification could not reasonably be expected to
have a Material Adverse Effect; provided, that nothing in this
Section 4.01(b) shall be deemed to prohibit the Seller from
merging with or consolidating with or into, or from disposing of
assets (other than Purchased Assets sold by the Seller hereunder)
to and from, a Subsidiary of the Seller; provided, further, that
any survivor of any such merger or consolidation (if not the
Seller) must satisfy each of the following conditions precedent:
(i) such survivor shall have executed an agreement to assume the
obligations of Seller hereunder, in form and substance reasonably
satisfactory to JSC; (ii) except as otherwise contemplated in
Section 2.02(c), the representations and warranties made by the
Seller as of the Effective Date shall be made by such survivor as
of the effective date of such merger or consolidation, and shall
be true and correct as to such Person in all respects as of such
date; (iii) Finco, the Facility Agent and each Rating Agency
shall have received, in form and substance satisfactory to each
of them, an executed copy of such assumption agreement and such
evidence of corporate existence and good standing, secretary's
certificates, UCC lien search reports, UCC financing statements,
legal opinions and similar documentation required of the Seller
on or prior to the Effective Date (with sufficient copies of all
such documentation provided to the Facility Agent for delivery to
the other Banks) and such other documentation as may be
reasonably required by Finco or the Facility Agent; and (iv) the
Rating Agency Condition shall have been satisfied with respect to
such merger or consolidation.
(c) Performance and Compliance with Receivables. At its
expense, timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it with
respect to the Receivables and related Invoices (and contracts)
included in the Purchased Assets sold by the Seller hereunder,
except where the failure to so perform and comply could not
reasonably be expected to have a Material Adverse Effect.
(d) Location of Records. Keep its principal place of
business and chief executive office at the address of the Seller
referred to in Section 6.02 hereof, and the offices where it
keeps the Records, at the addresses referred to on Schedule
3.01(h) or, upon 30 days' prior written notice to Finco and the
Facility Agent, at such other locations within the United States
where all action required by Section 5.05 shall have been taken
and completed.
(e) Credit and Collection Policy. From the date hereof,
comply in all material respects with the Credit and Collection
Policy attached as Exhibit B to the Receivables Sale Agreement
(as such Credit and Collection Policy may be amended in
accordance with Section 4.03(c) of the Receivables Sale
Agreement) applicable to the Receivables and the related Invoices
(and contracts) included in the Purchased Assets sold by the
Seller hereunder.
(f) Collections. From the date hereof, instruct all
Obligors to cause all Collections relating to Receivables sold by
it to JSC hereunder to be deposited directly to a Lock-Box
Account. If the Seller or any of its agents or representatives
shall receive any Collections on or after the date hereof, such
recipient will comply with the terms and provisions of Section
5.01 hereof.
(g) Audits; Information. From the date hereof, furnish JSC
and its permitted assigns from time to time such information with
respect to the Receivables sold by it to JSC hereunder as JSC or
its permitted assigns shall reasonably request from the Seller.
At any time and from time to time during the Seller's normal
business hours, with reasonable notice, the Seller shall permit
JSC and its permitted assigns or their respective agents or
representatives, (i) to examine and make copies of and abstracts
from all books, records and documents (including computer tapes
and disks) in the possession or under the control of the Seller
relating to such Receivables or the other Purchased Assets sold
by it to JSC hereunder, (ii) to visit the offices and properties
of the Seller for the purpose of examining such materials
described in clause (i) above, (iii) to discuss matters relating
to such Receivables or such other Purchased Assets, or the
Seller's performance hereunder with any of the officers or
employees of the Seller having knowledge of such matters and
(iv) to verify the validity, amount or any other matter relating
to any such Receivable.
(h) Delivery of Records. Upon the request of JSC, its
agents, representatives or permitted assigns, deliver or cause to
be delivered, copies of all Records, including computer tapes
generated by or on behalf of the Seller or any of its
Consolidated Affiliates, relating to the Purchased Assets sold by
it to JSC hereunder (including all Receivables and Collections
included therein).
(i) Segregation of Collections. From the date hereof, use
all reasonable efforts to minimize the deposit of any funds other
than Collections into any of the Lock-Box Accounts and, to the
extent that any such funds owed to the Seller are nevertheless
deposited into any of such Lock-Box Accounts, promptly identify
any such funds to JSC.
(j) Books and Records. From the date hereof, maintain at
all times complete books, records and accounts relating to the
Purchased Assets sold by the Seller hereunder (including all
Receivables and Collections thereof) in which timely entries are
made in accordance with GAAP. From the date hereof, such books
and records shall be marked to indicate the sales of all
Receivables and Related Security by the Seller hereunder and
shall include (i) all payments received and all credits and
extensions granted with respect to such Receivables; (ii) the
return, rejection, repossessions, or stoppage in transit of any
merchandise the sale of which has given rise to a Receivable
included in the Purchased Assets; and (iii) any other Dilution
Factors.
(k) Identification of Receivables. From the date hereof,
establish and maintain procedures as are necessary for
determining and for identifying, on any date, the aggregate
Outstanding Balances of all Receivables sold by it to JSC
hereunder and the amount of any Dilution Adjustments.
(l) Taxes. File or cause to be filed, and cause each of
its Subsidiaries with whom it shares consolidated tax liability
to file, all Federal, state, local and foreign tax returns which
are required to be filed by it, except where the failure to file
such returns and pay the tax required to be shown thereon could
not reasonably be expected to have a Material Adverse Effect, and
pay or cause to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, other than any
taxes or assessments, the validity of which are being contested
in good faith by appropriate proceedings and with respect to
which the Seller or such Subsidiary shall have set aside adequate
reserves on its books in accordance with GAAP.
(m) Ownership of Seller. The Seller shall notify the
Agents and each Rating Agency of any change in ownership of its
capital stock.
SECTION 4.02. General Reporting Requirements of the Seller
to JSC. From the date hereof until the Collection Date, the
Seller shall, unless JSC (and its assigns) shall otherwise
consent in writing, furnish to JSC (and to JSC's assigns or
designees):
(a) As soon as practicable and in no event later than two
Business Days after a Responsible Officer of the Seller has
actual knowledge of the occurrence of a Liquidation Event or an
Unmatured Liquidation Event, a statement from such officer
setting forth such Liquidation Event or Unmatured Liquidation
Event and the action which the Seller proposes to take with
respect thereto (copies of which shall be concurrently furnished
to the Facility Agent and each Rating Agency); and
(b) Promptly, from time to time, provide such other
information, documents, records or reports respecting the
Purchased Assets, including the Receivables, or the conditions or
operations, financial or otherwise, of the Seller as JSC, or any
of its respective agents, representatives or permitted assigns,
may from time to time reasonably request, in order to protect the
interests of JSC and its assigns under or as contemplated by this
Agreement.
SECTION 4.03. Negative Covenants of the Seller. From the
date hereof (or, if stated otherwise in any subsection of this
Section 4.03, from the date stated therein) until the Collection
Date, the Seller will not, without the written consent of JSC
and, to the extent required under the Liquidity Agreement, the
written consent of its assigns:
(a) Sales, Liens, Etc. Against Receivables. From the date
hereof, except as otherwise provided herein, (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create
or suffer to exist any Liens (except for Permitted Liens) upon or
with respect to any of the Receivables sold, or other Purchased
Assets sold or to be sold, by the Seller hereunder or with
respect to any Lock-Box Account; or (ii) assign any right to
receive income in respect of such Purchased Assets or Lock-Box
Account. In the event that the Seller fails, after the date
hereof, to keep any Purchased Assets sold by it to JSC hereunder
free and clear of any Lien in favor of any Person claiming by or
through the Seller (except as created in favor of JSC hereunder
and except for Permitted Liens), JSC may (without limiting its
other rights with respect to the Seller's breach of its
obligations hereunder) make reasonable expenditures necessary to
release such Lien.
(b) Extension or Amendment of Receivables. From the date
hereof, amend or otherwise modify the terms of any of its
Receivables included in the Purchased Assets without the prior
consent of JSC.
(c) Change in Credit and Collection Policy. Make any
change in the Credit and Collection Policy which could reasonably
be expected to impair the collectibility of the Receivables sold
by it to JSC hereunder or to result in a material delay in the
collection thereof or would otherwise adversely affect the
interests of JSC and/or the Banks' interests under the Liquidity
Agreement in any material respect (and provided that notice of
any change in the Credit and Collection Policy shall be given to
the Facility Agent and each Rating Agency concurrently with the
effectiveness of that change).
(d) Change in Payment Instructions to Obligors. From the
date hereof: (i) make any change in its instructions to Obligors
regarding Collections on Receivables sold by it to JSC hereunder,
directing payments other than to a Lock-Box Account or, via wire
transfer, directly to the Collection Account, or (ii) voluntarily
add or terminate any bank as a Lock-Box Bank unless, with respect
to the addition of a Lock-Box Bank, JSC and the Facility Agent
shall have first received and approved (which approval shall not
be unreasonably withheld) (x) copies of Lock-Box Agreements
executed by each new Lock-Box Bank and the Seller and (y) copies
of all agreements and documents signed by the Seller or the
respective Lock-Box Bank with respect to any new Lock-Box
Account.
(e) Change in Corporate Name. Make any change to its
corporate name or conduct any business under any trade names,
fictitious names or assumed names other than those identified on
Schedule 3.01(j) unless (i) JSC, Finco, the Facility Agent and
each Rating Agency shall have received twenty (20) Business Days
prior written notice of such name change or use and (ii) at least
ten (10) Business Days prior to the effective date of any such
name change or use, the Seller shall have executed and delivered
to JSC (and its assigns) such Financing Statements (Form UCC-1
and UCC-3) which JSC or its assigns may request to reflect such
name change or use, together with such other documents and
instruments that JSC or its assigns may request in connection
therewith.
(f) Accounting of Purchases. Prepare any financial
statements which shall account for the transactions contemplated
hereby in any manner other than the sale of the Purchased Assets
by the Seller to JSC, or in any other respect account for or
treat the transactions contemplated hereby (including but not
limited to accounting and, where taxes are not consolidated, for
tax reporting purposes) in any manner other than as a sale of the
Purchased Assets sold by it to JSC.
ARTICLE V ADMINISTRATION AND COLLECTION
SECTION 5.01. Collection of Receivables. As of the date
hereof, the Seller shall have transferred to JSC or its assigns
the exclusive ownership and control of the Lock-Box Accounts used
by it and all related lock-boxes. The Seller hereby agrees to
take any further action necessary or that JSC (or its assigns)
may reasonably request to effect or maintain the effectiveness of
any such transfer. From and after the date hereof, the Seller
shall not have any further right, title and/or interest in or
control over any of the Lock-Box Accounts or related lock-boxes.
If the Seller or its agents or representatives shall at any time
receive any cash, checks or other instruments which constitute
Collections, such recipient shall promptly segregate such payment
and hold such payment in trust for and in a manner acceptable to
Finco and its assigns and shall, promptly upon identification of
any such payment (and in any event within two Business Days
following such identification), remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to a Lock-Box Account or to the Collection Account.
JSC may notify any or all of the Obligors of the ownership of
Purchased Assets by JSC and may direct any or all of the Obligors
of Receivables included in the Purchased Assets to pay all
amounts payable under any such Receivables directly to the
Collection Account (i) at any time, with contemporaneous notice
to the Seller, after the occurrence and during the continuance of
a Liquidation Event or (ii) otherwise, at any time following five
Business Days' advance notice to Seller. At JSC's request and at
the Seller's expense, the Seller shall give notice of JSC's
ownership of Purchased Assets purchased from Seller to each
Obligor thereunder and direct that payments be made directly to
the Collection Account and assemble all Records of the Seller,
and make the same available to JSC at a place selected by JSC or
its designee. The Seller hereby authorizes JSC, and gives JSC
its irrevocable power of attorney, which authorization shall be
coupled with an interest, to take any and all steps in the
Seller's name and on behalf of the Seller, which steps are
necessary or desirable, in the reasonable determination of JSC,
to collect all amounts due under the Purchased Assets, including
endorsing the Seller's name on checks and other instruments
representing Collections and enforcing such Receivables and the
related Invoices (it being understood that JSC or the Servicer on
behalf of JSC, and not the Seller, shall be responsible for such
expenses of enforcement).
SECTION 5.02. Designation of Servicer. The servicing,
administration and enforcement of collection of the Receivables
shall be conducted by the Servicer so designated from time to
time in accordance with Section 5.02 of the Receivables Sale
Agreement. It is expressly understood that JSC may designate the
Seller as the subservicer with respect to the Receivables of the
Seller. It is expressly understood that neither JSC nor any
subservicer shall have any rights to withdraw amounts in any
Lock-Box Account.
SECTION 5.03. Duties of the Servicer; Daily Reports and
Settlement Statements; Servicer Fee. The Servicer shall have the
duties set forth in the Receivables Sale Agreement.
SECTION 5.04. Responsibilities of the Seller. Anything
herein to the contrary notwithstanding:
(a) The Seller shall (i) perform all of its obligations
under any contracts related to the Receivables sold by it to JSC
hereunder to the same extent as if such Receivables had not been
sold hereunder and the exercise by JSC of its rights hereunder
shall not relieve the Seller from such obligations and (ii) pay,
when due, any taxes relating to the origination and sale of such
Receivables and the other Purchased Assets sold by it to JSC
hereunder.
(b) JSC and its permitted assigns shall have no obligation
or liability with respect to any Receivable or related contract
sold by the Seller to JSC, nor shall JSC or any such assignee be
obligated to perform any of the obligations of the Seller
thereunder, and the Seller agrees to indemnify and hold harmless
JSC against and from any and all liabilities arising from or
related to any such obligation or liability.
SECTION 5.05. Further Action Evidencing Purchases.
(a) The Seller agrees that, at any time and from time to time,
at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may
be necessary to perfect, protect or more fully evidence JSC's
ownership of the Purchased Assets sold by it to JSC hereunder, or
to enable JSC or its permitted assigns to exercise or enforce any
of its rights hereunder. Without limiting the generality of the
foregoing, the Seller will (i) cause its computer files relating
to the Receivables sold by it to JSC hereunder to indicate that,
unless otherwise specifically identified on such list or print-
out as a Receivable not so sold, all Receivables included in such
list or print-out and Related Security have been sold to JSC and
further sold to Finco in accordance with this Agreement and the
Receivables Sale Agreement and (ii) promptly execute and file
such financing or continuation statements, or amendments thereto
or assignments thereof, and such other instruments and notices,
as may be necessary or appropriate to evidence or perfect JSC's
ownership interest of all or any of the Purchased Assets now
existing or hereafter arising or as JSC or any of its agents,
representatives or permitted assigns may reasonably request for
such purpose.
(b) In the event that the Seller, within five (5) Business
Days after notice from JSC, fails to deliver to JSC one or more
financing or continuation statements, and amendments thereto and
assignments thereof, that JSC or any of its agents,
representatives or permitted assigns may reasonably determine to
be necessary to evidence or perfect JSC's ownership of all or any
of the Purchased Assets now existing or hereafter arising, then
the Seller hereby authorizes JSC to file any such statements
without the signature of the Seller where permitted by law. A
carbon, photographic or other reproduction of this Agreement or
any financing statement covering the Purchased Assets or any part
thereof, shall be sufficient as a financing statement.
SECTION 5.06. Application of Collections. From and after
the Effective Date, any payment by an Obligor in respect of any
indebtedness or other obligations owed by such Obligor to the
Seller or JSC shall, except as otherwise specified by such
Obligor or otherwise required by law, be applied as a Collection
of any Receivable of such Obligor purchased hereunder (in the
order of the age by invoice date of such Receivables, starting
with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to (i) any
Receivable arising subsequent to the Termination Date which is
not purchased hereunder or (ii) any other indebtedness of such
Obligor to the Seller.
SECTION 5.07. Performance by JSC. If the Seller fails to
perform any of its agreements or obligations under this
Agreement, following expiration of any applicable cure period,
JSC may (but shall not be required to) perform, or cause
performance of, such agreement or obligation, and the reasonable
expenses of JSC incurred in connection therewith shall be payable
by the Seller upon JSC's written demand therefor (which demand
shall itemize such expenses in reasonable detail).
ARTICLE VI MISCELLANEOUS
SECTION 6.01. Amendments, Etc. No amendment to any
provision of this Agreement, nor any waiver of any provision
thereof or consent to any departure by JSC or the Seller
therefrom, shall in any event be effective unless the same shall
be in writing and signed by JSC and the Seller. Any such waiver,
consent or approval shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 6.02. Notices, Etc. Any notice shall be con-
clusively deemed to have been received by a party hereto and,
subject to Section 6.04, to be effective (i) if sent by regular
mail, commercial delivery service or by personal delivery, on the
day on which delivered to such party at its address set forth
under its name on the signature pages hereof (or at such other
address as such party shall specify to the other parties hereto
in writing); (ii) if sent by telex, graphic scanning or other
telecopy communications of the sending party, when delivered by
such equipment to the number set forth under its name on the
signature pages hereof and confirmed by electronic receipt or
similar means or (iii) if sent by registered or certified mail,
on the day on which delivered to such party (or delivery is
refused), addressed to such party at its address set forth under
its name on the signature pages hereof or at such other address
as shall be designated by such party in a written notice to the
other parties hereto. Notwithstanding the foregoing, notices and
communications pursuant to Article II will not be effective until
received by the addressee.
SECTION 6.03. No Waiver; Remedies. No waiver of any breach
or default of or by JSC or the Seller under this Agreement shall
be deemed a waiver of any other previous breach or default or any
thereafter occurring. No failure on the part of JSC on the one
hand, or the Seller on the other hand, to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder, or any abandonment or discontinuation of steps to
enforce such right, preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 6.04. Binding Effect; Assignability. This
Agreement shall be binding upon and inure to the benefit of JSC,
the Seller and their respective successors and permitted assigns.
Neither JSC nor the Seller may assign any of its rights and
obligations hereunder or any interest herein (except for
assignment by the Seller of its rights under the Short-Term Note
and its rights hereunder to its lenders as collateral, and except
any merger or other transaction permitted by Section 4.01(b))
without the prior written consent of Finco (which consent shall
not be unreasonably withheld) and satisfaction of the Rating
Agency Condition. Notwithstanding the generality of the
foregoing, JSC may assign all its rights hereunder to Finco. The
Seller and JSC acknowledge that Finco intends, pursuant to the
Liquidity Agreement, to assign to the Collateral Agent, as
further security, all of Finco's rights under this Agreement.
The Seller consents to such grant and such assignment; provided,
that each of the Agents, the Banks and the Term Bank acknowledge
and agree in writing to observe the confidentiality provisions of
the Liquidity Agreement for the benefit of the Seller. This
Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall
remain in full force and effect until the Collection Date;
provided, however, that the provisions of Section 5.04(b),
Section 6.06 and Section 6.07 shall be continuing and shall
survive any termination of this Agreement.
SECTION 6.05. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF PERSONAL SERVICE AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION
OF THE INTERESTS OF JSC IN THE PURCHASED ASSETS OR REMEDIES
HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. JSC AND
SELLER HEREBY AGREE TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK, NEW
YORK (AND ANY COURTS HEARING APPEALS FROM SUCH STATE OR FEDERAL
COURT) OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON EITHER OF THEM AND CONSENT THAT ALL SUCH SERVICE OF PROCESS
BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT THE ADDRESS
SET FORTH ON THE SIGNATURE PAGE HEREOF. JSC AND THE SELLER
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO
VENUE OF ANY ACTION INSTITUTED HEREUNDER WITHIN THE STATE OF NEW
YORK AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY ANY COURT IN SUCH STATE.
NOTHING IN THIS SECTION 6.05 SHALL AFFECT THE RIGHT OF ANY PARTY
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF JSC OR THE SELLER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE SELLER AND JSC OR THEIR RESPECTIVE
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT
NECESSARY FOR REALIZING ON THEIR RESPECTIVE INTEREST IN ANY
PURCHASED ASSET. JSC AND THE SELLER HEREBY EXPRESSLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER
OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER OR
IN CONNECTION HEREWITH, AND AGREE THAT ANY SUCH ACTION SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 6.06. Costs, Expenses and Taxes. The Seller agrees
to pay on demand all reasonable costs and expenses of JSC in
connection with the sales of Receivables hereunder, the
negotiation, preparation, execution and delivery of this
Agreement and all amendments with respect to this Agreement,
including the reasonable fees and expenses of counsel for JSC
with respect thereto and with respect to advising JSC as to its
rights and remedies under this Agreement, and all costs and
expenses (including reasonable counsel fees and expenses) of JSC
in connection with the enforcement as against the Seller of this
Agreement. In addition, the Seller will pay any and all stamp
and similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, recording or
enforcement of this Agreement, and hereby indemnifies and saves
JSC harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 6.07. Confidentiality. Finco hereby acknowledges
that the Records and other information which the Seller must
assign and/or deliver to Finco hereunder and under the Receivable
Purchase Agreement may contain information in which the Seller
has a proprietary interest and which may not, at the time of
assignment and/or delivery, be generally available to and known
by the public (including information contained in the Information
Memorandum). Finco hereby agrees to maintain as confidential all
such information obtained from the Seller and not to disclose
such information to any other Person, provided, however, that
nothing in this Section 6.07 shall (a) restrict the Seller from
disclosing such confidential information to any Person nor (b)
prevent Finco from disclosing such information (i) to any Dealer,
the Depositary and, to the extent required pursuant to any
applicable securities laws, any holder or offeree of Commercial
Paper, (ii) to any permitted assign of Finco, the Agents or any
Bank (or their permitted participants and assignees and
prospective participants and assignees), provided that each such
party agrees in writing, for the benefit of the Seller, (x) to
use such information and keep such information confidential in
accordance with the same terms set forth herein or, in the case
of the Agents, any Bank or any of their actual or potential
participants or assigns, as set forth in Section 12.08 of the
Liquidity Agreement as in effect on the date hereof, and (y) that
it will not disclose such information to any of its Affiliates
which is not a financial institution or a parent company of a
financial institution, (iii) to its employees, agents, attorneys,
auditors and accountants, (iv) subject to the further
requirements set forth in this Section 6.07, upon the order of
any court or administrative agency or upon the request or demand
of any regulatory agency, authority or official having jurisdic-
tion over Finco, (v) which has (other than through a breach of
this Section 6.07) been obtained from any Person other than
Finco, any Seller or any other party hereto, or (vi) as otherwise
expressly contemplated by this Agreement or Section 12.08 of the
Liquidity Agreement as in effect on the date hereof. Finco (a)
will provide the Seller with prompt written notice of any
subpoena or any request or requirement by any governmental
authority (other than any such request or requirement in
connection with an audit or other regulatory review of a
financial institution) for disclosure of any confidential
information so that the Seller may seek a protective order or
other appropriate remedy prior to such disclosure and (b) shall
consult with the Seller to a reasonable extent on the
advisability of taking legally available steps to resist or
narrow such request or requirement. In the event that such
protective order or other remedy is not obtained, Finco will
exercise all reasonable efforts (x) to limit the information
disclosed to such information which it is legally required to
disclose and (y) to obtain reliable assurance that confidential
treatment will be accorded any such information so disclosed.
SECTION 6.08. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this
Agreement 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.
SECTION 6.09. Termination Date. The agreement of the
Seller to sell Receivables hereunder, and the agreement of JSC to
purchase Receivables hereunder, shall in any event automatically
terminate on the Termination Date. JSC shall have the right, by
giving notice to Finco and to the Facility Agent as described in
clause (ii) of the definition of Liquidation Period in Annex I
hereto, to cause the Termination Date to occur on the date so
designated in such notice. Notwithstanding any such termination
described above, all other provisions of this Agreement shall
remain in full force and effect as provided in Section 6.04.
SECTION 6.10. No Proceedings. JSC and the Seller hereby
agree, on behalf of itself and of all holders of the Short-Term
Note, that it will neither (i) institute against Finco any
involuntary proceeding of the type referred to in the definition
of "Insolvency Event" so long as this Agreement remains in full
force and effect and for at least one year and one day following
the latest to occur of: (a) the payment in full of all Liquidity
Loans; (b) the payment in full of the Term Loan; or (c) the
payment in full of the latest maturing Commercial Paper Note, nor
(ii) in its capacity (if any) as a shareholder of Finco, cause
Finco to file any voluntary proceeding of the type referred to in
the definition of "Insolvency Event" except as otherwise
permitted under Finco's certificate of incorporation.
SECTION 6.11. Entire Agreement. From and after the date
hereof, this Agreement, including the annexes, exhibits and
schedules hereto and thereto, contains a final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements
and other writings with respect thereto.
SECTION 6.12. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the date
hereof, and each Purchase thereafter and shall continue in full
force and effect until the Collection Date; provided, however,
that the provisions of Section 5.04(b), Section 6.06, Section
6.07 and Section 6.10 shall be continuing and shall survive any
termination of this Agreement.
[Remainder of Page Intentionally Left Blank]<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
THE SELLER:
SMURFIT NEWSPRINT CORPORATION
By: (Sgd.) Richard P. Marra
Name: Richard P. Marra
Title: Assisant Treasurer
Notice address:
Smurfit Newsprint Corporation
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: Charles A. Hinrichs
Facsimile: (314) 746-1281
THE PURCHASER:
JEFFERSON SMURFIT CORPORATION (U.S.)
(including in its capacity as Servicer)
By: (Sgd.) Richard P. Marra
Name: Richard P. Marra
Title: Assistant Treasurer
Notice address:
Smurfit Newsprint Corporation
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: Richard P. Marra
Facsimile: (314) 746-1281
Acknowledged and consented to:
JEFFERSON SMURFIT FINANCE CORPORATION
By: (Sgd.) Richard P. Marra
Name: Richard P. Marra
Title: Assistant Treasurer
Notice Address:
Jefferson Smurfit Finance Corporation
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: Charles A. Hinrichs
Facsimile: (314) 746-1281
EXHIBIT A
[FORM OF SHORT-TERM NOTE]
SHORT-TERM NOTE
_______________
___________, 1996
FOR VALUE RECEIVED, the undersigned, JEFFERSON SMURFIT
CORPORATION (U.S.), a Delaware corporation, ("JSC") hereby
promises to pay to the order of Smurfit Newsprint Corporation, a
Delaware corporation (together with its successors and assigns,
the "Lender"), to the "Lender's Account" (as defined below) in
lawful money of the United States of America and in immediately
available funds, upon demand, the aggregate unpaid principal sum
outstanding of all Short-Term Loans made from time to time by the
Lender to JSC.
This Short-Term Note is referred to in and was executed and
delivered pursuant to that certain Affiliate Receivables Sale
Agreement dated as of March 31, 1996 (as such agreement may be
amended, restated or otherwise modified from time to time, the
"ARPSA"). Reference to the ARPSA is hereby made for a statement
of the terms and conditions under which the Short-Term Loans
evidenced hereby have been and will be made. All terms which are
capitalized and used herein (which are not otherwise specifically
defined herein) shall have the meanings assigned to such terms in
the ARPSA.
JSC further promises to pay interest on the outstanding
unpaid principal amount hereof, as provided in the ARPSA, for
each day from the date hereof until payment in full hereof at a
rate equal to the Federal Funds Rate; provided, however, that if
JSC shall default in the payment of any principal hereof, JSC
promises to pay interest on any such unpaid amounts, from and
after the Business Day immediately following the Business Day JSC
receives notice thereof from the Lender to the date of actual
payment, at two percent (2%) per annum in excess of the rate of
interest otherwise payable hereunder (but in no case higher than
the highest lawful rate). Interest shall be payable on each
Settlement Date in arrears.
JSC may at any time and from time to time prepay the
outstanding indebtedness evidenced hereby, in whole or in part,
without premium or penalty.
The Lender is authorized and directed by JSC to enter on the
grid attached hereto, or, at its option, in its books and
records, the date and amount of each Short-Term Loan made by it
which is evidenced by this Short-Term Note and the amount of each
payment of principal made by JSC, and absent manifest error, such
entries shall constitute prima facie evidence of the accuracy of
the information so entered; provided, that neither the failure of
the Lender to make any such entry nor any error therein shall
expand, limit or affect the obligations of JSC hereunder.
All payments of principal and interest in respect of this
Short-Term Note shall be made to the Lender in lawful money of
the United States of America in same day funds to the Lender's
account at such place as shall be designated from time to time in
writing by the Lender for such purpose in accordance with the
terms of the ARPSA (the "Lender's Account").
This Short-Term Note shall not be amended or modified except
in accordance with Section 6.01 of the ARPSA.
This Short-Term Note shall be interpreted and the rights and
liabilities of the parties hereto determined in accordance with
the laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law of New York but
otherwise without regard to conflicts of laws principles).
Wherever possible each provision of this Short-Term Note shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Short-Term Note
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Short-Term Note.
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor.
JEFFERSON SMURFIT CORPORATION (U.S.)
By:_____________________________________
Name:________________________________
Title:_______________________________
SCHEDULE
to
SHORT-TERM NOTE
LOANS AND PAYMENTS OF PRINCIPAL
Amount Amount Unpaid
of of Principal Notation
Date Loan Principal Paid Balance made by
Schedule 3.01(h)
Location of Records, Chief Executive Offices
and Principal Place of Business
Chief Executive Office and Principal Place of Business:
8182 Maryland Avenue
St. Louis, Missouri 63105
Additional Location of Records and Computer Software:
401 Alton Street
Alton, Illinois 62002-2276
Schedule 3.01(i)
List of Lock-Box Banks
The Boatmen's National Bank of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, MO 63101
Contact: Ms. Susan Bentele, Vice President
St. Louis Lockbox: 18265
St. Louis Account #: 100101218706
Bank of America National Trust & Savings Bank
231 South LaSalle Street
Chicago, IL 60697
Contact: Mr. Hector J. Cueller, Vice President
*Los Angeles Lockbox #: 53870
Los Angeles Account #: 12334-55131
Chicago Lockbox #: 91942
Chicago Account #: 72-32039
Nationsbank
233 South Wacker Drive
Suite 2800
Chicago, IL 60606
Contact: Michael O. Lincoln, Vice President
Charlotte Lockbox #: 651564
Dallas Lockbox #: 840865
Charlotte/Dallas Account #: 3750677531
*Addition of Smurfit Newsprint Corporation Lockbox
Schedule 3.01(j)
List of Other Corporate Names
Receivables Sale Agreement
Following are the names that Smurfit Newsprint Corporation has
used during the six-years prior to the effective date of the
Affiliate Receivables Sale Agreement:
Smurfit Newsprint Corporation
Schedule 3.01(k)
Litigation and Related Matters
(i) None.
(ii) As follows:
A. Litigation
The Company is a defendant in a number of other lawsuits which
have arisen in the normal course of business. While any
litigation has an element of uncertainty, the management of the
Company believes that the outcome of such suits will not have a
material adverse effect on its financial condition or operations.
B. Environmental Matters
Federal, state and local environmental requirements, particularly
relating to air and water quality, are a significant factor in
the Seller's business. The Seller employs processes in the
manufacture of its products, resulting in various discharges and
emissions that are subject to numerous federal, state and local
environmental control statutes, regulations and ordinances. The
Seller operates and expects to operate under permits and similar
authorizations from various governmental authorities that
regulate such discharges and emissions. Occasional violations of
permit terms have occurred from time to time at the Seller's
facilities, resulting in administrative actions, legal
proceedings or consent decrees and similar arrangements.
On May 11, 1995, the United States Environmental Protection
Agency ("EPA") executed a search warrant at the Sweet Home,
Oregon manufacturing of the Seller, at which Cladwood, a wood
composite panel manufactured from sawmill shavings, is produced.
According to the search warrant, the U.S. Attorney's office for
the District of Oregon and the EPA are investigating whether this
facility violated the Clean Water Act or other federal laws in
connection with its waste water discharges. The Seller has been
advised that the government has presented, or intends to present,
evidence to a grand jury in connection with the investigation.
The Seller and certain of its employees could be charged, and the
Seller could be assessed significant fines and penalties if an
indictment and conviction follows as a result of the grand jury
proceeding.
Schedule 3.01(l)
List of Computer Programs
AR-302 Dun & Bradstreet Accounts Receivable System
(formerly MSA Accounts Receivable System) IBM MVS
