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
For the quarterly period ended September 30, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-30270
CK WITCO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-2183153
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One American Lane, Greenwich, Connecticut 06831-2559
(Address of principal executive offices) (Zip Code)
(203) 552-2000
(Registrant's telephone number, including area code)
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
The number of shares of common stock outstanding is as follows:
Class Outstanding at October 31, 1999
Common Stock - $.01 par value 118,936,249
CK WITCO CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
INDEX PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Accompanying Notes
Consolidated Statements of Operations (Unaudited) - Third
quarter and nine months ended 1999 and 1998 2
Consolidated Balance Sheets - September 30, 1999 (Unaudited)
and December 26, 1998 3
Consolidated Statements of Cash Flows (Unaudited)
-Nine months ended 1999 and 1998 4
Notes to Consolidated Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosure of
Market Risk 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 4. Submission of Matters to Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 20
Signatures 21
CK WITCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
Third quarter and nine months ended 1999 and 1998
(In thousands of dollars, except per share data)
Third quarter ended Nine months ended
1999 1998 1999 1998
Net sales $ 500,429 $ 442,768 $1,305,895 $1,394,324
Cost of products sold 329,630 279,600 825,507 874,156
Selling, general and
administrative 79,588 64,219 200,244 197,566
Depreciation and
amortization 30,459 20,164 67,962 60,651
Research and development 16,374 13,080 38,960 39,443
acquired in-process
research and development 195,000 - 195,000 -
Equity (income) loss 164 - (9,270) -
Operating profit (loss) (150,786) 65,705 (12,508) 222,508
Interest expense 17,611 17,916 43,718 62,034
Other (income) expense 2,465 (1,055) (37,790) (2,602)
Earnings (loss) before
income taxes and
extraordinary loss (170,862) 48,844 (18,436) 163,076
Income taxes 9,058 18,252 64,312 60,746
Earnings (loss) before
extraordinary loss (179,920) 30,592 (82,748) 102,330
Extraordinary loss on early
extinguishment of debt (208) (5,674) (1,293) (21,468)
Net earnings (loss) $(180,128) $ 24,918 $ (84,041) $ 80,862
Basic earnings (loss) per common share:
Earnings (loss) before
extraordinary loss $(2.21) $.41 $(1.15) $1.37
Extraordinary loss - (.07) (.02) (.28)
Net earnings (loss) $(2.21) $.34 $(1.17) $1.09
Diluted earnings (loss) per common share:
Earnings (loss) before
extraordinary loss $(2.21) $.40 $(1.15) $1.34
Extraordinary loss - (.07) (.02) (.28)
Net earnings (loss) $(2.21) $.33 $(1.17) $1.06
Dividends per common share $ - $ - $ .05 $ .05
See accompanying notes to consolidated financial statements.
CK WITCO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1999 (Unaudited) and December 26, 1998
(In thousands of dollars)
September 30, December 26,
1999 (a) 1998
ASSETS
CURRENT ASSETS
Cash $ 88,393 $ 12,104
Accounts receivable 522,117 173,668
Inventories 554,533 334,562
Other current assets 128,122 77,422
Total current assets 1,293,165 597,756
NON-CURRENT ASSETS
Property, plant, and equipment 1,312,968 473,403
Cost in excess of acquired net
assets 959,906 166,184
Other assets 311,107 171,550
$3,877,146 $1,408,893
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 16,884 $ 17,305
Accounts payable 277,087 117,338
Accrued expenses 444,836 139,401
Income taxes payable 99,629 103,179
Other current liabilities 14,622 17,149
Total current liabilities 853,058 394,372
NON-CURRENT LIABILITIES
Long-term debt 1,452,597 646,857
Postretirement health care
liability 225,289 142,727
Other liabilities 453,121 158,234
STOCKHOLDERS' EQUITY
Common stock 1,189 7,733
Additional paid-in capital 1,046,186 238,615
Accumulated deficit (103,298) (15,985)
Accumulated other comprehensive
loss (50,259) (37,571)
Treasury stock at cost - (125,246)
Deferred compensation (737) (843)
Total stockholders' equity 893,081 66,703
$ 3,877,146 $ 1,408,893
(a) The results of final valuations of property, plant and equipment
and intangible assets have not yet been completed, as well as
final estimates for severance and other charges related to the
merger integration.
See accompanying notes to consolidated financial statements.
CK WITCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended 1999 and 1998
(In thousands of dollars)
Nine months ended
Increase (decrease) in cash 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ (84,041) $ 80,862
Adjustments to reconcile net earnings
(loss) to net cash provided by operations:
Acquired in-process research and development 195,000 -
Gain on sale of specialty ingredients (42,060) -
Extraordinary loss on early debt extinguishment 1,293 21,468
Depreciation and amortization 67,962 60,651
Equity income (9,270) -
Changes in assets and liabilities, net(a) (100,304) 2,503
Net cash provided by operations (a) 28,580 165,484
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of specialty ingredients 103,000 -
Capital expenditures (65,436) (42,084)
Acquired cash of Witco Corporation 236,658 -
Other investing activities (19,309) (5,547)
Net cash provided by (used in) investing
activities 254,913 (47,631)
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of 11% and 12% notes - (352,802)
Proceeds (payments) on long-term borrowings (122,758) 259,438
Proceeds (payments) on short-term borrowings (3,031) 9,825
Premium paid on early extinguishment of debt (1,691) (22,984)
Treasury stock acquired (74,596) (20,922)
Dividends paid (3,272) (3,721)
Other financing activities (2,787) 10,669
Net cash used in financing activities (208,135) (120,497)
CASH
Effects of exchange rate changes on cash 931 840
Change in cash 76,289 (1,804)
Cash at the beginning of period 12,104 10,607
Cash at the end of period $ 88,393 $ 8,803
(a) 1999 includes a tax payment of $48 million relating to the
fourth quarter 1998 gain on the sale of Gustafson and 1998 includes
cash flow from operations for the Gustafson business of $11 million.
See accompanying notes to consolidated financial statements.
CK WITCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
MERGER OF EQUALS
On September 1, 1999, the shareholders of Crompton and Knowles
Corporation (Crompton) and Witco Corporation (Witco) approved a tax-
free stock-for-stock merger of equals of Crompton and Witco (the Merger). The
terms of the Merger provided that (a) Crompton merge with and into
CK Witco Corporation (the "Company") and (b) immediately thereafter, Witco
merged with and into the Company, so that the Company is the surviving
corporation. Also, under the terms of the Merger, each share of Crompton's
common stock was automatically converted into one share of the Company's common
stock, and each share of Witco's common stock was exchanged for 0.9242 shares of
the Company's common stock.
The merger was accounted for as a purchase and accordingly, the results
of operations of Witco have been included in the consolidated financial
statements from the date of acquisition. A preliminary allocation of
the purchase price resulted in cost in excess of the estimated fair
value of net assets acquired (goodwill) of approximately $813 million. This is
being amortized on a straight-line basis over forty years. The results of final
valuations of property, plant and equipment and intangible assets have not yet
been completed, as well as final estimates for severance and other charges
related to the merger integration. Accordingly, related segment asset
information has also not yet been finalized.
PRO FORMA FINANCIAL INFORMATION
The following pro forma unaudited results of operations for the nine
months ended 1999 and 1998, assume the merger had been consummated as
of January 1, 1998 and exclude the write-off of acquired in-process research and
development of $195 million:
Nine Months Ended
(In thousands of dollars, except per share data) 1999 1998
Net sales $2,635,188 $ 2,926,938
Earnings before extraordinary loss $ 124,373 $ 140,700
Net earnings $ 123,080 $ 119,232
Net earnings before extraordinary loss
per common share: Basic $1.04 $1.10
Net earnings before extraordinary loss
per common share: Diluted $1.03 $1.08
Net earnings per common share: Basic $1.03 $0.93
Net earnings per common share: Diluted $1.02 $0.92
Weighted average shares outstanding: Basic 119,650 127,579
Weighted average shares outstanding: Diluted 121,106 129,767
ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT
Acquired in-process research and development (IPR&D) represents the value
assigned in a purchase business combination to research and development projects
of the acquired business that had commenced, but had not yet been completed at
the date of acquisition, and which, if unsuccessful, have no alternative future
use in research and development activities or otherwise. In accordance with
Statement of Financial Accounting Standards (SFAS) No. 2 "Accounting for
Research and Development Costs" as clarified by Financial Accounting Standards
Board (FASB) Interpretation No. 4, amounts assigned to purchased IPR&D that meet
the above stated criteria must be charged to expense as part of the allocation
of the purchase price of the business combination. Accordingly, charges totaling
$195 million were recorded in the third quarter of 1999 as part of the
allocation of the purchase price related to the acquisition of Witco.
The Company engaged an independent appraiser to provide a basis for allocating
a portion of the purchase price of Witco to the purchased IPR&D. The fair value
assigned to purchased IPR&D was determined by the independent appraiser applying
the income approach and a valuation model, incorporating revenue and expense
projections, probability of commercial and technological success, stage of
development and present value factors.
The more significant IPR&D projects were principally in the Polymer Additives
and OrganoSilicones segments. The following is a summary of the
IPR&D projects and the values assigned:
Projected
Business Percent Completion IPR&D Value
Segment Complete Date (In thousands)
Polymer Additives (a) 24-86% 2000-2003 $ 62,000
OrganoSilicones (b) 8-65% 2000-2001 106,000
Crop Protection (c) 21-37% 2000-2004 27,000
Total IPR&D $195,000
The IPR&D project descriptions are as follows:
(a) Includes the development of an internal anti-static agent for use
in acrylic sheets and pellets for extrusion and injection molding
($19,000), replacement of lead-based stabilizers utilized in
PVC ($15,000) and approximately 35 other projects ($28,000).
(b) Includes the development of a family of chemicals utilized in
finished tires, which are expected to provide improved compounding
and dispersion of silica in a single compounding pass ($11,000),
production of a chemical to be used in the manufacture of
silica tires, which are expected to provide tires with improved
performance and longer life ($20,000) and approximately 78 other
projects ($75,000).
(c) Includes approximately 29 projects.
Due to the uniqueness of each of the projects, the costs and effort required are
estimated based on the latest available information. Additionally, the
completion date reflects management's best estimate of the time that the company
will begin to benefit from cash inflows or cost reductions from the projects.
However, there is a risk that certain projects may not be completed successfully
for a variety of reasons including change in strategies, changes in market
demand or customer requirements, technology issues, etc. However, the projected
revenues, costs, and margins in the cash flow forecasts are substantially
consistent with projections utilized by management in evaluating the feasibility
of research and development projects.
PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The information in the foregoing consolidated financial statements is unaudited,
but reflects all of the adjustments which, in the opinion of management, are
necessary for a fair presentation of the results of operations for the interim
periods presented.
Included in accounts receivable are allowances for doubtful accounts of $23.9
million at September 30, 1999 and $9.8 million at December 26, 1998.
Accumulated depreciation amounted to $452.8 million at September 30, 1999 and
$434.7 million at December 26, 1998.
Accumulated amortization of cost in excess of acquired net assets amounted to
$44.7 million at September 30, 1999 and $44.6 million at December 26, 1998.
It is suggested that the interim consolidated financial statements be read in
conjunction with the consolidated financial statements and notes included in
Crompton's and Witco's 1998 Annual Reports on Form 10-K.
Effective with the Merger, the Company adopted a fiscal year ending on December
31. Prior to the Merger, Crompton's fiscal year was the 52 or 53 weeks ending
on the last Saturday in December.
COMMON STOCK
As of September 30, 1999, there were 118,919,219 common shares issued
and outstanding at $.01 par value.
INVENTORIES
Components of inventories are as follows:
September 30, December 26,
(In thousands) 1999 1998
Finished goods 415,869 $ 226,663
Raw materials and supplies 138,664 107,899
$ 554,533 $ 334,562
EARNINGS PER COMMON SHARE
The computation of basic earnings per common share is based on the
weighted average number of common shares outstanding. The computation
of diluted earnings per common share is based on the weighted average number of
common and common equivalent shares outstanding. The following
is a reconciliation of the shares used in the computations:
(In thousands) Third quarter ended Nine months ended
1999 1998 1999 1998
Weighted average
common shares outstanding 81,619 74,460 71,788 74,331
Effect of dilutive stock
options and other
equivalents - 1,823 - 2,189
Weighted average common
and common equivalent
shares outstanding 81,619 76,283 71,788 76,520
BUSINESS SEGMENT DATA
The Company evaluates a segment's performance based on several factors,
of which a primary financial measure is operating profit. In computing
operating profit, the following items have been excluded: interest expense,
other (income) expense and income taxes.
(In thousands) Third quarter ended Nine months ended
1999 1998 1999 1998
Net Sales
Polymer Products
Polymer Additives $ 152,813 $ 94,673 $ 351,984 $ 298,318
Polymers 72,467 83,202 230,613 258,248
Polymer Processing
Equipment 61,485 90,446 231,724 255,207
Eliminations (981) - (981) -
285,784 268,321 813,340 811,773
Specialty Products
OrganoSilicones 38,331 - 38,331 -
Crop Protection 73,992 86,900 221,050 295,288
Other 102,322 87,547 233,174 287,263
214,645 174,447 492,555 582,551
Total net sales $500,429 $442,768 $1,305,895 $1,394,324
Operating Profit
Polymer Products
Polymer Additives $ 17,166 $ 12,182 $ 42,729 $ 41,529
Polymers 15,990 19,340 61,879 60,415
Polymer Processing
Equipment 1,998 12,368 18,899 33,088
35,154 43,890 123,507 135,032
Specialty Products
OrganoSilicones 4,267 - 4,267 -
Crop Protection 14,671 21,346 68,953 82,938
Other 4,219 7,742 19,495 31,691
23,157 29,088 92,715 114,629
General corporate expense
including amortization (14,097) (7,273) (33,730) (27,153)
Acquired in-process
research and development (195,000) - (195,000) -
Total operating
profit (loss) $(150,786) $ 65,705 $ (12,508) $222,508
COMPREHENSIVE INCOME (LOSS)
An analysis of the Company's comprehensive income (loss) follows:
Third quarter ended Nine months ended
(In thousands) 1999 1998 1999 1998
Net earnings (loss) $(180,128) $24,918 $(84,041) $80,862
Other comprehensive
income (expense):
Foreign currency
translation
adjustments (522) 11,690 (12,688) 7,151
Comprehensive income
(loss) $(180,650) $36,608 $(96,729) $88,013
The components of accumulated other comprehensive loss, net of related
tax, at September 30, 1999 and December 26, 1998 are as follows:
September 30, December 26,
(In thousands) 1999 1998
Foreign currency translation
adjustments $(49,306) $(36,618)
Pension minimum liability
adjustments (953) (953)
Accumulated other comprehensive
loss $(50,259) $(37,571)
SUBSEQUENT EVENTS
On October 28, 1999, the Company entered into a $600 million 364-day
senior unsecured revolving credit facility and a $400 million five-year
senior unsecured credit facility with a syndicate of lenders. Borrowings on
these facilities are at various rate options to be determined on the date of
borrowing. On October 29, 1999, the Company utilized $450 million of these
facilities to pay down and terminate its previously existing revolving credit
agreements.
On November 4, 1999, Uniroyal Chemical Company, Inc. (Uniroyal), a wholly
owned subsidiary of the Company, offered to purchase for cash any and all of
its outstanding 9% Senior Notes due 2000 and 10 1/2% Senior Notes due 2002.
In connection with the offers, Uniroyal commenced a consent solicitation
seeking the consent of the holders of those notes to certain proposed
amendments to the indentures under which the applicable series of notes were
issued. The consent solicitation with respect to each note will end on
November 18, 1999, and the offer with respect to each note will end on
December 6, 1999, unless either the offer or the related consent solicitation
with respect to either or both series of notes is extended at the Company's
discretion. If a majority of the aggregate principal amount of the
applicable series of notes has been tendered and consented to the proposed
amendments, promptly following the expiration of the applicable offer,
Uniroyal will acquire the tendered notes, eliminate certain covenants and
certain events of default, and amend certain other provisions of the
indentures. The Company expects the total funds required to purchase the
notes and to pay the related fees and expenses will be approximately $355
million, which will be funded by drawing on the Company's revolving credit
agreement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THIRD QUARTER RESULTS
Overview
Consolidated net sales of $500.4 million for the third quarter of 1999
increased 13% from the comparable period in 1998. After adjusting 1998 net
sales to exclude $46.1 million from deconsolidated joint ventures and the
divestiture of the specialty ingredients business, and to include $144.1
million from Witco operations for the month of September 1998, net sales
decreased 7%. This decrease is primarily the result of lower sales in the
Polymer Processing Equipment and Crop Protection businesses. International
sales, including U.S. exports, were 42% of total sales, up from 41% in the
third quarter of 1998.
The net loss in third quarter was $180.1 million, or $2.21 per common share
diluted as compared to net earnings of $24.9 million, or $.33 per common
share diluted in the third quarter of 1998. Earnings before after-tax special
items were $15.1 million, or $.18 per common share diluted, as compared with
$30.6 million, or $.40 per common share diluted, in the third quarter of 1998.
Gross margin as a percentage of sales decreased to 34.1% in the third quarter
of 1999 from 36.9% in the third quarter of 1998. The decrease was primarily
due to the impact of including one month of Witco results, lower pricing and
unfavorable product mix. Consolidated operating profit, excluding the $195
million charge for acqired IPR&D, declined 33% versus the third quarter of
1998. However, after further adjusting to exclude $2.7 million from
deconsolidated joint ventures and the divestiture of the specialty ingredients
business, and to include $10.2 million from Witco operations for the month of
September 1998, operating profit was down 40% versus the third quarter of 1998.
Third quarter ended
(In thousands) 1998 1998
Witco Deconsol-
1999 1998 Operations idated 1998
As As Month of Joint Divested 1998
Reported Reported September Ventures Business Adjusted
Net Sales
Polymer Products
Polymer Additives $152,813 $ 94,673 $ 58,396 $ - $ - $153,069
Polymers 72,467 83,202 - (10,128) - 73,074
Polymer Processing
Equipment 61,485 90,446 - - - 90,446
Eliminations (981) - - - - -
285,784 268,321 58,396 (10,128) - 316,589
Specialty Products
OrganoSilicones 38,331 - 36,037 - - 36,037
Crop Protection 73,992 86,900 12,599 (14,311) - 85,188
Other 102,322 87,547 37,051 - (21,635) 102,963
214,645 174,447 85,687 (14,311) (21,635) 224,188
Total net sales $500,429 $442,768 $144,083 $(24,439) $(21,635) $540,777
Third quarter ended
(In thousands) 1998 1998
Witco Deconsol
1999 1998 Operations -idated 1998
As As Month of Joint Divested 1998
Reported Reported September Ventures Business Adjusted
Operating Profit
Polymer Products
Polymer Additives $17,166 $12,182 $5,494 $ - $ - $17,676
Polymers 15,990 19,340 - (148) - 19,192
Polymer
Processing
Equipment 1,998 12,368 - - - 12,368
35,154 43,890 5,494 (148) - 49,236
Specialty Products
OrganoSilicones 4,267 - 7,327 - - 7,327
Crop Protection 14,671 21,346 340 (260) - 21,426
Other 4,219 7,742 1,487 - (2,197) 7,032
23,157 29,088 9,154 (260) (2,197) 35,785
General corporate expense
including
amortization (14,097) (7,273) (4,467) (102) - (11,842)
Total
operating
profit before
special items 44,214 65,705 10,181 (510) (2,197) 73,179
Acquired in-
process research
and
development (195,000) - - - - -
Total
operating
profit
(loss) $(150,786) $65,705 $10,181 $(510) $(2,197) $73,179
Polymer Products
Polymer Additives sales of $152.8 million were essentially unchanged from
adjusted 1998 sales of $153.1 million. Plastic additives sales were up 4%
primarily as a result of higher sales volume. Rubber chemicals sales were
down 1% primarily due to lower pricing partially offset by an increase in
sales volume. Urethane chemicals sales declined 12% compared to September
1998 primarily due to lower pricing and sales volume. Operating profit of
$17.2 million decreased 3% from an adjusted $17.7 million in 1998 primarily
as a result of lower pricing and an unfavorable sales mix.
Polymers sales of $72.5 million decreased 1% from an adjusted $73.1 million
in the third quarter of 1998. Urethane sales increased 10% primarily due to
increased demand for new products used in premium golf ball applications.
This increase was more than offset by an 8% decline in EPDM sales as a few
major customers reduced their normal third quarter requirements. Operating
profit of $16 million was $3.2 million lower than an adjusted 1998 primarily
as a result of higher raw material costs in EPDM and lower equity income for
our nitrile rubber joint venture.
Polymer Processing Equipment sales of $61.5 million decreased 32% from $90.4
million in the third quarter of 1998. The decline primarily reflects lower
sales volume and pricing as the plastics machinery market continues in its
current down cycle. Operating profit of $2 million was $10.4 million lower
than 1998 primarily as a result of lower sales volume, increased price
competition, and a sales shift toward lower margin equipment systems. The
backlog at the end of the quarter was $111 million versus $103 million at the
end of the second quarter and $118 million at the end of 1998.
Specialty Products
OrganoSilicones sales of $38.3 million increased 6% from an adjusted $36
million in September of 1998. The increase was primarily attributable to
higher sales volume. Operating profit of $4.3 million was $3.1 million lower
than September 1998 primarily due to issues in SAP implementation in the
third quarter of 1998 that resulted in a favorable impact on earnings that
was adjusted for in later periods, and higher consulting costs in 1999.
Crop Protection sales of $74 million decreased 13% from an adjusted $85.2
million in the third quarter of last year. The decrease was due primarily to
adverse weather conditions and continued weakness in the US and European farm
economies. Also, increased competition related to genetically engineered
seeds resulted in lower sales of herbicide products, and customer financing
difficulties in Eastern Europe reduced sales in that region. Operating
profit of $14.7 million declined $6.7 million from an adjusted $21.4 million
in the third quarter of 1998 primarily as a result of lower sales volume.
Other sales of $102.3 million were less than 1% lower than an adjusted $103
million in the third quarter of 1998. Colors and Glycerine/Fatty Acids sales
declined 11% primarily due to lower pricing. Refined Products and Petroleum
Additives sales rose 16% and 13%, respectively, primarily as a result of
higher sales volume. Operating profit of $4.2 million was $2.8 million lower
than an adjusted $7 million in the third quarter of 1998, primarily due to
lower pricing in the Colors business.
Other
Selling, general and administrative expenses of $79.6 million increased 24%
versus the third quarter of 1998 primarily due to the Merger, offset
partially by the impact of the deconsolidation of the joint ventures and the
divestiture of the specialty ingredients business. Depreciation and
amortization (up 51%) and research and development costs (up 25%) also
increased as a result of the Merger. Interest expense of $17.6 million
decreased 2% primarily due to lower levels of indebtedness prior to the
Merger, which more than offset the one month impact of the debt acquired in
the Merger. Other expense of $2.5 million compares to other income of $1.1
million in 1998, partially due to $1.5 million of fees in 1999 related to
accounts receivable securitization programs. The effective tax rate,
excluding the impact of acquired IPR&D, of 37.5% compares with 37.4% in the
comparable quarter of 1998.
YEAR-TO-DATE RESULTS
Overview
Consolidated net sales of $1,305.9 million for the first nine months of 1999
decreased 6% from the comparable period in 1998. After adjusting 1998 net
sales to exclude $177.8 million from deconsolidated joint ventures and the
divestiture of the specialty ingredients business and include $144.1 million
from Witco operations for the month of September 1998, net sales decreased
4%. This decrease is primarily the result of lower sales in the Colors,
Polymer Processing Equipment and Crop Protection businesses. International
sales, including U.S. exports, were 43% of total sales, up from 40% in the
nine months of 1998.
The net loss for the first nine months was $84 million, or $1.17 per common
share diluted, as compared to net earnings of $80.9 million, or $1.06 per
common share diluted in the first nine months of 1998. Earnings before after-tax
special items were $85.4 million, or $1.19 per common share diluted, as compared
with $102.3 million, or $1.34 per common share diluted in 1998.
Gross margin as a percentage of sales remained unchanged at 37% from the
first nine months of 1998. Consolidated operating profit, excluding the $195
million charge for acquired IPR&D, was down 18% versus the comparable period
of 1998. However, after further adjusting to exclude $18.2 million from
deconsolidated joint ventures and the divestiture of the specialty ingredients
business, and to include $10.2 million from Witco operations for the month of
September 1998, operating profit was down 15% versus the nine month period of
1998.
Nine months ended
(In thousands) 1998 1998
Witco Deconsol
1999 1998 Operations -idated 1998
As As Month of Joint Divested 1998
Reported Reported September Ventures Business Adjusted
Net Sales
Polymer Products
Polymer
Additives $351,984 $298,318 $58,396 $ - $- $356,714
Polymers 230,613 258,248 - (31,842) - 226,406
Polymer
Processing
Equipment 231,724 255,207 - - - 255,207
Eliminations (981) - - - - -
813,340 811,773 58,396 (31,842) - 838,327
Specialty Products
OrganoSilicones 38,331 - 36,037 - - 36,037
Crop
Protection 221,050 295,288 12,599 (76,190) - 231,697
Other 233,174 287,263 37,051 - (69,786) 254,528
492,555 582,551 85,687 (76,190) (69,786) 522,262
Total net
sales $1,305,895 $1,394,324 $144,083 $(108,032) $(69,786) $1,360,589
Nine months ended
(In thousands) 1998 1998
Witco Deconsol
1999 1998 Operations -idated 1998
As As Month of Joint Divested 1998
Reported Reported September Ventures Business Adjusted
Operating Profit
Polymer Products
Polymer
Additives $42,729 $41,529 $5,494 $ - $ - $47,023
Polymers 61,879 60,415 - (744) - 59,671
Polymer
Processing
Equipment 18,899 33,088 - - - 33,088
123,507 135,032 5,494 (744) - 139,782
Specialty
Products
OrganoSilicones 4,267 - 7,327 - - 7,327
Crop
Protection 68,953 82,938 340 (10,252) - 73,026
Other 19,495 31,691 1,487 - (7,195) 25,983
92,715 114,629 9,154 (10,252) (7,195) 106,336
General corporate expense
including
amortization (33,730) (27,153) (4,467) 16 - (31,604)
Total operating
profit before
special items 182,492 222,508 10,181 (10,980) (7,195) 214,514
Acquired
in-process
research and
development (195,000) - - - - -
Total operating
profit (loss) $(12,508) $222,508 $10,181 $(10,980) $(7,195) $214,514
Polymer Products
Polymer Additives sales of $352 million declined 1% from an adjusted $356.7
million for nine months of 1998. Plastic additives sales
rose 2% primarily as a result of increased sales volume. Rubber chemicals
sales were down 3% primarily due to lower pricing. Urethane chemicals sales
declined 12% compared to September 1998 primarily as a result of lower
pricing and an unfavorable sales mix. Operating profit of $42.7 million
declined 9% from an adjusted $47 million for the first nine months of 1998
primarily as a result of lower pricing in rubber chemicals.
Polymers sales of $230.6 million increased 2% from an adjusted $226.4 million
for the first nine months of 1998. Urethane sales increased 3% primarily as
a result of higher sales volume. EPDM sales were up 1% primarily a result of
higher pricing partially offset by a decline in sales volume. Operating
profit of $61.9 million rose 4% from an adjusted $59.7 million for the nine
months of 1998 primarily as a result of improved pricing.
Polymer Processing Equipment sales of $231.7 million decreased 9% from $255.2
million for the first nine months of 1998. The decline was primarily
attributable to lower sales volume and pricing which was reflective of the
continuing downward cycle currently being experienced by the plastics
machinery market. Operating profit of $18.9 million was $14.2 million lower
than the prior year primarily as a result of competitive pricing pressure,
lower sales volume, and a sales shift toward lower margin equipment.
Specialty Products
OrganoSilicones sales of $38.3 million increased 6% from an adjusted $36.0
million in September of 1998. The increase was primarily attributable to
higher sales volume. Operating profit of $4.3 million was $3.1 million lower
than September 1998 primarily due to issues in SAP implementation in the
third quarter of 1998 that resulted in a favorable impact on earnings that
was adjusted for in later periods, and higher consulting costs in 1999.
Crop Protection sales of $221.1 million decreased $10.6 million from an
adjusted $231.7 million for the nine months of 1998. The
decline was primarily a result of lower third quarter sales volume
attributable to adverse weather conditions and a continuation of the general
weakness in the US and European farm economies. In addition, herbicide
product sales were adversely affected by increased competition related to
genetically engineered seeds, and customer financing difficulties in Eastern
Europe reduced sales in that region. Operating profit of $69.0 million was
$4.1 million lower than an adjusted $73.0 million in 1998 primarily as a
result of lower sales volume.
Other sales of $233.2 million decreased 8% from an adjusted $254.5 million
for the first nine months of 1998. Colors sales were down 15% primarily as a
result of reduced sales volume and lower pricing. Glycerine/Fatty Acids
sales declined 11% due primarily to lower pricing. Refined Products and
Petroleum Additives sales rose 16% and 8%, respectively, primarily a result
of increased sales volume. Operating profit of $19.5 million was $6.5
million lower than an adjusted $26 million for the prior year, primarily a
result of lower sales volume and lower pricing in the Colors business.
Other
Selling, general and administrative expenses of $200.2 million increased 1%
versus the nine months of 1998 primarily due to the Merger, offset partially
by the impact of the deconsolidation of the joint ventures and the
divestiture of the specialty ingredients business. Depreciation and
amortization (up 12%) increased primarily as a result of the Merger.
Research and development costs were down 1% from the nine months of 1998.
Equity income of $9.3 million for the first nine months of 1999 was
primarily attributable to the seed treatment joint venture. Interest expense
of $43.7 million decreased 30% primarily due to lower levels of indebtedness
and lower interest cost on borrowings used to redeem high cost debt in 1998.
Other income of $37.8 million for the nine months of 1999 includes a gain in
the amount of $42.1 million from the divestiture of the specialty
ingredients business offset partially by $3.7 million in fees related to the
accounts receivable securitization programs. The effective tax rate,
excluding the impact of IPR&D, of 36.4% compares favorably with 37.3% in the
same period of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The September 30, 1999 working capital balance of $440.1 million increased
$236.7 million from the year-end 1998 balance of $203.4 million, while the
current ratio remained unchanged at 1.5. The increase in working capital was
primarily due to the Merger. Days sales in receivables averaged 44 days in
the nine month period in 1999, versus 55 days in the same period in 1998,
principally due to the impact of the accounts receivable securitization
programs. Inventory turnover averaged 3.1, compared to 3.2 in 1998.
Net cash provided by operations of $28.6 million decreased $136.9 million
from the net cash provided by operations of $165.5 million in the first nine
months of 1998, due to a $48.2 million income tax payment in 1999 related to
the 1998 Gustafson gain, lower earnings before after-tax special items of $17
million, 1998 cash flow provided by Gustafson of $11 million and the
remainder due to higher working capital requirements. Cash provided from
operations, the Witco merger and the sale of the specialty ingredients
business were used primarily to reduce borrowings under the Company's
revolving credit agreements, repurchase common shares, finance capital
expenditures, pay merger costs and make dividend payments. The Company's
debt to total capital decreased to 62% from 91% at year-end 1998 primarily as a
result of the Witco merger. The Company's liquidity needs, including debt
servicing, are expected to be financed from operations. At September 30,
1999, the Company had available revolving credit agreements providing for
borrowings of $1 billion through September 2003. Borrowings under the
agreement amounted to $475 million at September 30, 1999 and carried a
weighted average interest rate of 5.7%. In addition, the Company has
available accounts receivable securitization programs to sell up to $232
million of domestic accounts receivable to agent banks. As of September 30,
1999, $169 million of domestic accounts receivable had been sold under these
agreements.
On October 28, 1999, the Company entered into a $600 million 364-day senior
unsecured revolving credit facility and a $400 million five-year senior
unsecured credit facility with a syndicate of lenders. Borrowings on these
facilities are at various rate options to be determined on the date of
borrowing. On October 29, 1999, the Company utilized $450 million of these
facilities to pay down and terminate its previously existing revolving credit
agreements.
In September 1998, the Company announced a share repurchase program to buy
back 7.5 million shares or approximately 10% of the common shares then
outstanding. In January 1999, the Company announced another share repurchase
program for 6.8 million shares, or approximately 10% of the common shares
then outstanding. During the first nine months of 1999, the Company
repurchased 4.1 million common shares and from September 1998 to date, has
repurchased 9.5 million shares at an average price of $17.85 per share.
Capital expenditures for the first nine months of 1999 amounted to $65.4
million as compared to $42.1 during the same period of 1998. Capital
expenditures are expected to approximate $143 million in 1999, primarily
related to the Company's replacement needs and improvement of domestic and
foreign facilities.
YEAR 2000
State of Readiness
The Company is currently in the process of addressing date sensitive system
issues associated with the Year 2000. The Company's Year 2000 project is led
by Y2K project leaders for each of the former Crompton and Witco
organizations, and is managed by an executive steering committee of key
management personnel. The Company has assigned business teams, regional and
location coordinators and contracted third-party vendors to carry out the
Company's Year 2000 compliance plan. The Company's Board of Directors is
updated regularly regarding the Year 2000 compliance plan and its progress.
The Company's approach to mitigating the Year 2000 issue involves the
following five phases: awareness, assessment (including an inventory of
hardware, software, process control equipment and monitoring devices for
plants, safety systems and other non-information technology systems and
equipment), repair/replacement, testing and implementation.
In connection with Witco's 1996 restructuring plans and other initiatives,
Witco began a worldwide business process redesign and SAP implementation
project (SAP Project). It is anticipated that the implementation of the new
SAP systems, which are Year 2000 compliant, will replace substantially all
of the Company's existing information technology (IT) business application
systems. All of the Company's other IT business application systems, which
are not part of the SAP Project, and all non-IT systems and equipment
(collectively non-SAP) will be made compliant through the efforts of internal
resources and third-party vendors. In order to assess the readiness of its
SAP and non-SAP systems and equipment with the Year 2000 issue, the Company
has completed an inventory of hardware, software, process control equipment
and monitoring devices for plants, safety systems and other non-IT systems
and equipment. Regarding both the SAP and non-SAP projects, the Company has
completed the awareness and the assessment phases, is nearly 100 percent
complete with respect to the repair/replacement phase and is nearly 100
percent complete with respect to each of the testing and implementation
phases. Completion of the critical repair/replacement, testing and
implementation phases was done during the third quarter of 1999. The
repair/replacement, testing and implementation phases will be completed by the
end of November 1999.
The Company's Polymer Processing Equipment business currently sells equipment
controls containing programs and microchips. The Company believes that these
products which are used in the operation of extrusion machinery are Year 2000
compliant.
The Company has identified critical raw material suppliers, service providers
and major customers and has initiated communications with these third parties
in an effort to assess their plans and progress in addressing the Year 2000
issue. The Company is 100 percent complete with its evaluation of critical
raw material suppliers, service providers and major customers. The Company
has identified high-impact suppliers whose failure to deliver raw materials
could cause disruption to operations and a loss of business. The Company has
obtained information from key service providers with respect to their Year
2000 readiness and has considered their Year 2000 compliance status such that
long-term disruptions in the services provided are not anticipated at this
time. The Company has also surveyed its major customers regarding their Year
2000 compliance status. The Company will closely monitor the Year 2000
readiness of its high-impact suppliers, key service providers and major
customers throughout 1999.
Costs
The Company expects total costs associated with the SAP Project and the non-
SAP systems and equipment to approximate $16 million (including approximately
$11 million of capital expenditures), of which $10.7 million has been
incurred ($6.1 million capitalized and $4.6 million expensed) to date.
Expenditures of $5.9 million were made during the first nine months of 1999
($4.2 million capitalized and $1.7 million expensed). Prior to the Merger,
Witco incurred $119.3 million of costs ($102.8 million capitalized and $16.5
million expensed) related to the SAP and non-SAP projects. Substantially all
of these costs are associated with the SAP Project. The costs associated with
the third-party evaluation initiative are not expected to be significant.
Risks and Contingency Plans
The Company has ascertained that failure to alleviate the Year 2000 issues
within its SAP and non-SAP projects could result in possible system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, produce
products and engage in similar normal business activities, with a
corresponding impact on the Company's results of operations. The Company has
completed its contingency plans for its critical SAP and non-SAP activities,
which involve, among other actions, manual and/or external processing and
building inventories. Reviews and revisions of such plans have been made
throughout 1999 as circumstances warrant.
To the extent that the operations of critical raw material suppliers, service
providers, and major customers are impacted by their failure to address their
Year 2000 issues, such disruption may have a direct impact on the Company's
results of operations. Contingency plans are being developed and will
include, but will not be limited to, building inventories, switching
suppliers, managing production levels and finding alternate methods of
transportation. The Company is 100 percent complete with respect to the
development of its third-party contingency plans for raw material suppliers
and service providers. Reviews and revisions of such plans will be made
throughout the remainder of 1999 and the first quarter of 2000 as
circumstances warrant.
The Company has determined that failure to implement systems that are able to
process both the Euro and participating countries national currency may cause
disruptions to operations including, among other things, a temporary
inability to process transactions, send invoices or engage in normal business
activities. These problems could be substantially alleviated with manual
processing. However, this would cause delays in certain normal business
activities.
The Company is confident that the Year 2000 issues will be resolved by the
implementation of the SAP and non-SAP projects and the completion of the
third-party initiative. If the measures associated with the SAP and non-SAP
projects, as well as the efforts associated with critical raw material
suppliers, service providers, and major customers, were to fail, the
contingency plans would be implemented. The amount of potential liability and
lost revenue associated with the failure to alleviate the Year 2000 issues or
implement appropriate contingency plans cannot be reasonably estimated at
this time.
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." In June 1999, the FASB
issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" which
delays the effective date of SFAS No. 133 to fiscal years beginning after
June 15, 2000. The Company plans to adopt the provisions of this statement
in the first quarter of 2001.
ENVIRONMENTAL MATTERS
The Company is involved in claims, litigation, administrative proceedings and
investigations of various types in a number of jurisdictions. A number of
such matters involve claims for a material amount of damages and relate to or
allege environmental liabilities, including clean-up costs associated with
hazardous waste disposal sites, natural resource damages, property damage and
personal injury. The Company and some of its subsidiaries have been
identified by federal, state or local governmental agencies, and by other
potentially responsible parties (PRP) under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or comparable
state statutes, as a PRP with respect to costs associated with waste disposal
sites at various locations in the United States. In addition, the Company is
involved with environmental remediation and compliance activities at some of
its current and former sites in the United States and abroad.
The Company continually evaluates and reviews estimates for future
remediation and other costs to determine appropriate environmental reserve
amounts. For each site, a determination is made of the specific measures
that are believed to be required to remediate the site, the estimated total
cost to carry out the remediation plan, the portion of the total remediation
costs to be borne by the Company and the anticipated time frame over which
payments toward the remediation plan will occur. As of September 30, 1999,
the Company's reserves for environmental remediation activities totaled
$179.6 million. It is reasonably possible that the Company's estimates for
environmental remediation liabilities may change in the future should
additional sites be identified, further remediation measures be required or
undertaken, the interpretation of current laws and regulations be modified or
additional environmental laws and regulations be enacted.
The Company intends to assert all meritorious legal defenses and all other
equitable factors which are available to it with respect to the above
matters. The Company believes that the resolution of these environmental
matters will not have a material adverse effect on its consolidated financial
position or liquidity. While the Company believes it is unlikely, the
resolution of these environmental matters could have a material adverse
effect on the Company's consolidated results of operations or cash flows in
any given year if a significant number of these matters are resolved
unfavorably.
EURO CONVERSION
On January 1, 1999, certain member countries of the European Union adopted
the Euro as their common legal currency. Between January 1, 1999 and January
1, 2002, transactions may be conducted in either the Euro or the
participating countries national currency. However, by July 1, 2002, the
participating countries will withdraw their national currency as legal tender
and complete the conversion to the Euro.
The Company conducts business in Europe and does not expect the conversion to
the Euro to have an adverse effect on its competitive position or
consolidated financial position. The Company believes that the implementation
of SAP will allow the Company to conduct business transactions in
both the Euro as well as the participating countries' national currency.
FORWARD-LOOKING STATEMENTS
Certain statements made in this Form 10-Q are forward looking statements
that involve risks and uncertainties. These statements are based on
currently available information and the Company's actual results may differ
significantly from the results discussed. Investors are cautioned that
there can be no assurances that the actual results will not differ materially
from those suggested in such forward-looking statements.
ITEM 3. Quantitative and Qualitative Disclosure of Market Risk
The fair market value of long-term debt is subject to interest rate risk.
The Company's long-term debt amounted to $1,452.6 million at September 30,
1999. The fair market value of such debt was $1,469.7 million, and with
respect to notes, has been determined based on quoted market prices.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
(1) Reference is made to page 15 of the Crompton 1998 Annual Report
on Form 10-K for information pertaining to consolidated litigation brought by
the Beacon Heights and Laurel Park Coalitions seeking contribution for
remediation costs at the Beacon Heights and Laurel Park sites, respectively.
On September 22, 1999, the United States District Court for the District of
Connecticut set aside the Report and Recommendations of the Special Master
and issued an order allowing recovery against various municipalities by the
Beacon Heights Coalition in the amount of approximately $3,955,000 and the
Laurel Park Coalition in the amount of approximately $1,000,000. Motions to
Alter and Amend and for Reconsideration and Rehearing on the ruling have been
filed by various parties to the litigation.
(2) Reference is made to page 5 of the Witco Quarterly Report on
Form 10Q for the quarter ended June 30, 1999, for information pertaining to
Witco as a defendant in four similar actions arising out of Witco's
involvement in the polybutylene resin manufacturing business in the 1970's.
In August 1999, Witco Corporation settled two of the actions, East Bay
Municipal Utility District v. Mobil Oil Corporation, et al., filed in
November 1993 and pending in Superior Court for the County of San Mateo,
California for the amount of $3,850,000 and City of Austin v. Shell Oil
Company, et al., filed in June 1996, and pending in the District Court of
Travis County, Texas for the amount of $1,850,000.
ITEM 4. Submission of Matters to Vote of Security Holders
(a) A Special Meeting of the Crompton Stockholders was held
on September 1, 1999.
(b) Proxies for the Special Meeting were solicited pursuant
to Regulation 14A under the Securities and Exchange Act
of 1934.
(c) A brief description of the matters submitted to a vote
at the Special Meeting, and the results of voting, are
as follows:
Approval of the Agreement and Plan of Reorganization, dated as of May 31, 1999,
by and among Witco Corporation, a Delaware corporation, CK Witco Corporation
(formerly known as Park Merger Co.), a Delaware corporation and wholly owned
subsidiary of Crompton, and Crompton, and the completion of the transactions
contemplated by the merger agreement, which will also constitute approval of an
amendment to Crompton's 1998 Long Term Incentive Plan to increase the number of
shares of common stock reserved for issuance thereunder.
Votes
For Against Abstain
48,362,336 shares 3,804,085 shares 69,937 shares
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description
(4.1)* $600,000,000, 364-Day Credit Agreement dated
as of October 28, 1999, among the
Registrant, certain subsidiaries of the
Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent and
Bank of America, N.A. and Deutsche Bank
Securities Inc., as Co-Documentation Agents.
(4.2)* $400,000,000, Five-Year Credit Agreement
dated as of October 28, 1999, among the
Registrant, certain subsidiaries of the
Registrant, various banks, The Chase
Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent and
Bank of America, N.A. and Deutsche Bank
Securities Inc., as Co-Documentation Agents.
(27)* Financial Data Schedule
(b) During the fiscal third quarter of 1999, the
Registrant filed the following Reports on Form 8-K:
On September 2, 1999, the registrant filed a Current
Report on Form 8-K reporting on Item 5, Other Events
and Item 7, Financial Statements and Exhibits.
On September 15, 1999, the Registrant filed a Current
Report on Form 8-K12G3 reporting on Item 2,
Acquisition or Disposition of Assets, Item 5, Other
Events, and Item 7, Financial Statements and Exhibits.
On September 28, 1999, the Registrant filed a Current
Report on Form 8-K12G3/A reporting on Item 7,
Financial Statements and Exhibits (including Financial
Statements of Businesses Acquired).
On September 30, 1999, the Registrant filed a Current
Report on Form 8-K reporting on Item 5, Other Events
and Item 7, Financial Statements and Exhibits.
* Copies of these Exhibits are annexed to this report on Form
10-Q provided to the Securities and Exchange Commission.
CK WITCO CORPORATION
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.
CK WITCO CORPORATION
(Registrant)
/s/ Peter Barna
Date: November 15, 1999 Peter Barna
Senior Vice President and
Chief Financial Officer
/s/ John T. Ferguson II
Date: November 15, 1999 John T. Ferguson II
Senior Vice President,
General Counsel and
Secretary
EXHIBIT 4.1
$600,000,000
364-DAY CREDIT AGREEMENT
dated as of
October 28, 1999
among
CK Witco Corporation
The Eligible Subsidiaries
Referred to Herein
The Banks Listed Herein
The Chase Manhattan Bank,
as Syndication Agent
Citibank, N.A.,
as Administrative Agent
and
Bank of America, N.A. and Deutsche Bank Securities Inc.,
as Co-Documentation Agents
Chase Securities Inc.,
as Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 14
SECTION 1.03. Types of Borrowings 14
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend 14
SECTION 2.02. Method of Committed Borrowing 15
SECTION 2.03. Money Market Borrowings 15
SECTION 2.04. Notice to Banks; Funding of Loans 19
SECTION 2.05. Notes 19
SECTION 2.06. Maturity of Loans 20
SECTION 2.07. Interest Rates 20
SECTION 2.08. Facility Fees 23
SECTION 2.09. Optional Termination or Reduction of Commitments 24
SECTION 2.10. Mandatory Termination of Commitments 24
SECTION 2.11. Prepayments 24
SECTION 2.12. General Provisions as to Payments 25
SECTION 2.13. Funding Losses 26
SECTION 2.14. Computation of Interest and Fees 26
SECTION 2.15. Taxes 26
SECTION 2.16. Judgment Currency 28
SECTION 2.17. Foreign Subsidiary Costs 29
SECTION 2.18. Extension of Commitments 33
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness 35
SECTION 3.02. Borrowings 36
SECTION 3.03. First Borrowing by Each Eligible Subsidiary 37
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power 37
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention 37
SECTION 4.03. Binding Effect 38
SECTION 4.04. Financial Information 38
SECTION 4.05. Litigation 38
SECTION 4.06. Compliance with ERISA 38
SECTION 4.07. Environmental Matters 39
SECTION 4.08. Taxes 39
SECTION 4.09. Subsidiaries 39
SECTION 4.10. Not an Investment Company or a Public Utility
Holding Company 39
SECTION 4.11. Full Disclosure 40
SECTION 4.12. Year 2000 40
ARTICLE 5
COVENANTS
SECTION 5.01. Information 40
SECTION 5.02. Payment of Obligations 42
SECTION 5.03. Maintenance of Property; Insurance 42
SECTION 5.04. Conduct of Business and Maintenance of Existence 42
SECTION 5.05. Compliance with Laws 43
SECTION 5.06. Inspection of Property, Books and Records 43
SECTION 5.07. Financial Covenants 43
SECTION 5.08. Negative Pledge 43
SECTION 5.09. Consolidations, Mergers and Sales of Assets 44
SECTION 5.10. Use of Proceeds 44
SECTION 5.11. Additional Subsidiaries 44
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default 45
SECTION 6.02. Notice of Default 47
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization 47
SECTION 7.02. Agents and Affiliates 47
SECTION 7.03. Action by Agents 47
SECTION 7.04. Consultation with Experts 47
SECTION 7.05. Liability of Agents 47
SECTION 7.06. Indemnification 48
SECTION 7.07. Credit Decision 48
SECTION 7.08. Successor Agents 48
SECTION 7.09. Agents' Fees 49
SECTION 7.10. Co-Documentation Agents 50
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair 49
SECTION 8.02. Illegality 49
SECTION 8.03. Increased Cost and Reduced Return 50
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed
Rate Loans 51
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate Existence and Power 52
SECTION 9.02. Corporate and Governmental Authorization;
No Contravention 52
SECTION 9.03. Binding Effect 52
SECTION 9.04. Taxes 52
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty 52
SECTION 10.02. Guaranty Unconditional 53
SECTION 10.03. Discharge Only upon Payment in Full; Reinstatement
in Certain Circumstances 53
SECTION 10.04. Waiver by the Company 53
SECTION 10.05. Subrogation 54
SECTION 10.06. Stay of Acceleration 56
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices 55
SECTION 11.02. No Waivers 55
SECTION 11.03. Expenses; Indemnification 55
SECTION 11.04. Sharing of Set-offs 55
SECTION 11.05. Amendments and Waivers 56
SECTION 11.06. Successors and Assigns 56
SECTION 11.07. Collateral 58
SECTION 11.08. Governing Law; Submission to Jurisdiction 58
SECTION 11.09. Counterparts; Integration 59
SECTION 11.10. Waiver of Jury Trial 59
SECTION 11.11. Confidentiality 59
PRICING SCHEDULE
EXHIBIT A Note
EXHIBIT B Opinion of John T. Ferguson, II, Esq.,
General Counsel of the Company
EXHIBIT C Opinion of Wachtell Lipton Rosen & Katz,
Special Counsel for the Company
EXHIBIT D Assignment and Assumption Agreement
EXHIBIT E Form of Money Market Quote Request
EXHIBIT F Form of Invitation for Money Market Quotes
EXHIBIT G Form of Money Market Quote
EXHIBIT H Form of Election to Participate
EXHIBIT I Form of Election to Terminate
EXHIBIT J Opinion of Counsel for the Borrower
EXHIBIT K Form of Subsidiary Guarantee Agreement
EXHIBIT L Form of Indemnity, Subrogation and Contribution Agreement
364-DAY CREDIT AGREEMENT
AGREEMENT dated as of October 28, 1999 among CK WITCO CORPORATION,
the ELIGIBLE SUBSIDIARIES referred to herein, the BANKS listed on the
signature pages hereof, CITIBANK, N.A., as Administrative Agent, THE CHASE
MANHATTAN BANK, as Syndication Agent, and BANK OF AMERICA, N.A., and DEUTSCHE
BANK SECURITIES INC., as Co-Documentation Agents.
WHEREAS, the Company wishes to have a revolving credit facility
under which it or any of its Eligible Subsidiaries may from time to time
borrow funds, denominated in Dollars, from the Banks ratably in proportion to
their respective Commitments;
WHEREAS, the Company wishes said credit facility to permit the
Company or any Eligible Subsidiary from time to time to borrow funds,
denominated in Dollars, from one or more Banks on the basis of their
competitive bids;
WHEREAS, the Banks are willing to extend said credit facility to the
Company and its Eligible Subsidiaries on the terms and conditions set forth
herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.07(c).
"Administrative Agent" means Citibank, N.A., in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent,
duly completed by such Bank and submitted to the Administrative Agent (with a
copy to the Company).
"Affiliate" means, 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.
"Agents" means the Administrative Agent, the Syndication Agent and
the Co-Documentation Agents, and "Agent" means any of the foregoing.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Percentage" means, with respect to any Bank, the
percentage of the total Commitments represented by such Bank's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall
be determined based upon the Commitments most recently in effect, giving
effect to any assignments.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 11.06(c).
"Availability Period" means the period from and including the
Effective Date to but not including the Termination Date.
"Bank" means each Person listed on the signature pages hereof, each
Assignee or other Person which becomes a Bank pursuant to Section 11.06(c) or
Section 2.18, and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan pursuant to the applicable Notice of Committed Borrowing or
Article 8.
"Base Rate Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"Borrower" means the Company or any Eligible Subsidiary, as the
context may require, and their respective successors, and "Borrowers" means
all of the foregoing.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank as a CD Loan
pursuant to the applicable Notice of Committed Borrowing.
"CD Reference Banks" means the financial institutions acting as the
Administrative Agent, the Syndication Agent and the Co-Documentation Agents.
"Co-Documentation Agents" means Bank of America, N.A. and Deutsche
Bank Securities Inc., in their capacities as co-documentation agents for the
Banks hereunder, and their successors in such capacity.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 2.09 or 2.10 and as such
amount may be reduced or increased from time to time pursuant to assignments
to or by such Bank in accordance with Section 11.06 or in connection with an
extension pursuant to Section 2.18.
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01.
"Company" means CK Witco Corporation, a Delaware corporation, and
its successors.
"Company's S-4" means the Company's registration statement on
Form S-4, as filed on July 28, 1999 with the Securities and Exchange
Commission.
"Consolidated Debt" means at any date the Debt of the Company and
its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company
in its consolidated financial statements if such statements were prepared as
of such date.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except (a) trade accounts payable arising in the
ordinary course of business, (b) obligations incurred in the ordinary course
of business in connection with additions to property, plant or equipment which
are deferred for no more than 120 days after the later of the acquisition or
completion of installation of such additions, (c) other obligations arising in
the ordinary course of business which are deferred for no more than 120 days
after the date on which they would first be reflected as liabilities on a
balance sheet of such Person and (d) obligations in connection with the
compensation for services of officers, directors or employees of such Person,
(iv) the capitalized amount of all obligations of such Person as lessee which
are capitalized in accordance with generally accepted accounting principles,
(v) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, (vi) all Debt of others
Guaranteed by such Person and (vii) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit or letters
of guaranty.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or other similar transaction (including any option with respect to any
of the foregoing transactions) or any combination of the foregoing
transactions.
"Dollars" and the sign "$" mean lawful money of the United States.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Company and the Administrative Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Domestic Subsidiary" means each Subsidiary that is organized under
a jurisdiction which is any of the United States, any State thereof or the
District of Columbia.
"EBITDA" means, for any period, the consolidated net income of the
Company and its Consolidated Subsidiaries for such period plus, to the extent
deducted in computing such consolidated net income for such period, the sum
(without duplication) of (a) income tax expense, (b) Interest Expense,
(c) depreciation and amortization expense, (d) non-recurring restructuring
charges in an amount not to exceed $65 million in any fiscal year of the
Company, (e) extraordinary and other non-recurring losses and (f) any other
non-cash charges (including merger-related purchase accounting adjustments in
an amount not to exceed $289 million made as a result of the merger of
Crompton & Knowles Corporation and Witco Corporation), minus, to the extent
added in computing such consolidated net income for such period,
(a) consolidated interest income, (b) extraordinary and other non-recurring
gains and (c) any other non-cash income. Anything contained in this
definition or elsewhere in this Agreement to the contrary notwithstanding, in
calculating EBITDA for the four fiscal-quarter periods ending on December 31,
1999, March 31, 2000 and June 30, 2000, respectively, EBITDA in fiscal
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999 shall be
deemed to equal the combined EBITDA of Crompton & Knowles Corporation and
Witco Corporation for such fiscal quarters, as adjusted on a pro forma basis
to give effect to the merger of Crompton & Knowles Corporation and Witco
Corporation as if such merger had occurred on December 31, 1998.
"Effective Date" means the date the obligations of the Banks to
extend credit under this Agreement become effective in accordance with
Section 3.01.
"Election to Participate" means an Election to Participate
substantially in the form of Exhibit H hereto.
"Election to Terminate" means an Election to Terminate substantially
in the form of Exhibit I hereto.
"Eligible Subsidiary" means any Wholly-Owned Consolidated Subsidiary
as to which an Election to Participate shall have been delivered to the
Administrative Agent and as to which an Election to Terminate shall not have
been delivered to the Administrative Agent. Each such Election to Participate
and Election to Terminate shall be duly executed on behalf of such
Wholly-Owned Consolidated Subsidiary and the Company in such number of copies
as the Administrative Agent may request. The delivery of an Election to
Terminate shall not affect any obligation of an Eligible Subsidiary
theretofore incurred. The Administrative Agent shall promptly give notice to
the Banks of the receipt of any Election to Participate or Election to
Terminate.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" at any time means the Company and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company, are
treated at such time as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Company and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan that bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices of
the financial institutions acting as the Administrative Agent, the Syndication
Agent and the Co-Documentation Agents.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest rate
on Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to
United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreements" means (i) the $500,000,000 Credit
Agreement dated as of March 31, 1997, among Witco Corporation, the Eligible
Subsidiaries referred to therein, the banks listed on the signature pages
thereof, The Chase Manhattan Bank, as Administrative Agent, and Morgan
Guaranty Trust Company of New York, as Documentation Agent and (ii) the
US$600,000,000 Third Amended and Restated Credit Agreement dated as of March
31, 1998, among Crompton & Knowles Corporation, Crompton & Knowles Colors
Incorporated, Davis-Standard Corporation, Ingredient Technology Corporation,
Uniroyal Chemical Company, Inc., the B-2 Borrowers named therein and Uniroyal
Chemical Co., as Borrowers, the Initial Lenders, Initial Issuing Banks and
Swing Line Bank named therein, Citicorp USA, Inc., as Agent, and The Chase
Manhattan Bank, Corestates Bank, N.A. and First Union National Bank, as
Managing Agents.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to the Administrative Agent
on such day on such transactions as determined by the Administrative Agent.
"Five-Year Credit Agreement" means the Five-Year Credit Agreement
dated as of the date hereof among the Company, the eligible subsidiaries named
therein, Citibank, N.A., as administrative agent, the banks named therein, The
Chase Manhattan Bank, as syndication agent, and Bank of America, N.A. and
Deutsche Bank Securities Inc., as co-documentation agents.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01) or any combination of the foregoing.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guaranty shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Indemnity, Subrogation and Contribution Agreement" means the 364-
Day Indemnity, Subrogation and Contribution Agreement, substantially in the
form of Exhibit L hereto, among the Company, the Subsidiary Guarantors and the
Administrative Agent.
"Interest Coverage Ratio" means, on any date, the ratio of
(a) EBITDA for the period of four consecutive fiscal quarters ended on or most
recently prior to such date to (b) Interest Expense for the period of four
consecutive fiscal quarters ended on or most recently prior to such date.
"Interest Expense" means, for any period, the interest expense of
the Company and its Consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles, including (i) the amortization of debt discounts to the extent
included in interest expense in accordance with generally accepted accounting
principles, (ii) the amortization of all fees (including fees with respect to
interest rate protection agreements or other interest rate hedging
arrangements) payable in connection with the incurrence of Debt to the extent
included in interest expense in accordance with generally accepted accounting
principles and (iii) the portion of any rents payable under capital leases
allocable to interest expense in accordance with generally accepted accounting
principles. Anything contained in this definition or elsewhere in this
Agreement to the contrary notwithstanding, in calculating Interest Expense for
the four fiscal-quarter periods ending on December 31, 1999, March 31, 2000
and June 30, 2000, respectively, Interest Expense in fiscal quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999 shall be deemed to equal
the combined Interest Expense of Crompton & Knowles Corporation and Witco
Corporation for such fiscal quarters, as adjusted on a pro forma basis to give
effect to the merger of Crompton & Knowles Corporation and Witco Corporation
as if such merger had occurred on December 31, 1998.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter (or nine or twelve months thereafter if,
at the time of the relevant Borrowing, an interest period of such duration is
available to all Banks), as the relevant Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (c) below) which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day in a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day in a calendar month; and
(c) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date.
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the relevant
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is not
a Domestic Business Day shall be extended to the next succeeding Domestic
Business Day; and
(b) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date.
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is not
a Domestic Business Day shall be extended to the next succeeding Domestic
Business Day; and
(b) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date.
(4) with respect to each Money Market LIBOR Borrowing, the period commencing
on the date of such Borrowing and ending such whole number of months
thereafter as the relevant Borrower may elect in accordance with Section 2.03;
provided that:
(a) any Interest Period (except an Interest Period determined
pursuant to clause (c) below) which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day in a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day in a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 7 days) as the relevant Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"Leverage Ratio" means, on any date, the ratio of (a) Total Debt on
such date to (b) EBITDA for the period of four consecutive fiscal quarters
ended on or most recently prior to such date.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Company or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a Domestic Loan, a Euro-Dollar Loan or a Money Market
Loan, and "Loans" means Domestic Loans, Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"Loan Documents" means this Agreement, the Subsidiary Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement.
"Loan Parties" means the Company, the other Borrowers and the
Subsidiary Guarantors.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"London Office" means, at any time, the office of the Administrative
Agent in London specified in or pursuant to Section 11.01 at such time.
"Material Debt" means Debt (other than the obligations under this
Agreement and the Five-Year Credit Agreement) of the Company and/or one or
more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $25,000,000.
"Material Financial Obligations" means a principal or face amount of
Debt and/or payment or collateralization obligations in respect of Derivatives
Obligations of the Company and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, in an aggregate amount
exceeding $25,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Material Subsidiary" means at any time any Subsidiary, except
Subsidiaries which at such time have been designated by the Company (by notice
to the Agents, which may be amended from time to time) as nonmaterial, none of
which singly would meet the definition of a "significant subsidiary" contained
as of the date hereof in Regulation S-X of the Securities and Exchange
Commission and all of which, if aggregated and considered as a single
Subsidiary, would not have total assets (determined on a consolidated basis
for such Subsidiaries and their consolidated subsidiaries) in excess of 15% of
the consolidated assets of the Company and its Consolidated Subsidiaries at
such time.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Company and the Administrative Agent; provided that any Bank may from time to
time by notice to the Company and the Administrative Agent designate separate
Money Market Lending Offices for its Money Market LIBOR Loans, on the one
hand, and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d)(ii)(C).
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group (i) is then making or accruing an obligation to make
contributions or (ii) for purposes of Section 6.01(i) only, has within the
preceding five plan years made contributions, including for purposes of this
clause (ii) any Person which ceased to be a member of the ERISA Group during
such five year period.
"New York Office" means, at any time, the office of the
Administrative Agent in New York specified in or pursuant to Section 11.01 at
such time.
"Notes" means promissory notes of a Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of such Borrower to repay
the Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) for purposes of
Section 6.01(i) only, has at any time within the preceding five years been
maintained, or contributed to, by any Person which was at such time a member
of the ERISA Group for employees of any Person which was at such time a member
of the ERISA Group.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest publicly announced by the
Administrative Agent in New York City from time to time as its Prime Rate.
"Principal Officer" means any of the following officers of the
Company: the Chairman of the Board, the President, the chief executive
officer, the chief financial officer, the treasurer, the controller and the
general counsel. If the titles of the Company's officers are changed after the
date hereof, the term "Principal Officer" shall thereafter mean any officer
performing substantially the same functions as are presently performed by one
or more of the officers listed in the first sentence of this definition.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank to any
Borrower.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Banks" means at any time Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, having Loans amounting to more than 50% of the aggregate unpaid
principal amount of the Loans.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Company.
"Subsidiary Guarantee Agreement" means the 364-Day Subsidiary
Guarantee Agreement substantially in the form of Exhibit K hereto, among the
Company, the Subsidiary Guarantors, and the Administrative Agent.
"Subsidiary Guarantors" means, collectively, each Domestic
Subsidiary of the Company that is a party to the Subsidiary Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement as of the
date hereof, and each Domestic Subsidiary that, pursuant to Section 5.11,
becomes a party to such agreements by execution of supplements in the forms
provided therein.
"Syndication Agent" means The Chase Manhattan Bank, in its capacity
as syndication agent for the Banks hereunder.
"Termination Date" means October 26, 2000, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day or, in
the case of any Bank, any later date to which the Termination Date shall have
been extended as to such Bank pursuant to Section 2.18.
"Total Debt" means, at any date, all Debt of the Company and its
Consolidated Subsidiaries at such date to the extent such Debt should be
reflected on a consolidated balance sheet of the Company at such date in
accordance with generally accepted accounting principles.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefit liabilities
under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such liabilities (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares or nominal shares of foreign
entities) are at the time directly or indirectly owned by the Company.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Company's independent public accountants) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Company notifies
the Agents that the Company wishes to amend any covenant in Article 5 to
eliminate the effect of any change in generally accepted accounting principles
on the operation of such covenant (or if either Agent notifies the Company
that the Required Banks wish to amend Article 5 for such purpose), then the
Company's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Company and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
(a) an aggregation of Committed Loans to be made by the Banks to
the same Borrower pursuant to Section 2.01 on the same day, all of which Loans
(i) are of the same type (subject to Article 8) and (ii) have the same initial
Interest Period; and
(b) an aggregation of one or more Money Market Loans to be made
by one or more Banks to the same Borrower pursuant to Section 2.03 on the same
day, all of which Loans (i) are of the same type and (ii) have the same
Interest Period.
Borrowings may be classified for purposes of this Agreement by
reference to the pricing of the Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or
(ii) by reference to the provisions of Article 2 under which participation
therein is determined (i.e., a "Committed Borrowing" is a Borrowing under
Section 2.01 in which all Banks participate in proportion to their
Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which one or more Banks participate on the basis of their
bids).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrowers during the Availability Period, provided that the aggregate amount
of the Committed Loans made by such Bank at any one time outstanding shall not
exceed the amount of its Commitment. Each Borrowing under this Section shall
be in an aggregate principal amount of $5,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in an aggregate amount equal
to the aggregate amount available in accordance with Section 3.02) and shall
be made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrowers may borrow under this
Section, repay, or to the extent permitted by Section 2.11, prepay, Loans and
reborrow at any time during the Availability Period.
SECTION 2.02. Method of Committed Borrowing. The relevant Borrower
shall give the Administrative Agent notice (a "Notice of Committed Borrowing")
not later than 10:30 A.M. (New York City time) on (w) the date of each Base
Rate Borrowing, (x) the second Domestic Business Day before each CD Borrowing
and (y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Committed Loans comprising such Borrowing are
to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
On the last day of the Interest Period for any Borrowing, unless the Borrower
has otherwise notified the Administrative Agent on or prior to such day, the
Borrower shall be deemed to have given a Committed Notice of Borrowing for a
new Base Rate Borrowing in the same amount as the Borrowing that has become
due on such day, and the Borrowing becoming due on such day shall be deemed
replaced with such new Base Rate Borrowing.
SECTION 2.03. Money Market Borrowings. (a) The Money Market Option.
In addition to Committed Loans pursuant to Section 2.01, any Borrower may, as
set forth in this Section, request the Banks during the period beginning on
the Effective Date and continuing to at least seven days prior to the
Termination Date to make offers to make Money Market Loans to such Borrower.
The Banks may, but shall have no obligation to, make such offers and such
Borrower may, but shall have no obligation to, accept any such offers in a
manner set forth in this Section.
(b) Money Market Quote Request. When a Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit E hereto so as to be received by
the Administrative Agent at its New York Office not later than 10:30 AM. (New
York City time) on (x) the fourth Euro-Dollar Business Day before the date of
Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the
case of an Absolute Rate Auction or, in any such case, such other time or date
as the Company and the Administrative Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective. Each such Money Market Quote Request shall
specify:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in the
case of an Absolute Rate Auction,
(ii) the proposed aggregate amount of such Borrowing, which
shall be an aggregate amount equal to $5,000,000 or a larger multiple of
$1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
A Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Company and the Administrative Agent may
agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks
by telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit F hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request
relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Administrative Agent by telex or facsimile at its New
York Office not later than (x) 2:00 P.M. (New York City time) on the fourth
Euro-Dollar Business Day before the proposed date of Borrowing, in the case of
a LIBOR Auction, or (y) 9:30 A.M. (New York City time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction or, in any such case, such
other time or date as the Company and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date
of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective; provided that Money Market
Quotes submitted by the Administrative Agent (or any affiliate of the
Administrative Agent) in the capacity of a Bank may be submitted, and may only
be submitted, if the Administrative Agent or such affiliate notifies the
Borrower of the terms of the offer or offers contained therein not later than
(x) one hour prior to the deadline for the other Banks, in the case of a LIBOR
Auction or (y) 15 minutes prior to the deadline for the other Banks, in the
case of an Absolute Rate Auction. Subject to Articles 2 and 6, any Money
Market Quote so made shall be irrevocable except with the written consent of
the Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit G hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Bank, (x) must be an aggregate
amount equal to $5,000,000 or a larger multiple of $1,000,000, (y) may not
exceed the principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to the
principal amount of Money Market Loans for which offers being made by such
quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or subtracted from such base
rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers
by the quoting Bank with respect to each Interest Period specified in the
related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit G
hereto or does not specify all of the information required by
subsection (d)(ii) above;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded by
the Administrative Agent unless such subsequent Money Market Quote is
submitted solely to correct a manifest error in such former Money Market
Quote. The Administrative Agent's notice to the Borrower shall specify (A) the
aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market
Loans for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. The Borrower shall notify
the Administrative Agent of its acceptance or non-acceptance of the offers
notified to it pursuant to subsection (e) at its New York Office not later
than 10:30 A.M. (New York City time) on (x) the third Euro-Dollar Business Day
before the proposed date of Borrowing, in the case of a LIBOR Auction or
(y) the proposed date of Borrowing, in the case of an Absolute Rate Auction
or, in any such case, such other time or date as the Company and the
Administrative Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is to be
effective. In the case of acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related Money
Market Quote Request;
(ii) the principal amount of each Money Market
Borrowing must be an aggregate amount equal to $5,000,000 or a larger multiple
of $1,000,000;
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market Absolute Rates, as the
case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two
or more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which such offers are accepted for the related Interest
Period, the principal amount of Money Market Loans in respect of which such
offers are accepted shall be allocated by the Administrative Agent among such
Banks as nearly as possible (in multiples of $1,000,000, as the Administrative
Agent may deem appropriate) in proportion to the aggregate principal amounts
of such offers. Determinations by the Administrative Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt
of a Notice of Borrowing, the Administrative Agent shall promptly notify each
Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) On the date of each Borrowing, each Bank participating
therein shall make available its share of such Borrowing in Dollars not later
than 12:00 Noon (New York City time), in Federal or other funds immediately
available in New York City, to the Administrative Agent at its New York
Office. Unless the Administrative Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the Administrative
Agent will make the funds so received from the Banks available to the Borrower
in its bank account maintained at the Administrative Agent's aforesaid
address.
(c) If any Bank makes a new Loan hereunder to a Borrower on a day
on which such Borrower is to repay all or any part of an outstanding Loan from
such Bank, such Bank shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed by such Borrower and the amount being repaid shall be
made available by such Bank to the Administrative Agent as provided in
subsection (b) of this Section, or remitted by such Borrower to the
Administrative Agent as provided in Section 2.12, as the case may be.
(d) Unless the Administrative Agent shall have received notice from
a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 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 Bank shall not have so
made such share available to the Administrative Agent, such Bank 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, a rate per annum equal to the interest rate applicable thereto
pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in
such Borrowing for purposes of this Agreement. In no event shall any payment
by the Administrative Agent, or repayment by the Borrower, of any amount
pursuant to this Section relieve the Bank that failed to make available its
share of the related Borrowing of its obligations hereunder.
SECTION 2.05. Notes. (a) The Loans of each Bank to each Borrower
shall, upon request of the applicable Bank, be evidenced by a single Note of
such Borrower payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the
Administrative Agent, request that its Loans of a particular type to such
Borrower be evidenced by a separate Note of such Borrower in an amount equal
to the aggregate unpaid principal amount of such Loans. Each such Note shall
be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the
relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note requested pursuant to
Section 2.05(a), the Administrative Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount, type and maturity of each Loan
made by it to each Borrower and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note of any
Borrower, endorse on the schedule forming a part thereof appropriate notations
to evidence the foregoing information with respect to each such Loan to such
Borrower then outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of any
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by each Borrower so to endorse its Notes and to attach to and make
a part of any Note a continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
sum of the Base Rate Margin for such day plus the applicable Base Rate for
such day. Such interest shall be payable for each Interest Period on the last
day thereof. Any overdue principal of or interest on any Base Rate Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans
for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the CD Margin for such day
plus the applicable Adjusted CD Rate; provided that if any CD Loan shall, as a
result of clause (2)(b) of the definition of Interest Period, have an Interest
Period of less than 30 days, such CD Loan shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than 90 days, at intervals of
90 days after the first day thereof. Any overdue principal of or interest on
any CD Loan shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
CD Margin for such day plus the Adjusted CD Rate applicable to such Loan and
(ii) the rate applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to a day during any Interest
Period means a rate per annum determined pursuant to the following formula:
CDBR*
ACDR = ______________ + AR
1.00-DRP
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
____________
* The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%.
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from each CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period.
"CD Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of new non-personal time deposits in Dollars in New York City
having a maturity comparable to the related Interest Period and in an amount
of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States of America. The Adjusted CD Rate shall be adjusted automatically
on and as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for
such day plus the applicable Adjusted London Interbank Offered Rate. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of
three months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered
Rate applicable to such Loan and (ii) the sum of the Euro-Dollar Margin for
such day plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than one month as
the Administrative Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by
(y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day).
(e) Subject to Section 8.01, each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the
first day thereof. Any overdue principal of or interest on any Money Market
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the Base Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the participating Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence
of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated hereby. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply
SECTION 2.08. Fees. (a) The Company shall pay to the
Administrative Agent for the account of each Bank a facility fee calculated
for each day at the Facility Fee Rate for such day (determined in accordance
with the Pricing Schedule). Such facility fees shall accrue from and including
the Effective Date to but excluding the date of termination of the Commitments
in their entirety, on the daily aggregate amount of the Commitments (whether
used or unused) or, if the Commitments have terminated, on the outstanding
amount of the Loans. Accrued fees under this Section shall be payable
quarterly in arrears on each March 31, June 30, September 30 and December 31
and on the date of termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their entirety).
(b) For any day on which the outstanding principal amount of Loans
shall be greater than 33% of the total Commitments (and for any day after the
termination of all the Commitments on which Loans shall be outstanding), the
Company shall pay to the Administrative Agent for the account of each Bank a
utilization fee at the per annum rate indicated in the Pricing Schedule on the
aggregate amount of each Bank's outstanding Loans on such day. Accrued and
unpaid utilization fees, if any, shall be payable on the last day of each
March, June, September and December and on the date on which the Commitments
shall have terminated and all Loans shall have been repaid in full. All
utilization fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(c) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and utilization fees, to the Banks entitled thereto.
Fees paid shall not be refundable under any circumstances.
SECTION 2.09. Optional Termination or Reduction of Commitments.
During the Availability Period, the Company may, upon at least three Domestic
Business Days' notice to the Administrative Agent, terminate at any time, or
proportionately reduce from time to time by an aggregate amount of at least
$10,000,000 or any larger multiple of $1,000,000, the unused portions of the
Commitments. If the Commitments are terminated in their entirety, all accrued
facility fees shall be payable on the effective date of such termination.
SECTION 2.10. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.11. Prepayments. (a) The Borrower may, upon at least
one Domestic Business Day's notice to the Administrative Agent, prepay any
Base Rate Borrowing (or any Money Market Borrowing bearing interest at the
Base Rate pursuant to Section 8.01) in whole at any time, or from time to time
in part in amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several Banks included in
such Borrowing.
(b) Except as provided in subsection (c) or (d) below or in
Section 8.02, the Borrower may not prepay all or any portion of the principal
amount of any Fixed Rate Loan prior to the maturity thereof unless the
Borrower pays any breakage costs under Section 2.13.
(c) If the Company becomes obligated to indemnify any Bank or the
Administrative Agent for Taxes or Other Taxes pursuant to Section 2.15(c) and
actions taken pursuant to Section 2.15(f) do not or will not eliminate such
indemnity payments, then (i) the Company may, upon at least one Domestic
Business Day's notice to the Administrative Agent, prepay all Borrowings in
whole by paying the principal amount together with accrued interest thereon to
the date of prepayment (in which event the Company shall also terminate the
Commitments in their entirety pursuant to Section 2.09) or (ii) the Company
may, at its sole expense and effort, upon notice to such Bank and the
Administrative Agent, require such Bank to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.06(c)), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee
may be another Bank, if a Bank accepts such assignment); provided that (A) the
Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (B) such Bank shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Company (in the case of all other
amounts) and (C) such assignment will result in a reduction to the indemnity
payable pursuant to Section 2.15(c). A Bank shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Bank or otherwise, the circumstances entitling the Company to require
such assignment and delegation cease to apply.
(d) The Company shall cause one or more Borrowers to prepay Loans
to the extent (if any) required so that on any such date, after giving effect
to such prepayment, the aggregate amount of the Loans do not exceed the
aggregate amount of the Commitments.
(e) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrowers shall make each payment of principal of, and interest on, the Loans
and of fees hereunder not later than 11:00 A.M. (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Administrative Agent at its New York Office. The Administrative
Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Administrative Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Domestic Loans or of
fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business Day, the date
for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Euro-Dollar Business Day. Whenever any payment of principal of, or interest
on, the Money Market Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be
payable for such extended time. All payments by each Borrower shall be made
without deduction for any counterclaim, defense, recoupment or setoff.
(b) Unless the Administrative Agent shall have received notice from
a Borrower prior to the date on which any payment is due from such Borrower to
the Banks hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that such Borrower shall not have so made such payment, each Bank shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Administrative Agent at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article 2, 6 or 8
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with
Section 2.04(a) or 2.11, the Company shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow or prepay, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.
SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Taxes. (a) For the purposes of this Section 2.15,
the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
any Loan Party pursuant to any Loan Document or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank and
Agent, taxes imposed on its income, and franchise or similar taxes imposed on
it, by a jurisdiction (or any subdivision thereof) under the laws of which
such Bank or Agent (as the case may be) is organized or in which its principal
executive office is located or, in the case of each Bank, in which its
Applicable Lending Office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only to the extent
that such Bank is subject to United States withholding tax at the time such
Bank first becomes a party to this Agreement or changes its Applicable Lending
Office.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to any Loan Document or under any Note or
from the execution or delivery of, or otherwise with respect to, any Loan
Document or any Note.
(b) Any and all payments by any Loan Party to or for the account of
any Bank or Agent under any Loan Document or under any Note shall be made
without deduction for any Taxes or Other Taxes except as required by law;
provided that, if any change in law occurring after any Bank or Agent first
becomes a party to this Agreement (or any law of a jurisdiction other than the
U.S., regardless of whether a change in law has occurred, in the case of any
Taxes or Other Taxes arising as a result of any Subsidiary other than a
Domestic Subsidiary becoming an Eligible Subsidiary after the date hereof)
requires any Loan Party to deduct any Taxes or Other Taxes from any payments
to any such Bank or Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section) such Bank or Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Loan Party shall make such deductions,
(iii) such Loan Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and
(iv) such Loan Party shall furnish to the Administrative Agent, at its address
referred to in Section 11.01, the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Company and each other Borrower agrees to indemnify each
Bank and Agent for the full amount of Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section because of a change
in law occurring after such Bank or Agent first becomes a party to this
Agreement (or under any law of a jurisdiction other than the U.S., regardless
of whether a change in law has occurred, in the case of any Taxes or Other
Taxes arising as a result of any Subsidiary other than a Domestic Subsidiary
becoming an Eligible Subsidiary after the date hereof) paid by such Bank or
Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto as certified in good
faith to the Company and each other Borrower by each Bank or Agent seeking
indemnification pursuant to this Section 2.15(c). This indemnification shall
be paid within 30 days after such Bank or Agent (as the case may be) makes
demand therefor; provided, however, that the indemnification obligations of
the Company and each other Borrower under this Section 2.15 shall be reduced
appropriately to take into account any Tax deduction, credit or benefit or
Other Tax deduction, credit or benefit to which a Bank or Agent is entitled as
a result of its payment of Taxes or Other Taxes. If a Bank or Agent receives
a refund of indemnified Taxes or Other Taxes with respect to which the Company
or any other Borrower has made payment to such Bank or Agent pursuant to this
Section 2.15(c), such Bank or Agent shall pay over such refund to the Company
or other Borrower within 10 Days after receipt of such refund.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each
other Bank, from time to time thereafter if requested in writing by the
Company (but only so long as such Bank remains lawfully able to do so), and at
any time it changes its Applicable Lending Office, shall provide the Company
and the Administrative Agent with Internal Revenue Service form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Bank from
United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Company or the Administrative Agent with the appropriate form
pursuant to Section 2.15(d) (unless such failure is due to a change in treaty,
law or regulation occurring subsequent to the date on which such form
originally was required to be provided), such Bank shall not be entitled to
indemnification under Section 2.15(b) or (c) with respect to Taxes imposed by
the United States; provided that if a Bank, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to Taxes because
of its failure to deliver a form required hereunder, the Borrowers shall take
such steps as such Bank shall reasonably request to assist such Bank to
recover such Taxes.
(f) If any Loan Party is required to pay additional amounts to or
for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment
of such Bank, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise disadvantageous
to such Bank.
(g) If any Borrower is organized under a jurisdiction outside of
the United States, each Bank and Agent will use reasonable efforts to
cooperate with such Borrower and the Company (but shall not be required to
disclose any information it considers, in its sole discretion, to be
confidential) to assist such Borrower to obtain any reduction of or limit on
Taxes subject to the indemnification provisions of this Section 2.15.
SECTION 2.16. Judgment Currency. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from any Loan Party
under any Loan Document in the currency expressed to be payable herein or
therein (the "specified currency") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the specified currency with
such other currency at the Administrative Agent's New York office on the
Euro-Dollar Business Day preceding that on which final judgment is given. The
obligations of each Loan Party in respect of any sum due to any Bank or Agent
under any Loan Document or under any Note shall, notwithstanding any judgment
in a currency other than the specified currency, be discharged only to the
extent that on the Euro-Dollar Business Day following receipt by such Bank or
Agent (as the case may be) of any sum adjudged to be so due in such other
currency, such Bank or Agent (as the case may be) may in accordance with
normal banking procedures purchase the specified currency with such other
currency; if the amount of the specified currency so purchased is less than
the sum originally due to such Bank or Agent, as the case may be, in the
specified currency, each Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or Agent, as the case may be, against such
loss, and if the amount of the specified currency so purchased exceeds (a) the
sum originally due to any Bank or Agent, as the case may be, in the specified
currency and (b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate payment to such Bank under
Section 11.04, such Bank or Agent, as the case may be, agrees to remit such
excess to the appropriate Borrower.
SECTION 2.17. Foreign Subsidiary Costs. (a) If the cost to any
Bank of making or maintaining any Loan to an Eligible Subsidiary is increased,
or the amount of any sum received or receivable by any Bank (or its Applicable
Lending Office) is reduced by an amount deemed by such Bank to be material, by
reason of the fact that such Eligible Subsidiary is incorporated in, or
conducts business in, a jurisdiction outside the United States of America, the
Company shall indemnify such Bank for such increased cost or reduction within
15 days after demand by such Bank (with a copy to the Administrative Agent).
A certificate of such Bank claiming compensation under this
subsection 2.17(a) and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error.
(b) Each Bank will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge that will entitle
such Bank to additional interest or payments pursuant to
subsection 2.17(a) and, in the case of any Bank, will use reasonable efforts
to designate a different Applicable Lending Office, if, in the judgment of
such Bank, such designation will avoid the need for, or reduce the amount of,
such compensation and will not be otherwise disadvantageous to such Bank.
SECTION 2.18. Extension of Commitments. (a) The Company may, by
notice to the Administrative Agent (which shall promptly deliver a copy to
each of the Banks) given not less than 30 days and not more than 60 days prior
to the Termination Date then in effect, request that the Banks extend the
Termination Date for an additional period of not more than 364 days as
specified in such notice. Any such notice shall specify any fees that the
Company agrees to pay as consideration for such extension, any changes to the
Pricing Schedule that will apply during the term of such extension and the
amendments, if any, to the covenants contained herein or other provisions
hereof proposed by the Company to be applicable during the term of such
extension. Each Bank shall, by notice to the Company and the Administrative
Agent given not earlier than the 30th day and not later than the 15th day
prior to the Termination Date then in effect, advise the Administrative Agent
and the Company whether or not it agrees to such extension on the terms set
forth in such notice. Any Bank that has not so advised the Administrative
Agent by such day shall be deemed to have declined to agree to such extension.
(b) If (and only if) Banks (including any Banks becoming parties to
this Agreement as contemplated by the last sentence of paragraph (c) below)
holding more than 50% of the Commitments in effect prior to such extension
shall have agreed to extend the Termination Date (each such Bank being called
an "Extending Bank", and Banks not having so agreed being called "Non-
Extending Banks"), then, if the Company shall so elect in a notice delivered
to the Administrative Agent not earlier than the 15th day and not later than
the 10th day prior to the Termination Date then in effect, the Termination
Date shall be extended as to such Extending Banks for the additional period
and on the terms specified in the Company's notice provided for under
paragraph (a) and, if such terms vary from those contained in this Agreement,
the Company and the Extending Banks shall enter into an amendment to this
Agreement to be effective as of the Termination Date in effect prior to such
extension pursuant to which such terms shall be given effect as to the Company
and the Extending Banks and, to the extent consistent with Section 11.05, the
other Banks.
(c) If less than all the Banks consent to any extension request
pursuant to paragraph (a), the Administrative Agent shall promptly so notify
the Extending Banks, and each Extending Bank may, in its sole discretion, give
written notice to the Administrative Agent not later than 10 days prior to the
Termination Date in effect prior to giving effect to the extension provided
for in paragraph (b) (the "Existing Termination Date") of the amount of the
Non-Extending Banks' Commitments it is willing to assume. If such Extending
Banks are willing to assume Commitments in an aggregate amount that exceeds
the amount of the Commitments of the Non-Extending Banks, the Non-Extending
Banks' Commitments and outstanding Loans shall be allocated among Extending
Banks willing to assume such Commitments in such amounts as shall be agreed
between the Company and the Administrative Agent, and such Commitments and
outstanding Loans shall be assigned and assumed in accordance with the
provisions of Section 11.06(c). If after giving effect to the assignments
described above the full amount of the Commitments of the Non-Extending Banks
would not be assigned and assumed as set forth above prior to the Existing
Termination Date, the Company may (i) arrange for one or more Extending Banks
or other assignees eligible to become Banks hereunder (each, an "Extension
Assuming Bank"), to assume the unassigned amounts of the Commitments and
outstanding Loans of the Non-Extending Banks and become parties hereto with
all the rights and obligations of Banks hereunder, or (ii) subject to the
requirements of paragraph (b), reduce the aggregate amount of the Commitments
to an amount equal to the aggregate amount of Commitments held by all
Extending Banks and Extension Assuming Banks all as of the Existing
Termination Date.
On the Existing Termination Date:
(i) the Extending Banks and Extension Assuming Banks shall pay to
the Non-Extending Banks the principal amount of any outstanding Loans made by
such Non-Extending Banks and purchased in accordance with this paragraph (c),
together with any accrued interest thereon as of the Existing Termination
Date;
(ii) any accrued fees and other amounts payable hereunder to any Non-
Extending Bank as of the Existing Termination Date shall be paid to such Non-
Extending Bank by the Company or such Extending Banks and Extension Assuming
Banks; and
(iii) with respect to any such Extension Assuming Bank, the applicable
processing and recordation fee required under Section 11.06(c) shall be paid.
The commitment of any Extension Assuming Bank shall in no event be less than
$[10,000,000] unless the Commitment of a Non-Extending Bank as of the Existing
Termination Date is less than $[10,000,000], in which case such Extension
Assuming Bank may assume all of such lesser amount. Any such Non-Extending
Bank's rights under Sections 2.15, 2.17 and 8.03, and its obligations under
Section 7.06, shall survive such substitution as to matters occurring on or
prior to the Existing Termination Date.
At least three Business Days prior to the proposed effective date of
any extension of the Termination Date pursuant to this Section, (A) each
Extension Assuming Bank, if any, shall deliver to the Company and the
Administrative Agent an agreement in a form approved by the Administrative
Agent and the Company evidencing such Extension Assuming Bank's Commitment,
duly executed by such Extension Assuming Bank, such Non-Extending Bank a
Commitment of which is being assumed by such Extension Assuming Bank, the
Company and the Administrative Agent, and (B) each Extending Bank, if any,
shall have delivered written confirmation satisfactory to the Company and the
Administrative Agent as to any increase in the amount of its Commitment
resulting from its assumption of all or a portion of the Commitments of the
Non-Extending Banks. As of and following the effective date of any extension
made pursuant to this Section, each Extension Assuming Bank shall be a Bank
for all purposes of this Agreement.
(d) The decision to agree or withhold agreement to any requested
extension of the Termination Date hereunder shall be at the sole discretion of
each Bank. If the Termination Date shall have been extended as provided in
paragraph (b) above, the Commitment of any Non-Extending Bank shall terminate
on the Existing Termination Date.
(e) Notwithstanding the foregoing, no extension of the Termination
Date shall become effective under this Section unless (i) the conditions set
forth in paragraphs (c) and (d) of Section 3.02 shall be satisfied on the
Existing Termination Date and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Principal Officer
of the Borrower, and (ii) the Administrative Agent shall have received (with
sufficient copies for each of the Banks (other than any Non-Extending Banks))
documents consistent with those delivered under clauses (b), (c), (d) and (e)
of Section 3.01 as to the corporate power and authority of the Borrowers to
borrow hereunder after giving effect to such extension.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. The obligations of the Banks to
extend credit under this Agreement shall become effective on the date that
each of the following conditions shall have been satisfied (or waived in
accordance with Section 11.05):
(a) receipt by the Syndication Agent of counterparts hereof and
of each Loan Document signed by each of the parties hereto and thereto (or, in
the case of any party as to which an executed counterpart shall not have been
received, receipt by the Syndication Agent in form satisfactory to it of
telex, facsimile transmission or other written confirmation from such party of
execution of a counterpart hereof or thereof by such party);
(b) receipt by the Syndication Agent of an opinion of John T.
Ferguson II, Esq., General Counsel of the Company, substantially in the form
of Exhibit B hereto, and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request;
(c) receipt by the Syndication Agent of an opinion of Wachtell
Lipton Rosen & Katz, special counsel for the Company, substantially in the
form of Exhibit C hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request;
(d) receipt by the Syndication Agent of evidence satisfactory
to it that (i) all fees and expenses payable for the account of the Banks and
the Agents and their affiliates on or before the Effective Date have been paid
in full in the amounts previously agreed upon on or prior to the Effective
Date and (ii) the commitments under the Existing Credit Agreements have been
terminated and the principal of and interest on all loans and accrued fees
outstanding thereunder have been paid in full; and
(e) receipt by the Syndication Agent of all documents it may
reasonably request relating to the existence of the Loan Parties, the
corporate authority for and the validity of this Agreement, the other Loan
Documents and the Notes, and any other matters relevant hereto, all in form
and substance satisfactory to the Syndication Agent;
provided that the Banks shall have no obligation to extend credit hereunder
and their commitments under this Agreement shall become null and void unless
all of the foregoing conditions are satisfied not later than November 14,
1999. The Syndication Agent shall promptly notify the Company, the
Administrative Agent and the Banks of the Effective Date, and such notice
shall be conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligations of any Bank to make a
Loan on the occasion of any Borrowing (excluding a continuation or conversion
of any Borrowing which does not increase the principal amount of Loans
outstanding under such Borrowing) are subject to the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of a Notice of
Borrowing as required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the sum of
the aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrowers contained in this Agreement (except, unless the Borrowing is taking
place on the Effective Date, the representation and warranty set forth in
Section 4.04(b) as to any matter which has theretofore been disclosed in
writing by the Company to the Banks) shall be true and correct on and as of
the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing that the facts specified in
clauses (b), (c) and, to the extent applicable, (d) of this Section are true
and correct.
SECTION 3.03. First Borrowing by Each Eligible Subsidiary. The
obligation of each Bank to make a Loan on the occasion of the first Borrowing
by each Eligible Subsidiary, is subject to the satisfaction of the following
further conditions:
(a) receipt by the Administrative Agent of an opinion of
counsel for such Eligible Subsidiary acceptable to the Administrative Agent,
substantially in the form of Exhibit J hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required Banks
may reasonably request; and
(b) receipt by the Administrative Agent of all documents which
it may reasonably request relating to the existence of such Eligible
Subsidiary, the corporate authority for and the validity of the Election to
Participate of such Eligible Subsidiary, the Loan Documents and the Notes of
such Eligible Subsidiary, and any other matters relevant thereto, all in form
and substance satisfactory to the Administrative Agent.
The opinion referred to in clause (a) above shall be dated no more
than five Euro-Dollar Business Days before the date of the first Borrowing by
such Eligible Subsidiary hereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Loan Party of
each Loan Document to which such Loan Party is a party are within the
corporate powers of such Loan Party, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or Regulation or
of the certificate of incorporation or by-laws of any Loan Party or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon any Loan Party or result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement and each Loan
Document constitutes a valid and binding agreement of each Loan Party party
thereto and each Note, when executed and delivered in accordance with this
Agreement, will constitute a valid and binding obligation of the relevant
Borrower.
SECTION 4.04. Financial Information. (a) The unaudited pro forma
combined balance sheet of Crompton & Knowles Corporation and Witco Corporation
as of June 26, 1999 (for Crompton & Knowles Corporation) and as of June 30,
1999 (for Witco Corporation) and the related consolidated statement of
operations for the years ended December 26, 1998 (for Crompton & Knowles
Corporation) and December 31, 1998 (for Witco Corporation), a copy of which
has been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position
of Crompton & Knowles Corporation and Witco Corporation and their respective
consolidated subsidiaries as of such dates and their consolidated results of
operations for such periods.
(b) Since June 26, 1999, there has been no material adverse
change in the business, financial position or results of operations of the
Company and its Consolidated Subsidiaries, considered as a whole or, with
respect to any change occurring prior to September 1, 1999, of Witco
Corporation and its consolidated subsidiaries and Crompton & Knowles
Corporation and its consolidated subsidiaries, all taken as a whole.
(c) the Management Projections contained in the Confidential
Information Memorandum dated September, 1999, relating to the credit facility
hereunder, were prepared in good faith on the basis of assumptions believed to
reasonable at the time such assumptions were made.
SECTION 4.05. Litigation. Except as disclosed in the Company's S-
4, there is no action, suit or proceeding pending against, or to the knowledge
of the Company threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable likelihood of an adverse decision
which would materially adversely affect the business (taken as a whole),
consolidated financial position or consolidated results of operations of the
Company and its Consolidated Subsidiaries or which in any manner draws into
question the validity or enforceability of any Loan Document or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all respect with the presently applicable provisions of ERISA
and the Internal Revenue Code with respect to each Plan, except for such
noncompliance which would not have a material adverse effect on the business,
financial position or results of operations of the Company and its
Consolidated Subsidiaries, considered as a whole. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any
amendment to any Plan, which has resulted or could result in the imposition of
a Lien or the posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA, except
in the case of clause (iii) above for such liabilities which do not exceed
$5,000,000 in the aggregate during the term of this Agreement.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Company conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Company
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital
or operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures required
to achieve or maintain compliance with environmental protection standards
imposed by law or as a condition of any license, permit or contract, any
related constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or change in
the nature of operations conducted thereat and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Company has reasonably concluded
that, except as disclosed in the Company's S-4, Environmental Laws are
unlikely to have a material adverse effect on the business, financial position
or results of operations of the Company and its Consolidated Subsidiaries,
considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns of
Crompton & Knowles Corporation and Witco Corporation have been examined and
settled through December 31, 1997, for Crompton & Knowles Corporation, and
through December 31, 1995, for Witco Corporation. The Company and its
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have
paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any Subsidiary, except for items being diligently
contested in good faith and by appropriate proceedings. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Company,
adequate.
SECTION 4.09. Subsidiaries. Each of the Company's Material
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company or a Public Utility Holding
Company. The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Company to the Agents or any Bank in writing for purposes of
or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Company to the Agents
or any Bank in writing will be, taken as a whole, true and accurate in all
material respects on the date as of which such information is stated or
certified. The Company has disclosed to the Banks in writing any and all facts
which materially and adversely affect or may affect (to the extent the Company
can now reasonably foresee) the business, operations or financial condition of
the Company and its Consolidated Subsidiaries, taken as a whole, or the
ability of the Company or any other Loan Party to perform its obligations
under this Agreement or any other Loan Document.
SECTION 4.12. Year 2000. The Company and its Subsidiaries are
taking commercially reasonable steps to ascertain the extent of, and to
quantify and successfully address, business and financial risks facing the
Company and its Subsidiaries as a result of what is commonly referred to as
the "Year 2000 Problem" (i.e., the inability of certain computer applications
to recognize correctly and perform date-sensitive functions involving certain
dates prior to and after December 31, 1999), (b) the Company and its
Subsidiaries reasonably believe that any remedial actions required to permit
the proper functioning of any systems critical to the operations of the
Company and its Subsidiaries, taken as a whole, despite the Year 2000 Problem
have been or will be performed on or prior to December 31, 1999 and (c) the
Company and its Subsidiaries reasonably believe that the Year 2000 Problem
(including any preparations or remediations in response thereto) will not have
a material adverse effect on the business, financial position or results of
operations of the Company and its Consolidated Subsidiaries, taken as a whole.
ARTICLE 5
COVENANTS
The Company agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Company will deliver to the
Administrative Agent for distribution to each of the Banks:
(a) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, a consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of operations, cash flows and
shareholders' equity for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in
accordance with generally accepted accounting principles by KPMG LLP or other
independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Company, a consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of operations for such quarter and consolidated statements of
operations and condensed cash flows for the portion of the Company's fiscal
year ended at the end of such quarter, setting forth in the case of the
statement of operations in comparative form the figures for the corresponding
quarter, in the case of the statements of operations and cash flows the
figures for the corresponding portion of the Company's previous fiscal year
and in the case of the balance sheet the figures for the previous year end,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer, treasurer or the controller or other chief accounting
officer of the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer, treasurer or the controller or other chief accounting
officer of the Company (i) setting forth in reasonable detail the calculations
required to establish whether the Company was in compliance with the
requirements of Sections 5.07 to 5.08, inclusive, on the date of such
financial statements and (ii) stating whether any Default exists on the date
of such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Company is taking or proposes to take with
respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that any Default
existed on the date of such statements relating only to Sections 5.07,
5.08(a), 5.08(c), 5.08(f), 5.08(g)(i), 5.08(g)(ii) and 5.08(h) and
(ii) confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) within five Domestic Business Days after any Principal
Officer of the Company obtains knowledge of any Default, if such Default is
then continuing, a certificate of the chief financial officer or the
controller or other chief accounting officer of the Company setting forth the
details thereof and the action which the Company is taking or proposes to take
with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and proxy,
statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) which the Company shall have filed with the
Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed
with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement
which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security, a certificate of the chief financial officer or
the controller or other chief accounting officer of the Company setting forth
details as to such occurrence and action, if any, which the Company or
applicable member of the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as any
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity (or, in the case of tax liabilities, if later, before the same become
subject to penalties), all their respective obligations and liabilities
(including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings) if the failure to so pay
and discharge would have a material adverse effect on the business, financial
position or results of operations of the Company and its Consolidated
Subsidiaries considered as a whole, and will maintain, and will maintain for
each Material Subsidiary or cause each Material Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. The Company will
keep, and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted; will maintain, and will cause each Material Subsidiary to
maintain (either in the name of the Company or in such Material Subsidiary's
own name) with insurance companies which at the time such insurance is
purchased or renewed are financially sound and reputable, insurance on all
their property in at least such amounts (including self-insurance retentions)
and against at least such risks as are usually insured against (including
self-insurance retentions) in the same general area by companies of similar
size engaged in the same or a similar business; and will furnish to the Banks,
upon written request from the Administrative Agent, full information as to the
insurance carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
The Company and its Material Subsidiaries (on a consolidated basis) will
continue to engage in business of the same general types as now conducted by
the Company and its Material Subsidiaries, and will preserve, renew and keep
in full force and effect, and will cause each Material Subsidiary to preserve,
renew and keep in full force and effect their respective corporate existence
and their respective rights, privileges and franchises necessary or desirable
in the normal conduct of business; provided that nothing in this Section 5.04
shall prohibit (i) the merger of a Subsidiary into the Company or the merger
or consolidation of a Subsidiary with or into another Person if the
corporation surviving such consolidation or merger is a Wholly-Owned
Consolidated Subsidiary and if, in each case, after giving effect thereto, no
Default shall have occurred and be continuing, (ii) the termination of the
corporate existence, rights, privileges or franchises of any Subsidiary (other
than any Subsidiary which is a Borrower) if the Company in good faith
determines that such termination is in the best interest of the Company and is
not materially disadvantageous to the Banks or (iii) any disposition of assets
not prohibited by Section 5.09 hereof.
SECTION 5.05. Compliance with Laws. The Company will comply, and
cause each Subsidiary to comply, in all respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder and all applicable laws, ordinances, rules, regulations
and requirements of governmental authorities relating to the acquisition
referred to in Section 5.10) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or where
failure to comply would not materially adversely affect the business (taken as
a whole), consolidated financial position or consolidated results of
operations of the Company and its Consolidated Subsidiaries.
SECTION 5.06. Inspection of Property, Books and Records. The
Company will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities; and
will permit, and will cause each Material Subsidiary to permit,
representatives of any Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all upon such reasonable notice, at such reasonable times and as
often as may reasonably be desired.
SECTION 5.07. Financial Covenants. (a) The Company will not permit
the Leverage Ratio at any time to exceed 3.50 to 1.00.
(b) The Company will not permit the Interest Coverage Ratio at any
time to be less than 3.00 to 1.00.
SECTION 5.08. Negative Pledge. Neither the Company nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount not
exceeding $75,000,000 (exclusive of Liens permitted by clause (h) of this
Section);
(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring,
constructing or improving such asset, provided that such Lien attaches to such
asset concurrently with or within 180 days after the acquisition thereof or
completion of the construction or improvement thereto, as the case may be,
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the Company or a
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Company or a Subsidiary and not created in contemplation of
such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) Liens not otherwise permitted by the foregoing clauses of
this Section arising in the ordinary course of its business which (i) do not
secure Debt, (ii) do not secure obligations in an amount exceeding
$100,000,000 in the aggregate and (iii) do not materially impair the use of
the assets subject thereto in the operation of the business of the Company and
its Subsidiaries; or
(h) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt or interest rate and currency swaps in an aggregate
principal amount, notional principal and final exchange amount at any time
outstanding not to exceed $50,000,000.
SECTION 5.09. Consolidations, Mergers and Sales of Assets. The
Company and its Subsidiaries will not (i) consolidate or merge with or into
any other Person or (ii) sell, lease or otherwise transfer, directly or
indirectly, any of the assets of the Company and its Subsidiaries, to any
other Person; provided that (A) the Company or a Subsidiary may merge with
another Person if (x) the Company or, in the case of a merger not involving
the Company, a Subsidiary Guarantor is the corporation surviving such merger
and (y) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, (B) each of the Company and its Subsidiaries may
sell, lease or otherwise transfer any of its inventory in the ordinary course
of business and any of its assets which, in the judgment of its officers, are
obsolete, excess or unserviceable and (C) the Company and its Subsidiaries may
sell, lease or transfer any of their assets with a market value that does not,
in the aggregate together with all other sales, leases and transfers pursuant
to this clause (C), exceed 25% of the total assets of the Company and its
Subsidiaries as of the date hereof.
SECTION 5.10. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrowers for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.11. Additional Subsidiaries. The Company will ensure at
all times that Domestic Subsidiaries are (or become within 10 Domestic
Business Days of being formed or acquired) Subsidiary Guarantors so that (a)
the total assets of the Company and the Subsidiary Guarantors comprise at
least 85% by book value of the total assets of the Company and the Domestic
Subsidiaries and (b) the total revenues of the Company and the Subsidiary
Guarantors, as of the most recently ended fiscal quarter, comprise at least
85% of the total revenues of the Company and the Domestic Subsidiaries for
such fiscal quarter; provided, that only Domestic Subsidiaries shall be
required to become Subsidiary Guarantors.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) any Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within three Domestic Business Days of the due date
thereof any interest on any Loan, any fees or any other amount payable
hereunder;
(b) the Company or any other Borrower shall fail to observe or
perform any applicable covenant contained in Sections 5.07 to 5.10, inclusive;
(c) any Loan Party shall fail to observe or perform any covenant
or agreement contained in any Loan Document (other than those covered by
clause (a) or (b) above) for 30 days after written notice thereof has been
given to the Company by the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement
made by any Loan Party in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document shall
prove to have been incorrect in any material respect when made (or deemed
made);
(e) a "Default" occurs and is continuing under the Five-Year
Credit Agreement or the Company or any Subsidiary shall fail to make any
payment of principal, face amount, interest, premium, fees or any similar
obligation in respect of any Material Financial Obligations when due or within
any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Company, any other Borrower or any Material Subsidiary
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company, any other Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Company, any other Borrower or any Material Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate
a Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group
to incur a current payment obligation in excess of $25,000,000;
(j) a judgment or order, or judgments or orders, for the payment
of money in excess in the aggregate of $25,000,000 (in excess of available
insurance coverage) shall be rendered against the Company, any other Borrower
or any Material Subsidiary and such judgment or order, or judgments or orders,
shall continue unsatisfied and unstayed for a period of 30 days;
(k) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 35%
or more of the outstanding shares of common stock of the Company; or, during
any period of twelve consecutive calendar months commencing after September 1,
1999, individuals who were directors of the Company on the first day of such
period shall cease to constitute a majority of the board of directors of the
Company; or
(l) the guaranty by the Company in Article 10 shall for any
reason be revoked or invalidated, or otherwise cease to be in full force and
effect, or the Company (or any Person on behalf of the Company) shall deny or
disaffirm its obligations under such guaranty;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by
notice to the Company terminate the Commitments and they shall thereupon
terminate and (ii) if requested by Banks holding more than 50% of the
aggregate amount of the Loans, by notice to the Company declare the Loans
(together with accrued interest thereon) to be, and the Loans shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Borrower;
provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to any Borrower, automatically, without
any notice to any Borrower or any other act by the Agents or the Banks, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall
give notice to the Company under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes each Agent to take such action as its agent on its
behalf and to exercise such powers under the Loan Documents and the Notes as
are delegated to such Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of the Agents shall have
the same rights and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were not an Agent,
and each of the Agents and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Company or any
Subsidiary or affiliate of the Company as if it were not an Agent hereunder.
SECTION 7.03. Action by Agents. The obligations of the Agents
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, none of the Agents shall be required to take any
action with respect to any Default, except as expressly provided with respect
to the Administrative Agent in Article 6.
SECTION 7.04. Consultation with Experts. Each Agent may consult with
legal counsel (who may be counsel for any Borrower), independent public
accountants and other experts selected by it and shall not be liable to any
Bank for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. None of the Agents nor any of
their respective affiliates or any of their respective directors, officers,
agents or employees shall be liable to any Bank for any action taken or not
taken by it in connection herewith (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence or
willful misconduct. None of the Agents nor any of their respective affiliates
or any of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to such Agent; or (iv) the validity, effectiveness or genuineness of
any Loan Document, the Notes or any other instrument or writing furnished in
connection herewith. No Agent shall incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other writing (which may
be a bank wire, telex, facsimile transmission or similar writing) believed by
it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify each Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except in the
case of each indemnitee such as result from such indemnitee's gross negligence
or willful misconduct) that such indemnitees may suffer or incur in connection
with any Loan Document or any action taken or omitted by such indemnitees
hereunder or thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent
or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, which successor shall (unless an Event of Default shall have occurred
and be continuing) be reasonably acceptable to the Company. If no successor
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which successor shall (unless an Event of Default
shall have occurred and be continuing) be reasonably acceptable to the
Company, and which shall be a commercial bank organized or licensed under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance by a
successor Agent of its appointment as Agent hereunder, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent.
SECTION 7.09. Agents' Fees. The Company shall pay to each Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Company and such Agent.
SECTION 7.10. Co-Documentation Agents. Notwithstanding anything to
the contrary contained herein, none of the Banks identified on the facing page
or signature pages of this Agreement as "co-documentation agent" shall have
any right, power, obligation, liability, responsibility or duty under any Loan
Document other than those applicable to all Banks as such. Without limiting
the foregoing, none of such Banks shall have or be deemed to have any
fiduciary relationship with any other Bank in connection herewith. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any CD
Loan, Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more
of the amount of the Commitments advise the Administrative Agent that the
Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as the case
may be, to such Borrower as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their CD Loans
or Euro-Dollar Loans, as the case may be, for such Interest Period,
(c) the Administrative Agent shall forthwith give notice thereof to
the Company and the Banks, whereupon until the Administrative Agent notifies
the Company that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as
the case may be, shall be suspended. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of
any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing in the same aggregate amount as the requested Borrowing
and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the
Money Market LIBOR Loans comprising such Borrowing shall be made in the same
aggregate amount as the requested Borrowing and shall bear interest for each
day from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or
its Euro-Dollar Lending Office) with any request or directive promulgated on
or after the date hereof (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans to any Borrower and such Bank shall so notify
the Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Banks and the Company, whereupon until such Bank notifies
the Company and the Administrative Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-
Dollar Loans to such Borrower shall be suspended. Before giving any notice to
the Administrative Agent pursuant to this Section, each Bank will use
reasonable efforts to designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans to such Borrower to maturity and shall so
specify in such notice, such Borrower shall immediately prepay in full the
then outstanding principal amount of each such Euro-Dollar Loan, together with
accrued interest thereon. Concurrently with prepaying each such Euro-Dollar
Loan, such Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan, any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency made or promulgated after the date hereof
shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (A) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (B) with
respect to any Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or shall impose on any Bank (or its Applicable Lending
Office) or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its Fixed Rate Loans or
its Note or its obligation to make Fixed Rate Loans and the result of any of
the foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand
by such Bank (with a copy to the Administrative Agent), the Company shall pay
to such Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or Regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on capital of such
Bank (or the Parent of either) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Administrative Agent), the
Company shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation pursuant to this
Section and will use reasonable efforts to designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans to any
Borrower has been suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03(a) with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent,
have elected that the provisions of this Section shall apply to such Bank,
then, unless and until such Bank notifies the Company that the circumstances
giving rise to such suspension or demand for compensation no longer apply:
(a) all Loans to such Borrower which would otherwise be made by such
Bank as CD Loans or Euro-Dollar Loans, as the case may be, to such Borrower
shall be made instead as Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Fixed Rate Loans of the
other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, to such Borrower has been repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be applied to repay
its Base Rate Loans instead.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall be deemed by the execution and
delivery of its Election to Participate to have represented and warranted as
of the date thereof that:
SECTION 9.01. Corporate Existence and Power. It is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is a Wholly-Owned Consolidated Subsidiary.
SECTION 9.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by it of its Election to Participate
and its Notes, and the performance by it of the Loan Documents to which it is
a party and its Notes, are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or Regulation or of its certificate of incorporation or by-laws or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or such Eligible Subsidiary or result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries.
SECTION 9.03. Binding Effect. Each Loan Document to which such
Eligible Subsidiary is a party constitutes a valid and binding agreement of it
and its Notes, when executed and delivered in accordance with this Agreement,
will constitute valid and binding obligations of such Eligible Subsidiary.
SECTION 9.04. Taxes. Except as disclosed in such Election to
Participate, there is no income, stamp or other tax of any country, or any
taxing authority thereof or therein, imposed by or in the nature of
withholding or otherwise, which is imposed on any payment to be made by such
Eligible Subsidiary pursuant hereto or on its Notes, or is imposed on or by
virtue of the execution, delivery or enforcement of its Election to
Participate or of its Notes.
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty. The Company hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Loan made
to any Eligible Subsidiary pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by any Eligible Subsidiary under
this Agreement. Upon failure by any Eligible Subsidiary to pay punctually any
such amount, the Company shall forthwith on demand pay the amount not so paid
at the place and in the manner specified in this Agreement.
SECTION 10.02. Guaranty Unconditional. The obligations of the
Company hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or
otherwise affected
by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Eligible Subsidiary under this
Agreement, any other Loan Document or any Note, by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this
Agreement, any other Loan Document or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of any Eligible Subsidiary
under this Agreement, any other Loan Document or any Note;
(d) any change in the corporate existence, structure or ownership of
any Eligible Subsidiary, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Eligible Subsidiary or its assets or
any resulting release or discharge of any obligation of any Eligible
Subsidiary contained in this Agreement, any other Loan Document or any Note;
(e) the existence of any claim, set-off or other rights which the
Company may have at any time against any Eligible Subsidiary, any Agent, any
Bank or any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
Eligible Subsidiary for any reason of this Agreement, any other Loan Document
or any Note, or any provision of applicable law or Regulation purporting to
prohibit the payment by any Eligible Subsidiary of the principal of or
interest on any Note or any other amount payable by it under any Loan
Document; or
(g) any other act or omission to act or delay of any kind by any
Eligible Subsidiary, any Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the Company's obligations
hereunder.
SECTION 10.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. The Company's obligations hereunder shall remain in
full force and effect until the Commitments shall have terminated and the
principal of and interest on the Notes and all other amounts payable by the
Loan Parties under the Loan Documents shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other
amount payable by any Eligible Subsidiary under this Agreement or any other
Loan Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of any Eligible Subsidiary or
otherwise, the Company's obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had been due but not
made at such time.
SECTION 10.04. Waiver by the Company. The Company irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by
any Person against any Eligible Subsidiary or any other Person.
SECTION 10.05. Subrogation. Upon making any payment with respect to
any Eligible Subsidiary hereunder, the Company shall be subrogated to the
rights of the payee against such Eligible Subsidiary with respect to such
payment; provided that the Company shall not enforce any payment by way of
subrogation until all amounts of principal of and interest on the Loans and
all other amounts payable under this Agreement have been paid in full.
SECTION 10.06. Stay of Acceleration. In the event that acceleration
of the time for payment of any amount payable by any Eligible Subsidiary under
this Agreement or its Notes is stayed upon insolvency, bankruptcy or
reorganization of such Eligible Subsidiary, all such amounts otherwise subject
to acceleration under the terms of this Agreement shall nonetheless be payable
by the Company hereunder forthwith on demand by the Administrative Agent made
at the request of the Required Banks.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given to
such party: (a) in the case of any Borrower, at its address, facsimile number
or telex number set forth on the signature pages hereof (or, in the case of an
Eligible Subsidiary, its Election to Participate), (b) in the case of the
Administrative Agent, at its address, facsimile number or telex number in New
York City set forth on the signature pages hereof, (c) in the case of any
Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (d) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agents and the Company. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and
the appropriate answer back is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other means,
when delivered at the address specified in this Section; provided that notices
under Article 2 or Article 8 shall not be effective until received.
SECTION 11.02. No Waivers. No failure or delay by either Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.03. Expenses; Indemnification. (a) The Company shall pay
(i) all out-of-pocket expenses of the Agents, including reasonable fees and
disbursements of special counsel for the Agents, in connection with the
preparation and administration of the Loan Documents, any waiver or consent
hereunder or thereunder or any amendment hereof or thereof or any Default or
alleged Default hereunder or thereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by any of the Agents and each
Bank, including fees and disbursements of counsel (which counsel may be an
employee of such Bank or Agent), in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Company agrees to indemnify each Agent and Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each, an "indemnitee") and hold each indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel (which counsel may be an employee of such
indemnitee), which may be incurred by such indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of any Loan Document or any actual or proposed use of
proceeds of Loans hereunder; provided that no indemnitee shall have the right
to be indemnified hereunder for its own gross negligence or willful misconduct
or breach of its obligations under any Loan Document as determined by a court
of competent jurisdiction.
SECTION 11.04. Sharing of Set-offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to the Loans owed to it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Loans owed to such other Bank,
the Bank receiving such proportionately greater payment shall purchase
participations in such Loans held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment of
indebtedness of a Borrower other than its indebtedness hereunder. Each
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Loan, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-
off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of such
Borrower in the amount of such participation.
SECTION 11.05. Amendments and Waivers. Any provision of this
Agreement, the other Loan Documents or the Notes may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Company and the Required Banks (and, if the rights or duties of any Agent are
affected thereby, by such Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder or for any scheduled reduction or termination of any Commitment, or
(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks which shall be required
for the Banks or any of them to take any action under this Section or any
other provision of this Agreement, (v) modify any provision of Article 10 in
any material respect or (vi) release all or any substantial portion of the
Subsidiary Guarantors from their Guarantees under the Subsidiary Guarantee
Agreement, except as provided therein; provided further that no such
amendment, waiver or modification shall, unless signed by an Eligible
Subsidiary, (w) subject such Eligible Subsidiary to any additional obligation,
(x) increase the principal of or rate of interest on any outstanding Loan of
such Eligible Subsidiary, (y) change the stated maturity of any outstanding
Loan of such Eligible Subsidiary or (z) change this proviso.
SECTION 11.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Borrower may
assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Banks
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Agents, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrowers and the Agents
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification, amendment or waiver
of this Agreement described in clause (i), (ii) or (iii) of Section 11. 05
without the consent of the Participant. The Borrowers agree that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article 8 with respect to its participating
interest. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto executed by
such Assignee and such transferor Bank, with (and subject to) the consent of
the Company and the Administrative Agent, such consents not to be unreasonably
withheld; provided that if an Assignee is an affiliate of a Bank or was a Bank
immediately prior to such assignment, no such consent shall be required, and
if an Event of Default has occurred and is continuing, the consent of the
Company shall not be required; and provided further that any assignment shall
not be less than $10,000,000, or if less, shall constitute an assignment of
all of such Bank's rights and obligations under this Agreement and the Notes.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrowers shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall, prior
to the first date on which interest or fees are payable hereunder for its
account, deliver to the Company and the Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 2.17.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Company's prior written
consent or by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) Notwithstanding anything to the contrary contained herein, any
Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC") of such Granting Bank, identified as such in writing from time to time
by the Granting Bank to the Administrative Agent and the Company, the option
to provide to the Borrower all or any part of any Loan that such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to Section 2.01;
provided that (i) nothing herein shall constitute a commitment to make any
Loan by any SPC and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Bank
shall be obligated to make such Loan pursuant to the terms hereof. The making
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Bank to the same extent, and as if, such Loan were made by the Granting Bank.
Each party hereto hereby agrees that no SPC shall be liable for any payment
under this Agreement for which a Bank would otherwise be liable, for so long
as, and to the extent, the related Granting Bank makes such payment. In
furtherance of the foregoing, each party hereto hereby agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or similar
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
11.06 any SPC may (i) with notice to, but without the prior written consent
of, the Company or the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interest in any Loans to its
Granting Bank or to any financial institutions providing liquidity and/or
credit facilities to or for the account of such SPC to fund the Loans made by
such SPC or to support the securities (if any) issued by such SPC to fund such
Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit or liquidity enhancement to such
SPC. This section may not be amended with respect to any SPC without the
written consent of such SPC's Granting Bank. Notwithstanding any grant of
rights to an SPC pursuant to this paragraph, the Granting Bank shall retain
the sole right to approve any amendment, modification or waiver of any
provision of this Agreement or the other Loan Documents; provided that the
Granting Bank may enter into and perform any agreement with the SPC as to the
manner in which it will exercise such right.
SECTION 11.07. Collateral. Each of the Banks represents to the
Agents and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
SECTION 11.08. Governing Law; Submission to Jurisdiction. (a) This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York.
(b) Each Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby. Each Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
(c) Each Borrower irrevocably designates and appoints CT Corporation
System, having an office on the date hereof at 1633 Broadway, New York, New
York 10102 as such Borrower's authorized agent, to accept and acknowledge on
its behalf service of any and all process which may be served in any suit,
action or proceeding referred to in subsection (b) above in any federal or New
York State court sitting in New York City. Each Borrower represents and
warrants that such agent has agreed to accept such appointment. Said
designation and appointment shall not be revocable by any Borrower until all
principal, interest and other amounts payable hereunder shall have been paid
in full in accordance with the provisions hereof or, if earlier, when such
Borrower's status as a Borrower hereunder is terminated. If such agent shall
cease to act as agent for any Borrower, such Borrower agrees to designate
irrevocably and appoint without delay another such agent satisfactory to the
Agent.
(d) Each Borrower consents to process being served in any suit,
action or proceeding referred to in subsection (b) above in any federal or New
York State court sitting in New York City by service of process upon its agent
appointed as provided in subsection (c) above; provided that, to the extent
lawful and possible, notice of said service upon such agent shall be mailed by
registered or certified air mail, postage prepaid, return receipt requested,
to such Borrower at its address specified in or pursuant to Section 11.01.
Each Borrower irrevocably waives, to the fullest extent permitted by law, all
claim of error by reason of service in such manner and agrees that such
service shall be deemed in every respect effective service of process upon
such Borrower in any such suit, action or proceeding and shall, to the fullest
extent permitted by law, constitute valid and personal service upon and
personal delivery to such Borrower.
(e) Nothing in this Section shall affect the right of the
Administrative Agent or any Bank to serve process in any other manner
permitted by law or limit the right of the Administrative Agent or any Bank to
bring proceedings against any Borrower in the courts of any jurisdiction or
jurisdictions.
SECTION 11.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement and the other Loan Documents constitute the entire
agreement and understanding among the parties hereto and supersedes any and
all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
SECTION 11.10. Waiver of Jury Trial. EACH OF THE COMPANY, THE
BORROWERS, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.11. Confidentiality. Each Bank agrees to exercise all
reasonable efforts to keep any information delivered or made available by a
Borrower to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent any Bank from disclosing such information (i) to any other Bank,
(ii) to its affiliates and its and their officers, directors, employees,
agents, attorneys and accountants who have a need to know such information in
accordance with customary banking practices and who receive such information
having been made aware of the restrictions set forth in this Section,
(iii) upon the order of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority having jurisdiction
over such Bank, (v) which has been publicly disclosed, (vi) to the extent
reasonably required in connection with any litigation to which any Agent, any
Bank, or their respective affiliates may be a party, (vii) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(viii) to such Bank's legal counsel and independent auditors, and (ix) to any
actual or proposed participant or assignee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
CK WITCO CORPORATION
By /s/John R. Jepsen
Name: John R. Jepsen
Title: Vice President & Treasurer
Attention:
Facsimile number:
CITIBANK, N.A., individually and as
Administrative Agent,
By/s/Carolyn Sheridan
Name:Carolyn Sheridan
Title: Vice President Citibank, N.A.
Attention:
Facsimile number:
<PAGE>
PRICING SCHEDULE
Each of "Facility Fee Rate", "Euro-Dollar Margin", "Base Rate
Margin" and "CD Margin" means, for any day, the rate set forth below in the
row opposite such term and in the column corresponding to the Pricing Level
that applies on such day as determined based on the ratings by Moody's and
S&P:
Level I Level II Level III Level IV Level V
Pricing Level A-/A3 BBB+/Baa1 BBB/Baa2 BBB-/Baa3 <BBB-/Baa3
Facility Fee Rate .090% .110% .125% .150% .200%
Euro-Dollar Margin .335% .390% .500% .725% 1.050%
CD Margin 1.585% 1.640% 1.750% 1.975% 2.300%
Utilization Fee 0.125% 0.125% 0.125% 0.250% 0.250%
Base Rate Margin 0.000% 0.000% 0.000% 0.000% 0.050%
For purposes of this Schedule, the following terms have the
following meanings:
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Company
without third-party credit enhancement, and any rating assigned to any other
debt security of the Company shall be disregarded. The ratings in effect for
any day are those in effect at the close of business on such day. In the case
of split ratings from S&P and Moody's, the rating to be used to determine the
applicable Pricing Level is the higher of the two ratings (e.g., A-/Baa1
results in Level I Pricing) or, if the ratings differ by more than one Level
indicated above, the rating one above the lower of the two ratings; provided
that if one of such ratings is below Level III, the Pricing Level will be
based on the lower of such ratings.
EXHIBIT A
NOTE
New York, New York
, 19
For value received, [name of relevant Borrower], a [relevant
Borrower's jurisdiction of incorporation] corporation (the "Borrower"),
promises to pay to the order of [name of Bank] (the "Bank"), for the account
of its Applicable Lending Office, the unpaid principal amount of each Loan
made by the Bank to the Borrower pursuant to the Credit Agreement referred to
below on the last day of the Interest Period relating to such Loan or as
otherwise provided in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Citibank, N.A.,
399 Park Avenue, New York, NY 10043.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof, provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the 364-Day Credit
Agreement dated as of October 28, 1999 among CK Witco Corporation, the
Eligible Subsidiaries referred to therein, the banks listed on the signature
pages thereof, Citibank, N.A., as Administrative Agent, The Chase Manhattan
Bank, as Syndication Agent, and Bank of America, N.A. and Deutsche Bank
Securities Inc., as Co-Documentation Agents (as the same may be amended from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the prepayment hereof and the acceleration of the
maturity hereof.
[The payment in full of the principal and interest on this note has,
pursuant to the provisions of the Credit Agreement, been unconditionally
guaranteed by CK Witco Corporation.]
[NAME OF RELEVANT BORROWER]
By
Name:
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount of Type of Amount of Maturity Notation
Loan Loan Principal Date Made By
Repaid
EXHIBIT B
OPINION OF JOHN T. FERGUSON, II, ESQ.,
GENERAL COUNSEL OF THE COMPANY
October 28, 1999
To the Banks and the Agents
Referred to Below
c/o Bank of America, N.A. and
Deutsche Bank Securities Inc.,
as Co-Documentation Agents
[ ]
Dear Sirs:
I am General Counsel of CK Witco Corporation (the "Company"). This
opinion is being rendered to you pursuant to Section 3.01(b) of the 364-Day
Credit Agreement dated as of October 28, 1999 (the "Credit Agreement") among
the Company, the Eligible Subsidiaries referred to therein, the Banks listed
on the signature pages thereof, The Chase Manhattan Bank, as Syndication
Agent, Citibank, N.A., as Administrative Agent, and Bank of America, N.A. and
Deutsche Bank Securities Inc., as Co-Documentation Agents. Terms defined in
the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and officers of the Company and its
Subsidiaries and other instruments and have conducted such other
investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion. I have assumed, with your permission, that the
signatures (other than those of officers of the Company and its
Subsidiaries) on all the documents that I have examined are genuine.
Upon the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and has
all corporate powers required to carry on its business as now conducted. Each
of the Company's Subsidiaries which is a "significant subsidiary" within the
meaning of Regulation S-X of the Securities and Exchange Commission is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers required to carry
on its business as now conducted.
2. The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action, and
require no action by or in respect of, or filing with, any governmental agency
or official.
3. The execution, delivery and performance by the Company of the
Credit Agreement and by the other Loan Parties of the Loan Documents to which
they are parties will not contravene, or constitute a default under, any
provision of applicable law or Regulation or of the articles of incorporation
or bylaws of any Loan Party or any agreement or instrument evidencing Debt of
any Loan Party or, to the best of my knowledge, any other agreement, judgment,
injunction, order, decree or other instrument binding upon any Loan Party or,
to the best of my knowledge, result in the creation or imposition of any Lien
on any asset of the Company or any of its Subsidiaries.
4. The Credit Agreement constitutes a valid and binding agreement of
the Company and the other Loan Documents constitute valid and binding
agreements of the Loan Parties that are party thereto.
5. Except as disclosed in the Company's S-4 as filed with the
Securities and Exchange Commission on July 28, 1999, there is no action, suit
or proceeding pending against, or to the best of my knowledge threatened
against or affecting, the Company or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official, in which there is
a reasonable possibility of an adverse decision which could materially
adversely affect the business or consolidated financial position of the
Company and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity of the Credit Agreement, any other
Loan Document or the Notes. For the purposes hereof, I have not regarded an
action, suit or proceeding to be "threatened" against the Company or any of
its Subsidiaries unless the potential litigant has manifested to the
management of the Company in writing an intention to institute the same.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without my prior written consent.
Very truly yours,
EXHIBIT C
OPINION OF
WACHTELL LIPTON ROSEN & KATZ,
SPECIAL COUNSEL FOR THE COMPANY
October 28, 1999
To the Banks and the Agents
Referred to Below
c/o Bank of America, N.A. and Deutsche Bank
Securities Inc., as Co-Documentation Agents
[ ]
[ ]
Dear Sirs:
We have acted as special counsel to CK Witco Corporation, a Delaware
corporation (the "Company"), in connection with the 364-Day Credit Agreement
(the "Credit Agreement") dated as of October 28, 1999 among the Company, the
Eligible Subsidiaries referred to therein, the banks listed on the signature
pages thereof (the "Banks"), The Chase Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Administrative Agent and Bank of America, N.A. and Deutsche
Bank Securities Inc., as Co-Documentation Agents (the "Agents"). This opinion
is being delivered pursuant to Section 3.01(c) of the Credit Agreement. Terms
defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Company of the
Credit Agreement and its Notes [and by each Loan Party that is organized under
the laws of Delaware or New York of the Loan Documents to which such Loan
party is a party] are within the corporate powers of the Company and such Loan
Parties, respectively, and have been duly authorized by a necessary corporate
action.
2. The Loan Documents constitute valid and binding agreements of the
Company and the Loan Parties party thereto, in each case enforceable against
the Company and such Loan Parties in accordance with their respective terms,
except to the extent the same may be limited by applicable bankruptcy,
moratorium, insolvency, reorganization or similar laws of general application
and by general principles of equity (whether considered in a proceeding at law
or in equity).
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving the foregoing opinion, we
express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _______, 19_ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [CK WITCO CORPORATION (the
"Company"), CITIBANK, N.A., as Administrative Agent and BANK OF AMERICA, N.A.
and DEUTSCHE BANK SECURITIES INC. as Co-Documentation Agents (collectively the
"Agents")].
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the 364-Day Credit Agreement dated as of October 28, 1999 among the
Company, the Eligible Subsidiaries referred to therein, the Assignor and the
other Banks party thereto, as Banks, and the Agents (as the same may be
amended or modified from time to time, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans in an aggregate amount at any time outstanding not to
exceed $_________________;
WHEREAS, Committed Loans made by the Assignor under the Credit
Agreement in the aggregate amount of $_____ are outstanding at the
date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $_________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, (the Company and
the Agents) and the payment of the amounts specified in Section 3 required to
be paid on the date hereof (i) the Assignee shall, as of the date hereof,
succeed to the rights and be obligated to perform the obligations of a Bank
under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof, in Dollars (in Federal Funds), the amount heretofore agreed
between them.1 It is understood that facility fees accrued to the date hereof
are for the account of the Assignor and such fees accruing from and including
the date hereof are for the account of the Assignee. Each of the Assignor and
the Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
[SECTION 4. Consent of the Company and the Agents. This Agreement is
conditioned upon the consent of the Company and the Agents pursuant to
Section 11.06(c) of the Credit Agreement. The execution of this Agreement by
the Company and the Agents is evidence of this consent. Pursuant to
Section 11.06(c) the Borrower agrees, if requested by the Assignee, to execute
and deliver a Note payable to the order of the Assignee to evidence the
assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of any Borrower, or the validity and enforceability of the
obligations of any Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrowers.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By
Name:
Title:
[ASSIGNEE]
By
Name:
Title:
[CK WITCO CORPORATION
By
Name:
Title: ]
CITIBANK, N.A., as Administrative
Agent
By
Name:
Title:
[BANK OF AMERICA, N.A., as Co-
Documentation Agent,
By
Name:
Title: ]
[DEUTSCHE BANK SECURITIES INC., as
Co-Documentation Agent,
By
Name:
Title: ]
1 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any up
front fee to be paid by the Assignor to the Assignee.
EXHIBIT E
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Citibank, N.A. (the "Administrative Agent")
From: [Name of Relevant Borrower]
Re: 364-Day Credit Agreement (the "Credit Agreement") dated as of
October 28, 1999 among CK Witco Corporation, the Eligible
Subsidiaries referred to therein, and the Banks and Agents listed
on the signature pages thereof
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
Principal Amount 1 Interest Period 2
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
[Name of Relevant Borrower]
By
Name:
Title:
1 Amount must be equal to $5,000,000 or a larger multiple of $1,000,000.
2 Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
EXHIBIT F
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of Borrower] (the
"Borrower")
Pursuant to Section 2.03 of the 364-Day Credit Agreement dated as of
October 28, 1999 among CK Witco Corporation, the Eligible Subsidiaries
referred to therein, the Banks and Agents (including the undersigned) parties
thereto, we are pleased on behalf of the Borrower to invite you to submit
Money Market Quotes to the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] (New York City/London time) on [date].
CITIBANK, N.A., as Administrative Agent
By
Authorized Officer
EXHIBIT G
FORM OF 364-DAY MONEY MARKET QUOTE
To: Citibank, N.A., as Administrative Agent
Re: Money Market Quote to [Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the Borrower dated
______________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing:
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
Principal Interest Money Market
Amount** Period*** [Margin****][Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans for which
the above offers may be accepted shall not exceed $__________________.]**
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the 364-Day Credit
Agreement dated as of October 28, 1999, among CK Witco Corporation, the
Eligible Subsidiaries referred to therein, and the Banks and Agents listed on
the signature pages thereof, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
Dated: ____________________ [NAME OF BANK]
By:
Authorized Officer
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
an amount equal to $5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of
1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
<PAGE>
EXHIBIT H
FORM OF ELECTION TO PARTICIPATE
__________________, 19__
CITIBANK, N.A., as Administrative Agent for the Banks named in the 364-Day
Credit Agreement dated as of October 28, 1999 among CK Witco Corporation, the
Eligible Subsidiaries referred to therein, such Banks, such Administrative
Agent and Bank of America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents (the "Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to be an Eligible Subsidiary for
purposes of the Credit Agreement, effective from the date hereof until an
Election to Terminate shall have been delivered on behalf of the undersigned
in accordance with the Credit Agreement. The undersigned confirms that the
representations and warranties set forth in Article 9 of the Credit Agreement
are true and correct as to the undersigned as of the date hereof, and the
undersigned hereby agrees to perform all the obligations of an Eligible
Subsidiary under, and to be bound in all respects by the terms of, the Credit
Agreement as if the undersigned were a signatory party thereto.
The address to which all notices to the undersigned under the Credit
Agreement should be directed is:
This instrument shall be construed in accordance with and governed
by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By
Title:
The undersigned hereby confirms that [name of Eligible Subsidiary] is an
Eligible Subsidiary for purposes of the Credit Agreement described above.
CK Witco Corporation
By
Name:
Title:
Receipt of the above Election to Participate is hereby acknowledged
on and as of the date set forth above.
CITIBANK, N.A., as Administrative Agent
By
Name:
Title:
EXHIBIT I
FORM OF ELECTION TO TERMINATE
__________________, 19__
CITIBANK, N.A., as Administrative Agent for the Banks named in the 364-Day
Credit Agreement dated as of October 28, 1999 among CK Witco Corporation, the
Eligible Subsidiaries referred to therein, such Banks, such Administrative
Agent, The Chase Manhattan Bank, as Syndication Agent, and Bank of America,
N.A. and Deutsche Bank Securities Inc., as Co-Documentation Agents (the
"Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to terminate its status as an
Eligible Subsidiary for purposes of the Credit Agreement, effective as of the
date hereof. The undersigned hereby represents and warrants that all principal
and interest on all Notes of the undersigned and all other amounts payable by
the undersigned pursuant to the Credit Agreement have been paid in full on or
prior to the date hereof. Notwithstanding the foregoing, this Election to
Terminate shall not affect any obligation of the undersigned under the Credit
Agreement or under any Note heretofore incurred.
This instrument shall be construed in accordance with and governed
by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By
Title:
The undersigned hereby confirms that the status of [name of Eligible
Subsidiary] as an Eligible Subsidiary for purposes of the Credit Agreement
described above is terminated as of the date hereof
CK WITCO CORPORATION
By
Name:
Title:
Receipt of the above Election to Terminate is hereby acknowledged on and as
of the date set forth above.
CITIBANK, N.A., as Administrative
Agent
By
Name:
Title:
EXHIBIT J
OPINION OF
COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided
in Section 3.03 of
the Credit Agreement]
To the Banks and the Agents Referred to Below
c/o Citibank, N.A., as Administrative Agent
[ ]
[ ]
Dear Sirs:
I am counsel to [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation (the "Borrower") and give this opinion pursuant to
Section 3.03(a) of the 364-Day Credit Agreement (the "Credit Agreement") dated
as of October 28, 1999 among CK Witco Corporation (the "Company"), the
Eligible Subsidiaries referred to therein, the Banks listed on the signature
pages thereof, Citibank, N.A., as Administrative Agent, and Bank of America,
N.A. and Deutsche Bank Securities Inc., as Co-Documentation Agents. Terms
defined in the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations
of fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of [jurisdiction of incorporation], and is
a Wholly-Owned Consolidated Subsidiary.
2. The execution and delivery by the Borrower of its Election to
Participate and its Notes and the performance by the Borrower of the Credit
Agreement and its Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the
Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or the Company or any of its Subsidiaries
or result in the creation or imposition of any Lien on any asset of the
Company or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and its Notes constitute valid and binding obligations of the
Borrower.
4. Except as disclosed in the Borrower's Election to Participate,
there is no income, stamp or other tax of [jurisdiction of incorporation and,
if different, principal place of business], or any taxing authority thereof or
therein, imposed by or in the nature of withholding or otherwise, which is
imposed on any payment to be made by the Borrower pursuant to the Credit
Agreement or its Notes, or is imposed on or by virtue of the execution,
delivery or enforcement of its Election to Participate or of its Notes.
Very truly yours,
EXHIBIT K
364-DAY SUBSIDIARY GUARANTEE AGREEMENT (together with instruments executed and
delivered pursuant to Section 19, this "Agreement") dated as of October 28,
1999, among each of the subsidiaries of CK Witco Corporation (the "Company")
listed on Schedule I hereto (the "Subsidiary Guarantors"), and CITIBANK, N.A.,
a national banking association ("Citibank"), as administrative agent (in such
capacity, the "Administrative Agent") for the Banks (as defined in the Credit
Agreement referred to below).
Reference is made to the 364-Day Credit Agreement dated as of
October 28, 1999, (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Company, the Banks (as defined in
Article I thereof) and the Administrative Agent for the Banks. Capitalized
terms used and not defined herein are used with the meanings assigned to such
terms in the Credit Agreement.
The Banks have agreed to make Loans to the Company and the Eligible
Subsidiaries pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of the Subsidiary Guarantors is a
Subsidiary of the Company and acknowledges that it will derive substantial
benefit from the making of the Loans by the Banks to the Borrowers. The
obligations of the Banks to make Loans are conditioned on, among other things,
the execution and delivery by the Subsidiary Guarantors of a Subsidiary
Guarantee Agreement in the form hereof. As consideration therefor and in
order to induce the Banks to make Loans, the Subsidiary Guarantors are willing
to execute this Agreement for the benefit of the Administrative Agent, the
Banks and each counterparty to a Derivatives Obligation with the Borrowers
which was an Affiliate of a Bank at the time such Derivatives Obligation was
entered into (collectively, the "Lending Parties") .
Accordingly, the parties hereto agree as follows:
SECTION 1. Subsidiary Guarantee. Each Subsidiary Guarantor
unconditionally guarantees, jointly with the other Subsidiary Guarantors and
severally, as a primary obligor and not merely as a surety, the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise and (ii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrowers to the Lending Parties under this Agreement, the Credit
Agreement and the other Loan Documents, (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrowers
under or pursuant to this Agreement, the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all the
covenants, agreements, obligations and liabilities of each Loan Party under or
pursuant to this Agreement and the other Loan Documents, and (d) unless
otherwise agreed upon in writing by the applicable Bank party thereto, the due
and punctual payment and performance of all obligations of the Borrowers,
monetary or otherwise, under each Derivatives Obligation entered into with
any counterparty that was a Bank (or an Affiliate of a Bank) at the time such
Derivatives Obligation was entered into (all the monetary and other
obligations referred to in the preceding lettered clauses of this paragraph
being referred to collectively as the "Obligations"). Each Subsidiary
Guarantor waives notice of and hereby consents to any agreements or
arrangements whatsoever by the Lending Parties with any other person
pertaining to the Obligations, including agreements and arrangements for
payment, extension, renewal, subordination, composition, arrangement,
discharge or release of the whole or any part of the Obligations, or for the
discharge or surrender of any or all security, or for the compromise, whether
by way of acceptance of part payment or otherwise, and the same shall in no
way impair such Subsidiary Guarantor's liability hereunder.
SECTION 2. Obligations Not Waived. To the fullest extent permitted
by applicable law, each Subsidiary Guarantor waives presentment to, demand of
payment from and protest to the Borrowers or any other person of any of the
Obligations, and also waives notice of acceptance of its guarantee, notice of
protest for nonpayment, and all other formalities. To the fullest extent
permitted by applicable law, the obligations of each Subsidiary Guarantor
hereunder shall not be affected by (a) the failure of any Loan Party to assert
any claim or demand or to enforce or exercise any right or remedy against the
Company, the Borrowers or any other Subsidiary Guarantor under the provisions
of the Credit Agreement, any other Loan Document or otherwise, (b) any
extension, renewal or increase of or in any of the Obligations, (c) any
rescission, waiver, amendment or modification of, or any release from, any of
the terms or provisions of this Agreement, the Credit Agreement, any other
Loan Document, any guarantee or any other agreement or instrument, including
with respect to any other Subsidiary Guarantor under this Agreement, (d) the
release of (or the failure to perfect a security interest in) any of the
security held by or on behalf of the Administrative Agent or any other Lending
Party or (e) the failure or delay of any Lending Party to exercise any right
or remedy against any other guarantor of the Obligations.
SECTION 3. Security. Each of the Subsidiary Guarantors authorizes
the Administrative Agent to, subject to the terms of any security agreement
that may hereafter be entered into by the Administrative Agent and any
Subsidiary Guarantor or Borrower, (a) take and hold security for the payment
of this Subsidiary Guarantee and the Obligations and exchange, enforce, waive
and release any such security, (b) apply such security and direct the order or
manner of sale thereof as it in its sole discretion may determine subject to
the terms of any other Loan Documents and (c) release or substitute any one or
more endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Subsidiary Guarantor further
agrees that its guarantee constitutes a guarantee of payment when due and not
of collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Lending Party to any of the security held
for payment of the Obligations or to any balance of any deposit account or
credit on the books of the Administrative Agent or any other Lending Party
in favor of the Borrowers or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense (other than a defense of
payment) or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations
of each Subsidiary Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any other
Lending Party to assert any claim or demand or to enforce any remedy under the
Credit Agreement, any other Loan Document, any guarantee or any other
agreement or instrument, by any amendment, waiver or modification of any
provision of the Credit Agreement or any other Loan Document or other
agreement or instrument, by any default, failure or delay, wilful or
otherwise, in the performance of the Obligations, or by any other act,
omission or delay to do any other act that may or might in any manner or to
any extent vary the risk of such Subsidiary Guarantor or that would otherwise
operate as a discharge of such Subsidiary Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations) or which would impair or eliminate any right of such Subsidiary
Guarantor to subrogation.
SECTION 6. Defenses Waived. To the fullest extent permitted by
applicable law, each of the Subsidiary Guarantors waives any defense based on
or arising out of the unenforceability of the Obligations or any part thereof
from any cause or the cessation from any cause of the liability (other than
the final and indefeasible payment in full in cash of the Obligations) of the
Borrowers or any other person. The Administrative Agent and the other
Lending Parties may, at their election, foreclose on any security held by one
or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust
any part of the Obligations, make any other accommodation with the Borrowers
or any other guarantor or exercise any other right or remedy available to them
against the Borrowers or any other guarantor, without affecting or impairing
in any way the liability of any Subsidiary Guarantor hereunder except to the
extent the Obligations have been fully, finally and indefeasibly paid in cash.
Pursuant to applicable law, each of the Subsidiary Guarantors waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Subsidiary
Guarantor against the Borrowers or any other guarantor or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the
foregoing and not in limitation of any other right that the Administrative
Agent or any other Lending Party has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Borrowers or
any other Loan Party to pay any Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, each Subsidiary Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Administrative Agent or such other Lending
Party as designated thereby in cash an amount equal to the unpaid principal
amount of such Obligations then due, together with accrued and unpaid interest
and fees on such Obligations. Upon payment by any Subsidiary Guarantor of any
sums to the Administrative Agent or any Lending Party as provided above, all
rights of such Subsidiary Guarantor against the Borrowers arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity
or otherwise shall in all respects be subordinate and junior in right of
payment to the prior indefeasible payment in full in cash of all the
Obligations. In addition, any indebtedness of the Borrowers or any Subsidiary
now or hereafter held by any Subsidiary Guarantor is hereby subordinated in
right of payment to the prior payment in full of the Obligations. If at any
time when any Obligation then due and owing has not been paid, any amount
shall be paid to any Subsidiary Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness, such amount shall be held in trust for the benefit of the
Lending Parties and shall forthwith be paid to the Administrative Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. Each of the Subsidiary Guarantors assumes
all responsibility for being and keeping itself informed of the Borrowers'
financial condition and assets, all other circumstances bearing upon the risk
of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Subsidiary Guarantor assumes and incurs hereunder and agrees
that none of the Administrative Agent or the other Lending Parties will have
any duty to advise any of the Subsidiary Guarantors of information known to it
or any of them regarding such circumstances or risks.
SECTION 9. Representations and Warranties. Each of the Subsidiary
Guarantors represents and warrants as to itself that all representations and
warranties relating to it contained in the Credit Agreement are true and
correct.
SECTION 10. Termination. The Guarantees made hereunder (a) shall
terminate when (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on all Loans and (ii) all other
obligations then due and owing, have in each case been indefeasibly paid in
full and the Banks have no further commitment to lend under the Credit
Agreement and (b) shall continue to be effective or be reinstated, as the case
may be, if at any time any payment, or any part thereof, on any Obligation is
rescinded or must otherwise be restored by any Lending Party upon the
bankruptcy or reorganization of the Company, the Borrowers, or any Subsidiary
Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments;
Releases. 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 the
Subsidiary Guarantors that are contained in this Agreement shall bind and
inure to the benefit of each party hereto and their respective successors and
assigns. This Agreement shall become effective as to any Subsidiary Guarantor
when a counterpart hereof (or a Supplement referred to in Section 19) executed
on behalf of such Subsidiary Guarantor shall have been delivered to the
Administrative Agent and a counterpart hereof (or a Supplement referred to in
Section 19) shall have been executed on behalf of the Administrative Agent,
and thereafter shall be binding upon such Subsidiary Guarantor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Subsidiary Guarantor, the Administrative Agent
and the other Lending Parties, and their respective successors and assigns,
except that no Subsidiary Guarantor shall have the right to assign its rights
or obligations hereunder or any interest herein (and any such attempted
assignment shall be void). This Agreement shall be construed as a separate
agreement with respect to each Subsidiary Guarantor and may be amended,
modified, supplemented, waived or released with respect to any Subsidiary
Guarantor without the approval of any other Subsidiary Guarantor and without
affecting the obligations of any other Subsidiary Guarantor. The
Administrative Agent is hereby expressly authorized to, and agrees upon
request of the Company it will, release any Subsidiary Guarantor from its
obligations hereunder in the event (i) that all the capital stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of to a
person that is not an Affiliate of the Company in a transaction permitted by
Section 5.09 of the Credit Agreement or (ii) the Company requests such release
in writing accompanied by a certificate of a Principal Officer certifying that
no Default shall have occurred and be continuing and that the requirements of
Section 5.11 of the Credit Agreement shall be met immediately following such
release.
SECTION 12. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent 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 discontinuance 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 hereunder and of the other Lending Parties 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 consent to any departure by any Subsidiary Guarantor therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) 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 any Subsidiary Guarantor in any case shall entitle such Subsidiary
Guarantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Subsidiary Guarantors to which such waiver, amendment or
modification relates and the Administrative Agent with consent required under
the Credit Agreement.
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 11.01 of the Credit
Agreement. All communications and notices hereunder to each Subsidiary
Guarantor shall be given to it at its address set forth in Schedule I with a
copy to the Company.
SECTION 15. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Subsidiary
Guarantors herein and 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 Administrative
Agent and the other Secured Parties and shall survive the making by the Banks
of the Loans regardless of any investigation made by the Lending Parties 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 any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid.
(b) 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 (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). 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 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract, and shall become
effective as provided in Section 11. Delivery of an executed signature page
to this Agreement by facsimile transmission shall be as effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each
Subsidiary Guarantor 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 court 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 the Administrative Agent
or any other Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Subsidiary Guarantor or its properties in the courts of any jurisdiction.
(b) Each Subsidiary Guarantor 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 by mail to the address provided in Section 14. 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 18. 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 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 18.
SECTION 19. Additional Subsidiary Guarantors. Pursuant to
Section 5.11 of the Credit Agreement, the Company must ensure that
Subsidiaries are (or become within 10 Domestic Business Days of being formed
or acquired) Subsidiary Guarantors so that certain asset and revenue criteria
are met. Upon execution and delivery after the date hereof by the
Administrative Agent and such a Subsidiary of a Supplement in the form of
Annex 1, such Subsidiary shall become a Subsidiary Guarantor hereunder with
the same force and effect as if originally named as a Subsidiary Guarantor
herein. The execution and delivery of any Supplement adding an additional
Subsidiary Guarantor as a party to this Agreement shall not require the
consent of any other Subsidiary Guarantor hereunder. The rights and
obligations of each Subsidiary Guarantor hereunder (other than any Subsidiary
Guarantor released pursuant to Section 11 hereof) shall remain in full force
and effect notwithstanding (a) the addition of any new Subsidiary Guarantor as
a party to this Agreement or (b) the release of any other Subsidiary Guarantor
pursuant to Section 11 hereof.
SECTION 20. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lending Party is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
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 Lending Party to or for the credit or the account of any
Subsidiary Guarantor against any or all the obligations of such Subsidiary
Guarantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Lending Party, irrespective of whether or not the
Administrative Agent or any Lending Party shall have made any demand under
this Agreement or any other Loan Document and although such obligations may be
unmatured. The rights of each Lending Party under this Section 20 are in
addition to other rights and remedies (including other rights of setoff) which
such Lending Party may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
By
Name:
Title:
CITIBANK, N.A., as
Administrative Agent,
By
Name:
Title:
Schedule I to the
Subsidiary Guarantee Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc.
World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex 1 to the
Subsidiary Guarantee Agreement
SUPPLEMENT NO. dated as of , to the
364-Day Subsidiary Guarantee Agreement dated as of October 28, 1999 (the
"Subsidiary Guarantee Agreement"), among each of the subsidiaries of CK Witco
Corporation (the "Company") listed on Schedule I thereto (the "Subsidiary
Guarantors"), and CITIBANK, N.A., a national banking association ("Citibank"),
as administrative agent (in such capacity, the "Administrative Agent") for the
Lending Parties (as defined in the Subsidiary Guarantee Agreement).
A. Reference is made to the 364-Day Credit Agreement dated as of
October 28, 1999, (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Company, the Banks listed therein and
the Administrative Agent.
B. Capitalized terms used and not otherwise defined herein are used
with the meanings assigned to such terms in the Subsidiary Guarantee Agreement
and the Credit Agreement.
C. The Subsidiary Guarantors have entered into the Subsidiary
Guarantee Agreement in order to induce the Banks to make Loans. Pursuant to
Section 5.11 of the Credit Agreement, the Company must ensure that Domestic
Subsidiaries are (or become within 10 Domestic Business Days of being formed
or acquired) Subsidiary Guarantors so that certain asset and revenue criteria
are met. Section 19 of the Subsidiary Guarantee Agreement provides that
additional Subsidiaries may become Subsidiary Guarantors under the Subsidiary
Guarantee Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary of the Company (the "New
Subsidiary Guarantor") is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Guarantor under
the Subsidiary Guarantee Agreement in order to induce the Banks to make
additional Loans and as consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Subsidiary
Guarantor agree as follows:
SECTION 1. In accordance with Section 19 of the Subsidiary
Guarantee Agreement, the New Subsidiary Guarantor by its signature below
becomes a Subsidiary Guarantor under the Subsidiary Guarantee Agreement with
the same force and effect as if originally named therein as a Subsidiary
Guarantor and the New Subsidiary Guarantor hereby (a) agrees to all the terms
and provisions of the Subsidiary Guarantee Agreement applicable to it as a
Subsidiary Guarantor thereunder (including its guarantee of the Obligations)
and (b) represents and warrants that the representations and warranties made
by it as a Subsidiary Guarantor thereunder are true and correct on and as of
the date hereof. Each reference to a "Subsidiary Guarantor" in the Subsidiary
Guarantee Agreement shall be deemed to include the New Subsidiary Guarantor.
SECTION 2. The New Subsidiary Guarantor represents and warrants to
the Administrative Agent and the other Lending Parties that this Supplement
has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Subsidiary Guarantor and
the Administrative Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Subsidiary
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Subsidiary Guarantee Agreement shall not in any
way be affected or impaired thereby (it being understood that the invalidity
of a particular provision hereof in a particular jurisdiction shall not in and
of itself affect the validity of such provision in any other jurisdiction).
The parties hereto 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 7. All communications and notices hereunder shall be in
writing and given as provided in Section 14 of the Subsidiary Guarantee
Agreement. All communications and notices hereunder to the New Subsidiary
Guarantor shall be given to it at the address set forth under its signature
below, with a copy to the Company.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse the
Administrative Agent for its out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Administrative Agent have duly executed this Supplement to the Subsidiary
Guarantee Agreement as of the day and year first above written.
[Name Of New Subsidiary Guarantor],
by
Name:
Title:
Address:
CITIBANK, N.A., as Administrative Agent,
by
Title:
EXHIBIT L
364-DAY INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT (together with
instruments executed and delivered pursuant to Section 11, this "Agreement")
dated as of October 28, 1999, among CK WITCO CORPORATION, a Delaware
corporation (the "Company"), each subsidiary of the Company listed on Schedule
I hereto (the "Subsidiary Guarantors") and CITIBANK, N.A., a national banking
association, as administrative agent (in such capacity, the "Administrative
Agent") for the Lending Parties (as defined below).
Reference is made to (a) the 364-Day Credit Agreement dated as of
October 28, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Company, the Banks listed therein and
the Administrative Agent and (b) the 364-Day Subsidiary Guarantee Agreement
dated as of October 28, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Subsidiary Guarantee Agreement"), among the Subsidiary
Guarantors and the Administrative Agent. Capitalized terms used herein and
not defined herein are used with the meanings assigned to such terms in the
Credit Agreement.
The Banks have agreed to make Loans to the Borrowers pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Subsidiary Guarantors have guaranteed such Loans and the other
Obligations (as defined in the Subsidiary Guarantee Agreement) pursuant to the
Subsidiary Guarantee Agreement. The obligations of the Banks to make Loans
are conditioned on, among other things, the execution and delivery by the
Company and the Subsidiary Guarantors of an agreement in the form hereof.
Accordingly, the Company, each Subsidiary Guarantor and the
Administrative Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such
rights of indemnity and subrogation as the Subsidiary Guarantors may have
under applicable law (but subject to Section 3), the Company agrees that in
the event a payment shall be made by any Subsidiary Guarantor under the
Subsidiary Guarantee Agreement, the Company shall indemnify such Subsidiary
Guarantor for the full amount of such payment and, until such indemnification
obligation shall have been satisfied, such Subsidiary Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been
made to the extent of such payment.
SECTION 2. Contribution and Subrogation. Each Subsidiary Guarantor
(a "Contributing Guarantor") agrees (subject to Section 3) that, in the event
a payment shall be made by any other Subsidiary Guarantor under the Subsidiary
Guarantee and such other Subsidiary Guarantor (the "Claiming Guarantor") shall
not have been fully indemnified by the Company as provided in Section 1, the
Contributing Guarantor shall, to the extent the Claiming Guarantor shall not
have been so indemnified by the Company, indemnify the Claiming Guarantor in
an amount equal to the amount of such payment multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Guarantor on
the date hereof (or, in the case of any Subsidiary Guarantor becoming a party
hereto pursuant to Section 11, the date of the Supplement hereto executed and
delivered by such Subsidiary Guarantor) and the denominator shall be the
aggregate net worth of all the Subsidiary Guarantors on the date hereof (or,
in the case of any Subsidiary Guarantor becoming a party hereto pursuant to
Section 11, the date of the Supplement hereto executed and delivered by such
Subsidiary Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the
rights of such Claiming Guarantor under Section 1 to the extent of such
payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Subsidiary Guarantors under
Sections 1 and 2 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations. No failure on
the part of the Company or any Subsidiary Guarantor to make the payments
required by Sections 1 and 2 (or any other payments required under applicable
law or otherwise) shall in any respect limit the obligations and liabilities
of any Subsidiary Guarantor with respect to its obligations hereunder, and
each Subsidiary Guarantor shall remain liable for the full amount of the
obligations of such Subsidiary Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in
full force and effect so long as the Subsidiary Guarantee Agreement has not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Lending Party upon the
bankruptcy or reorganization of the Company, any Subsidiary Guarantor or
otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
Administrative Agent or any Subsidiary Guarantor to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any Subsidiary Guarantor preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. None of the Administrative Agent and the
Subsidiary Guarantors shall be deemed to have waived any rights hereunder
unless such waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Company, the Subsidiary Guarantors and the Administrative Agent,
with any consent required under the Credit Agreement.
SECTION 7. Notices. All communications and notices hereunder shall
be in writing and given as provided in the Credit Agreement or the Subsidiary
Guarantee Agreement, as applicable, and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. 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 the parties that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. Neither the Company nor any Subsidiary Guarantor may
assign or transfer any of its rights or obligations hereunder (and any such
attempted assignment or transfer shall be void) without the prior written
consent of the Required Banks. Notwithstanding the foregoing, at the time any
Subsidiary Guarantor is released from its obligations under the Subsidiary
Guarantee Agreement in accordance with the Subsidiary Guarantee Agreement and
the Credit Agreement, such Subsidiary Guarantor will cease to have any rights
or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants
and agreements made by the Company and each Subsidiary Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
this Agreement or the other Loan Documents shall be considered to have been
relied upon by the Administrative Agent, the Banks and each Subsidiary
Guarantor, shall survive the making by the Banks of the Loans and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loans or any other fee or amount payable under the Credit
Agreement, this Agreement or any of the other Loan Documents is outstanding
and unpaid or the Commitments have not been terminated.
(b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein 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. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Subsidiary Guarantor when a counterpart bearing the signature
of such Subsidiary Guarantor shall have been delivered to the Administrative
Agent. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
SECTION 11. Additional Subsidiary Guarantors; Release. Pursuant to
Section 5.11 of the Credit Agreement, the Company must ensure that Domestic
Subsidiaries are (or become within 10 Domestic Business Days of being formed
or acquired) Subsidiary Guarantors so that certain asset and revenue criteria
are met. Upon execution and delivery, after the date hereof, by the
Administrative Agent and such a Subsidiary of an instrument in the form of
Annex 1 hereto, such Subsidiary shall become a Subsidiary Guarantor hereunder
with the same force and effect as if originally named as a Subsidiary
Guarantor hereunder. The execution and delivery of any instrument adding an
additional Subsidiary Guarantor as a party to this Agreement shall not require
the consent of any Subsidiary Guarantor hereunder. The rights and obligations
of each Subsidiary Guarantor hereunder (other than any Subsidiary Guarantor
released pursuant to this Section 11) shall remain in full force and effect
notwithstanding (a) the addition of any new Subsidiary Guarantor as a party to
this Agreement or (b) the release of any other Subsidiary Guarantor pursuant
to Section 11 of the Subsidiary Guarantee Agreement. Each Subsidiary
Guarantor shall be released from its obligations under this Agreement without
further action upon its release from its obligations under the Subsidiary
Guarantee Agreement in accordance with Section 11 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the date first appearing
above.
CK WITCO CORPORATION,
by
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO,
by
Name:
Title:
CITIBANK, N.A., as Administrative
Agent,
by
Name:
Title:
SCHEDULE I
to the Indemnity, Subrogation
and Contribution Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc.
World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. (this "Supplement")
dated as of [ ], to the 364-Day Indemnity, Subrogation and Contribution
Agreement dated as of October 28, 1999 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Indemnity,
Subrogation and Contribution Agreement"), among CK Witco Corporation, a
Delaware corporation (the "Company"), each subsidiary of the Company listed on
Schedule I thereto (the "Subsidiary Guarantors") and Citibank, N.A., a
national banking association, as administrative agent (in such capacity, the
"Administrative Agent") for the Banks.
A. Reference is made to (a) the 364-Day Credit Agreement dated as
of October 28, 1999, (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement") among the Company, the Banks listed therein
and the Administrative Agent and (b) the 364-Day Subsidiary Guarantee
Agreement dated as of October 28, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Subsidiary Guarantee Agreement"), among the
Subsidiary Guarantors and the Administrative Agent
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Indemnity, Subrogation
and Contribution Agreement and the Credit Agreement.
C. The Company and the Subsidiary Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Banks
to make Loans. Pursuant to Section 5.11 of the Credit Agreement, the Company
must ensure that Subsidiaries are (or become within 10 Domestic Business Days
of being formed or acquired) Subsidiary Guarantors so that certain asset and
revenue criteria are met. Section 11 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries may become
Subsidiary Guarantors under the Indemnity, Subrogation and Contribution
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Guarantor") is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Subsidiary Guarantor under the Indemnity, Subrogation and
Contribution Agreement in order to induce the Banks to make additional Loans
and as consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 11 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its signature
below becomes a Subsidiary Guarantor under the Indemnity, Subrogation and
Contribution Agreement with the same force and effect as if originally named
therein as a Subsidiary Guarantor and the New Guarantor hereby agrees to all
the terms and provisions of the Indemnity, Subrogation and Contribution
Agreement applicable to it as a Subsidiary Guarantor thereunder. Each
reference to a "Subsidiary Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor.
SECTION 2. The New Guarantor represents and warrants to the
Administrative Agent and the Banks that this Supplement has been duly author-
ized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute
a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Guarantor and the
Administrative Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Indemnity, Subrogation and Contribution Agreement
shall not in any way be affected or impaired. The parties hereto 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 7. All communications and notices hereunder shall be in
writing and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent
have duly executed this Supplement to the Indemnity, Subrogation and
Contribution Agreement as of the day and year first above written.
[Name Of New Guarantor],
by
Name:
Title:
Address:
CITIBANK, N.A., as Administrative
Agent,
by
Name:
Title:
EXHIBIT 4.2
$400,000,000
FIVE-YEAR CREDIT AGREEMENT
dated as of
October 28, 1999
among
CK Witco Corporation
The Eligible Subsidiaries
Referred to Herein
The Banks Listed Herein
The Chase Manhattan Bank,
as Syndication Agent
Citibank, N.A.,
as Administrative Agent
and
Bank of America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents
Chase Securities Inc.,
as Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 14
SECTION 1.03. Types of Borrowings 14
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend 15
SECTION 2.02. Method of Committed Borrowing 15
SECTION 2.03. Money Market Borrowings 16
SECTION 2.04. Notice to Banks; Funding of Loans 20
SECTION 2.05. Notes 21
SECTION 2.06. Maturity of Loans 21
SECTION 2.07. Interest Rates 22
SECTION 2.08. Facility Fees 25
SECTION 2.09. Optional Termination or Reduction of
Commitments 22
SECTION 2.10. Mandatory Termination of Commitments 25
SECTION 2.11. Prepayments 25
SECTION 2.12. General Provisions as to Payments 26
SECTION 2.13. Funding Losses 27
SECTION 2.14. Computation of Interest and Fees 27
SECTION 2.15. Taxes 27
SECTION 2.16. Judgment Currency 29
SECTION 2.17. Foreign Subsidiary Costs 30
SECTION 2.18. Letters of Credit 30
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness 35
SECTION 3.02. Borrowings 36
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary 37
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power 37
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention 37
SECTION 4.03. Binding Effect 38
SECTION 4.04. Financial Information 38
SECTION 4.05. Litigation 38
SECTION 4.06. Compliance with ERISA 38
SECTION 4.07. Environmental Matters 39
SECTION 4.08. Taxes 39
SECTION 4.09. Subsidiaries 34
SECTION 4.10. Not an Investment Company or a
Public Utility Holding Company 40
SECTION 4.11. Full Disclosure 40
SECTION 4.12. Year 2000 40
ARTICLE 5
COVENANTS
SECTION 5.01. Information 41
SECTION 5.02. Payment of Obligations 43
SECTION 5.03. Maintenance of Property; Insurance 43
SECTION 5.04. Conduct of Business and Maintenance of
Existence 43
SECTION 5.05. Compliance with Laws 44
SECTION 5.06. Inspection of Property, Books and
Records 44
SECTION 5.07. Financial Covenants 44
SECTION 5.08. Negative Pledge 45
SECTION 5.09. Consolidations, Mergers and Sales of
Assets 45
SECTION 5.10. Use of Proceeds 46
SECTION 5.11. Additional Subsidiaries 45
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default 46
SECTION 6.02. Notice of Default 48
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization 48
SECTION 7.02. Agents and Affiliates 49
SECTION 7.03. Action by Agents 49
SECTION 7.04. Consultation with Experts 49
SECTION 7.05. Liability of Agents 49
SECTION 7.06. Indemnification 49
SECTION 7.07. Credit Decision 50
SECTION 7.08. Successor Agents 50
SECTION 7.09. Agents= Fees 50
SECTION 7.10. Co-Documentation Agents 50
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair 51
SECTION 8.02. Illegality 51
SECTION 8.03. Increased Cost and Reduced Return 52
SECTION 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans 53
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate Existence and Power 54
SECTION 9.02. Corporate and Governmental
Authorization; No Contravention 54
SECTION 9.03. Binding Effect 54
SECTION 9.04. Taxes 54
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty 55
SECTION 10.02. Guaranty Unconditional 55
SECTION 10.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances 56
SECTION 10.04. Waiver by the Company 56
SECTION 10.05. Subrogation 56
SECTION 10.06. Stay of Acceleration 56
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices 57
SECTION 11.02. No Waivers 57
SECTION 11.03. Expenses; Indemnification 57
SECTION 11.04. Sharing of Set-offs 57
SECTION 11.05. Amendments and Waivers 58
SECTION 11.06. Successors and Assigns 59
SECTION 11.07. Collateral 60
SECTION 11.08. Governing Law; Submission to
Jurisdiction 60
SECTION 11.09. Counterparts; Integration 61
SECTION 11.10. Waiver of Jury Trial 61
SECTION 11.11. Confidentiality 62
PRICING SCHEDULE
EXHIBIT A Note
EXHIBIT B Opinion of John T. Ferguson, II, Esq., General
Counsel of the Company
EXHIBIT C Opinion of Wachtell Lipton Rosen & Katz, Special
Counsel for the Company
EXHIBIT D Assignment and Assumption Agreement
EXHIBIT E Form of Money Market Quote Request
EXHIBIT F Form of Invitation for Money Market Quotes
EXHIBIT G Form of Money Market Quote
EXHIBIT H Form of Election to Participate
EXHIBIT I Form of Election to Terminate
EXHIBIT J Opinion of Counsel for the Borrower
EXHIBIT K Form of Subsidiary Guarantee Agreement
EXHIBIT L Form of Indemnity, Subrogation and Contribution
Agreement
EXHIBIT M Existing Letters of Credit
FIVE-YEAR CREDIT AGREEMENT
AGREEMENT dated as of October 28, 1999 among CK WITCO
CORPORATION, the ELIGIBLE SUBSIDIARIES referred to herein, the
BANKS listed on the signature pages hereof, CITIBANK, N.A., as
Administrative Agent, THE CHASE MANHATTAN BANK, as Syndication
Agent, and BANK OF AMERICA, N.A. and DEUTSCHE BANK SECURITIES
INC., as Co-Documentation Agents.
WHEREAS, the Company wishes to have a revolving credit
facility under which it or any of its Eligible Subsidiaries may
from time to time borrow funds, denominated in Dollars, from the
Banks ratably in proportion to their respective Commitments and
may from time to time obtain letters of credit to support
obligations of the Company or any of its Eligible Subsidiaries
incurred in the ordinary course of their businesses;
WHEREAS, the Company wishes said credit facility to
permit the Company or any Eligible Subsidiary from time to time
to borrow funds, denominated in Dollars, from one or more Banks
on the basis of their competitive bids;
WHEREAS, the Banks are willing to extend said credit
facility to the Company and its Eligible Subsidiaries, and the
Issuing Bank is willing to issue Letters of Credit for the
account of the Company and its Eligible Subsidiaries, in each
case on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as
used herein, have the following meanings:
A364-Day Credit Agreement@ means the 364-Day Credit
Agreement dated as of the date hereof among the Company, the
eligible subsidiaries named therein, Citibank, N.A., as
administrative agent, the banks named therein, The Chase
Manhattan Bank, as syndication agent, and Bank of America, N.A.
and Deutsche Bank Securities Inc., as co-documentation agents.
AAbsolute Rate Auction@ means a solicitation of Money
Market Quotes setting forth Money Market Absolute Rates pursuant
to Section 2.03.
AAdjusted CD Rate@ has the meaning set forth in
Section 2.07(b).
AAdjusted London Interbank Offered Rate@ has the
meaning set forth in Section 2.07(c).
AAdministrative Agent@ means Citibank, N.A., in its
capacity as administrative agent for the Banks hereunder, and its
successors in such capacity.
AAdministrative Questionnaire@ means, with respect to
each Bank, an administrative questionnaire in the form prepared
by the Administrative Agent, duly completed by such Bank and
submitted to the Administrative Agent (with a copy to the
Company).
AAffiliate@ means, 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.
AAgents@ means the Administrative Agent, the
Syndication Agent and the Co-Documentation Agents, and AAgent@
means any of the foregoing.
AApplicable Lending Office@ means, with respect to any
Bank, (i) in the case of its Domestic Loans, its Domestic Lending
Office, (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office and (iii) in the case of its Money
Market Loans, its Money Market Lending Office.
AApplicable Percentage@ means, with respect to any
Bank, the percentage of the total Commitments represented by such
Bank's Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to
any assignments.
AAssessment Rate@ has the meaning set forth in
Section 2.07(b).
AAssignee@ has the meaning set forth in
Section 11.06(c).
AAvailability Period@ means the period from and
including the Effective Date to but not including the Termination
Date.
ABank@ means each Person listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to
Section 11.06(c), and their respective successors.
ABase Rate@ means, for any day, a rate per annum equal
to the higher of (i) the Prime Rate for such day and (ii) the sum
of 2 of 1% plus the Federal Funds Rate for such day.
ABase Rate Loan@ means a Committed Loan to be made by a
Bank as a Base Rate Loan pursuant to the applicable Notice of
Committed Borrowing or Article 8.
ABorrower@ means the Company or any Eligible
Subsidiary, as the context may require, and their respective
successors, and ABorrowers@ means all of the foregoing.
ABorrowing@ has the meaning set forth in Section 1.03.
ACD Base Rate@ has the meaning set forth in
Section 2.07(b).
ACD Loan@ means a Committed Loan to be made by a Bank
as a CD Loan pursuant to the applicable Notice of Committed
Borrowing.
ACD Reference Banks@ means the financial institutions
acting as the Administrative Agent, the Syndication Agent and
the Co-Documentation Agents.
ACo-Documentation Agents@ means Bank of America, N.A.
and Deutsche Bank Securities Inc. in their capacities as co-
documentation agents for the Banks hereunder, and their
successors in such capacity.
ACommitment@ means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature
pages hereof, as such amount may be reduced from time to time
pursuant to Section 2.09 or 2.10 and as such amount may be
reduced or increased from time to time pursuant to assignments to
or by such Bank in accordance with Section 11.06.
ACommitted Loan@ means a loan made by a Bank pursuant
to Section 2.01.
ACompany@ means CK Witco Corporation, a Delaware
corporation, and its successors.
ACompany=s S-4@ means the Company=s registration
statement on Form S-4, as filed on July 28, 1999 with the
Securities and Exchange Commission.
AConsolidated Debt@ means at any date the Debt of the
Company and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
AConsolidated Subsidiary@ means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements if such statements were prepared as of such
date.
ADebt@ of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except (a) trade accounts payable arising
in the ordinary course of business, (b) obligations incurred in
the ordinary course of business in connection with additions to
property, plant or equipment which are deferred for no more than
120 days after the later of the acquisition or completion of
installation of such additions, (c) other obligations arising in
the ordinary course of business which are deferred for no more
than 120 days after the date on which they would first be
reflected as liabilities on a balance sheet of such Person and
(d) obligations in connection with the compensation for services
of officers, directors or employees of such Person, (iv) the
capitalized amount of all obligations of such Person as lessee
which are capitalized in accordance with generally accepted
accounting principles, (v) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed
by such Person, (vi) all Debt of others Guaranteed by such
Person and (vii) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit
or letters of guaranty.
ADefault@ means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
ADerivatives Obligations@ of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or other similar transaction
(including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
ADollars@ and the sign A$@ mean lawful money of the
United States.
ADomestic Business Day@ means any day except a
Saturday, Sunday or other day on which commercial banks in New
York City are authorized by law to close.
ADomestic Lending Office@ means, as to each Bank, its
office located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank
may hereafter designate as its Domestic Lending Office by notice
to the Company and the Administrative Agent; provided that any
Bank may so designate separate Domestic Lending Offices for its
Base Rate Loans, on the one hand, and its CD Loans, on the other
hand, in which case all references herein to the Domestic Lending
Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
ADomestic Loans@ means CD Loans or Base Rate Loans or
both.
ADomestic Reserve Percentage@ has the meaning set forth
in Section 2.07(b).
ADomestic Subsidiary@ means each Subsidiary that is
organized under a jurisdiction which is any of the United States,
any State thereof or the District of Columbia.
AEBITDA@ means, for any period, the consolidated net
income of the Company and its Consolidated Subsidiaries for such
period plus, to the extent deducted in computing such
consolidated net income for such period, the sum (without
duplication) of (a) income tax expense, (b) Interest Expense,
(c) depreciation and amortization expense, (d) non-recurring
restructuring charges in an amount not to exceed $65 million in
any fiscal year of the Company, (e) extraordinary and other non-
recurring losses and (f) any other non-cash charges (including
merger-related purchase accounting adjustments in an amount not
to exceed $289 million made as a result of the merger of Crompton
& Knowles Corporation and Witco Corporation), minus, to the
extent added in computing such consolidated net income for such
period, (a) consolidated interest income, (b) extraordinary and
other non-recurring gains and (c) any other non-cash income.
Anything contained in this definition or elsewhere in this
Agreement to the contrary notwithstanding, in calculating EBITDA
for the four fiscal-quarter periods ending on December 31, 1999,
March 31, 2000 and June 30, 2000, respectively, EBITDA in fiscal
quarters ended March 31, 1999, June 30, 1999 and September 30,
1999 shall be deemed to equal the combined EBITDA of Crompton &
Knowles Corporation and Witco Corporation for such fiscal
quarters, as adjusted on a pro forma basis to give effect to the
merger of Crompton & Knowles Corporation and Witco Corporation as
if such merger had occurred on December 31, 1998.
AEffective Date@ means the date the obligations of the
Banks to extend credit under this Agreement become effective in
accordance with Section 3.01.
AElection to Participate@ means an Election to
Participate substantially in the form of Exhibit H hereto.
AElection to Terminate@ means an Election to Terminate
substantially in the form of Exhibit I hereto.
AEligible Subsidiary@ means any Wholly-Owned
Consolidated Subsidiary as to which an Election to Participate
shall have been delivered to the Administrative Agent and as to
which an Election to Terminate shall not have been delivered to
the Administrative Agent. Each such Election to Participate and
Election to Terminate shall be duly executed on behalf of such
Wholly-Owned Consolidated Subsidiary and the Company in such
number of copies as the Administrative Agent may request. The
delivery of an Election to Terminate shall not affect any
obligation of an Eligible Subsidiary theretofore incurred. The
Administrative Agent shall promptly give notice to the Issuing
Bank and the Banks of the receipt of any Election to Participate
or Election to Terminate.
AEnvironmental Laws@ means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
AERISA@ means the Employee Retirement Income Security
Act of 1974, as amended, or any successor statute.
AERISA Group@ at any time means the Company and all
members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control
which, together with the Company, are treated at such time as a
single employer under Section 414 of the Internal Revenue Code.
AEuro-Dollar Business Day@ means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
AEuro-Dollar Lending Office@ means, as to each Bank,
its office, branch or affiliate located at its address set forth
in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as
it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Company and the Administrative Agent.
AEuro-Dollar Loan@ means a Committed Loan that bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice
of Committed Borrowing.
AEuro-Dollar Margin@ means a rate per annum determined
in accordance with the Pricing Schedule.
AEuro-Dollar Rate@ means a rate of interest determined
pursuant to Section 2.07(c) on the basis of a London Interbank
Offered Rate.
AEuro-Dollar Reference Banks@ means the principal
London offices of the financial institutions acting as the
Administrative Agent, the Syndication Agent and the Co-
Documentation Agents.
AEuro-Dollar Reserve Percentage@ means, for any day,
that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion
dollars in respect of AEurocurrency liabilities@ (or in respect
of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents).
AEvent of Default@ has the meaning set forth in
Section 6.01.
AExisting Credit Agreements@ means (i) the $500,000,000
Credit Agreement dated as of March 31, 1997, among Witco
Corporation, the Eligible Subsidiaries referred to therein, the
banks listed on the signature pages thereof, The Chase Manhattan
Bank, as Administrative Agent, and Morgan Guaranty Trust Company
of New York, as Documentation Agent and (ii) the US$600,000,000
Third Amended and Restated Credit Agreement dated as of March 31,
1998, among Crompton & Knowles Corporation, Crompton & Knowles
Colors Incorporated, Davis-Standard Corporation, Ingredient
Technology Corporation, Uniroyal Chemical Company, Inc., the B-2
Borrowers named therein and Uniroyal Chemical Co., as Borrowers,
the Initial Lenders, Initial Issuing Banks and Swing Line Bank
named therein, Citicorp USA, Inc., as Agent, and The Chase
Manhattan Bank, Corestates Bank, N.A. and First Union National
Bank, as Managing Agents.
AFederal Funds Rate@ means, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such
day is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
AFixed Rate Loans@ means CD Loans or Euro-Dollar Loans
or Money Market Loans (excluding Money Market LIBOR Loans bearing
interest at the Base Rate pursuant to Section 8.01) or any
combination of the foregoing.
AGuaranty@ by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person
and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term
Guaranty shall not include endorsements for collection or deposit
in the ordinary course of business. The term AGuarantee@ used as
a verb has a corresponding meaning.
AIndemnity, Subrogation and Contribution Agreement@
means the Five-Year Indemnity, Subrogation and Contribution
Agreement, substantially in the form of Exhibit L hereto, among
the Company, the Subsidiary Guarantors and the Administrative
Agent.
AInterest Coverage Ratio@ means, on any date, the ratio
of (a) EBITDA for the period of four consecutive fiscal quarters
ended on or most recently prior to such date to (b) Interest
Expense for the period of four consecutive fiscal quarters ended
on or most recently prior to such date.
AInterest Expense@ means, for any period, the interest
expense of the Company and its Consolidated Subsidiaries for such
period determined on a consolidated basis in accordance with
generally accepted accounting principles, including (i) the
amortization of debt discounts to the extent included in interest
expense in accordance with generally accepted accounting
principles, (ii) the amortization of all fees (including fees
with respect to interest rate protection agreements or other
interest rate hedging arrangements) payable in connection with
the incurrence of Debt to the extent included in interest expense
in accordance with generally accepted accounting principles and
(iii) the portion of any rents payable under capital leases
allocable to interest expense in accordance with generally
accepted accounting principles. Anything contained in this
definition or elsewhere in this Agreement to the contrary
notwithstanding, in calculating Interest Expense for the four
fiscal-quarter periods ending on December 31, 1999, March 31,
2000 and June 30, 2000, respectively, Interest Expense in fiscal
quarters ended March 31, 1999, June 30, 1999 and September 30,
1999 shall be deemed to equal the combined Interest Expense of
Crompton & Knowles Corporation and Witco Corporation for such
fiscal quarters, as adjusted on a pro forma basis to give effect
to the merger of Crompton & Knowles Corporation and Witco
Corporation as if such merger had occurred on December 31, 1998.
AInterest Period@ means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending one, two, three or six months thereafter (or
nine or twelve months thereafter if, at the time of the relevant
Borrowing, an interest period of such duration is available to
all Banks), as the relevant Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period (except an Interest Period
determined pursuant to clause (c) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day in a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day in a
calendar month; and
(c) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination
Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on
the date of such Borrowing and ending 30, 60, 90 or 180 days
thereafter, as the relevant Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination
Date shall end on the Termination Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination
Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole
number of months thereafter as the relevant Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period (except an Interest Period
determined pursuant to clause (c) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day in a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day in a
calendar month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate Borrowing,
the period commencing on the date of such Borrowing and ending
such number of days thereafter (but not less than 7 days) as the
relevant Borrower may elect in accordance with Section 2.03;
provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
AInternal Revenue Code@ means the Internal Revenue Code
of 1986, as amended, or any successor statute.
AInvestment@ means any investment in any Person,
whether by means of share purchase, capital contribution, loan,
time deposit or otherwise.
"Issuing Bank" means Citibank, N.A., in its capacity as
the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.18(i). The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank, in which case the
term "Issuing Bank" shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing
Bank pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at
such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the
Borrowers at such time. The LC Exposure of any Bank at any time
shall be its Applicable Percentage of the total LC Exposure at
such time.
ALetter of Credit@ means each letter of credit listed
in Exhibit M (to the extent outstanding as of the Effective Date)
and any letter of credit issued pursuant to this Agreement.
ALeverage Ratio@ means, on any date, the ratio of
(a) Total Debt on such date to (b) EBITDA for the period of four
consecutive fiscal quarters ended on or most recently prior to
such date.
ALIBOR Auction@ means a solicitation of Money Market
Quotes setting forth Money Market Margins based on the London
Interbank Offered Rate pursuant to Section 2.03.
ALien@ means, with respect to any asset, any mortgage,
lien, pledge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset.
ALoan@ means a Domestic Loan, a Euro-Dollar Loan or a
Money Market Loan, and ALoans@ means Domestic Loans, Euro-Dollar
Loans or Money Market Loans or any combination of the foregoing.
ALoan Documents@ means this Agreement, the Subsidiary
Guarantee Agreement and the Indemnity, Subrogation and
Contribution Agreement.
ALoan Parties@ means the Company, the other Borrowers
and the Subsidiary Guarantors.
ALondon Interbank Offered Rate@ has the meaning set
forth in Section 2.07(c).
ALondon Office@ means, at any time, the office of the
Administrative Agent in London specified in or pursuant to
Section 11.01 at such time.
AMaterial Debt@ means Debt (other than the obligations
under this Agreement and the 364-Day Credit Agreement) of the
Company and/or one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, in an aggregate principal
or face amount exceeding $25,000,000.
AMaterial Financial Obligations@ means a principal or
face amount of Debt and/or payment or collateralization
obligations in respect of Derivatives Obligations of the Company
and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate amount
exceeding $25,000,000.
AMaterial Plan@ means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of $25,000,000.
AMaterial Subsidiary@ means at any time any Subsidiary,
except Subsidiaries which at such time have been designated by
the Company (by notice to the Agents, which may be amended from
time to time) as nonmaterial, none of which singly would meet the
definition of a Asignificant subsidiary@ contained as of the date
hereof in Regulation S-X of the Securities and Exchange
Commission and all of which, if aggregated and considered as a
single Subsidiary, would not have total assets (determined on a
consolidated basis for such Subsidiaries and their consolidated
subsidiaries) in excess of 15% of the consolidated assets of the
Company and its Consolidated Subsidiaries at such time.
AMoney Market Absolute Rate@ has the meaning set forth
in Section 2.03(d).
AMoney Market Absolute Rate Loan@ means a loan to be
made by a Bank pursuant to an Absolute Rate Auction.
AMoney Market Lending Office@ means, as to each Bank,
its Domestic Lending Office or such other office, branch or
affiliate of such Bank as it may hereafter designate as its Money
Market Lending Office by notice to the Company and the
Administrative Agent; provided that any Bank may from time to
time by notice to the Company and the Administrative Agent
designate separate Money Market Lending Offices for its Money
Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as
the context may require.
AMoney Market LIBOR Loan@ means a loan to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing
interest at the Base Rate pursuant to Section 8.01).
AMoney Market Loan@ means a Money Market LIBOR Loan or
a Money Market Absolute Rate Loan.
AMoney Market Margin@ has the meaning set forth in
Section 2.03(d)(ii)(C).
AMoney Market Quote@ means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.03.
AMultiemployer Plan@ means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the ERISA Group (i) is then making
or accruing an obligation to make contributions or (ii) for
purposes of Section 6.01(i) only, has within the preceding five
plan years made contributions, including for purposes of this
clause (ii) any Person which ceased to be a member of the ERISA
Group during such five year period.
ANew York Office@ means, at any time, the office of the
Administrative Agent in New York specified in or pursuant to
Section 11.01 at such time.
ANotes@ means promissory notes of a Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of such Borrower to repay the Loans made to it, and
ANote@ means any one of such promissory notes issued hereunder.
ANotice of Borrowing@ means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
AParent@ means, with respect to the Issuing Bank or any
Bank, any Person controlling the Issuing Bank or such Bank.
AParticipant@ has the meaning set forth in
Section 11.06(b).
APBGC@ means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
APerson@ means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any
other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
APlan@ means at any time an employee pension benefit
plan (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) for
purposes of Section 6.01(i) only, has at any time within the
preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the
ERISA Group.
APricing Schedule@ means the Pricing Schedule attached
hereto.
APrime Rate@ means the rate of interest publicly
announced by the Administrative Agent in New York City from time
to time as its Prime Rate.
APrincipal Officer@ means any of the following officers
of the Company: the Chairman of the Board, the President, the
chief executive officer, the chief financial officer, the
treasurer, the controller and the general counsel. If the titles
of the Company=s officers are changed after the date hereof, the
term APrincipal Officer@ shall thereafter mean any officer
performing substantially the same functions as are presently
performed by one or more of the officers listed in the first
sentence of this definition.
AReference Banks@ means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
AReference Bank@ means any one of such Reference Banks.
ARefunding Borrowing@ means a Committed Borrowing
which, after application of the proceeds thereof, results in no
net increase in the outstanding principal amount of Committed
Loans made by any Bank to any Borrower.
ARegulation U@ means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
"Related Parties" means, with respect to any specified
Person, such Person's Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such
Person's Affiliates.
ARequired Banks@ means at any time Banks having more
than 50% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, having Loans and
unreimbursed LC Disbursements amounting to more than 50% of the
aggregate unpaid principal amount of the Loans and unreimbursed
LC Disbursements.
ASubsidiary@ means any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time
directly or indirectly owned by the Company.
ASubsidiary Guarantee Agreement@ means the Five-Year
Subsidiary Guarantee Agreement substantially in the form of
Exhibit K hereto, among the Company, the Subsidiary Guarantors,
and the Administrative Agent.
ASubsidiary Guarantors@ means, collectively, each
Domestic Subsidiary of the Company that is a party to the
Subsidiary Guarantee Agreement and the Indemnity, Subrogation and
Contribution Agreement as of the date hereof, and each Domestic
Subsidiary that, pursuant to Section 5.11, becomes a party to
such agreements by execution of supplements in the forms provided
therein.
ASyndication Agent@ means The Chase Manhattan Bank, in
its capacity as syndication agent for the Banks hereunder.
ATermination Date@ means October 28, 2004, or, if such
day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day.
ATotal Debt@ means, at any date, all Debt of the
Company and its Consolidated Subsidiaries at such date to the
extent such Debt should be reflected on a consolidated balance
sheet of the Company at such date in accordance with generally
accepted accounting principles.
AUnfunded Liabilities@ means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value
of all benefit liabilities under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such liabilities
(excluding any accrued but unpaid contributions), all determined
as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability
of a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
AWholly-Owned Consolidated Subsidiary@ means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors= qualifying
shares or nominal shares of foreign entities) are at the time
directly or indirectly owned by the Company.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes
concurred in by the Company=s independent public accountants)
with the most recent audited consolidated financial statements of
the Company and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Company notifies the Agents that the
Company wishes to amend any covenant in Article 5 to eliminate
the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if either Agent
notifies the Company that the Required Banks wish to amend
Article 5 for such purpose), then the Company=s compliance with
such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Company and
the Required Banks.
SECTION 1.03. Types of Borrowings. The term
ABorrowing@ denotes
(a) an aggregation of Committed Loans to be made by
the Banks to the same Borrower pursuant to Section 2.01 on the
same day, all of which Loans (i) are of the same type (subject to
Article 8) and (ii) have the same initial Interest Period; and
(b) an aggregation of one or more Money Market
Loans to be made by one or more Banks to the same Borrower
pursuant to Section 2.03 on the same day, all of which Loans
(i) are of the same type and (ii) have the same Interest Period.
Borrowings may be classified for purposes of this Agreement
by reference to the pricing of the Loans comprising such
Borrowing (e.g., a AEuro-Dollar Borrowing@ is a Borrowing
comprised of Euro-Dollar Loans) or (ii) by reference to the
provisions of Article 2 under which participation therein is
determined (i.e., a ACommitted Borrowing@ is a Borrowing under
Section 2.01 in which all Banks participate in proportion to
their Commitments, while a AMoney Market Borrowing@ is a
Borrowing under Section 2.03 in which one or more Banks
participate on the basis of their bids).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend.
Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make loans to the Borrowers
during the Availability Period, provided that the aggregate
amount of the Committed Loans made by such Bank plus its LC
Exposure at any one time outstanding shall not exceed the amount
of its Commitment. Each Borrowing under this Section shall be in
an aggregate principal amount of $5,000,000 or any larger
multiple of $1,000,000 (except that any such Borrowing may be in
an aggregate amount equal to the aggregate amount available in
accordance with Section 3.02 or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section
2.18(e)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing
limits, the Borrowers may borrow under this Section, repay, or to
the extent permitted by Section 2.11, prepay, Loans and reborrow
at any time during the Availability Period.
SECTION 2.02. Method of Committed Borrowing. The
relevant Borrower shall give the Administrative Agent notice (a
ANotice of Committed Borrowing@) not later than 10:30 A.M. (New
York City time) on (w) the date of each Base Rate Borrowing,
(x) the second Domestic Business Day before each CD Borrowing and
(y) the third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Committed Loans comprising such
Borrowing are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration
of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
On the last day of the Interest Period for any Borrowing, unless
the Borrower has otherwise notified the Administrative Agent on
or prior to such day, the Borrower shall be deemed to have given
a Committed Notice of Borrowing for a new Base Rate Borrowing in
the same amount as the Borrowing that has become due on such day,
and the Borrowing becoming due on such day shall be deemed
replaced with such new Base Rate Borrowing.
SECTION 2.03. Money Market Borrowings. (a) The Money
Market Option. In addition to Committed Loans pursuant to
Section 2.01, any Borrower may, as set forth in this Section,
request the Banks during the period beginning on the Effective
Date and continuing to at least seven days prior to the
Termination Date to make offers to make Money Market Loans to
such Borrower. The Banks may, but shall have no obligation to,
make such offers and such Borrower may, but shall have no
obligation to, accept any such offers in a manner set forth in
this Section.
(b) Money Market Quote Request. When a Borrower wishes
to request offers to make Money Market Loans under this Section,
it shall transmit to the Administrative Agent by telex or
facsimile transmission a Money Market Quote Request substantially
in the form of Exhibit E hereto so as to be received by the
Administrative Agent at its New York Office not later than
10:30 AM. (New York City time) on (x) the fourth Euro-Dollar
Business Day before the date of Borrowing proposed therein, in
the case of a LIBOR Auction or (y) the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of
an Absolute Rate Auction or, in any such case, such other time or
date as the Company and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is
to be effective. Each such Money Market Quote Request shall
specify:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the proposed aggregate amount of such Borrowing,
which shall be an aggregate amount equal to $5,000,000 or a
larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute Rate.
A Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote
Request. No Money Market Quote Request shall be given within five
Euro-Dollar Business Days (or such other number of days as the
Company and the Administrative Agent may agree) of any other
Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Administrative Agent
shall send to the Banks by telex or facsimile transmission an
Invitation for Money Market Quotes substantially in the form of
Exhibit F hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to
make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes.
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any
Invitation for Money Market Quotes. Each Money Market Quote must
comply with the requirements of this subsection (d) and must be
submitted to the Administrative Agent by telex or facsimile at
its New York Office not later than (x) 2:00 P.M. (New York City
time) on the fourth Euro-Dollar Business Day before the proposed
date of Borrowing, in the case of a LIBOR Auction, or
(y) 9:30 A.M. (New York City time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction or, in any
such case, such other time or date as the Company and the
Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective; provided that
Money Market Quotes submitted by the Administrative Agent (or any
affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the
Administrative Agent or such affiliate notifies the Borrower of
the terms of the offer or offers contained therein not later than
(x) one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the deadline
for the other Banks, in the case of an Absolute Rate Auction.
Subject to Articles 2 and 6, any Money Market Quote so made shall
be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially
the form of Exhibit G hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal amount
(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be an aggregate amount equal to $5,000,000
or a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to
the principal amount of Money Market Loans for which offers being
made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered Rate (the
AMoney Market Margin@) offered for each such Money Market Loan,
expressed as a percentage (specified to the nearest 1/10,000th of
1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest 1/10,000th
of 1%) (the AMoney Market Absolute Rate@) offered for each such
Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest Period
specified in the related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with
Exhibit G hereto or does not specify all of the information
required by subsection (d)(ii) above;
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money Market
Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall
promptly notify the Borrower of the terms (x) of any Money Market
Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market
Quote shall be disregarded by the Administrative Agent unless
such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The
Administrative Agent=s notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for
which offers have been received for each Interest Period
specified in the related Money Market Quote Request, (B) the
respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money Market
Quote may be accepted.
(f) Acceptance and Notice by Borrower. The Borrower
shall notify the Administrative Agent of its acceptance or
non-acceptance of the offers notified to it pursuant to
subsection (e) at its New York Office not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day
before the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) the proposed date of Borrowing, in the case of an
Absolute Rate Auction or, in any such case, such other time or
date as the Company and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is
to be effective. In the case of acceptance, such notice (a
ANotice of Money Market Borrowing@) shall specify the aggregate
principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Money Market Quote in whole
or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request;
(ii) the principal amount of each Money Market Borrowing
must be an aggregate amount equal to $5,000,000 or a larger
multiple of $1,000,000;
(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute Rates,
as the case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are
made by two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such
offers are accepted shall be allocated by the Administrative
Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest
error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Bank of the contents thereof and
of such Bank=s share (if any) of such Borrowing and such Notice
of Borrowing shall not thereafter be revocable by the Borrower.
(b) On the date of each Borrowing, each Bank
participating therein shall make available its share of such
Borrowing in Dollars not later than 12:00 Noon (New York City
time), in Federal or other funds immediately available in New
York City, to the Administrative Agent at its New York Office.
Unless the Administrative Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the
Administrative Agent will make the funds so received from the
Banks available to the Borrower in its bank account maintained at
the Administrative Agent=s aforesaid address; provided, that
funds in respect of Base Rate Loans made to finance the
reimbursement of an LC Disbursement as provided in Section
2.18(e) shall be remitted by the Administrative Agent to the
Issuing Bank.
(c) If any Bank makes a new Loan hereunder to a
Borrower on a day on which such Borrower is to repay all or any
part of an outstanding Loan from such Bank, such Bank shall apply
the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being
borrowed by such Borrower and the amount being repaid shall be
made available by such Bank to the Administrative Agent as
provided in subsection (b) of this Section, or remitted by such
Borrower to the Administrative Agent as provided in Section 2.12,
as the case may be.
(d) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Borrowing
that such Bank will not make available to the Administrative
Agent such Bank=s share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 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 Bank shall not have so made such
share available to the Administrative Agent, such Bank 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, a
rate per annum equal to the interest rate applicable thereto
pursuant to Section 2.07 and (ii) in the case of such Bank, the
Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Bank=s Loan included in such
Borrowing for purposes of this Agreement. In no event shall any
payment by the Administrative Agent, or repayment by the
Borrower, of any amount pursuant to this Section relieve the Bank
that failed to make available its share of the related Borrowing
of its obligations hereunder.
SECTION 2.05. Notes. (a) The Loans of each Bank to
each Borrower shall, upon request of the applicable Bank, be
evidenced by a single Note of such Borrower payable to the order
of such Bank for the account of its Applicable Lending Office in
an amount equal to the aggregate unpaid principal amount of such
Bank=s Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the
Administrative Agent, request that its Loans of a particular type
to such Borrower be evidenced by a separate Note of such Borrower
in an amount equal to the aggregate unpaid principal amount of
such Loans. Each such Note shall be in substantially the form of
Exhibit A hereto with appropriate modifications to reflect the
fact that it evidences solely Loans of the relevant type. Each
reference in this Agreement to the ANote@ of such Bank shall be
deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank=s Note requested
pursuant to Section 2.05(a), the Administrative Agent shall
forward such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it to each
Borrower and the date and amount of each payment of principal
made by the Borrower with respect thereto, and may, if such Bank
so elects in connection with any transfer or enforcement of its
Note of any Borrower, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing
information with respect to each such Loan to such Borrower then
outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations
of any Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by each Borrower so to endorse its Notes
and to attach to and make a part of any Note a continuation of
any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in
any Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate
Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such
day. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2%
plus the rate otherwise applicable to Base Rate Loans for such
day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during the
Interest Period applicable thereto, at a rate per annum equal to
the sum of the CD Margin for such day plus the applicable
Adjusted CD Rate; provided that if any CD Loan shall, as a result
of clause (2)(b) of the definition of Interest Period, have an
Interest Period of less than 30 days, such CD Loan shall bear
interest during such Interest Period at the rate applicable to
Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than 90 days, at intervals of
90 days after the first day thereof. Any overdue principal of or
interest on any CD Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of
2% plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to such Loan and (ii) the
rate applicable to Base Rate Loans for such day.
The AAdjusted CD Rate@ applicable to a day during any
Interest Period means a rate per annum determined pursuant to the
following formula:
CDBR*
ACDR = ------------ + AR
1.00-DRP
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
* The amount in brackets being rounded upward, if necessary, to
the next higher 1/100 of 1%.
The ACD Base Rate@ applicable to any Interest Period is
the rate of interest determined by the Administrative Agent to be
the average (rounded upward, if necessary, to the next higher
1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M.
(New York City time) (or as soon thereafter as practicable) on
the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank of its
certificates of deposit in an amount comparable to the principal
amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such
Interest Period.
ACD Margin@ means a rate per annum determined in
accordance with the Pricing Schedule.
ADomestic Reserve Percentage@ means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
five billion dollars in respect of new non-personal time deposits
in Dollars in New York City having a maturity comparable to the
related Interest Period and in an amount of $100,000 or more. The
Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
AAssessment Rate@ means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup AA@ (or a comparable
successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.4(a) (or any successor provision) to the
Federal Deposit Insurance Corporation (or any successor) for such
Corporation=s (or such successor=s) insuring time deposits at
offices of such institution in the United States of America. The
Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the
Interest Period applicable thereto, at a rate per annum equal to
the sum of the Euro-Dollar Margin for such day plus the
applicable Adjusted London Interbank Offered Rate. Such interest
shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
The AAdjusted London Interbank Offered Rate@ applicable
to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The ALondon Interbank Offered Rate@ applicable to any
Interest Period means the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum
at which deposits are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately
equal to the principal amount of the Euro-Dollar Loan of such
Euro-Dollar Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest
Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan, and any overdue reimbursement of an LC
Disbursement, shall bear interest, payable on demand, for each
day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the Adjusted London
Interbank Offered Rate applicable to such Loan and (ii) the sum
of the Euro-Dollar Margin for such day plus the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than
three Euro-Dollar Business Days, then for such other period of
time not longer than one month as the Administrative Agent may
select) deposits in dollars in an amount approximately equal to
such overdue payment due to each of the Euro-Dollar Reference
Banks are offered to such Euro-Dollar Reference Bank in the
London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or
(b) of Section 8.01 shall exist, at a rate per annum equal to the
sum of 2% plus the rate applicable to Base Rate Loans for such
day).
(e) Subject to Section 8.01, each Money Market LIBOR
Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the London Interbank Offered Rate
for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money
Market Margin quoted by the Bank making such Loan in accordance
with Section 2.03. Each Money Market Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than three months, at intervals of
three months after the first day thereof. Any overdue principal
of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Base Rate for such day.
(f) The Administrative Agent shall determine each
interest rate applicable to the Loans hereunder. The
Administrative Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence
of manifest error.
(g) Each Reference Bank agrees to use its best efforts
to furnish quotations to the Administrative Agent as contemplated
hereby. If any Reference Bank does not furnish a timely
quotation, the Administrative Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of
Section 8.01 shall apply
SECTION 2.08. Fees. (a) The Company shall pay to the
Administrative Agent for the account of each Bank a facility fee
calculated for each day at the Facility Fee Rate for such day
(determined in accordance with the Pricing Schedule). Such
facility fees shall accrue from and including the Effective Date
to but excluding the date of termination of the Commitments in
their entirety, on the daily aggregate amount of the Commitments
(whether used or unused) or, if the Commitments have terminated,
on the outstanding amount of the Loans. Accrued fees under this
Section shall be payable quarterly in arrears on each March 31,
June 30, September 30 and December 31 and on the date of
termination of the Commitments in their entirety (and, if later,
the date the Loans shall be repaid in their entirety).
(b) The Company agrees to pay (i) to the
Administrative Agent for the account of each Bank a participation
fee with respect to its participations in Letters of Credit,
which shall accrue at the Euro-Dollar Margin used to compute
interest on Euro-Dollar Loans on the average daily amount of such
Bank's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the
date on which such Bank's Commitment terminates and the date on
which such Bank ceases to have any LC Exposure, and (ii) to the
Issuing Bank a fronting fee, which shall accrue at the rate of
0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective
Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees shall be payable quarterly
in arrears on each March 31, June 30, September 30 and
December 31 and on the date of termination of the Commitments in
their entirety (and, if later, the date there are no remaining LC
Exposures); provided that all such fees shall be payable on the
date on which the Commitments terminate and any such fees
accruing after the date on which the Commitments terminate shall
be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day
but excluding the last day).
(c) For any day on which the outstanding principal
amount of Loans shall be greater than 33% of the total
Commitments (and for any day after the termination of all the
Commitments on which Loans shall be outstanding), the Company
shall pay to the Administrative Agent for the account of each
Bank a utilization fee at the per annum rate indicated in the
Pricing Schedule on the aggregate amount of each Bank's
outstanding Loans on such day. Accrued and unpaid utilization
fees, if any, shall be payable on the last day of each March,
June, September and December and on the date on which the
Commitments shall have terminated, all Loans shall have been
repaid in full and the Banks shall have no LC Exposures. All
utilization fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Company agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Company and the
Administrative Agent.
(d) All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative
Agent (or to the Issuing Bank, in the case of fees payable to it)
for distribution, in the case of facility fees and utilization
fees, to the Banks entitled thereto. Fees paid shall not be
refundable under any circumstances.
SECTION 2.09. Optional Termination or Reduction of
Commitments. During the Availability Period, the Company may,
upon at least three Domestic Business Days= notice to the
Administrative Agent, terminate at any time, or proportionately
reduce from time to time by an aggregate amount of at least
$10,000,000 or any larger multiple of $1,000,000, the unused
portions of the Commitments. If the Commitments are terminated in
their entirety, all accrued facility fees shall be payable on the
effective date of such termination.
SECTION 2.10. Mandatory Termination of Commitments.
The Commitments shall terminate on the Termination Date, and any
Loans then outstanding (together with accrued interest thereon)
shall be due and payable on such date.
SECTION 2.11. Prepayments. (a) The Borrower may,
upon at least one Domestic Business Day=s notice to the
Administrative Agent, prepay any Base Rate Borrowing (or any
Money Market Borrowing bearing interest at the Base Rate pursuant
to Section 8.01) in whole at any time, or from time to time in
part in amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Borrowing.
(b) Except as provided in subsection (c) or (d) below
or in Section 8.02, the Borrower may not prepay all or any
portion of the principal amount of any Fixed Rate Loan prior to
the maturity thereof unless the Borrower pays any breakage costs
under Section 2.13.
(c) If the Company becomes obligated to indemnify any
Bank, the Issuing Bank or the Administrative Agent for Taxes or
Other Taxes pursuant to Section 2.15(c) and actions taken
pursuant to Section 2.15(f) do not or will not eliminate such
indemnity payments, then (i) the Company may, upon at least one
Domestic Business Day=s notice to the Administrative Agent, (A)
prepay all Borrowings in whole by paying the principal amount
together with accrued interest thereon to the date of prepayment
and (B) deposit cash collateral in respect of any outstanding
Letters of Credit as provided in Section 2.18(j) (in which event
the Company shall also terminate the Commitments in their
entirety pursuant to Section 2.09) or (ii) the Company may, at
its sole expense and effort, upon notice to such Bank and the
Administrative Agent, require such Bank to assign and delegate,
without recourse (in accordance with and subject to the
restrictions contained in Section 11.06(c)), all its interests,
rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another
Bank, if a Bank accepts such assignment); provided that (A) the
Company shall have received the prior written consent of the
Administrative Agent and the Issuing Bank, which consent shall
not unreasonably be withheld, (B) such Bank shall have received
payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Company (in the
case of all other amounts) and (C) such assignment will result in
a reduction to the indemnity payable pursuant to Section 2.15(c).
A Bank shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such
Bank or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply.
(d) The Company shall cause one or more Borrowers to
prepay Loans to the extent (if any) required so that on any date,
after giving effect to such prepayment, the aggregate amount of
the Loans plus the aggregate LC Exposures do not exceed the
aggregate amount of the Commitments.
(e) Upon receipt of a notice of prepayment pursuant to
this Section, the Administrative Agent shall promptly notify each
Bank of the contents thereof and of such Bank=s ratable share (if
any) of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrowers shall make each payment of principal of, and
interest on, the Loans and of fees hereunder and of reimbursement
of LC Disbursements, not later than 11:00 A.M. (New York City
time) on the date when due, in Federal or other funds immediately
available in New York City, to the Administrative Agent at its
New York Office. The Administrative Agent will promptly
distribute to each Bank or the Issuing Bank its ratable share of
each such payment received by the Administrative Agent for the
account of the Banks or the Issuing Bank, as the case may be.
Whenever any payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest
on, the Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended
time. All payments by each Borrower shall be made without
deduction for any counterclaim, defense, recoupment or setoff.
(b) Unless the Administrative Agent shall have
received notice from a Borrower prior to the date on which any
payment is due from such Borrower to the Banks or the Issuing
Bank hereunder that such Borrower will not make such payment in
full, the Administrative Agent may assume that such Borrower has
made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank or the Issuing
Bank, as the case may be, on such due date an amount equal to the
amount then due such Bank or the Issuing Bank. If and to the
extent that such Borrower shall not have so made such payment,
each Bank and the Issuing Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank or
the Issuing Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank or the
Issuing Bank until the date such Bank or the Issuing Bank repays
such amount to the Administrative Agent at the Federal Funds
Rate.
SECTION 2.13. Funding Losses. If a Borrower makes any
payment of principal with respect to any Fixed Rate Loan
(pursuant to Article 2, 6 or 8 or otherwise) on any day other
than the last day of the Interest Period applicable thereto, or
the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any
Fixed Rate Loans after notice has been given to any Bank in
accordance with Section 2.04(a) or 2.11, the Company shall
reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period
after any such payment or failure to borrow or prepay, provided
that such Bank shall have delivered to the Borrower a certificate
as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed on
the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first
day but excluding the last day). All other interest and fees
shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.15. Taxes. (a) For the purposes of this
Section 2.15, the following terms have the following meanings:
ATaxes@ means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings with
respect to any payment by any Loan Party pursuant to any Loan
Document or under any Note, and all liabilities with respect
thereto, excluding (i) in the case of each Bank, the Issuing Bank
and Agent, taxes imposed on its income, and franchise or similar
taxes imposed on it, by a jurisdiction (or any subdivision
thereof) under the laws of which such Bank or Agent or the
Issuing Bank (as the case may be) is organized or in which its
principal executive office is located or, in the case of each
Bank, in which its Applicable Lending Office is located and
(ii) in the case of each Bank and the Issuing Bank, any United
States withholding tax imposed on such payments but only to the
extent that such Bank or the Issuing Bank is subject to United
States withholding tax at the time such Bank or the Issuing Bank
first becomes a party to this Agreement or changes its Applicable
Lending Office.
AOther Taxes@ means any present or future stamp or
documentary taxes and any other excise or property taxes, or
similar charges or levies, which arise from any payment made
pursuant to any Loan Document or any Letter of Credit or under
any Note or from the execution or delivery of, or otherwise with
respect to, any Loan Document, any Letter of Credit or any Note.
(b) Any and all payments by any Loan Party to or for
the account of any Bank or Agent or the Issuing Bank under any
Loan Document or under any Note or Letter of Credit shall be made
without deduction for any Taxes or Other Taxes except as required
by law; provided that, if any change in law occurring after any
Bank or Agent or the Issuing Bank first becomes a party to this
Agreement (or any law of a jurisdiction other than the U.S.,
regardless of whether a change in law has occurred, in the case
of any Taxes or Other Taxes arising as a result of any Subsidiary
other than a Domestic Subsidiary becoming an Eligible Subsidiary
after the date hereof) requires any Loan Party to deduct any
Taxes or Other Taxes from any payments to any such Bank or Agent
or the Issuing Bank, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this
Section) such Bank or Agent or the Issuing Bank (as the case may
be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make
such deductions, (iii) such Loan Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Loan Party shall
furnish to the Administrative Agent, at its address referred to
in Section 11.01, the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Company and each other Loan Party agrees to
indemnify the Issuing Bank and each Bank and Agent for the full
amount of Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section because of a
change in law occurring after such Issuing Bank, Bank or Agent
first becomes a party to this Agreement (or under any law of a
jurisdiction other than the U.S., regardless of whether a change
in law has occurred, in the case of any Taxes or Other Taxes arising
as a result of any Subsidiary other than a Domestic Subsidiary becoming
an Eligible Subsidiary after the date
hereof) paid by the Issuing Bank or such Bank or Agent (as the
case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto as certified
in good faith to the Company and each other Borrower by each
Bank, Agent, or Issuing Bank seeking indemnification pursuant to
this Section 2.15(c). This indemnification shall be paid within
30 days after the Issuing Bank or such Bank or Agent (as the case
may be) makes demand therefor; provided, however, that the
indemnification obligations of the Company and each other
Borrower under this Section 2.15 shall be reduced appropriately
to take into account any Tax deduction, credit or benefit or
Other Tax deduction, credit or benefit to which a Bank, Agent, or
the Issuing Bank is entitled as a result of its payment of Taxes
or Other Taxes. If a Bank, Agent, or the Issuing Bank receives a
refund of indemnified Taxes or Other Taxes with respect to which
the Company or any other Borrower has made payment to the Bank,
Agent, or the Issuing Bank pursuant to this Section 2.15(c), the
Bank, Agent, or the Issuing Bank, as the case may be, shall pay
over such refund to the Company or other Borrower within 10 Days
after receipt of such refund.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the date
of its execution and delivery of this Agreement in the case of
each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other
Bank, from time to time thereafter if requested in writing by the
Company (but only so long as such Bank remains lawfully able to
do so), and at any time it changes its Applicable Lending Office,
shall provide the Company and the Administrative Agent with
Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income
tax treaty to which the United States is a party which exempts
the Bank from United States withholding tax or reduces the rate
of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a
trade or business in the United States.
(e) For any period with respect to which a Bank has
failed to provide the Company or the Administrative Agent with
the appropriate form pursuant to Section 2.15(d) (unless such
failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required
to be provided), such Bank shall not be entitled to
indemnification under Section 2.15(b) or (c) with respect to
Taxes imposed by the United States; provided that if a Bank,
which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure
to deliver a form required hereunder, the Borrowers shall take
such steps as such Bank shall reasonably request to assist such
Bank to recover such Taxes.
(f) If any Loan Party is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section, then such Bank will change the jurisdiction of its
Applicable Lending Office if, in the judgment of such Bank, such
change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
(g) If any Borrower is organized under a jurisdiction
outside of the United States, the Issuing Bank and each Bank and
Agent will use reasonable efforts to cooperate with such Borrower
and the Company (but shall not be required to disclose any
information it considers, in its sole discretion, to be
confidential) to assist such Borrower to obtain any reduction of
or limit on Taxes subject to the indemnification provisions of
this Section 2.15.
SECTION 2.16. Judgment Currency. If for the purpose
of obtaining judgment in any court it is necessary to convert a
sum due from any Loan Party under any Loan Document in the
currency expressed to be payable herein or therein (the
Aspecified currency@) into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative
Agent could purchase the specified currency with such other
currency at the Administrative Agent=s New York office on the
Euro-Dollar Business Day preceding that on which final judgment
is given. The obligations of each Loan Party in respect of any
sum due to the Issuing Bank or any Bank or Agent under any Loan
Document or under any Note or Letter of Credit shall,
notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the
Euro-Dollar Business Day following receipt by the Issuing Bank or
such Bank or Agent (as the case may be) of any sum adjudged to be
so due in such other currency the Issuing Bank or such Bank or
Agent (as the case may be) may in accordance with normal banking
procedures purchase the specified currency with such other
currency; if the amount of the specified currency so purchased is
less than the sum originally due to the Issuing Bank or such Bank
or Agent, as the case may be, in the specified currency, each
Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such
judgment, to indemnify the Issuing Bank or such Bank or Agent, as
the case may be, against such loss, and if the amount of the
specified currency so purchased exceeds (a) the sum originally
due to the Issuing Bank or any Bank or Agent, as the case may be,
the specified currency and (b) any amounts shared with other
Banks as a result of allocations of such excess as a
disproportionate payment to such Bank under Section 11.04, the
Issuing Bank and such Bank or Agent, as the case may be, agrees
to remit such excess to the appropriate Borrower.
SECTION 2.17. Foreign Subsidiary Costs. (a) If the
cost to any Bank of making or maintaining any Loan to an Eligible
Subsidiary is increased or the cost to the Issuing Bank of
issuing or maintaining any Letter of Credit for the account of an
Eligible Subsidiary hereunder, or the amount of any sum received
or receivable by the Issuing Bank or any Bank (or its Applicable
Lending Office) is reduced by an amount deemed by the Issuing
Bank or such Bank to be material, by reason of the fact that such
Eligible Subsidiary is incorporated in, or conducts business in,
a jurisdiction outside the United States of America, the Company
shall indemnify the Issuing Bank or such Bank for such increased
cost or reduction within 15 days after demand by the Issuing Bank
or such Bank (with a copy to the Administrative Agent). A
certificate of the Issuing Bank or such Bank claiming
compensation under this subsection 2.17(a) and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error.
(b) Each Bank and the Issuing Bank will promptly
notify the Company and the Administrative Agent of any event of
which it has knowledge that will entitle the Issuing Bank or such
Bank to additional interest or payments pursuant to
subsection 2.17(a) and, in the case of any Bank, will use
reasonable efforts to designate a different Applicable Lending
Office, if, in the judgment of such Bank, such designation will
avoid the need for, or reduce the amount of, such compensation
and will not be otherwise disadvantageous to such Bank.
SECTION 2.18. Letters of Credit. (a) General.
Subject to the terms and conditions set forth herein, each of the
Borrowers may request the issuance of Letters of Credit,
denominated in Dollars, for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted
by a Borrower to, or entered into by a Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), a Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank
and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Euro-Dollar Business Day), the
date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by
the Issuing Bank, the applicable Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form
in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if
the conditions to issue set forth in Section 3.02 hereof have
been satisfied and only if (and upon issuance, amendment, renewal
or extension of each Letter of Credit the applicable Borrower
shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the
LC Exposure shall not exceed $50,000,000 and (ii) the sum of the
LC Exposures and the principal amount of outstanding Loans shall
not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall
expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the
date that is ten Domestic Business Days prior to the Termination
Date.
(d) Participations. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the
amount thereof) and without any further action on the part of the
Issuing Bank or the Banks, the Issuing Bank hereby grants to each
Bank, and each Bank hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Bank's
Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Bank hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Bank's Applicable
Percentage of each LC Disbursement made by the Issuing Bank and
not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to any Borrower for any reason. Each
Bank acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters
of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal
or extension of any Letter of Credit in accordance with the terms
hereof or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Borrower
shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on or prior to the
second Domestic Business Day following the date such LC
Disbursement is made, if the Borrower shall have received notice
of such LC Disbursement prior to 10:00 a.m., New York City time,
on such second Domestic Business Day, or, if such notice has not
been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the
Domestic Business Day that the Borrower receives such notice, if
such notice is received prior to 10:00 a.m., New York City time,
on the day of receipt, or (ii) the Domestic Business Day
immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the
day of receipt; provided that, if such LC Disbursement is not
less than $5,000,000, the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section
2.02 that such payment be financed with a Base Rate Borrowing in
an equivalent amount and, to the extent so financed, the
Borrower's obligation to make such payment shall be discharged
and replaced by the resulting Base Rate Borrowing. If the
Borrower fails to make such payment when due, the Administrative
Agent shall notify each Bank of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and
such Bank's Applicable Percentage thereof. Promptly following
receipt of such notice, each Bank shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.04 with
respect to Loans made by such Bank (and Section 2.04 shall apply,
mutatis mutandis, to the payment obligations of the Banks), and
the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Banks. Promptly following
receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the
extent that Banks have made payments pursuant to this paragraph
to reimburse the Issuing Bank, then to such Banks and the Issuing
Bank as their interests may appear. Any payment made by a Bank
pursuant to this paragraph to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of Base Rate Loans as
contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation
to reimburse LC Disbursements as provided in paragraph (e) of
this Section shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision
therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate
in any respect, (iii) payment by the Issuing 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, or (iv)
any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Administrative
Agent, the Banks nor the Issuing Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are
caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence
or wilful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be
in substantial compliance with the terms of a Letter of Credit,
the Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to
the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing
Bank and the Banks with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make
any LC Disbursement, then, unless the Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is
made, the unpaid amount thereof shall bear interest, for each day
from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to Base Rate
Loans; provided that, if the Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section,
then Section 2.07(d) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by
any Bank pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Bank to the
extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank
may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank. The Administrative Agent shall
notify the Banks of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.08(b). From and
after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional
Letters of Credit.
(j) Cash Collateralization. If any Event of Default
shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Administrative Agent or the
Required Banks (or, if the maturity of the Loans has been
accelerated, Banks with LC Exposure representing greater than 50%
of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit
in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Banks, an amount
in cash equal to the LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in
clause (g) or (h) of Article VI. Each such deposit shall be held
by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this
Agreement. The Administrative 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, which investments shall be made
at the option and sole discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of
the reimbursement obligations of the Borrower for the LC Exposure
at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Banks with LC Exposure
representing greater than 50% of the total LC Exposure), be
applied to satisfy other obligations of the Borrower under this
Agreement. 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.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. The obligations of the
Banks to extend credit under this Agreement shall become
effective on the date that each of the following conditions shall
have been satisfied (or waived in accordance with Section 11.05):
(a) receipt by the Syndication Agent of
counterparts hereof and of each Loan Document signed by each of
the parties hereto and thereto (or, in the case of any party as
to which an executed counterpart shall not have been received,
receipt by the Syndication Agent in form satisfactory to it of
telex, facsimile transmission or other written confirmation from
such party of execution of a counterpart hereof or thereof by
such party);
(b) receipt by the Syndication Agent of an opinion
of John T. Ferguson II, Esq., General Counsel of the Company,
substantially in the form of Exhibit B hereto, and covering such
additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(c) receipt by the Syndication Agent of an opinion
of Wachtell Lipton Rosen & Katz, special counsel for the Company,
substantially in the form of Exhibit C hereto and covering such
additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Syndication Agent of evidence
satisfactory to it that (i) all fees and expenses payable for the
account of the Banks and the Agents and their affiliates on or
before the Effective Date have been paid in full in the amounts
previously agreed upon on or prior to the Effective Date and
(ii) the commitments under the Existing Credit Agreements have
been terminated and the principal of and interest on all loans
and accrued fees outstanding thereunder have been paid in full;
and
(e) receipt by the Syndication Agent of all
documents it may reasonably request relating to the existence of
the Loan Parties, the corporate authority for and the validity of
this Agreement, the other Loan Documents and the Notes, and any
other matters relevant hereto, all in form and substance
satisfactory to the Syndication Agent;
provided that the Banks shall have no obligation to extend credit
hereunder and their commitments under this Agreement shall become
null and void unless all of the foregoing conditions are
satisfied not later than November 14, 1999. The Syndication Agent
shall promptly notify the Company, the Administrative Agent and
the Banks of the Effective Date, and such notice shall be
conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligations of any Bank
to make a Loan on the occasion of any Borrowing (excluding a
continuation or conversion of any Borrowing which does not
increase the principal amount of Loans outstanding under such
Borrowing) and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, are subject to the satisfaction of
the following conditions:
(a) in the case of a Loan, receipt by the
Administrative Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such
Borrowing or such issuance, amendment, renewal or extension of
such Letter of Credit, the sum of the aggregate outstanding
principal amount of the Loans and the aggregate LC Exposures will
not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately before and after
such Borrowing or such issuance, amendment, renewal or extension
of such Letter of Credit, no Default shall have occurred and be
continuing; and
(d) the fact that the representations and
warranties of the Borrowers contained in this Agreement (except,
unless the Borrowing is taking place on the Effective Date, the
representation and warranty set forth in Section 4.04(b) as to
any matter which has theretofore been disclosed in writing by the
Company to the Banks) shall be true and correct on and as of the
date of such Borrowing.
Each Borrowing hereunder and the issuance, amendment, renewal or
extension of any Letter of Credit hereunder, shall be deemed to
be a representation and warranty by the Borrower on the date of
such Borrowing, or such issuance, amendment, renewal or extension
of such Letter of Credit, that the facts specified in
clauses (b), (c) and, to the extent applicable, (d) of this
Section are true and correct.
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary. The obligation of each Bank to make a Loan on the
occasion of the first Borrowing by each Eligible Subsidiary, and
of the Issuing Bank to issue a Letter of Credit on the occasion
of the first Letter of Credit issued for the account of each
Eligible Subsidiary, is subject to the satisfaction of the
following further conditions:
(a) receipt by the Administrative Agent of an
opinion of counsel for such Eligible Subsidiary acceptable to the
Administrative Agent, substantially in the form of Exhibit J
hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may
reasonably request; and
(b) receipt by the Administrative Agent of all
documents which it may reasonably request relating to the
existence of such Eligible Subsidiary, the corporate authority
for and the validity of the Election to Participate of such
Eligible Subsidiary, the Loan Documents and the Notes of such
Eligible Subsidiary, and any other matters relevant thereto, all
in form and substance satisfactory to the Administrative Agent.
The opinion referred to in clause (a) above shall be
dated no more than five Euro-Dollar Business Days before the date
of the first Borrowing by such Eligible Subsidiary hereunder or
the issuance of the first Letter of Credit for the account of
such Eligible Subsidiary hereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has
all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which
such Loan Party is a party are within the corporate powers of
such Loan Party, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of
applicable law or Regulation or of the certificate of
incorporation or by-laws of any Loan Party or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon any Loan Party or result in the creation or imposition of
any Lien on any asset of the Company or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement and each
Loan Document constitutes a valid and binding agreement of each
Loan Party party thereto and each Note, when executed and
delivered in accordance with this Agreement, will constitute a
valid and binding obligation of the relevant Borrower.
SECTION 4.04. Financial Information. (a) The
unaudited pro forma combined balance sheet of Crompton & Knowles
Corporation and Witco Corporation as of June 26, 1999 (for
Crompton & Knowles Corporation) and as of June 30, 1999 (for
Witco Corporation) and the related consolidated statement of
operations for the years ended December 26, 1998 (for Crompton &
Knowles Corporation) and December 31, 1998 (for Witco
Corporation), a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of
Crompton & Knowles Corporation and Witco Corporation and their
respective consolidated subsidiaries as of such dates and their
consolidated results of operations for such periods.
(b) Since June 26, 1999, there has been no
material adverse change in the business, financial position or
results of operations of the Company and its Consolidated
Subsidiaries, considered as a whole or, with respect to any
change occurring prior to September 1, 1999, of Witco Corporation
and its consolidated subsidiaries and Crompton & Knowles
Corporation and its consolidated subsidiaries, all taken as a
whole.
(c) the Management Projections contained in the
Confidential Information Memorandum dated September, 1999,
relating to the credit facility hereunder, were prepared in good
faith on the basis of assumptions believed to reasonable at the
time such assumptions were made.
SECTION 4.05. Litigation. Except as disclosed in the
Company=s S-4, there is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against or
affecting, the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official
in which there is a reasonable likelihood of an adverse decision
which would materially adversely affect the business (taken as a
whole), consolidated financial position or consolidated results
of operations of the Company and its Consolidated Subsidiaries or
which in any manner draws into question the validity or
enforceability of any Loan Document or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of
the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all respect with the
presently applicable provisions of ERISA and the Internal Revenue
Code with respect to each Plan, except for such noncompliance
which would not have a material adverse effect on the business,
financial position or results of operations of the Company and
its Consolidated Subsidiaries, considered as a whole. No member
of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA, except in the case of
clause (iii) above for such liabilities which do not exceed
$5,000,000 in the aggregate during the term of this Agreement.
SECTION 4.07. Environmental Matters. In the ordinary
course of its business, the Company conducts an ongoing review of
the effect of Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in the course of
which it identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat and any
actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis of
this review, the Company has reasonably concluded that, except as
disclosed in the Company=s S-4, Environmental Laws are unlikely
to have a material adverse effect on the business, financial
position or results of operations of the Company and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax
returns of Crompton & Knowles Corporation and Witco Corporation
have been examined and settled through December 31, 1997, for
Crompton & Knowles Corporation, and through December 31, 1995,
for Witco Corporation. The Company and its Subsidiaries have
filed all United States Federal income tax returns and all other
material tax returns which are required to be filed by them and
have paid all taxes due pursuant to such returns or pursuant to
any assessment received by the Company or any Subsidiary, except
for items being diligently contested in good faith and by
appropriate proceedings. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Company,
adequate.
SECTION 4.09. Subsidiaries. Each of the Company=s
Material Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company or a Public
Utility Holding Company. The Company is not an Ainvestment
company@ within the meaning of the Investment Company Act of
1940, as amended, or a Aholding company@ within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Full Disclosure. All information
heretofore furnished by the Company to the Agents or any Bank in
writing for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information
hereafter furnished by the Company to the Agents or any Bank in
writing will be, taken as a whole, true and accurate in all
material respects on the date as of which such information is
stated or certified. The Company has disclosed to the Banks in
writing any and all facts which materially and adversely affect
or may affect (to the extent the Company can now reasonably
foresee) the business, operations or financial condition of the
Company and its Consolidated Subsidiaries, taken as a whole, or
the ability of the Company or any other Loan Party to perform its
obligations under this Agreement or any other Loan Document.
SECTION 4.12. Year 2000. The Company and its
Subsidiaries are taking commercially reasonable steps to
ascertain the extent of, and to quantify and successfully
address, business and financial risks facing the Company and its
Subsidiaries as a result of what is commonly referred to as the
AYear 2000 Problem@ (i.e., the inability of certain computer
applications to recognize correctly and perform date-sensitive
functions involving certain dates prior to and after December 31,
1999), (b) the Company and its Subsidiaries reasonably believe
that any remedial actions required to permit the proper
functioning of any systems critical to the operations of the
Company and its Subsidiaries, taken as a whole, despite the Year
2000 Problem have been or will be performed on or prior to
December 31, 1999 and (c) the Company and its Subsidiaries
reasonably believe that the Year 2000 Problem (including any
preparations or remediations in response thereto) will not have a
material adverse effect on the business, financial position or
results of operations of the Company and its Consolidated
Subsidiaries, taken as a whole.
ARTICLE 5
COVENANTS
The Company agrees that, so long as any Bank has any
Commitment or LC Exposure hereunder or any LC Disbursement
remains unreimbursed or any amount payable hereunder or under
any Note remains unpaid:
SECTION 5.01. Information. The Company will deliver
to the Administrative Agent for distribution to each of the
Banks:
(a) as soon as available and in any event within
120 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of operations, cash flows and
shareholders= equity for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal
year, all reported on in accordance with generally accepted
accounting principles by KPMG LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within
60 days after the end of each of the first three quarters of each
fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such
quarter and the related consolidated statements of operations for
such quarter and consolidated statements of operations and
condensed cash flows for the portion of the Company=s fiscal year
ended at the end of such quarter, setting forth in the case of
the statement of operations in comparative form the figures for
the corresponding quarter, in the case of the statements of
operations and cash flows the figures for the corresponding
portion of the Company=s previous fiscal year and in the case of
the balance sheet the figures for the previous year end, all
certified (subject to normal year-end adjustments) as to fairness
of presentation, generally accepted accounting principles and
consistency by the chief financial officer, treasurer or the
controller or other chief accounting officer of the Company;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial officer, treasurer or the
controller or other chief accounting officer of the Company
(i) setting forth in reasonable detail the calculations required
to establish whether the Company was in compliance with the
requirements of Sections 5.07 to 5.08, inclusive, on the date of
such financial statements and (ii) stating whether any Default
exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which
the Company is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set
of financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants which
reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default existed
on the date of such statements relating only to Sections 5.07,
5.08(a), 5.08(c), 5.08(f), 5.08(g)(i), 5.08(g)(ii) and
5.08(h) and (ii) confirming the calculations set forth in the
officer=s certificate delivered simultaneously therewith pursuant
to clause (c) above;
(e) within five Domestic Business Days after any
Principal Officer of the Company obtains knowledge of any
Default, if such Default is then continuing, a certificate of the
chief financial officer or the controller or other chief
accounting officer of the Company setting forth the details
thereof and the action which the Company is taking or proposes to
take with respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all financial
statements, reports and proxy, statements so mailed;
(g) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which
the Company shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of any
"reportable event@ (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is
in reorganization, is insolvent or has been terminated, a copy of
such notice; (iii) receives notice from the PBGC under Title IV
of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such notice;
(iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the controller or
other chief accounting officer of the Company setting forth
details as to such occurrence and action, if any, which the
Company or applicable member of the ERISA Group is required or
proposes to take; and
(i) from time to time such additional information
regarding the financial position or business of the Company and
its Subsidiaries as any Agent, at the request of any Bank, may
reasonably request.
SECTION 5.02. Payment of Obligations. The Company
will pay and discharge, and will cause each Subsidiary to pay and
discharge, at or before maturity (or, in the case of tax
liabilities, if later, before the same become subject to
penalties), all their respective obligations and liabilities
(including, without limitation, tax liabilities, except where the
same may be contested in good faith by appropriate proceedings)
if the failure to so pay and discharge would have a material
adverse effect on the business, financial position or results of
operations of the Company and its Consolidated Subsidiaries
considered as a whole, and will maintain, and will maintain for
each Material Subsidiary or cause each Material Subsidiary to
maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the
same.
SECTION 5.03. Maintenance of Property; Insurance. The
Company will keep, and will cause each Material Subsidiary to
keep, all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted;
will maintain, and will cause each Material Subsidiary to
maintain (either in the name of the Company or in such Material
Subsidiary=s own name) with insurance companies which at the time
such insurance is purchased or renewed are financially sound and
reputable, insurance on all their property in at least such
amounts (including self-insurance retentions) and against at
least such risks as are usually insured against (including self-
insurance retentions) in the same general area by companies of
similar size engaged in the same or a similar business; and will
furnish to the Banks, upon written request from the
Administrative Agent, full information as to the insurance
carried.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. The Company and its Material Subsidiaries (on a
consolidated basis) will continue to engage in business of the
same general types as now conducted by the Company and its
Material Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Material Subsidiary to
preserve, renew and keep in full force and effect their
respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal
conduct of business; provided that nothing in this Section 5.04
shall prohibit (i) the merger of a Subsidiary into the Company or
the merger or consolidation of a Subsidiary with or into another
Person if the corporation surviving such consolidation or merger
is a Wholly-Owned Consolidated Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and
be continuing, (ii) the termination of the corporate existence,
rights, privileges or franchises of any Subsidiary (other than
any Subsidiary which is a Borrower) if the Company in good faith
determines that such termination is in the best interest of the
Company and is not materially disadvantageous to the Banks or
(iii) any disposition of assets not prohibited by Section 5.09
hereof.
SECTION 5.05. Compliance with Laws. The Company will
comply, and cause each Subsidiary to comply, in all respects with
all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and
regulations thereunder and all applicable laws, ordinances,
rules, regulations and requirements of governmental authorities
relating to the acquisition referred to in Section 5.10) except
where the necessity of compliance therewith is contested in good
faith by appropriate proceedings or where failure to comply would
not materially adversely affect the business (taken as a whole),
consolidated financial position or consolidated results of
operations of the Company and its Consolidated Subsidiaries.
SECTION 5.06. Inspection of Property, Books and
Records. The Company will keep, and will cause each Subsidiary
to keep, proper books of record and account in which full, true
and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will
permit, and will cause each Material Subsidiary to permit,
representatives of any Bank at such Bank=s expense to visit and
inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public
accountants, all upon such reasonable notice, at such reasonable
times and as often as may reasonably be desired.
SECTION 5.07. Financial Covenants. (a) The Company
will not permit the Leverage Ratio at any time to exceed 3.50 to
1.00.
(b) The Company will not permit the Interest Coverage
Ratio at any time to be less than 3.00 to 1.00.
SECTION 5.08. Negative Pledge. Neither the Company
nor any Subsidiary will create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement in an
aggregate principal amount not exceeding $75,000,000 (exclusive
of Liens permitted by clause (h) of this Section);
(b) any Lien existing on any asset of any
corporation at the time such corporation becomes a Subsidiary and
not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost
of acquiring, constructing or improving such asset, provided that
such Lien attaches to such asset concurrently with or within
180 days after the acquisition thereof or completion of the
construction or improvement thereto, as the case may be,
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged or consolidated
with or into the Company or a Subsidiary and not created in
contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Subsidiary and not
created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any Lien
permitted by any of the foregoing clauses of this Section,
provided that such Debt is not increased and is not secured by
any additional assets;
(g) Liens not otherwise permitted by the foregoing
clauses of this Section arising in the ordinary course of its
business which (i) do not secure Debt, (ii) do not secure
obligations in an amount exceeding $100,000,000 in the aggregate
and (iii) do not materially impair the use of the assets subject
thereto in the operation of the business of the Company and its
Subsidiaries; or
(h) Liens not otherwise permitted by the foregoing
clauses of this Section securing Debt or interest rate and
currency swaps in an aggregate principal amount, notional
principal and final exchange amount at any time outstanding not
to exceed $50,000,000.
SECTION 5.09. Consolidations, Mergers and Sales of
Assets. The Company and its Subsidiaries will not
(i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer, directly or indirectly,
any of the assets of the Company and its Subsidiaries, to any
other Person; provided that (A) the Company or a Subsidiary may
merge with another Person if (x) the Company or, in the case of a
merger not involving the Company, a Subsidiary Guarantor is the
corporation surviving such merger and (y) immediately after
giving effect to such merger, no Default shall have occurred and
be continuing, (B) each of the Company and its Subsidiaries may
sell, lease or otherwise transfer any of its inventory in the
ordinary course of business and any of its assets which, in the
judgment of its officers, are obsolete, excess or unserviceable
and (C) the Company and its Subsidiaries may sell, lease or
transfer any of their assets with a market value that does not,
in the aggregate together with all other sales, leases and
transfers pursuant to this clause (C), exceed 25% of the total
assets of the Company and its Subsidiaries as of the date hereof.
SECTION 5.10. Use of Proceeds. Letters of Credit and
the proceeds of the Loans made under this Agreement will be used
by the Borrowers for general corporate purposes. None of such
proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
any Amargin stock@ within the meaning of Regulation U.
SECTION 5.11. Additional Subsidiaries. The Company
will ensure at all times that Domestic Subsidiaries are (or
become within 10 Domestic Business Days of being formed or
acquired) Subsidiary Guarantors so that (a) the total assets of
the Company and the Subsidiary Guarantors comprise at least 85%
by book value of the total assets of the Company and the Domestic
Subsidiaries and (b) the total revenues of the Company and the
Subsidiary Guarantors, as of the most recently ended fiscal
quarter, comprise at least 85% of the total revenues of the
Company and the Domestic Subsidiaries for such fiscal quarter;
provided, that only Domestic Subsidiaries shall be required to
become Subsidiary Guarantors.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the following events (AEvents of Default@) shall have occurred
and be continuing:
(a) any Borrower shall fail to pay when due any
principal of any Loan or to reimburse when due any LC
Disbursement, or shall fail to pay within three Domestic Business
Days of the due date thereof any interest on any Loan, any fees
or any other amount payable hereunder;
(b) the Company or any other Borrower shall fail to
observe or perform any applicable covenant contained in
Sections 5.07 to 5.10, inclusive;
(c) any Loan Party shall fail to observe or perform
any covenant or agreement contained in any Loan Document (other
than those covered by clause (a) or (b) above) for 30 days after
written notice thereof has been given to the Company by the
Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or
statement made by any Loan Party in any Loan Document or in any
certificate, financial statement or other document delivered
pursuant to any Loan Document shall prove to have been incorrect
in any material respect when made (or deemed made);
(e) a ADefault@ occurs and is continuing under the
364-Day Credit Agreement or the Company or any Subsidiary shall
fail to make any payment of principal, face amount, interest,
premium, fees or any similar obligation in respect of any
Material Financial Obligations when due or within any applicable
grace period;
(f) any event or condition shall occur which
results in the acceleration of the maturity of any Material Debt
or enables the holder of such Debt or any Person acting on such
holder=s behalf to accelerate the maturity thereof;
(g) the Company, any other Borrower or any Material
Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall
be commenced against the Company, any other Borrower or any
Material Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Company, any
other Borrower or any Material Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay
when due an amount or amounts aggregating in excess of
$25,000,000 which it shall have become liable to pay under
Title IV of ERISA; or notice of intent to terminate a Material
Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of
$25,000,000;
(j) a judgment or order, or judgments or orders,
for the payment of money in excess, in the aggregate, of
$25,000,000 (in excess of available insurance coverage) shall be
rendered against the Company, any other Borrower or any Material
Subsidiary and such judgment or order, or judgments or orders,
shall continue unsatisfied and unstayed for a period of 30 days;
(k) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of
1934, as amended) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities
and Exchange Commission under said Act) of 35% or more of the
outstanding shares of common stock of the Company; or, during any
period of twelve consecutive calendar months commencing after
September 1, 1999, individuals who were directors of the Company
on the first day of such period shall cease to constitute a
majority of the board of directors of the Company; or
(l) the guaranty by the Company in Article 10 or
the Subsidiary Guarantee Agreement shall for any reason be
revoked or invalidated, or otherwise cease to be in full force
and effect, or the Company (or any Person on behalf of the
Company) or any Subsidiary Guarantor shall deny or disaffirm its
obligations under such guaranty;
then, and in every such event, the Administrative Agent shall
(i) if requested by Banks having more than 50% in aggregate
amount of the Commitments, by notice to the Company terminate the
Commitments and they shall thereupon terminate, (ii) if requested
by Banks holding more than 50% of the aggregate amount of the
Loans, by notice to the Company declare the Loans (together with
accrued interest thereon) to be, and the Loans shall thereupon
become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by each Borrower and (iii) if requested by Banks having
more than 50% in aggregate of the LC Exposures then outstanding,
demand cash collateral be deposited in accordance with Section
2.18(j); provided that in the case of any of the Events of
Default specified in clause (g) or (h) above with respect to any
Borrower, automatically, without any notice to any Borrower or
any other act by the Agents or the Banks, the Commitments shall
thereupon terminate, the Loans (together with accrued interest
thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower, and the Company shall
be obligated to deposit cash collateral as provided in Section
2.18(j).
SECTION 6.02. Notice of Default. The Administrative
Agent shall give notice to the Company under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes each Agent to take such
action as its agent on its behalf and to exercise such powers
under the Loan Documents and the Notes as are delegated to such
Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of the Agents
shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same
as though it were not an Agent, and each of the Agents and its
affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Company or any Subsidiary
or affiliate of the Company as if it were not an Agent hereunder.
SECTION 7.03. Action by Agents. The obligations of the
Agents hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, none of the
Agents shall be required to take any action with respect to any
Default, except as expressly provided with respect to the
Administrative Agent in Article 6.
SECTION 7.04. Consultation with Experts. Each Agent may
consult with legal counsel (who may be counsel for any Borrower),
independent public accountants and other experts selected by it
and shall not be liable to any Bank for any action taken or
omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. None of the Agents
nor any of their respective affiliates or any of their respective
directors, officers, agents or employees shall be liable to any
Bank for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or
willful misconduct. None of the Agents nor any of their
respective affiliates or any of their respective directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of the Borrower;
(iii) the satisfaction of any condition specified in Article 3,
except receipt of items required to be delivered to such Agent;
or (iv) the validity, effectiveness or genuineness of any Loan
Document, the Notes or any other instrument or writing furnished
in connection herewith. No Agent shall incur any liability by
acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex,
facsimile transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably
in accordance with its Commitment, indemnify each Agent, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrowers) against
any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except in the case of
each indemnitee such as result from such indemnitee's gross
negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with any Loan Document or any
action taken or omitted by such indemnitees hereunder or
thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon any Agent or any
other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.08. Successor Agents. Any Agent may resign at
any time by giving written notice thereof to the Banks and the
Company. Upon any such resignation, the Required Banks shall have
the right to appoint a successor Agent, which successor shall
(unless an Event of Default shall have occurred and be
continuing) be reasonably acceptable to the Company. If no
successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which successor shall (unless an Event of Default shall
have occurred and be continuing) be reasonably acceptable to the
Company, and which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance by a successor Agent of
its appointment as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights and
duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any
retiring Agent=s resignation hereunder as Agent, the provisions
of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent.
SECTION 7.09. Agents= Fees. The Company shall pay to
each Agent for its own account fees in the amounts and at the
times previously agreed upon between the Company and such Agent.
SECTION 7.10. Co-Documentation Agents. Notwithstanding
anything to the contrary contained herein, none of the Banks
identified on the facing page or signature pages of this
Agreement as "co-documentation agent" shall have any right,
power, obligation, liability, responsibility or duty under any
Loan Document other than those applicable to all Banks as such.
Without limiting the foregoing, none of such Banks shall have or
be deemed to have any fiduciary relationship with any other Bank
in connection herewith. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period for any CD Loan, Euro-Dollar Loan or Money Market
LIBOR Loan:
(a) the Administrative Agent is advised by the
Reference Banks that deposits in dollars (in the applicable
amounts) are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having
50% or more of the amount of the Commitments advise the
Administrative Agent that the Adjusted CD Rate or the Adjusted
London Interbank Offered Rate, as the case may be, to such
Borrower as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding
their CD Loans or Euro-Dollar Loans, as the case may be, for such
Interest Period.
(c) the Administrative Agent shall forthwith give
notice thereof to the Company and the Banks, whereupon until the
Administrative Agent notifies the Company that the circumstances
giving rise to such suspension no longer exist, the obligations
of the Banks to make CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before
the date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow
on such date, (i) if such Fixed Rate Borrowing is a Committed
Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing in the same aggregate amount as the requested Borrowing
and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing
shall be made in the same aggregate amount as the requested
Borrowing and shall bear interest for each day from and including
the first day to but excluding the last day of the Interest
Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of
this Agreement, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank (or its Euro-Dollar Lending Office) or by the Issuing Bank
with any request or directive promulgated on or after the date
hereof (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it
unlawful or impossible for any Bank (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans to any
Borrower or for the Issuing Bank to issue or maintain any Letter
of Credit and such Bank or the Issuing Bank, as the case may be,
shall so notify the Administrative Agent, the Administrative
Agent shall forthwith give notice thereof to the other Banks and
the Company, whereupon until such Bank or the Issuing Bank, as
the case may be, notifies the Company and the Administrative
Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar
Loans to such Borrower, or of the Issuing Bank to issue Letters
of Credit in favor of such Borrower, shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this
Section, each Bank will use reasonable efforts to designate a
different Euro-Dollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank.
If such Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to
such Borrower to maturity and shall so specify in such notice,
such Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Loan,
together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan, such Borrower shall borrow
a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and such
Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If
on or after (x) the date hereof, in the case of any Committed
Loan, any obligation to make Committed Loans, any Letter of
Credit or any commitment to issue or participate in Letters of
Credit or (y) the date of the related Money Market Quote, in the
case of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Issuing Bank or any Bank (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency made or
promulgated after the date hereof shall impose, modify or deem
applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding (A) with respect to any CD Loan any
such requirement included in an applicable Domestic Reserve
Percentage and (B) with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve
Percentage), special deposit, insurance assessment (excluding,
with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) or similar requirement against assets
of, deposits with or for the account of, or credit extended by or
Letters of Credit issued by or participated in, the Issuing Bank
or any Bank (or its Applicable Lending Office) or shall impose on
the Issuing Bank or any Bank (or its Applicable Lending
Office) or on the United States market for certificates of
deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, the Letters of Credit or its Note
or its obligation to make Fixed Rate Loans or to issue or
participate in Letters of Credit and the result of any of the
foregoing is to increase the cost to the Issuing Bank or such
Bank (or its Applicable Lending Office) of making or maintaining
any Letter of Credit or Fixed Rate Loan or participation therein,
or to reduce the amount of any sum received or receivable by the
Issuing Bank or such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank or the Issuing Bank to
be material, then, within 15 days after demand by such Bank or
the Issuing Bank (with a copy to the Administrative Agent), the
Company shall pay to such Bank or the Issuing Bank such
additional amount or amounts as will compensate such Bank or the
Issuing Bank for such increased cost or reduction.
(b) If any Bank or the Issuing Bank shall have
determined that, after the date hereof, the adoption of any
applicable law, rule or Regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital of the
Issuing Bank or such Bank (or the Parent of either) as a
consequence of the Issuing Bank's or such Bank=s obligations
hereunder to a level below that which the Issuing Bank or such
Bank (or the Parent of either) could have achieved but for such
adoption, change, request or directive (taking into consideration
its policies with respect to capital adequacy) by an amount
deemed by the Issuing Bank or such Bank to be material, then from
time to time, within 15 days after demand by the Issuing Bank or
such Bank (with a copy to the Administrative Agent), the Company
shall pay to the Issuing Bank or such Bank such additional amount
or amounts as will compensate the Issuing Bank or such Bank (or
the Parent of either) for such reduction.
(c) Each Bank and the Issuing Bank will promptly notify
the Company and the Administrative Agent of any event of which it
has knowledge, occurring after the date hereof, which will
entitle the Issuing Bank or such Bank to compensation pursuant to
this Section and, in the case of a Bank, will use reasonable
efforts to designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Bank,
be otherwise disadvantageous to such Bank. A certificate of the
Issuing Bank or any Bank claiming compensation under this Section
and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive in the absence of manifest
error. In determining such amount, the Issuing Bank or such Bank
may use any reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans. If (i) the obligation of any Bank to make Euro-
Dollar Loans to any Borrower has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) with respect to its CD Loans or Euro-Dollar Loans
and the Borrower shall, by at least five Euro-Dollar Business
Days= prior notice to such Bank through the Administrative Agent,
have elected that the provisions of this Section shall apply to
such Bank, then, unless and until such Bank notifies the Company
that the circumstances giving rise to such suspension or demand
for compensation no longer apply:
(a) all Loans to such Borrower which would otherwise be
made by such Bank as CD Loans or Euro-Dollar Loans, as the case
may be, to such Borrower shall be made instead as Base Rate Loans
(on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other
Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as
the case may be, to such Borrower has been repaid, all payments
of principal which would otherwise be applied to repay such Fixed
Rate Loans shall be applied to repay its Base Rate Loans instead.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall be deemed by the
execution and delivery of its Election to Participate to have
represented and warranted as of the date thereof that:
SECTION 9.01. Corporate Existence and Power. It is a
corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and
is a Wholly-Owned Consolidated Subsidiary.
SECTION 9.02. Corporate and Governmental Authorization;
No Contravention. The execution and delivery by it of its
Election to Participate and its Notes, and the performance by it
of the Loan Documents to which it is a party and its Notes, are
within its corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision
of applicable law or Regulation or of its certificate of
incorporation or by-laws or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the
Company or such Eligible Subsidiary or result in the creation or
imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
SECTION 9.03. Binding Effect. Each Loan Document to
which such Eligible Subsidiary is a party constitutes a valid and
binding agreement of it and its Notes, when executed and
delivered in accordance with this Agreement, will constitute
valid and binding obligations of such Eligible Subsidiary.
SECTION 9.04. Taxes. Except as disclosed in such
Election to Participate, there is no income, stamp or other tax
of any country, or any taxing authority thereof or therein,
imposed by or in the nature of withholding or otherwise, which is
imposed on any payment to be made by such Eligible Subsidiary
pursuant hereto or on its Notes, or is imposed on or by virtue of
the execution, delivery or enforcement of its Election to
Participate or of its Notes.
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty. The Company hereby
unconditionally guarantees the full and punctual payment (whether
at stated maturity, upon acceleration or otherwise) of the
principal of and interest on each Loan made to any Eligible
Subsidiary pursuant to this Agreement, and the full and punctual
payment of all other amounts (including with respect to LC
Disbursements) payable by any Eligible Subsidiary under this
Agreement. Upon failure by any Eligible Subsidiary to pay
punctually any such amount, the Company shall forthwith on demand
pay the amount not so paid at the place and in the manner
specified in this Agreement.
SECTION 10.02. Guaranty Unconditional. The obligations
of the Company hereunder shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected
by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any Eligible
Subsidiary under this Agreement, any other Loan Document or any
Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to
this Agreement, any other Loan Document or any Note;
(c) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any obligation
of any Eligible Subsidiary under this Agreement, any other Loan
Document or any Note;
(d) any change in the corporate existence, structure or
ownership of any Eligible Subsidiary, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting
any Eligible Subsidiary or its assets or any resulting release or
discharge of any obligation of any Eligible Subsidiary contained
in this Agreement, any other Loan Document or any Note;
(e) the existence of any claim, set-off or other rights
which the Company may have at any time against any Eligible
Subsidiary, any Agent, any Bank or any other Person, whether in
connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or
against any Eligible Subsidiary for any reason of this Agreement,
any other Loan Document or any Note, or any provision of
applicable law or Regulation purporting to prohibit the payment
by any Eligible Subsidiary of the principal of or interest on any
Note or any other amount payable by it under any Loan Document;
or
(g) any other act or omission to act or delay of any
kind by any Eligible Subsidiary, any Agent, any Bank or any other
Person or any other circumstance whatsoever which might, but for
the provisions of this paragraph, constitute a legal or equitable
discharge of the Company=s obligations hereunder.
SECTION 10.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances. The Company=s obligations
hereunder shall remain in full force and effect until the
Commitments shall have terminated and the principal of and
interest on the Notes and all other amounts payable by the Loan
Parties under the Loan Documents shall have been paid in full. If
at any time any payment of the principal of or interest on any
Note or any other amount payable by any Eligible Subsidiary under
this Agreement or any other Loan Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of any Eligible Subsidiary or otherwise, the
Company=s obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had been
due but not made at such time.
SECTION 10.04. Waiver by the Company. The Company
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person
against any Eligible Subsidiary or any other Person.
SECTION 10.05. Subrogation. Upon making any payment
with respect to any Eligible Subsidiary hereunder, the Company
shall be subrogated to the rights of the payee against such
Eligible Subsidiary with respect to such payment; provided that
the Company shall not enforce any payment by way of subrogation
until all amounts of principal of and interest on the Loans and
all other amounts payable under this Agreement have been paid in
full.
SECTION 10.06. Stay of Acceleration. In the event that
acceleration of the time for payment of any amount payable by any
Eligible Subsidiary under this Agreement or its Notes is stayed
upon insolvency, bankruptcy or reorganization of such Eligible
Subsidiary, all such amounts otherwise subject to acceleration
under the terms of this Agreement shall nonetheless be payable by
the Company hereunder forthwith on demand by the Administrative
Agent made at the request of the Required Banks.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (a) in the case of any
Borrower, at its address, facsimile number or telex number set
forth on the signature pages hereof (or, in the case of an
Eligible Subsidiary, its Election to Participate), (b) in the
case of the Administrative Agent, at its address, facsimile
number or telex number in New York City set forth on the
signature pages hereof, (c) in the case of any Bank, at its
address, facsimile number or telex number set forth in its
Administrative Questionnaire or (d) in the case of any party,
such other address, facsimile number or telex number as such
party may hereafter specify for the purpose by notice to the
Agents and the Company. Each such notice, request or other
communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this
Section and the appropriate answer back is received, (ii) if
given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of
receipt is received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section;
provided that notices under Article 2 or Article 8 shall not be
effective until received.
SECTION 11.02. No Waivers. No failure or delay by
either Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.03. Expenses; Indemnification. (a) The
Company shall pay (i) all out-of-pocket expenses of the Agents,
including reasonable fees and disbursements of special counsel
for the Agents, in connection with the preparation and
administration of the Loan Documents, any waiver or consent
hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder, (ii) all out-
of-pocket expenses of the Issuing Bank, including reasonable fees
and disbursements of special counsel for the Issuing Bank, in
connection with the preparation and administration of this
Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (iii) if
an Event of Default occurs, all out-of-pocket expenses incurred
by any of the Issuing Bank, the Agents and each Bank, including
fees and disbursements of counsel (which counsel may be an
employee of such Bank or the Issuing Bank), in connection with
such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(b) The Company agrees to indemnify the Issuing Bank,
each Agent and Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each, an Aindemnitee@) and hold each indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel
(which counsel may be an employee of such indemnitee), which may
be incurred by such indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or
not such indemnitee shall be designated a party thereto) brought
or threatened relating to or arising out of any Loan Document or
any actual or proposed use of proceeds of Loans or Letters of
Credit hereunder; provided that no indemnitee shall have the
right to be indemnified hereunder for its own gross negligence or
willful misconduct or breach of its obligations under any Loan
Document as determined by a court of competent jurisdiction.
SECTION 11.04. Sharing of Set-offs. Each Bank agrees
that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to
the Loans and participations in LC Disbursement owed to it which
is greater than the proportion received by any other Bank in
respect of the aggregate amount of principal and interest due
with respect to any Loans and participations in LC Disbursements
owed to such other Bank, the Bank receiving such proportionately
greater payment shall purchase participations in such Loans and
participations in LC Disbursements held by the other Banks, and
such other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to the
Loans and the participations in LC Disbursements held by the
Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of
indebtedness of a Borrower other than its indebtedness hereunder.
Each Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation in a
Loan or LC Disbursement, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation
as fully as if such holder of a participation were a direct
creditor of such Borrower in the amount of such participation.
SECTION 11.05. Amendments and Waivers. Any provision of
this Agreement, the other Loan Documents or the Notes may be
amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Company and the Required Banks (and,
if the rights or duties of the Issuing Bank or any Agent are
affected thereby, by the Issuing Bank or such Agent); provided
that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks)
or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or LC Disbursement
or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or LC
Disbursement or any fees hereunder or for any scheduled reduction
or termination of any Commitment, or (iv) change the percentage
of the Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks which shall be required for the
Banks or any of them to take any action under this Section or any
other provision of this Agreement, (v) modify any provision of
Article 10 in any material respect or (vi) release all or any
substantial portion of the Subsidiary Guarantors from their
Guarantees under the Subsidiary Guarantee Agreement, except as
provided therein; provided further that no such amendment, waiver
or modification shall, unless signed by an Eligible Subsidiary,
(w) subject such Eligible Subsidiary to any additional
obligation, (x) increase the principal of or rate of interest on
any outstanding Loan of such Eligible Subsidiary, (y) change the
stated maturity of any outstanding Loan of such Eligible
Subsidiary or (z) change this proviso.
SECTION 11.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns, except that no Borrower may assign or otherwise
transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks
or other institutions (each a AParticipant@) participating
interests in its Commitment or any or all of its Loans and its
interest in LC Disbursements. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not
upon notice to the Borrowers and the Agents, such Bank shall
remain responsible for the performance of its obligations
hereunder, and the Borrowers and the Agents shall continue to
deal solely and directly with such Bank in connection with such
Bank=s rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide
that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii) or
(iii) of Section 11. 05 without the consent of the Participant.
The Borrowers agree that each Participant shall, to the extent
provided in its participation agreement, be entitled to the
benefits of Article 8 with respect to its participating interest.
An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more
banks or other institutions (each an AAssignee@) all, or a
proportionate part of all, of its rights and obligations under
this Agreement and the Notes, and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit D hereto executed
by such Assignee and such transferor Bank, with (and subject to)
the consent of the Company, the Issuing Bank and the
Administrative Agent, such consents not to be unreasonably
withheld; provided that if an Assignee is an affiliate of a Bank
or was a Bank immediately prior to such assignment, no such
consent shall be required, and if an Event of Default has
occurred and is continuing, the consent of the Company shall not
be required; and provided further that any assignment shall not
be less than $10,000,000, or if less, shall constitute an
assignment of all of such Bank=s rights and obligations under
this Agreement and the Notes. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank
of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Administrative
Agent and the Borrowers shall make appropriate arrangements so
that, if required, new Notes are issued to the Assignee. In
connection with any such assignment, the transferor Bank shall
pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $2,500. If the
Assignee is not incorporated under the laws of the United States
of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account,
deliver to the Company and the Administrative Agent certification
as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 2.17.
(d) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Notes to a Federal
Reserve Bank. No such assignment shall release the transferor
Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any
Bank=s rights shall be entitled to receive any greater payment
under Section 8.03 than such Bank would have been entitled to
receive with respect to the rights transferred, unless such
transfer is made with the Company=s prior written consent or by
reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
(f) Notwithstanding anything to the contrary contained
herein, any Bank (a AGranting Bank@) may grant to a special
purpose funding vehicle (an ASPC@) of such Granting Bank,
identified as such in writing from time to time by the Granting
Bank to the Administrative Agent and the Company, the option to
provide to the Borrower all or any part of any Loan that such
Granting Bank would otherwise be obligated to make to the
Borrower pursuant to Section 2.01; provided that (i) nothing
herein shall constitute a commitment to make any Loan by any SPC
and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the
Granting Bank shall be obligated to make such Loan pursuant to
the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent,
and as if, such Loan were made by the Granting Bank. Each party
hereto hereby agrees that no SPC shall be liable for any payment
under this Agreement for which a Bank would otherwise be liable,
for so long as, and to the extent, the related Granting Bank
makes such payment. In furtherance of the foregoing, each party
hereto hereby agrees that, prior to the date that is one year and
one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join
any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 11.06 any SPC
may (i) with notice to, but without the prior written consent of,
the Company or the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interest
in any Loans to its Granting Bank or to any financial
institutions providing liquidity and/or credit facilities to or
for the account of such SPC to fund the Loans made by such SPC or
to support the securities (if any) issued by such SPC to fund
such Loans and (ii) disclose on a confidential basis any non-
public information relating to its Loans to any rating agency,
commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPC. This section may not
be amended with respect to any SPC without the written consent of
such SPC's Granting Bank. Notwithstanding any grant of rights to
an SPC pursuant to this paragraph, the Granting Bank shall retain
the sole right to approve any amendment, modification or waiver
of any provision of this Agreement or the other Loan Documents;
provided that the Granting Bank may enter into and perform any
agreement with the SPC as to the manner in which it will exercise
such right.
SECTION 11.07. Collateral. Each of the Banks represents
to the Agents and each of the other Banks that it in good faith
is not relying upon any Amargin stock@ (as defined in
Regulation U) as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 11.08. Governing Law; Submission to
Jurisdiction. (a) This Agreement and each Note shall be governed
by and construed in accordance with the laws of the State of New
York.
(b) Each Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in
New York City for purposes of all legal proceedings arising out
of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby. Each Borrower irrevocably
waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in
an inconvenient forum.
(c) Each Borrower irrevocably designates and appoints
CT Corporation System, having an office on the date hereof at
1633 Broadway, New York, New York 10102 as such Borrower=s
authorized agent, to accept and acknowledge on its behalf service
of any and all process which may be served in any suit, action or
proceeding referred to in subsection (b) above in any federal or
New York State court sitting in New York City. Each Borrower
represents and warrants that such agent has agreed to accept such
appointment. Said designation and appointment shall not be
revocable by any Borrower until all principal, interest and other
amounts payable hereunder shall have been paid in full in
accordance with the provisions hereof or, if earlier, when such
Borrower=s status as a Borrower hereunder is terminated. If such
agent shall cease to act as agent for any Borrower, such Borrower
agrees to designate irrevocably and appoint without delay another
such agent satisfactory to the Agent.
(d) Each Borrower consents to process being served in
any suit, action or proceeding referred to in
subsection (b) above in any federal or New York State court
sitting in New York City by service of process upon its agent
appointed as provided in subsection (c) above; provided that, to
the extent lawful and possible, notice of said service upon such
agent shall be mailed by registered or certified air mail,
postage prepaid, return receipt requested, to such Borrower at
its address specified in or pursuant to Section 11.01. Each
Borrower irrevocably waives, to the fullest extent permitted by
law, all claim of error by reason of service in such manner and
agrees that such service shall be deemed in every respect
effective service of process upon such Borrower in any such suit,
action or proceeding and shall, to the fullest extent permitted
by law, constitute valid and personal service upon and personal
delivery to such Borrower.
(e) Nothing in this Section shall affect the right of
the Administrative Agent or any Bank to serve process in any
other manner permitted by law or limit the right of the
Administrative Agent or any Bank to bring proceedings against any
Borrower in the courts of any jurisdiction or jurisdictions.
SECTION 11.09. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Agreement and the other Loan Documents constitute the entire
agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, oral
or written, relating to the subject matter hereof.
SECTION 11.10. Waiver of Jury Trial. EACH OF THE
COMPANY, THE BORROWERS, THE ISSUING BANK, THE AGENTS AND THE
BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.11. Confidentiality. Each Bank agrees to
exercise all reasonable efforts to keep any information delivered
or made available by a Borrower to it which is clearly indicated
to be confidential information, confidential from anyone other
than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided that nothing herein shall
prevent any Bank from disclosing such information (i) to any
other Bank, (ii) to its affiliates and its and their officers,
directors, employees, agents, attorneys and accountants who have
a need to know such information in accordance with customary
banking practices and who receive such information having been
made aware of the restrictions set forth in this Section,
(iii) upon the order of any court or administrative agency,
(iv) upon the request or demand of any regulatory agency or
authority having jurisdiction over such Bank, (v) which has been
publicly disclosed, (vi) to the extent reasonably required in
connection with any litigation to which any Agent, any Bank, or
their respective affiliates may be a party, (vii) to the extent
reasonably required in connection with the exercise of any remedy
hereunder, (viii) to such Bank=s legal counsel and independent
auditors, and (ix) to any actual or proposed participant or
assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this Section.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
CK WITCO CORPORATION
By /s/John R. Jepsen
Name: John R. Jepsen
Title: Vice President & Treasurer
CK Witco Corporation
Attention:
Facsimile number:
CITIBANK, N.A., individually and
as Administrative Agent,
By /s/Carolyn Sheridan
Name: Carolyn Sheridan
Title: Vice President
Citibank, N.A.
Attention:
Facsimile number:
<PAGE>
PRICING SCHEDULE
Each of AFacility Fee Rate@, AEuro-Dollar Margin@ and
ACD Margin@ means, for any day, the rate set forth below in the
row opposite such term and in the column corresponding to the
Pricing Level that applies on such day as determined based on the
ratings by Moody's and S&P:
Level I Level II Level III Level IV Level V
Pricing Level A-/A3 BB+/Baa1 BBB/Baa2 BBB-/Baa3 <BBB-/Baa3
Facility Fee
Rate .100% .125% .150% .200% .250%
Euro-Dollar
Margin .325% .375% .475% .675% 1.000%
CD Margin 1.575% 1.625% 1.725% 1.925% 2.250%
Utilization
Fee 0.125% 0.125% 0.125% 0.250% 0.250%
For purposes of this Schedule, the following terms have
the following meanings:
AMoody=s@ means Moody=s Investors Service, Inc.
AS&P@ means Standard & Poor=s Ratings Services, a
division of The McGraw-Hill Companies, Inc.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt
securities of the Company without third-party credit enhancement,
and any rating assigned to any other debt security of the Company
shall be disregarded. The ratings in effect for any day are those
in effect at the close of business on such day. In the case of
split ratings from S&P and Moody=s, the rating to be used to
determine the applicable Pricing Level is the higher of the two
ratings (e.g., A-/Baa1 results in Level I Pricing) or, if the
ratings differ by more than one Level indicated above, the rating
one above the lower of the two ratings; provided that if one of
such ratings is below Level III, the Pricing Level will be based
on the lower of such ratings.
<PAGE>
EXHIBIT A
NOTE
New York, New York
, 19
For value received, [name of relevant Borrower], a [relevant
Borrower=s jurisdiction of incorporation] corporation (the
ABorrower@), promises to pay to the order of [name of Bank] (the
ABank@), for the account of its Applicable Lending Office, the
unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on
the last day of the Interest Period relating to such Loan or as
otherwise provided in the Credit Agreement. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan
on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other
immediately available funds at the office of Citibank, N.A., 399
Park Avenue, New York, NY 10043.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, if the Bank so elects in
connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof, provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Five-Year
Credit Agreement dated as of October 28, 1999 among CK Witco
Corporation, the Eligible Subsidiaries referred to therein, the
banks listed on the signature pages thereof, Citibank, N.A., as
Administrative Agent, The Chase Manhattan Bank, as Syndication
Agent, and Bank of America, N.A. and Deutsche Bank Securities
Inc., as Co-Documentation Agents (as the same may be amended from
time to time, the ACredit Agreement@). Terms defined in the
Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
[The payment in full of the principal and interest on this
note has, pursuant to the provisions of the Credit Agreement,
been unconditionally guaranteed by CK Witco Corporation.]
[NAME OF RELEVANT BORROWER]
By
Name:
Title:
Note (cont=d)
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount of Type of Amount of Maturity Notation
Loan Loan Principal Date Made By
Repaid
<PAGE>
EXHIBIT B
OPINION OF JOHN T. FERGUSON, II, ESQ.,
GENERAL COUNSEL OF THE COMPANY
October 28, 1999
To the Banks and the Agents
Referred to Below
c/o Bank of America, N.A. and
Deutsche Bank Securities Inc.,
as Co-Documentation Agents
[ ]
Dear Sirs:
I am General Counsel of CK Witco Corporation (the
ACompany@). This opinion is being rendered to you pursuant to
Section 3.01(b) of the Five-Year Credit Agreement dated as of
October 28, 1999 (the ACredit Agreement@) among the Company, the
Eligible Subsidiaries referred to therein, the Banks listed on
the signature pages thereof, The Chase Manhattan Bank, as
Syndication Agent, Citibank, N.A., as Administrative Agent, and
Bank of America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents. Terms defined in the Credit Agreement are
used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate
records, certificates of public officials and officers of the
Company and its Subsidiaries and other instruments and have
conducted such other investigations of fact and law as I have
deemed necessary or advisable for purposes of this opinion. I
have assumed, with your permission, that the signatures (other
than those of officers of the Company and its Subsidiaries) on
all the documents that I have examined are genuine.
Upon the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers required to carry on
its business as now conducted. Each of the Company=s Subsidiaries
which is a Asignificant subsidiary@ within the meaning of
Regulation S-X of the Securities and Exchange Commission is a
corporation validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has all corporate
powers required to carry on its business as now conducted.
2. The execution, delivery and performance by each Loan
Party of the Loan Documents to which it is a party are within
such Loan Party=s corporate powers, have been duly authorized by
all necessary corporate action, and require no action by or in
respect of, or filing with, any governmental agency or official.
3. The execution, delivery and performance by the
Company of the Credit Agreement and by the other Loan Parties of
the Loan Documents to which they are parties will not contravene,
or constitute a default under, any provision of applicable law or
Regulation or of the articles of incorporation or bylaws of any
Loan Party or any agreement or instrument evidencing Debt of any
Loan Party or, to the best of my knowledge, any other agreement,
judgment, injunction, order, decree or other instrument binding
upon any Loan Party or, to the best of my knowledge, result in
the creation or imposition of any Lien on any asset of the
Company or any of its Subsidiaries.
4. The Credit Agreement constitutes a valid and binding
agreement of the Company and the other Loan Documents constitute
valid and binding agreements of the Loan Parties that are party
thereto..
5. Except as disclosed in the Company=s S-4 as filed
with the Securities and Exchange Commission on July 28, 1999,
there is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Company
or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could
materially adversely affect the business or consolidated
financial position of the Company and its Consolidated
Subsidiaries, considered as a whole, or which in any manner draws
into question the validity of the Credit Agreement, any other
Loan Document or the Notes. For the purposes hereof, I have not
regarded an action, suit or proceeding to be Athreatened@ against
the Company or any of its Subsidiaries unless the potential
litigant has manifested to the management of the Company in
writing an intention to institute the same.
This opinion is rendered solely to you in connection
with the above matter. This opinion may not be relied upon by you
for any other purpose or relied upon by any other person without
my prior written consent.
Very truly yours,
<PAGE>
EXHIBIT C
OPINION OF
WACHTELL LIPTON ROSEN & KATZ,
SPECIAL COUNSEL FOR THE COMPANY
October 28, 1999
To the Banks and the Agents
Referred to Below
c/o Bank of America, N.A. and Deutsche
Bank Securities Inc., as
Co-Documentation Agents
[ ]
[ ]
Dear Sirs:
We have acted as special counsel to CK Witco Corporation, a
Delaware corporation (the ACompany@), in connection with the
Five-Year Credit Agreement (the ACredit Agreement@) dated as of
October 28, 1999 among the Company, the Eligible Subsidiaries
referred to therein, the banks listed on the signature pages
thereof (the ABanks@), The Chase Manhattan Bank, as Syndication
Agent, Citibank, N.A., as Administrative Agent and Bank of
America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents (the AAgents@). This opinion is being
delivered pursuant to Section 3.01(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate
records, certificates of public officials and other instruments
and have conducted such other investigations of fact and law as
we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Company of
the Credit Agreement and its Notes [and by each Loan Party that
is organized under the laws of Delaware or New York of the Loan
Documents to which such Loan party is a party] are within the
corporate powers of the Company and such Loan Parties,
respectively, and have been duly authorized by a necessary
corporate action.
2. The Loan Documents constitute valid and binding
agreements of the Company and the Loan Parties party thereto, in
each case enforceable against the Company and such Loan Parties
in accordance with their respective terms, except to the extent
the same may be limited by applicable bankruptcy, moratorium,
insolvency, reorganization or similar laws of general application
and by general principles of equity (whether considered in a
proceeding at law or in equity).
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York
and the General Corporation Law of the State of Delaware. In
giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State
of New York) in which any Bank is located which limits the rate
of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any
other purpose or relied upon by or furnished to any other person
without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _______, 19_ among [ASSIGNOR]
(the AAssignor@), [ASSIGNEE] (the AAssignee@), [CK WITCO
CORPORATION (the ACompany@), CITIBANK, N.A., as Administrative
Agent and BANK OF AMERICA, N.A. and DEUTSCHE BANK SECURITIES INC.
as Co-Documentation Agents (collectively the AAgents@)].
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
AAgreement@) relates to the Five-Year Credit Agreement dated as
of October 28, 1999 among the Company, the Eligible Subsidiaries
referred to therein, the Assignor and the other Banks party
thereto, as Banks, and the Agents (as the same may be amended or
modified from time to time, the ACredit Agreement@);
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans in an aggregate amount at
any time outstanding not to exceed $_________________;
WHEREAS, Committed Loans made by the Assignor under the
Credit Agreement in the aggregate amount of $_____ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment thereunder in
an amount equal to $_________ (the AAssigned Amount@), together
with a corresponding portion of its outstanding Committed Loans,
and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such
terms;
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein, the parties hereto agree
as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and
sells to the Assignee all of the rights of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, and the
Assignee hereby accepts such assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, (the Company and the
Agents) and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as
of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement with
a Commitment in an amount equal to the Assigned Amount, and
(ii) the Commitment of the Assignor shall, as of the date hereof,
be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof, in Dollars
(in Federal Funds), the amount heretofore agreed between them.1
It is understood that facility fees accrued to the date hereof
are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees
that if it receives any amount under the Credit Agreement which
is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of
such other party=s interest therein and shall promptly pay the
same to such other party.
[SECTION 4. Consent of the Company and the Agents. This
Agreement is conditioned upon the consent of the Company and the
Agents pursuant to Section 11.06(c) of the Credit Agreement. The
execution of this Agreement by the Company and the Agents is
evidence of this consent. Pursuant to Section 11.06(c) the
Borrower agrees, if requested by the Assignee, to execute and
deliver a Note payable to the order of the Assignee to evidence
the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes
no representation or warranty in connection with, and shall have
no responsibility with respect to, the solvency, financial
condition, or statements of any Borrower, or the validity and
enforceability of the obligations of any Borrower in respect of
the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and
financial condition of the Borrowers.
1 Amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee,
net of any portion of any upfront fee to be paid by the Assignor
to the Assignee.
SECTION 6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 7. Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By
Name:
Title:
[ASSIGNEE]
By
Name:
Title:
[CK WITCO CORPORATION
By
Name:
Title: ]
CITIBANK, N.A., as
Administrative Agent
By
Name:
Title:
[BANK OF AMERICA, N.A., as Co-
Documentation Agent,
By
Name:
Title: ]
[DEUTSCHE BANK SECURITIES INC.,
as Co-Documentation Agent,
By
Name:
Title: ]
<PAGE>
EXHIBIT E
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Citibank, N.A. (the AAdministrative Agent@)
From: [Name of Relevant Borrower]
Re: Five-Year Credit Agreement (the ACredit Agreement@)
dated as of October 28, 1999 among CK Witco
Corporation, the Eligible Subsidiaries referred to
therein, and the Banks and Agents listed on the
signature pages thereof
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following
proposed Money Market Borrowing(s):
Date of Borrowing:
Principal Amount 1 Interest Period 2
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
1 Amount must be equal to $5,000,000 or a larger multiple of
$1,000,000.
2 Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the
definition of Interest Period.
[Name of Relevant Borrower]
By
Name:
Title:
<PAGE>
EXHIBIT F
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of Borrower]
(the ABorrower@)
Pursuant to Section 2.03 of the Five-Year Credit Agreement
dated as of October 28, 1999 among CK Witco Corporation, the
Eligible Subsidiaries referred to therein, the Banks and Agents
(including the undersigned) parties thereto, we are pleased on
behalf of the Borrower to invite you to submit Money Market
Quotes to the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Please respond to this invitation by no later than
[2:00 P.M.] [9:30 A.M.] (New York City/London time) on [date].
CITIBANK, N.A., as Administrative Agent
By
Authorized Officer
<PAGE>
EXHIBIT G
FORM OF FIVE-YEAR MONEY MARKET QUOTE
To: Citibank, N.A., as Administrative Agent
Re: Money Market Quote to [Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the Borrower
dated ______________, 19__, we hereby make the following Money
Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: *
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest Periods
and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin***][Absolute Rate****]
$
$
[Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not exceed
$________________.]**
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the
sum of the individual offers exceeds the amount the Bank is
willing to lead. Bids must be made for an amount equal to
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified
in the related Invitation. No more than five bids are permitted
for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify whether
"PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set
forth in the Five-Year Credit Agreement dated as of October 28,
1999, among CK Witco Corporation, the Eligible Subsidiaries
referred to therein, and the Banks and Agents listed on the
signature pages thereof, irrevocably obligates us to make the
Money Market Loan(s) for which any offer(s) are accepted, in
whole or in part.
Very truly yours,
Dated: ____________________
[NAME OF BANK]
By:
Authorized Officer
EXHIBIT H
FORM OF ELECTION TO PARTICIPATE
__________________, 19__
CITIBANK, N.A., as Administrative Agent for the Banks named in
the Five-Year Credit Agreement dated as of October 28, 1999 among
CK Witco Corporation, the Eligible Subsidiaries referred to
therein, such Banks, such Administrative Agent and Bank of
America, N.A. and Deutsche Bank Securities Inc., as Co-
Documentation Agents (the ACredit Agreement@)
Dear Sirs:
Reference is made to the Credit Agreement described above.
Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meaning provided
therein.
The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects to be
an Eligible Subsidiary for purposes of the Credit Agreement,
effective from the date hereof until an Election to Terminate
shall have been delivered on behalf of the undersigned in
accordance with the Credit Agreement. The undersigned confirms
that the representations and warranties set forth in Article 9 of
the Credit Agreement are true and correct as to the undersigned
as of the date hereof, and the undersigned hereby agrees to
perform all the obligations of an Eligible Subsidiary under, and
to be bound in all respects by the terms of, the Credit Agreement
as if the undersigned were a signatory party thereto.
The address to which all notices to the undersigned under
the Credit Agreement should be directed is:
This instrument shall be construed in accordance with and
governed by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By
Title:
The undersigned hereby confirms that [name of Eligible
Subsidiary] is an Eligible Subsidiary for purposes of the Credit
Agreement described above.
CK Witco Corporation
By
Name:
Title:
Receipt of the above Election to Participate is hereby
acknowledged on and as of the date set forth above.
CITIBANK, N.A.,
as Administrative Agent
By
Name:
Title:
EXHIBIT I
FORM OF ELECTION TO TERMINATE
__________________, 19__
CITIBANK, N.A., as Administrative Agent for the Banks named
in the Five-Year Credit Agreement dated as of October 28, 1999
among CK Witco Corporation, the Eligible Subsidiaries referred to
therein, such Banks, such Administrative Agent, The Chase
Manhattan Bank, as Syndication Agent, and Bank of America, N.A.
and Deutsche Bank Securities Inc., as Co-Documentation Agents
(the "Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above.
Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meaning provided
therein.
The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects to
terminate its status as an Eligible Subsidiary for purposes of
the Credit Agreement, effective as of the date hereof. The
undersigned hereby represents and warrants that all principal and
interest on all Notes of the undersigned and all other amounts
payable by the undersigned pursuant to the Credit Agreement have
been paid in full on or prior to the date hereof. Notwithstanding
the foregoing, this Election to Terminate shall not affect any
obligation of the undersigned under the Credit Agreement or under
any Note heretofore incurred.
This instrument shall be construed in accordance with and
governed by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By
Title:
The undersigned hereby confirms that the status of [name of
Eligible Subsidiary] as an Eligible Subsidiary for purposes of
the Credit Agreement described above is terminated as of the date
hereof
CK WITCO CORPORATION
By
Name:
Title:
Receipt of the above Election to Terminate is hereby
acknowledged on and as of the date set forth above.
CITIBANK, N.A., as Administrative
Agent
By
Name:
Title:
EXHIBIT J
OPINION OF COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided
in Section 3.03 of
the Credit Agreement]
To the Banks and the Agents Referred to Below
c/o Citibank, N.A., as Administrative Agent
[ ]
[ ]
Dear Sirs:
I am counsel to [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation (the "Borrower") and
give this opinion pursuant to Section 3.03(a) of the Five-Year
Credit Agreement (the "Credit Agreement") dated as of October 28,
1999 among CK Witco Corporation (the "Company"), the Eligible
Subsidiaries referred to therein, the Banks listed on the
signature pages thereof, Citibank, N.A., as Administrative Agent,
and Bank of America, N.A. and Deutsche Bank Securities Inc., as
Co-Documentation Agents. Terms defined in the Credit Agreement
are used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate
records, certificates of public officials and other instruments
and have conducted such other investigations of fact and law as I
have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of [jurisdiction of
incorporation], and is a Wholly-Owned Consolidated Subsidiary.
2. The execution and delivery by the Borrower of its
Election to Participate and its Notes and the performance by the
Borrower of the Credit Agreement and its Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower or the Company or any of its Subsidiaries or
result in the creation or imposition of any Lien on any asset of
the Company or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and its Notes constitute valid and
binding obligations of the Borrower.
4. Except as disclosed in the Borrower's Election to
Participate, there is no income, stamp or other tax of
[jurisdiction of incorporation and, if different, principal place
of business], or any taxing authority thereof or therein, imposed
by or in the nature of withholding or otherwise, which is imposed
on any payment to be made by the Borrower pursuant to the Credit
Agreement or its Notes, or is imposed on or by virtue of the
execution, delivery or enforcement of its Election to Participate
or of its Notes.
Very truly yours,
EXHIBIT K
FIVE-YEAR SUBSIDIARY GUARANTEE AGREEMENT (together with
instruments executed and delivered pursuant to Section 19, this
"Agreement") dated as of October 28, 1999, among each of the
subsidiaries of CK Witco Corporation (the "Company") listed on
Schedule I hereto (the "Subsidiary Guarantors"), and CITIBANK,
N.A., a national banking association ("Citibank"), as
administrative agent (in such capacity, the "Administrative
Agent") for the Banks (as defined in the Credit Agreement
referred to below).
Reference is made to the Five-Year Credit Agreement dated as
of October 28, 1999, (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among the
Company, the Banks (as defined in Article I thereof), the
Administrative Agent and Citibank, N.A., as issuing bank (in such
capacity, the "Issuing Bank") for the Banks. Capitalized terms
used and not defined herein are used with the meanings assigned
to such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Company and the
Eligible Subsidiaries, and the Issuing Bank has agreed to issue
Letters of Credit for the accounts of the Borrowers, in each case
pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of the Subsidiary
Guarantors is a Subsidiary of the Company and acknowledges that
it will derive substantial benefit from the making of the Loans
by the Banks to the Borrowers, and the issuance of the Letters of
Credit by the Issuing Bank for the accounts of the Borrowers.
The obligations of the Banks to make Loans and of the Issuing
Bank to issue Letters of Credit are conditioned on, among other
things, the execution and delivery by the Subsidiary Guarantors
of a Subsidiary Guarantee Agreement in the form hereof. As
consideration therefor and in order to induce the Banks to make
Loans and the Issuing Bank to issue Letters of Credit, the
Subsidiary Guarantors are willing to execute this Agreement for
the benefit of the Administrative Agent, the Banks and each
counterparty to a Derivatives Obligation with the Borrowers which
was an Affiliate of a Bank at the time such Derivatives
Obligation was entered into (collectively, the "Lending
Parties").
Accordingly, the parties hereto agree as follows:
SECTION 1. Subsidiary Guarantee. Each Subsidiary Guarantor
unconditionally guarantees, jointly with the other Subsidiary
Guarantors and severally, as a primary obligor and not merely as
a surety, (a) the due and punctual payment of (i) the principal
of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set
for prepayment or otherwise, (ii) each payment required to be
made by the Borrowers under the Credit Agreement in respect of
any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrowers to the Lending
Parties under this Agreement, the Credit Agreement and the other
Loan Documents, (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the
Borrowers under or pursuant to this Agreement, the Credit
Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all the covenants, agreements,
obligations and liabilities of each Loan Party under or pursuant
to this Agreement and the other Loan Documents, and (d) unless
otherwise agreed upon in writing by the applicable Bank party
thereto, the due and punctual payment and performance of all
obligations of the Borrowers, monetary or otherwise, under each
Derivatives Obligation entered into with any counterparty that
was a Bank (or an Affiliate of a Bank) at the time such
Derivatives Obligation was entered into (all the monetary and
other obligations referred to in the preceding lettered clauses
of this paragraph being referred to collectively as the
"Obligations"). Each Subsidiary Guarantor waives notice of and
hereby consents to any agreements or arrangements whatsoever by
the Lending Parties with any other person pertaining to the
Obligations, including agreements and arrangements for payment,
extension, renewal, subordination, composition, arrangement,
discharge or release of the whole or any part of the Obligations,
or for the discharge or surrender of any or all security, or for
the compromise, whether by way of acceptance of part payment or
otherwise, and the same shall in no way impair such Subsidiary
Guarantor's liability hereunder.
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Subsidiary Guarantor waives
presentment to, demand of payment from and protest to the
Borrowers or any other person of any of the Obligations, and also
waives notice of acceptance of its guarantee, notice of protest
for nonpayment, and all other formalities. To the fullest extent
permitted by applicable law, the obligations of each Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of
any Loan Party to assert any claim or demand or to enforce or
exercise any right or remedy against the Company, the Borrowers
or any other Subsidiary Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any
extension, renewal or increase of or in any of the Obligations,
(c) any rescission, waiver, amendment or modification of, or any
release from, any of the terms or provisions of this Agreement,
the Credit Agreement, any other Loan Document, any guarantee or
any other agreement or instrument, including with respect to any
other Subsidiary Guarantor under this Agreement, (d) the release
of (or the failure to perfect a security interest in) any of the
security held by or on behalf of the Administrative Agent or any
other Lending Party or (e) the failure or delay of any Lending
Party to exercise any right or remedy against any other guarantor
of the Obligations.
SECTION 3. Security. Each of the Subsidiary Guarantors
authorizes the Administrative Agent to, subject to the terms of
any security agreement that may hereafter be entered into by the
Administrative Agent and any Subsidiary Guarantor or Borrower,
(a) take and hold security for the payment of this Subsidiary
Guarantee and the Obligations and exchange, enforce, waive and
release any such security, (b) apply such security and direct the
order or manner of sale thereof as it in its sole discretion may
determine subject to the terms of any other Loan Documents and
(c) release or substitute any one or more endorsees, other
guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Subsidiary Guarantor
further agrees that its guarantee constitutes a guarantee of
payment when due and not of collection, and waives any right to
require that any resort be had by the Administrative Agent or any
other Lending Party to any of the security held for payment of
the Obligations or to any balance of any deposit account or
credit on the books of the Administrative Agent or any other
Lending Party in favor of the Borrowers or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination
for any reason (other than the indefeasible payment in full in
cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense (other than a defense of
payment) or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each
Subsidiary Guarantor hereunder shall not be discharged or
impaired or otherwise affected by the failure of the
Administrative Agent or any other Lending Party to assert any
claim or demand or to enforce any remedy under the Credit
Agreement, any other Loan Document, any guarantee or any other
agreement or instrument, by any amendment, waiver or modification
of any provision of the Credit Agreement or any other Loan
Document or other agreement or instrument, by any default,
failure or delay, wilful or otherwise, in the performance of the
Obligations, or by any other act, omission or delay to do any
other act that may or might in any manner or to any extent vary
the risk of such Subsidiary Guarantor or that would otherwise
operate as a discharge of such Subsidiary Guarantor as a matter
of law or equity (other than the indefeasible payment in full in
cash of all the Obligations) or which would impair or eliminate
any right of such Subsidiary Guarantor to subrogation.
SECTION 6. Defenses Waived. To the fullest extent
permitted by applicable law, each of the Subsidiary Guarantors
waives any defense based on or arising out of the
unenforceability of the Obligations or any part thereof from any
cause or the cessation from any cause of the liability (other
than the final and indefeasible payment in full in cash of the
Obligations) of the Borrowers or any other person. The
Administrative Agent and the other Lending Parties may, at their
election, foreclose on any security held by one or more of them
by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other
accommodation with the Borrowers or any other guarantor or
exercise any other right or remedy available to them against the
Borrowers or any other guarantor, without affecting or impairing
in any way the liability of any Subsidiary Guarantor hereunder
except to the extent the Obligations have been fully, finally and
indefeasibly paid in cash. Pursuant to applicable law, each of
the Subsidiary Guarantors waives any defense arising out of any
such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such
Subsidiary Guarantor against the Borrowers or any other guarantor
or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance
of the foregoing and not in limitation of any other right that
the Administrative Agent or any other Lending Party has at law or
in equity against any Subsidiary Guarantor by virtue hereof, upon
the failure of the Borrowers or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or
otherwise, each Subsidiary Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Administrative Agent
or such other Lending Party as designated thereby in cash an
amount equal to the unpaid principal amount of such Obligations
then due, together with accrued and unpaid interest and fees on
such Obligations. Upon payment by any Subsidiary Guarantor of
any sums to the Administrative Agent or any Lending Party as
provided above, all rights of such Subsidiary Guarantor against
the Borrowers arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of
payment to the prior indefeasible payment in full in cash of all
the Obligations. In addition, any indebtedness of the Borrowers
or any Subsidiary now or hereafter held by any Subsidiary
Guarantor is hereby subordinated in right of payment to the prior
payment in full of the Obligations. If at any time when any
Obligation then due and owing has not been paid, any amount shall
be paid to any Subsidiary Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar
right or (ii) any such indebtedness, such amount shall be held in
trust for the benefit of the Lending Parties and shall forthwith
be paid to the Administrative Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents.
SECTION 8. Information. Each of the Subsidiary Guarantors
assumes all responsibility for being and keeping itself informed
of the Borrowers' financial condition and assets, all other
circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that
such Subsidiary Guarantor assumes and incurs hereunder and agrees
that none of the Administrative Agent or the other Lending
Parties will have any duty to advise any of the Subsidiary
Guarantors of information known to it or any of them regarding
such circumstances or risks.
SECTION 9. Representations and Warranties. Each of the
Subsidiary Guarantors represents and warrants as to itself that
all representations and warranties relating to it contained in
the Credit Agreement are true and correct.
SECTION 10. Termination. The Guarantees made hereunder (a)
shall terminate when (i) the principal of and premium, if any,
and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such
proceeding) on all Loans, (ii) each payment required to be made
under the Credit Agreement in respect of any Letter of Credit,
and (iii) all other obligations then due and owing, have in each
case been indefeasibly paid in full and the Banks have no further
commitment to lend under the Credit Agreement, the LC Exposure
has been reduced to zero and the Issuing Bank has no further
obligation to issue Letters of Credit under the Credit Agreement
and (b) shall continue to be effective or be reinstated, as the
case may be, if at any time any payment, or any part thereof, on
any Obligation is rescinded or must otherwise be restored by any
Lending Party upon the bankruptcy or reorganization of the
Company, the Borrowers, or any Subsidiary Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments;
Releases. 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 the Subsidiary Guarantors that
are contained in this Agreement shall bind and inure to the
benefit of each party hereto and their respective successors and
assigns. This Agreement shall become effective as to any
Subsidiary Guarantor when a counterpart hereof (or a Supplement
referred to in Section 19) executed on behalf of such Subsidiary
Guarantor shall have been delivered to the Administrative Agent
and a counterpart hereof (or a Supplement referred to in Section
19) shall have been executed on behalf of the Administrative
Agent, and thereafter shall be binding upon such Subsidiary
Guarantor and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of such
Subsidiary Guarantor, the Administrative Agent and the other
Lending Parties, and their respective successors and assigns,
except that no Subsidiary Guarantor shall have the right to
assign its rights or obligations hereunder or any interest herein
(and any such attempted assignment shall be void). This
Agreement shall be construed as a separate agreement with respect
to each Subsidiary Guarantor and may be amended, modified,
supplemented, waived or released with respect to any Subsidiary
Guarantor without the approval of any other Subsidiary Guarantor
and without affecting the obligations of any other Subsidiary
Guarantor. The Administrative Agent is hereby expressly
authorized to, and agrees upon request of the Company it will,
release any Subsidiary Guarantor from its obligations hereunder
in the event (i) that all the capital stock of such Subsidiary
Guarantor shall be sold, transferred or otherwise disposed of to
a person that is not an Affiliate of the Company in a transaction
permitted by Section 5.09 of the Credit Agreement or (ii) the
Company requests such release in writing accompanied by a
certificate of a Principal Officer certifying that no Default
shall have occurred and be continuing and that the requirements
of Section 5.11 of the Credit Agreement shall be met immediately
following such release.
SECTION 12. Waivers; Amendment. (a) No failure or delay
of the Administrative Agent 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 discontinuance 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 hereunder and of the other Lending
Parties 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 consent to
any departure by any Subsidiary Guarantor therefrom shall in any
event be effective unless the same shall be permitted by
paragraph (b) 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 any Subsidiary Guarantor in
any case shall entitle such Subsidiary Guarantor to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written
agreement entered into between the Subsidiary Guarantors to which
such waiver, amendment or modification relates and the
Administrative Agent with consent required under the Credit
Agreement.
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 14. Notices. All communications and notices
hereunder shall be in writing and given as provided in
Section 11.01 of the Credit Agreement. All communications and
notices hereunder to each Subsidiary Guarantor shall be given to
it at its address set forth in Schedule I with a copy to the
Company.
SECTION 15. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the
Subsidiary Guarantors herein and 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 Administrative Agent and the
other Secured Parties and shall survive the making by the Banks
of the Loans and the issuance of the Letters of Credit by the
Issuing Bank regardless of any investigation made by the Lending
Parties 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 any other fee or amount payable under this Agreement or
any other Loan Document is outstanding and unpaid, the LC
Exposure does not equal zero or the Commitments and the
obligations of the Issuing Bank to issue Letters of Credit have
not been terminated.
(b) 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 (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other
jurisdiction). 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 16. Counterparts. This Agreement may be executed
in counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute a single
contract, and shall become effective as provided in Section 11.
Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process.
(a) Each Subsidiary Guarantor 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 court 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 the Administrative Agent or any other
Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents
against any Subsidiary Guarantor or its properties in the courts
of any jurisdiction.
(b) Each Subsidiary Guarantor 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 by mail to the address provided in Section 14.
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 18. 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 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 18.
SECTION 19. Additional Subsidiary Guarantors. Pursuant to
Section 5.11 of the Credit Agreement, the Company must ensure
that Domestic Subsidiaries are (or become within 10 Domestic
Business Days of being formed or acquired) Subsidiary Guarantors
so that certain asset and revenue criteria are met. Upon
execution and delivery after the date hereof by the
Administrative Agent and such a Subsidiary of a Supplement in the
form of Annex 1, such Subsidiary shall become a Subsidiary
Guarantor hereunder with the same force and effect as if
originally named as a Subsidiary Guarantor herein. The execution
and delivery of any Supplement adding an additional Subsidiary
Guarantor as a party to this Agreement shall not require the
consent of any other Subsidiary Guarantor hereunder. The rights
and obligations of each Subsidiary Guarantor hereunder (other
than any Subsidiary Guarantor released pursuant to Section 11
hereof) shall remain in full force and effect notwithstanding (a)
the addition of any new Subsidiary Guarantor as a party to this
Agreement or (b) the release of any other Subsidiary Guarantor
pursuant to Section 11 hereof.
SECTION 20. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lending Party is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off 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 Lending Party to or for the credit or the account of any
Subsidiary Guarantor against any or all the obligations of such
Subsidiary Guarantor now or hereafter existing under this
Agreement and the other Loan Documents held by such Lending
Party, irrespective of whether or not the Administrative Agent or
any Lending Party shall have made any demand under this Agreement
or any other Loan Document and although such obligations may be
unmatured. The rights of each Lending Party under this
Section 20 are in addition to other rights and remedies
(including other rights of setoff) which such Lending Party may
have.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I
HERETO,
By
Name:
Title:
CITIBANK, N.A., as
Administrative Agent,
By
Name:
Title:
Schedule I to the
Subsidiary Guarantee Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc. World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex 1 to the
Subsidiary Guarantee
Agreement
SUPPLEMENT NO. dated as of , to the
Five-Year Subsidiary Guarantee Agreement dated as of October 28,
1999 (the "Subsidiary Guarantee Agreement"), among each of the
subsidiaries of CK Witco Corporation (the "Company") listed on
Schedule I thereto (the "Subsidiary Guarantors"), and CITIBANK,
N.A., a national banking association ("Citibank"), as
administrative agent (in such capacity, the "Administrative
Agent") for the Lending Parties (as defined in the Subsidiary
Guarantee Agreement).
A. Reference is made to the Five-Year Credit Agreement
dated as of October 28, 1999, (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
among the Company, the Banks listed therein, the Administrative
Agent, and Citibank, N.A., as issuing bank (in such capacity, the
"Issuing Bank).
B. Capitalized terms used and not otherwise defined herein
are used with the meanings assigned to such terms in the
Subsidiary Guarantee Agreement and the Credit Agreement.
C. The Subsidiary Guarantors have entered into the
Subsidiary Guarantee Agreement in order to induce the Banks to
make Loans and the Issuing Bank to issue Letters of Credit.
Pursuant to Section 5.11 of the Credit Agreement, the Company
must ensure that Domestic Subsidiaries are (or become within 10
Domestic Business Days of being formed or acquired) Subsidiary
Guarantors so that certain asset and revenue criteria are met.
Section 19 of the Subsidiary Guarantee Agreement provides that
additional Subsidiaries may become Subsidiary Guarantors under
the Subsidiary Guarantee Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned
Subsidiary of the Company (the "New Subsidiary Guarantor") is
executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Subsidiary Guarantor under the
Subsidiary Guarantee Agreement in order to induce the Banks to
make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made
and Letters of Credit previously issued.
Accordingly, the Administrative Agent and the New Subsidiary
Guarantor agree as follows:
SECTION 1. In accordance with Section 19 of the Subsidiary
Guarantee Agreement, the New Subsidiary Guarantor by its
signature below becomes a Subsidiary Guarantor under the
Subsidiary Guarantee Agreement with the same force and effect as
if originally named therein as a Subsidiary Guarantor and the New
Subsidiary Guarantor hereby (a) agrees to all the terms and
provisions of the Subsidiary Guarantee Agreement applicable to it
as a Subsidiary Guarantor thereunder (including its guarantee of
the Obligations) and (b) represents and warrants that the
representations and warranties made by it as a Subsidiary
Guarantor thereunder are true and correct on and as of the date
hereof. Each reference to a "Subsidiary Guarantor" in the
Subsidiary Guarantee Agreement shall be deemed to include the New
Subsidiary Guarantor.
SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Administrative Agent and the other Lending
Parties that this Supplement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This
Supplement shall become effective when the Administrative Agent
shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Subsidiary
Guarantor and the Administrative Agent. Delivery of an executed
signature page to this Supplement by facsimile transmission shall
be as effective as delivery of a manually executed counterpart of
this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Subsidiary Guarantee Agreement shall remain in full force and
effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and
in the Subsidiary Guarantee Agreement shall not in any way be
affected or impaired thereby (it being understood that the
invalidity of a particular provision hereof in a particular
jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties hereto
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 7. All communications and notices hereunder shall
be in writing and given as provided in Section 14 of the
Subsidiary Guarantee Agreement. All communications and notices
hereunder to the New Subsidiary Guarantor shall be given to it at
the address set forth under its signature below, with a copy to
the Company.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse
the Administrative Agent for its out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
disbursements and other charges of counsel for the Administrative
Agent.
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Administrative Agent have duly executed this Supplement to the
Subsidiary Guarantee Agreement as of the day and year first above
written.
[Name Of New Subsidiary Guarantor],
by
Name:
Title:
Address:
CITIBANK, N.A., as Administrative
Agent,
by
Name:
Title:
EXHIBIT L
FIVE-YEAR INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT
(together with instruments executed and delivered pursuant to
Section 11, this "Agreement") dated as of October 28, 1999, among
CK WITCO CORPORATION, a Delaware corporation (the "Company"),
each subsidiary of the Company listed on Schedule I hereto (the
"Subsidiary Guarantors") and CITIBANK, N.A., a national banking
association, as administrative agent (in such capacity, the
"Administrative Agent") for the Lending Parties (as defined
below).
Reference is made to (a) the Five-Year Credit Agreement dated
as of October 28, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the
Company, the Banks listed therein, the Administrative Agent and
Citibank, N.A., as issuing bank (in such capacity, the "Issuing
Bank") and (b) the Five-Year Subsidiary Guarantee Agreement dated
as of October 28, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Subsidiary Guarantee Agreement),
among the Subsidiary Guarantors and the Administrative Agent.
Capitalized terms used herein and not defined herein are used
with the meanings assigned to such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrowers, and
the Issuing Bank has agreed to issue Letters of Credit for the
accounts of the Borrowers, in each case pursuant to, and upon the
terms and subject to the conditions specified in, the Credit
Agreement. The Subsidiary Guarantors have guaranteed such Loans
and the other Obligations (as defined in the Subsidiary Guarantee
Agreement) pursuant to the Subsidiary Guarantee Agreement. The
obligations of the Banks to make Loans and of the Issuing Bank to
issue Letters of Credit are conditioned on, among other things,
the execution and delivery by the Company and the Subsidiary
Guarantors of an agreement in the form hereof.
Accordingly, the Company, each Subsidiary Guarantor and the
Administrative Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Subsidiary
Guarantors may have under applicable law (but subject to Sec-
tion 3), the Company agrees that in the event a payment shall be
made by any Subsidiary Guarantor under the Subsidiary Guarantee
Agreement, the Company shall indemnify such Subsidiary Guarantor
for the full amount of such payment and, until such
indemnification obligation shall have been satisfied, such
Subsidiary Guarantor shall be subrogated to the rights of the
person to whom such payment shall have been made to the extent of
such payment.
SECTION 2. Contribution and Subrogation. Each Subsidiary
Guarantor (a "Contributing Guarantor") agrees (subject to
Section 3) that, in the event a payment shall be made by any
other Subsidiary Guarantor under the Subsidiary Guarantee and
such other Subsidiary Guarantor (the "Claiming Guarantor") shall
not have been fully indemnified by the Company as provided in
Section 1, the Contributing Guarantor shall, to the extent the
Claiming Guarantor shall not have been so indemnified by the
Company, indemnify the Claiming Guarantor in an amount equal to
the amount of such payment multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on
the date hereof (or, in the case of any Subsidiary Guarantor
becoming a party hereto pursuant to Section 11, the date of the
Supplement hereto executed and delivered by such Subsidiary
Guarantor) and the denominator shall be the aggregate net worth
of all the Subsidiary Guarantors on the date hereof (or, in the
case of any Subsidiary Guarantor becoming a party hereto pursuant
to Section 11, the date of the Supplement hereto executed and
delivered by such Subsidiary Guarantor). Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 2 shall be subrogated to the rights of such Claiming
Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Subsidiary
Guarantors under Sections 1 and 2 and all other rights of
indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment
in full in cash of the Obligations. No failure on the part of
the Company or any Subsidiary Guarantor to make the payments
required by Sections 1 and 2 (or any other payments required
under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Subsidiary Guarantor with
respect to its obligations hereunder, and each Subsidiary
Guarantor shall remain liable for the full amount of the
obligations of such Subsidiary Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and
be in full force and effect so long as the Subsidiary Guarantee
Agreement has not been terminated, and shall continue to be
effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by any Lending Party upon the
bankruptcy or reorganization of the Company, any Subsidiary
Guarantor or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the
part of the Administrative Agent or any Subsidiary Guarantor to
exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy by the
Administrative Agent or any Subsidiary Guarantor preclude any
other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative
and are not exclusive of any other remedies provided by law.
None of the Administrative Agent and the Subsidiary Guarantors
shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written
agreement entered into between the Company, the Subsidiary
Guarantors and the Administrative Agent, with any consent
required under the Credit Agreement.
SECTION 7. Notices. All communications and notices here-
under shall be in writing and given as provided in the Credit
Agreement or the Subsidiary Guarantee Agreement, as applicable,
and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. 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 the parties that are contained in this Agreement
shall bind and inure to the benefit of their respective
successors and assigns. Neither the Company nor any Subsidiary
Guarantor may assign or transfer any of its rights or obligations
hereunder (and any such attempted assignment or transfer shall be
void) without the prior written consent of the Required Banks.
Notwithstanding the foregoing, at the time any Subsidiary
Guarantor is released from its obligations under the Subsidiary
Guarantee Agreement in accordance with the Subsidiary Guarantee
Agreement and the Credit Agreement, such Subsidiary Guarantor
will cease to have any rights or obligations under this
Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Company and each Subsidiary
Guarantor herein and in the certificates or other instruments
prepared or delivered in connection with this Agreement or the
other Loan Documents shall be considered to have been relied upon
by the Administrative Agent, the Banks and each Subsidiary
Guarantor, shall survive the making by the Banks of the Loans and
the issuance of the Letters of Credit by the Issuing Bank and
shall continue in full force and effect as long as the principal
of or any accrued interest on any Loans or any other fee or
amount payable under the Credit Agreement, this Agreement or any
of the other Loan Documents is outstanding and unpaid, the LC
Exposure does not equal zero or the Commitments have not been
terminated.
(b) In case any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable
in any respect, no party hereto shall be required to comply with
such provision for so long as such provision is held to be
invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein 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. Counterparts. This Agreement may be executed
in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but
all of which when taken together shall constitute a single
contract. This Agreement shall be effective with respect to any
Subsidiary Guarantor when a counterpart bearing the signature of
such Subsidiary Guarantor shall have been delivered to the
Administrative Agent. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.
SECTION 11. Additional Subsidiary Guarantors; Release.
Pursuant to Section 5.11 of the Credit Agreement, the Company
must ensure that Domestic Subsidiaries are (or become within 10
Domestic Business Days of being formed or acquired) Subsidiary
Guarantors so that certain asset and revenue criteria are met.
Upon execution and delivery, after the date hereof, by the
Administrative Agent and such a Subsidiary of an instrument in
the form of Annex 1 hereto, such Subsidiary shall become a
Subsidiary Guarantor hereunder with the same force and effect as
if originally named as a Subsidiary Guarantor hereunder. The
execution and delivery of any instrument adding an additional
Subsidiary Guarantor as a party to this Agreement shall not
require the consent of any Subsidiary Guarantor hereunder. The
rights and obligations of each Subsidiary Guarantor hereunder
(other than any Subsidiary Guarantor released pursuant to this
Section 11) shall remain in full force and effect notwithstanding
(a) the addition of any new Subsidiary Guarantor as a party to
this Agreement or (b) the release of any other Subsidiary
Guarantor pursuant to Section 11 of the Subsidiary Guarantee
Agreement. Each Subsidiary Guarantor shall be released from its
obligations under this Agreement without further action upon its
release from its obligations under the Subsidiary Guarantee
Agreement in accordance with Section 11 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the date first appearing above.
CK WITCO CORPORATION,
by
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO,
by
Name:
Title:
CITIBANK, N.A., as Administrative
Agent,
by
Name:
Title:
SCHEDULE I
to the Indemnity, Subrogation
and Contribution Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc. World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. (this "Supplement") dated as of
[ ], to the Five-Year Indemnity, Subrogation and
Contribution Agreement dated as of October 28, 1999 (as the same
may be amended, supplemented or otherwise modified from time to
time, the "Indemnity, Subrogation and Contribution
Agreement"),among CK Witco Corporation, a Delaware corporation
(the "Company"), each subsidiary of the Company listed on
Schedule I thereto (the "Subsidiary Guarantors") and Citibank,
N.A., a national banking association, as administrative agent (in
such capacity, the "Administrative Agent") for the Banks.
A. Reference is made to (a) the Five-Year Credit Agreement
dated as of October 28, 1999, (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
among the Company, the Banks listed therein, the Administrative
Agent and Citibank, N.A., as issuing bank (in such capacity, the
"Issuing Bank") and (b) the Five-Year Subsidiary Guarantee
Agreement dated as of October 28, 1999 (as amended, supplemented
or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"), among the Subsidiary Guarantors and the
Administrative Agent
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the
Indemnity, Subrogation and Contribution Agreement and the Credit
Agreement.
C. The Company and the Subsidiary Guarantors have entered
into the Indemnity, Subrogation and Contribution Agreement in
order to induce the Banks to make Loans and the Issuing Bank to
issue Letters of Credit. Pursuant to Section 5.11 of the Credit
Agreement, the Company must ensure that Domestic Subsidiaries
are (or become within 10 Domestic Business Days of being formed
or acquired) Subsidiary Guarantors so that certain asset and
revenue criteria are met. Section 11 of the Indemnity,
Subrogation and Contribution Agreement provides that additional
Subsidiaries may become Subsidiary Guarantors under the
Indemnity, Subrogation and Contribution Agreement by execution
and delivery of an instrument in the form of this Supplement.
The undersigned Subsidiary (the "New Guarantor") is executing
this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Guarantor under the Indemnity,
Subrogation and Contribution Agreement in order to induce the
Banks to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans
previously made and Letters of Credit previously issued.
Accordingly, the Administrative Agent and the New Guarantor
agree as follows:
SECTION 1. In accordance with Section 11 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its
signature below becomes a Subsidiary Guarantor under the
Indemnity, Subrogation and Contribution Agreement with the same
force and effect as if originally named therein as a Subsidiary
Guarantor and the New Guarantor hereby agrees to all the terms
and provisions of the Indemnity, Subrogation and Contribution
Agreement applicable to it as a Subsidiary Guarantor thereunder.
Each reference to a "Subsidiary Guarantor" in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include
the New Guarantor.
SECTION 2. The New Guarantor represents and warrants to the
Administrative Agent and the Banks that this Supplement has been
duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This
Supplement shall become effective when the Administrative Agent
shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Guarantor and the
Administrative Agent. Delivery of an executed signature page to
this Supplement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in
full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, neither party hereto shall be
required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but
the validity, legality and enforceability of the remaining
provisions contained herein and in the Indemnity, Subrogation and
Contribution Agreement shall not in any way be affected or
impaired. The parties hereto 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 7. All communications and notices hereunder shall
be in writing and given as provided in Section 7 of the
Indemnity, Subrogation and Contribution Agreement. All
communications and notices hereunder to the New Guarantor shall
be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Administrative
Agent.
IN WITNESS WHEREOF, the New Guarantor and the Administrative
Agent have duly executed this Supplement to the Indemnity,
Subrogation and Contribution Agreement as of the day and year
first above written.
[Name Of New Guarantor],
by
Name:
Title:
Address:
CITIBANK, N.A., as Administrative Agent,
by
Name:
Title:
EXHIBIT M
Identification Reference Amount Expiration
Number Number Outstanding Beneficiary Date
2764 30018802 $5,000 L. Marquez 1/1/00
2767 30018010 $175,000 Kredietbank NV 10/26/99
2768 30012561 $150,000 Kredietbank NV 1/1/00
2774 30007163 $150,000 U.S. Nuclear
Regulatory 7/26/00
Commission
2776 00501942 $1,978,000 National Union
Fire 10/26/99
Insurance
Company
3460 30022456 $4,272 UCDC Bangladesh 12/30/99
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 88,393
<SECURITIES> 0
<RECEIVABLES> 522,117
<ALLOWANCES> 23,850
<INVENTORY> 554,533
<CURRENT-ASSETS> 1,293,165
<PP&E> 1,312,968
<DEPRECIATION> 452,804
<TOTAL-ASSETS> 3,877,146
<CURRENT-LIABILITIES> 853,058
<BONDS> 1,452,597
0
0
<COMMON> 1,189
<OTHER-SE> 891,892
<TOTAL-LIABILITY-AND-EQUITY> 3,877,146
<SALES> 1,305,895
<TOTAL-REVENUES> 1,305,895
<CGS> 825,507
<TOTAL-COSTS> 1,318,403
<OTHER-EXPENSES> (37,790)
<LOSS-PROVISION> 2,398
<INTEREST-EXPENSE> 43,718
<INCOME-PRETAX> (18,436)
<INCOME-TAX> 64,312
<INCOME-CONTINUING> (82,748)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,293)
<CHANGES> 0
<NET-INCOME> (84,041)
<EPS-BASIC> (1.17)
<EPS-DILUTED> (1.17)
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