<PAGE> 1
FORM 10-Q
____________________
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION WASHINGTON, D.C. 20549
______________________________________
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended
DECEMBER 31, 1993
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 1-5667
CABOT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2271897
(State of Incorporation) (I.R.S. Employer Identification No.)
75 STATE STREET 02109-1806
BOSTON, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (617) 345-0100
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, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---------
Indicate the number of shares outstanding of each of the classes of Common
Stock, as of the latest practicable date.
AS OF DECEMBER 31, 1993, THE COMPANY HAD 18,778,791 SHARES OF COMMON
STOCK, PAR VALUE $1 PER SHARE, OUTSTANDING.
-1-
<PAGE> 2
CABOT CORPORATION
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Part I. Financial Information Page No.
--------
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income
Three Months Ended December 31, 1993 and 1992 3
Consolidated Balance Sheets
December 31, 1993 and September 30, 1993 4
Consolidated Statements of Cash Flows
Three Months Ended December 31, 1993 and 1992 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
-2-
</TABLE>
<PAGE> 3
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 1993 and 1992
(Dollars in thousands, except per share amounts)
UNAUDITED
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Revenues:
Net sales and other operating revenues $ 398,475 $ 396,104
Interest and dividend income 978 1,449
---------- ----------
Total revenues 399,453 397,553
Costs and expenses:
Cost of sales 296,750 300,310
Selling and administrative expenses 51,029 50,649
Research and technical service 11,721 10,029
Interest expense 10,259 10,996
Other (income) expense, net 3,659 3,219
----------- ----------
Total costs and expenses 373,418 375,203
----------- ----------
Income before income taxes 26,035 22,350
Provision for income taxes (10,414) (9,085)
Equity in net income (loss) of affiliated companies 337 (1,338)
----------- ----------
Income before cumulative effect of accounting changes 15,958 11,927
Cumulative effect of accounting changes - (26,109)
----------- ----------
Net income (loss) 15,958 (14,182)
----------- ----------
Dividends on preferred stock, net of tax
benefit of $484 and $474, respectively (899) (920)
----------- ----------
Income (loss) applicable to primary common shares $ 15,059 $ (15,102)
----------- ----------
----------- ----------
Weighted average common shares outstanding (000):
Primary 19,079 18,637
Fully diluted (Note A) 20,641 20,211
Income per common share:
Primary
Continuing operations $ 0.79 $ 0.59
Cumulative effect of accounting changes - (1.40)
----------- ----------
Income per share $ 0.79 $ (0.81)
----------- ----------
----------- ----------
Fully diluted (Note A)
Continuing operations $ 0.74 $ 0.59
Cumulative effect of accounting changes - (1.40)
------------ ----------
Income per share $ 0.74 $ (0.81)
----------- ----------
----------- ----------
Dividends per common share $ 0.26 $ 0.26
----------- ----------
----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 4
CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and September 30, 1993
(Dollars in thousands)
ASSETS
<TABLE>
<CAPTION>
December 31 September 30
1993 1993
(Unaudited)
------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 33,319 $ 40,267
Accounts and notes receivable
(net of reserve for doubtful
accounts of $6,413 and $6,321) 245,077 258,057
Inventories:
Raw materials 47,916 45,589
Work in process 33,786 36,923
Finished goods 93,262 77,747
Other 35,655 35,091
------------- -----------
Total inventories 210,619 195,350
Prepaid expenses 15,245 8,771
Deferred income taxes 37,979 41,761
------------- -----------
Total current assets 542,239 544,206
------------- -----------
Investments:
At equity 164,258 166,669
At cost 7,915 7,911
------------- -----------
Total investments 172,173 174,580
------------- -----------
Property, plant and equipment:
At cost 1,242,128 1,250,228
Accumulated depreciation and amortization 610,691 603,708
------------- -----------
Net property, plant and equipment 631,437 646,520
Other assets:
Intangible assets, net of amortization 78,306 78,873
Deferred income taxes 6,321 5,752
Other assets 34,551 39,542
------------- -----------
Total other assets 119,178 124,167
------------- -----------
Total assets $ 1,465,027 $ 1,489,473
------------- -----------
------------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 5
CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and September 30, 1993
(Dollars in thousands)
LIABILITIES & STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31 September 30
1993 1993
(Unaudited)
-------------- ---------------
<S> <C> <C>
Current liabilities:
Notes payable to banks $ 66,588 $ 1,501
Current portion of long-term debt 159,383 29,205
Accounts payable and accrued liabilities 234,539 297,201
U.S. and foreign income taxes payable 17,686 25,029
Deferred income taxes 1,208 1,285
-------------- -------------
Total current liabilities 479,404 354,221
Long-term debt 307,885 459,275
Deferred income taxes 88,074 86,344
Other liabilities 143,512 147,360
Commitments and contingencies (Note B)
Stockholders' Equity: (Note C)
Preferred stock:
Authorized: 2,000,000 shares of $1 par value
Series A Junior Participating Preferred Stock
Issued and outstanding: none
Series B ESOP Convertible Preferred Stock 7.75% Cumulative
Issued: 75,336 shares (aggregate redemption value
$74,167 and $74,982) 75,336 75,336
Less cost of shares of preferred treasury stock (3,321) (3,003)
Common stock:
Authorized: 80,000,000 shares of $1 par value
Issued: 33,887,484 shares 33,887 33,887
Additional paid-in capital 34,583 33,621
Retained earnings 871,986 861,803
Less cost of common treasury stock
(including unearned amounts of $6,788 and $7,321) (480,997) (483,184)
Deferred employee benefits (68,447) (68,781)
Foreign currency translation adjustments (16,875) (7,406)
------------ --------------
Total stockholders' equity 446,152 442,273
------------ -------------
Total liabilities and stockholders' equity $ 1,465,027 $ 1,489,473
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 6
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended December 31, 1993 and 1992
(Dollars in thousands)
UNAUDITED
<TABLE>
<CAPTION>
1993 1992
----- -----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,958 $ (14,182)
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 21,004 21,151
Deferred tax provision 4,934 1,350
Gain on sale of investments - (2,829)
Effects of accounting changes - 26,109
Equity in net income/loss of affiliated companies,
net of dividends received 1,891 3,294
Other, net 734 (778)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 9,515 (9,768)
Increase in inventory (16,881) (15,066)
Decrease in accounts payable and accruals (58,716) (12,007)
Increase in prepayments and intangible assets (3,209) (452)
Other, net (10,033) (3,396)
---------- ----------
Cash used by operating activities (34,803) (6,574)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (13,183) (14,518)
Investments - (10,515)
Sales of investments and property, plant and equipment 29 3,081
---------- ----------
Cash used by investing activities (13,154) (21,952)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt - 5,330
Reduction in long-term debt (695) (3,021)
Increase in short-term debt 45,549 13,125
Sales of treasury stock, net 2,130 6,305
Cash dividends paid to stockholders (5,775) (5,712)
---------- ----------
Cash provided by financing activities 41,209 16,027
Effect of exchange rate changes on cash (200) 4,896
---------- ----------
Decrease in cash and cash equivalents (6,948) (7,603)
Cash and cash equivalents at beginning of period 40,267 30,656
---------- ----------
Cash and cash equivalents at end of period $ 33,319 $ 23,053
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 7
CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1993
A. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Cabot
Corporation and all majority-owned and controlled domestic and foreign
subsidiaries. Investments in majority-owned affiliates where control
is temporary and investments in 20 percent-to 50 percent-owned
affiliates are accounted for on the equity method. All significant
intercompany transactions have been eliminated.
The financial statements have been prepared in accordance with the
requirements of Form 10-Q and consequently do not include all
disclosures required by Form 10-K. Additional information may be
obtained by referring to the Company's Form 10-K for the year ended
September 30, 1993.
The financial information submitted herewith is unaudited and reflects
all adjustments which are, in the opinion of management, necessary to
provide a fair statement of the results for the interim periods ended
December 31, 1993 and 1992. All such adjustments are of a normal
recurring nature. The results for interim periods are not necessarily
indicative of the results to be expected for the fiscal year. During
the fourth quarter of fiscal 1993, the Company adopted two new
accounting standards related to postretirement benefits and income
taxes. Both of these standards were adopted as of October 1, 1992,
and as a result, the quarter ending December 31, 1992 has been
restated.
Earnings Per Share
The computation of fully diluted earnings per share considers the
conversion of the Company's Series B ESOP Convertible Preferred Stock
held by the Company's Employee Stock Ownership Plan, and also includes
the potentially dilutive effects of the Company's Equity Incentive
Plan.
B. CONTINGENCIES
The Company is a defendant in various lawsuits and is involved in
other gas contract issues and environmental proceedings wherein
substantial amounts are claimed. In the opinion of the Company's
management, these suits and claims should not result in final
judgments or settlements which, in the aggregate, would have a
material adverse effect on the Company's financial condition.
Fumed silica supplied by Cabot was used by others in the manufacture
of silicone breast implant envelopes. There are currently pending
more than 10,000 lawsuits in state and federal courts alleging
injuries arising from the use of silicone breast implants. The
federal cases have been consolidated in the Multi-District Litigation
pending in the United States District Court for the Northern District
of Alabama. Generally, the various state cases have been similarly
consolidated in each jurisdiction. In addition, arrangements have
been made for consolidated discovery in all actions. Cabot has been
named as a defendant in fewer than 100 of those lawsuits, although
additional lawsuits have been threatened and are expected to be
brought in due course. The pleadings in those suits are based on
master form complaints adopted for use in the various jurisdictions.
In each of the lawsuits brought against Cabot, Cabot is one of many
defendants and the complaints do not allege the specific factual bases
for liability against Cabot or the amount of damages specifically
claimed against Cabot. Cabot believes that it will be alleged that
fumed silica supplied by Cabot contributed to the plaintiffs' injuries
but also believes that it has adequate defenses. However, the
scientific, legal and societal issues raised by these cases are
complex and the outcome is uncertain. Cabot is still evaluating the
litigation and therefore cannot predict with any assurance the course
this litigation will take, the number of cases to which Cabot will be
added as a defendant, the amount of damages, if any, that may be
assessed against Cabot or the defense costs that will be incurred by
Cabot.
-7-
<PAGE> 8
CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
December 31, 1993
UNAUDITED
C. STOCKHOLDERS' EQUITY
The following table summarizes the changes in stockholders' equity for the
three months ended December 31, 1993.
(Dollars in thousands)
<TABLE>
<CAPTION>
Preferred Stock Preferred Common Stock
--------------- Treasury Stock ------------ Additional
Shares -------------- Shares Paid-In Retained
Issued Value Shares Cost Issued Value Capital Earnings
------ ----- ------ ----- ------ ----- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1993 75,336 $75,336 3,686 $(3,003) 33,887,484 $33,887 $33,621 $861,803
Net Income 15,958
Common stock dividends paid (4,876)
Issuance of treasury stock under
employee compensation plans 329
Purchase of treasury stock-preferred 250 (318)
Sale of treasury stock to Profit Sharing
and Savings Plan 633
Preferred stock dividends paid to
Employee Stock Ownership Plan,
net of tax (899)
Principal payment by Employee Stock
Ownership Plan under guaranteed
loan
Amortization of unearned compensation
Foreign currency translation adjustments
------ ------- ----- ------- ---------- ------- ------- --------
Balance at December 31, 1993 75,336 $75,336 3,936 $(3,321) 33,887,484 $33,887 $34,583 $871,986
------ ------- ----- ------- ---------- ------- ------- --------
------ ------- ----- ------- ---------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
Common Foreign Total
Treasury Stock Deferred Currency Stock-
-------------- Unearned Employee Translation holders'
Shares Cost Compensation Benefits Adjustments Equity
------ ---- ------------ --------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1993 15,161,103 $(475,863) $(7,321) $(68,781) $(7,406) $442,273
Net Income 15,958
Common stock dividends paid (4,876)
Issuance of treasury stock under
employee compensation plans (32,620) 1,029 (168) 1,190
Purchase of treasury stock-preferred (318)
Sale of treasury stock to Profit Sharing
and Savings Plan (19,790) 625 1,258
Preferred stock dividends paid to
Employee Stock Ownership Plan,
net of tax (899)
Principal payment by Employee Stock
Ownership Plan under guaranteed
loan 334 334
Amortization of unearned compensation 701 701
Foreign currency translation adjustments (9,469) (9,469)
---------- ---------- -------- --------- --------- --------
Balance at December 31, 1993 15,108,693 $(474,209) $(6,788) $(68,447) $(16,875) $446,152
---------- ---------- -------- --------- --------- --------
---------- ---------- -------- --------- --------- --------
</TABLE>
-8-
<PAGE> 9
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
I. RESULTS OF OPERATIONS
Sales and operating profit by industry segment are shown in the accompanying
table on page 11.
Three Months Ended December 31, 1993 versus
Three Months Ended December 31, 1992
Net income for the first quarter of fiscal year 1994 was $16.0 million ($0.79
per primary common share), compared with a loss of $14.2 million ($0.81 loss
per primary common share) in the same quarter a year ago. Fiscal 1993 first
quarter results were restated to reflect a $26.1 million ($1.40 per share)
charge for required accounting changes. Net income before these accounting
changes was $11.9 million ($0.59 per primary common share). Net sales and
other operating revenues of $398.5 million were relatively flat with last
year's revenues of $396.1 million. Total operating profit, however, increased
16% to $41.6 million from $35.9 million last year.
In the Specialty Chemicals and Materials Group, sales decreased 3% to
$278.2 million from $288.2 million, while operating profits increased 21% to
$36.0 million from $29.7 million in the first quarter of fiscal 1993. Strong
operating profits reflected favorable margins in most of the Specialty
Chemicals businesses, and the effect of continued cost reductions. The
only significant shifts in Specialty Chemicals volumes were declines
in the European Carbon Black Division, partially offset by increases in the
South American Carbon Black Division and the Cab-O-Sil Division. Regionally,
economic uncertainty continues in Europe and in Japan. The Company expects to
implement planned European capacity reduction with the closing of its carbon
black production facility in Hanau, Germany later this year. The Company's
equity affiliate in Japan continues to review the possibility of carbon black
capacity reductions.
In the Energy Group, sales grew 11% to $120.3 million from $107.9 million, and
operating profits fell 10% to $5.6 million from $6.2 million last year. The
decline in operating profits is a result of smaller margins in the Company's
LNG business brought about by an overall weakness in energy prices. LNG prices
have recently rebounded with the unusually cold weather in the Northeast. The
Company's LNG business imported 6 cargoes during the quarter versus 4 cargoes
last year.
First quarter net income also included a $1.7 million increase in the Company's
equity in affiliates. This increase reflects performance improvement in
certain carbon black affiliate plants.
Interest expense declined 6% to $10.3 million from $11.0 million a year ago.
The improvement is a result of an overall reduction in debt from a year ago and
lower effective interest rates.
The Company's effective tax rate remained unchanged from last year at 40%.
The Company remains concerned that the European and Japanese economies are
still quite sluggish. In Europe, carbon black volumes are down versus the year
ago quarter, and margins remain under pressure. In the Energy Group, the
Company has recently experienced and expects to continue to experience some LNG
supply constraint due to the refurbishment of its Algerian supplier's LNG
facility. The Company expects the positive effects of the cold winter in the
Northeast to offset the negative effects of the reduced shipments in the second
quarter.
-9-
<PAGE> 10
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
II. CASH FLOWS AND LIQUIDITY
During the quarter, the Company's operations used $35 million of cash
reflecting increased working capital requirements due to normal seasonal trends
and the settlement of the last significant, and previously reserved for,
take-or-pay case. Cabot increased its borrowings by $44.9 million during the
quarter primarily to fund these needs.
The Company invested $13 million in plant and equipment during the quarter.
The Company made no investments in its equity affiliates during this quarter
compared to $10.5 million in the first quarter of fiscal 1993.
At December 31, 1993, there were no amounts borrowed under a $250 million line
of credit available to the Company. In January 1994, the company replaced this
existing line of credit with a new line, for the same amount, under similar
terms. The Company's ratio of total debt (including short term debt net of
cash) to capital increased from 50% to 53% during the quarter. The Company
believes its businesses can support higher-than-targeted leverage for an
interim period as a result of investment in businesses that will contribute
materially to the growth and stability of the Company's earnings.
Management expects cash from operations and present financing arrangements,
including the Company's unused line of credit, to be sufficient to meet the
Company's cash requirements for the foreseeable future.
-10-
<PAGE> 11
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<TABLE>
<CAPTION>
Three Months Ended
------------------
12/31/93 12/31/92
--------- --------
Dollars in millions,
except per share amounts
------------------------
<S> <C> <C>
Industry Segment Data
Sales:
Specialty Chemicals & Materials $ 278.2 $ 288.2
Energy 120.3 107.9
--------- --------
Net Sales $ 398.5 $ 396.1
--------- --------
--------- --------
Operating Profit:
Specialty Chemicals & Materials $36.0 $ 29.7
Energy 5.6 6.2
--------- --------
Total operating profit 41.6 35.9
Interest expense (10.3) (11.0)
General corporate expense (5.3) (2.6)
--------- --------
Income from continuing operations before income taxes 26.0 22.3
Provision for income taxes (10.4) (9.1)
Equity in net income (loss) of affiliated companies 0.4 (1.3)
--------- --------
Net income before the cumulative effect of accounting changes 16.0 11.9
Cumulative effect of accounting changes - (26.1)
--------- ---------
Net income (loss) 16.0 (14.2)
Dividends on preferred stock (0.9) (0.9)
--------- --------
Income (loss) applicable to primary common shares $ 15.1 $ (15.1)
--------- --------
--------- --------
Income (loss) per common share:
Primary
Continuing operations $ 0.79 $ 0.59
Cumulative effect of accounting changes - (1.40)
--------- --------
Income (loss) per share $ 0.79 $ (0.81)
--------- --------
--------- --------
Fully Diluted
Continuing operations $ 0.74 $ 0.59
Cumulative effect of accounting changes - (1.40)
--------- --------
Income (loss) per share $ 0.74 $ (0.81)
--------- --------
--------- --------
</TABLE>
-11-
<PAGE> 12
Part II. Other Information
Item 1. Legal Proceedings
During the first quarter of fiscal year 1994, a take-or-pay case pending
against the Company and certain former subsidiaries and on appeal before the
court of appeals for the Seventh District of Texas was settled with no material
adverse effect on the Company's financial condition. This case is in addition
to a take-or-pay case reported in the Company's Annual Report on Form 10-K to
have been settled in December 1993.
Fumed silica supplied by Cabot was used by others in the manufacture of
silicone breast implant envelopes. There are currently pending more than
10,000 lawsuits in state and federal courts alleging injuries arising from the
use of silicone breast implants. The federal cases have been consolidated in
the Multi-District Litigation pending in the United States District Court for
the Northern District of Alabama. Generally, the various state cases have been
similarly consolidated in each jurisdiction. In addition, arrangements have
been made for consolidated discovery in all actions. Cabot has been named as a
defendant in fewer than 100 of those lawsuits, although additional lawsuits
have been threatened and are expected to be brought in due course. The
pleadings in those suits are based on master form complaints adopted for use in
the various jurisdictions. In each of the lawsuits brought against Cabot,
Cabot is one of many defendants and the complaints do not allege the specific
factual bases for liability against Cabot or the amount of damages specifically
claimed against Cabot. Cabot believes that it will be alleged that fumed
silica supplied by Cabot contributed to the plaintiffs' injuries but also
believes that it has adequate defenses. However, the scientific, legal and
societal issues raised by these cases are complex and the outcome is uncertain.
Cabot is still evaluating the litigation and therefore cannot predict with any
assurance the course this litigation will take, the number of cases to which
Cabot will be added as a defendant, the amount of damages, if any, that may be
assessed against Cabot or the defense costs that will be incurred by Cabot.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The Exhibit number corresponds to the number assigned to such
Exhibits in the Exhibit Table of Item 601 of Regulation S-K.
Exhibit
Number Description
------- -----------
4 Credit Agreement, dated as of January 13, 1994,
among Cabot Corporation and nine banks and
Morgan Guaranty Trust Company of New York, as agent
for the banks, filed herewith.
11 Statements regarding Computation of Per Share
Earnings filed herewith.
12 Statement regarding Computation of Ratio of
Earnings to Fixed Charges filed herewith.
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three months ended December 31, 1993.
-12-
<PAGE> 13
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.
CABOT CORPORATION
Date: February 10, 1994 /s/ John G.L. Cabot
----------------------------
John G.L. Cabot
Vice Chairman and Chief Financial Officer
Date: February 10, 1994 /s/ William R. Thompson
-----------------------------
William R. Thompson
Vice President and Controller
(Chief Accounting Officer)
-13-
<PAGE> 1
EXHIBIT 4
[EXECUTION COPY]
$250,000,000
CREDIT AGREEMENT
dated as of
January 13, 1994
among
Cabot Corporation,
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE> 2
<TABLE>
TABLE OF CONTENTS*
Page
ARTICLE I ----
DEFINITIONS
<S> <C> <C>
SECTION 1.01 Definitions.......................... 1
1.02 Accounting Terms and Determinations.. 15
1.03 Types of Borrowings.................. 15
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend During
Revolving Credit Period............ 16
2.02 Notice of Committed Borrowings....... 16
2.03 Money Market Borrowings.............. 17
2.04 Notice to Banks; Funding of Loans.... 21
2.05 Notes................................ 22
2.06 Maturity of Loans.................... 23
2.07 Interest Rates....................... 23
2.08 Fees................................. 27
2.09 Optional Termination or
Reduction of Commitments........... 28
2.10 Mandatory Termination of
Commitments........................ 28
2.11 Optional Prepayments................. 28
2.12 General Provisions as to Payments.... 29
2.13 Funding Losses....................... 30
2.14 Computation of Interest and Fees..... 30
2.15 Taxes................................ 30
2.16 Regulation D Compensation ........... 33
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness........................ 33
3.02 Borrowings........................... 35
</TABLE>
- ---------
* The Table of Contents is not a part of this Agreement.
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
<S> <C> <C>
SECTION 4.01 Corporate Existence and Power....... 36
4.02 Corporate and Governmental
Authorization; No Contravention... 36
4.03 Binding Effect...................... 36
4.04 Financial Information............... 36
4.05 Litigation.......................... 37
4.06 Compliance with ERISA............... 37
4.07 Environmental Matters............... 37
4.08 Taxes............................... 38
4.09 Subsidiaries........................ 38
4.10 Not an Investment Company........... 38
4.11 Full Disclosure..................... 39
ARTICLE V
COVENANTS
SECTION 5.01 Information......................... 39
5.02 Payment of Obligations.............. 42
5.03 Maintenance of Property; Insurance.. 43
5.04 Conduct of Business and
Maintenance of Existence.......... 43
5.05 Compliance with Laws................ 44
5.06 Inspection of Property,
Books and Records................. 44
5.07 Debt................................ 44
5.08 Minimum Consolidated Tangible
Net Worth......................... 44
5.09 Operating Cash Flow................. 45
5.10 Investments......................... 45
5.11 Negative Pledge..................... 46
5.12 Consolidations and Mergers.......... 47
5.13 Sales of Assets..................... 47
5.14 Use of Proceeds..................... 47
5.15 Transactions with Affiliates........ 48
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
ARTICLE VI
DEFAULTS
<S> <C> <C>
SECTION 6.01 Events of Default................... 48
6.02 Notice of Default................... 51
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization....... 51
7.02 Agent and Affiliates................ 51
7.03 Action by Agent..................... 51
7.04 Consultation with Experts........... 51
7.05 Liability of Agent.................. 52
7.06 Indemnification..................... 52
7.07 Credit Decision..................... 52
7.08 Successor Agent..................... 53
7.09 Agent's Fee......................... 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair.......... 53
8.02 Illegality........................... 54
8.03 Increased Cost and Reduced Return.... 55
8.04 Base Rate Loans Substituted for
Affected Fixed Rate Loans.......... 56
8.05 Substitution of Bank................. 57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.............................. 57
9.02 No Waivers........................... 58
9.03 Expenses; Documentary Taxes;
Indemnification.................... 58
9.04 Sharing of Set-Offs.................. 58
9.05 Amendments and Waivers............... 59
9.06 Successors and Assigns............... 59
9.07 Collateral........................... 61
9.08 Governing Law; Submission to Juris-
diction............................ 61
9.09 Counterparts; Integration............ 62
9.10 WAIVER OF JURY TRIAL................. 62
</TABLE>
-iii-
<PAGE> 5
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of General Counsel of
the Borrower
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
-iv-
<PAGE> 6
CREDIT AGREEMENT
AGREEMENT dated as of January 13, 1994 among CABOT
CORPORATION, the BANKS listed on the signature pages hereof
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
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).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other
than the Borrower, a Consolidated Subsidiary or an Equity
Affiliate) which is controlled by or is under common control
with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its permitted successors in such capacity.
"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,
<PAGE> 7
its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Assignee" has the meaning set forth in Section
9.06(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06(c), 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 Borrowing" has the meaning set forth in
Section 1.03.
"Base Rate Loan" means a Committed Loan to be made
by a Bank as a Base Rate Loan in accordance with the
applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"Borrower" means Cabot Corporation, a Delaware
corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's
annual report on Form 10-K for its 1993 fiscal year, as
filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Borrowing" has the meaning set forth in
Section 1.03.
"CD Loan" means a Committed Loan to be made by a
Bank as a CD Loan in accordance with the applicable Notice
of Committed Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
-2-
<PAGE> 8
"CD Reference Banks" means The First National Bank
of Boston, Citibank, N.A. and Morgan Guaranty Trust Company
of New York, or any successor CD Reference Bank appointed as
such pursuant to Section 2.07(h).
"Committed Borrowing" has the meaning set forth in
Section 1.03.
"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 Sections 2.09 and 2.10.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01.
"Consolidated Debt" means at any date the Debt of
the Borrower 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 are
consolidated with those of the Borrower in its consolidated
financial statements prepared as of such date.
"Consolidated Tangible Net Worth" means at any
date (i) the consolidated stockholders' equity of the
Borrower as of such date, calculated excluding the effect of
any foreign currency translation adjustments after September
30, 1993, minus (ii) to the extent reflected in determining
such consolidated stockholders' equity at such date, the
amount of consolidated Intangible Assets of the Borrower and
its Consolidated Subsidiaries booked for the first time
after September 30, 1993.
"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, promissory notes or other similar
instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of
business, (iv) 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, and (vi) all Debt of others
Guaranteed by such Person.
-3-
<PAGE> 9
"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.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City or Boston, Massachusetts 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 Borrower and
the 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).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws (including case
law), regulations, ordinances, rules, judgments, orders,
decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants,
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, Hazardous Substances or wastes or the clean-up
or other remediation thereof.
"Equity Affiliate" means at any date any
corporation or other entity (which may be a Subsidiary but
not a Consolidated Subsidiary) of which securities or other
owner-
-4-
<PAGE> 10
ship interests are at the time directly or indirectly
owned by the Borrower and accounted for under the equity
method of accounting.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower 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 Borrower, are treated as a
single employer under Section 414 of the Internal Revenue
Code.
"Euro-Dollar Borrowing" has the meaning set forth
in Section 1.03.
"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 Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be
made by a Bank as a Euro-Dollar Loan in accordance with the
applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of The First National Bank of Boston,
Citibank, N.A. and Morgan Guaranty Trust Company of New
York, or any successor Euro-Dollar Reference Bank appointed
as such pursuant to Section 2.07(h).
"Euro-Dollar Reserve Percentage" means for any day
for any Bank 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 effective reserve requirement for such
Bank as determined in good faith by such Bank in respect of
-5-
<PAGE> 11
"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.
"Facility Fee Rate" means (i) .175 of 1% per annum
for any day on which Investment Level I Status exists, (ii)
.20 of 1% per annum for any day on which Investment Level II
Status exists, (iii) .225 of 1% per annum for any day on
which Investment Level III Status exists and (iv) .25 of 1%
per annum for any day on which Investment Level IV Status
exists.
"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 Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Borrowing" has the meaning set forth
in Section 1.03.
"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 and, except as provided in Section 2.02, CD Loans
bearing interest at the Base Rate pursuant to Section
2.07(b)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any
obliga-
-6-
<PAGE> 12
tion, 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 (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 of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part),
PROVIDED that the term Guarantee shall not include (v)
obligations to purchase assets as a part of the purchase of
businesses or product lines, (w) endorsements for collection
or deposit in the ordinary course of business, (x)
take-or-pay contracts entered into for the business purposes
of the Borrower or any of its Consolidated Subsidiaries or
Equity Affiliates and not for the purpose of being assigned
to an obligee of another Person's Debt, (y) letters or other
undertakings which state that the Borrower or a Consolidated
Subsidiary will maintain its ownership of another Person but
which do not include any obligation related to the financial
condition of such other Person and (z) project completion
assurances given in connection with projects undertaken by
the Borrower or any of its Consolidated Subsidiaries or
Equity Affiliates in furtherance of their businesses. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Intangible Assets" means the amount of (i) all
write-ups of assets (other than write-ups of assets of a
going concern business made within twelve months after the
acquisition of such business); (ii) all Investments in
Persons other than (x) Consolidated Subsidiaries and (y)
Equity Affiliates (A) in which the Borrower directly or
indirectly owns equity securities or other comparable
ownership interests of not less than 30% and (B) which are
engaged in the same general business as the Borrower or any
of its Subsidiaries or engaged in a business incidental or
related thereto; and (iii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, anticipated future
benefit of tax loss carry-forwards, copyrights, organization
or developmental expenses and other assets treated as
intangible assets under generally accepted accounting
principles.
-7-
<PAGE> 13
"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, as the Borrower may elect in the applicable
Notice of Borrowing; 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 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 of 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 end on the last Euro-Dollar Business Day
of a calendar month; and
(c) any Interest Period which would otherwise end
after the date determined pursuant to clause (y) of the
definition of Termination Date shall end on the date so
determined.
(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 Borrower may elect in the
applicable Notice of Borrowing; 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 date determined pursuant to clause (y) of the
definition of Termination Date shall end on the date so
determined.
(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 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
-8-
<PAGE> 14
(b) any Interest Period which would otherwise end
after the date determined pursuant to clause (y) of the
definition of Termination Date shall end on the date so
determined.
(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 (but not less than
one month) as the 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 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 of 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 of a calendar month; and
(c) any Interest Period which would otherwise end
after the date determined pursuant to clause (y) of the
definition of Termination Date shall end on the date so
determined.
(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 30 days) as the 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 date determined pursuant to clause (y) of the
definition of Termination Date shall end on the date so
determined.
-9-
<PAGE> 15
"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, demand or time deposit or otherwise.
"Investment Level I Status" exists at any date if,
at such date, (x) the Borrower's outstanding senior
unsecured long term debt securities are (i) rated A- or
better by S&P AND (ii) rated A3 or better by Moody's and (y)
Investment Level IV status does not exist.
"Investment Level II Status" exists at any date
if, at such date, (x) the Borrower's outstanding senior
unsecured long-term debt securities are (i) rated BBB+ or
better by S&P AND (ii) rated Baa1 or better by Moody's and
(y) neither Investment Level I Status nor Investment Level
IV Status exists.
"Investment Level III Status" exists at any date
if, at such date, (x) the Borrower's outstanding senior
unsecured long-term debt securities are (i) rated BBB
(without a minus sign) or better by S&P AND (ii) rated Baa2
or better by Moody's and (y) none of Investment Level I
Status, Investment Level II Status and Investment Level IV
Status exists.
"Investment Level IV Status" exists at any date,
if at such date (x) the Borrower's outstanding senior
unsecured long-term debt securities are (i) rated BBB- or
lower by S&P AND (ii) rated Baa3 or lower by Moody's or (y)
if the Borrower's commercial paper rating is A3 by S&P or P3
by Moody's.
"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, charge or security interest in
respect of such asset. For the purposes of this Agreement,
the Borrower 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 (but not operating
lease) or other title retention agreement relating to such
asset.
-10-
<PAGE> 16
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Margin Stock" means margin stock within the
meaning of Regulation U.
"Material Debt" means (x) Debt (other than the
Notes) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal amount exceeding
$50,000,000 or (y) Debt of the Borrower (other than the
Notes) and/or one or more of its Consolidated Subsidiaries,
arising in one or more related or unrelated transactions, in
an aggregate principal amount exceeding $20,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities at such time in excess
of $20,000,000.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Borrowing" has the
meaning set forth in Section 1.03.
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Borrowing" has the meaning set forth
in Section 1.03.
"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 Borrower and the Agent; PROVIDED that any Bank may from
time to time by notice to the Borrower and the 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.
-11-
<PAGE> 17
"Money Market LIBOR Borrowing" has the meaning set
forth in Section 1.03.
"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).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc.
"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
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, 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)).
"Operating Cash Flow" shall mean, for any period,
the sum (without duplication), determined on a consolidated
basis for the Borrower and its Subsidiaries, of (a) net
income for such period PLUS (b) to the extent deducted in
determining net income for such period, the sum of
depreciation, amortization and other non-cash charges.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
-12-
<PAGE> 18
"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
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) 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.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its prime rate.
"Profit Sharing Plan" means the Profit Sharing and
Savings Plan of Cabot Corporation effective as restated on
October 1, 1976, as amended from time to time.
"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.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"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, holding Notes
evidencing more than 50% of the aggregate unpaid principal
amount of the Loans.
-13-
<PAGE> 19
"Revolving Credit Period" means the period from
and including the Effective Date to and including the
Termination Date.
"S&P" means Standard & Poor's Corporation.
"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 Borrower.
"Temporary Cash Investment" means any Investment
in (i) securities of the U.S. Treasury; (ii) securities of
agencies of the U.S. Government; (iii) commercial paper,
with a rating in the United States of A-1 by S&P and a
rating in the United States of P-1 by Moody's or better; or
in the case of a foreign issuer, an equivalent rating by
another recognized credit rating service; (iv) bankers'
acceptances, certificates of deposit, and time deposits
issued by any Bank or by a bank having capital in excess of
$1,000,000,000; (v) repurchase agreements with a "primary"
dealer of the Federal Reserve or a bank described in clause
(iv) of this definition which is collateralized by
obligations of the U.S. Government or federal agencies with
a value not to be below 102% of the face value of the
repurchase agreement; (vi) municipal obligations with a
rating of MIG-1 by S&P and a rating of SP-1 by Moody's or
better, (vii) preferred stock which is rated A by S&P or A2
by Moody's or better and whose dividend rate is set no
longer than every 49 days through a Dutch auction process
and (viii) money market funds substantially all of whose
investments listed in the relevant prospectus are of the
types listed in the foregoing items (i) through (vii).
"Termination Date" means the earlier of (x) the
date on which the Commitments are terminated pursuant to
Section 2.09(i) hereof and (y) January 13, 1997, or, if
January 13, 1997 is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"Total Capitalization" means, at any date,
Consolidated Debt PLUS the consolidated stockholders' equity
of the Borrower, calculated without regard to changes in
foreign currency translation adjustments subsequent to
September 30, 1993, all as would be presented according to
generally accepted accounting principles in a consolidated
balance sheet of the Borrower as of such date.
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<PAGE> 20
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the
present value of all accrued benefits under such Plan
exceeds (ii) the fair market value of all Plan assets
allocable to such benefits (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.
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 Borrower's independent public accountants) with
the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to
the Banks.
SECTION 1.03. TYPES OF BORROWINGS. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on a
single date and for a single Interest Period. Borrowings
are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing
(I.E., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans, a "CD Borrowing" is a Borrowing comprised
of CD Loans, a "Base Rate Borrowing" is a Borrowing
comprised of Base Rate Loans, a "Money Market LIBOR
Borrowing" is a Borrowing comprised of Money Market LIBOR
Loans, a "Money Market Absolute Rate Borrowing" is a
Borrowing comprised of Money Market Absolute Rate Loans and
a "Fixed Rate Borrowing" is a Borrowing comprised of Fixed
Rate Loans) or by reference to the provisions of Article II
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 the Bank participants are
determined on the basis of their bids in accordance
therewith).
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<PAGE> 21
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND DURING
REVOLVING CREDIT PERIOD. During the Revolving Credit Period
each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time in amounts such
that the aggregate principal amount of Committed Loans 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 $10,000,000 or
any larger integral multiple of $1,000,000 (except that any
such Borrowing may be in the aggregate amount available in
accordance with Section 3.02(b)) and shall be made from the
several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay, or to the extent permitted
by Section 2.11, prepay Loans and reborrow at any time
during the Revolving Credit Period under this Section.
SECTION 2.02. NOTICE OF COMMITTED BORROWINGS.
The Borrower shall give the Agent notice (a "Notice of
Committed Borrowing") not later than 10:00 A.M. (New York
City time) on the date of each Base Rate Borrowing and not
later than 11:00 A.M. (New York City time) on (x) the second
Domestic Business Day before each CD Borrowing and (y) the
third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) 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,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing
are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(d) in the case of a Fixed Rate Borrowing
(including, for this purpose, a Borrowing of CD Loans
bearing interest at the Base Rate pursuant to Section
2.07(b)), the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period.
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<PAGE> 22
SECTION 2.03. MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. In addition to
Committed Borrowings pursuant to Section 2.01, the Borrower
may, as set forth in this Section, request the Banks during
the Revolving Credit Period to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall
have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any such offers
in the manner set forth in this Section.
(b) MONEY MARKET QUOTE REQUEST. When the
Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex
or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
received no later than 10:00 A.M. (New York City time) on
(x) the fifth Euro-Dollar Business Day prior to 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 either case, such other time or date as the
Borrower and the 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) specifying:
(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 aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger integral 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.
The 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
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<PAGE> 23
of days as the Borrower and the 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 Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C 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 Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 9.01 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:15 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the 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 Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
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 III and VI, any Money
Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
the Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D 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
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<PAGE> 24
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger integral 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 D hereto or does not specify all of the
information required by subsection (d)(ii);
(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 Agent shall promptly
notify the Borrower of the terms (x) of any Money Market
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<PAGE> 25
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
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The 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. Not later
than (x) 10:00 A.M. (New York City time) on the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 10:15 A.M.
(New York City time) or 30 minutes after the receipt of the
Money Market Quote from the Agent on the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the
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), the Borrower
shall notify the Agent of its acceptance or non-acceptance
of the offers so notified to it pursuant to subsection (e).
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 $10,000,000 or a larger multiple of
$1,000,000,
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<PAGE> 26
(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 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 Agent among such Banks as nearly as
possible (in integral multiples of $1,000,000, as the Agent
may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the
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
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) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address specified in or pursuant
to Section 9.01. Unless the Agent determines that any
applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from
the Banks available to the Borrower at the Agent's aforesaid
address.
(c) If any Bank makes a new Loan hereunder on a
day on which the 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
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<PAGE> 27
being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in
subsection (b), or remitted by the Borrower to the Agent as
provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this
Section 2.04 and the 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 Agent,
such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and 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
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.05. NOTES. (a) The Loans of each Bank
shall be evidenced by a single Note 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.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note 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 pursuant to
Section 3.01(d), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount, type and
maturity of each Loan made by it and the date and amount of
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<PAGE> 28
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, endorse on the
schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such
Loan then outstanding; PROVIDED that the failure of any Bank
to make any such recordation or endorsement shall not affect
the obligations of the Borrower hereunder or under the
Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a
part of its 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 the Interest
Period applicable thereto, at a rate per annum equal to the
sum of the CD Margin plus the applicable Adjusted CD Rate;
PROVIDED that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion 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 plus the Adjusted
CD Rate applicable to such Loan and (ii) the rate applicable
to Base Rate Loans for such day (excluding the application
of the last sentence in Section 2.07(a)).
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<PAGE> 29
<TABLE>
"CD Margin" means, for any day, the percentage per
annum equal to the applicable CD Margin set forth in the
table below.
<CAPTION>
If the Investment The CD
Level Status is: Margin is:
- ----------------- ----------
<S> <C>
Investment Level Status I .325 of 1%
Investment Level Status II .425 of 1%
Investment Level Status III .525 of 1%
Investment Level Status IV .625 of 1%
</TABLE>
The "Adjusted CD Rate" applicable to 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 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.
"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
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<PAGE> 30
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. X 327.3(d) (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. 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 the Interest
Period applicable thereto, at a rate per annum equal to the
sum of the Euro-Dollar Margin plus the applicable 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.
<TABLE>
"Euro-Dollar Margin" means, for any day, the
percentage per annum equal to the applicable Euro-Dollar
Margin set forth in the table below.
<CAPTION>
If the Investment The Euro-Dollar
Level Status is: Margin is:
- ----------------- ---------------
<S> <C>
Investment Level Status I .20 of 1%
Investment Level Status II .30 of 1%
Investment Level Status III .40 of 1%
Investment Level Status IV .50 of 1%
</TABLE>
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 in dollars 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
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<PAGE> 31
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 plus the London Interbank Offered
Rate applicable to such Loan and (ii) the Euro-Dollar Margin
plus 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 three months as the 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 (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
(excluding the application of the last sentence in Section
2.07(a)).
(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 Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
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<PAGE> 32
prompt notice to the Borrower and the participating Banks by
telex or cable of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence
of manifest error; PROVIDED that the Borrower shall, for a
period of 60 days after such notice is given, have the right
to demonstrate that the rate of interest so determined was
not calculated in accordance with the terms of this
Agreement; PROVIDED FURTHER that until the fact that the
rate of interest was not calculated in accordance with the
terms of this Agreement is demonstrated to the satisfaction
of the Agent (which must act reasonably and in good faith),
the Borrower shall continue to pay interest in accordance
with the notice given.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the 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.
(h) If for any reason any CD Reference Bank or
Euro-Dollar Reference Bank, as the case may be, ceases to be
a Bank, the Agent with the written consent of the Borrower,
which consent shall not be unreasonably withheld, shall
appoint a successor CD Reference Bank or Euro-Dollar
Reference Bank, as the case may be, which shall be one of
the Banks.
SECTION 2.08. FEES.
(a) FACILITY FEE. The Borrower shall pay to the
Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate per annum. Such facility fee shall
accrue for each day (i) from and including the Effective
Date to but excluding the Termination Date, on the aggregate
amount of the Commitments (whether used or unused) for such
day and (ii) from and including the Termination Date to but
excluding the date the Loans shall be repaid in their
entirety, on the daily average aggregate outstanding
principal amount of the Loans on such day.
(b) PAYMENTS. Accrued fees under this Section
shall be payable quarterly in arrears on each March 31, June
30, September 30 and December 31 and upon the date of
termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their
entirety).
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<PAGE> 33
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION
OF COMMITMENTS. During the Revolving Credit Period, the
Borrower may, upon at least one Domestic Business Day's
notice to the Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of
$25,000,000 or any larger integral multiple thereof, the
aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans. If the
Commitments are reduced or terminated pursuant to this
Section, such Commitments may not be increased or reinstated
thereafter.
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. OPTIONAL PREPAYMENTS. (a) The
Borrower may, upon same day notice (no later than 10:00 A.M.
New York City time) to the Agent, prepay any Base Rate
Borrowing (or any Money Market LIBOR Borrowing bearing
interest at the Base Rate pursuant to Section 8.01(a)) in
whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger integral 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) The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, in the case of
a CD Borrowing or a Money Market Absolute Rate Borrowing, or
upon at least three Euro-Dollar Business Days' notice to the
Agent, in the case of a Euro-Dollar Borrowing or a Money
Market LIBOR Borrowing (other than a Money Market LIBOR
Borrowing bearing interest at the Base Rate pursuant to
Section 8.01(a)), subject to the provisions of Section 2.13,
prepay any such Borrowing in whole or in part in amounts
aggregating $10,000,000 or any larger integral multiple of
$1,000,000, on any Domestic Business Day, in the case of a
CD Borrowing or a Money Market Absolute Rate Borrowing, or
any Euro-Dollar Business Day, in the case of a Euro-Dollar
Borrowing or a Money Market LIBOR Borrowing, by paying the
principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such
prepayment shall be applied to prepay ratably the
outstanding CD Loans,
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Euro-Dollar Loans or Money Market Loans of the several Banks
included in such Borrowing, subject to Article VIII.
(c) Upon receipt of a notice of prepayment
pursuant to this Section, the 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 Borrower shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the 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 or the Money
Market LIBOR 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 Absolute Rate 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.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the 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
the Borrower shall not have so made such payment, each Bank
shall repay to the 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
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<PAGE> 35
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. FUNDING LOSSES. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Section 2.11(b), Article VI or VIII
or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the end of an
applicable period fixed pursuant to Section 2.07(d), or if
the Borrower fails to borrow any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section
2.04(a), the Borrower 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, 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, PROVIDED that the Borrower shall have the right,
within 60 days of receipt of such certificate, to
demonstrate that the amount set forth in such certificate is
incorrect and request an adjustment of the amount to be, or
theretofore, paid.
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) Any and all payments by
the Borrower to or for the account of any Bank or the Agent
hereunder or under any Note shall be made free and clear of
and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
EXCLUDING, (1) in the case of each Bank and the Agent, taxes
imposed on its income, and franchise or similar taxes
imposed on it, by the jurisdiction under the laws of which
such Bank or the Agent (as the case may be) is organized,
(2) in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the
jurisdiction of such Bank's Applicable Lending Office and
(3) in the case of each Bank, taxes imposed on its net
income and franchise taxes
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<PAGE> 36
which such Bank or Agent is subject to at the time the Bank first
becomes a party to this Agreement, at whatever rates may be in
effect for such taxes from time to time (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Bank
or the 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 2.15) such
Bank or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise solely from any payment made hereunder or under any
Note or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and
the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this
Section 2.15) paid by such Bank or the Agent (as the case
may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 15 days from the date
such Bank or the Agent (as the case may be) makes demand
therefor; PROVIDED, HOWEVER, that (1) after the Borrower has
made a payment pursuant to this provision, the Borrower
shall not be obligated to pay any further penalties,
interest or expenses accrued thereafter imposed by a
jurisdiction with respect to such Taxes or Other Taxes to
which the payment is related and (2) if the Bank knows or
has reason to know of the imposition of any Taxes or Other
Taxes for which the Borrower is required to indemnify such
Bank under this Section 8.04 and fails to promptly notify
the Borrower of such imposition, the Borrower shall not be
obligated to pay any penalties, interest or expenses accrued
with respect to such Taxes or Other
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<PAGE> 37
Taxes after the Bank has such knowledge and before the Borrower
has received such notification.
(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, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower 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 reduces the rate of
withholding tax on payments of interest 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. If the form provided by a
Bank at the time such Bank first becomes a party to this
Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in Section
2.15(a).
(e) For any period with respect to which a Bank
has failed to provide the Borrower 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 a form originally was required to be
provided), such Bank shall not be entitled to
indemnification under Section 2.15(a) with respect to Taxes
imposed by the United States; PROVIDED, HOWEVER, that should
a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such
Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 2.15, then such Bank will change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if
such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
(g) Upon a reasonable request of the Borrower, a
Bank shall, at the expense of the Borrower, seek the refund
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<PAGE> 38
for any Taxes or Other Taxes for which the Borrower has
indemnified the Bank under this Section 8.04, PROVIDED that
such Bank, in its sole discretion, determines that the
application of such refund will not be detrimental to such
Bank.
SECTION 2.16. REGULATION D COMPENSATION. Each
Bank may require the Borrower to pay, contemporaneously with
each payment of interest on the related Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loans of such
Bank at a rate per annum determined by such Bank up to but
not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one MINUS the
Euro-Dollar Reserve Percentage over (ii) the applicable
London Interbank Offered Rate. Any Bank wishing to require
payment of such additional interest (x) shall so notify the
Borrower and the Agent in writing no later than two
Euro-Dollar Business Days before the making of any
Euro-Dollar Loans hereunder, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be
payable to such Bank at the place indicated in such notice
with respect to each Interest Period commencing at least
three Euro-Dollar Business Days after the giving of such
notice and (y) shall notify the Borrower at least five
Euro-Dollar Business Days prior to each date on which
interest is payable on the Euro-Dollar Loans of the amount
then due it under this Section.
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS. This Agreement
shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof
signed by each of the parties hereto (or, in the case
of any party as to which an executed counterpart shall
not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile
transmission or other written confirmation from such
party of execution of a counterpart hereof by such
party);
(b) receipt by the Agent of certified copies of
the corporate charter and by-laws of the Borrower and
of all corporate action taken by the
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<PAGE> 39
Borrower authorizing the execution, delivery and performance of
this Agreement (including, without limitation, a certificate of
the Borrower setting forth the resolutions of the Board of
Directors or the Executive Committee of the Board of Directors
authorizing the transactions contemplated thereby and a
certified copy of the by-laws provision of the Borrower
authorizing the Executive Committee so to act;
(c) receipt by the Agent of a certificate from
the Borrower in respect of the name and signature of
each of the officers (i) who is authorized to sign on
its behalf and (ii) who will, until replaced by another
officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing
documents and giving notices and other communications
in connection with this Agreement;
(d) receipt by the Agent for the account of each
Bank of a duly executed Note dated on or before the
Effective Date complying with the provisions of Section
2.05;
(e) receipt by the Agent of an opinion of Robert
Rothberg, General Counsel of the Borrower,
substantially in the form of Exhibit E hereto and
covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(f) receipt by the Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Agent,
substantially in the form of Exhibit F hereto and
covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(g) termination of the commitments, and payment
in full of all amounts payable, under the Credit
Agreement dated as of April 16, 1991, as amended, among
Cabot Corporation, the banks listed therein and Morgan
Guaranty Trust Company of New York, as Agent; and
(h) receipt by the Agent of all documents it may
reasonably request relating to the existence of the
Borrower, the corporate authority for and
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<PAGE> 40
the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory
to the Agent;
PROVIDED that this Agreement shall not become effective or
be binding on any party hereto unless all of the foregoing
conditions are satisfied not later than January 13, 1994.
The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive
and binding on all parties hereto.
SECTION 3.02. BORROWINGS. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) receipt by the 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 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 (or, in the case of a
Refunding Borrowing, no Event of Default by reason of
failure to comply with Section 5.07, 5.08 or 5.09)
shall have occurred and be continuing; and
(d) the fact that the representations and
warranties of the Borrower contained in this Agreement
(except, in the case of a Refunding Borrowing, the
Borrower need not make the representations and
warranties set forth in Sections 4.04(b), 4.05, 4.06
and 4.07) shall be true 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 as to the facts specified in clauses (b), (c)
and (d) of this Section.
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<PAGE> 41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws 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 the Borrower of this Agreement and the
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 (other than regular
informational filings with the Securities and Exchange
Commission) 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 judgment, injunction, order, decree or material
agreement or instrument binding upon the Borrower or any of
its Consolidated Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Borrower or any
of its Consolidated Subsidiaries.
SECTION 4.03. BINDING EFFECT. This Agreement
constitutes a valid and binding agreement of the Borrower
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of September
30, 1993, and the related consolidated statements of income,
cash flows and stockholders' equity for the fiscal year then
ended, reported on by Coopers & Lybrand and set forth in the
Borrower's 1993 Form 10-K, 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 the Borrower and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
fiscal year.
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<PAGE> 42
(b) Since September 30, 1993, there has been no
material adverse change in the business, financial position,
results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. LITIGATION. Except as described in
the Borrower's 1993 Form 10-K, there is no action, suit or
proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or
any of its Consolidated Subsidiaries before any court or
arbitrator or any governmental body, agency or official
which poses a material risk of being adversely determined
and, if so determined, might reasonably be expected to
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries considered as
a whole or which in any manner draws into question the
validity of this Agreement 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
respects material to the Borrower and its Consolidated
Subsidiaries considered as a whole with the presently
applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan. No member of the ERISA Group
has within the past five years (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 reasonably be expected to result in the imposition of
a Lien under Section 302(f) of ERISA, Section 412(n) of the
Internal Revenue Code or any successor provision thereto or
the posting of a bond or other security under Section 307 of
ERISA, Section 401(a)(29) of the Internal Revenue Code or
any successor provision thereto in excess of $20,000,000 or
(iii) incurred any liability in excess of $10,000,000 under
Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.07. ENVIRONMENTAL MATTERS. In the
ordinary course of its business, the Borrower conducts an
ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Borrower and its
Consolidated Subsidiaries, in the course of which, taking
into account the requirements of such Environmental Laws, it
makes a reasonable effort to identify and evaluate known and
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<PAGE> 43
potential 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 Laws or as a condition of any license, permit
or contract held or entered into by the Borrower or any
Consolidated Subsidiary, 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 material liabilities to third parties,
including employees of the Borrower and its Consolidated
Subsidiaries and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded
that such liabilities and costs, including the cost of
compliance with and liabilities arising under Environmental
Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
SECTION 4.08. TAXES. United States Federal
income tax returns of the Borrower and its Consolidated
Subsidiaries have been examined and closed through the
fiscal year ended September 30, 1987. The Borrower and its
Consolidated 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 Borrower or any Subsidiary,
except such taxes or assessments, if any, as are being
contested in good faith by appropriate proceedings or where
the failure to do so does not materially adversely affect
the Borrower and its Consolidated Subsidiaries, considered
as a whole. The charges, accruals and reserves on the books
of the Borrower and its Consolidated Subsidiaries in respect
of taxes or other governmental charges are, in the opinion
of the Borrower, adequate.
SECTION 4.09. SUBSIDIARIES. Each of the
Borrower's Subsidiaries which is organized as a corporation
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. The
Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
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<PAGE> 44
SECTION 4.11. FULL DISCLOSURE. All information
heretofore furnished by the Borrower to the Agent or any
Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent
or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated
or certified. The Borrower has disclosed to the Banks in
writing any and all facts known to the Borrower's management
which materially and adversely affect or may affect (to the
extent the Borrower's management can now reasonably
foresee), the business, operations or financial condition of
the Borrower and its Consolidated Subsidiaries, taken as a
whole, or the ability of the Borrower to perform its
obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower 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 Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event within
95 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of
income, cash flow and stockholders' equity for such
fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities
and Exchange Commission by Coopers & Lybrand or other
independent accountants of nationally recognized
standing;
(b) as soon as available and in any event within
50 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income, cash
flow and stockholders' equity for such quarter and for
the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in
compara-
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<PAGE> 45
tive form the figures for the corresponding quarter and
the corresponding portion of the Borrower's previous fiscal
year, all certified (subject to normal year-end adjustments)
as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or
the chief accounting officer of the Borrower;
(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
or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 5.07 to
5.15, 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 Borrower 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
accountants which reported on such statements whether
anything has come to their attention to cause them to
believe that any Default existed on the date of such
statements;
(e) within five Domestic Business Days after any
officer of the Borrower obtains knowledge of any
Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth the
details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Borrower 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 Borrower shall have
filed with the Securities and Exchange Commission;
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<PAGE> 46
(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 with
respect to a Multiemployer Plan 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 which
is a defined benefit pension 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 makes any amendment to any Plan
which has resulted or could reasonably be expected to
result in the imposition of a Lien under Section 302(f)
of ERISA or Section 412(n) of the Internal Revenue Code
or any successor provision thereto or the posting of a
bond or other security under Section 307 of ERISA or
Section 401(a)(29) of the Internal Revenue Code or any
successor provision thereto, a certificate of the chief
financial officer or the chief accounting officer of
the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or
applicable member of the ERISA Group is required or
proposes to take;
(i) if and when any officer of the Borrower
obtains knowledge of any actual or pending change in
the rating of the Borrower's outstanding senior
unsecured long-term debt securities or commercial paper
by Moody's or S&P, a certificate of the chief financial
officer or the chief accounting officer of the Borrower
setting forth the details thereof;
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(j) if and when any officer of the Borrower
obtains knowledge of any reason why the Agent and each
Bank may not conclusively rely on the certificate from
the Borrower in respect of the names and signatures of
authorized officers delivered pursuant to Section
3.01(c) of this Agreement, a notice in writing from the
Borrower setting forth the details thereof; and
(k) from time to time such additional information
regarding the financial position or business of the
Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
The Banks and the Agent understand that some of the
information furnished to them pursuant to this Section 5.01
may be received by them prior to the time such information
shall have been made public, and the Banks and the Agent
agree that upon written notice from the Borrower that any
such written information has not been made public they will
keep such information furnished to them pursuant to this
Section 5.01 confidential and will make no use of such
information or disclosure of such information to other
Persons who have not been furnished such information until
it shall have become public through no fault of any of the
Banks, except to the extent that such use or disclosure (i)
is in connection with matters involving this Agreement, any
assignment and assumption agreement with Assignees or
participation agreements with Participants or (ii) is made
in accordance with obligations under law or regulations or
in response to requests from governmental agencies or
authorities pursuant to subpoenas or other process to make
information available to governmental agencies and examiners
or to others. Notwithstanding the foregoing, the Banks may
make information furnished to them pursuant to this Section
5.01 available to their Assignees or Participants or
proposed Assignees or Participants, PROVIDED that such
Persons have agreed in writing to be bound by the
confidentiality provisions set forth in this Section.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The
Borrower will pay and discharge, and will cause each
Consolidated Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and
liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will cause
each Subsidiary to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the
accrual of any of the same.
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SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Borrower will keep, and will cause each Consolidated
Subsidiary to keep, all of its properties used or useful in
the conduct of its business or the business of such
Subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Borrower may be
necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at
all times; PROVIDED, that nothing in this clause (a) shall
prevent the Borrower or any of its Consolidated Subsidiaries
from discontinuing the operations and maintenance of any of
its properties or those of its Consolidated Subsidiaries if
such discontinuance is, in the judgment of the Borrower or
such Subsidiary, desirable in the conduct of its or their
business and which do not in the aggregate materially
adversely affect the business of the Borrower and its
Consolidated Subsidiaries considered as a whole.
(b) The Borrower will, and will cause each of its
Consolidated Subsidiaries to, maintain (either in the name
of the Borrower or in such Subsidiary's own name) with
financially sound and reputable insurance companies,
insurance on such of their respective properties in at least
such amounts and against at least such risks (and with such
risk retention) as are usually insured against in the same
general area by companies of established repute engaged in
the same or similar business; and will furnish to the Banks,
upon request from the Agent, information presented in
reasonable detail (but not including the actual insurance
policy) as to the insurance so carried.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE
OF EXISTENCE. The Company will do or cause to be done, and
will cause each of its Consolidated Subsidiaries to do or
cause to be done, all things necessary to preserve and keep
in full force and effect its existence and good standing
under the laws of its jurisdiction of incorporation,
maintain its qualification to do business in each state in
which the failure to do so would have a material adverse
effect on the condition, financial or otherwise, of the
Borrower and its Consolidated Subsidiaries considered as a
whole, and maintain all of the rights and franchises
reasonably necessary to the conduct of the business of the
Borrower and its Consolidated Subsidiaries considered as a
whole; PROVIDED that nothing in this Section 5.04 shall
prohibit mergers or consolidations or sales of assets not
prohibited by Sections 5.12 and 5.13
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hereof or prevent the Borrower from liquidating or selling any
of its Consolidated Subsidiaries.
SECTION 5.05. COMPLIANCE WITH LAWS. The
Borrower will comply, and cause each Consolidated Subsidiary
to comply, in all material respects with all material
applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by
appropriate proceedings.
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND
RECORDS. The Borrower will keep, and will cause each
Consolidated 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 Consolidated Subsidiary to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of
their respective properties, and, for the purposes of
verifying compliance with this Agreement or the accuracy of
the financial information provided hereunder, 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 at such reasonable times
and as often as may reasonably be desired.
SECTION 5.07. DEBT. Consolidated Debt minus the
lesser of (x) $30,000,000 and (y) the amount of Temporary
Cash Investments (at book value) then held in the Borrower's
corporate cash management system will not exceed 57.5% of
Total Capitalization at any time. Total Debt of all
Consolidated Subsidiaries (excluding Debt of a Consolidated
Subsidiary to the Borrower or to another Consolidated
Subsidiary) will at no time exceed 25% of Total
Capitalization. For purposes of this Section any preferred
stock of a Consolidated Subsidiary held by a Person other
than the Borrower or a Consolidated Subsidiary shall be
included, at the higher of its voluntary or involuntary
liquidation value, in "Consolidated Debt" and in the "Debt"
of such Consolidated Subsidiary.
SECTION 5.08. MINIMUM CONSOLIDATED TANGIBLE NET
WORTH. Consolidated Tangible Net Worth will at no time be
less than the sum of (i) $375,931,811 PLUS (ii) 50% of net
income earned after the fiscal quarter ending on September
30, 1993 PLUS (iii) 75% of the net cash proceeds of any
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capital stock (whether common stock or preferred stock)
issued by the Borrower after the Effective Date, PROVIDED
that (x) sales of treasury stock to State Street Bank, as
trustee of the Borrower's Profit Sharing Plan, in the
ordinary course and (y) sales of the Borrower's capital
stock to employees of the Borrower or its Subsidiaries or
Equity Affiliates or consultants, up to a maximum of
$3,000,000 of proceeds to the Borrower, after the date of
this Agreement, shall not be considered issuances of stock
for purposes of this clause (iii).
<TABLE>
SECTION 5.09. OPERATING CASH FLOW. The ratio at
each fiscal quarter-end falling within a period set forth
below of (a) Operating Cash Flow for the four fiscal
quarters then ended to (b) Consolidated Debt at such fiscal
quarter-end will at no time be less than the applicable
ratio set forth below for such period:
<CAPTION>
Periods Ratios
------- ------
<S> <C>
Effective Date through 12/31/94 .20 to 1.0
1/1/95 and thereafter .25 to 1.0
</TABLE>
SECTION 5.10. INVESTMENTS. Neither the Borrower
nor any Consolidated Subsidiary will make, acquire or hold
any Investment in any Person other than:
(a) Investments in Subsidiaries and Equity
Affiliates (including investments in entities which, as
a result of such Investment, become Subsidiaries or
Equity Affiliates) and Investments held as of September
30, 1993 in entities which were Equity Affiliates on
such date but which cease to be such;
(b) Temporary Cash Investments;
(c) Investments consisting of Margin Stock,
PROVIDED that the aggregate book value of all
Investments in Margin Stock held at any time under this
Section 5.10 does not exceed $20,000,000, and PROVIDED
FURTHER that the making, acquisition or holding of such
Investments does not cause or result in any violation
of the provisions of Regulation U;
(d) Investments in the Borrower by any
Consolidated Subsidiary; and
(e) any Investment not otherwise permitted by the
foregoing clauses of this Section if, immediately after
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such Investment is made or acquired, the aggregate net
book value of all Investments permitted by this clause
(e) does not exceed 10% of Consolidated Tangible Net
Worth.
SECTION 5.11. NEGATIVE PLEDGE. Neither the
Borrower nor any Consolidated 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
$25,000,000;
(b) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Consolidated Subsidiary;
(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 such asset (including an asset
to be held pursuant to a capital lease), PROVIDED that
such Lien attaches to such asset concurrently with or
within 90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Borrower or a
Consolidated Subsidiary;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Consolidated
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 arising in the ordinary course of its
business which (i) do not secure Debt, (ii) do not
secure any single obligation in an amount exceeding
$75,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or
materially impair the use thereof in the operation of
its business;
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(h) any purchase money mortgages and Liens
created in respect of property acquired pursuant to
Investments made after the date of this Agreement in
specialty chemical businesses located outside North
America and Western Europe, PROVIDED that (i) no such
mortgage or Lien shall extend to or cover any other
property of the Borrower or any Consolidated Subsidiary
and (ii) the aggregate principal amount of all
liabilities secured by all mortgages and Liens in
respect of such property (whether or not the Borrower
or any Consolidated Subsidiary assumes or becomes
liable for such liabilities) shall not at any time
exceed 100% of the purchase price of such property; and
(i) any Lien on Margin Stock; and
(j) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not
to exceed 10% of Consolidated Tangible Net Worth.
SECTION 5.12. CONSOLIDATIONS AND MERGERS. The
Borrower will not (i) consolidate or merge with or into any
other Person unless upon completion of such merger or
consolidation the surviving entity is the Borrower or (ii)
sell, lease or otherwise transfer, directly or indirectly,
in any one transaction or series of related transactions,
all or substantially all of the assets of the Borrower and
its Consolidated Subsidiaries, taken as a whole, to any
other Person.
SECTION 5.13. SALES OF ASSETS. Except as
provided in Section 5.03, the Borrower shall maintain direct
ownership of substantially all of the tangible and
intangible assets employed in connection with (x) the
Borrower's United States domestic carbon black business and
(y) the Borrower's United States domestic fumed silica
business, and shall conduct such businesses generally in the
same manner and to the same extent as conducted by the
Borrower on September 30, 1993 and as described in the
Borrower's 1993 Form 10-K.
SECTION 5.14. USE OF PROCEEDS. The proceeds of
the Loans made under this Agreement will be used by the
Borrower for general corporate purposes, PROVIDED that no
more than $20,000,000 of principal amount of Loans
outstanding at any time shall be Loans the proceeds of which
have been used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and PROVIDED FURTHER that in no event
shall
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such proceeds be used in any manner which would result
in a violation of Regulation U or any other applicable law
or regulation.
SECTION 5.15. TRANSACTIONS WITH AFFILIATES.
Neither the Borrower nor any Consolidated Subsidiary will
directly or indirectly engage in any transaction (including,
without limitation, the purchase, sale or exchange of assets
or the rendering of any service) with any Affiliate, except
upon terms that are no less favorable to the Borrower or
such Consolidated Subsidiary than those which might be
obtained in an arm's-length transaction at the time with
Persons which are not Affiliates.
ARTICLE VI
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) the Borrower shall fail to pay when due any
principal of any Loan, or shall fail to pay within five
days of the due date thereof any interest, fees or any
other amount payable hereunder;
(b) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.07 to 5.15,
inclusive;
(c) the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after written notice thereof has been given
to the Borrower by the Agent at the request of any
Bank;
(d) any representation, warranty, certification
or statement made by the Borrower in this Agreement or
in any certificate, financial statement or other
document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to
make any payment in respect of any Material Debt when
due, taking into account any applicable grace period;
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(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 Borrower or any Subsidiary or
Subsidiaries in which the Borrower's aggregate direct
and indirect Investment is at least $20,000,000 shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with
respect to itself or themselves or its or their 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 them or any substantial part
of its or their 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 them, or shall make
a general assignment for the benefit of creditors, or
shall fail generally to pay its or their 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 Borrower or any Subsidiary or
Subsidiaries in which the Borrower's aggregate direct
and indirect Investment is at least $20,000,000 seeking
liquidation, reorganization or other relief with
respect to it or them or its or their 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 them or any substantial part
of its or their 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 Borrower or any Subsidiary or
Subsidiaries in which the Borrower's aggregate direct
and indirect Investment is at least $20,000,000 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 $20,000,000 which it shall have become liable to pay
under Title IV of ERISA and such amount shall continue
to be unpaid and unstayed for a period of 10 days; or
notice of intent to terminate a Material Plan in a
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<PAGE> 55
distress termination shall be filed under Title IV of
ERISA by any member of the ERISA Group, any plan
administrator of any such Material Plan 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 specified in ERISA Section 4042(a)
(other than the condition specified in ERISA Section
4042(a)(4)) 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 for the payment of money
in excess of $20,000,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of
10 days; or
(k) any person or group of persons (within the
meaning of Section 13 of the Securities Exchange Act of
1934, as amended), other than members of the Cabot
family or Persons holding securities for the benefit of
members of the Cabot family, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission
under said Act) of 25% or more of the outstanding
shares of common stock of the Borrower; or, during any
period of 24 consecutive calendar months, individuals
who were directors of the Borrower on the first day of
such period shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
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<PAGE> 56
waived by the Borrower; PROVIDED that in the case of any of
the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes
(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 the Borrower.
SECTION 6.02. NOTICE OF DEFAULT. The Agent shall
give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. APPOINTMENT AND AUTHORIZATION.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. AGENT AND AFFILIATES. Morgan
Guaranty Trust Company of New York 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 the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. ACTION BY AGENT. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. CONSULTATION WITH EXPERTS. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action
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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 AGENT. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable 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. Neither the Agent nor any of its
affiliates nor 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 this
Agreement 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 III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex 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 the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. CREDIT DECISION. Each Bank
acknowledges that it has, independently and without reliance
upon the 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 the 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.
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<PAGE> 58
SECTION 7.08. SUCCESSOR AGENT. The Agent may
resign at any time by giving written notice thereof to the
Banks and the Borrower. Upon any such resignation, the
Required Banks with the written consent of the Borrower,
which consent shall not be unreasonably withheld, shall have
the right to appoint a successor Agent. 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 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 of its
appointment as Agent hereunder by a successor Agent, 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 Agent.
SECTION 7.09. AGENT'S FEE. The Borrower shall
pay to the Agent for its own account fees in the amounts and
at the times previously agreed upon between the Borrower and
the Agent.
ARTICLE VIII
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 Fixed Rate Borrowing:
(a) the 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 aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate
or the London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and
fairly reflect the cost to such
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Banks of funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower 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 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 and (ii) if such Fixed Rate Borrowing is a
Money Market LIBOR Borrowing, the Money Market LIBOR Loans
comprising such Borrowing 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 (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 and such Bank shall
so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until
such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Loans
shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall 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 maturity and shall so
specify in such notice, the 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
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<PAGE> 60
Euro-Dollar Loan, the 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 or 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 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 (i) with respect to
any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any
Euro-Dollar Loan any such requirement with respect to which
such Bank is entitled to compensation during the relevant
Interest Period under Section 2.16), 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, 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 Agent), the Borrower
shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or
reduction. The Borrower's obligation under this Section
8.03(a) shall be limited to paying any costs which the Bank
incurs after or within 45 days prior to receipt by the
Borrower of the notice provided for under Section 8.03(c).
-55-
<PAGE> 61
(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 its Parent)
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 Agent), the Borrower
shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such
reduction. The Borrower's obligation under this Section
8.03(b) shall be limited to paying any costs which the Bank
incurs after or within 90 days prior to receipt by the
Borrower of the notice provided for under Section 8.03(c).
(c) Each Bank will promptly notify the Borrower
and the 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
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 calculation in reasonable
detail of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest
error, PROVIDED that the Borrower shall have the right,
within 60 days of receipt of such certificate, to
demonstrate that the amount set forth in such certificate is
incorrect and request an adjustment of the amount to be, or
therefore, paid. 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 has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least
five
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<PAGE> 62
Euro-Dollar Business Days' prior notice to such Bank through
the Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer apply:
(a) all Loans which would otherwise be made by
such Bank as CD Loans or Euro-Dollar Loans, as the case
may be, 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, 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.
SECTION 8.05. SUBSTITUTION OF BANK. If (i) any
Bank has required the Borrower to pay additional amounts to
or for the account of any Bank pursuant to Section 2.15,
(ii) the obligation of any Bank to make Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or (iii) any
Bank has demanded compensation under Section 8.03, the
Borrower shall, upon at least three Euro-Dollar Business
Days' notice to the Agent, have the right, with the
assistance of the Agent, to seek a mutually satisfactory
substitute bank or banks (which may be one or more of the
Banks) to purchase the Note and assume the Commitment of
such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. 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: (x)
in the case of the Borrower or the Agent, at its address or
telex number set forth on the signature pages hereof, (y) in
the case of any Bank, at its address or facsimile number set
forth in its Administrative Questionnaire or (z) in the case
of any party, such other address or telex number as such
party may hereafter specify for the purpose by notice to the
Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by mail, when
delivered or (ii) if given by any other means, when
delivered
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<PAGE> 63
at the address specified in this Section; PROVIDED
that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 9.02. NO WAIVERS. No failure or delay by
the 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 9.03. EXPENSES; DOCUMENTARY TAXES;
INDEMNIFICATION. (a) The Borrower shall pay (i) all
out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in
connection with the preparation of this Agreement, any
waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the
Agent and each Bank, including fees and disbursements of
counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom. The Borrower shall
indemnify each Bank against any transfer taxes (except in
the case of any voluntary transfer by a Bank to an Assignee
or Participant hereunder), documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.
(b) The Borrower agrees to indemnify each Bank
and hold each Bank 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 may be incurred by any Bank
(or by the Agent in connection with its actions as Agent
hereunder) in connection with any investigative,
administrative or judicial proceeding (whether or not such
Bank shall be designated a party thereto) relating to or
arising out of this Agreement or any actual or proposed use
of proceeds of Loans hereunder; PROVIDED that no Bank shall
have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction.
SECTION 9.04. 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
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<PAGE> 64
of the aggregate amount of principal and interest
due with respect to any Note held by 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 Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes 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 Notes 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
the Borrower other than its indebtedness under the Notes.
The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note, 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 the Borrower in the amount of such
participation.
SECTION 9.05. AMENDMENTS AND WAIVERS. Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the 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
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.
SECTION 9.06. 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 the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
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<PAGE> 65
(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 Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent 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 Borrower 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
9.05 which would directly affect the Participant without the
consent of the Participant. The Borrower agrees that each
Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of
Article VIII 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 (PROVIDED
that any such assignment shall be of an amount not less than
$10,000,000), and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit G hereto
executed by such Assignee and such transferor Bank, with
(and subject to) the subscribed consent of the Borrower and
the Agent; PROVIDED that if an Assignee is another Bank or
is an affiliate of such transferor Bank, no such consent
shall be required; and PROVIDED FURTHER that such assignment
may, but need not, include rights of the transferor Bank in
respect of outstanding Money Market Loans. 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
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<PAGE> 66
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 Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note
is issued to the Assignee. In connection with any such assignment,
the transferor Bank shall pay to the Agent an administrative fee for
processing such assignment in the amount of $2,000. If the
Assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with Section
2.15.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note 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 2.15 or 8.03 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 2.15, 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.
SECTION 9.07. COLLATERAL. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any Margin Stock as
collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. GOVERNING LAW; SUBMISSION TO
JURISDICTION. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The 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 or the transactions contemplated hereby. The
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
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<PAGE> 67
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.
SECTION 9.09. 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 constitutes 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 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT 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.
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<PAGE> 68
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.
CABOT CORPORATION
By__________________________
Title:
Telecopy number: (617) 342-6103
-63-
<PAGE> 69
<TABLE>
<CAPTION>
COMMITMENTS
- -----------
<S> <C>
$20,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Charles R. Pardue
-----------------------------------
Title: Associate
$20,000,000 J.P. MORGAN DELAWARE
By /s/ David J. Morris
-----------------------------------
Title: Vice President
$40,000,000 THE FIRST NATIONAL BANK OF BOSTON
By /s/ Robert E. Gallery
-----------------------------------
Title: Division Executive
$35,000,000 CITIBANK, N.A.
By /s/ Gian Paolo Potsios
-----------------------------------
Title: Attorney-In-Fact
</TABLE>
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<PAGE> 70
<TABLE>
<CAPTION>
COMMITMENTS
- -----------
<S> <C>
$30,000,000 CREDIT LYONNAIS
NEW YORK BRANCH
By /s/ Alain Papiasse
-----------------------------------
Title: Senior Vice President
Deputy General Manager
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
By /s/ Alain Papiasse
-----------------------------------
Title: Authorized Signature
$25,000,000 ABN AMRO BANK N.V.
By /s/ Elliot O. May
-----------------------------------
Title: Group Vice President
By /s/ R.E. James Hunter
-----------------------------------
Title: Vice President
$25,000,000 CHEMICAL BANK
By /s/ Robert E. Kennedy
-----------------------------------
Title: Vice President
</TABLE>
-65-
<PAGE> 71
EXHIBIT A
NOTE
New York, New York
January 13, 1994
For value received, Cabot Corporation (the
"Borrower"), a Delaware corporation (the "Borrower"),
promises to pay to the order of (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. 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 Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New
York.
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
Credit Agreement dated as of January 13, 1994 among the
Borrower, the banks listed on the signature pages thereof
and Morgan Guaranty Trust Company of New York, as Agent (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.
CABOT CORPORATION
By ________________________
Title:
<PAGE> 72
<TABLE>
<CAPTION>
COMMITMENTS
- -----------
<S> <C>
$20,000,000 THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
By /s/ Mark J. Rakov
-----------------------------------
Title: Vice President
$25,000,000 THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By /s/ Robert W. Rampage, Jr.
-----------------------------------
Title: Senior Vice President
$5,000,000 BROWN BROTHERS HARRIMAN & CO.
By /s/ William J. Whelan, Jr.
-----------------------------------
Title: Manager
</TABLE>
- -----------------
Total Commitments
$250,000,000
=================
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<PAGE> 73
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Charles R. Pardue
----------------------------
Title: Associate
60 Wall Street
New York, New York 10260
Attention: Charles R. Pardue
Telex number: 177615
Telecopy number: (212) 648-5018
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<PAGE> 74
EXHIBIT B
Form of Money Market Quote Request
----------------------------------
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: Cabot Corporation (the "Borrower")
Re: Credit Agreement (the "Credit Agreement") dated as
of January 13, 1994 among the Borrower, the Banks
listed on the signature pages thereof and the
Agent
<TABLE>
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: __________________
<CAPTION>
Principal Amount* Interest Period**
- ----------------- -----------------
<S> <C>
$
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 BORROWER]
By________________________
Title:
<FN>
* Amount must be $10,000,000 or a larger integral
multiple of $1,000,000.
** Not less than one month (LIBOR Auction) or not less
than 30 days (Absolute Rate Auction), subject to the
provisions of the definition of Interest Period.
</TABLE>
<PAGE> 75
EXHIBIT C
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Cabot Corporation (the "Borrower")
<TABLE>
Pursuant to Section 2.03 of the Credit Agreement
dated as of January 13, 1994 among the Borrower, the Banks,
parties thereto and the undersigned, as Agent, 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: __________________
<CAPTION>
Principal Amount Interest Period
- ---------------- ---------------
<S> <C>
$
</TABLE>
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.] [9:15 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE> 76
<TABLE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
______________________________________________________________________
<CAPTION>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
</TABLE>
-2-
<PAGE> 77
EXHIBIT D
Form of Money Market Quote
--------------------------
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260
Attention:
Re: Money Market Quote to
Cabot Corporation (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: ____________________*
<TABLE>
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:
<CAPTION>
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
----------- ------------ ---------------------------------
<S> <C> <C>
$
$
<FN>
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted shall
no 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 lend. Bids must be made for $5,000,000 or a larger
integral multiple of $1,000,000.
(notes continued on following page)
</TABLE>
<PAGE> 78
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions
set forth in the Credit Agreement dated as of January 13, 1994
among the Borrower, the Banks listed on the signature pages
thereof and yourselves, as Agent, 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,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
----------
*** Not less than one month or not less than 30 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%).
-2-
<PAGE> 79
EXHIBIT E
OPINION OF GENERAL
COUNSEL OF THE BORROWER
-----------------------
January 13, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
This opinion is rendered to you pursuant to
Section 3.01(e) of the Credit Agreement dated as of January
13, 1994 (the "Credit Agreement") among Cabot Corporation, a
Delaware corporation (the "Borrower"), the banks listed on
the signature pages thereof (the "Banks") and Morgan
Guaranty Trust Company, as Agent (the "Agent"). Terms
defined in the Credit Agreement and not otherwise defined
herein are used herein with the meanings so defined.
I am the Borrower's General Counsel, and I have
examined the original 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 rendering the opinions set forth herein.
In my examination I have assumed the genuineness
of all signatures (except the signature of the Borrower on
the Credit Agreement and the Notes), the legal capacity of
natural persons, the authenticity of all documents submitted
to me as originals, the conformity to original documents of
all documents submitted to me as certified or other copies,
and the authenticity of the originals of such copies. I
have also assumed the due authorization, execution and
delivery of the Credit Agreement by all parties thereto
other than the Borrower. In rendering this opinion I have
assumed that no
<PAGE> 80
party will exercise any right or remedy except in a commercially
reasonable manner and in good faith.
My opinions herein are limited to the effects of
the laws of the United States of America and The
Commonwealth of Massachusetts, and the Delaware General
Corporation Law. I note that the Credit Agreement and Notes
purport to be governed by the laws of New York. I have,
with your permission, assumed for the purposes of this
opinion that the laws of New York, insofar as they relate to
the Credit Agreement, the Notes and related transactions,
are the same as those of Massachusetts; and I express no
opinion regarding the reasonableness of such assumption.
My opinions herein to the extent they relate to
the enforceability of the Credit Agreement and Notes are
subject to the following qualifications: (a) enforceability
may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, bulk
transfer or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) the
application of principles of equity, including without
limitation the principle that equitable remedies, such as
the remedy of specific performance, are subject to the
discretion of the court before which any proceeding therefor
may be brought; (b) I express no opinion as to the
enforceability of any provision purporting to (i) waive the
right to trial by jury or any other rights under the
constitution or laws of the United States of America or any
state, (ii) give the Agent or the Banks the sole and
absolute discretion to decide matters affecting the
Borrower, or (iii) indemnify or exculpate any party for
conduct which is negligent or in bad faith; and (c) I
express no opinion as to the effect of any law of any
jurisdiction (other than Massachusetts) which limits the
rate of interest that any Bank may charge or collect. I
also wish to point out that the holder of a Note may, under
certain circumstances, be called upon to prove the
outstanding amount of the loans evidenced thereby.
Based upon and subject to 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 the State of Delaware with corporate powers
adequate for the execution, delivery and performance of
-2-
<PAGE> 81
the Credit Agreement and the Notes, and for the carrying on of
the business now conducted by it. No government license,
authorization, consent or approval is required to be
obtained by the Borrower in order to enable it to execute,
deliver and perform the Credit Agreement and the Notes.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and each Note and the
making of the borrowings contemplated by the Credit
Agreement have been duly authorized by the Borrower.
3. The Credit Agreement and each Note have been
duly executed and delivered by the Borrower, and each is the
legal, valid, binding and enforceable obligation of the
Borrower.
4. Neither the execution or delivery of the
Credit Agreement or any Note by the Borrower, nor the making
of the borrowings under the Credit Agreement by the
Borrower, nor compliance by the Borrower with the terms and
provisions of the Credit Agreement or any Note, each as in
effect on the date hereof, will contravene, result in a
breach or violation of or constitute a default or result in
the creation of a Lien under: (i) the charter or by-laws of
the Borrower; (ii) any existing federal or Massachusetts law
or government regulation applicable to the Borrower; or
(iii) any injunction, judgment, order or decree or material
agreement or instrument to which the Borrower is a party or
by which it is bound and of which I have knowledge.
5. Except as described in the Borrower's 1993
Form 10-K, to the best of my knowledge after diligent
inquiry, there is no action, suit or proceeding pending
against or threatened against or affecting, the Borrower or
any of its Consolidated Subsidiaries before any court or
arbitrator or any governmental body, agency or official
which poses a material risk of being adversely determined
and, if so determined, might reasonably be expected to
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries considered as
whole or which in any manner draws into question the
validity of the Credit Agreement or the Notes.
6. Each of Cabot International Capital
Corporation, Cabot Safety Corporation, Distrigas Corpora-
-3-
<PAGE> 82
tion and TUCO, INC. (being all of the current subsidiaries of the
Borrower which were listed as significant subsidiaries in
Borrower's 1993 Form 10-K and which are organized under the
laws of a State of the United States of America) is a
corporation duly incorporated, validly existing and in good
standing under the laws of Delaware.
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 my prior written
consent.
Very truly yours,
Robert Rothberg
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<PAGE> 83
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
--------------------------------------
January 13, 1994
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Credit Agreement (the "Credit Agreement") dated as of
January 13, 1994 among Cabot Corporation, a Delaware
corporation (the "Borrower"), the banks listed on the
signature pages thereof (the "Banks") and Morgan Guaranty
Trust Company of New York, as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.01(f) 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
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers and have been duly
authorized by all necessary corporate action.
<PAGE> 84
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable against the Borrower, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar
laws of general application affecting the rights and
remedies of creditors and to general principles of equity
(regardless of 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, the federal laws of the United States of
America 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,
-2-
<PAGE> 85
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
CABOT CORPORATION (the "Borrower") and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Credit Agreement dated as
of January 13, 1994 among the Borrower, the Assignor and the
other Banks party thereto, as Banks, and the Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Borrower
in an aggregate principal amount at any time outstanding not
to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by
the Assignor under the Credit Agreement in the aggregate
principal 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.
<PAGE> 86
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 Borrower
and the Agent 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
Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or 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 BORROWER. This
Agreement is conditioned upon the consent of the Borrower
and the Agent pursuant to Section 9.06(c) of the Credit
Agreement. The execution of this Agreement by the Borrower
and the Agent is evidence of this consent. Pursuant to
Section 9.06(c) the Borrower agrees to execute and deliver a
Note payable to the order of the Assignee to evidence the
assignment and assumption
-2-
<PAGE> 87
provided for herein upon the surrender and cancellation of the
Note held by the Assignor.
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 the
Borrower, or the validity and enforceability of the
obligations of the 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 Borrower.
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_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
-3-
<PAGE> 88
CABOT CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
-4-
<PAGE> 1
EXHIBIT 11
CABOT CORPORATION
Earnings per Common Share for the Three Month Period Ended December 31, 1993
Statement Regarding Computation of Per Share Earnings
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Primary Fully Diluted
------- -------------
<S> <C> <C>
Shares of common stock outstanding at September 30, 1993,
less treasury stock 18,726 18,726
Plus net weighted shares of treasury stock issued 28 28
Plus common stock equivalents:
Effect of convertible preferred stock conversion - 1,562
Effect of equity incentive awards 325 325
--------- ---------
Weighted average shares outstanding 19,079 20,641
--------- ---------
--------- ---------
Income applicable to common shares $ 15,059 $ 15,059
Dividends on preferred stock - 899
Preferred stock conversion compensation shortfall - (625)
--------- ---------
Earnings applicable to common shares $ 15,059 $ 15,333
--------- ---------
Earnings per common share $ 0.79 $ 0.74
--------- ---------
--------- ---------
</TABLE>
<PAGE> 1
EXHIBIT 12
CABOT CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Three Months
Ended Years ended September 30
December 31 --------------------------------------------------
1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income from continuing operations $26,035 $67,900 $116,599 $62,362 $63,983 $(25,480)
Distributed income of affiliated companies 2,237 5,988 5,766 4,688 3,607 1,704
Add fixed charges:
Interest on indebtedness 10,259 44,043 41,714 38,661 41,145 34,059
Portion of rents representative of
the interest factor 1,288 4,838 4,933 5,715 5,226 4,764
------- -------- -------- -------- -------- -------
Income as adjusted $39,819 $122,769 $169,012 $111,426 $113,961 $15,047
Fixed charges:
Interest on indebtedness $10,259 $44,043 $41,714 $38,661 $41,145 $34,059
Capitalized interest -- -- 3,963 8,745 -- --
Portion of rents representative of
the interest factor 1,288 4,838 4,933 5,715 5,226 4,764
------- -------- -------- -------- -------- -------
Total fixed charges $11,547 $ 48,881 $50,610 $53,121 $46,371 $38,823
Ratio of earnings to fixed charges 3.45 2.51 3.34 2.10 2.46 *
------- -------- -------- -------- --------
------- -------- -------- -------- --------
</TABLE>
* Earnings in fiscal 1989 were inadequate to cover fixed charges by $23,776.
Operating profit for 1989 includes a $71,716 loss associated with the
energy group restructuring and aggregate charges of $18,933 related to the
reorganization of the Company's carbon black operations, streamlining of
the ceramic packaging business, and provisions for environmental issues.
Without these charges, the ratio of earnings to fixed charges would be
2.72 for 1989.
