SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the quarterly period
ended June 27, 1998
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 No. 1-4663
Crompton & Knowles Corporation
(exact name of registrant as specified in its charter)
Massachusetts 04-1218720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Station Place, Metro Center
Stamford, Connecticut 06902
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203)353-5400
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at July 15, 1998
Common Stock, $.10 par value 74,442,064 shares
CROMPTON & KNOWLES CORPORATION
FORM 10-Q
FOR QUARTER ENDED JUNE 27, 1998
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Financial Statements and
Accompanying Notes
. Consolidated Statements of Earnings
(unaudited) - Quarters and six months ended
June 27, 1998 and June 28, 1997
. Consolidated Balance Sheets - June 27, 1998
(unaudited) and December 27, 1997
. Consolidated Statements of Cash Flows
(unaudited) - Six months ended
June 27, 1998 and June 28, 1997
. Notes to Consolidated Financial
Statements - Quarter ended June 27, 1998
(unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION:
Item 1. Legal proceedings
Item 6. Exhibits and Reports on Form 8-K
Signatures
*Exhibit 4 $600,000,000 Third Amended and Restated
Credit Agreement
*Exhibit 4.1 Amendment of 1988 Rights Agreement
Exhibit 11 Statement Re Computation of Per Share Earnings
*Exhibit 27 Financial Data Schedules
* Copies of these Exhibits are annexed to this report on Form
10-Q provided to the Securities and Exchange Commission and the
New York Stock Exchange.
UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
Quarters and six months ended June 27, 1998 and June 28, 1997
(In thousands, except per share data)
Quarters ended Six months ended
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
Net sales $ 474,337 $ 494,142 $ 951,556 $ 968,015
Cost of products sold 292,091 312,638 594,556 617,010
Selling, general
and administrative 66,074 69,767 133,347 136,439
Depreciation and amortization 20,394 20,300 40,487 40,153
Research and development 13,200 13,054 26,363 25,938
Operating profit 82,578 78,383 156,803 148,475
Interest expense 20,505 26,581 44,118 53,534
Other (income) expense (1,258) 583 (1,547) 781
Earnings before income
taxes and extraordinary loss 63,331 51,219 114,232 94,160
Provision for income taxes 23,536 19,451 42,494 35,781
Earnings before
extraordinary loss 39,795 31,768 71,738 58,379
Extraordinary loss on early
extinguishment of debt (13,843) (1,227) (15,794) (1,227)
Net earnings $ 25,952 $ 30,541 $ 55,944 $ 57,152
Basic Earnings per common share:
Earnings before
extraordinary loss $ .53 $ .44 $ .96 $ .80
Extraordinary loss (.18) (.02) (.21) (.02)
Net earnings $ .35 $ .42 $ .75 $ .78
Diluted Earnings per common share:
Earnings before
extraordinary loss $ .52 $ .43 $ .94 $ .78
Extraordinary loss (.18) (.02) (.21) (.02)
Net earnings $ .34 $ .41 $ .73 $ .76
Dividends per common share $ .05 $ .05 $ .05 $ .05
See accompanying notes to consolidated financial statements.
- 2 -
June 27, 1998 UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
June 27, 1998 and December 27, 1997
(In thousands of dollars)
June 27, December 27,
1998 1997
ASSETS
CURRENT ASSETS
Cash $ 14,831 $ 10,607
Accounts receivable 268,786 262,412
Inventories 359,307 356,716
Other current assets 74,844 85,314
Total current assets 717,768 715,049
NON-CURRENT ASSETS
Property, plant and equipment 467,457 474,892
Cost in excess of acquired net assets 179,700 181,025
Other assets 166,358 177,854
$ 1,531,283 $ 1,548,820
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 2,944 $ 1,770
Accounts payable 134,528 145,405
Accrued expenses 153,535 149,910
Income taxes payable 47,461 38,909
Other current liabilities 26,333 27,094
Total current liabilities 364,801 363,088
NON-CURRENT LIABILITIES
Long-term debt 832,578 896,291
Postretirement health care liability 148,560 149,344
Other liabilities 144,585 160,187
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 7,733 7,733
Additional paid-in capital 237,874 232,213
Accumulated deficit (121,796) (174,019)
Accumulated translation adjustment (46,584) (42,045)
Treasury stock at cost (32,874) (40,228)
Deferred compensation (834) (984)
Pension liability adjustment (2,760) (2,760)
Total stockholders' equity (deficit) 40,759 (20,090)
$ 1,531,283 $ 1,548,820
See accompanying notes to consolidated financial statements.
- 3 -
UNAUDITED
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six months ended June 27, 1998 and June 28, 1997
(In thousands of dollars)
June 27, June 28,
Increase (decrease) to cash 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 55,944 $ 57,152
Adjustments to reconcile net earnings
to net cash provided by operations:
Extraordinary loss on early
extinguishment of debt 15,794 1,227
Depreciation and amortization 40,487 40,153
Noncash interest 5,068 6,946
Deferred taxes 6,762 12,009
Changes in assets and liabilities, net (9,653) (21,926)
Net cash provided by operations 114,402 95,561
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions (5,927) -
Capital expenditures (21,341) (17,040)
Other investing activities 235 2,535
Net cash used by investing activities (27,033) (14,505)
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of 11% and 12% notes (352,802) -
Proceeds (payments) on long-term borrowings 279,313 (65,777)
Proceeds (payments) on short-term borrowings 1,174 (5,157)
Premium paid on early extinguishment of debt (15,289) (1,464)
Dividends paid (3,721) (3,663)
Other financing activities 9,343 3,053
Net cash used by financing activities (81,982) (73,008)
CASH
Effect of exchange rates on cash (1,163) (531)
Change in cash 4,224 7,517
Cash at beginning of period 10,607 21,120
Cash at end of period $ 14,831 $ 28,637
See accompanying notes to consolidated financial statements.
-4-
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
Quarter ended June 27, 1998
PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The information included in the foregoing consolidated financial
statements is unaudited but reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of
the results for the interim periods presented.
Included in accounts receivable are allowances for doubtful
accounts of $9.6 million in 1998 and $8.7 million at December 27,
1997.
Accumulated depreciation amounted to $442.2 million in 1998 and
$416.6 million at December 27, 1997.
Accumulated amortization of cost in excess of acquired net assets
amounted to $45.1 million in 1998 and $42.2 million at December
27, 1997.
Accumulated amortization of patents, unpatented technology,
trademarks and other intangibles included in other assets
amounted to $130.6 million in 1998 and $123.3 million at December
27, 1997.
Cash payments during the six months ended June 27, 1998 and June
28, 1997 included interest of $40.7 million and $46.9 million,
respectively, and income taxes of $9.6 million and $16.2 million,
respectively.
It is suggested that the interim consolidated financial
statements be read in conjunction with the consolidated financial
statements and notes included in the Company's 1997 Annual Report
on Form 10-K.
CAPITAL STOCK
As of June 27, 1998, there were 77,332,751 common shares issued
at $.10 par value, of which 2,890,787 shares were held in the
treasury.
INVENTORIES
Components of inventories are as follows:
June 27, Dec. 27,
(In thousands) 1998 1997
Finished goods $243,936 $226,730
Work in process 43,718 47,029
Raw materials and supplies 71,653 82,957
$359,307 $356,716
EARNINGS(LOSS)PER COMMON SHARE
The computation of basic earnings per common share is based on
the weighted average number of common shares outstanding. The
computation of diluted earnings per common share is based on the
weighted average number of common and common equivalent shares
outstanding. The following is a reconciliation of the shares used
in both computations:
(In thousands) Second Quarter Six Months
1998 1997 1998 1997
Weighted average common
shares outstanding 74,430 73,341 74,267 73,210
Stock options, warrants
and other equivalents 2,383 1,834 2,346 1,738
Weighted average common
and common equivalent
shares outstanding 76,813 75,175 76,613 74,948
BUSINESS SEGMENT DATA
Second Quarter Ended
June 27, June 28,
(In thousands) 1998 1997
SALES
Specialty Chemicals $ 393,185 $ 418,303
Specialty Equipment and Controls 81,152 75,839
Total net sales $ 474,337 $ 494,142
OPERATING PROFIT
Specialty Chemicals $ 77,899 $ 76,074
Specialty Equipment and Controls 9,832 8,122
General corporate expense ( 5,153) ( 5,813)
Total operating profit $ 82,578 $ 78,383
Six Months Ended
June 27, June 28,
(In thousands) 1998 1997
SALES
Specialty Chemicals $ 786,795 $ 817,009
Specialty Equipment and Controls 164,761 151,006
Total net sales $ 951,556 $ 968,015
OPERATING PROFIT
Specialty Chemicals $ 148,117 $ 144,632
Specialty Equipment and Controls 20,198 15,748
General corporate expense ( 11,512) ( 11,905)
Total operating profit $ 156,803 $ 148,475
COMPREHENSIVE INCOME
Effective in the first quarter of 1998, the Company adopted
Financial Accounting Standards Board Statement No. 130 "Reporting
Comprehensive Income". The statement establishes standards for
reporting "comprehensive income" and its components in financial
statements and notes thereto. An analysis of the Company's
comprehensive income follows:
Second Quarter Six Months
Ended Ended
June 27, June 28, June 27, June 28,
(In thousands) 1998 1997 1998 1997
Net earnings $ 25,952 $ 30,541 $ 55,944 $ 57,152
Other comprehensive
(income)expense:
Foreign currency
translation adjustments 1,343 4,300 4,539 11,239
Minimum pension liability
adjustments, net - - - ( 953)
1,343 4,300 4,539 10,286
Comprehensive income $ 24,609 $ 26,241 $ 51,405 $ 46,866
LONG-TERM DEBT
On March 31, 1998, the Company amended its $600 million revolving
credit agreement with a syndicate of banks. The termination date
was extended to September 2003 from August 2001. Borrowings
under the credit agreement were amended as follows: Tranche I
provides a maximum of $375 million (up from $300 million)
available to the Company for working capital and general
corporate purposes. Tranche II provides a maximum of $75 million
(down from $150 million) available to Uniroyal Chemical Company,
Inc. for working capital and general corporate purposes. Tranche
III continues to provide up to $150 million available to the
European and Canadian subsidiaries of the Company.
On May 8, 1998 the Company redeemed the outstanding 11% Senior
Subordinated Notes at a price of 105.5% of the principal amount
thereof plus accrued and unpaid interest and the 12% Subordinated
Discount Notes at a price of 100% of the principal amount thereof
plus accrued and unpaid interest. The payment for the redemption
including premium and accrued interest amounted to $366.2 million
and was funded by drawing on the Company's $600 million revolving
credit agreement. Borrowings under the revolving credit
agreement totaled $389.1 million at June 27, 1998.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SECOND QUARTER RESULTS
Overview
Consolidated net sales of $474.3 million for the second quarter
of 1998 decreased 4% from the comparable 1997 period. The
decrease was primarily attributable to lower unit volume.
Improved pricing of 1% offset lower foreign currency
translation. International sales, including US exports, were
40% of total sales compared to 39% in the second quarter of
1997.
Net earnings before extraordinary losses on early extinguishment
of debt increased 25% to $39.8 million, or $.53 cents per share
basic and $.52 cents per share diluted, compared to $31.8
million, or $.44 cents per share basic and $.43 per share
diluted, in last year's second quarter. The extraordinary loss
of $.18 cents per share in the second quarter of 1998 reflects
the redemption of the 11% and 12% Notes on May 8, 1998. Net
earnings were $26.0 million, or $.35 cents per share basic and
$.34 cents per share diluted, compared to $30.5 million, or $.42
cents per share basic and $.41 cents per share diluted, in the
prior year's second quarter.
Gross margin as a percentage of net sales increased to 38.4%
from 36.7% in the second quarter of 1997. The increase was
attributable primarily to lower raw material costs and improved
pricing. Consolidated operating profit increased 5% to $82.6
million from $78.4 million in the prior year. Both segments
contributed to the increase as specialty chemicals rose 2% and
specialty process equipment and controls increased 21%.
Specialty Chemicals
The Company's specialty chemicals segment sales of $393.2
million decreased 6% from the comparable 1997 period. The
decrease was primarily due to lower unit volume. An analysis of
sales by major product class within the specialty chemicals
segment follows.
Chemicals and polymers sales of $123.5 million decreased 2% from
the second quarter of 1997 primarily attributable to lower unit
volume, as improved pricing of 1% was offset by lower foreign
currency translation. Sales of rubber chemicals were lower than
1997 primarily due to lower pricing, foreign currency
translation and unit volume. EPDM sales increased primarily due
to improved pricing. Nitrile rubber sales decreased as a result
of lower unit volume.
Crop protection sales of $100.5 million decreased 13% from the
comparable 1997 quarter primarily as a result of lower unit
volume due to weather conditions in California which were
unfavorable for its miticide products. This is the reverse of
1997 when second quarter sales were unusually strong and third
quarter sales were weak. Improved pricing of 1% offset lower
foreign currency translation.
Specialty sales of $81.2 million decreased 1% versus the second
quarter of 1997 primarily attributable to lower unit volume as
improved pricing of 1% offset lower foreign currency
translation. The comparison to last year's strong second
quarter was difficult considering the 12% increase over the
comparable 1996 quarter.
Colors sales of $64.6 million decreased 7% from the second
quarter of 1997 primarily due to lower unit volume of 4%,
foreign currency translation of 2% and lower pricing of 1%.
Increased imports of finished apparel into the U.S. negatively
affected the business.
Specialty ingredients sales of $23.4 million were 9% lower than
the second quarter of 1997 primarily attributable to lower unit
volume as a result of product rationalization in the second half
of 1997.
Operating profit of $77.9 million increased 2% versus the second
quarter of 1997 primarily as a result of lower raw materials
costs and improved pricing.
Specialty Process Equipment and Controls
The Company's specialty process equipment and controls segment
sales of $81.1 million increased 7% from the second quarter of
1997 primarily attributable to higher unit volume. Sales were
strong in most of the segment's major markets.
Operating profit of $9.8 million increased 21% from the second
quarter of 1997 primarily as a result of increased unit volume.
The order backlog of extruders and related equipment at the end
of the second quarter of 1998 amounted to $115 million compared
to $109 million at the end of the first quarter.
Other
Selling, general and administrative expenses of $66.1 million
decreased 5% versus the second quarter of 1997, essentially in
line with the lower unit volume of sales. Depreciation and
amortization of $20.4 million increased slightly from the
comparable 1997 period as a result of a higher fixed asset base.
Research and development costs of $13.2 million increased 1%
from the second quarter of 1997, but as a percentage of sales
remained constant at 3%. Interest expense of $20.5 million
decreased 23% from the comparable period of 1997 primarily due
to lower levels of indebtedness and lower interest on borrowings
used to redeem the 11% and 12% Notes in May. Other income of
$1.3 million compared to $583 thousand of other expense in the
second quarter of 1997 primarily due to increased interest
income. The effective tax rate of 37.2% decreased versus 38.0%
in the comparable 1997 quarter.
YEAR-TO-DATE RESULTS
Overview
Consolidated net sales of $951.6 million for the first six
months of 1998 decreased 2% from the comparable period in 1997.
The decrease resulted primarily from the impact of lower foreign
currency translation. International sales, including U.S.
exports, increased as a percentage of total sales to 40% from
38% for the first six months of 1997.
Net earnings before extraordinary losses on early extinguishment
of debt increased 23% to $71.7 million, or $.96 cents per share
basic and $.94 cents per share diluted, compared to $58.4
million, or $.80 cents per share basic and $.78 cents per share
diluted, in the first six months of 1997. Net earnings were
$55.9 million, or $.75 cents per share basic and $.73 cents per
share diluted, versus $57.2 million, or $.78 cents per share
basic and $.76 cents per share diluted, in 1997.
Gross margin as a percentage of net sales increased to 37.5%
from 36.3% for the first six months of 1997. The increase was
attributable primarily to lower raw material and other
manufacturing costs. Consolidated operating profit increased 6%
to $156.8 million as the specialty chemicals segment rose 2% and
the specialty process equipment and controls segment increased
28%.
Specialty Chemicals
The Company's specialty chemicals segment sales of $786.8
million, decreased 4% from the comparable 1997 period. The
decrease was primarily due to lower foreign currency translation
and lower unit volume of approximately 2% each. An analysis of
sales by major product class within the specialty chemicals
segment follows:
Chemicals and polymers sales of $244.3 million decreased 4% from
the first six months of 1997. The decrease was primarily
attributed to lower foreign currency translation of
approximately 2% and lower pricing and lower unit volume of 1%
each. Sales of rubber chemicals were lower than 1997 primarily
due to lower pricing, foreign currency translation and unit
volume. EPDM sales increased primarily due to improved pricing.
Nitrile rubber sales decreased primarily as a result of lower
unit volume.
Crop protection sales of $208.4 million decreased 5% from the
comparable 1997 period primarily as a result of lower unit
volume due to weather conditions in California which were
unfavorable for its miticide products.
Specialty sales of $160.3 million increased 2% from the six
month period of 1997 primarily due to increased unit volume.
Improved pricing of 1% was offset by the impact of lower foreign
currency translation.
Colors sales of $125.7 million decreased 6% from the first six
months of 1997 primarily due to lower unit volume of 3%, foreign
currency translation of 2% and lower pricing of 1%.
Specialty ingredients sales of $48.1 million were 7% lower than
the comparable period in 1997 primarily attributable to lower
unit volume as a result of product rationalization in the second
half of 1997.
Operating profit of $148.1 million for the first six months of
1998 increased 2% versus the prior year. The improvement in
operating profit resulted primarily from lower raw material and
other manufacturing costs.
Specialty Process Equipment and Controls
The Company's specialty process equipment and controls segment
reported sales of $164.8 million representing a 9% increase from
the 1997 six month period. Essentially all of the increase was
attributable to higher unit volume.
Operating profit of $20.2 million increased 28% versus the
comparable 1997 period primarily due to increased unit volume.
Other
Selling, general and administrative expenses of $133.3 million
decreased 2% versus the comparable period in 1997, essentially
in line with the lower unit volume of sales. Depreciation and
amortization of $40.5 million increased 1% versus the 1997
period primarily as a result of a higher fixed asset base.
Research and development cost of $26.4 million increased 2% from
$25.9 million in 1997, but as a percentage of sales remained
constant at 3%. Interest expense of $44.1 million decreased 18%
from the comparable period in 1997 due to lower levels of
indebtedness and lower interest on borrowings used to redeem the
11% and 12% Notes in May. Other income of $1.5 million compared
to $781 thousand of other expense in 1997 was primarily due to
increased interest income. The effective tax rate of 37.2%
decreased versus 38.0% in the comparable 1997 period.
LIQUIDITY AND CAPITAL RESOURCES
The June 27, 1998 working capital balance of $353.0 million was
comparable to the balance at year-end 1997. The current ratio
of 2.0 remained unchanged from the end of 1997. Days sales in
receivables averaged 54 days for the six month period in 1998,
unchanged from 1997. Inventory turnover averaged 3.2 compared
to 3.3 at year-end 1997.
Net cash flow provided by operations of $114.4 million increased
$18.8 million from the first half of 1997 primarily due to
increased operating earnings and lower working capital needs.
The cash flow was primarily used, together with additional
credit agreement borrowings, to fund capital expenditures,
reduce debt including the 11% and 12% Notes, and pay the annual
cash dividend. The Company's debt to total capital percentage
decreased to 95% from 102% at year-end 1997. The Company's
liquidity needs, including debt servicing, are expected to be
financed from operations.
On May 8, 1998 the Company redeemed the outstanding 11% Senior
Subordinated Notes and the 12% Subordinated Discount Notes. The
payment for the redemption including premium and accrued
interest amounted to $366.2 million and was funded by drawing on
the Company's $600 million revolving credit agreement.
Borrowings under the revolving credit agreement totaled $389.1
million at June 27, 1998.
Capital expenditures are expected to approximate $60 million in
1998 primarily for replacement needs and improvement of domestic
and foreign facilities.
In 1995 the Company initiated a program to update the current
information technology systems on a worldwide basis. The Company
evaluated its major computer systems and software applications
with the goal of avoiding interruption in the supply of goods,
services and business information at the turn of the century.
Year 2000 compliance remediation costs are not expected to have
a material effect on the Company's results of operation.
ACCOUNTING STANDARD CHANGE
In June 1997 the Financial Accounting Standards Board issued
Statement No. 131 "Disclosures about Segments of an Enterprise
and Related Information", which is effective for years beginning
after 1997. In June 1998, the Financial Accounting Standards
Board issued Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities", which is effective for
years beginning after 1999. The Company is currently evaluating
the statements and plans to adopt Statement No. 131 in the
fourth quarter of 1998 and Statement No. 133 in the first
quarter of 2000.
ENVIRONMENTAL MATTERS
The Company is involved in claims, litigation, administrative
proceedings and investigations of various types in a number of
jurisdictions. A number of such matters involve claims for a
material amount of damages and relate to or allege environmental
liabilities, including clean-up costs associated with hazardous
waste disposal sites, natural resource damages, property damage
and personal injury. The Company and some of its subsidiaries
have been identified by federal, state or local governmental
agencies, and by other potentially responsible parties (each a
"PRP") under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or
comparable state statutes, as a PRP with respect to costs
associated with waste disposal sites at various locations in the
United States. In addition, the Company is involved with
environmental remediation and compliance activities at some of
its current and former sites in the United States and abroad.
Each quarter, the Company evaluates and reviews estimates for
future remediation and other costs to determine appropriate
environmental reserve amounts. For each site a determination is
made of the specific measures that are believed to be required
to remediate the site, the estimated total cost to carry out the
remediation plan, the portion of the total remediation costs to
be borne by the Company and the anticipated time frame over
which payments toward the remediation plan will occur. As of
June 27, 1998, the Company's reserves for environmental
remediation activities totaled $99.9 million. These estimates
may change in the future should additional sites be identified,
further remediation measures be required or undertaken, the
interpretation of current laws and regulations be modified or
additional environmental laws and regulations be enacted.
The Company intends to assert all meritorious legal defenses and
other equitable factors which are available to it with respect
to the above matters. The Company believes that the resolution
of these environmental matters will not have a material adverse
effect on the consolidated financial position of the Company.
While the Company believes it is unlikely, the resolution of
these environmental matters could have a material adverse effect
on the Company's consolidated results of operation in any given
year if a significant number of these matters are resolved
unfavorably.
FORWARD-LOOKING STATEMENTS
The information in this Form 10-Q contains forward-looking
statements and estimates which are based on currently available
information. The Company's actual results may differ
significantly from the results discussed. Investors are
cautioned that there can be no assurance that the actual results
will not differ materially from those suggested in such forward-
looking statements and estimates.
Part II -- OTHER INFORMATION
Item 1. Legal Proceedings.
(i) Reference is made to page 16 (Other Environmental
Matters) of the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 27, 1997, for information pertaining
to a suit brought by Sundor Canada Inc. against Uniroyal Chemical
Co./Cie. and others. In June 1998, final settlement was reached
among the parties in accordance with the terms previously
disclosed and after judicial approval the suit was dismissed with
prejudice.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description
4* $600,000,000 Third Amended and
Restated Credit Agreement dated as
of March 31, 1998, by and among
Crompton & Knowles Corporation and
certain of its subsidiaries, as
Borrowers, and various lenders, and
Citicorp USA, Inc., as Agent and The
Chase Manhattan Bank, Corestates Bank, N.A.
and First Union National Bank as Managing
Agents.
4.1* Amendment dated as of January 20, 1998,
amending the Rights Agreement dated as of
July 20, 1988, as amended March 28, 1991 and
October 1, 1992, between the Registrant and
Mellon Bank N.A. as Rights Agent (Exhibit 1
to Form 8-K dated July 29, 1988.)
11 Statement Re Computation of
Per Share Earnings
27* Financial Data Schedules
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
* Copies of these Exhibits are annexed to this report on Form
10-Q provided to the Securities and Exchange Commission
and the New York Stock Exchange.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CROMPTON & KNOWLES CORPORATION
(Registrant)
August 11, 1998 By:/s/ Charles J. Marsden
Charles J. Marsden
Senior Vice President &
Chief Financial Officer
August 11, 1998 By:/s/ John T. Ferguson II
John T. Ferguson II
Vice President, General
Counsel and Secretary
EXECUTION COPY
US$600,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 31, 1998
Among
CROMPTON & KNOWLES CORPORATION,
CROMPTON & KNOWLES COLORS INCORPORATED,
DAVIS-STANDARD CORPORATION,
INGREDIENT TECHNOLOGY CORPORATION,
UNIROYAL CHEMICAL COMPANY, INC.,
THE B-2 BORROWERS NAMED HEREIN,
THE ITALIAN BORROWERS NAMED HEREIN
AND
UNIROYAL CHEMICAL CO.
as Initial Borrowers
and
THE INITIAL LENDERS, INITIAL ISSUING BANKS AND
SWING LINE BANK NAMED HEREIN
as Initial Lenders, Initial Issuing Banks and Swing Line Bank
and
CITICORP USA, INC.
as Agent
and
THE CHASE MANHATTAN BANK,
CORESTATES BANK, N.A.
AND
FIRST UNION NATIONAL BANK
as Managing Agents
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 2
1.02. Computation of Time Periods 38
1.03. Accounting Terms 38
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
2.01. The Advances 39
2.02. Making the Advances 43
2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit 47
2.04. Drawings of Bankers' Acceptances 49
2.05. Repayment of Advances 52
2.06. Termination or Reduction of the Commitments 54
2.07. Prepayments 55
2.08. Interest 57
2.09. Fees 60
2.10. Conversion of Advances 61
2.11. Renewal and Conversion of Bankers' Acceptances 62
2.12. Increased Costs, Etc 64
2.13. Illegality 66
2.14. Payments and Computations 67
2.15. Taxes 69
2.16. Sharing of Payments, Etc. 73
2.17. Use of Proceeds 74
2.18. Defaulting Lenders 74
2.19. Evidence of Debt 77
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Effectiveness of Amendment
and Restatement 78
3.02. Initial Extension of Credit to Each Designated
Subsidiary and Each Designated Italian
Subsidiary 81
3.03. Conditions Precedent to Each Borrowing, Drawing and
Issuance 83
3.04. Determinations Under Sections 3.01 and 3.02 84
3.05. Conditions Precedent to Delayed Effectiveness of
Certain Provisions 84
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the
Borrowers 85
4.02. Additional Representations and Warranties of the
Crompton A Borrowers and Uniroyal B-1 Borrower 89
ARTICLE V
COVENANTS OF THE BORROWERS
5.01. Affirmative Covenants 89
5.02. Negative Covenants 92
5.03. Reporting Requirements 103
5.04. Financial Covenants 107
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default 108
6.02. Actions in Respect of the Letters of Credit and
Bankers' Acceptances upon Default 111
6.03. Actions in Respect of Working Capital B-1
Commitments Reserved Pursuant to Section 2.01(j) 112
ARTICLE VII
THE AGENT
7.01. Authorization and Action 113
7.02. Agent's Reliance, Etc. 113
7.03. Citicorp and Affiliates 114
7.04. Lender Party Credit Decision 114
7.05. Indemnification 114
7.06. Successor Agents 115
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc. 116
8.02. Notices, Etc. 117
8.03. No Waiver; Remedies 118
8.04. Costs and Expenses 118
8.05. Right of Set-off 120
8.06. Binding Effect 120
8.07. Assignments and Participations 120
8.08. Designated Subsidiaries and Designated Italian
Subsidiaries 124
8.09. Execution in Counterparts 124
8.10. No Liability of the Issuing Banks 124
8.11. Confidentiality 125
8.12. Jurisdiction, Etc. 125
8.13. Judgment 126
8.14. Power of Attorney 126
8.15. Governing Law 127
8.16. Limitation on B-2 Borrower Obligations, Italian
Borrower Obligations and Canadian Borrower
Obligations 127
8.17. Substitution of Currency 127
8.18. Waiver of Jury Trial 129
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Subsidiary Guarantors
Schedule III - Minor Subsidiaries
Schedule IV - B-2 Borrowers
Schedule V - Italian Borrowers
Schedule VI - Italian Lenders
Schedule VII - Borrowers' Accounts
Schedule 3.01(b) - Disclosed Litigation
Schedule 3.02(b)(viii) - Foreign Local Counsel
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals,
Actions, Notices and Filings
Schedule 4.01(l) - Environmental Disclosure
Schedule 4.01(o) - Surviving Debt
Schedule 4.01(p) - Material Subsidiaries
Schedule 5.02(a) - Existing Liens
Schedule 5.02(e) - Investments
EXHIBITS
Exhibit A-1 - Form of Working Capital A Note
Exhibit A-2 - Form of Working Capital B-1 Note
Exhibit A-3 - Form of Working Capital B-2 Note
Exhibit A-4 - Form of Italian Borrower Note
Exhibit A-5 - Form of Canadian Borrower Note
Exhibit A-6 - Form of Generic Draft
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Drawing
Exhibit C - Form of Assignment and
Acceptance
Exhibit D-1 - Form of Parent Guarantor's
Consent
Exhibit D-2 - Form of Subsidiary Guarantors'
Consent
Exhibit E-1 - Form of Opinion of Counsel for
the Loan Parties
Exhibit E-2 - Form of Opinion of General
Counsel to Crompton Corp.
and its Subsidiaries
Exhibit F - Form of Designation Letter
Exhibit G - Form of Acceptance by Process
Agent
Exhibit H - Form of Opinion of Counsel to a
Designated [Italian] Subsidiary
Exhibit I - Form of Italian Lender Joinder
Agreement
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as
of March 31, 1998 among CROMPTON & KNOWLES CORPORATION, a
Massachusetts corporation ("Crompton Corp."), CROMPTON & KNOWLES
COLORS INCORPORATED, a Delaware corporation ("Crompton Colors"),
DAVIS-STANDARD CORPORATION, a Delaware corporation ("Davis-
Standard"), INGREDIENT TECHNOLOGY CORPORATION, a Delaware
corporation ("ITC" and, together with Crompton Corp., Crompton
Colors and Davis-Standard, the "Crompton A Borrowers"), UNIROYAL
CHEMICAL COMPANY, INC., a New Jersey corporation ("Uniroyal" or
the "Uniroyal B-1 Borrower"), THE B-2 BORROWERS LISTED ON
SCHEDULE IV HERETO (together with each Designated Subsidiary of
Crompton Corp. that shall become a B-2 Borrower party to this
Agreement pursuant to Section 8.08, the "B-2 Borrowers"), THE
ITALIAN BORROWERS LISTED ON SCHEDULE V HERETO (together with
each Designated Italian Subsidiary of Crompton Corp. that shall
become an Italian Borrower party to this Agreement pursuant to
Section 8.08, the "Italian Borrowers"), UNIROYAL CHEMICAL CO., a
corporation organized under the laws of Nova Scotia, Canada (the
"Canadian Borrower"), the banks, financial institutions and
other institutional lenders listed on the signature pages hereof
as the Initial Lenders (the "Initial Lenders"), the Initial
Issuing Banks (the "Initial Issuing Banks") and the Swing Line
Bank (as hereinafter defined), CITICORP USA, INC. ("Citicorp"),
as agent (together with any successor appointed pursuant to
Article VII, the "Agent") for the Lender Parties (as hereinafter
defined), and THE CHASE MANHATTAN BANK, CORESTATES BANK, N.A.
and FIRST UNION NATIONAL BANK, as Managing Agents.
PRELIMINARY STATEMENT. The Existing Lenders party to the
Existing Credit Agreement and the Initial Borrowers have agreed
to amend and restate the Existing Credit Agreement in order to
extend the Commitments of the Lender Parties, to allow such
Existing Lenders to assign a portion of their Commitments to the
Lender Parties hereunder, to reflect the occurrence of the
Collateral Release Date (as defined in the Existing Credit
Agreement) and to amend certain covenants. The Lender Parties
have indicated their willingness to agree to amend and restate
the Existing Credit Agreement and to lend such amounts on the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Advance" means a Working Capital Advance, a Swing
Line Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or
officer of such Person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more
of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of
parties to this Agreement.
"Agent's Account" means (a) in the case of Advances
denominated in US Dollars (other than an Italian Borrower
Advance), the account of the Agent maintained by the Agent with
Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 3885-8061, Attention: Alexandra Lozovsky,
(b) in the case of Advances denominated in any Foreign Currency
(other than an Italian Borrower Advance or a Canadian Borrower
Advance), the account of the Agent designated in writing from
time to time by the Agent to Crompton Corp. and the Lender
Parties for such purpose, (c) in the case of any Italian
Borrower Advance, the account of the Agent in Milan, Italy
designated in writing from time to time by the Agent to Crompton
Corp. and the Lender Parties for such purpose and (d) in the
case of any Canadian Borrower Advance denominated in Canadian
Dollars, the account of the Agent in Toronto, Canada designated
in writing from time to time by the Agent to Crompton Corp., and
the Lender Parties for such purpose.
"Applicable Lending Office" means, with respect to
each Lender Party, such Lender Party's Domestic Lending Office
in the case of a Base Rate Advance, such Lender Party's
Eurocurrency Lending Office in the case of a Eurocurrency Rate
Advance, in the case of any Italian Borrower Advance, such
Lender Party's Eurocurrency Lending Office located in Italy, in
the case of any Canadian Borrower Advance, such Lender Party's
Canadian Domestic Lending Office and, in the case of a Drawing,
such Lender Party's BA Lending Office.
"Applicable Margin" means a percentage per annum
determined by reference to the Total Debt/EBITDA Ratio as set
forth below:
Base Rate Advances/ Eurocurrency Rate
Total Debt/EBITDA Ratio Local Rate Advances
Advances
Level I
less than or equal
to 2.0:1.0 0.0% 0.375%
Level II
greater than
2.0:1.0,
but less than or
equal to 2.5:1.0 0.0% 0.500%
Level III
greater than
2.5:1.0,
but less than or
equal to 3.0:1.0 0.0% 0.625%
Level IV
greater than
3.0:1.0 0.0% 0.750%
; provided, however, the Applicable Margin for each Italian
Borrower Advance shall equal the sum of (a) the applicable
percentage per annum determined by reference to the Total
Debt/EBITDA Ratio set forth above plus (b) 0.05%. The
Applicable Margin for each Advance shall be determined by
reference to the Total Debt/EBITDA Ratio in effect from time to
time; provided, however, that, at any date of determination of
the Applicable Margin, if the relevant Financial Statements
shall not have been delivered to the Agent and the Lender
Parties by such date and Crompton Corp. shall have delivered to
the Agent a certificate setting forth Crompton Corp.'s good
faith estimate of the Total Debt/EBITDA Ratio for the
immediately preceding Rolling Period, the Applicable Margin
shall be determined by reference to such good faith estimate of
the Total Debt/EBITDA Ratio, provided further that if, upon
delivery by Crompton Corp. of such Financial Statements, such
Financial Statements indicate that such estimate of the Total
Debt/EBITDA Ratio was incorrect and, as a result thereof, the
Applicable Margin was too low at such date of determination,
such Applicable Margin shall be increased, as appropriate, with
retroactive effect to the beginning of the Rolling Period during
which such date of determination occurred, and the applicable
Borrower shall immediately pay to the Agent for the account of
the Lender Parties all additional interest due by reason of such
increased Applicable Margin.
"Applicable Percentage" means a percentage per annum
determined by reference to the Total Debt/EBITDA Ratio as set
forth below:
Total Debt/EBITDA Commitment Trade Standby
Ratio Fees Letter Letter
of Credit of Credit
Fees Fees/Drawing
Fees
Level I
less than or equal 0.125% 0.125% 0.375%
to 2.0:1.0
Level II
greater than
2.0:1.0, 0.150% 0.250% 0.500%
but less than or
equal to 2.5:1.0
Level III
greater than
2.5:1.0,
but less than or 0.175% 0.375% 0.625%
equal to 3.0:1.0
Level IV
greater than
3.0:1.0 0.250% 0.500% 0.750%
The Applicable Percentage shall be determined by reference
to the Total Debt/EBITDA Ratio in effect from time to time;
provided, however, that, at any date of determination of the
Applicable Percentage, if the relevant Financial Statements
shall not have been delivered to the Agent and the Lender
Parties by such date and Crompton Corp. shall have delivered to
the Agent a certificate setting forth Crompton Corp.'s good
faith estimate of the Total Debt/EBITDA Ratio for the
immediately preceding Rolling Period, the Applicable Percentage
shall be determined by reference to such good faith estimate of
the Total Debt/EBITDA Ratio, provided further that if, upon
delivery by Crompton Corp. of such Financial Statements, such
Financial Statements indicate that such estimate of the Total
Debt/EBITDA Ratio was incorrect and, as a result thereof, the
Applicable Percentage was too low at such date of determination,
such Applicable Percentage shall be increased, as appropriate,
with retroactive effect to the beginning of the Rolling Period
during which such date of determination occurred, and the
applicable Borrower shall immediately pay to the Agent for the
account of the Lender Parties all additional fees due by reason
of such increased Applicable Percentage.
"Appropriate Lender" means, at any time, with respect
to (a) any of the Working Capital Facilities, a Lender that has
a Commitment with respect to such Facility at such time, (b) any
of the Letter of Credit Facilities, (i) any Issuing Bank that
has a Commitment with respect to such Facility at such time and
(ii) if other Working Capital Lenders have made Letter of Credit
Advances pursuant to Section 2.03(c) that are outstanding at
such time, each such other Working Capital Lender and (c) either
of the Swing Line Facilities, (i) the Swing Line Bank and (ii)
if other Working Capital Lenders have made Swing Line Advances
pursuant to Section 2.02(b) that are outstanding at such time,
each such other Working Capital Lender.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender Party and an Eligible
Assignee, and accepted by the Agent, in accordance with Section
8.07 and in substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at
any time, the maximum amount available to be drawn under such
Letter of Credit at such time (assuming compliance at such time
with all conditions to drawing).
"Available Cash Flow" means, for any Fiscal Year, an
amount equal to the sum of (a) Operating Cash Flow for the
previous Fiscal Year, (b) the amount of Capital Expenditures
permitted to be made in the previous Fiscal Year pursuant to
Section 5.02(l) less the amount of Capital Expenditures actually
made during the previous Fiscal Year, (c) the amount of
dividends permitted to be paid by Crompton Corp. in the previous
Fiscal Year pursuant to Section 5.02(f) less the amount of such
dividends actually paid during the previous Fiscal Year, (d) the
aggregate amount of Net Cash Proceeds from the sale or other
disposition of assets pursuant to clause (iii) or (vi) (to the
extent not used permanently to prepay Debt or to make Capital
Expenditures) of Section 5.02(d) during the previous Fiscal Year
and (e) US$100,000,000.
"B-2 Borrowers" has the meaning specified in the
recital of parties to this Agreement.
"B-2 Facility Overage" means, as determined on the
first Business Day of each month, the lesser of (a)
US$10,000,000 minus the amount set forth in clause (b) of the
definition "Italian Facility Overage" at such time and (b) the
sum of (i) the excess, if any, of the aggregate principal US
Dollar amount (or Equivalent in US Dollars, as applicable) of
the Working Capital B-2 Advances, the Letter of Credit Advances
made under the Letter of Credit B-2 Facility and the aggregate
Available Amount under all Letters of Credit outstanding under
the Letter of Credit B-2 Facility at such time over an amount
equal to 97% of the Working Capital B-2 Facility on such
Business Day and (ii) the aggregate principal US Dollar amount
(or Equivalent in US Dollars, as applicable) sufficient to cause
the aggregate amount on deposit in the relevant L/C Cash
Collateral Account to equal the amount by which the aggregate
Available Amount of all Letters of Credit then outstanding under
the Letter of Credit B-2 Facility exceeds the Letter of Credit
B-2 Facility on such Business Day.
"BA Lending Office" means, with respect to each
Canadian Lender, the office of such Lender set forth as its "BA
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender
or such other office of such Lender in Canada as such Lender may
from time to time specify to the Canadian Borrower and the Agent
for such purpose.
"BA Rate" means, for all Bankers' Acceptances
comprising part of the same Drawing to be purchased by a
Canadian Lender, the average rate (calculated on an annual basis
of a year of 365 days and rounded up to the nearest multiple of
1/4 of 1%, if such average is not such a multiple) for Canadian
Dollar Bankers' Acceptances having a comparable term that
appears on the Reuters Screen CDOR Page (or such other page as
is a replacement page for such bankers' acceptances) at 10:00
A.M. (Toronto time) or, if such rate is not available at such
time, the applicable discount rate in respect of such Bankers'
acceptances shall be the arithmetic average of the discount
rates (calculated on an annual basis of a year of 365 days) and
rounded up to the nearest multiple of 1/4 of 1%, if such average
is not such a multiple, quoted by each Canadian Reference Lender
at 9:30 a.m. (Toronto time) on the date of such Drawing as the
discount rate at which such Canadian Reference Lender would
purchase, on such date, its own bankers' acceptances having an
aggregate Face Amount equal to and with a term to maturity the
same as the Bankers' Acceptances to be acquired by such Canadian
Lender as part of such Drawing. The BA Rate for each Bankers'
Acceptance comprising part of the same Drawing shall be
determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Canadian
Reference Lenders on the date of the applicable Drawing,
subject, however, to the provisions of Section 2.08.
"Bank Hedge Agreement" means any Hedge Agreement
required or permitted under Article V that is entered into by
and between any Borrower and any Hedge Bank.
"Banker's Acceptance" has the meaning specified in
Section 2.01(f).
"Base Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced
publicly by Citibank in New York, New York, from time to time,
as Citibank's base rate;
(b) the sum (adjusted to the
nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the
rate obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United
States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined
weekly on each Monday (or, if such day is not a Business Day, on
the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing
selected by Citibank, by (B) a percentage equal to 100% minus
the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement)
for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar non-
personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment
rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum
above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.08(b)(i).
"Borrower's Account" means, with respect to any
Borrower in respect of US Dollars, Canadian Dollars or any
Foreign Currency, the account of such Borrower maintained by
Citibank set forth opposite such Borrower for US Dollars,
Canadian Dollars or the Foreign Currency, so designated, as
applicable, on Schedule VII and such other accounts maintained
on behalf of such Borrower as such Borrower with respect to any
additional Foreign Currencies may notify the Agent from time to
time.
"Borrower's Share" of any amount means those fees,
indemnities, expenses or other amounts arising from or directly
or indirectly relating to any B-2 Borrower, any Italian Borrower
or the Canadian Borrower at any time.
"Borrowers" means, collectively, each Initial
Borrower, each Designated Subsidiary and each Designated Italian
Subsidiary that shall become a party to this Agreement pursuant
to Section 8.08.
"Borrowing" means a Working Capital Borrowing or a
Swing Line Borrowing.
"Business Day" means a day of the year on which banks
are not required or authorized by law to close in New York City
and, if the applicable Business Day relates to any Eurocurrency
Rate Advances, on which dealings are carried on in the London
interbank market and in the country of issue of the currency of
such Eurocurrency Rate Advance.
"Canadian Base Rate" means a fluctuating interest rate
per annum in effect from time to time, which rate per annum
shall at all times be equal to the higher of:
(a) the average (rounded upward to the
nearest whole multiple of 1/4 of 1% per annum, if such average
is not such a multiple) of the rates per annum which the
principal office of each of the Canadian Reference Lenders in
Toronto, Ontario announces publicly from time to time as its
reference rate of interest for commercial loans in US Dollars
made by it to Canadian borrowers in Canada; and
(b) 1/2 of 1% per annum above the Federal
Funds Rate.
"Canadian Base Rate Advance" means a Canadian Borrower
Advance made in US Dollars that bears interest as provided in
Section 2.08(b)(iv).
"Canadian Borrower" has the meaning specified in the
recital of parties to this Agreement.
"Canadian Borrower Advance" has the meaning specified
in Section 2.01(e).
"Canadian Borrower Note" means a promissory note of
the Canadian Borrower payable to the order of any Canadian
Lender, in substantially the form of Exhibit A-5 hereto,
evidencing the aggregate indebtedness of the Canadian Borrower
to such Lender resulting from the Canadian Borrower Advances
made by or otherwise owing to such Lender to the extent required
to be issued pursuant to Section 2.19.
"Canadian Borrowing" means a borrowing consisting of
simultaneous Canadian Borrower Advances of the same Type made by
the Canadian Lenders.
"Canadian Business Day" means a day of the year on
which banks are not required or authorized by law to close in
Toronto, Ontario, Canada and New York, New York and, if the
applicable Business Day relates to any Eurocurrency Rate
Advances, on which dealings are carried on in the London
interbank market.
"Canadian Cash Collateral Account" means an interest-
bearing cash collateral account to be established and maintained
by the Agent, over which the Agent shall have sole dominion and
control, upon terms as may be satisfactory to the Agent.
"Canadian Commitment" means, with respect to any
Canadian Lender at any time, the US Dollar amount set forth
opposite such Lender's name on the signature pages hereof under
the caption "Canadian Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to
Section 8.07(d) as such Lender's "Canadian Commitment", as such
US Dollar amount may be reduced at or prior to such time
pursuant to Section 2.06.
"Canadian Dollar Advances" means Canadian Borrower
Advances denominated in Canadian Dollars.
"Canadian Dollars" and "CN$" each means lawful money
of Canada.
"Canadian Domestic Lending Office" means, with respect
to each Canadian Lender, the office of such Lender specified as
its "Domestic Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it
became a Lender or such other office of such Lender as such
Lender may from time to time specify to the Canadian Borrower
and the Agent.
"Canadian Eurocurrency Lending Office" means, with
respect to each Canadian Lender, the office of such Lender
specified as its "Eurocurrency Lending Office" opposite its name
on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the
Canadian Borrower and the Agent.
"Canadian Facility" means, at any time, the aggregate
amount of the Canadian Lenders' Canadian Commitments at such
time.
"Canadian Interbank Rate" means the interest rate,
expressed as a percentage per annum, which is customarily used
by the Agent when calculating interest due by it or owing to it
arising from or in connection with correction of errors between
it and other Canadian chartered banks.
"Canadian Lender" means any Lender that (a) is a
Canadian chartered bank lending and receiving payment through
Canadian offices and (b) has a Canadian Commitment.
"Canadian Facility Overage" means, as determined on
the first Business Day of each month, the lesser of (a)
US$10,000,000 and (b) the sum of (i) the excess, if any, of the
aggregate principal US Dollar amount (or Equivalent in US
Dollars, as applicable) of the Canadian Borrower Advances and
the Face Amount of all Bankers' Acceptances outstanding under
the Canadian Facility at such time over an amount equal to 97%
of the Canadian Facility on such Business Day and (ii) the
aggregate principal US Dollar amount (or Equivalent in US
Dollars, as applicable) sufficient to cause the aggregate amount
on deposit in the relevant Canadian Cash Collateral Account to
equal the amount by which the aggregate Face Amount of all
Bankers' Acceptances then outstanding under the Canadian
Facility exceeds the Canadian Facility on such Business Day.
"Canadian Prime Rate" means a fluctuating interest
rate per annum in effect from time to time, which rate per annum
shall at all times be equal to the higher of:
(a) the average (rounded upward to the
nearest whole multiple of 1/4 of 1% per annum, if such average
is not such a multiple) of the rates per annum which the
principal office of each of the Canadian Reference Lenders in
Toronto, Ontario announces publicly from time to time as its
prime rate for determining rates of interest on commercial loans
in Canadian Dollars made by it in Canada; and
(b) 3/4 of 1% per annum above the rate quoted
for 30-day Canadian Dollar bankers acceptances of Citibank
Canada that appears on the Reuters Screen CDOR Page (or any
replacement page) as of 10:00 a.m. (Toronto, Ontario time) on
the date of determination.
"Canadian Prime Rate Advance" means a Canadian
Borrower Advance made in Canadian Dollars that bears interest as
provided in Section 2.08(b)(iii).
"Canadian Reference Lenders" means Citibank Canada,
Canadian Imperial Bank of Commerce and The Toronto-Dominion
Bank; provided that, if any of the foregoing shall cease to be a
Canadian Lender, the term "Canadian Reference Lenders" shall no
longer include such Canadian Lender and shall thereafter include
such Canadian Lender as the Agent shall designate as a
replacement Canadian Reference Lender, which designation shall
be made with the consent of such replacement Canadian Reference
Lender and the Canadian Borrower, which consent shall not be
unreasonably withheld or delayed and provided, further, that if
any Canadian Lenders are banks set forth in Schedule I of the
Bank Act (Canada), at least one of the Canadian Reference
Lenders will be such a Schedule I bank.
"Capital Expenditures" means, for any Person for any
period and without duplication, the sum of (a) all expenditures
(including, without limitation, expenditures for environmental
remediation) made, directly or indirectly, by such Person during
such period for equipment, fixed or capital assets, real
property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant
or equipment on a Consolidated balance sheet of such Person plus
(b) the aggregate principal amount of all Debt (including
Obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures but excluding (x)
expenditures made in connection with the replacement or
restoration of assets, to the extent such replacement or
restoration is financed out of insurance proceeds paid on
account of the loss of or damage to the assets so replaced or
restored and (y) interest capitalized during construction;
provided, however, that notwithstanding anything contained
herein, Capital Expenditures shall not include any Investments.
"Capitalized Leases" means all leases that have been
or should be, in accordance with GAAP, recorded as capitalized
leases.
"Cash Equivalents" means any of the following, to the
extent owned by any Borrower or any of its Subsidiaries free and
clear of all Liens and having a maturity of not greater than 90
days from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United
States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of
deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues
(or the parent of which issues) commercial paper rated as
described in clause (c), is organized under the laws of the
United States or any State thereof and has combined capital and
surplus of at least US$1 billion, (c) commercial paper in an
aggregate amount of no more than US$5,000,000 per issuer
outstanding at any time, issued by any corporation organized
under the laws of any State of the United States and rated at
least "Prime-1" (or the then equivalent grade) by Moody's or "A-
1" (or the then equivalent grade) by S&P or (d) in the case of
any Foreign Subsidiary, any equivalent, prudent, short-term
investment consistent with the foregoing.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
from time to time.
"CERCLIS" means the Comprehensive Environmental
Response, Compensation and Liability Information System
maintained by the U.S. Environmental Protection Agency.
"Citibank" means Citibank, N.A.
"Citibank Seoul" means Citibank, N.A., Seoul Branch.
"Citicorp" has the meaning specified in the recital of
parties to this Agreement.
"Commitment" means a Working Capital A Commitment, a
Working Capital B-1 Commitment, a Working Capital B-2
Commitment, an Italian Commitment, a Canadian Commitment or a
Letter of Credit Commitment.
"Confidential Information" means information that any
Borrower furnishes to the Agent or any Lender Party in a writing
designated as confidential but does not include any such
information that is or becomes generally available to the public
other than as a result of a breach by the Agent or any Lender
Party of its obligations hereunder or that is or becomes
available to the Agent or such Lender Party from a source other
than a Borrower that is not, to the best of the Agent's or such
Lender Party's knowledge, acting in violation of a
confidentiality agreement with any Borrower.
"Consents" means the Consents to this Third Amended
and Restated Credit Agreement in substantially the form of
Exhibit D-1 and D-2 dated as of the date hereof by the Parent
Guarantor (as defined in the Parent Guaranty) and each
Subsidiary Guarantor.
"Consolidated" refers to the consolidation of accounts
in accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to
a conversion of Advances of one Type into Advances of the other
Type pursuant to Section 2.10, 2.11 or 2.12.
"Crompton A Borrowers" has the meaning specified in
the recital of parties to this Agreement.
"Crompton Colors" has the meaning specified in the
recital of parties to this Agreement.
"Crompton Corp." has the meaning specified in the
recital of parties to this Agreement.
"Crompton Guarantors" means the Subsidiaries of
Crompton Corp. listed on Part I of Schedule II hereto and each
other Subsidiary of Crompton Corp. (other than, in any event,
Uniroyal Corp. and its Subsidiaries) that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(i).
"Davis-Standard" has the meaning specified in the
recital of parties to this Agreement.
"Daylight Overdraft Bank" means Citibank.
"Daylight Overdraft Documents" means those documents
and agreements entered into from time to time by the Daylight
Overdraft Bank and any Loan Party, evidencing or relating to the
Debt owing to the Daylight Overdraft Bank in respect of any
daylight overdraft facility or in connection with any automated
clearinghouse transfers of funds.
"Debt" of any Person means, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all
Obligations of such Person for the deferred purchase price of
property or services (other than trade payables not overdue by
more than 60 days (unless the subject of a bona fide dispute)
incurred in the ordinary course of such Person's business), (c)
all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of
such Person created or arising under any conditional sale or
other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under Capitalized
Leases, (f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or
any other Person or any warrants, rights or options to acquire
such capital stock, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h)
all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h)
above or clause (j) below guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment
or purchase of such Debt, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor
against loss, and (j) all Debt referred to in clauses (a)
through (i) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Debt Rating" means, as of any date, the lowest rating
that has been most recently announced by either S&P or Moody's,
as the case may be, for any class of non-credit enhanced long-
term senior unsecured debt issued by Crompton Corp. or, if
applicable, the rating assigned in writing by either S&P or
Moody's, as the case may be, as the "implied rating" of Crompton
Corp.'s non-credit enhanced long-term senior unsecured Debt,
provided that for purposes of the foregoing, if S&P or Moody's
shall change the basis on which ratings are established, each
reference to the Debt Rating announced by S&P or Moody's, as the
case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender
Party at any time, the portion of any Advance required to be
made by such Lender Party to any Borrower pursuant to Section
2.01 or 2.02 at or prior to such time which has not been made by
such Lender Party or the Agent for the account of such Lender
Party pursuant to Section 2.02(e) as of such time. In the event
that a portion of a Defaulted Advance shall be deemed made
pursuant to Section 2.18(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance
originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender
Party at any time, any amount required to be paid by such Lender
Party to the Agent or any other Lender Party hereunder or under
any other Loan Document at or prior to such time which has not
been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.02(b) to purchase a portion of a
Swing Line Advance made by the Swing Line Bank, (b) any Issuing
Bank pursuant to Section 2.03(c) to purchase a portion of a
Letter of Credit Advance made by such Issuing Bank, (c) the
Agent pursuant to Section 2.02(e) to reimburse the Agent for the
amount of any Advance made by the Agent for the account of such
Lender Party, (d) any other Lender Party pursuant to Section
2.16 to purchase any participation in Advances owing to such
other Lender Party and (e) the Agent or any Issuing Bank
pursuant to Section 7.05 to reimburse the Agent or such Issuing
Bank for such Lender Party's ratable share of any amount
required to be paid by the Lender Parties to the Agent or such
Issuing Bank as provided therein. In the event that a portion
of a Defaulted Amount shall be deemed paid pursuant to Section
2.18(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid
hereunder or under any other Loan Document on the same date as
the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender
Party that, at such time, (a) owes a Defaulted Advance or a
Defaulted Amount or (b) shall take any action or be the subject
of any action or proceeding of a type described in Section
6.01(f).
"Designated Italian Subsidiary" means any wholly-owned
Subsidiary of Crompton Corp. designated for borrowing privileges
as an Italian Borrower under this Agreement pursuant to Section
8.08.
"Designated Subsidiary" means any wholly-owned
Subsidiary of Crompton Corp. designated for borrowing privileges
as a B-2 Borrower under this Agreement pursuant to Section 8.08.
"Designation Letter" means, with respect to any
Designated Subsidiary or Designated Italian Subsidiary, a letter
in the form of Exhibit F hereto signed by such Designated
Subsidiary or Designated Italian Subsidiary and Crompton Corp.
"Disclosed Litigation" has the meaning specified in
Section 3.01(b).
"Domestic Lending Office" means, with respect to any
Lender Party, the office of such Lender Party specified as its
"Domestic Lending Office" opposite its name on Schedule I hereto
or in the Assignment and Acceptance pursuant to which it became
a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify
to Crompton Corp. and the Agent.
"Domestic Subsidiary" of Crompton Corp. means any
Subsidiary of Crompton Corp. other than a Foreign Subsidiary.
"Draft" means a blank bill of exchange, within the
meaning of the Bills of Exchange Act (Canada), drawn by the
Canadian Borrower on any Canadian Lender, in substantially the
form of Exhibit A-6, and which, except as otherwise provided
herein, has not been completed or accepted by such Lender.
"Drawing" means the simultaneous acceptance of Drafts
and purchase of Bankers' Acceptances by the Canadian Lenders, in
accordance with Section 2.04(a).
"Drawing Fee" means, with respect to each Bankers'
Acceptance, an amount equal to (a) the Applicable Percentage in
effect on the date of the Drawing or renewal, as the case may
be, of such Bankers' Acceptance multiplied by (b) the Face
Amount of such Bankers' Acceptance, calculated on the basis of
the term to maturity of such Bankers' Acceptance and a year of
365 days.
"Drawing Purchase Price" means, with respect to each
Bankers' Acceptance to be purchased and/or accepted by any
Canadian Lender at any time, the amount (adjusted to the nearest
whole cent or, if there is no nearest whole cent, the next
higher whole cent) obtained by dividing (i) the aggregate Face
Amount of such Bankers' Acceptance, by (ii) the sum of (A) one
and (B) the product of (1) the BA Rate in effect at such time
(expressed as a decimal fraction) multiplied by (2) a fraction
the numerator of which is the number of days in the term to
maturity of such Bankers' Acceptance and the denominator of
which is 365 days.
"EBITDA" means, for any period, net income (or net
loss) calculated before the cumulative effect of accounting
changes plus the sum of (a) interest expense, (b) income tax
expense, (c) extraordinary losses included in net income, (d)
depreciation expense, (e) amortization expense, (f) all foreign
currency losses less foreign currency gains (but only to the
extent such foreign currency gains do not exceed such foreign
currency losses) and (g) non-recurring restructuring charges in
an amount not to exceed US$30,000,000 in any Fiscal Year or
US$50,000,000 in the aggregate after the Effective Date less
extraordinary gains included in net income, determined on a
Consolidated basis in accordance with GAAP for such period.
"Effective Date" means any date on or before March 31,
1998 on which the conditions set forth in Article III applicable
to the effectiveness of this Agreement have been fulfilled or
waived.
"Eligible Assignee" means (a) with respect to any
Facility (other than the Letter of Credit Facilities), (i) a
Lender; (ii) an Affiliate of a Lender; and (iii) any other
Person approved by the Agent and Crompton Corp., such approval
not to be unreasonably withheld or delayed; provided, however,
any such Eligible Assignee under the Italian Facility shall have
entered into an Italian Lender Joinder Agreement; and (b) with
respect to the Letter of Credit Facilities, any Person approved
by the Agent and Crompton Corp., such approval not to be
unreasonably withheld or delayed; provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall
qualify as an Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand,
demand letter, claim, notice of non-compliance or violation,
notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any
way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other
actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"Equivalent" in (a) US Dollars of any Foreign Currency
on any date means the equivalent in US Dollars of such Foreign
Currency determined by using the quoted spot rate for an
equivalent amount at which Citibank's principal office in London
offers to exchange US Dollars for such Foreign Currency in
London prior to 11:00 A.M. (London time) on such date as is
required pursuant to the terms of this Agreement, (b) in any
Foreign Currency of US Dollars means the equivalent in such
Foreign Currency of US Dollars determined by using the quoted
spot rate for an equivalent amount at which Citibank's principal
office in London offers to exchange such Foreign Currency for US
Dollars in London prior to 11:00 A.M. (London time) on such date
as is required pursuant to the terms of this Agreement, (c) in
US Dollars of Canadian Dollars, on any date of determination,
the equivalent thereof determined by using the quoted spot rate
at which Citibank's principal office in Toronto, Ontario offers
to exchange US Dollars for Canadian Dollars in Toronto, Ontario
at 11:00 a.m. (New York City time) on such date and (d) in
Canadian Dollars of US Dollars on any date of determination, the
equivalent thereof determined by using the quoted spot rate at
which Citibank's principal office in New York City, New York
offers to exchange Canadian Dollars for US Dollars in New York
City, New York at 11:00 a.m. (New York City time) on such date.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes
of Title IV of ERISA is a member of the controlled group of any
Loan Party, or under common control with any Loan Party, within
the meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan unless the 30-day notice requirement
with respect to such event has been waived by the PBGC, or (ii)
the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f)
of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or (h)
the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment
of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurocurrency Lending Office" means, with respect to
any Lender Party, the office of such Lender Party specified as
its "Eurocurrency Lending Office" opposite its name on Schedule
I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such
Lender Party as such Lender Party may from time to time specify
to Crompton Corp. and the Agent.
"Eurocurrency Rate" means, for any Interest Period for
all Eurocurrency Rate Advances comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate per annum at which
deposits in US Dollars, Canadian Dollars or the applicable
Foreign Currency, as the case may be, are offered by the
principal office of Citibank in Milan, Italy, with respect to
any such Eurocurrency Rate Advance which is an Italian Borrower
Advance, and London, England, with respect to all other
Eurocurrency Rate Advances, to prime banks in the primary
interbank eurocurrency market in which such eurocurrency
deposits are traded at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an
amount substantially equal to Citibank's Eurocurrency Rate
Advance comprising part of such Borrowing to be outstanding
during such Interest Period (or, if Citibank shall not have such
a Eurocurrency Rate Advance, US$1,000,000) and for a period
equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurocurrency Rate Reserve Percentage (if applicable)
for such Interest Period.
"Eurocurrency Rate Advance" means an Advance that
bears interest as provided in Section 2.08(b)(ii).
"Eurocurrency Rate Reserve Percentage" for any
Interest Period for all Eurocurrency Rate Advances comprising
part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the
interest rate on Eurocurrency Rate Advances is determined)
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in
Section 6.01.
"Existing Credit Agreement" means the credit agreement
dated as of August 21, 1996 among the Crompton A Borrowers,
Uniroyal, the Existing Lenders, Citicorp Securities, Inc., as
arranger, the Agent and the Managing Agent, as amended and
restated as of December 19, 1996, as further amended and
restated as of July 25, 1997 and as further amended,
supplemented or otherwise modified through the date hereof.
"Existing Lenders" means the lenders parties to the
Existing Credit Agreement.
"Face Amount" means, with respect to any Bankers'
Acceptance, the amount payable to the holder of such Bankers'
Acceptance on its then existing Maturity Date.
"Facility" means any of any Working Capital Facility,
either Swing Line Facility or any Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for
<PAGE>
such day for such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Statements" means, at any time, the most
recent financial statements furnished or required to be
furnished by Crompton Corp. to the Agent and the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be.
"Fiscal Year" means a fiscal year of Crompton Corp.
and its Consolidated Subsidiaries ending on or about December 31
in any calendar year.
"Foreign Currencies" means lawful currency of the
United Kingdom of Great Britain and Northern Ireland, lawful
currency of the Republic of France, the lawful currency of the
Federal Republic of Germany, the lawful currency of Italy, the
lawful currency of Japan, the lawful currency of the Kingdom of
Belgium, the lawful currency of the Swiss Confederation, the
lawful currency of the Netherlands and such other freely
transferable currencies as agreed upon by the Required Lenders
from time to time.
"Foreign Exchange Agreements" means currency swap
agreements, currency future or option contracts and other
similar agreements other than contracts or agreements under
which neither any Loan Party nor any of its Subsidiaries has any
obligation that may require payment in the future.
"Foreign Subsidiary" of Crompton Corp. means (a)
solely for purposes of Section 5.02(a), (b), (c), (d) and (e),
Uniroyal Chemical International Company, Gustafson International
Company and Uniroyal Chemical Company Limited and (b) in all
instances, any Subsidiary of Crompton Corp. (i) which is not
incorporated in the United States and (ii)(A) substantially all
of whose assets and properties are located, or substantially all
of whose business is carried on, outside of the United States or
(B) substantially all of whose assets consist of Subsidiaries
that are Foreign Subsidiaries as defined in clauses (i) and
(ii)(A) of this definition.
"GAAP" has the meaning specified in Section 1.03.
"Guarantied Parties" means the Agent, the Lender
Parties, the Hedge Banks and the Daylight Overdraft Bank.
"Guaranties" means the Parent Guaranty, the Subsidiary
Guaranty and any other guaranty delivered pursuant to Section
5.01(i).
"Guarantors" means Crompton Corp. and the Subsidiary
Guarantors.
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous
or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means, collectively, Interest Rate
Swap Agreements, Foreign Exchange Agreements and agreements
designed to manage the total cost of publicly traded Debt
obligations of the Borrowers.
"Hedge Bank" means any Lender Party or any of its
Affiliates in its capacity as a party to a Bank Hedge Agreement.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Initial Borrowers" means the Crompton A Borrowers,
Uniroyal, those B-2 Borrowers listed on Schedule IV hereto,
those Italian Borrowers listed on Schedule V hereto and the
Canadian Borrower.
"Initial Extension of Credit" means the earliest to
occur of the initial Borrowing, the initial issuance of a Letter
of Credit and the initial Drawing hereunder.
"Initial Issuing Banks" has the meaning specified in
the recital of parties to this Agreement.
"Initial Lenders" has the meaning specified in the
recital of parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities, as defined
in Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, at any date of
determination, the ratio of Consolidated EBITDA to interest
payable on, and amortization of debt discount in respect of, all
Debt (including, without limitation, the interest component of
Capitalized Leases), in each case of Crompton Corp. and its
Subsidiaries for the immediately preceding Rolling Period.
"Interest Period" means, for each Eurocurrency Rate
Advance comprising part of the same Borrowing, the period
commencing on the date of such Eurocurrency Rate Advance or the
date of the Conversion of any Base Rate Advance into such
Eurocurrency Rate Advance, and ending on the last day of the
period selected by the Borrower requesting such Borrowing or
Conversion pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day
of the period selected by such Borrower pursuant to the
provisions below. The duration of each such Interest Period
shall be one, two, three or six months, as such Borrower may,
upon notice received by the Agent not later than (i) 11:00 A.M.
(New York City time) in the case of Eurocurrency Rate Advances
under the Working Capital A Facility, the Working Capital B-1
Facility or the Canadian Facility and (ii) 11:00 A. M. (London
time) in the case of Eurocurrency Rate Advances under the
Working Capital B-2 Facility or the Italian Facility, in each
case on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that:
(a) such Borrower may not select
any Interest Period with respect to any Eurocurrency Rate
Advance under a Facility that ends after any principal repayment
installment date for such Facility unless, after giving effect
to such selection, the aggregate principal amount of Base Rate
Advances, Canadian Base Rate Advances and Canadian Prime Rate
Advances, as the case may be, and of Eurocurrency Rate Advances
having Interest Periods that end on or prior to such principal
repayment installment date for such Facility shall be at least
equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods commencing on
the same date for Eurocurrency Rate Advances comprising part of
the same Borrowing shall be of the same duration;
(c) whenever the last day of any
Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day of
such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(d) whenever the first day of any
Interest Period occurs on a day of an initial calendar month for
which there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Interest Rate Swap Agreements" means interest rate
swap, cap or collar agreements, interest rate future or option
contracts and other similar agreements other than contracts or
agreements under which neither any Loan Party nor any of its
Subsidiaries has any obligation that may require payment in the
future.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Investment" in any Person means any loan or advance
to such Person, any purchase or other acquisition of all or
substantially all of the assets of any business of such Person
or any capital stock or other ownership or profit interest,
warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any
other investment in such Person, including, without limitation,
any arrangement pursuant to which the investor incurs Debt of
the types referred to in clause (i) or (j) of the definition of
"Debt" in respect of such Person.
"Issuing Banks" means (a) with respect to the Letter
of Credit A Facility, each Initial Issuing Bank that has a
Letter of Credit A Commitment set forth opposite its name on the
signature pages hereof and any other Working Capital A Lender
approved as an Issuing Bank by the Agent and, so long as no
Default shall have occurred and be continuing, by Crompton Corp.
(such approval not to be unreasonably withheld or delayed) and
each Eligible Assignee to which a Letter of Credit A Commitment
hereunder has been assigned pursuant to Section 8.07, (b) with
respect to the Letter of Credit B-1 Facility, each Initial
Issuing Bank that has a Letter of Credit B-1 Commitment set
forth opposite its name on the signature pages hereof and any
other Working Capital B-1 Lender approved as an Issuing Bank by
the Agent and, so long as no Default shall have occurred and be
continuing, by Crompton Corp. (such approval not to be
unreasonably withheld or delayed) and each Eligible Assignee to
which a Letter of Credit B-1 Commitment hereunder has been
assigned pursuant to Section 8.07 and (c) with respect to the
Letter of Credit B-2 Facility, Citibank, N.A., London and each
Eligible Assignee to which a Letter of Credit B-2 Commitment
hereunder has been assigned pursuant to Section 8.07 so long as,
in each case, each such Lender or Eligible Assignee expressly
agrees to perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to
be performed by it as an Issuing Bank and notifies the Agent of
its Applicable Lending Office and the amount of its Letter of
Credit Commitment (which information shall be recorded by the
Agent in the Register).
"Italian Borrower Advance" has the meaning specified
in Section 2.01(d).
"Italian Borrower Note" means a promissory note of any
Italian Borrower payable to the order of any Italian Lender, in
substantially the form of Exhibit A-3 hereto, evidencing the
aggregate indebtedness of such Italian Borrower to such Lender
resulting from the Italian Borrower Advances made by such Lender
to the extent required to be issued pursuant to Section 2.19.
"Italian Borrowers" has the meaning specified in the
recital of parties to this Agreement.
"Italian Borrowing" means a borrowing consisting of
simultaneous Italian Borrower Advances of the same Type made by
the Italian Lenders.
"Italian Commitment" means, with respect to any
Italian Lender at any time, the Dollar amount set forth opposite
such Lender's name on the signature pages hereof under the
caption "Italian Commitment" or, if such Lender has entered into
one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to
Section 8.07(d) as such Lender's "Italian Commitment", as such
Dollar amount may be reduced at or prior to such time pursuant
to Section 2.06.
"Italian Facility" means, at any time, the aggregate
amount of the Italian Lenders' Italian Commitments at such time.
"Italian Facility Overage" means, as determined on the
first Business Day of each month, the lesser of (a)
US$10,000,000 minus the B-2 Facility Overage at such time and
(b) the excess, if any, of the aggregate principal US Dollar
amount (or Equivalent in US Dollars, as applicable) of the
Italian Borrower Advances at such time over an amount equal to
97% of the Italian Facility on such Business Day.
"Italian Lender" means any Lender that has an Italian
Commitment.
"Italian Lender Joinder Agreement" means a joinder
agreement entered into by an Italian Lender and an Eligible
Assignee, and accepted by the Agent, in accordance with Section
8.07 and in substantially the form of Exhibit I hereto.
"ITC" has the meaning specified in the recital of
parties to this Agreement.
"L/C Cash Collateral Account" means an interest-
bearing cash collateral account to be established and maintained
by the Agent, over which the Agent shall have sole dominion and
control, upon terms as may be satisfactory to the Agent.
"L/C Related Documents" has the meaning specified in
Section 2.05(h)(ii).
"Lender Party" means any Lender, any Issuing Bank or
the Swing Line Bank.
"Lenders" means the Initial Lenders and each Person
that shall become a Lender hereunder pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in
Section 2.01.
"Letter of Credit A Commitment" means, with respect to
any Issuing Bank at any time, the amount set forth opposite such
Issuing Bank's name on the signature pages hereof under the
caption "Letter of Credit A Commitment" or, if such Issuing Bank
has entered into one or more Assignments and Acceptances, set
forth for such Issuing Bank in the Register maintained by the
Agent pursuant to Section 8.07(d) as such Issuing Bank's "Letter
of Credit A Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.06.
"Letter of Credit A Facility" means, at any time, an
amount equal to the lesser of (a) the aggregate amount of the
Issuing Banks' Letter of Credit A Commitments at such time and
(b) US$50,000,000, as such amount may be reduced at or prior to
such time pursuant to Section 2.06.
"Letter of Credit Advance" means an advance made by
any Issuing Bank or any Appropriate Lender pursuant to Section
2.03(c).
"Letter of Credit Agreement" has the meaning specified
in Section 2.03(a).
"Letter of Credit B-1 Commitment" means, with respect
to any Issuing Bank at any time, the amount set forth opposite
such Issuing Bank's name on the signature pages hereof under the
caption "Letter of Credit B-1 Commitment" or, if such Issuing
Bank has entered into one or more Assignments and Acceptances,
set forth for such Issuing Bank in the Register maintained by
the Agent pursuant to Section 8.07(d) as such Issuing Bank's
"Letter of Credit B-1 Commitment", as such amount may be reduced
at or prior to such time pursuant to Section 2.06.
"Letter of Credit B-2 Commitment" means, with respect
to any Issuing Bank at any time, such amount, if any, as may be
agreed upon from time to time between an Issuing Bank and a B-2
Borrower or, if such Issuing Bank has entered into one or more
Assignments and Acceptances with respect to any such amount, the
amount set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(d) as such
Issuing Bank's "Letter of Credit B-2 Commitment", as such amount
may be reduced at or prior to such time pursuant to Section
2.06.
"Letter of Credit B-1 Facility" means, at any time, an
amount equal to the lesser of (a) the aggregate amount of the
Issuing Banks' Letter of Credit B-1 Commitments at such time and
(b) US$20,000,000, as such amount may be reduced at or prior to
such time pursuant to Section 2.06.
"Letter of Credit B-2 Facility" means, at any time, an
amount equal to the lesser of (a) the aggregate amount of the
Issuing Banks' Letter of Credit B-2 Commitments at such time and
(b) US$30,000,000, as such amount may be reduced at or prior to
such time pursuant to Section 2.06.
"Letter of Credit Commitment" means a Letter of Credit
A Commitment, a Letter of Credit B-1 Commitment or a Letter of
Credit B-2 Commitment.
"Letter of Credit Facility" means the Letter of Credit
A Facility, the Letter of Credit B-1 Facility or the Letter of
Credit B-2 Facility.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real
property.
"Loan Documents" means (a) for purposes of this
Agreement and the Notes, if any, and any amendment, supplement
or modification hereof or thereof and for all other purposes
other than for purposes of the Guaranties, (i) this Agreement,
(ii) the Notes, if any, (iii) the Guaranties, (iv) each Letter
of Credit Agreement and (v) the Consents and (b) for purposes of
the Guaranties, (i) this Agreement, (ii) the Notes, if any,
(iii) the Guaranties, (iv) each Letter of Credit Agreement, (v)
each Bank Hedge Agreement, (vi) the Daylight Overdraft Documents
and (vii) the Consents, in each case as amended, supplemented or
otherwise modified from time to time.
"Loan Parties" means the Borrowers and the Guarantors.
"Local Rate" means (a) with respect to any Working
Capital B-2 Advance denominated in any Foreign Currency, the
rate of interest from time to time publicly announced by
Citibank in the jurisdiction of issuance of such Foreign
Currency as its base rate (or its equivalent thereof) for loans
denominated in such Foreign Currency at the principal lending
office of Citibank in the jurisdiction of issuance of such
Foreign Currency, (b) with respect to any Italian Borrower
Advance, the rate of interest from time to time publicly
announced by the principal office of Citibank in Milan, Italy as
the base rate (or its equivalent thereof) for loans denominated
in such Foreign Currency at the principal lending office of
Citibank in the jurisdiction of issuance of such Foreign
Currency and (c) with respect to any Canadian Borrower Advance
denominated in Canadian Dollars, the Canadian Prime Rate.
"Local Rate Advance" shall mean each Working Capital
B-2 Advance, Italian Borrower Advance or Canadian Borrower
Advance hereunder at such time as it is made and/or being
maintained at a rate of interest based upon the Local Rate for
the relevant Foreign Currency or Canadian Dollars, as the case
may be.
"Margin Stock" has the meaning specified in Regulation
U.
"Material Adverse Change" means any material adverse
change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of (a) Crompton
Corp. and its Subsidiaries, taken as a whole, (b) Crompton Corp.
and its Subsidiaries (other than Uniroyal Corp. and its
Subsidiaries), taken as a whole, or (c) Uniroyal and its
Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse
effect on (a) the business, condition (financial or otherwise),
operations, performance, properties or prospects of (i) Crompton
Corp. and its Subsidiaries, taken as a whole, (ii) Crompton
Corp. and its Subsidiaries (other than Uniroyal Corp. and its
Subsidiaries), taken as a whole, or (iii) Uniroyal and its
Subsidiaries, taken as a whole, (b) the rights and remedies of
the Agent or any Lender Party under any Loan Document or (c) the
ability of any Loan Party to perform its Obligations under any
Loan Document to which it is or is to be a party.
"Material Subsidiary" means, at any time, a Subsidiary
of Crompton Corp. having at least US$10,000,000 in assets on a
Consolidated basis (determined as of the last day of the most
recent fiscal quarter of Crompton Corp.) or at least
US$20,000,000 in revenues, on a Consolidated basis, for the 12-
month period ending on the last day of the most recent fiscal
quarter of Crompton Corp.; provided, however, that any
Subsidiary formed or acquired after the last day of the most
recent fiscal quarter of Crompton Corp. that would have been a
Material Subsidiary if it had been formed or acquired on or
prior to the last day of such fiscal quarter shall be a Material
Subsidiary for purposes hereof from and after the date of its
formation or acquisition.
"Maturity Date" means, for each Bankers' Acceptance
comprising part of the same Drawing, the date on which the Face
Amount for such Bankers' Acceptance becomes due and payable in
accordance with the provisions set forth below, which shall be a
Business Day occurring one, two or three months or, if available
to all Canadian Lenders purchasing Bankers' Acceptances in
connection with the applicable Drawing, six months after the
date on which such Bankers' Acceptance is purchased and/or
accepted as part of any Drawing, as the Canadian Borrower may
select upon notice received by the Agent not later than 10:00
a.m. (New York City time) on a Canadian Business Day at least
three Canadian Business Days prior to the date on which such
Bankers' Acceptance is to be accepted and purchased (whether as
a new Drawing, by renewal or by Conversion); provided, however,
that:
(a) such Borrower may not select any Maturity
Date for any Bankers' Acceptance that occurs after the then
scheduled Termination Date;
(b) the Maturity Date for all Bankers'
Acceptances comprising part of the same Drawing shall occur on
the same date; and
(c) whenever the Maturity Date for any
Bankers' Acceptance would otherwise occur on a day other than a
Canadian Business Day, such Maturity Date shall be extended to
occur on the next succeeding Canadian Business Day.
"Minor Subsidiaries" means those Subsidiaries of
Crompton Corp. listed on Schedule III hereto.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which any Loan Party
or any ERISA Affiliate is making or accruing an obligation to
make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such
plan has been or were to be terminated.
"Naugatuck" means Naugatuck Treatment Company, a
Connecticut corporation.
"Net Cash Proceeds" means, with respect to any sale,
lease, transfer or other disposition of any asset or the sale or
issuance of any Debt or capital stock or other ownership or
profit interest, any securities convertible into or exchangeable
for capital stock or other ownership or profit interest or any
warrants, rights, options or other securities to acquire capital
stock or other ownership or profit interest by any Person, the
aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a result of
such transaction, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt
of such cash, actually paid to a Person that is not an Affiliate
of such Person or any Loan Party or any Affiliate of any Loan
Party and are properly attributable to such transaction or to
the asset that is the subject thereof; provided, however, that
in the case of taxes that are deductible under clause (b) but
for the fact that at the time of receipt of such cash, such
taxes have not been actually paid or are not then payable, such
Person may deduct an amount equal to the amount reserved in
accordance with GAAP for such Person's reasonable estimate of
such taxes, other than taxes for which such Person is
indemnified; provided further, however, that if the amount
deducted pursuant to clause (b) above is greater than the amount
actually so paid, the amount of such excess shall constitute Net
Cash Proceeds.
"Note" means a Working Capital A Note, a Working
Capital B-1 Note, a Working Capital B-2 Note, an Italian
Borrower Note or a Canadian Borrower Note, in each case to the
extent required to be issued pursuant to Section 2.19.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Issuance" has the meaning specified in
Section 2.03(a).
"Notice of Swing Line Borrowing" has the meaning
specified in Section 2.02(b).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any
payment, performance or other obligation of such Person of any
kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by
any proceeding referred to in Section 6.01(f). Without limiting
the generality of the foregoing, the Obligations of each Loan
Party under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by such Loan Party under any Loan
Document and (b) the obligation of such Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on
behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation
and Development.
"Operating Cash Flow" means, for any Fiscal Year, an
amount equal to "cash flow from operations" for such Fiscal Year
as set forth on the statement of cash flows furnished for such
Fiscal Year pursuant to Section 5.03(c) less scheduled principal
amounts of Debt paid or to be paid (other than in connection
with the refinancing or replacement of any Surviving Debt) by
Crompton Corp. and its Subsidiaries during such Fiscal Year.
"Other Taxes" has the meaning specified in Section
2.15(b).
"Parent Guaranty" has the meaning specified in Section
3.01(f)(iii).
"Payment Office" means with respect to any Working
Capital B-2 Advance, Italian Borrower Advance or Canadian
Borrower Advance, the office of Citibank set forth opposite the
caption "Working Capital B-2 Advances", "Italian Borrower
Advances" and "Canadian Borrower Advances", respectively, on
Schedule VII, or such other office as shall be from time to time
selected by the Agent, subject, so long as no Default shall have
occurred and be continuing, to the consent of Crompton Corp.,
such consent not to be unreasonably withheld or delayed,
provided that each Payment Office designated for Canadian
Borrower Advances shall be located in Canada.
"PBGC" means the Pension Benefit Guaranty Corporation
or any successor agency or entity performing substantially the
same functions.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or
agency thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pro Rata Share" of any amount means (a) with respect
to any Working Capital A Lender at any time, the product of such
amount times a fraction the numerator of which is the amount of
such Lender's Working Capital A Commitment at such time and the
denominator of which is the Working Capital A Facility at such
time, (b) with respect to any Working Capital B-1 Lender at any
time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Working Capital B-1
Commitment at such time and the denominator of which is the
Working Capital B-1 Facility, (c) with respect to any Working
Capital B-2 Lender at any time, the product of such amount times
a fraction the numerator of which is the amount of such Lender's
Working Capital B-2 Commitment at such time and the denominator
of which is the Working Capital B-2 Facility, (d) with respect
to any Italian Lender at any time, the product of such amount
times a fraction the numerator of which is the amount of such
Lender's Italian Commitment at such time and the denominator of
which is the Italian Facility and (e) with respect to any
Canadian Lender at any time, the product of such amount times a
fraction the numerator of which is the amount of such Lender's
Canadian Commitment at such time and the denominator of which is
the Canadian Facility.
"Process Agent" has the meaning specified in Section
8.12(a).
"Receivables Securitization" has the meaning specified
in Section 5.02(d).
"Register" has the meaning specified in Section
8.07(d).
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
"Required Lenders" means at any time Lenders owed or
holding at least 51% of the sum of the aggregate Working Capital
A Commitments, Working Capital B-1 Commitments, Working Capital
B-2 Commitments, Italian Commitments and Canadian Commitments at
such time, or, if the Working Capital A Commitments, Working
Capital B-1 Commitments, Working Capital B-2 Commitments,
Italian Commitments and Canadian Commitments have been
terminated, 51% of the sum of the aggregate outstanding Working
Capital A Advances, Working Capital B-1 Advances, Working
Capital B-2 Advances, Italian Advances and Canadian Borrower
Advances and Face Amount of Bankers' Acceptances (in each case,
based on the Equivalent in US Dollars at such time) at such
time; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time the aggregate
amount of the Working Capital A Commitment, Working Capital B-1
Commitment, Working Capital B-2 Commitment, Italian Commitment
and Canadian Commitment of such Lender at such time.
"Responsible Officer" means any officer of any Loan
Party or any of its Subsidiaries.
"Rolling Period" means, with respect to any fiscal
quarter of Crompton Corp. and its Subsidiaries, such fiscal
quarter and the three consecutive immediately preceding fiscal
quarters.
"S&P" means Standard & Poor's Rating Group, a division
of The McGraw-Hill Companies, Inc.
"Seoul Guaranty" means the guaranty made by Uniroyal
in favor of Citibank Seoul, which has issued bank guaranties of
the obligations of Unikor Chemical Inc. (Korea), a joint venture
50% owned by Uniroyal, to certain banks organized and located in
Korea.
"Seoul Guaranty Amount" means a fluctuating dollar
amount equal to the amount of Uniroyal's obligations under the
Seoul Guaranty, not to exceed US$2,000,000 or such other amount
(not to exceed, in any event, US$5,000,000) as agreed from time
to time by Citibank, Uniroyal and the Agent.
"Single Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of any Loan Party or any ERISA
Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value
of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay such
debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the
amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit
issued under any Letter of Credit Facility, other than a Trade
Letter of Credit.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued
and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest
in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantors" means the Crompton Guarantors
and the Uniroyal Guarantors.
"Subsidiary Guaranty" has the meaning specified in
Section 3.01(g)(iv).
"Surviving Debt" means the Debt identified on Schedule
4.01(o).
"Swing Line A Advance" means an advance made by (a)
the Swing Line Bank pursuant to Section 2.01(g) or (b) any
Working Capital A Lender pursuant to Section 2.02(b).
"Swing Line A Borrowing" means a borrowing consisting
of a Swing Line A Advance made by the Swing Line Bank.
"Swing Line A Facility" has the meaning specified in
Section 2.01(g).
"Swing Line Advance" means a Swing Line A Advance or a
Swing Line B-1 Advance.
"Swing Line B-1 Advance" means an advance made by (a)
the Swing Line Bank pursuant to Section 2.01(h) or (b) any
Working Capital B-1 Lender pursuant to Section 2.02(b).
"Swing Line B-1 Borrowing" means a borrowing
consisting of a Swing Line B-1 Advance made by the Swing Line
Bank.
"Swing Line B-1 Facility" has the meaning specified in
Section 2.01(h).
"Swing Line Bank" means Citicorp.
"Swing Line Borrowing" means a Swing Line A Borrowing
or a Swing Line B-1 Borrowing.
"Swing Line Facility" means the Swing Line A Facility
or the Swing Line B-1 Facility.
"Tax Agreement" means the Tax Agreement to be entered
into by Crompton Corp. and some or all of its Subsidiaries.
"Taxes" has the meaning specified in Section 2.15(a).
"Termination Date" means the earlier of September 30,
2003 and the date of termination in whole of the Working Capital
A Commitments, the Working Capital B-1 Commitments, the Working
Capital B-2 Commitments, the Italian Commitments, the Canadian
Commitments and the Letter of Credit Commitments pursuant to
Section 2.06 or 6.01.
"Total Debt" of any Person means all Debt of such
Person of the types referred to in clauses (a) though (e) of the
definition of "Debt".
"Total Debt/EBITDA Ratio" means, at any date of
determination, the ratio of Consolidated Total Debt of Crompton
Corp. and its Subsidiaries as at the end of the immediately
preceding Rolling Period to Consolidated EBITDA of Crompton
Corp. and its Subsidiaries for such immediately preceding
Rolling Period.
"Trade Letter of Credit" means any Letter of Credit
that is issued under either Letter of Credit Facility for the
benefit of a supplier of inventory to any Borrower or any of its
Subsidiaries to effect payment for such inventory, the
conditions to drawing under which include the presentation to
the Issuing Bank that issued such Letter of Credit of negotiable
bills of lading, invoices and related documents.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate and Advances bearing interest
at the Eurocurrency Rate and, with respect to Canadian Borrower
Advances, refers to the distinction among such Advances bearing
interest at the Canadian Base Rate, such Advances bearing
interest at the Canadian Prime Rate and such Advances bearing
interest at the Eurocurrency Rate.
"Uniroyal" has the meaning specified in the recital of
parties to this Agreement.
"Uniroyal B-1 Borrower" has the meaning specified in
the recital of parties to this Agreement.
"Uniroyal Corp." means Uniroyal Chemical Corporation,
a Delaware corporation.
"Uniroyal Corp. Senior Notes" means the 10-1/2% Senior
Notes due 2002 in an aggregate principal amount of
US$300,000,000, issued by Uniroyal Corp. pursuant to an
Indenture dated as of February 8, 1993 between Uniroyal Corp.
and State Street Bank and Trust Company, as Trustee, as amended,
supplemented or otherwise modified from time to time.
"Uniroyal Corp. Senior Subordinated Notes" means the
11% Senior Subordinated Notes due 2003 in an aggregate principal
amount of US$325,000,000, issued by Uniroyal Corp. pursuant to
an Indenture dated as of February 8, 1993 between Uniroyal Corp.
and United States Trust Company of New York, as Trustee, as
amended, supplemented or otherwise modified from time to time.
"Uniroyal Corp. Subordinated Discount Notes" means the
12% Subordinated Discount Notes due 2005 in an aggregate
principal amount of US$229,952,000, issued by Uniroyal Corp.
pursuant to an Indenture dated as of February 8, 1993 between
Uniroyal Corp. and Shawmut Bank Connecticut, National
Association, as Trustee, as amended, supplemented or otherwise
modified from time to time.
"Uniroyal Guarantors" means Uniroyal Corp., the
Subsidiaries of Uniroyal Corp. listed on Part II of Schedule II
hereto and each other Subsidiary of Uniroyal Corp. that shall be
required to execute and deliver a guaranty pursuant to Section
5.01(i).
"Uniroyal Indentures" means the Indentures pursuant to
which the Uniroyal Corp. Senior Notes, Uniroyal Corp. Senior
Subordinated Notes, Uniroyal Corp. Subordinated Discount Notes
and Uniroyal Senior Notes were issued, in each case as amended,
supplemented or otherwise modified or refinanced or refunded
from time to time in accordance with its terms, to the extent
permitted in accordance with the Loan Documents.
"Uniroyal Senior Notes" means the 9% Senior Notes
issued by Uniroyal pursuant to an Indenture dated as of
September 1, 1993 between Uniroyal and State Street Bank and
Trust Company, as Trustee, as amended, supplemented or otherwise
modified from time to time.
"Unused Working Capital Commitment" means, with
respect to any Working Capital Facility and any Working Capital
Lender at any time, (a) such Lender's Working Capital Commitment
under such Working Capital Facility at such time minus (b) the
sum (without duplication) of (i) the aggregate principal amount
in US Dollars of all Working Capital Advances, Swing Line
Advances and Letter of Credit Advances made under such Working
Capital Facility, by such Lender (in its capacity as a Lender
but not in its capacity as an Issuing Bank or a Swing Line Bank)
and outstanding at such time, plus (ii) such Lender's Pro Rata
Share of (A) the aggregate Available Amount of all Letters of
Credit outstanding under such Working Capital Facility at such
time, (B) the aggregate principal amount in US Dollars of all
Letter of Credit Advances made under such Working Capital
Facility by the Issuing Banks pursuant to Section 2.03(c) and
outstanding at such time, (C) the aggregate principal amount in
US Dollars of all Swing Line Advances made under such Working
Capital Facility by the Swing Line Bank pursuant to Section
2.01(g) or (h), as the case may be, and outstanding at such
time, (D) in the case of the Working Capital B-1 Facility, the
amount of the Working Capital B-1 Commitments then reserved
pursuant to Section 2.01(j), (E) in the case of the Working
Capital A Facility, the amount of the Working Capital A
Commitments then reserved pursuant to Sections 2.01(k) and
2.01(l) and (F) in the case of the Canadian Facility, the
aggregate Face Amount of all Bankers' Acceptances purchased
and/or accepted by such Lender and outstanding at such time.
"US Dollars" and the "US$" sign each means lawful
money of the United States of America.
"Voting Stock" means capital stock issued by a
corporation, or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even
if the right so to vote has been suspended by the happening of
such a contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, that is maintained for employees of any
Loan Party or in respect of which any Loan Party could have
liability.
"Withdrawal Liability" has the meaning specified in
Part I of Subtitle E of Title IV of ERISA.
"Working Capital A Advance" has the meaning specified
in Section 2.01(a).
"Working Capital A Borrowing" means a borrowing
consisting of simultaneous Working Capital A Advances of the
same Type made by the Working Capital A Lenders.
"Working Capital A Commitment" means, with respect to
any Working Capital A Lender at any time, the Dollar amount set
forth opposite such Lender's name on the signature pages hereof
under the caption "Working Capital A Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances,
set forth for such Lender in the Register maintained by the
Agent pursuant to Section 8.07(d) as such Lender's "Working
Capital A Commitment", as such Dollar amount may be reduced at
or prior to such time pursuant to Section 2.06.
"Working Capital A Facility" means, at any time, the
aggregate amount of the Working Capital A Lenders' Working
Capital A Commitments at such time.
"Working Capital A Lender" means any Lender that has a
Working Capital A Commitment.
"Working Capital A Note" means a promissory note of
any Crompton A Borrower payable to the order of any Working
Capital A Lender, in substantially the form of Exhibit A-1
hereto, evidencing the aggregate indebtedness of such Borrower
to such Lender resulting from the Working Capital A Advances
made by such Lender to the extent required to be issued pursuant
to Section 2.19.
"Working Capital Advance" means a Working Capital A
Advance, a Working Capital B-1 Advance, a Working Capital B-2
Advance, an Italian Borrower Advance or a Canadian Borrower
Advance.
"Working Capital B-1 Advance" has the meaning
specified in Section 2.01(b).
"Working Capital B-1 Borrowing" means a borrowing
consisting of simultaneous Working Capital B-1 Advances of the
same Type made by the Working Capital B-1 Lenders.
"Working Capital B-1 Commitment" means, with respect
to any Working Capital B-1 Lender at any time, the Dollar amount
set forth opposite such Lender's name on the signature pages
hereof under the caption "Working Capital B-1 Commitment" or, if
such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 8.07(d) as such
Lender's "Working Capital B-1 Commitment", as such Dollar amount
may be reduced at or prior to such time pursuant to Section
2.06.
"Working Capital B-1 Facility" means, at any time, the
aggregate amount of the Working Capital B-1 Lenders' Working
Capital B-1 Commitments at such time.
"Working Capital B-1 Lender" means any Lender that has
a Working Capital B-1 Commitment.
"Working Capital B-1 Note" means a promissory note of
the Uniroyal B-1 Borrower payable to the order of any Working
Capital B-1 Lender, in substantially the form of Exhibit A-2
hereto, evidencing the aggregate indebtedness of the Uniroyal B-
1 Borrower to such Lender resulting from the Working Capital B-1
Advances made by such Lender to the extent required to be issued
pursuant to Section 2.19.
"Working Capital B-2 Advance" has the meaning
specified in Section 2.01(c).
"Working Capital B-2 Borrowing" means a borrowing
consisting of simultaneous Working Capital B-2 Advances of the
same Type made by the Working Capital B-2 Lenders.
"Working Capital B-2 Commitment" means, with respect
to any Working Capital B-2 Lender at any time, the Dollar amount
set forth opposite such Lender's name on the signature pages
hereof under the caption "Working Capital B-2 Commitment" or, if
such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 8.07(d) as such
Lender's "Working Capital B-2 Commitment", as such Dollar amount
may be reduced at or prior to such time pursuant to Section
2.06.
"Working Capital B-2 Facility" means, at any time, the
aggregate amount of the Working Capital B-2 Lenders' Working
Capital B-2 Commitments at such time.
"Working Capital B-2 Lender" means any Lender that has
a Working Capital B-2 Commitment.
"Working Capital B-2 Note" means a promissory note of
any B-2 Borrower payable to the order of any Working Capital B-2
Lender, in substantially the form of Exhibit A-3 hereto,
evidencing the aggregate indebtedness of such B-2 Borrower to
such Lender resulting from the Working Capital B-2 Advances made
by such Lender to the extent required to be issued pursuant to
Section 2.19.
"Working Capital Borrowing" means a Working Capital A
Borrowing, a Working Capital B-1 Borrowing, a Working Capital B-
2 Borrowing, an Italian Borrowing or a Canadian Borrowing.
"Working Capital Commitment" means a Working Capital A
Commitment, a Working Capital B-1 Commitment, a Working Capital
B-2 Commitment, an Italian Commitment or a Canadian Commitment.
"Working Capital Facility" means the Working Capital A
Facility, the Working Capital B-1 Facility, the Working Capital
B-2 Facility, the Italian Facility or the Canadian Facility.
"Working Capital Lender" means a Working Capital A
Lender, a Working Capital B-1 Lender, a Working Capital B-2
Lender, an Italian Lender or a Canadian Lender.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Working
Capital A Advances. Each Working Capital A Lender severally
agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Working Capital A Advance") to any
Crompton A Borrower from time to time on any Business Day during
the period from the date hereof until the Termination Date in an
amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment under the Working Capital A Facility
at such time. Each Working Capital A Borrowing shall be in an
aggregate amount of US$5,000,000 (or, if the Swing Line Bank
shall, in its sole discretion, decline to make a Swing Line A
Advance on such Business Day after a request therefor by such
Crompton A Borrower pursuant to Section 2.01(g), US$1,000,000)
or an integral multiple of US$1,000,000 in excess thereof and
shall consist of Working Capital A Advances made simultaneously
by the Working Capital A Lenders ratably according to their
Working Capital A Commitments. Each Working Capital A Advance
shall be denominated in US Dollars. Within the limits of each
Working Capital A Lender's Unused Working Capital Commitment
under the Working Capital A Facility in effect from time to
time, the Crompton A Borrowers may borrow under this Section
2.01(a), prepay pursuant to Section 2.07(a) and reborrow under
this Section 2.01(a).
(b) The Working Capital B-1 Advances. Each
Working Capital B-1 Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a
"Working Capital B-1 Advance") to the Uniroyal B-1 Borrower from
time to time on any Business Day during the period from the date
hereof until the Termination Date in an amount for each such
Advance not to exceed such Lender's Unused Working Capital
Commitment under the Working Capital B-1 Facility at such time.
Each Working Capital B-1 Borrowing shall be in an aggregate
amount of US$5,000,000 (or, if the Swing Line Bank shall, in its
sole discretion, decline to make a Swing Line B-1 Advance on
such Business Day after a request therefor by the Uniroyal B-1
Borrower pursuant to Section 2.01(h), US$1,000,000) or an
integral multiple of US$1,000,000 in excess thereof and shall
consist of Working Capital B-1 Advances made simultaneously by
the Working Capital B-1 Lenders ratably according to their
Working Capital B-1 Commitments. Each Working Capital B-1
Advance shall be denominated in US Dollars. Within the limits of
each Working Capital B-1 Lender's Unused Working Capital
Commitment under the Working Capital B-1 Facility in effect from
time to time, the Uniroyal B-1 Borrower may borrow under this
Section 2.01(b), prepay pursuant to Section 2.07(a) and reborrow
under this Section 2.01(b).
(c) The Working Capital B-2 Advances. Each
Working Capital B-2 Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a
"Working Capital B-2 Advance") to any B-2 Borrower from time to
time on any Business Day during the period from the date hereof
until the Termination Date in an amount (based in respect of any
Working Capital B-2 Advance denominated in a Foreign Currency on
the Equivalent in US Dollars on the Business Day such Advance is
made) for each such Advance not to exceed such Lender's Unused
Working Capital Commitment under the Working Capital B-2
Facility at such time. Each Working Capital B-2 Borrowing shall
be in an aggregate amount of US$1,000,000 (or the Equivalent
thereof in any Foreign Currency) or an integral multiple of
US$100,000 (or the Equivalent thereof in any Foreign Currency)
in excess thereof and shall consist of Working Capital B-2
Advances made simultaneously by the Working Capital B-2 Lenders
ratably according to their Working Capital B-2 Commitments.
Within the limits of each Working Capital B-2 Lender's Unused
Working Capital Commitment under the Working Capital B-2
Facility in effect from time to time, any B-2 Borrower may
borrow under this Section 2.01(c), prepay pursuant to Section
2.07(a) and reborrow under this Section 2.01(c).
(d) The Italian Borrower Advances. Each Italian
Lender severally agrees, on the terms and conditions hereinafter
set forth, to make advances (each an "Italian Borrower Advance")
to any Italian Borrower from time to time on any Business Day
during the period from the date hereof until the Termination
Date in an amount (based in respect of any Italian Borrower
Advance denominated in a Foreign Currency on the Equivalent in
US Dollars on the Business Day such Advance is made) for each
such Advance not to exceed such Lender's Unused Working Capital
Commitment under the Italian Facility at such time. Each
Italian Borrowing shall be in an aggregate amount of
US$1,000,000 (or the Equivalent thereof in any Foreign Currency)
or an integral multiple of US$100,000 (or the Equivalent thereof
in any Foreign Currency) in excess thereof and shall consist of
Italian Borrower Advances made simultaneously by the Italian
Lenders ratably according to their Italian Commitments. Within
the limits of each Italian Lender's Unused Working Capital
Commitment under the Italian Facility in effect from time to
time, any Italian Borrower may borrow under this Section
2.01(d), prepay pursuant to Section 2.07(a) and reborrow under
this Section 2.01(d).
(e) Canadian Borrower Advances. Each Canadian
Lender severally agrees, on the terms and conditions hereinafter
set forth, to make advances (each a "Canadian Borrower Advance")
in either US Dollars or Canadian Dollars to the Canadian
Borrower, in each case, from time to time on any Business Day
during the period from the date hereof until the Termination
Date in an amount for each such Advance (based in respect of any
Canadian Borrower Advance denominated in Canadian Dollars, on
the Equivalent in US Dollars on the Business Day such Advance is
made) not to exceed such Lender's Unused Working Capital
Commitment under the Canadian Facility at such time. Each
Canadian Borrowing (other than a Canadian Borrowing the proceeds
of which will be used solely to repay a Borrowing of Canadian
Prime Rate Advances pursuant to Section 2.04(a) in connection
with any Drawing) under this Section 2.01(e) shall be in an
aggregate amount of US$5,000,000 (or the Equivalent thereof in
Canadian Dollars), or an integral multiple of US$1,000,000 (or
the Equivalent thereof in Canadian Dollars), in excess thereof
and shall consist of Canadian Borrower Advances made
simultaneously by the Canadian Lenders ratably according to
their Canadian Commitments. Within the limits of each Canadian
Lender's Unused Working Capital Commitment under the Canadian
Facility in effect from time to time, the Canadian Borrower may
borrow under this Section 2.01(e), prepay pursuant to Section
2.07(a) and reborrow under this Section 2.01(e).
(f) Drawings. Each Canadian Lender severally
agrees, on the terms and conditions hereinafter set forth, to
accept Drafts (each Draft so accepted, a "Bankers' Acceptance")
for the account of the Canadian Borrower, and to purchase such
Bankers' Acceptances from time to time on any Business Day
during the period from the date hereof until the Termination
Date having a Face Amount (determined in the Equivalent thereof
in US Dollars) for all such Bankers' Acceptances purchased by
such Lender at the time of such Drawing not to exceed such
Lender's Unused Working Capital Commitment under the Canadian
Facility at such time. Each Drawing shall be comprised solely
of Canadian Dollars, shall be in an aggregate Face Amount which,
together with any Canadian Prime Rate Advances made in
connection with such Drawing, equals CN$5,000,000 or an integral
multiple of CN$1,000,000 in excess thereof and shall consist of
the creation and purchase of Bankers' Acceptances at or about
the same time by the Canadian Lenders ratably in accordance with
their respective Canadian Commitments. Within the limits of
each Canadian Lender's Unused Working Capital Commitment under
the Canadian Facility in effect from time to time, amounts drawn
by the Canadian Borrower under this Section 2.01(f) and repaid
or prepaid from time to time may be redrawn by the Canadian
Borrower under this Section 2.01(f).
(g) The Swing Line A Advances. Any Crompton A
Borrower may request the Swing Line Bank to make, and the Swing
Line Bank may, if in its sole discretion it elects to do so,
make, on the terms and conditions hereinafter set forth, Swing
Line A Advances to such Crompton A Borrower from time to time on
any Business Day during the period from the date hereof until
the Termination Date (i) in an aggregate amount not to exceed at
any time outstanding US$15,000,000 (the "Swing Line A Facility")
and (ii) in an amount for each such Swing Line A Borrowing not
to exceed the aggregate of the Unused Working Capital
Commitments under the Working Capital A Facility of the Working
Capital A Lenders at such time. No Swing Line A Advance shall
be used for the purpose of funding the payment of principal of
any other Swing Line A Advance. Each Swing Line A Borrowing
shall be in an amount of US$500,000 or an integral multiple of
US$100,000 in excess thereof and shall be made as a Base Rate
Advance. Within the limits of the Swing Line A Facility and
within the limits referred to in clause (ii) above, so long as
the Swing Line Bank, in its sole discretion, elects to make
Swing Line A Advances, the Crompton A Borrowers may borrow under
this Section 2.01(g), repay pursuant to Section 2.05(g) or
prepay pursuant to Section 2.07(a) and reborrow under this
Section 2.01(g).
(h) The Swing Line B-1 Advances. The Uniroyal B-1
Borrower may request the Swing Line Bank to make, and the Swing
Line Bank may, if in its sole discretion it elects to do so,
make, on the terms and conditions hereinafter set forth, Swing
Line B-1 Advances to the Uniroyal B-1 Borrower from time to time
on any Business Day during the period from the date hereof until
the Termination Date (i) in an aggregate amount not to exceed at
any time outstanding US$15,000,000 (the "Swing Line B-1
Facility") and (ii) in an amount for each such Swing Line
Borrowing not to exceed the aggregate of the Unused Working
Capital Commitments under the Working Capital B-1 Facility of
the Working Capital B-1 Lenders at such time. No Swing Line B-1
Advance shall be used for the purpose of funding the payment of
principal of any other Swing Line B-1 Advance. Each Swing Line
B-1 Borrowing shall be in an amount of US$500,000 or an integral
multiple of US$100,000 in excess thereof and shall be made as a
Base Rate Advance. Within the limits of the Swing Line B-1
Facility and within the limits referred to in clause (ii) above,
so long as the Swing Line Bank, in its sole discretion, elects
to make Swing Line B-1 Advances, the Uniroyal B-1 Borrower may
borrow under this Section 2.01(h), repay pursuant to Section
2.05(g) or prepay pursuant to Section 2.07(a) and reborrow under
this Section 2.01(h).
(i) Letters of Credit. Each Issuing Bank
severally agrees, on the terms and conditions hereinafter set
forth, to issue letters of credit (the "Letters of Credit") for
the account of any Borrower under the Letter of Credit A
Facility, Letter of Credit B-1 Facility or Letter of Credit B-2
Facility, as the case may be, from time to time on any Business
Day during the period from the date hereof until 30 days before
the Termination Date (i) in an aggregate Available Amount for
all Letters of Credit issued by such Issuing Bank not to exceed
at any time such Issuing Bank's Letter of Credit Commitment at
such time under the Facility which the applicable Notice of
Issuance specifies as the Facility under which such Letter of
Credit is to be issued, (ii) in an Available Amount for each
such Letter of Credit to be issued under the Letter of Credit A
Facility not to exceed the lesser of (x) the Letter of Credit A
Facility at such time and (y) the aggregate Unused Working
Capital Commitments of the Working Capital A Lenders under the
Working Capital A Facility at such time, (iii) in an Available
Amount for each such Letter of Credit to be issued under the
Letter of Credit B-1 Facility not to exceed the lesser of (x)
the Letter of Credit B-1 Facility at such time and (y) the
aggregate Unused Working Capital Commitments of the Working
Capital B-1 Lenders under the Working Capital B-1 Facility at
such time and (iv) in an Available Amount for each such Letter
of Credit to be issued under the Letter of Credit B-2 Facility
not to exceed the lesser of (x) the Letter of Credit B-2
Facility at such time and (y) the aggregate Unused Working
Capital Commitments of the Working Capital B-2 Lenders under the
Working Capital B-2 Facility at such time. Letters of Credit
issued under the Letter of Credit A Facility shall be issued for
the account of any Crompton A Borrower, Letters of Credit issued
under the Letter of Credit B-1 Facility shall be issued for the
account of the Uniroyal B-1 Borrower and Letters of Credit
issued under the Letter of Credit B-2 Facility shall be issued
for the account of any B-2 Borrower. No Letters of Credit shall
be issued under the Italian Facility or the Canadian Facility.
No Letter of Credit shall have an expiration date (including all
rights of the applicable Borrower or the beneficiary to require
renewal) later than the earlier of 30 days before the
Termination Date and (A) in the case of a Standby Letter of
Credit, one year after the date of issuance thereof and (B) in
the case of a Trade Letter of Credit, 90 days after the date of
issuance thereof. Within the limits of the Letter of Credit A
Facility, the Letter of Credit B-1 Facility or the Letter of
Credit B-2 Facility, as the case may be, and subject to the
limits referred to above, any Crompton A Borrower, the Uniroyal
B-1 Borrower, any B-2 Borrower, as the case may be, may request
the issuance of Letters of Credit under this Section 2.01(i),
repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance
of additional Letters of Credit under this Section 2.01(i).
(j) Set Aside of Working Capital B-1 Commitments
in Respect of the Seoul Guaranty. Each Working Capital B-1
Lender's Pro Rata Share of an aggregate amount of Working
Capital B-1 Commitments equal to the Seoul Guaranty Amount shall
be reserved to ensure that sufficient funds may be made
available to Uniroyal for payment to Citibank Seoul of the Seoul
Guaranty Amount as the same becomes due and payable. The amount
of Working Capital B-1 Commitments reserved under this Section
2.01(j) shall equal the Seoul Guaranty Amount from time to time.
(k) Set Aside of Working Capital A Commitments in
Respect of B-2 Facility Overage. Each Working Capital A
Lender's Pro Rata Share of an aggregate amount of Working
Capital A Commitments equal to the B-2 Facility Overage shall be
reserved against the Working Capital A Commitment. The
aggregate amount of Working Capital A Commitments reserved under
this Section 2.01(k) shall equal the B-2 Facility Overage from
time to time.
(l) Set Aside of Working Capital A Commitments in
Respect of Italian Facility Overage. Each Working Capital A
Lender's Pro Rata Share of an aggregate amount of Working
Capital A Commitments equal to the Italian Facility Overage
shall be reserved against the Working Capital A Commitment. The
aggregate amount of Working Capital A Commitments reserved under
this Section 2.01(l) shall equal the Italian Facility Overage
from time to time.
(m) Set Aside of Working Capital A Commitments in
Respect of Canadian Facility Overage. Each Working Capital A
Lender's Pro Rata Share of an aggregate amount of Working
Capital A Commitments equal to the Canadian Facility Overage
shall be reserved against the Working Capital A Commitment. The
aggregate amount of Working Capital A Commitments reserved under
this Section 2.01(m) shall equal the Canadian Facility Overage
from time to time.
SECTION 2.02. Making the Advances. (a) Except as
otherwise provided in Section 2.02(b) or 2.03, each Borrowing
shall be made on notice, given not later than (v) 11:00 A.M.
(New York City time) on the third Business Day prior to the date
of the proposed Borrowing in the case of a Borrowing consisting
of Eurocurrency Rate Advances under the Working Capital A
Facility or the Working Capital B-1 Facility, (w) 11:00 A.M.
(London time) on the third Business Day prior to the date of the
proposed Borrowing in the case a Borrowing consisting of
Eurocurrency Rate Advances under the Working Capital B-2
Facility or the Italian Facility, (x) 11:00 A.M. (New York City
time) on the third Canadian Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of
Eurocurrency Rate Advances under the Canadian Facility, (y)
11:00 A.M. (New York City time) on the first Canadian Business
Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Canadian Base Rate Advances or Canadian
Prime Rate Advances or (z) 11:00 A.M. (New York City time) on
the first Business Day prior to the date of the proposed
Borrowing (or, if the Swing Line Bank shall, in its sole
discretion, decline to make a Swing Line Advance on the date of
the proposed Borrowing after a request therefor by a Borrower
pursuant to Section 2.01(g) or (h), the date of the proposed
Borrowing) in the case of a Borrowing consisting of Base Rate
Advances, by any Borrower to the Agent, which shall give to each
Appropriate Lender prompt notice thereof by telex or telecopier.
Each such notice of a Borrowing (a "Notice of Borrowing") shall
be by telephone, confirmed immediately in writing, or telex or
telecopier, in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Borrowing,
(ii) Facility under which such Borrowing is to be made, (iii)
Type of Advances comprising such Borrowing, (iv) aggregate
amount of such Borrowing and (v) in the case of a Borrowing
consisting of Eurocurrency Rate Advances, initial Interest
Period and currency for each such Advance. Each Appropriate
Lender shall, (x) before 11:00 A.M. (New York City time), in the
case of a Borrowing under the Working Capital A Facility,
Working Capital B-1 Facility or Canadian Facility and (y) before
11:00 (London time), in the case of a Borrowing under the
Working Capital B-2 Facility or Italian Facility, in each case,
on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Agent at the applicable
Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing in accordance with the respective
Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. If for any reason set forth in
Section 2.13, any Lender is unable to make, maintain or fund any
Eurocurrency Rate Advance, such Lender shall make available for
the account of its Applicable Lending Office to the Agent at the
applicable Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such
Lender and the other Appropriate Lenders; provided, however,
such Lender shall make such Eurocurrency Rate Advance available
in US Dollars or such other currency as such Lender and the
applicable Borrower may agree upon. After the Agent's receipt
of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will make such funds
available to the relevant Borrower by crediting the relevant
Borrower's Account or at the applicable Payment Office, as the
case may be.
(b) Each Swing Line Borrowing shall be made on
notice, given not later than 11:00 A.M. (New York City time) on
the date of the proposed Swing Line Borrowing, by any Borrower
to the Swing Line Bank and the Agent. Each such notice of a
Swing Line Borrowing (a "Notice of Swing Line Borrowing") shall
be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (i) date of such
Borrowing, (ii) amount of such Borrowing and (iii) maturity of
such Borrowing (which maturity shall be no later than the
seventh day after the requested date of such Borrowing). If, in
its sole discretion, it elects to make the requested Swing Line
Advance, the Swing Line Bank will make the amount thereof
available to the Agent at the Agent's Account, in same day
funds. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the relevant
Borrower by crediting the relevant Borrower's Account. Upon
written demand by the Swing Line Bank with an outstanding Swing
Line A Advance or Swing Line B-1 Advance, as the case may be,
with a copy of such demand to the Agent, each other Working
Capital A Lender or Working Capital B-1 Lender, as the case may
be, shall purchase from the Swing Line Bank, and the Swing Line
Bank shall sell and assign to each such other Working Capital A
Lender or Working Capital B-1 Lender, as the case may be, such
other Lender's Pro Rata Share of such outstanding Swing Line A
Advance or Swing Line B-1 Advance, as the case may be, as of the
date of such demand, by making available for the account of its
Applicable Lending Office to the Agent for the account of the
Swing Line Bank, by deposit to the Agent's Account, in same day
funds, an amount equal to the portion of the outstanding
principal amount of such Swing Line A Advance or Swing Line B-1
Advance, as the case may be, to be purchased by such Lender.
Each Borrower hereby agrees to each such sale and assignment.
Each Working Capital A Lender agrees to purchase its Pro Rata
Share of an outstanding Swing Line A Advance and each Working
Capital B-1 Lender agrees to purchase its Pro Rata Share of an
outstanding Swing Line B-1 Advance on (i) the Business Day on
which demand therefor is made by the Swing Line Bank, provided
that notice of such demand is given not later than 11:00 A.M.
(New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by
the Swing Line Bank to any other Working Capital Lender of a
portion of a Swing Line Advance, the Swing Line Bank represents
and warrants to such other Lender that the Swing Line Bank is
the legal and beneficial owner of such interest being assigned
by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Swing Line Advance, the
Loan Documents or any Loan Party. If and to the extent that any
Working Capital A Lender or Working Capital B-1 Lender, as the
case may be, shall not have so made the amount of such Swing
Line A Advance or Swing Line B-1 Advance, as the case may be,
available to the Agent, such Lender agrees to pay to the Agent
forthwith on demand such amount together with interest thereon,
for each day from the date of demand by the Swing Line Bank
until the date such amount is paid to the Agent, at the Federal
Funds Rate. If such Lender shall pay to the Agent such amount
for the account of the Swing Line Bank on any Business Day, such
amount so paid in respect of principal shall constitute a Swing
Line Advance made by such Lender on such Business Day for
purposes of this Agreement, and the outstanding principal amount
of the Swing Line Advance made by the Swing Line Bank shall be
reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the
contrary notwithstanding, (i) the Borrowers may not select
Eurocurrency Rate Advances for any Borrowing if the aggregate
amount of such Borrowing is less than (A) US$5,000,000 in the
case of any Working Capital A Advance or any Working Capital B-1
Advance and (B) US$1,000,000 (or the Equivalent thereof in any
Foreign Currency or Canadian Dollars) in the case of any Working
Capital B-2 Advance, any Italian Borrower Advance or any
Canadian Borrower Advance, or if the obligation of the
Appropriate Lenders to make Eurocurrency Rate Advances shall
then be suspended pursuant to Section 2.12 or Section 2.13 and
(ii) the Working Capital Advances may not be outstanding as part
of more than 12 separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing
Line Borrowing shall be irrevocable and binding on the Borrower
giving such notice. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of
Eurocurrency Rate Advances, the Borrower giving such notice
shall indemnify each Appropriate Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when
such Advance, as a result of such failure, is not made on such
date.
(e) Unless the Agent shall have received notice
from an Appropriate Lender prior to the date of any Borrowing
under a Facility under which such Lender has a Commitment that
such Lender will not make available to the Agent such Lender's
ratable portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the
date of such Borrowing in accordance with subsection (a) or (b)
of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the relevant Borrower on such date
a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Agent, such Lender and the relevant Borrower severally agree to
repay or pay to the Agent forthwith on demand such corresponding
amount and to pay interest thereon, for each day from the date
such amount is made available to such Borrower until the date
such amount is repaid or paid to the Agent, at (i) in the case
of the Borrowers, the interest rate applicable at such time
under Section 2.08 to Advances comprising such Borrowing and
(ii) in the case of such Lender, the higher of (A) the Federal
Funds Rate and (b) the cost of funds incurred by the Agent in
respect of such amount. If such Lender shall pay to the Agent
such corresponding amount, such amount so paid shall constitute
such Lender's Advance as part of such Borrowing for all
purposes.
(f) The failure of any Lender to make the Advance
to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
(g) Uniroyal hereby irrevocably authorizes and
appoints Citibank as its attorney-in-fact to execute and deliver
a Notice of Borrowing in accordance with Section 2.02(a) or a
Notice of Swing Line Borrowing in accordance with Section
2.02(b), on behalf of and in the name of Uniroyal, for a Working
Capital B-1 Borrowing or Swing Line B-1 Borrowing, as the case
may be, in an aggregate amount not to exceed the Seoul Guaranty
Amount. Uniroyal hereby authorizes each of Citibank and
Citibank Seoul, in its discretion, to hold the proceeds of such
Borrowing as collateral for, and/or then or at any time
thereafter to apply such proceeds in whole or in part against
the Obligations of Uniroyal under the Seoul Guaranty. Each
Working Capital B-1 Lender severally agrees, notwithstanding any
other term or condition of this Agreement (including, without
limitation, any non-fulfillment of any of the conditions
specified in Article III), to make an Advance to or for the
account of Uniroyal for the purposes specified in the proviso to
the first sentence of Section 2.17 hereof, on any Business Day
during the period from the date hereof until the Termination
Date, in an aggregate amount not to exceed such Lender's Pro
Rata Share of the amount of Working Capital B-1 Commitments then
reserved pursuant to Section 2.01(j); provided that, after
giving effect to the Advances made pursuant to this Section
2.02(g), the sum of the aggregate principal amount of Working
Capital B-1 Advances, Swing Line B-1 Advances and Letter of
Credit B-1 Advances then outstanding plus the Available Amount
of all Letters of Credit issued under the Letter of Credit B-1
Facility and then outstanding shall not exceed the aggregate
Working Capital B-1 Commitments.
SECTION 2.03. Issuance of and Drawings and
Reimbursement Under Letters of Credit. (a) Request for
Issuance. Each Letter of Credit shall be issued upon notice,
given not later than (i) 11:00 A.M. (New York City time) in the
case of any proposed issuance under the Letter of Credit A
Facility or Letter of Credit B-1 Facility and (ii) 11:00 A. M.
(London time) in the case of any proposed issuance under the
Letter of Credit B-2 Facility, in each case on the second
Business Day prior to the date of the proposed issuance of such
Letter of Credit, by any Crompton A Borrower to any Issuing Bank
under the Letter of Credit A Facility, by the Uniroyal B-1
Borrower to any Issuing Bank under the Letter of Credit B-1
Facility or by any B-2 Borrower to any Issuing Bank under the
Letter of Credit B-2 Facility, which shall give to the Agent and
each Appropriate Lender prompt notice thereof by telex or
telecopier. No Letter of Credit shall be issued hereunder for
the account of any Italian Borrower. Each such notice of
issuance of a Letter of Credit (a "Notice of Issuance") shall be
by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount
and currency of such Letter of Credit, (C) expiration date of
such Letter of Credit, (D) name and address of the beneficiary
of such Letter of Credit, (E) Facility under which such Letter
of Credit is to be issued and (F) form of such Letter of Credit,
and shall be accompanied by such application and agreement for
letter of credit as such Issuing Bank may specify to the
relevant Borrower for use in connection with such requested
Letter of Credit (a "Letter of Credit Agreement"). If (x) the
requested form of such Letter of Credit is acceptable to such
Issuing Bank in its sole discretion and (y) it has not received
notice of objection to such issuance from Appropriate Lenders
holding at least 51% of the Working Capital A Commitments,
Working Capital B-1 Commitments or Working Capital B-2
Commitments, as the case may be, such Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article
III, make such Letter of Credit available to the Borrower
requesting the issuance of such Letter of Credit at its office
referred to in Section 8.02 or as otherwise agreed with such
Borrower in connection with such issuance. In the event and to
the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this
Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank
shall furnish (A) to the Agent on the first Business Day of each
week a written report summarizing issuance and expiration dates
of Letters of Credit issued by such Issuing Bank during the
previous week and drawings during such week under all Letters of
Credit issued by such Issuing Bank, (B) to each Appropriate
Lender on the first Business Day of each month a written report
summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by
such Issuing Bank and (C) to the Agent and each Appropriate
Lender on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate
Available Amount during the preceding calendar quarter of all
Letters of Credit issued by such Issuing Bank.
(c) Drawing and Reimbursement. The payment by any
Issuing Bank of a draft drawn under any Letter of Credit shall
constitute for all purposes of this Agreement the making by such
Issuing Bank of a Letter of Credit Advance, which shall be a
Base Rate Advance, in the amount of such draft. Upon payment by
any Issuing Bank of a draft drawn under any Letter of Credit,
such Issuing Bank shall give prompt notice thereof to the
applicable Borrower and the Agent. Upon written demand by any
Issuing Bank with an outstanding Letter of Credit Advance, with
a copy of such demand to the Agent, each Appropriate Lender
shall purchase from such Issuing Bank, and such Issuing Bank
shall sell and assign to each such Appropriate Lender, such
Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for
the account of its Applicable Lending Office to the Agent for
the account of such Issuing Bank, by deposit to the applicable
Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Agent shall transfer such funds to such
Issuing Bank. Each Borrower hereby agrees to each such sale and
assignment. Each Appropriate Lender agrees to purchase its Pro
Rata Share of an outstanding Letter of Credit Advance on (i) the
Business Day on which demand therefor is made by the Issuing
Bank which made such Advance, provided notice of such demand is
given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such
demand if notice of such demand is given after such time. Upon
any such assignment by an Issuing Bank to any Appropriate Lender
of a portion of a Letter of Credit Advance, such Issuing Bank
represents and warrants to such Appropriate Lender that such
Issuing Bank is the legal and beneficial owner of such interest
being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility
with respect to such Letter of Credit Advance, the Loan
Documents or any Loan Party. If and to the extent that any
Appropriate Lender shall not have so made the amount of such
Letter of Credit Advance available to the Agent, such
Appropriate Lender agrees to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day
from the date of demand by such Issuing Bank until the date
such amount is paid to the Agent, at the Federal Funds Rate for
its account or the account of such Issuing Bank, as applicable.
If such Lender shall pay to the Agent such amount for the
account of such Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit
Advance made by such Lender on such Business Day for purposes of
this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by such Issuing Bank shall be
reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances.
The failure of any Lender to make the Letter of Credit Advance
to be made by it on the date specified in Section 2.03(c) shall
not relieve any other Lender of its obligation hereunder to make
its Letter of Credit Advance on such date, but no Lender shall
be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such
date.
SECTION 2.04. Drawings of Bankers' Acceptances. (a)
Request for Drawing. Each Drawing shall be made on notice,
given not later than 12:00 noon (New York City time) on a
Canadian Business Day at least two Canadian Business Days prior
to the date of the proposed Drawing, by the Canadian Borrower to
the Agent, which shall give each Canadian Lender prompt notice
thereof by telex or telecopier. Each notice of a Drawing (a
"Notice of Drawing") shall be in writing (including by telex or
telecopier), in substantially the form of Exhibit B-2 hereto,
and shall be confirmed by telephone immediately by the Canadian
Borrower, specifying therein the requested (i) date of such
Drawing (which shall be a Business Day), (ii) aggregate Face
Amount of such Drawing and (iii) initial Maturity Date for each
Bankers' Acceptance comprising part of such Drawing; provided,
however, that, if the Agent determines in good faith (which
determination shall be conclusive and binding upon the Canadian
Borrower) that the Drafts to be accepted and purchased as part
of any Drawing cannot, due solely to the requested aggregate
Face Amount thereof, be accepted and/or purchased ratably by the
Canadian Lenders in accordance with Section 2.01(f), then the
aggregate Face Amount of such Drawing (or the Face Amount of
Bankers' Acceptances to be created by any Canadian Lender) shall
be reduced to such lesser amount as the Agent determines will
permit such Drafts comprising part of such Drawing to be so
accepted and purchased and, unless the Canadian Borrower shall
have given written notice to the contrary to the Agent, each
Canadian Lender shall fund the difference between such Lender's
ratable portion of the original aggregate Face Amount of such
Drawing and the Face Amount of the Bankers' Acceptances to be
created by such Lender after giving effect to such reduction in
the form of a Canadian Prime Rate Advance, which shall be deemed
for all purposes hereof to be a Canadian Borrower Advance made
pursuant to Section 2.01(f). The Agent agrees that it will, as
promptly as practicable, notify the Canadian Borrower of the
unavailability of Bankers' Acceptances and, if applicable, of
the date and the amount of each Canadian Prime Rate Advance to
be made or actually made in accordance with the immediately
preceding sentence. Each Draft in connection with any requested
Drawing (A) shall be in a minimum amount of CN$100,000 or an
integral multiple of CN$100,000 in excess thereof, and (B) shall
be dated the date of the proposed Drawing. Each Canadian Lender
shall, before 1:00 p.m. (Toronto time) on the date of each
Drawing, complete one or more Drafts in accordance with the
related Notice of Drawing, accept such Drafts and purchase the
Bankers' Acceptances created thereby for the Drawing Purchase
Price and shall, before 1:00 p.m. (Toronto time) on such date,
make available for the account of its Applicable Lending Office
to the Agent at its appropriate Agent's Account, in same day
funds, the Drawing Purchase Price payable by such Lender for
such Drawing less the Drawing Fee payable to such Lender with
respect thereto under Section 2.09(d). Upon the fulfillment of
the applicable conditions set forth in Article III, the Agent
will make the funds it has received from the Canadian Lenders
available to the Canadian Borrower by crediting the relevant
Borrower's Account or at the applicable Payment Office, as the
case may be.
(b) Limitations on Drawings. Anything in Section
2.04(a) to the contrary notwithstanding, the Canadian Borrower
may not select a Drawing if the obligation of the Canadian
Lenders to purchase and accept Bankers' Acceptances shall then
be suspended pursuant to Section 2.04(d) or 2.13.
(c) Binding Effect of Notices of Drawing. Each
Notice of Drawing shall be irrevocable and binding on the
Canadian Borrower. In the case of any proposed Drawing, the
Canadian Borrower shall indemnify each Canadian Lender against
any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in the
Notice of Drawing for such Drawing the applicable conditions set
forth in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
Drawing Purchase Price to be paid by such Lender as part of such
Drawing when, as a result of such failure, such Drawing is not
made on such date.
(d) Circumstances Making Bankers' Acceptances
Unavailable. (i) If, with respect to any proposed Drawing, the
Agent determines in good faith that circumstances affecting the
money markets at the time any related Notice of Drawing is
delivered or is outstanding will result in no market for the
Bankers' Acceptances to be created in connection with such
Drawing or an insufficient demand for such Bankers' Acceptances
to allow the Lenders creating such Bankers' Acceptances to sell
or trade the Bankers' Acceptances to be created and purchased or
discounted by them hereunder in connection with such Drawing,
then, upon notice to the Canadian Borrower and the Canadian
Lenders thereof, (A) the Notice of Drawing with respect to such
proposed Drawing shall be cancelled and the Drawing requested
therein shall not be made and (B) the right of the Canadian
Borrower to request a Drawing shall be suspended until the Agent
shall notify such Borrower that the circumstances causing such
suspension no longer exist. In the case of any such
cancellation of a Notice of Drawing, unless the Canadian
Borrower shall give written notice to the contrary to the Agent,
the cancellation of any such Notice of Drawing shall be deemed
to be the giving by the Canadian Borrower of a Notice of
Borrowing for Canadian Borrower Advances consisting of Canadian
Prime Rate Advances in an aggregate principal amount equal to
the aggregate Face Amount of such proposed Drawing and the
Canadian Lenders shall, subject to the terms and conditions
hereof applicable to the making of Canadian Borrower Advances,
make such Advances available to the Canadian Borrower, if
practicable, on the same Business Day, and otherwise on the next
Business Day. The Agent agrees that it will, as promptly as
practicable, notify the Canadian Borrower of the unavailability
of Bankers' Acceptances and, if applicable, of the date and the
amount of each Canadian Prime Rate Advance to be made or
actually made in accordance with the immediately preceding
sentence.
(ii) Upon the occurrence and during the
continuance of any Default, the obligation of the Canadian
Lenders to purchase and/or accept Bankers' Acceptances shall be
suspended.
(e) Assumptions of the Agent. Unless the Agent
shall have received notice from a Canadian Lender prior to the
date of any Drawing that such Lender will not make available to
it such Lender's ratable share of such Drawing in accordance
with Section 2.04(a), the Agent may assume that such Lender has
made such ratable share available to it on the date of such
Drawing in accordance with Section 2.04(a) and the Agent may, in
reliance upon such assumption, make available to the Canadian
Borrower on such date a corresponding amount. If and to the
extent that any such Lender shall not have so made such ratable
share available to the Agent, such Lender and the Canadian
Borrower severally agree to repay or pay to the Agent forthwith
on demand such corresponding amount, together with interest
thereon, for each day from the date such amount is made
available to such Borrower until the date such amount is repaid
or paid to the Agent, at (i) in the case of the Canadian
Borrower, a rate per annum equal to the BA Rate used in
calculating the Drawing Purchase Price with respect to such
Drawing, and (ii) in the case of such Lender, the Canadian
Interbank Rate. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such
Lender's Bankers' Acceptance as part of such Drawing for all
purposes under this Agreement.
(f) Presigned Draft Forms. To enable the Canadian
Lenders to create Bankers' Acceptances in accordance with
Section 2.01(f) and this Section 2.04, (i) the Canadian Borrower
shall supply each Canadian Lender, upon the Canadian Borrower's
execution of this Agreement, with such number of Drafts provided
to the Canadian Borrower by the Agent as the Agent may from time
to time reasonably request, duly endorsed and executed on behalf
of the Canadian Borrower by any one or more of its duly
authorized officers. Each Canadian Lender shall exercise such
care in the custody and safekeeping of any Drafts in its
possession from time to time as it would exercise in the custody
and safekeeping of similar property owned by it. The signatures
of officers of the Canadian Borrower on Drafts may be
mechanically reproduced in facsimile and Bankers' Acceptances
bearing such facsimile signatures shall be binding upon the
Canadian Borrower as if they had been manually signed by such
officers. Notwithstanding that any of the individuals whose
manual or facsimile signature appears on any Draft as one of
such officers may no longer hold office at the date of such
draft or at the date of its acceptance by a Lender hereunder or
at any time thereafter, any Draft or Bankers' Acceptance so
signed shall be valid and binding upon, and enforceable against,
the Canadian Borrower.
(g) Distribution of Bankers' Acceptances.
Bankers' Acceptances purchased by a Canadian Lender in
accordance with the terms of Section 2.01(f) and this Section
2.04 may, in such Lender's sole discretion, be held by such
Lender for its own account until the applicable Maturity Date or
sold, rediscounted or otherwise disposed of by it at any time
prior thereto in any relevant market therefor.
(h) Failure to Fund in Respect of Drawings. The
failure of any Canadian Lender to fund the Drawing Purchase
Price to be funded by it as part of any Drawing shall not
relieve any other Canadian Lender of its obligation hereunder to
fund its Drawing Purchase Price on the date of such Drawing, but
no Canadian Lender shall be responsible for the failure of any
other Canadian Lender to fund the Drawing Purchase Price to be
funded by such other Canadian Lender on the date of any Drawing.
SECTION 2.05. Repayment of Advances. (a) Working
Capital A Advances. Each Crompton A Borrower shall repay to the
Agent for the ratable account of the Working Capital A Lenders
on the Termination Date the aggregate principal amount of the
Working Capital A Advances made to such Crompton A Borrower and
then outstanding.
(b) Working Capital B-1 Advances. The Uniroyal B-
1 Borrower shall repay to the Agent for the ratable account of
the Working Capital B-1 Lenders on the Termination Date the
aggregate principal amount of the Working Capital B-1 Advances
then outstanding.
(c) Working Capital B-2 Advances. Each B-2
Borrower shall repay to the Agent for the ratable account of the
Working Capital B-2 Lenders on the Termination Date the
aggregate principal amount of the Working Capital B-2 Advances
made to such B-2 Borrower and then outstanding, provided that
such B-2 Borrower shall repay such amount in the currency in
which such Working Capital B-2 Advance was made.
(d) Italian Borrower Advances. Each Italian
Borrower shall repay to the Agent for the ratable account of the
Italian Lenders on the Termination Date the aggregate principal
amount of the Italian Borrower Advances made to such Italian
Borrower and then outstanding, provided that such Italian
Borrower shall repay such amount in the currency in which such
Italian Borrower Advance was made.
(e) Canadian Borrower Advances. The Canadian
Borrower shall repay to the Agent for the ratable account of the
Canadian Lenders on the Termination Date the aggregate principal
amount of the Canadian Borrower Advances then outstanding;
provided that the Canadian Borrower shall repay such amount in
the currency in which such Canadian Borrower Advance was made.
(f) Bankers' Acceptances. The Canadian Borrower
shall, subject to Sections 2.11(a) and 2.11(b), pay to the Agent
for the ratable account of the Canadian Lenders on the Maturity
Date of any Bankers' Acceptances an amount equal to the
aggregate Face Amount of all such Bankers' Acceptances maturing
on such date. Any payment by the Canadian Borrower of any
Bankers' Acceptances in accordance with this Section 2.05(f)
shall, to the extent of such payment, satisfy the obligations of
the Canadian Borrower under the Bankers' Acceptances to which it
relates and, in the case of a Bankers' Acceptance, the Lender
that has accepted such Bankers' Acceptance shall, to the extent
of such payment to such Lender, thereafter be solely responsible
for the payment thereof.
(g) Swing Line Advances. Each Borrower shall
repay to the Agent for the account of the Swing Line Bank and
each other Working Capital Lender that has made a Swing Line
Advance to such Borrower the outstanding principal amount of
each Swing Line Advance made by each of them and owing by such
Borrower on the earlier of the maturity date specified in the
applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of
such Borrowing) and the Termination Date.
(h) Letter of Credit Advances. (i) Each Borrower
shall repay in like funds advanced to the Agent for the account
of each Issuing Bank and each other Working Capital Lender that
has made a Letter of Credit Advance to such Borrower on the
earlier of the second Business Day following the date on which
the related Letter of Credit is drawn and the Termination Date
the outstanding principal amount of each Letter of Credit
Advance made by each of them.
(ii) The Obligations of each Borrower under this
Agreement, any Letter of Credit Agreement and any other
agreement or instrument relating to any Letter of Credit shall
be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of
Credit Agreement and such other agreement or instrument under
all circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any
Loan Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating thereto
(all of the foregoing being, collectively, the "L/C Related
Documents");
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations of any Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense
or other right that any Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may
be acting), any Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(E) payment by any Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent
to departure from any Guaranty or any other guarantee, for all
or any of the Obligations of any Borrower in respect of the L/C
Related Documents; or
(G) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge of,
any Borrower, any Guarantor or any other guarantor.
SECTION 2.06. Termination or Reduction of the
Commitments. (a) Optional. Crompton Corp. may, on its own
behalf and on behalf of the other Borrowers, upon at least two
Business Days' notice to the Agent, terminate in whole or reduce
in part the unused portion of any Letter of Credit Facility, any
Swing Line Facility or the Unused Working Capital Commitments
under any Working Capital Facility; provided, however, that each
partial reduction of a Facility (i) shall be in an aggregate
amount of US$10,000,000 or an integral multiple of US$5,000,000
in excess thereof and (ii) shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with
respect to such Facility.
(b) Mandatory. (i) The Letter of Credit A
Facility, Letter of Credit B-1 Facility or Letter of Credit B-2
Facility, as the case may be, shall be permanently reduced from
time to time on the date of each reduction in the Working
Capital A Facility, Working Capital B-1 Facility or Working
Capital B-2 Facility, as the case may be, by the amount, if any,
by which the amount of the Letter of Credit A Facility, Letter
of Credit B-1 Facility or Letter of Credit B-2 Facility, as the
case may be, exceeds the Working Capital A Facility, Working
Capital B-1 Facility or Working Capital B-2 Facility, as the
case may be, after giving effect to such reduction of such
Working Capital Facility.
(ii) The Swing Line A Facility or Swing Line B-1
Facility, as the case may be, shall be permanently reduced from
time to time on the date of each reduction in the Working
Capital A Facility or Working Capital B-1 Facility, as the case
may be, by the amount, if any, by which the amount of the Swing
Line A Facility or Swing Line B-1 Facility, as the case may be,
exceeds the Working Capital A Facility or Working Capital B-1
Facility, as the case may be, after giving effect to such
reduction of such Working Capital Facility.
(iii) Upon the date of receipt by Crompton Corp.
or any of its Subsidiaries of the Net Cash Proceeds from the
sale or other disposition of assets pursuant to clause (vii) of
Section 5.02(d), the Working Capital Facilities shall be
automatically and permanently reduced, on a pro rata basis, by
the amount of such Net Cash Proceeds to the extent required
under such clause (vii).
SECTION 2.07. Prepayments. (a) Optional. Each
Borrower may, upon at least one Business Day's notice in the
case of Base Rate Advances and three Business Days' notice in
the case of Eurocurrency Rate Advances, in each case to the
Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given such Borrower
shall, prepay the outstanding aggregate principal amount of the
Advances comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of
such prepayment on the aggregate principal amount prepaid;
provided, however, that (x) each partial prepayment shall be (A)
with respect to any Working Capital A Advance or any Working
Capital B-1 Advance, in an aggregate principal amount of
US$5,000,000 or an integral multiple of US$1,000,000 in excess
thereof or (B) with respect to any Working Capital B-2 Advance
or any Italian Borrower Advance, in an aggregate principal
amount of US$1,000,000 (or the Dollar Equivalent in the Foreign
Currency of such Advance) or an integral multiple of US$100,000
(or the Dollar Equivalent in the Foreign Currency of such
Advance), in each case in US Dollars or the applicable Foreign
Currency of such Advance, determined on the day such notice is
given and (y) if any prepayment of a Eurocurrency Rate Advance
is made on a date other than the last day of an Interest Period
for such Advance, such Borrower shall also pay any amounts owing
pursuant to Section 8.04(c).
(b) Mandatory. (i) The Crompton A Borrowers
shall, on each Business Day, prepay an aggregate principal
amount of the Working Capital A Advances comprising part of the
same Borrowings, the Letter of Credit A Advances and the Swing
Line A Advances equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Working Capital A
Advances, (y) the Letter of Credit A Advances and (z) the Swing
Line A Advances then outstanding plus the aggregate Available
Amount of all Letters of Credit then outstanding under the
Working Capital A Facility exceeds (B) the Working Capital A
Facility on such Business Day.
(ii) The Uniroyal B-1 Borrower shall, on each
Business Day, prepay an aggregate principal amount of the
Working Capital B-1 Advances comprising part of the same
Borrowings, the Letter of Credit B-1 Advances and the Swing Line
B-1 Advances equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Working Capital B-1
Advances, (y) the Letter of Credit B-1 Advances and (z) the
Swing Line B-1 Advances then outstanding plus the aggregate
Available Amount of all Letters of Credit then outstanding under
the Working Capital B-1 Facility exceeds (B) the Working Capital
B-1 Facility on such Business Day.
(iii) Notwithstanding anything herein to the
contrary, each B-2 Borrower shall, on the first Business Day of
each month, prepay such B-2 Borrower's Borrower's Share of any
amount set forth in clause (b) of the definition "B-2 Facility
Overage" that exceeds the lesser of (A) US$10,000,000 minus the
Italian Facility Overage at such time and (B) the aggregate
Unused Working Capital Commitments of the Working Capital A
Lenders at such time.
(iv) Notwithstanding anything herein to the
contrary, each Italian Borrower shall, on the first Business Day
of each month, prepay such Italian Borrower's Borrower's Share
of any amount set forth in clause (b) of the definition "Italian
Facility Overage" that exceeds the lesser of (A) US$10,000,000
minus the B-2 Facility Overage at such time and (B) the
aggregate Unused Working Capital Commitments of the Working
Capital A Lenders at such time.
(v) The Canadian Borrower shall, on each Business
Day, prepay an aggregate principal amount of the Canadian
Borrower Advances comprising part of the same Borrowings equal
to the amount by which (A) the sum of (x) the aggregate
principal amount of the Canadian Borrower Advances and (y) the
aggregate Face Amount of Bankers' Acceptances then outstanding
exceeds (B) the Canadian Facility on such Business Day.
(vi) Notwithstanding anything herein to the
contrary, the Canadian Borrower shall, on the first Business Day
of each month, prepay any amount set forth in clause (b) of the
definition "Canadian Facility Overage" that exceeds the lesser
of (A) US$10,000,000 and (B) the aggregate Unused Working
Capital Commitments of the Working Capital A Lenders at such
time.
(vii) The Crompton A Borrowers shall, on each
Business Day, pay to the Agent for deposit in the relevant L/C
Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount
by which the aggregate Available Amount of all Letters of Credit
then outstanding under the Working Capital A Facility exceeds
the Letter of Credit A Facility on such Business Day.
(viii) The Uniroyal B-1 Borrower shall, on each
Business Day, pay to the Agent for deposit in the relevant L/C
Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount
by which the aggregate Available Amount of all Letters of Credit
then outstanding under the Letter of Credit B-1 Facility exceeds
the Letter of Credit B-1 Facility on such Business Day.
(ix) The Canadian Borrower shall, on each Business
Day, pay to the Agent for deposit in the Canadian Cash
Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount by which
the aggregate Face Amount of all Bankers' Acceptances then
outstanding under the Canadian Facility exceeds the Canadian
Facility on such Business Day.
(x) Prepayments of the Working Capital A Facility,
Working Capital B-1 Facility, Working Capital B-2 Facility,
Italian Facility or Canadian Facility made pursuant to clause
(i), (ii), (iii), (iv), (v) or (vi) above shall be first applied
to prepay Letter of Credit Advances then outstanding under such
Facility until such Advances are paid in full, second applied to
prepay Swing Line Advances then outstanding under such Facility
until such Advances are paid in full, third applied to prepay
Working Capital Advances then outstanding under such Facility
comprising part of the same Borrowings until such Advances are
paid in full and fourth deposited in the relevant L/C Cash
Collateral Account to cash collateralize 100% of the Available
Amount of the Letters of Credit then outstanding under such
Facility or, in the case of the Canadian Facility, deposited in
the Canadian Cash Collateral Account to cash collateralize 100%
of the Face Amount of all Bankers' Acceptances then outstanding.
(xi) All prepayments under this subsection (b)
shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest. (a) Availability of Types
of Advances. Subject in each case to the provisions of Sections
2.10 and 2.13, Canadian Borrower Advances in US Dollars may be
Canadian Base Rate Advances or Eurocurrency Rate Advances only
and Canadian Borrower Advances in Canadian Dollars may be
Canadian Prime Rate Advances only.
(b) Scheduled Interest. Each Borrower shall pay
interest on the unpaid principal amount of each Advance made to
such Borrower and owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at
the following rates per annum:
(i) Base Rate Advances. During such periods as
such Advance is a Base Rate Advance, a rate per annum equal at
all times to the sum of (A) the Base Rate in effect from time to
time plus (B) the Applicable Margin in effect from time to time,
payable in arrears quarterly on the first day of each October,
January, April and July during such periods and on the date such
Base Rate Advance shall be Converted or paid in full.
(ii) Eurocurrency Rate Advances. During such
periods as such Advance is a Eurocurrency Rate Advance, a rate
per annum equal at all times during each Interest Period for
such Advance to the sum of (A) the Eurocurrency Rate for such
Interest Period for such Advance plus (B) the Applicable Margin
in effect from time to time, payable in US Dollars or the
applicable Foreign Currency, as the case may be, in arrears on
the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from
the first day of such Interest Period and on the date such
Eurocurrency Rate Advance shall be Converted or paid in full.
(iii) Local Rate Advances. During such periods as
such Advance is a Local Rate Advance, a rate per annum equal at
all times to the sum of (A) the Local Rate in effect from time
to time plus (B) the Applicable Margin for Local Rate Advances
in effect from time to time, payable in arrears quarterly on the
first day of each October, January, April and July during such
periods and on the date such Local Rate Advance shall be
Converted or paid in full.
(iv) Canadian Base Rate Advances. During such
periods as such Advance is a Canadian Base Rate Advance, a rate
per annum equal at all times to the sum of (A) the Canadian Base
Rate in effect from time to time plus (B) the Applicable Margin
for Canadian Base Rate Advances in effect from time to time,
payable in arrears quarterly on the first day of each October,
January, April and July during such periods and on the date such
Canadian Base Rate Advance shall be Converted or paid in full.
(c) Default Interest. Upon the occurrence and
during the continuance of an Event of Default, each Borrower
shall pay interest on (i) the unpaid principal amount of each
Advance made to such Borrower and owing to each Lender, payable
in US Dollars or the applicable Foreign Currency, as the case
may be, in arrears on the dates referred to in clause (b)(i)
through (b)(iv) above and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (b)(i) through
(b)(iv) above and (ii) to the fullest extent permitted by law,
the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in
US Dollars or the applicable Foreign Currency, as the case may
be, in arrears on the date such amount shall be paid in full and
on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (b)(i) through (b)(iv) above, and, in
all other cases, on Base Rate Advances pursuant to clause (b)(i)
above.
(d) Notice of Interest Rate. Promptly after
receipt of a Notice of Borrowing pursuant to Section 2.02(a),
the Agent shall give notice to the relevant Borrower and each
Appropriate Lender of the applicable interest rate determined by
the Agent for purposes of clause (a).
(e) Interest Rate Determination. (i) If the
Reuters Screen CDOR Page is not available for the timely
determination of the BA Rate, each Canadian Reference Lender
agrees to furnish to the Agent timely information for the
purpose of determining the BA Rate. If any one or more of such
Canadian Reference Lenders shall not furnish such timely
information to the Agent for the purpose of determining any such
interest rate, the Agent shall determine such interest rate on
the basis of timely information furnished by the remaining
Canadian Reference Lenders.
(ii) If the Reuters Screen CDOR Page is not
available for the timely determination of the BA Rate, and fewer
than two Canadian Reference Lenders are able to furnish timely
information to the Agent for determining the BA Rate for any
Bankers' Acceptances,
(A) the Agent shall forthwith notify the Canadian
Borrower and the Canadian Lenders that the interest rate cannot
be determined for such Bankers' Acceptances, and
(B) the obligation of the Canadian Lenders to
make, or to renew, Bankers' Acceptances shall be suspended until
the Agent shall notify the Canadian Borrower and the Canadian
Lenders that the circumstances causing such suspension no longer
exist.
(f) Interest Act (Canada). Whenever a rate of
interest hereunder is calculated on the basis of a year (the
"deemed year") which contains fewer days than the actual number
of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the
Interest Act (Canada) by multiplying such rate of interest by
the actual number of days in the calendar year of calculation
and dividing it by the number of days in the deemed year.
(g) Nominal Rates; No Deemed Reinvestment. The
principle of deemed reinvestment of interest shall not apply to
any interest calculation under this Agreement; all interest
payments to be made hereunder shall be paid without allowance or
deduction for reinvestment or otherwise, before and after
maturity, default and judgment. The rates of interest specified
in this Agreement are intended to be nominal rates and not
effective rates. Interest calculated hereunder shall be
calculated using the nominal rate method and not the effective
rate method of calculation.
(h) Interest Paid by the Canadian Borrower.
Notwithstanding any provision of this Agreement, in no event
shall the aggregate "interest" (as defined in Section 347 of the
Criminal Code (Canada)) payable by the Canadian Borrower under
this Agreement exceed the effective annual rate of interest on
the "credit advanced" (as defined in the Section) under this
Agreement lawfully permitted by that Section and, if any
payment, collection or demand pursuant to this Agreement in
respect of "interest" (as defined in that Section) is determined
to be contrary to the provisions of that Section, such payment,
collection or demand shall be deemed to have been made by mutual
mistake of the Canadian Borrower and the Canadian Lenders and
the amount of such payment or collection shall be refunded to
the Canadian Borrower. For the purposes of this Agreement, the
effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and
principles over the relevant term and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Canadian Lenders will be prima facie
evidence of such rate.
SECTION 2.09. Fees. (a) Commitment Fee. The
Borrowers jointly and severally agree to pay to the Agent for
the account of the Lenders a commitment fee, from August 15,
1996 in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender until
the Termination Date, payable in US Dollars in arrears quarterly
on the first Business Day of each January, April, July and
October, commencing October 1, 1996, and on the Termination
Date, at a rate per annum equal to the Applicable Percentage in
effect from time to time on the average daily Unused Working
Capital Commitments of such Lender (without giving effect to
clauses (b)(ii)(D) and (b)(ii)(E) of the definition of "Unused
Working Capital Commitment"); provided, however, that any
commitment fee accrued with respect to any of the Commitments of
a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall
not be payable by the Borrowers so long as such Lender shall be
a Defaulting Lender except to the extent that such commitment
fee shall otherwise have been due and payable by the Borrowers
prior to such time; provided further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so
long as such Lender shall be a Defaulting Lender; and provided
further that, notwithstanding anything herein to the contrary
and pursuant to Section 8.16, each B-2 Borrower, each Italian
Borrower and the Canadian Borrower shall only be responsible for
such B-2 Borrower's, such Italian Borrower's or the Canadian
Borrower's Borrower's Share of such Commitment Fee.
(b) Letter of Credit Fees, Etc. (i) The
Borrowers jointly and severally agree to pay to the Agent for
the account of each Working Capital A Lender each Working
Capital B-1 Lender and each Working Capital B-2 Lender a
commission, payable in US Dollars quarterly in arrears on the
first Business Day of each January, April, July and October,
commencing October 1, 1996, and on the earliest to occur of the
full drawing, expiration, termination or cancellation of any
Letter of Credit and on the Termination Date, on such Lender's
Pro Rata Share of the average daily aggregate Available Amount
during such quarter of all Letters of Credit issued under the
Working Capital A Facility, Working Capital B-1 Facility and
Working Capital B-2 Facility, respectively, and outstanding from
time to time at the rate per annum equal to the Applicable
Percentage in effect from time to time; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower shall only be responsible for
such B-2 Borrower's Borrower's Share of such Letter of Credit
Fees.
(ii) Any Borrower giving a Notice of Issuance
shall pay to each Issuing Bank, for its own account, such
commissions, issuance fees, fronting fees, transfer fees and
other fees and charges in connection with the issuance or
administration of the requested Letter of Credit as such
Borrower and such Issuing Bank shall agree.
(c) Agent's Fees. The Borrowers jointly and
severally agree to pay to the Agent for its own account such
fees as may from time to time be agreed between the Borrowers
and the Agent; provided that, notwithstanding anything herein to
the contrary and pursuant to Section 8.16, each B-2 Borrower,
each Italian Borrower and the Canadian Borrower shall only be
responsible for such B-2 Borrower's, such Italian Borrower's or
the Canadian Borrower's Borrower's Share of such Agent's Fees.
(d) Drawing Fees. The Canadian Borrower shall, on
the date of each Drawing and on the date of each renewal of any
outstanding Bankers' Acceptances, pay to the Agent, in Canadian
Dollars, for the ratable account of the Canadian Lenders
accepting Drafts and purchasing Bankers' Acceptances, the
Drawing Fee with respect to such Bankers' Acceptances. The
Canadian Borrower irrevocably authorizes each such Lender to
deduct the Drawing Fee payable with respect to each Bankers'
Acceptance of such Lender from the Drawing Purchase Price
payable by such Lender in respect of such Bankers' Acceptance in
accordance with Section 2.04 and to apply such amount so
withheld to the payment of such Drawing Fee for the account of
the Canadian Borrower and, to the extent such Drawing Fee is so
withheld and legally permitted to be so applied, the Canadian
Borrower's obligations under the preceding sentence in respect
of such Drawing Fee shall be satisfied.
SECTION 2.10. Conversion of Advances. (a) Optional.
Any Borrower may on any Business Day, upon notice given to the
Agent not later than (i) 11:00 A.M. (New York City time) in the
case of Base Rate Advances or Eurocurrency Rate Advances under
the Working Capital A Facility, the Working Capital B-1 Facility
or the Canadian Facility and (ii) 11:00 A. M. (London time) in
the case of Eurocurrency Rate Advances under the Working Capital
B-2 Facility or the Italian Facility, on the third Business Day
prior to the date of the proposed Conversion and subject to the
provisions of Sections 2.08 and 2.13, Convert all or any portion
of the Advances of one Type made to such Borrower comprising the
same Borrowing into Advances of the other Type; provided,
however, that any Conversion of Eurocurrency Rate Advances into
Base Rate Advances or Canadian Base Rate Advances, as the case
may be, shall be made only on the last day of an Interest Period
for such Eurocurrency Rate Advances, any Conversion of Base Rate
Advances or Canadian Base Rate Advances, as the case may be,
into Eurocurrency Rate Advances shall be in an amount not less
than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(c) and each
Conversion of Advances comprising part of the same Borrowing
under any Facility shall be made ratably among the Appropriate
Lenders in accordance with their Commitments under such
Facility. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurocurrency Rate Advances, the duration of
the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower
giving such notice.
(b) Mandatory. (i) On the date on which the
aggregate unpaid principal amount of Eurocurrency Rate Advances
comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than US$5,000,000, or
US$1,000,000 (or the Equivalent thereof) in the case of Working
Capital B-2 Advances, Italian Borrower Advances and Canadian
Borrower Advances, such Advances shall automatically (A) if such
Eurocurrency Rate Advances are denominated in US Dollars, be
Converted into Base Rate Advances and (B) if such Eurocurrency
Rate Advances are denominated in any Foreign Currency, be
Converted into Local Rate Advances.
(ii) If any Borrower shall fail to select the
duration of any Interest Period for any Eurocurrency Rate
Advances made to such Borrower in accordance with the provisions
contained in the definition of "Interest Period" in Section
1.01, the Agent will forthwith so notify such Borrower and the
Appropriate Lenders, whereupon each such Eurocurrency Rate
Advance will automatically, on the last day of the then existing
Interest Period therefor, (A) if such Eurocurrency Rate Advances
are denominated in US Dollars, be Converted into Base Rate
Advances and (B) if such Eurocurrency Rate Advances are
denominated in any Foreign Currency, be Converted into a Local
Rate Advance.
(iii) Upon the occurrence and during the
continuance of any Event of Default, (x) each Eurocurrency Rate
Advance will automatically, on the last day of the then existing
Interest Period therefor, (A) if such Eurocurrency Rate Advances
are denominated in US Dollars, be Converted into Base Rate
Advances and (B) if such Eurocurrency Rate Advances are
denominated in any Foreign Currency, be redenominated into an
Equivalent amount of US Dollars and be Converted into a Base
Rate Advance and (y) the obligation of the Lenders to make, or
to Convert Advances into, Eurocurrency Rate Advances and the
obligation of the Canadian Lenders to create or renew Bankers'
Acceptances shall be suspended.
SECTION 2.11. Renewal and Conversion of Bankers'
Acceptances. (a) Optional Renewal. The Canadian Borrower may
on any Business Day, upon notice given to the Agent not later
than 12:00 noon (New York City time) on a Business Day at least
two Canadian Business Days prior to the date of the proposed
renewal and subject to the provisions of Section 2.13, renew all
or any portion of the Bankers' Acceptances comprising part of
the same Drawing; provided, however, that:
(i) any renewal of Bankers' Acceptances shall be
made only on the then existing Maturity Date for such Bankers'
Acceptances;
(ii) each renewal of Bankers' Acceptances
comprising part of the same Drawing shall be made ratably among
the Lenders holding such Bankers' Acceptances in accordance with
the respective amount of such Bankers' Acceptances so held; and
(iii) no renewal of any Bankers' Acceptance may be
made at any time that a Default has occurred and is continuing.
Each such notice of renewal shall, within the restrictions set
forth above, specify (A) the date of such renewal (which shall
be the then existing Maturity Date of such Bankers' Acceptances
and shall be a Canadian Business Day), (B) the Bankers'
Acceptances to be renewed, (C) if less than all of the Bankers'
Acceptances comprising part of any Drawing are to be renewed,
the aggregate Face Amount for such renewal and (D) the term to
maturity of the renewed Bankers' Acceptances (which shall comply
with the definition of "Maturity Date" in Section 1.01);
provided, however, that, if the Agent determines in good faith
(which determination shall be conclusive and binding upon the
Canadian Borrower) that the Bankers' Acceptances cannot, due
solely to the requested aggregate Face Amount thereof, be
renewed ratably by the Canadian Lenders, the aggregate Face
Amount of such renewal (or the Face Amount of Bankers'
Acceptances to be created by any Canadian Lender) shall be
reduced to such lesser amount as the Agent determines will
permit such renewal to be so made and each Canadian Lender shall
fund the difference between such Lender's ratable portion of the
original aggregate Face Amount of such renewal and the Face
Amount of the Bankers' Acceptances to be created by such Lender
after giving effect to such reduction in the form of a Canadian
Prime Rate Advance, which shall be deemed for all purposes
hereof to be a Canadian Borrower Advance made pursuant to
Section 2.01(e)(ii). Each notice of renewal under this Section
2.11 shall be irrevocable and binding on the Canadian Borrower.
Upon any renewal of Bankers' Acceptances comprising part of any
Drawing in accordance with this Section 2.11(a), the Lenders
holding the Bankers' Acceptances to be renewed shall exchange
such maturing Bankers' Acceptances for new Bankers' Acceptances
containing the terms set forth in the applicable notice of
renewal, and the Drawing Purchase Price payable for each such
renewal shall be applied, together with other funds, if
necessary, available to the Canadian Borrower, to reimburse the
Bankers' Acceptances otherwise maturing on such date in
accordance with Section 2.05(f). The Canadian Borrower hereby
irrevocably authorizes and directs each Canadian Lender to apply
the proceeds of each renewed Bankers' Acceptance owing to it to
the reimbursement, in accordance with this Section 2.11(a), of
the Bankers' Acceptances owing to such Lender and maturing on
such date.
(b) Optional Conversion. The Canadian Borrower
may on any Business Day, upon notice given to the Agent not
later than 12:00 noon (New York City time) on a Business Day at
least two Canadian Business Days prior to the date of the
proposed Conversion and subject to the provisions of Section
2.13, Convert all or any portion of the Bankers' Acceptances
comprising part of the same Drawing to a Canadian Borrowing
comprised of Canadian Prime Rate Advances; provided, however,
that:
(i) any Conversion of Bankers' Acceptances shall
be made only on the then existing Maturity Date for such
Bankers' Acceptances;
(ii) each Conversion of Bankers' Acceptances
comprising part of the same Drawing shall be made ratably among
the Lenders holding such Bankers' Acceptances in accordance with
the respective amounts of such Bankers' Acceptances so held; and
(iii) no Conversion may be made if (A) the amount
of the Advance to be made by any Canadian Lender in connection
with such Conversion would exceed such Lender's Unused Working
Capital Commitment under the Canadian Facility in effect at the
time of such Conversion, or (B) after giving effect to such
Conversion, the sum of the aggregate principal amount of
outstanding Canadian Borrower Advances plus the aggregate Face
Amount of Bankers' Acceptances then outstanding would exceed the
Canadian Facility.
Each such notice of Conversion shall, within the restrictions
set forth above, specify (A) the date of such Conversion (which
shall be the then existing Maturity Date of such Bankers'
Acceptances and shall be a Business Day), (B) the Bankers'
Acceptances to be Converted and (C) if less than all of the
Bankers' Acceptances comprising part of any Drawing are to be
Converted, the aggregate Face Amount of such Conversion. Each
notice of Conversion under this Section 2.11 shall be
irrevocable and binding on the Canadian Borrower. Upon any
Conversion of Bankers' Acceptances comprising part of the same
Drawing in accordance with this Section 2.11(b), the obligation
of the Canadian Borrower to reimburse the Lenders under Section
2.14 in respect of the Bankers' Acceptances otherwise maturing
on such date shall, to the extent of such conversion, be
Converted to an obligation to reimburse the Lenders making the
Canadian Borrower Advances made in respect of such maturing
Bankers' Acceptances on such date ratably in accordance with the
amount of the Advances held by such Lender at the time of
reimbursement. The Canadian Borrower hereby irrevocably
authorizes and directs each Canadian Lender to apply the net
proceeds of each Canadian Prime Rate Advance made by such Lender
pursuant to this Section 2.11(b) to the reimbursement of the
Bankers' Acceptances owing to such Lender and maturing on such
date.
(c) Mandatory Conversion. If any Default shall
have occurred and be continuing or if the Canadian Borrower
shall fail (i) to deliver a properly completed notice of renewal
under Section 2.11(b) or a properly completed notice of
Conversion under Section 2.11(b) indicating its intention to
renew or to Convert any maturing Bankers' Acceptances or (ii) to
reimburse the Canadian Lenders for any Bankers' Acceptances
comprising part of the same Drawing pursuant to Section 2.05,
the Agent will forthwith so notify the Canadian Borrower and the
Canadian Lenders, whereupon each such Bankers' Acceptance will
automatically, on the then existing Maturity Date of such
Bankers' Acceptances, Convert into a Canadian Prime Rate
Advance.
SECTION 2.12. Increased Costs, Etc. (a) If, due to
either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law),
there shall be:
(A) any increase in the cost to any Lender Party
of agreeing to make or of making, funding or maintaining
Eurocurrency Rate Advances or of agreeing to issue or of issuing
or maintaining Letters of Credit or of agreeing to make or of
making or maintaining Letter of Credit Advances;
(B) any increase in the cost to any Lender Party
of agreeing to perform or of performing its obligations under
this Agreement under or in respect of Bankers' Acceptances; or
(C) any reduction in any amount payable to, or any
increase in any payment required to be made by, or any
forgiveness or reduction of effective return to, any Lender
Party under this Agreement under or in respect of any Bankers'
Acceptances
(excluding for purposes of this Section 2.12 any such increased
costs resulting from (i) Taxes or Other Taxes (as to which
Section 2.15 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its
Applicable Lending Office or any political subdivision thereof),
then the Borrowers jointly and severally agree to pay from time
to time, upon demand by such Lender Party (with a copy of such
demand to the Agent), to the Agent for the account of such
Lender Party additional amounts sufficient to compensate such
Lender Party for such increased cost; provided, however, that,
before making any such demand, each Lender Party agrees to use
reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation
would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
A certificate as to the amount of such increased cost, submitted
to the Borrowers by such Lender Party, shall be conclusive and
binding for all purposes, absent manifest error; provided
further that, notwithstanding anything herein to the contrary
and pursuant to Section 8.16, each B-2 Borrower, each Italian
Borrower and the Canadian Borrower shall only be responsible for
such B-2 Borrower's, such Italian Borrower's or the Canadian
Borrower's Borrower's Share of such additional amounts.
(b) If any Lender Party determines that either (i)
the enactment of or any change in or in the interpretation of
any law or regulation or (ii) the compliance with any law or
regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or
expected to be maintained by such Lender Party or any
corporation controlling such Lender Party and that the amount of
such capital is increased by or based upon the existence of such
Lender Party's commitment to lend, to accept, purchase and/or
discount Bankers' Acceptances or to issue Letters of Credit
hereunder and other commitments of such type or the purchase
and/or acceptance and maintenance of Bankers' Acceptances or the
issuance or maintenance of the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender Party
(with a copy of such demand to the Agent), the Borrowers jointly
and severally agree to pay to the Agent for the account of such
Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender
Party in the light of such circumstances, to the extent that
such Lender Party reasonably determines such increase in capital
to be allocable to the existence of such Lender Party's
commitment to lend, to accept, purchase and/or discount Bankers'
Acceptances or to issue Letters of Credit hereunder or to the
purchase and/or acceptance and maintenance of Bankers'
Acceptances or the issuance or maintenance of any Letters of
Credit; provided, however, that, before making any such demand,
each Lender Party agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions)
to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the
amount of, such additional amounts payable under this subsection
(b) and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A
certificate as to such amounts submitted to the Borrowers by
such Lender Party shall be conclusive and binding for all
purposes, absent manifest error; provided further that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower and the Canadian Borrower shall
only be responsible for such B-2 Borrower's or the Canadian
Borrower's Borrower's Share of such additional amounts.
(c) If, with respect to any Eurocurrency Rate
Advances made or to be made under any Facility, Appropriate
Lenders holding at least 51% of the Commitments under such
Facility notify the Agent that the Eurocurrency Rate for any
Interest Period for such Advances will not adequately reflect
the cost to such Lenders of making, funding or maintaining their
Eurocurrency Rate Advances for such Interest Period, the Agent
shall forthwith so notify the Borrowers and the Appropriate
Lenders, whereupon (i) each such Eurocurrency Rate Advance under
such Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Appropriate Lenders to
make, or to Convert Advances into, Eurocurrency Rate Advances
shall be suspended until the Agent shall notify the Borrowers
that the Required Lenders have determined that the circumstances
causing such suspension no longer exist.
SECTION 2.13. Illegality. (a) If, 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
Lender Party (or its Eurocurrency 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 Lender Party (or its
Eurocurrency Lending Office) to make, maintain or fund its
Eurocurrency Rate Advances in US Dollars or any Foreign Currency
hereunder such Lender Party shall so notify the Agent and
Crompton Corp., whereupon until such Lender Party notifies the
Agent and Crompton Corp. that the circumstances giving rise to
such suspension no longer exist, the obligation of such Lender
Party to make such Eurocurrency Rate Advances shall be
suspended. Before giving any notice to the Agent and Crompton
Corp pursuant to this Section, such Lender Party shall designate
a different Eurocurrency Lending Office if such designation will
avoid the need for giving such notice and will not, in the
judgment of such Lender Party, be otherwise disadvantageous to
such Lender Party. If such Lender Party shall determine that it
may not lawfully continue to maintain and fund any of its
outstanding Eurocurrency Rate Advances to maturity and shall so
specify in such notice, each such Eurocurrency Rate Advance made
by such Lender Party will automatically, upon such demand, (a)
if such Eurocurrency Rate Advance is denominated in US Dollars,
be converted into a Base Rate Loan and (b) if such Eurocurrency
Advance is denominated in any Foreign Currency, be redenominated
into an Equivalent amount of US Dollars and converted into a
Local Rate Advance.
(b) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in the
interpretation of any law or regulation (including, without
limitation, any change in acceptance limits imposed on any
Lender) shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any
Lender or any of their respective BA Lending Offices to perform
its obligations hereunder to complete and accept Drafts, to
purchase Bankers' Acceptances or to continue to fund or maintain
Bankers' Acceptances hereunder, then, upon notice thereof and
demand therefor by such Lender to the Canadian Borrower through
the Agent (i) an amount equal to the aggregate Face Amount of
all Bankers' Acceptances outstanding at such time shall, upon
such demand (which shall only be made if deemed necessary by the
applicable Lender to comply with applicable law), be deposited
by the Canadian Borrower into the Canadian Cash Collateral
Account until the Maturity Date of each such Bankers'
Acceptance, (ii) upon the Maturity Date of any Bankers'
Acceptance in respect of which any such deposit has been made,
the Agent shall be, and hereby is, authorized (without notice to
or any further action by any Borrower) to apply, or to direct
the Agent to apply, such amount (or the applicable portion
thereof) to the reimbursement of such Bankers' Acceptance and
(iii) the obligation of the Canadian Lenders to complete and
accept Drafts and/or to purchase Bankers' Acceptances shall be
suspended until the Agent shall notify the Canadian Borrower
that such Lender has determined that the circumstances causing
such suspension no longer exist.
SECTION 2.14. Payments and Computations. (a) Each
Borrower (other than any B-2 Borrower or any Italian Borrower)
shall make each payment hereunder, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section
2.18), not later than 11:00 A.M. (New York City time) on the day
when due in US Dollars to the Agent at the applicable Agent's
Account in same day funds. Each B-2 Borrower and Italian
Borrower shall make each payment hereunder, irrespective of any
right of counterclaim or set-off (except as otherwise provided
in Section 2.18), not later than 11:00 A.M. (London time) on the
day when due in like funds as advanced to the Agent in same day
funds by deposit of such funds to the applicable Agent's Account
maintained at such Payment Office. The Agent will promptly
thereafter cause like funds to be distributed (i) if such
payment by such Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder
to more than one Lender Party, to such Lender Parties for the
account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations
then payable to such Lender Parties and (ii) if such payment by
such Borrower is in respect of any Obligation then payable
hereunder to one Lender Party, to such Lender Party for the
account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such
Assignment and Acceptance, the Agent shall make all payments
hereunder in respect of the interest assigned thereby to the
Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments
in such payments for periods prior to such effective date
directly between themselves.
(b) If the Agent receives funds for application to
the Obligations under the Loan Documents under circumstances for
which the Loan Documents do not specify the Advances or the
Facility to which, or the manner in which, such funds are to be
applied, the Agent may, but shall not be obligated to, elect to
distribute such funds to each Lender Party ratably in accordance
with such Lender Party's proportionate share of the principal
amount of all outstanding Advances, the Face Amount of all
outstanding Bankers' Acceptances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment
of such of the outstanding Advances or other Obligations owed to
such Lender Party, and for application to such principal
installments, as the Agent shall direct.
(c) Each Borrower hereby authorizes each Lender
Party, if and to the extent payment owed to such Lender Party is
not made when due hereunder to charge from time to time against
any or all of such Borrower's accounts with such Lender Party
any amount so due.
(d) All computations of interest based on the Base
Rate, the Local Rate and the Canadian Base Rate shall be made by
the Agent on the basis of a year of 365 or 366 days, as the case
may be, all computations of interest based on the Eurocurrency
Rate (other than such Eurocurrency Rate on any Advances
denominated in the lawful currency of the United Kingdom of
Great Britain and Northern Ireland) or the Federal Funds Rate
and of fees and Letter of Credit commissions shall be made by
the Agent on the basis of a year of 360 days, and all
computations of interest based on the BA Rate and the
Eurocurrency Rate on any Advances denominated in the lawful
currency of the United Kingdom of Great Britain and Northern
Ireland shall be made by the Agent on the basis of a year of 365
days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period
for which such interest, fees or commissions are payable. Each
determination by the Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(e) Whenever any payment hereunder or in respect
of Bankers' Acceptances shall be stated to be due on a day other
than a Business Day or a Canadian Business Day, as the case may
be, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included
in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension
would cause payment of interest on or principal of Eurocurrency
Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(f) Unless the Agent shall have received notice
from a Borrower prior to the date on which any payment is due to
any Lender Party hereunder that such Borrower will not make such
payment in full, the Agent may assume that such 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 such Lender Party on such due date an amount
equal to the amount then due such Lender Party. If and to the
extent any Borrower shall not have so made such payment in full
to the Agent, each such Lender Party shall repay to the Agent
forthwith on demand such amount distributed to such Lender Party
together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date such
Lender Party repays such amount to the Agent, at the higher of
(A) the Federal Funds Rate and (b) the cost of funds incurred by
the Agent in respect of such amount.
SECTION 2.15. Taxes. (a) Any and all payments by
any Borrower hereunder or in respect of any Bankers' Acceptance
shall be made, in accordance with Section 2.14, free and clear
of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, (i) in the case
of each Lender Party and the Agent, respectively, taxes that are
imposed on its overall net income or the overall net income of
its branch (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction under the laws of which such
Lender Party or the Agent, respectively, is organized or any
political subdivision thereof, (ii) in the case of each Lender
Party, taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction in which the principal office or such Lender
Party's Applicable Lending Office is located or any political
subdivision thereof and (iii) in the case of the Agent, taxes
that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the jurisdiction in which the office
through which the Agent performs its activities hereunder is
located but not excluding any such taxes required to be withheld
by an Italian Lender or Borrower with respect to any payments
due to a Lender Party or the Agent from such Italian Lender or
Borrower pursuant to this Agreement (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or in respect of a
Bankers' Acceptance being hereinafter referred to as "Taxes").
If any Borrower shall be required by law to deduct any Taxes
from or in respect of any sum paid or payable hereunder or in
respect of any Bankers' Acceptance to any Lender Party or the
Agent, or, if the Agent shall be required by law to deduct any
Taxes from or in respect of any sum paid or payable hereunder or
in respect of any Bankers' Acceptance to any Lender Party, (i)
the sum payable by such Borrower shall be increased by such
Borrower as may be necessary so that, after making all required
deductions (including deductions, whether by such Borrower or
the Agent, applicable to additional sums payable under this
Section 2.15) such Lender Party and the Agent each receive an
amount equal to the sum they each would have received had no
such deductions been made (for example, and without limitation,
if the sum paid or payable hereunder from or in respect of which
a Borrower or the Agent shall be required to deduct any Taxes is
interest, the interest payable by such Borrower shall be
increased by such Borrower as may be necessary so that, after
making all required deductions (including deductions applicable
to additional interest), such Lender Party and the Agent each
receive interest equal to the interest they each would have
received had no such deduction been made), (ii) such Borrower
(or, as the case may be and as required by applicable law, the
Agent) shall make such deductions and (iii) such Borrower (or,
as the case may be and as required by applicable law or the
Agent) shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with
applicable law.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder to such Borrower or in respect of any
Bankers' Acceptance or from the execution, delivery or
registration of, performance under, or otherwise with respect
to, this Agreement or any Bankers' Acceptance (hereinafter
referred to as "Other Taxes").
(c) Each Borrower shall indemnify each Lender
Party and the Agent for and hold harmless against the full
amount of Taxes or Other Taxes (as well as, without limitation,
any taxes imposed by any jurisdiction on amounts payable under
this Section 2.15) imposed on or paid by such Lender Party 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 30
days from the date such Lender Party or the Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment
of Taxes, each Borrower shall furnish to the Agent at its
address referred to in Section 8.02, the original or a certified
copy of a receipt evidencing payment thereof. In the case of
any payment hereunder or in respect of any Bankers' Acceptance
by or on behalf of any Borrower through an account or branch
outside the United States, the United Kingdom, the Republic of
France, the Kingdom of The Netherlands, the Federal Republic of
Germany, Italy, Belgium and Canada or by or on behalf of any
Borrower by a payor that is not a United States person or a
corporation organized under the laws of the United Kingdom, the
Republic of France, the Kingdom of The Netherlands, the Federal
Republic of Germany, Italy, Belgium or Canada, if such Borrower
determines that no Taxes are payable in respect thereof, such
Borrower shall furnish, or shall cause such payor to furnish, to
the Agent, at such address, an opinion of counsel reasonably
acceptable to the Agent stating that such payment is exempt from
Taxes. For purposes of this subsection (d), the terms "United
States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party, on or prior to the date of
its execution and delivery of this Agreement in the case of each
Initial Lender and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each
other Lender Party, and from time to time thereafter as
requested in writing by any Borrower (but only so long as such
Lender Party remains lawfully able to do so), shall provide such
Borrower and the Agent with any form or certificate that is
required by any taxing authority including, if applicable, two
original Internal Revenue Service forms 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal
Revenue Service or (in the case of a Lender Party that is
claiming exemption from United States withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with
respect to payments of "portfolio interest") two accurate and
complete signed original Forms W-8 or any successor form
prescribed by the Internal Revenue Service (and, if such Lender
Party delivers Forms W-8, two signed certificates certifying
that such Lender Party is not (i) a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, (ii) is not a 10-
percent shareholder (within the meaning of Section 871(h)(3)(B)
of the Internal Revenue Code) of the Borrower, (iii) is not a
controlled foreign corporation related to the Borrower (within
the meaning of Section 864(d)(4) of the Internal Revenue Code)
and (iv) is not a conduit entity participating in a conduit
financing arrangement (as defined in Treasury Regulation Section
1.881-3), as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying (if it is
the case) that such Lender Party is exempt from or entitled to a
reduced rate of Home Jurisdiction Withholding Taxes (as defined
below) on payments pursuant to this Agreement or in respect of
any Bankers' Acceptances (or, in the case of a Lender Party that
initially becomes a party to this Agreement pursuant to an
assignment under Section 8.07, exempt from or entitled to a
reduced rate of Home Jurisdiction Withholding Taxes on payments
made pursuant to this Agreement or in respect of any Bankers'
Acceptances that is no greater than the rate to which the
assigning Lender Party was subject (assuming such assigning
Lender Party provided such forms or certificates as may be
required by this subsection (e))); provided, however, that such
Lender Party shall have been advised in writing by each Borrower
(including at the time any renewal form is due) of the form or
certificate applicable to it, determined by reference to the
jurisdiction of organization and Applicable Lending Office of
such Lender Party set forth on Schedule I hereto, in the case of
each Initial Lender, or to the jurisdiction of organization and
Applicable Lending Office of such Lender Party set forth in the
Assignment and Acceptance pursuant to which it became a Lender
Party, in the case of each other Lender Party, or such other
branch or office of any Lender Party designated by such Lender
Party from time to time. If any form or document referred to in
this subsection (e) requires the disclosure of information not
substantially similar to the information necessary to compute
the tax payable and information required on the date hereof by
Internal Revenue Service form 1001 or 4224 or United Kingdom
Inland Revenue Form FD13, and which a Lender Party reasonably
considers to be confidential, such Lender Party shall give
notice thereof to the Borrower and shall not be obligated to
include in such form or document such confidential information.
If the accurate and complete forms provided by a Lender Party at
the time such Lender Party first becomes a party to this
Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender
Party provides the appropriate form certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by
such form; provided, however, that, if at the date of the
Assignment and Acceptance pursuant to which a Lender Party
becomes a party to this Agreement, the Lender Party assignor was
entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future
or other amounts otherwise includible in Taxes) United States
withholding tax, if any, applicable with respect to the Lender
Party assignee on such date.
"Home Jurisdiction Withholding Taxes" means (a) in the
case of Crompton Corp., Crompton Colors, Davis-Standard, ITC and
Uniroyal, withholding taxes imposed by the United States, (b) in
the case of any Borrower incorporated under the laws of the
United Kingdom of Great Britain and Northern Ireland,
withholding taxes imposed by the United Kingdom of Great Britain
and Northern Ireland or who is a tax resident in the United
Kingdom of Great Britain and Northern Ireland because of central
management and control being located in the United Kingdom of
Great Britain and Northern Ireland, (c) in the case of any
Borrower incorporated under the laws of Republic of France,
withholding taxes imposed by the Republic of France, (d) in the
case of any Borrower incorporated under the laws of the Kingdom
of The Netherlands, withholding taxes imposed by the Kingdom of
The Netherlands, (e) in the case of any Borrower incorporated
under the laws of the Federal Republic of Germany, withholding
taxes imposed by the Federal Republic of Germany, (f) in the
case of any Borrower incorporated under the laws of Italy, but
solely with respect to the Italian Lenders, withholding taxes
imposed by Italy, (g) in the case of C & K Services SA (a
Belgian coordination center) withholding taxes imposed by
Belgium and (h) in the case of the Canadian Borrower,
withholding taxes imposed by Canada.
(f) For any period with respect to which a Lender
Party has failed, within 30 days of such Lender Party's receipt
of written request therefor from any Borrower, to provide such
Borrower with the appropriate form or certificate described in
Section 2.15(e) (other than if such failure is due to a change
in law (including, without limitation, any change in regulation
or change in the interpretation of any statute or regulation or
other rule of law) occurring subsequent to the date on which a
form originally was required to be provided, such Lender Party
shall not be entitled to indemnification under Section 2.15(a)
or (c) with respect to Taxes imposed by the United States, the
United Kingdom, the Republic of France, the Kingdom of The
Netherlands, the Federal Republic of Germany, Italy, Belgium or
Canada, as applicable, by reason of such failure); provided,
however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form or certificate required
hereunder, each Borrower shall take such steps as such Lender
Party shall reasonably request, and at such Lender Party's
expense, to assist such Lender Party to recover such Taxes.
(g) Each Lender Party shall promptly upon the
request of the Agent take all action (including without
limitation the completion of forms and the provision of
information to the appropriate taxing authorities or to the
Agent), of the kind prescribed in regulations promulgated under
Section 118H of the U.K. Income and Corporation Taxes Act of
1988 (and any statements published by the Inland Revenue
relating thereto and having general application) and consistent
with such Lender Party's legal and regulatory restrictions,
reasonably requested by the Agent, and the Agent shall upon
reasonable request from any Borrower make such request of each
Lender Party and shall itself (consistent with the Agent's legal
and regulatory restrictions), to the extent appropriate and
reasonable, take similar action, to secure the benefit of any
exemption from, or relief with respect to, Taxes or Other Taxes
imposed by the United Kingdom under Section 118H of the U.K.
Income and Corporation Taxes Act of 1988 in relation to any
amounts payable under this Agreement.
(h) Any Lender Party or the Agent (as the case may
be) claiming any additional amounts payable pursuant to this
Section 2.15 agrees to use reasonable efforts (consistent with
such Lender Party's or the Agent's (as the case may be) internal
policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office or the office of
the Agent (as the case may be) if the making of such a change
would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in
the sole judgment of such Lender Party or in the reasonable
judgment of the Agent (as the case may be), be otherwise
disadvantageous to such Lender Party or the Agent (as the case
may be). Each Borrower shall promptly upon request by any
Lender Party or the Agent take all actions (including, without
limitation, the completion of forms and the provision of
information to the appropriate taxing authorities) reasonably
requested by such Lender Party or the Agent to secure the
benefit of any exemption from, or relief with respect to, Taxes
or Other Taxes in relation to any amounts payable under this
Agreement.
(i) If the Agent or any Lender Party, in its sole
opinion, determines that it has finally and irrevocably received
or been granted a refund in respect of any Taxes or Other Taxes
as to which indemnification has been paid by Crompton Corp.
pursuant to Section 2.15(a) or (c), it shall promptly remit such
refund (including any interest) to Crompton Corp., net of all
out-of-pocket expenses of the Agent or such Lender Party;
provided, however, that Crompton Corp., upon the request of the
Agent or such Lender Party, agrees promptly to return such
refund (plus any interest) to such party in the event such party
is required to repay such refund to the relevant taxing
authority. The Agent or such Lender Party shall provide
Crompton Corp. with a copy of any notice or assessment from the
relevant taxing authority (deleting any confidential information
contained therein) requiring repayment of such refund. Nothing
contained herein shall impose an obligation on the Agent or any
Lender Party to apply for any refund or to disclose to any party
any information regarding their proprietary information
regarding tax affairs and computations.
SECTION 2.16. Sharing of Payments, Etc. If any
Lender Party shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) (a) on account of Obligations due and
payable to such Lender Party hereunder and under any Bankers'
Acceptances at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
Obligations due and payable to such Lender Party at such time to
(ii) the aggregate amount of the Obligations due and payable to
all Lender Parties hereunder and under any Bankers' Acceptances
at such time) of payments on account of the Obligations due and
payable to all Lender Parties hereunder and under any Bankers'
Acceptances at such time obtained by all the Lender Parties at
such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under any
Bankers' Acceptances at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
Obligations owing to such Lender Party at such time to (ii) the
aggregate amount of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under any Bankers'
Acceptances at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender
Parties hereunder and under any Bankers' Acceptances at such
time obtained by all of the Lender Parties at such time, such
Lender Party shall forthwith purchase from the other Lender
Parties such participations in the Obligations due and payable
or owing to them, as the case may be, as shall be necessary to
cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such
purchasing Lender Party, such purchase from each other Lender
Party shall be rescinded and such other Lender Party shall repay
to the purchasing Lender Party the purchase price to the extent
of such Lender Party's ratable share (according to the
proportion of (i) the purchase price paid to such Lender Party
to (ii) the aggregate purchase price paid to all Lender Parties)
of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii)
the total amount so recovered from the purchasing Lender Party)
of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so
recovered. Each Borrower agrees that any Lender Party so
purchasing a participation from another Lender Party pursuant to
this Section 2.16 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-
off) with respect to such participation as fully as if such
Lender Party were the direct creditor of such Borrower in the
amount of such participation.
SECTION 2.17. Use of Proceeds. The proceeds of the
Advances and issuances of Letters of Credit under the Working
Capital Facilities shall be available (and each Borrower agrees
that it shall use such proceeds and Letters of Credit) solely to
pay transaction fees and expenses incurred in connection with
this Agreement, redeem or repurchase certain public Surviving
Debt of Uniroyal Corp. and Uniroyal, and for other general
corporate purposes, including, without limitation, to finance
permitted acquisitions and Capital Expenditures and provide
working capital for the Borrowers and their respective
Subsidiaries; provided that Advances made pursuant to Section
2.02(g) shall be used by Uniroyal solely for the purpose of
satisfying its obligations under the Seoul Guaranty.
SECTION 2.18. Defaulting Lenders. (a) In the event
that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Advance to any Borrower and (iii) such Borrower shall
be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender,
then such Borrower may, so long as no Default shall occur or be
continuing at such time and to the fullest extent permitted by
applicable law, set off and otherwise apply the Obligation of
such Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting
Lender to make such Defaulted Advance. In the event that, on
any date, such Borrower shall so set off and otherwise apply its
Obligation to make any such payment against the obligation of
such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied
by such Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have
been made pursuant to Section 2.01. Such Advance shall be a
Base Rate Advance, a Canadian Base Rate Advance or a Local Rate
Advance, as the case may be, and shall be considered, for all
purposes of this Agreement, to comprise part of the Borrowing in
connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the
other Advances comprising such Borrowing shall be Eurocurrency
Rate Advances on the date such Advance is deemed to be made
pursuant to this subsection (a). Each Borrower shall notify the
Agent at any time such Borrower exercises its right of set-off
pursuant to this subsection (a) and shall set forth in such
notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B)
the amount set off and otherwise applied in respect of such
Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by any Borrower to
or for the account of such Defaulting Lender which is paid by
such Borrower, after giving effect to the amount set off and
otherwise applied by such Borrower pursuant to this subsection
(a), shall be applied by the Agent as specified in subsection
(b) or (c) of this Section 2.18.
(b) In the event that, at any one time, (i) any
Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Amount to the Agent or any of the
other Lender Parties and (iii) any Borrower shall make any
payment hereunder or under any other Loan Document to the Agent
for the account of such Defaulting Lender, then the Agent may,
on its behalf or on behalf of such other Lender Parties and to
the fullest extent permitted by applicable law, apply at such
time the amount so paid by such Borrower to or for the account
of such Defaulting Lender to the payment of each such Defaulted
Amount to the extent required to pay such Defaulted Amount. In
the event that the Agent shall so apply any such amount to the
payment of any such Defaulted Amount on any date, the amount so
applied by the Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so
applied by the Agent shall be retained by the Agent or
distributed by the Agent to such other Lender Parties, ratably
in accordance with the respective portions of such Defaulted
Amounts payable at such time to the Agent and such other Lender
Parties and, if the amount of such payment made by any Borrower
shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Agent and the other Lender Parties, in
the following order of priority:
(i) first, to the Agent for any Defaulted Amount
then owing to the Agent; and
(ii) second, to any other Lender Parties for any
Defaulted Amounts then owing to such other Lender Parties,
ratably in accordance with such respective Defaulted Amounts
then owing to such other Lender Parties.
Any portion of such amount paid by any Borrower for the account
of such Defaulting Lender remaining, after giving effect to the
amount applied by the Agent pursuant to this subsection (b),
shall be applied by the Agent as specified in subsection (c) of
this Section 2.18.
(c) In the event that, at any one time, (i) any
Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall not owe a Defaulted Advance or a Defaulted Amount
and (iii) any Borrower, the Agent or any other Lender Party
shall be required to pay or distribute any amount hereunder or
under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower or such other Lender Party
shall pay such amount to the Agent to be held by the Agent, to
the fullest extent permitted by applicable law, in escrow or the
Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount otherwise held by it. Any funds held
by the Agent in escrow under this subsection (c) shall be
deposited by the Agent in an account with Citibank, in the name
and under the control of the Agent, but subject to the
provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to
the credit balance of such account from time to time, shall be
Citibank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from
time to time shall be held by the Agent in escrow under, and
applied by the Agent from time to time in accordance with the
provisions of, this subsection (c). The Agent shall, to the
fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make
any Advances required to be made by such Defaulting Lender and
to pay any amount payable by such Defaulting Lender hereunder
and under the other Loan Documents to the Agent or any other
Lender Party, as and when such Advances or amounts are required
to be made or paid and, if the amount so held in escrow shall at
any time be insufficient to make and pay all such Advances and
amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agent for any amount then due
and payable by such Defaulting Lender to the Agent hereunder;
(ii) second, to any other Lender Parties for any
amount then due and payable by such Defaulting Lender to such
other Lender Parties hereunder, ratably in accordance with such
respective amounts then due and payable to such other Lender
Parties; and
(iii) third, to such Borrower for any Advance then
required to be made by such Defaulting Lender pursuant to a
Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender
shall, at any time, cease to be a Defaulting Lender, any funds
held by the Agent in escrow at such time with respect to such
Lender Party shall be distributed by the Agent to such Lender
Party and applied by such Lender Party to the Obligations owing
to such Lender Party at such time under this Agreement and the
other Loan Documents ratably in accordance with the respective
amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting
Lender under this Section 2.18 are in addition to other rights
and remedies that the Borrowers may have against such Defaulting
Lender with respect to any Defaulted Advance and that the Agent
or any Lender Party may have against such Defaulting Lender with
respect to any Defaulted Amount.
SECTION 2.19. Evidence of Debt. (a) Each Lender
shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Advance owing to such Lender from
time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
Each Borrower agrees that upon notice by any Lender to such
Borrower (with a copy of such notice to the Agent) to the effect
that a Note is required or appropriate in order for such Lender
to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to, or to be made by, such Lender,
such Borrower shall promptly execute and deliver to such Lender
a Working Capital A Note, a Working Capital B-1 Note, a Working
Capital B-2 Note, an Italian Borrower Note or a Canadian
Borrower Note, as the case may be, payable to the order of such
Lender in a principal amount equal to the applicable Commitment
of such Lender.
(b) The Register maintained by the Agent pursuant
to Section 8.07(d) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken
together) shall be recorded (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such
Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and
payable from each Borrower to each Lender hereunder and (iv) the
amount of any sum received by the Agent from each Borrower
hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Agent in the
Register pursuant to subsection (b) above, and by each Lender in
its account or accounts pursuant to subsection (a) above, shall
be prima facie evidence of the amount of principal and interest
due and payable or to become due and payable from each Borrower
to, in the case of the Register, each Lender and, in the case of
such account or accounts, such Lender, under this Agreement,
absent manifest error; provided, however, that the failure of
the Agent or such Lender to make an entry, or any finding that
an entry is incorrect, in the Register or such account or
accounts shall not limit or otherwise affect the obligations of
any Borrower under this Agreement.
(d) References herein to Notes shall mean and be
references to Working Capital A Notes, Working Capital B-1
Notes, Working Capital B-2 Notes, Italian Borrower Notes or
Canadian Borrower Notes, unless otherwise specifically
indicated, in each case to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness
of Amendment and Restatement. The amendment and restatement of
the Existing Credit Agreement pursuant hereto shall become
effective on and as of the Effective Date, which shall occur on
such date on or prior to March 31, 1998, on which each of the
following conditions precedent shall have been satisfied:
(a) The Lenders (as defined in the Existing Credit
Agreement) shall have consented to this Third Amended and
Restated Credit Agreement.
(b) There shall exist no action, suit,
investigation, litigation or proceeding affecting any Loan Party
or any of its Subsidiaries pending or threatened before any
court, governmental agency or arbitrator that (i) would be
reasonably likely to have a Material Adverse Effect other than
the matters described on Schedule 3.01(b) (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity
or enforceability of this Agreement, any Note, any other Loan
Document or the consummation of the transactions contemplated
hereby, and there shall have been no material adverse change in
the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(b).
(c) All stock of the Borrowers (other than
Crompton Corp.) and the Borrowers' Subsidiaries, to the extent
owned by the Borrowers and their Subsidiaries, shall be owned by
the Borrowers or one or more of the Borrowers' Subsidiaries, in
each case free and clear of any lien, charge or encumbrance.
(d) All governmental and third party consents and
approvals (including, without limitation, any consents or
approvals required under the documents relating to the Uniroyal
Corp. Senior Notes and the Uniroyal Corp. Senior Subordinated
Notes) necessary in connection with Loan Documents and the
transactions contemplated thereby shall have been obtained
(without the imposition of any conditions that are not
reasonably acceptable to the Lender Parties) and shall remain in
effect other than such governmental or third party consents and
approvals the failure to obtain which shall not (x) be
materially adverse to any of the Borrowers, in each case
together with its respective Subsidiaries, taken as a whole, (y)
affect the enforceability, validity or binding effect of any of
the Loan Documents required to be executed and delivered prior
to or on the Effective Date or (z) expose the Agent or the
Lender Parties to personal liability; all applicable waiting
periods shall have expired without any action being taken by any
competent authority; and no law or regulation shall be
applicable in the judgment of the Lender Parties that restrains,
prevents or imposes materially adverse conditions upon the Loan
Documents or the transactions contemplated thereby.
(e) The Borrowers shall have paid all accrued fees
and expenses of the Agent and the Lender Parties (including the
accrued fees and expenses of counsel to the Agent and local
counsel to the Lender Parties).
(f) The Agent shall have received on or before the
Effective Date the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the
Agent (unless otherwise specified) and in sufficient copies for
each Lender Party:
(i) Certified copies of the
resolutions (or analogous authorizations) of the Board of
Directors (or other authorized legal representatives) of each
Borrower and each other Loan Party approving this Agreement, any
Notes and each other Loan Document to which it is or is to be a
party, and of all documents evidencing other necessary corporate
action and governmental and other third party approvals and
consents, if any, with respect to this Agreement, any Notes and
each other Loan Document.
(ii) To the extent that any such information
is changed from that previously delivered under the Existing
Credit Agreement, a copy of a certificate of the applicable
regulatory authority of the jurisdiction of its incorporation,
dated on or before the Effective Date listing the charter of
each Borrower and each other Loan Party and each amendment
thereto on file in his office and certifying that such
amendments are the only amendments to such Borrower's or such
Loan Party's charter on file in his office.
(iii) A certificate of each Borrower and each
other Loan Party, signed on behalf of such Borrower or such
other Loan Party, as the case may be, by its President or a Vice
President and its Secretary or any Assistant Secretary or an
authorized legal representative of such Borrower or such other
Loan Party, as the case may be, dated on or before the Effective
Date (the statements made in which certificate shall be true on
and as of such date), certifying as to (A) the absence of any
amendments to the charter of such Borrower or such other Loan
Party since the date of the certificate referred to in Section
3.01(f)(ii) or any similar certificate previously delivered
under the Existing Credit Agreement, (B) to the extent changed
from such documents previously delivered under the Existing
Credit Agreement, a true and correct copy of the bylaws (or
analogous organizational documents) of such Borrower or such
other Loan Party as in effect on such date, (C) to the extent
applicable in such jurisdiction, the due incorporation and good
standing of such Borrower or such other Loan Party organized
under the laws of the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or liquidation of
such Borrower or such other Loan Party, and the payment of all
franchise taxes by such Borrower or such Loan Party, as the case
may be, (D) the truth of the representations and warranties made
by such Borrower or such other Loan Party contained in the Loan
Documents as though made on and as of such date and (E) the
absence of any event occurring and continuing on the Effective
Date that constitutes a Default.
(iv) To the extent that any such information
is changed from that previously delivered under the Existing
Credit Agreement, a certificate of the Secretary or an Assistant
Secretary or an authorized legal representative of each Borrower
and each other Loan Party certifying the names and true
signatures of the officers of such Borrower or such other Loan
Party authorized to sign this Agreement, any Notes and each
other Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.
(v) A consent in substantially the form of
Exhibit D-1, by Crompton Corp. in favor of the Guarantied
Parties under the guaranty dated August 21, 1996 made by
Crompton Corp. in favor of the Guarantied Parties (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Parent Guaranty"), duly executed
by Crompton Corp., consenting to the amendment and restatement
contemplated by this Agreement.
(vi) A consent in substantially the form of
Exhibit D-2, by the Subsidiary Guarantors in favor of the
Guarantied Parties under the subsidiary guaranty dated August
21, 1996 made by the Subsidiary Guarantors in favor of the
Guarantied Parties (together with each other guaranty delivered
pursuant to Section 5.01(i), in each case as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"), duly
executed by each Subsidiary Guarantor, consenting to the
amendment and restatement contemplated by this Agreement.
(vii) Such financial, business and
other information regarding each Loan Party and its Subsidiaries
as the Lender Parties shall have requested, including, without
limitation, information as to possible contingent liabilities,
tax matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited annual
financial statements of Crompton Corp. and its Subsidiaries
dated December 28, 1997, interim financial statements dated the
end of the most recent fiscal quarter for which financial
statements are available, and forecasts prepared by management
of the Borrowers, in form and substance satisfactory to the
Lender Parties, on a Consolidated basis of balance sheets,
income statements and cash flow statements for the first year
following January 1, 1998 and on an annual basis for each year
thereafter until the Termination Date.
(viii) A letter, in form and
substance satisfactory to the Agent, from Crompton Corp. to KPMG
Peat Marwick LLP, its independent certified public accountants,
advising such accountants that the Agent and the Lender Parties
have been authorized to exercise all rights of the Borrowers to
require such accountants to disclose any and all financial
statements and any other information of any kind that they may
have with respect to the Borrowers and their respective
Subsidiaries and directing such accountants to comply with any
reasonable request of the Agent or any Lender Party for such
information; provided that all requests for such information
shall be provided through Crompton Corp.
(ix) A favorable opinion of Wachtell, Lipton,
Rosen & Katz, special counsel for the Borrowers, in
substantially the form of Exhibit E-1 hereto and as to such
other matters as any Lender Party through the Agent may
reasonably request.
(x) A favorable opinion of John T. Ferguson,
II, Esq., General Counsel and Corporate Secretary of Crompton
Corp. and its Subsidiaries, in substantially the form of Exhibit
E-2 hereto and as to such other matters as any Lender Party
through the Agent may reasonably request.
<PAGE>
(xi) A favorable opinion of Shearman &
Sterling, counsel for the Agent, in form and substance
satisfactory to the Agent.
SECTION 3.02. Initial Extension of Credit to Each
Designated Subsidiary and Each Designated Italian Subsidiary.
The obligation of each Lender Party to make an Initial Extension
of Credit to (a) each Designated Subsidiary following any
designation of such Designated Subsidiary as a B-2 Borrower
hereunder pursuant to Section 8.08 and (b) each Designated
Italian Subsidiary following any designation of such Designated
Italian Subsidiary as an Italian Borrower hereunder pursuant to
Section 8.08 is, in each case, subject to the Agent's receipt on
or before the date of such Initial Extension of Credit of each
of the following with respect to such Designated Subsidiary or
Designated Italian Subsidiary, as the case may be, in form and
substance satisfactory to the Agent and dated such date, and in
sufficient copies for each Lender Party:
(i) Certified copies of the resolutions (or
analogous authorizations) of the Board of Directors (or other
authorized legal representatives) of such B-2 Borrower or
Italian Borrower approving this Agreement, any Working Capital
B-2 Notes or Italian Borrower Notes, as the case may be, and
each other Loan Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to this Agreement, any Notes and each other
Loan Document.
(ii) To the extent applicable in such
jurisdiction, a copy of a certificate of the applicable
regulatory authority of the jurisdiction of its incorporation,
dated reasonably near the date of the Initial Extension of
Credit to such B-2 Borrower or Italian Borrower, as the case may
be, listing the charter of such B-2 Borrower or Italian Borrower
and each amendment thereto on file in his office and certifying
that (A) such amendments are the only amendments to such B-2
Borrower's or Italian Borrower's charter on file in his office,
(B) each such B-2 Borrower or Italian Borrower has paid all
franchise taxes to the date of such certificate and (C) each
such B-2 Borrower or Italian Borrower is duly incorporated and
in good standing under the laws of the jurisdiction of its
incorporation.
(iii) A certificate of such B-2 Borrower or
Italian Borrower, signed on behalf of such B-2 Borrower or
Italian Borrower, as the case may be, by its President or a Vice
President and its Secretary or any Assistant Secretary or an
authorized legal representative of such B-2 Borrower or Italian
Borrower, dated the date of the Initial Extension of Credit to
such B-2 Borrower or Italian Borrower, relating to such B-2
Borrower or Italian Borrower (the statements made in which
certificate shall be true on and as of such date), certifying as
to (A) the absence of any amendments to the charter of such B-2
Borrower or Italian Borrower, as the case may be, since the date
of the certificate referred to in Section 3.02(b)(iii), (B) a
true and correct copy of the bylaws (or analogous organizational
documents) of such B-2 Borrower or Italian Borrower as in effect
on such date, (C) to the extent applicable in such jurisdiction,
the due incorporation and good standing of such B-2 Borrower or
Italian Borrower organized under the laws of the jurisdiction of its
incorporation, and the absence of any proceeding for the
dissolution or liquidation of such B-2 Borrower or Italian
Borrower, (D) the truth of the representations and warranties
made by such B-2 Borrower or Italian Borrower contained in the
Loan Documents as though made on and as of such date and (E) the
absence of any event occurring and continuing, or resulting from
the Initial Extension of Credit to such B-2 Borrower or Italian
Borrower, that constitutes a Default.
(iv) A certificate of the Secretary or an
Assistant Secretary or an authorized legal representative of
such B-2 Borrower or Italian Borrower, as the case may be,
certifying the names and true signatures of the officers of such
B-2 Borrower or Italian Borrower authorized to sign this
Agreement, any Working Capital B-2 Notes or Italian Borrower
Notes, as the case may be, and each other Loan Document to which
they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(v) The Designation Letter of such Designated
Subsidiary or Designated Italian Subsidiary, as the case may be,
substantially in the form of Exhibit F hereto.
(vi) Evidence of the Process Agent's acceptance of
its appointment pursuant to Section 8.12(a) as the agent of such
B-2 Borrower or Italian Borrower, substantially in the form of
Exhibit G hereto.
(vii) A favorable opinion of counsel (which may be
in-house counsel) to such Designated Subsidiary or Designated
Italian Subsidiary, dated the date of such Initial Extension of
Credit to such B-2 Borrower or Italian Borrower, substantially
in the form of Exhibit H hereto or in form and substance
reasonably acceptable to the Agent.
(viii) Such other approvals, opinions or documents
as any Lender Party, through the Agent, may reasonably request.
SECTION 3.03. Conditions Precedent to Each Borrowing,
Drawing and Issuance. The right of the Borrowers to request and
the obligation of each Appropriate Lender to make an Advance or
to purchase, accept or renew a Bankers' Acceptance (other than a
Letter of Credit Advance made by an Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and a Swing Line
Advance made by a Working Capital Lender pursuant to Section
2.02(b)) on the occasion of each Borrowing (including the
Initial Extension of Credit), and the right of the Borrowers to
request and the obligation of each Issuing Bank to issue a
Letter of Credit (including the initial issuance) and the right
of the Borrowers to request a Swing Line Borrowing, shall be
subject to the further conditions precedent that on the date of
such Borrowing, Drawing or issuance (a) the following statements
shall be true (and each of the giving of the applicable Notice
of <PAGE>
Borrowing, Notice of Drawing, Notice of Swing Line Borrowing or
Notice of Issuance and the acceptance by the relevant Borrower
of the proceeds of such Borrowing, Drawing or Letter of Credit
shall constitute a representation and warranty by such Borrower
that both on the date of such notice and on the date of such
Borrowing, Drawing or issuance, such statements are true):
(i) the representations and warranties contained
in each Loan Document are correct on and as of such date, before
and after giving effect to such Borrowing, Drawing or issuance
and to the application of the proceeds therefrom, as though made
on and as of such date other than any such representations or
warranties that, by their terms, refer to a specific date other
than the date of such Borrowing, Drawing or issuance, in which
case as of such specific date; and
(ii) no event has occurred and is continuing, or
would result from such Borrowing, Drawing or issuance or from
the application of the proceeds therefrom, that constitutes a
Default;
and (b) the Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the
Agent may reasonably request.
SECTION 3.04. Determinations Under Sections 3.01 and
3.02. For purposes of determining compliance with the
conditions specified in Sections 3.01 and 3.02, each Lender
Party shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender Parties unless an officer of the
Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party
prior to the Initial Extension of Credit specifying its
objection thereto and, if such Initial Extension of Credit
consists of a Borrowing or a Drawing, such Lender Party shall
not have made available to the Agent such Lender Party's ratable
portion of such Borrowing or Drawing.
SECTION 3.05. Conditions Precedent to Delayed
Effectiveness of Certain Provisions. Notwithstanding anything
to the contrary in this Third Amended and Restated Credit
Agreement, in the event that the conditions set forth in clauses
(i), (ii), (iii), (iv), (viii), (ix), (x) and (xi) of Section
3.01(f) are not satisfied on or prior to March 31, 1998, but all
other conditions precedent set forth in Section 3.01 are
satisfied on or prior to such date, the Effective Date shall be
modified as follows:
(a) All provisions of this Third Amended and
Restated Credit Agreement shall become effective on such date
except as set forth in this Section 3.05.
(b) The definitions of "Working Capital A
Commitments", "Working Capital B-1 Commitments" and "Termination
Date" shall not be amended but shall continue to have the
meanings of such terms set forth in the Existing Credit
Agreement until such date as the conditions set forth in clauses
(i), (ii), (iii), (iv), (viii), (ix), (x) and (xi) of Section
3.01 are satisfied, which date shall not be later the May 31,
1998.
(c) On the date that the Agent shall have received
each of the items set forth in clauses (i), (ii), (iii), (iv),
(viii), (ix), (x) and (xi) of Section 3.01(f), on or before May
31, 1998, each dated as of such date, the definitions of
"Working Capital A Commitments", "Working Capital B-1
Commitments" and "Termination Date" shall have the meanings set
forth in this Third Amended and Restated Credit Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows;
provided, however, each B-2 Borrower, each Italian Borrower and
the Canadian Borrower represents and warrants solely with
respect to itself:
(a) To the extent applicable under the laws of the
jurisdiction of incorporation of each Loan Party, each Loan
Party (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a
foreign corporation in each other jurisdiction in which it owns
or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the
outstanding capital stock of the Borrowers has been validly
issued and is fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a
complete and accurate list as of the Effective Date of all
Subsidiaries of each Loan Party, showing as of the Effective
Date (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital
stock authorized, and the number outstanding, on the Effective
Date and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by such Loan Party and the
number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the
Effective Date. All of the outstanding capital stock of all of
such Subsidiaries to the extent owned by the Borrowers and their
Subsidiaries has been validly issued, is fully paid and non-
assessable and is owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens. Each such Subsidiary
(i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a
foreign corporation in each other jurisdiction in which it owns
or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(c) The execution, delivery and performance by
each Loan Party of this Agreement, any Notes and each other Loan
Document to which it is or is to be a party, and the other
transactions contemplated hereby, are within such Loan Party's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's
charter or bylaws, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any
loan agreement, indenture, mortgage, deed of trust or other
instrument or material contract or material lease binding on or
affecting any Loan Party, any of its Subsidiaries or any of
their properties or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No
Loan Party or any of its Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such loan
agreement, indenture, mortgage, deed of trust or other
instrument or material contract or material lease, the violation
or breach of which would have a Material Adverse Effect.
(d) No authorization or approval or other action
by, and no notice to or filing with, any governmental authority
or regulatory body or any other third party is required for (i)
the due execution, delivery, recordation, filing or performance
by any Loan Party of this Agreement, any Notes or any other Loan
Document to which it is or is to be a party, or for the
transactions contemplated hereby or (ii) the exercise by the
Agent or any Lender Party of its rights under the Loan
Documents, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d), all of which
have been duly obtained, taken, given or made and are in full
force and effect.
(e) This Agreement has been, and each other Loan
Document when delivered hereunder will have been, duly executed
and delivered by each Loan Party party thereto. This Agreement
is, and each other Loan Document when delivered hereunder will
be, the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance
with its terms.
(f) The Consolidated balance sheet of Crompton
Corp. and its Subsidiaries as at December 28, 1997, and the
related Consolidated statement of income and Consolidated
statement of cash flows of Crompton Corp. and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
KPMG Peat Marwick LLP, independent public accountants, copies of
which have been furnished to each Lender Party, fairly present
the Consolidated financial condition of Crompton Corp. and its
Subsidiaries as at such date and the Consolidated results of
operations of Crompton Corp. and its Subsidiaries for the
periods ended on such date, all in accordance with generally
accepted accounting principles applied on a consistent basis,
and since December 28, 1997, there has been no Material Adverse
Change.
(g) The Consolidated forecasted balance sheets,
income statements and cash flows statements of Crompton Corp.
and its Subsidiaries delivered to the Lender Parties pursuant to
Section 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the
light of conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, Crompton
Corp.'s good faith estimate of its future financial performance.
(h) No information, exhibit or report furnished by
any Loan Party to the Agent or any Lender Party in connection
with the negotiation of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements made therein not misleading.
(i) There is no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries, including any Environmental Action, pending or
threatened before any court, governmental agency or arbitrator
that (i) would be reasonably likely to have a Material Adverse
Effect (other than the Disclosed Litigation) or (ii) purports to
affect the legality, validity or enforceability of this
Agreement, any Note or any other Loan Document or the
consummation of the transactions contemplated hereby, and there
has been no material adverse change in the status, or financial
effect on any Loan Party or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(b).
(j) No proceeds of any Advance, any Drawing or
drawings under any Letter of Credit will be used to acquire any
equity security of a class that is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(k) No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Advance, any Drawing or
drawings under any Letter of Credit will be used to purchase or
carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.
(l) (i) Except as disclosed in Part I of Schedule
4.01(l) hereto, the operations and properties of each Loan Party
and each of its Subsidiaries comply in all material respects
with all applicable Environmental Laws and Environmental
Permits, all past non-compliance with such Environmental Laws
and Environmental Permits has been resolved without material
ongoing obligations or costs, and no circumstances exist that
would be reasonably likely to (A) form the basis of an
Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that could have a
Material Adverse Effect or (B) cause any such property to be
subject to any material restrictions on ownership, occupancy,
use or transferability under any Environmental Law in effect on
the date hereof.
(ii) Except as disclosed in Part II of Schedule
4.01(l) hereto or as would not, individually or in the
aggregate, result in a Material Adverse Effect, none of the
properties currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or, to the best
knowledge of any Loan Party, proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list or
is adjacent to any such property; there are no and never have
been any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by any Loan
Party or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by any
Loan Party or any of its Subsidiaries; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries; and
Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries.
(iii) Except as disclosed in Part III of Schedule
4.01(l) hereto, neither any Loan Party nor any of its
Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge
or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries have been disposed of in a
manner not reasonably expected to result in material liability
to any Loan Party or any of its Subsidiaries.
(m) Neither any Loan Party nor any of its
Subsidiaries is an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making
of any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by any
Borrower, nor the consummation of the other transactions
contemplated hereby, will violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(n) Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
(o) Set forth on Schedule 4.01(o) hereto is a
complete and accurate list as of the Effective Date of all
Surviving Debt, showing as of the Effective Date the principal
amount outstanding thereunder.
(p) Set forth on Schedule 4.01(p) hereto is a
complete and accurate list of all Material Subsidiaries existing
as of the Effective Date.
SECTION 4.02. Additional Representations and
Warranties of the Crompton A Borrowers and Uniroyal B-1
Borrower. Each Crompton A Borrower and the Uniroyal B-1
Borrower represents and warrants as follows:
(a) The aggregate revenues of the Minor
Subsidiaries, on a Consolidated basis, do not exceed US$250,000
for the twelve-month period ending on the last day of the most
recent fiscal quarter of Crompton Corp., and the aggregate book
value of the assets of the Minor Subsidiaries, on a Consolidated
basis, as at the end of the most recent fiscal quarter of
Crompton Corp. does not exceed US$250,000.
(b) (i) No ERISA Event has occurred or is
reasonably expected to occur with respect to any Plan that has
had or is reasonably expected to have a Material Adverse Effect.
(ii) Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan,
copies of which have been filed with the Internal Revenue
Service and furnished to the Lender Parties, is complete and
accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material
adverse change in such funding status.
(iii) Neither any Loan Party nor any ERISA
Affiliate has incurred or is reasonably expected to incur any
Withdrawal Liability to any Multiemployer Plan that has had or
is reasonably expected to have a Material Adverse Effect.
(c) Neither any Loan Party nor any ERISA Affiliate
has been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title
IV of ERISA which, in either event, has had or is reasonably
expected to have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, each Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause
each of its Subsidiaries to comply, in all material respects,
with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA
and the Racketeer Influenced and Corrupt Organizations Chapter
of the Organized Crime Control Act of 1970, except, in any case,
where the failure so to comply, either individually or in the
aggregate, could not be reasonably expected to have a Material
Adverse Effect and would not be reasonably likely to subject any
Loan Party or any of its Subsidiaries to any criminal penalties
or any Lender Party to any civil or criminal penalties.
(b) Payment of Taxes, Etc. Pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent, (i) all federal income and other
material taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property;
provided, however, that neither any Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim (x) that is being contested in good
faith and by proper proceedings and as to which appropriate
reserves are being maintained or (y) in respect of which the
Lien resulting therefrom, if any, attaches to its property and
becomes enforceable against its other creditors, to the extent
that the aggregate amount of all such taxes, assessments,
charges or claims does not exceed US$3,000,000.
(c) Maintenance of Insurance. Maintain (or have
maintained on its behalf or maintain on behalf of each of its
Subsidiaries), and cause each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which
such Borrower or such Subsidiary operates; it being understood
and agreed that Crompton Corp. and its Subsidiaries may self-
insure to the extent consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and cause each of its Subsidiaries (other
than any Minor Subsidiary) to preserve and maintain, its
existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and
franchises; provided, however, that such Borrower and its
Subsidiaries may consummate any merger or consolidation
permitted under Section 5.02(c); provided further that neither
any Borrower nor any of its Subsidiaries shall be required to
preserve any existence, legal structure, legal name, right,
permit, license, approval, privilege or franchise if such
Borrower or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of
the business of such Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to such Borrower, such Subsidiary or the Lender
Parties or, with respect to permits, licenses, approvals,
privileges and franchises, that the loss thereof could not be
reasonably expected to have a Material Adverse Effect.
(e) Visitation Rights. At any reasonable time and
from time to time, during regular business hours and upon
reasonable prior notice, permit the Agent or any of the Lender
Parties or any agents or representatives thereof, to examine and
make copies of and abstracts from the records (other than (i)
records subject to attorney-client privilege or confidentiality
agreements and (ii) records relating to trade secrets) and books
of account of, and visit the properties of, any Borrower and any
of its Subsidiaries, and to discuss the affairs, finances and
accounts of any Borrower and any of its Subsidiaries with any of
their respective officers or directors and with their
independent certified public accountants and authorize and
direct such accountants to disclose to the Agent or any of the
Lender Parties any and all financial statements and other
information of any kind that they may have with respect to any
Borrower and any of its Subsidiaries.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made of all financial
transactions and the assets and business of such Borrower and
each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted, except where the failure to do
so, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect.
(h) Transactions with Affiliates. Conduct, and
cause each of its Subsidiaries to conduct, all transactions
otherwise permitted under the Loan Documents with any of their
Affiliates other than wholly owned Subsidiaries (except the
Minor Subsidiaries) of Crompton Corp. on terms which have been
determined by the applicable Borrower's board of directors or
such Subsidiary's board of directors, board of trustees or
managing partners, as the case may be, to be at least as
favorable to the Borrowers as would be obtainable on an arm's
length basis at the time of such transaction for a comparable
transaction with a Person who is not an Affiliate; provided,
however, the foregoing restriction shall not apply to (i) the
execution by Crompton Corp. and certain of its Subsidiaries of,
and payments by Crompton Corp. and any of its Subsidiaries
pursuant to, the Tax Agreement, (ii) the payment of reasonable
and customary fees to members of the board of directors of
Crompton Corp. or any of its Subsidiaries who are not employees
of Crompton Corp. or any of its Subsidiaries, (iii) loans and
advances to officers, directors and employees of Crompton Corp.
or any of its Subsidiaries for travel, entertainment, moving and
other relocation expenses made in the ordinary course of
business to the extent otherwise permitted hereunder, (iv)
subject to the provisions of this Agreement, any transaction
between or among Crompton Corp. and any of its wholly owned
Subsidiaries or between Uniroyal and Premier Chemical Company,
Ltd. (so long as Premier Chemical Company, Ltd. remains at least
80% owned, directly or indirectly, by Crompton Corp.), (v)
payment by Crompton Corp. and its Subsidiaries of ordinary and
customary compensation to their respective employees in the
ordinary course of business, (vi) any dividends or other
distributions permitted by Section 5.02(f), (vii) transactions
with Monochem, Inc. and Rubicon Inc. on terms that are customary
in the ordinary course of business of Uniroyal and its
Subsidiaries as currently practiced, (viii) a Receivables
Securitization and (ix) transactions in addition to those
permitted by the foregoing clauses of this subsection (h) which
in the aggregate involve amounts not in excess of US$500,000 per
year.
(i) Covenant to Guarantee Obligations. (i) At
such time as any new direct or indirect Material Subsidiaries of
any Loan Party are formed or acquired by such Loan Party or at
such time as any Minor Subsidiary shall have revenues which
exceed US$250,000 for the twelve-month period ending on the last
day of the most recent fiscal quarter of Crompton Corp. or the
aggregate book value of the assets of such Minor Subsidiary, as
at the end of the most recent fiscal quarter of Crompton Corp.
exceeds US$250,000, in each case to the extent not prohibited by
the terms of the Uniroyal Indentures then in effect and at the
expense of the Borrowers, within 30 days after such formation or
acquisition, cause each such Material Subsidiary (other than any
Foreign Subsidiary) or each such Minor Subsidiary, as the case
may be, and cause each direct and indirect parent (other than
the Borrowers and any Foreign Subsidiary) of such Material
Subsidiary or each such Minor Subsidiary, as the case may be,
(if it has not already done so), to duly execute and deliver to
the Agent a guaranty, in form and substance satisfactory to the
Agent, guaranteeing the other Loan Parties' Obligations under
the Loan Documents;
(ii) Within 60 days after such formation,
acquisition or request, deliver to the Agent, upon the request
of the Agent in its sole discretion, a signed copy of a
favorable opinion, addressed to the Agent and the other
Guarantied Parties, of counsel for the Loan Parties acceptable
to the Agent as to the guaranties referred to in clause (i)
above being the legal, valid and binding obligations of each
Loan Party party thereto enforceable in accordance with their
terms and as to such other matters as the Agent may reasonably
request; and
(iii) At any time and from time to time, promptly
execute and deliver any and all further instruments and
documents and take all such other action as the Agent may deem
necessary or desirable in obtaining the full benefits of the
guaranties referred to in clause (i) above.
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, no Borrower will, at any time:
(a) Liens, Etc. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of
its properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or sign or
file or suffer to exist, or permit any of its Subsidiaries to
sign or file or suffer to exist, under the Uniform Commercial
Code of any jurisdiction, a financing statement that names any
Borrower or any of its Subsidiaries as debtor, or sign or suffer
to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or
permit any of its Subsidiaries to assign, any accounts or other
right to receive income, excluding, however, from the operation
of the foregoing restrictions the following:
(i) with respect to any Person, all
of the following:
(A) pledges or deposits by such Person
under workers' compensation laws, unemployment insurance laws or
similar legislation or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Debt) or
leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of
cash or United States Government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as
security for contested taxes or for charges relating thereto
(including, without limitation, interest, penalties and certain
other similar charges) or import duties or for the payment of
rent;
(B) (x) liens imposed by law, such as
carriers', warehousemen's and mechanics' liens or (y) other
liens arising out of judgments or awards against such Person
with respect to which such Person shall then be prosecuting an
appeal or other proceedings for review or otherwise arising out
of judicial proceedings to the extent such liens do not
constitute an Event of Default;
(C) liens for taxes, assessments
or governmental charges or levies to the extent not required to
be paid by Section 5.01(b); and
(D) minor survey exceptions,
minor encumbrances, easements or reservations of, or rights of
others for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens
incidental to the conduct of the business of such Person or to
the ownership of its properties which were not incurred in
connection with Debt or other extensions of credit and which do
not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation
of the business of such Person.
(ii) Liens existing on the
Effective Date and described on Schedule 5.02(a) hereto;
(iii) purchase money Liens upon or
in real property or personal property acquired or held by any
Borrower or any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or to
secure Debt incurred solely for the purpose of financing the
acquisition, construction or improvement of any such property to
be subject to such Liens, or Liens existing on any such property
at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the
purchase price); provided, however, that no such Lien shall
extend to or cover any property other than the property being
acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the aggregate principal
amount of the Debt secured by Liens permitted by this clause
(iii) shall not exceed the amount permitted under Section
5.02(b)(iv)(B) at any time outstanding and that any such Debt
shall not otherwise be prohibited by the terms of the Loan
Documents;
(iv) Liens arising in connection
with Capitalized Leases permitted under Section 5.02(b)(iv)(C);
provided that no such Lien shall extend to or cover any assets
other than the assets subject to such Capitalized Leases;
(v) Liens on property of a Person
existing at the time such Person is merged into or consolidated
with any Borrower or any Subsidiary of such Borrower or becomes
a Subsidiary of such Borrower; provided that such Liens were not
created in contemplation of such merger, consolidation or
investment and do not extend to any assets other than those of
the Person merged into or consolidated with such Borrower or
such Subsidiary or acquired by such Borrower or such Subsidiary;
(vi) Liens arising in connection
with any lease of real or personal property, provided that no
such Lien shall extend to or cover any assets other than the
assets subject to such lease;
(vii) Liens securing Debt incurred
by Foreign Subsidiaries pursuant to Section 5.02(b)(iv)(G);
(viii) Liens on accounts receivable
(and in property securing or otherwise supporting such accounts
receivable together with proceeds thereof) of Crompton Corp. and
its Subsidiaries in connection with a Receivables Securitization
or in connection with sales of accounts receivable to Crompton
Corp. or any of its Subsidiaries;
(ix) Liens securing Obligations of Crompton
Corp. or any of its Subsidiaries in an aggregate amount not to
exceed US$5,000,000 at any time outstanding;
(x) filings for information purposes only
under the Uniform Commercial Code, as amended, of any state in
connection with a lease of property or similar arrangement
(other than Capitalized Leases);
(xi) Liens to secure any extension,
renewal or replacement (or successive extensions, renewals or
replacements) as a whole, or in part, of any Debt secured by any
Lien referred to in the foregoing clauses (ii) through (vi),
provided that (A) such extended, renewed or replacement Lien
shall be limited to all or part of the same type of property
that secured the Lien extended, renewed or replaced (plus
improvements on such property) and (B) the Debt secured by such
Lien at such time is not increased to an amount in excess of the
original principal amount of the Debt secured by such Lien; and
(xii) Liens on the assets of any B-2
Borrower, any Italian Borrower or the Canadian Borrower or cash
collateral to secure any obligation set forth in Section
5.02(b)(v).
(b) Debt. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Debt other than:
(i) in the case of the Borrowers,
(A) Debt of Uniroyal in
respect of the Seoul Guaranty, provided that the US Dollar
equivalent of the amount of such Debt shall not exceed
US$5,000,000,
(B) Debt in respect of
non-speculative Interest Rate Swap Agreements designed to hedge
against fluctuations in interest rates incurred in the ordinary
course of business and consistent with prudent business
practice,
(C) Debt in respect of
non-speculative Foreign Exchange Agreements designed to hedge
against fluctuations in foreign exchange rates incurred in the
ordinary course of business and consistent with prudent business
practice, and
(D) Debt owed to Crompton Corp. or to a
wholly owned Subsidiary of Crompton Corp,
(ii) in the case of any of such
Borrower's Subsidiaries (other than any Minor Subsidiary), Debt
owed to any Borrower or to a wholly owned Subsidiary of any
Borrower,
(iii) in the case of Crompton Corp. and its
Domestic Subsidiaries, Debt not otherwise permitted under this
Section 5.02(b) in an aggregate amount not to exceed in the
aggregate US$150,000,000 at any time outstanding, provided that,
with respect to Debt of Uniroyal and its Domestic Subsidiaries
under this clause (iii), such Debt shall not exceed $50,000,000
in the aggregate at any time outstanding,
(iv) in the case of the Borrowers
and their respective Subsidiaries (other than any Minor
Subsidiary except as provided below),
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iii) not to exceed in the aggregate, together
with Debt referred to in clause (C) below, US$100,000,000 at any
time outstanding,
(C) (i) Capitalized Leases not to exceed
in the aggregate, together with Debt referred to in clause (B)
above, US$100,000,000 at any time outstanding and (ii) in the
case of Capitalized Leases to which any Subsidiary of any
Borrower is a party, Debt of such Borrower of the type described
in clause (i) of the definition of "Debt" guaranteeing the
Obligations of such Subsidiary under such Capitalized Leases,
(D) the Surviving Debt and any Debt
extending the maturity of, or refunding or refinancing, in whole
or in part, any Surviving Debt other than Debt outstanding under
the Uniroyal Indentures, provided that the terms relating to
principal amount, amortization, maturity, collateral (if any)
and subordination (if any), and other material terms taken as a
whole, of any such extending, refunding or refinancing Debt, and
of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material
respect to the Loan Parties or the Lender Parties than the terms
of any agreement or instrument governing the Surviving Debt
being extended, refunded or refinanced and the interest rate
applicable to any such extending, refunding or refinancing Debt
does not exceed the then market interest rate for companies
having a credit standing similar to that of Crompton Corp. at
such time, the principal amount of such Surviving Debt shall not
be increased above the principal amount thereof outstanding
immediately prior to such extension, refunding or refinancing
and the direct and contingent obligors therefor shall not be
changed as a result of or in connection with such extension,
refunding or refinancing,
(E) Debt of any Person that becomes a
Subsidiary of any Borrower after the Effective Date in
accordance with the terms of Section 5.02(e) which Debt is
existing at the time such Person becomes a Subsidiary of such
Borrower (other than Debt incurred solely in contemplation of
such Person becoming a Subsidiary of such Borrower),
(F) Debt owing to the Daylight Overdraft
Bank in respect of any daylight overdraft facility or in
connection with any automated clearing house transfers of funds
in an aggregate amount outstanding at any time not to exceed
US$10,000,000 in the case of the Crompton A Borrowers and
US$10,000,000 in the case of Uniroyal,
(G) (i) Debt of any Foreign Subsidiary
including any B-2 Borrower, any Italian Borrower or any of their
respective Subsidiaries incurred for business purposes in an
aggregate amount not to exceed US$150,000,000 at any time
outstanding and (ii) Debt of any Borrower of the type described
in clause (i) of the definition of "Debt" guaranteeing the
Obligations of Foreign Subsidiaries outstanding under clause (i)
above,
(H) Debt, if any, of Crompton Corp. and
its Subsidiaries incurred in connection with a Receivables
Securitization or in connection with sales of accounts
receivable to Crompton Corp. or any of its Subsidiaries,
(I) endorsement of negotiable
instruments for deposit or collection or similar transactions in
the ordinary course of business,
(J) unsecured Debt of Minor Subsidiaries
in an aggregate amount not to exceed US$1,000,000 at any time
outstanding, and
(K) guaranties of Debt set forth in
Section 5.02(b)(v),
(v) in the case of the B-2 Borrowers,
Italian Borrowers and Canadian Borrower, Debt in an amount not
to exceed US$30,000,000 in respect of letters of credit;
provided that the sum of (A) the aggregate amount of such Debt
outstanding at any time and (B) the aggregate amount of the
Letter of Credit B-2 Commitments in effect at any time shall not
exceed US$30,000,000, and
(vi) in the case of Crompton Corp., Debt
extending the maturity of, or refunding or refinancing, in whole
or in part, any Surviving Debt outstanding under the Uniroyal
Corp. Senior Notes and the Uniroyal Senior Notes, provided that
the terms relating to principal amount, amortization, maturity,
collateral (if any) and subordination (if any), and other
material terms taken as a whole, of any such extending,
refunding or refinancing Debt, and of any agreement entered into
and of any instrument issued in connection therewith, are no
less favorable in any material respect to the Loan Parties or
the Lender Parties than the terms of any agreement or instrument
governing the Surviving Debt being extended, refunded or
refinanced and the interest rate applicable to any such
extending, refunding or refinancing Debt does not exceed the
then market interest rate for companies having a credit standing
similar to that of Crompton Corp. at such time, and the
principal amount of such Surviving Debt shall not be increased
above the principal amount thereof outstanding immediately prior
to such extension, refunding or refinancing plus the amount of
any redemption premium stipulated in the indenture relating to
such Surviving Debt or other reasonable premium paid in
connection with any redemption or, or tender offer or exchange
offer for, or open market purchase of, such Surviving Debt.
(c) Mergers, Etc. Merge into or consolidate with
any Person or permit any Person to merge into it, or permit any
of its Subsidiaries to do so, except that (i) Uniroyal Corp. may
merge into or consolidate with Crompton Corp., (ii) any Foreign
Subsidiary may merge into or consolidate with any other
Subsidiary of Crompton Corp. so long as if any Domestic
Subsidiary is party to such merger or consolidation, such
Domestic Subsidiary shall survive such merger or consolidation,
(iii) any Domestic Subsidiary of Uniroyal Corp. may merge into
or consolidate with any other Domestic Subsidiary of Uniroyal
Corp. so long as if any Loan Party is party to such merger or
consolidation, such Loan Party shall survive such merger or
consolidation, (iv) any Subsidiary of Crompton Corp. may merge
into or consolidate with any Borrower or any other Subsidiary of
Crompton Corp. so long as if any Borrower is party to such
merger or consolidation, a Borrower shall survive such merger or
consolidation, (v) in connection with any acquisition permitted
under Section 5.02(e), any Subsidiary of Crompton Corp. may
merge into or consolidate with any other Person or permit any
other Person to merge into or consolidate with it so long as if
the Person surviving such merger is a Borrower, such Borrower
shall be a wholly owned Subsidiary of Crompton Corp. and (vi) in
connection with any sale or other disposition permitted under
Section 5.02(d) (other than clause (ii) thereof), any Subsidiary
of Crompton Corp. may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate
with it; provided, however, that in each case, immediately after
giving effect thereto, no event shall occur and be continuing
that constitutes a Default and, in the case of any such merger
to which Crompton Corp. is a party, Crompton Corp. is the
surviving corporation.
(d) Sales, Etc. of Assets. Sell, lease, transfer
or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets, or
grant any option or other right to purchase, lease or otherwise
acquire any assets other than inventory to be sold in the
ordinary course of its business, except:
(i) sales of inventory in the ordinary course
of its business,
(ii) in a transaction authorized by Section
5.02(c) (other than clause (vi) thereof),
(iii) sales of assets and for fair value in
an aggregate amount not to exceed US$100,000,000 in any Fiscal
Year or $150,000,000 in the aggregate from and after the
Effective Date,
(iv) the sale or other disposition of
damaged, worn out or obsolete property that is no longer
necessary for the proper conduct of the business of Crompton
Corp. and its Subsidiaries in the ordinary course of business,
(v) sales of accounts receivable of Foreign
Subsidiaries on a basis which is non-recourse to Crompton Corp.
and its Subsidiaries (other than any Minor Subsidiary) to the
extent permitted by Section 5.02(b)(iv)(G) and (H),
(vi) sales of assets after the Effective Date
having an aggregate fair market value of not more than the
greater of (A) US$100,000,000 and (B) an amount equal to 5% of
Consolidated sales of Crompton Corp. and its Subsidiaries since
the Effective Date, provided that the Net Cash Proceeds of such
asset sales are applied to purchase substantially similar assets
(whether by means of an acquisition of stock or assets or
otherwise) constituting Investments permitted under Section
5.02(e) or Capital Expenditures permitted under Section 5.02(l)
or to prepay permanently Debt of Crompton Corp. or any of its
Subsidiaries,
(vii) sales of accounts receivable of
Crompton Corp. and its Subsidiaries in connection with
agreements for limited recourse or non-recourse sales by
Crompton Corp. or any of its Subsidiaries for cash, provided
that (A) any such agreement is of a type and on terms customary
for comparable transactions in the good faith judgment of the
Board of Directors of Crompton Corp., (B) such agreement does
not create any interest in any asset other than accounts
receivable (and property securing or otherwise supporting
accounts receivable) and proceeds of the foregoing and (C) the
Net Cash Proceeds thereof in excess of US$25,000,000 shall be
applied to the permanent reduction of the Facilities in
accordance with Section 2.06(b)(iii) (a "Receivables
Securitization"),
(viii) the transfer of assets among Loan
Parties to the extent permitted under Section 5.02(e)(vii), and
(ix) sales of accounts receivable of Crompton
Corp. and its Subsidiaries to any Loan Party or any of its
Subsidiaries, provided that such sales of accounts receivable
shall be made in accordance with Section 5.01(h).
(e) Investments in Other Persons. Make or hold,
or permit any of its Subsidiaries to make or hold, any
Investment in any Person other than:
(i) equity Investments by the
Borrowers and their Subsidiaries in their Subsidiaries
outstanding on the Effective Date and additional equity
investments in wholly owned Subsidiaries (other than any Minor
Subsidiary), which Subsidiaries were in existence on the
Effective Date;
(ii) loans and advances to
employees in the ordinary course of the business of the
Borrowers and their Subsidiaries (other than any Minor
Subsidiary) as presently conducted in an aggregate principal
amount not to exceed US$5,000,000 at any time outstanding;
(iii) Investments by the Borrowers
and their Subsidiaries in Cash Equivalents;
(iv) Investments by the Borrowers
in Hedge Agreements permitted under Sections 5.02(b)(i)(B) and
(C);
(v) Investments consisting of
intercompany Debt permitted under Section 5.02(b)(i)(D) or (ii);
(vi) Investments existing on the
Effective Date and described on Part I of Schedule 5.02(e)
hereto;
(vii) Investments consisting of the
contribution of assets of (A) any Foreign Subsidiary to Crompton
Corp. or any of its Subsidiaries, (B) Uniroyal or any Domestic
Subsidiary of Uniroyal to Crompton Corp. or any of its
Subsidiaries and (C) Crompton Corp. and its Domestic
Subsidiaries (other than Uniroyal and its Domestic Subsidiaries)
to any of Crompton Corp. or any of its Subsidiaries, provided
that the aggregate amount of Investments permitted by this
clause (C) to Uniroyal and its Subsidiaries or to any Foreign
Subsidiary shall not exceed US$150,000,000 at any time
outstanding;
(viii) Investments by Crompton
Corp. and its Subsidiaries in (A) the joint ventures listed on
Part II of Schedule 5.02(e) and other joint ventures and non-
wholly owned Subsidiaries in an aggregate amount invested
(including, without limitation, assumption of debt,
noncompetition arrangements, "earn-outs" and other deferred
payment arrangements) not to exceed US$50,000,000 and (B)
Monochem, Inc. and Rubicon, Inc.; provided that with respect to
Investments made under this clause (viii): (1) immediately
before and after giving effect thereto, no Default shall have
occurred and be continuing or would result therefrom; (2) any
business acquired or invested in pursuant to this clause (viii)
shall be in the same general line of business or substantially
related lines of business as the business of Crompton Corp. or
such Subsidiary; and (3) immediately after giving effect to the
acquisition of a company or business pursuant to this clause
(viii), Crompton Corp. shall be in pro forma compliance with the
covenants contained in Section 5.04, calculated based on the
relevant Financial Statements, as though such acquisition had
occurred at the beginning of the 12-month period covered
thereby, as evidenced by a certificate of the chief financial
officer or treasurer of Crompton Corp. furnished to the Lender
Parties, demonstrating such compliance;
(ix) other Investments (other than
Investments in Minor Subsidiaries) in an aggregate amount
invested not to exceed the sum of (A) an amount equal to the
aggregate Net Cash Proceeds of any equity issued by Crompton
Corp. after the Effective Date and (B) in any Fiscal Year, an
amount equal to Available Cash Flow for such Fiscal Year;
provided that with respect to Investments made under this clause
(ix): (1) any newly acquired or created Subsidiary of any
Borrower or any of its Subsidiaries shall be a wholly owned
Subsidiary thereof; (2) immediately before and after giving
effect thereto, no Default shall have occurred and be continuing
or would result therefrom; (3) any business acquired or invested
in pursuant to this clause (ix) shall be in the same general
line of business or substantially related lines of business as
the business of such Borrower or any of its Subsidiaries; and
(4) immediately after giving effect to the acquisition of a
company or business pursuant to this clause (ix), Crompton Corp.
shall be in pro forma compliance with the covenants contained in
Section 5.04, calculated based on the relevant Financial
Statements, as though such acquisition had occurred at the
beginning of the 12-month period covered thereby, as evidenced
by a certificate of the chief financial officer or treasurer of
Crompton Corp. furnished to the Lender Parties, demonstrating
such compliance; and
(x) additional equity Investments in
Naugatuck and intercompany Debt incurred by Naugatuck not to
exceed US$5,000,000 in the aggregate from the Effective Date.
(f) Dividends, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value
any of its capital stock or any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding, return
any capital to its stockholders as such, make any distribution
of assets, capital stock, warrants, rights, options, obligations
or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such
capital stock, or permit any of its Subsidiaries to do any of
the foregoing or permit any of its Subsidiaries to purchase,
redeem, retire, defease or otherwise acquire for value any
capital stock of any Borrower or any warrants, rights or options
to acquire such capital stock or to issue or sell any capital
stock or any warrants, rights or options to acquire such capital
stock, except that, so long as no Default shall have occurred
and be continuing at the time of any action described in clauses
(i) and (ii) below or would result therefrom, (i) Crompton Corp.
may (A) declare and pay dividends and distributions payable only
in common stock of Crompton Corp., (B) issue and sell shares of
its capital stock, (C) purchase, redeem, retire, defease or
otherwise acquire shares of its capital stock with the proceeds
received from the issue of new shares of its capital stock with
equal or inferior voting powers, designations, preferences and
rights and (D) declare and pay cash dividends to its
stockholders and purchase, redeem, retire or otherwise acquire
shares of its own outstanding capital stock for cash in an
amount not to exceed in any Fiscal Year the greater of (I)
US$15,000,000 and (II) 50% of Consolidated net income of
Crompton Corp. and its Subsidiaries for the immediately
preceding Fiscal Year computed in accordance with GAAP, and (ii)
any Subsidiary of Crompton Corp. may (A) declare and pay cash
dividends to any Borrower (including, without limitation, the
declaration and payment of cash dividends by Uniroyal to
Uniroyal Corp.) and (B) declare and pay cash dividends to any
other wholly owned Subsidiary of any Borrower of which it is a
Subsidiary.
(g) Change in Nature of Business. Make, or permit
any of its Subsidiaries to make, any material change in the
nature of its business as carried on at the Effective Date.
(h) Charter Amendments. Amend its certificate of
incorporation or bylaws in any material respect.
(i) Accounting Changes. Make or permit, or permit
any of its Subsidiaries to make or permit, any change in (i)
accounting policies or reporting practices, except as required
or permitted by generally accepted accounting principles or (ii)
Fiscal Year, except in each case, as necessary to make such
Fiscal Year the same with respect to Uniroyal Corp. and Crompton
Corp.
(j) Negative Pledge. Enter into or suffer to
exist, or permit any of its Subsidiaries to enter into or suffer
to exist, any agreement prohibiting or conditioning the creation
or assumption of any Lien upon any of its property or assets
other than (i) in connection with any Surviving Debt, any Debt
extending the maturity of, or refunding or refinancing, in whole
or in part, any Surviving Debt in accordance with Section
5.02(b)(iii)(D) (to the extent the agreement or instrument
evidencing such Surviving Debt contained such a provision or
agreement) and any Debt outstanding on the date such Subsidiary
first becomes a Subsidiary (so long as such agreement was not
entered into solely in contemplation of such Subsidiary becoming
a Subsidiary) or (ii) in connection with any lease of real or
personal property solely to the extent that such lease prohibits
a Lien on the lease or the property subject to such lease.
(k) Partnerships, Etc. Become a general partner
in any general or limited partnership or joint venture, or
permit any of its Subsidiaries to do so, other than any
Subsidiary the sole assets of which consist of its interest in
such partnership or joint venture.
(l) Capital Expenditures. Make, or permit any of
its Subsidiaries to make, any Capital Expenditures that would
cause the aggregate of all such Capital Expenditures made by
Crompton Corp. and its Subsidiaries in any period set forth
below to exceed the amount set forth below for such period.
Fiscal Year Ending On or About Amount
December 31, 1996 US$100,000,000
December 31, 1997 US$100,000,000
December 31, 1998 US$110,000,000
December 31, 1999 US$110,000,000
December 31, 2000 US$110,000,000
December 31, 2001
and thereafter US$110,000,000
plus, for each Fiscal Year set forth above, an amount equal
to (i) the excess, if any, of the amount set opposite the
immediately preceding Fiscal Year over the aggregate amount of
such Capital Expenditures actually made during such Fiscal Year
(other than pursuant to clause (ii) below), provided that any
Capital Expenditures made in any Fiscal Year shall be applied
first against any amount permitted to be carried over from the
immediately preceding Fiscal Year and (ii) the amount of any Net
Cash Proceeds received with respect to the sale, lease, transfer
or other disposition of assets pursuant to Section 5.02(d)(vi),
solely to the extent such Net Cash Proceeds are not used to make
Investments permitted under Section 5.02(e) or to prepay
permanently Debt of Crompton Corp. or any of its Subsidiaries,
provided that such amount of Net Cash Proceeds shall not be
carried over to any subsequent Fiscal Year pursuant to clause
(i) above.
(m) Minor Subsidiaries. Permit any Minor
Subsidiary (other than Naugatuck) to enter into or conduct any
business or engage in any activity (including, without
limitation, any action or transaction that is required or
restricted with respect to any Borrower and its Subsidiaries
under Section 5.01 and this Section 5.02).
SECTION 5.03. Reporting Requirements. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, Crompton Corp. will furnish to the
Agent and the Lender Parties:
(a) Default Notice. As soon as possible and in
any event within five days after any Responsible Officer of any
Borrower becomes aware of the occurrence of each Default or any
event, development or occurrence reasonably likely to have a
Material Adverse Effect continuing on the date of such
statement, a statement of the chief financial officer, treasurer
or chief accounting officer of such Borrower setting forth
details of such Default and the action that such Borrower has
taken and proposes to take with respect thereto.
(b) Quarterly Financials. 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, a Consolidated balance
sheet of Crompton Corp. and its Subsidiaries as of the end of
such quarter and a Consolidated statement of income and a
Consolidated statement of cash flows of Crompton Corp. and its
Subsidiaries, for the period commencing at the end of the
previous fiscal quarter and ending with the end of such fiscal
quarter and a Consolidated statement of income and a
Consolidated statement of cash flows of Crompton Corp. and its
Subsidiaries, for the period commencing at the end of the
previous Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding Fiscal
Year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer or
treasurer of Crompton Corp. as having been prepared in
accordance with GAAP, together with (i) a certificate of the
chief financial officer or treasurer of Crompton Corp. stating
that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature
thereof and the action that such Borrower has taken and proposes
to take with respect thereto and (ii) a schedule in form
satisfactory to the Agent of the computations used by Crompton
Corp. in determining compliance with the covenants contained in
Sections 5.04(a) and (b), provided that in the event of any
change in GAAP used in the preparation of such financial
statements, Crompton Corp. shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement
of reconciliation conforming such financial statements to GAAP.
(c) Annual Financials. As soon as available and
in any event within 95 days after the end of each Fiscal Year, a
copy of the annual report for such year for Crompton Corp. and
its Subsidiaries, including therein a Consolidated balance sheet
of Crompton Corp. and its Subsidiaries as of the end of such
Fiscal Year and a Consolidated statement of income and a
Consolidated statement of cash flows of Crompton Corp. and its
Subsidiaries for such Fiscal Year, in each case accompanied by
an opinion acceptable to the Required Lenders of KPMG Peat
Marwick LLP or other independent public accountants of
recognized standing acceptable to the Required Lenders, together
with (i) a certificate of such accounting firm to the Lender
Parties stating that in the course of the regular audit of the
business of Crompton Corp. and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained
no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature
thereof, (ii) a schedule in form satisfactory to the Agent of
the computations used by such accountants in determining, as of
the end of such Fiscal Year, compliance with the covenants
contained in Sections 5.04(a) and (b), provided that in the
event of any change in GAAP used in the preparation of such
financial statements, Crompton Corp. shall also provide, if
necessary for the determination of compliance with Section 5.04,
a statement of reconciliation conforming such financial
statements to GAAP and (iii) a certificate of the chief
financial officer or treasurer of Crompton Corp. stating that no
Default has occurred and is continuing or, if a default has
occurred and is continuing, a statement as to the nature thereof
and the action that such Borrower has taken and proposes to take
with respect thereto.
(d) Annual Forecasts. As soon as available and in
any event no later than June 30 in each year, forecasts prepared
by management of Crompton Corp., in form satisfactory to the
Agent, of balance sheets, income statements and cash flow
statements for Crompton Corp. and its Subsidiaries on an annual
basis for the then current Fiscal Year and for each Fiscal Year
thereafter until the Termination Date.
(e) Annual Budget. As soon as available and in
any event within 45 days after the end of each Fiscal Year, an
annual budget for Crompton Corp. and its Subsidiaries, prepared
by management of Crompton Corp. consisting of balance sheets,
income statements and cash flow statements on a quarterly basis
for the Fiscal Year following such Fiscal Year then ended in
form and substance satisfactory to the Agent.
(f) ERISA Events and ERISA Reports. (i) Promptly
and in any event within 15 days after any Loan Party or any
ERISA Affiliate knows or has reason to know that any ERISA Event
has occurred, a statement of the chief financial officer or
treasurer of Crompton Corp. describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (ii)
promptly and in any event within two days after the date any
records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA,
a copy of such records, documents and information.
(g) Plan Terminations. Promptly and in any event
within three Business Days after receipt thereof by any Loan
Party or any ERISA Affiliate, copies of each notice from the
PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan.
(h) Plan Annual Reports. Promptly and in any
event within 30 days after the filing thereof with the Internal
Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with
respect to each Plan.
(i) Multiemployer Plan Notices. Promptly and in
any event within five Business Days after receipt thereof by any
Loan Party or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (i) the
imposition of Withdrawal Liability by any such Multiemployer
Plan, (ii) the reorganization or termination, within the meaning
of Title IV of ERISA, of any such Multiemployer Plan or (iii)
the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any
event described in clause (i) or (ii).
(j) Litigation. Promptly after the commencement
thereof, notice of all actions, suits, investigations,
litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party
or any of its Subsidiaries of the type described in Section
4.01(i), and promptly after the occurrence thereof, notice of
any adverse change in the status or the financial effect on any
Loan Party or any of its Subsidiaries of the Disclosed
Litigation from that described on Schedule 3.01(b).
(k) Securities Reports. Promptly after the
sending or filing thereof, copies of all proxy statements,
financial statements and reports that any Loan Party or any of
its Subsidiaries sends to its outside stockholders, and copies
of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission
or any governmental authority that may be substituted therefor,
or with any national securities exchange.
(l) Creditor Reports. Promptly after the
furnishing thereof, copies of any statement or report furnished
to any other holder of the securities of any Loan Party or of
any of its Subsidiaries pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required
to be furnished to the Lender Parties pursuant to any other
clause of this Section 5.03.
(m) Agreement Notices. Promptly upon receipt
thereof, copies of all notices of any default or breach and all
other material requests and other documents received by any Loan
Party or any of its Subsidiaries under or pursuant to any
indenture, loan or credit or similar agreement.
(n) Revenue Agent Reports. Within 10 days after
receipt, copies of all Revenue Agent Reports (Internal Revenue
Service Form 886), or other written proposals of the Internal
Revenue Service, that propose, determine or otherwise set forth
positive adjustments to the Federal income tax liability of the
affiliated group (within the meaning
of Section 1504(a)(1) of the Internal Revenue Code) of which
Crompton Corp. is a member aggregating US$3,000,000 or more.
(o) Environmental Conditions. Promptly after the
assertion or occurrence thereof, notice of any Environmental
Action against or of any noncompliance by any Loan Party or any
of its Subsidiaries with any Environmental Law or Environmental
Permit that could reasonably be expected to have a Material
Adverse Effect.
(p) Other Information. Such other information
respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan
Party or any of its Subsidiaries as any Lender Party (through
the Agent) may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, Crompton Corp. will:
(a) Leverage Ratio. Maintain at the end of each
fiscal quarter of Crompton Corp. a Total Debt/EBITDA Ratio of
not more than the amount set forth below for each Rolling Period
set forth below:
Rolling Period Ending On or About Ratio
March 31, 1998 3.75:1.0
June 30, 1998 3.50:1.0
September 30, 1998 3.50:1.0
December 31, 1998 3.50:1.0
March 31, 1999 3.25:1.0
June 30, 1999 3.00:1.0
September 30, 1999 3.00:1.0
December 31, 1999 3.00:1.0
March 31, 2000 3.00:1.0
June 30, 2000 3.00:1.0
September 30, 2000 3.00:1.0
December 31, 2000 3.00:1.0
March 31, 2001 3.00:1.0
June 30, 2001
and thereafter 3.00:1.0
(b) Interest Coverage Ratio. Maintain at the end
of each fiscal quarter of Crompton Corp. an Interest Coverage
Ratio of not less than the amount set forth below for each
Rolling Period set forth below:
Rolling Period Ending On or About Ratio
March 31, 1998 2.75:1.0
June 30, 1998 2.75:1.0
September 30, 1998 2.75:1.0
December 31, 1998 3.00:1.0
March 31, 1999 3.00:1.0
June 30, 1999 3.00:1.0
September 30, 1999 3.25:1.0
December 31, 1999 3.25:1.0
March 31, 2000 3.50:1.0
June 30, 2000 3.50:1.0
September 30, 2000 3.50:1.0
December 31, 2000 3.50:1.0
March 31, 2001 3.50:1.0
June 30, 2001
and thereafter 3.50:1.0
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) (i) any Borrower shall fail to pay any
principal of any Advance or any portion of any Bankers'
Acceptance when the same shall become due and payable or (ii)
any Borrower shall fail to pay any interest on any Advance, or
any Loan Party shall fail to make any other payment under any
Loan Document, in each case under this clause (ii) within five
days after the same becomes due and payable; or
(b) any representation or warranty made by any
Loan Party (including, without limitation, any Designated
Subsidiary and any Designated Italian Subsidiary) or any of its
officers under or in connection with any Loan Document, or by
any Designated Subsidiary or any Designated Italian Subsidiary
in the Designation Letter pursuant to which such
Designated Subsidiary or Designated Italian Subsidiary became a
Borrower hereunder, shall prove to have been incorrect in any
material respect when made; or
(c) any Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 2.17,
5.01(d), (e) or (i), 5.02, 5.03(a) or 5.04; or
(d) any Loan Party shall fail to perform or
observe any other term, covenant or agreement contained in any
Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 30 days after the earlier of
the date on which (A) a Responsible Officer becomes aware of
such failure or (B) written notice thereof shall have been given
to Crompton Corp. by the Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries
shall fail to pay any principal of, premium or interest on or
any other amount payable in respect of any Debt that is
outstanding in a principal or notional amount of at least
US$10,000,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement
or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof
to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or
redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity thereof;
or
(f) any Loan Party or any of its Material
Subsidiaries shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by
or against any Loan Party or any of its Material Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 60 days or any of
the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Material
Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money
in excess of US$10,000,000 shall be rendered against any Loan
Party or any of its Material Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any
period of 10 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any
such judgment or order shall not be an Event of Default under
this Section 6.01(g) if and to the extent that the amount of
such judgment or order is covered by a valid and binding policy
of insurance between the defendant and the insurer covering
payment thereof so long as such insurer, which shall be rated at
least "A" by A.M. Best Company, has been notified of, and has
not disputed the claim made for payment of, the amount of such
judgment or order; or
(h) any non-monetary judgment or order shall be
rendered against any Loan Party or any of its Material
Subsidiaries that is reasonably likely to have a Material
Adverse Effect, and there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(i) any provision of any Loan Document after
delivery thereof pursuant to Section 3.01 or 5.01(i) shall for
any reason cease to be valid and binding on or enforceable
against any Loan Party party to it, or any such Loan Party shall
so state in writing; or
(j) (i) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of Crompton Corp. (or other
securities convertible into such Voting Stock) representing 20%
or more of the combined voting power of all Voting Stock of
Crompton Corp.; or (ii) during any period of up to 24
consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 24-month
period were directors of Crompton Corp. shall cease for any
reason to constitute a majority of the board of directors of
Crompton Corp. (except to the extent that individuals who at the
beginning of such 24-month period were replaced by individuals
(x) elected by 66-2/3% of the remaining members of the board of
directors of Crompton Corp. or (y) nominated for election by a
majority of the remaining members of the board of directors of
Crompton Corp. and thereafter elected as directors by the
shareholders of Crompton Corp.); or (iii) Crompton Corp. shall
at any time for any reason cease to be the record and beneficial
owner of 100% of the capital stock of the other Borrowers; or
(k) (i) any ERISA Event shall have occurred with
respect to a Plan; (ii) the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of such
Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then
exist exceeds US$10,000,000; and (iii) such ERISA Events
(considered in the aggregate) are reasonably likely to result in
obligations on the part of the Loan Parties to make payments in
the aggregate in excess of US$10,000,000 in any given calendar
year; or
(l) any Loan Party or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer Plan
in an amount that, when aggregated with all other amounts
required to be paid to Multiemployer Plans by the Loan Parties
and the ERISA Affiliates as Withdrawal Liability (determined as
of the date of such notification), requires payments exceeding
US$10,000,000 in any given calendar year; or
(m) any Loan Party or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer
Plans for the plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or
termination occurs by an amount exceeding US$10,000,000;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to
the Borrowers, declare the Commitment of each Lender Party and
the obligation of each Appropriate Lender to make Advances
(other than Letter of Credit Advances by an Issuing Bank or a
Working Capital Lender pursuant to Section 2.03(c) and Swing
Line Advances by a Working Capital Lender pursuant to Section
2.02(b)), of each Canadian Lender to accept and/or purchase
Bankers' Acceptances and of each Issuing Bank to issue Letters
of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers,
declare the Advances, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
each Borrower; provided, however, that in the event of an actual
or deemed entry of an order for relief with respect to any Loan
Party or any of its Subsidiaries under the Federal Bankruptcy
Code, (x) the Commitment of each Lender Party and the obligation
of each Lender to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Working Capital Lender pursuant
to Section 2.03(c) and Swing Line Advances by a Working Capital
Lender pursuant to Section 2.02(b)) and of each Issuing Bank to
issue Letters of Credit shall automatically be terminated and
(y) the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Borrower.
SECTION 6.02. Actions in Respect of the Letters of
Credit and Bankers' Acceptances upon Default. If any Event of
Default shall have occurred and be continuing, the Agent shall
at the request, or may with the consent, of the Required
Lenders, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, (a) make demand upon the
Borrowers to, and forthwith upon such demand the Borrowers
jointly and severally agree to, pay to the Agent on behalf of
the Lender Parties in same day funds at the Agent's office
designated in such demand, for deposit in the relevant L/C Cash
Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower, each Italian Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such Italian Borrower's or the Canadian Borrower's
Borrower's Share of such amount and (b) make demand upon the
Canadian Borrower to, and forthwith upon such demand, such
Borrower will, pay to the Agent on behalf of the Canadian
Lenders in same day funds at the Agent's office designated in
such demand, for deposit in the Canadian Cash Collateral
Account, an amount equal to the aggregate Face Amount of all
Bankers' Acceptances then outstanding. If at any time the Agent
determines that any funds held in such L/C Cash Collateral
Account or Canadian Cash Collateral Account are subject to any
right or claim of any Person other than the Agent and the Lender
Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit or the
aggregate Face Amount of all outstanding Bankers' Acceptances,
the Borrowers jointly and severally agree to, forthwith upon
demand by the Agent, (x) pay to the Agent, as additional funds
to be deposited and held in such L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available
Amount over (b) the total amount of funds, if any, then held in
such L/C Cash Collateral Account that the Agent determines to be
free and clear of any such right and claim; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower, each Italian Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such Italian Borrower's or the Canadian Borrower's
Borrower's Share of such amount and (y) pay to the Agent, as
additional funds to be deposited and held in the Canadian Cash
Collateral Account, an amount equal to the excess of (i) such
aggregate Face Amount of all outstanding Bankers' Acceptances
over (ii) the total amount of funds, if any, then held in the
Canadian Cash Collateral Account that the Agent determines to be
free and clear of any such right and claim; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower, each Italian Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such Italian Borrower's or the Canadian Borrower's
Borrower's Share of such amount.
SECTION 6.03. Actions in Respect of Working Capital
B-1 Commitments Reserved Pursuant to Section 2.01(j). If, at
any time and from time to time, any Working Capital B-1
Commitments are reserved pursuant to Section 2.01(j) and either
(i) an Event of Default shall have occurred and be continuing or
(ii) the Termination Date shall have occurred, then, upon the
occurrence of any of the events described in clause (i) or (ii)
above, Citibank may, whether in addition to the taking by the
Agent of any of the actions described in Section 6.01 or 6.02 or
otherwise, make demand upon Uniroyal to, and forthwith upon such
demand Uniroyal will, pay to Citibank in same day funds at
Citibank's office designated in such demand, for deposit in a
special cash collateral account to be maintained in the name of
Citibank Seoul and under the sole dominion and control of
Citibank at such place as shall be designated by Citibank, an
amount equal to the Seoul Guaranty Amount on the date of such
demand.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender
Party (in its capacities as a Lender, a Swing Line Bank (if
applicable), an Issuing Bank (if applicable) and, on behalf of
itself and its Affiliates, a potential Hedge Bank) hereby
appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As
to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the
Debt resulting from the Advances), the Agent shall not be
required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions
shall be binding upon all Lender Parties and all holders of
Notes; provided, however, that the Agent shall not be required
to take any action that exposes the Agent to personal liability
or that is contrary to this Agreement or applicable law. The
Agent agrees to give to each Lender Party prompt notice of each
notice given to it by any Borrower pursuant to the terms of this
Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the
Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by
it or them under or in connection with the Loan Documents,
except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the Lender that made any
Advance as the holder of the Debt resulting therefrom until the
Agent receives and accepts an Assignment and Acceptance entered
into by such Lender, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.07; (b) may consult with
legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and shall not be responsible
to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in
connection with the Loan Documents; (d) shall not have any duty
to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of any Loan
Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party;
(e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any
lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall
incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument
or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Citicorp and Affiliates. With respect
to its Commitments, the Advances made by it and any Notes issued
to it, Citicorp shall have the same rights and powers under the
Loan Documents as any other Lender Party and may exercise the
same as though it were not the Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly
indicated, include Citicorp in its individual capacity.
Citicorp and its affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of
business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan
Party or any such Subsidiary, all as if Citicorp were not the
Agent and without any duty to account therefor to the Lender
Parties.
SECTION 7.04. Lender Party Credit Decision. Each
Lender Party acknowledges that it has, independently and without
reliance upon the Agent or any other Lender Party and based on
the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Agent or any other
Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. (a) Each Lender
Party severally agrees to indemnify the Agent (to the extent not
promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent in any
way relating to or arising out of the Loan Documents or any
action taken or omitted by the Agent under the Loan Documents;
provided, however, that no Lender Party shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Agent promptly upon demand
for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the
Borrowers under Section 8.04, to the extent that the Agent is
not promptly reimbursed for such costs and expenses by the
Borrowers. For purposes of this Section 7.05(a), the Lender
Parties' respective ratable shares of any amount shall be
determined, at any time, according to their respective Working
Capital Commitments at such time. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any
time, such Lender Party's Commitment with respect to the
Facility under which such Defaulted Advance was required to have
been made shall be considered to be unused for purposes of this
Section 7.05(a) to the extent of the amount of such Defaulted
Advance. The failure of any Lender Party to reimburse the Agent
promptly upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Agent as provided
herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse the Agent for its ratable
share of such amount, but no Lender Party shall be responsible
for the failure of any other Lender Party to reimburse the Agent
for such other Lender Party's ratable share of such amount.
(b) Each Lender Party severally agrees to
indemnify each Issuing Bank (to the extent not promptly
reimbursed by the Borrowers) from and against such Lender
Party's ratable share (determined as provided below) of any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against such Issuing Bank in any way relating to
or arising out of the Loan Documents or any action taken or
omitted by such Issuing Bank under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from such Issuing Bank's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender
Party agrees to reimburse such Issuing Bank promptly upon demand
for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the
Borrowers under Section 8.04, to the extent that such Issuing
Bank is not promptly reimbursed for such costs and expenses by
the Borrowers. For purposes of this Section 7.05(b), the Lender
Parties' respective ratable shares of any amount shall be
determined, at any time, according to their respective Working
Capital Commitments at such time. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any
time, such Lender Party's Commitment with respect to the
Facility under which such Defaulted Advance was required to have
been made shall be considered to be unused for purposes of this
Section 7.05(b) to the extent of the amount of such Defaulted
Advance. The failure of any Lender Party to reimburse such
Issuing Bank promptly upon demand for its ratable share of any
amount required to be paid by the Lender Parties to such Issuing
Bank as provided herein shall not relieve any other Lender Party
of its obligation hereunder to reimburse such Issuing Bank for
its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to
reimburse such Issuing Bank for such other Lender Party's
ratable share of such amount.
(c) Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05
shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan
Documents.
SECTION 7.06. Successor Agents. The Agent may resign
as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrowers and may
be removed as to all of the Facilities at any time with or
without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent as to such of the Facilities
as to which the Agent has resigned or been removed, subject, so
long as no Default shall have occurred and be continuing, to the
consent of Crompton Corp., such consent not to be unreasonably
withheld or delayed. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Required Lenders' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, subject, so long as
no Default shall have occurred and be continuing, to the consent
of Crompton Corp., such consent not to be unreasonably withheld
or delayed, which shall be a commercial bank organized under the
laws of the United States or of any State thereof and having a
combined capital and surplus of at least US$250,000,000. Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent as to all of the Facilities, such successor
Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent as to
less than all of the Facilities, such successor Agent shall
succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent as to
such Facilities, other than with respect to funds transfers and
other similar aspects of the administration of Borrowings under
such Facilities, issuances of Letters of Credit (notwithstanding
any resignation as Agent with respect to the Letter of Credit
Facility) and payments by the Borrowers in respect of such
Facilities, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement as to such
Facilities, other than as aforesaid. After any retiring Agent's
resignation or removal hereunder as Agent as to all of the
Facilities, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Agent as to any Facilities under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement or any Notes or any
other Loan Document, nor consent to any departure by any
Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that (a) no amendment, waiver or consent
shall, unless in writing and signed by all of the Lenders, do
any of the following at any time: (i) waive any of the
conditions specified in Section 3.01, or, in the case of the
Initial Extension of Credit to any Designated Subsidiary or
Designated Italian Subsidiary, Section 3.02, (ii) change the
number of Lenders or the percentage of (x) the Commitments, (y)
the aggregate unpaid principal amount of the Advances or (z) the
aggregate Available Amount of outstanding Letters of Credit
that, in each case, shall be required for the Lenders or any of
them to take any action hereunder, (iii) reduce or limit the
obligations of any Guarantor under Section 1 of the Guaranty to
which it is a party or otherwise limit such Guarantor's
liability with respect to the Obligations owing to the Agent and
the Lender Parties, (iv) amend this Section 8.01 or (v) limit
the liability of any Loan Party under any of the Loan Documents
and (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender that has a
Commitment under any Working Capital Facility if affected by
such amendment, waiver or consent, (i) increase the Commitments
of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the
Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender, (iii) postpone any date fixed
for any payment or prepayment of principal of, or interest on,
the Advances payable to such Lender or any fees or other amounts
payable hereunder to such Lender or (iv) change the order of
application of any prepayment set forth in Section 2.07 in any
manner that materially affects such Lender; provided further
that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank or each Issuing Bank, as the
case may be, in addition to the Lenders required above to take
such action, affect the rights or obligations of the Swing Line
Bank or of the Issuing Banks, as the case may be, under this
Agreement; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action,
affect the rights or duties of the Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy or telex communication) and
mailed, telegraphed, telecopied, telexed or delivered, if to the
Borrowers, addressed both c/o Crompton Corp. at its address at
One Station Place, Metro Center, Stamford, CT 06902, Attention:
Chief Financial Officer and c/o Uniroyal Corp. at its address at
World Headquarters, Benson Road, Middlebury, CT 06749,
Attention: Chief Financial Officer; if to any Initial Lender or
any Initial Issuing Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any
other Lender Party, at its Domestic Lending Office specified in
the Assignment and Acceptance pursuant to which it became a
Lender Party; and if to the Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: Carolyn Sheridan;
or, as to the Borrowers or the Agent, at such other address as
shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the
Borrowers and the Agent. All such notices and communications
shall (a) when mailed, be effective three Business Days after
the same is deposited in the mails, (b) when mailed for next day
delivery by a reputable freight company or reputable overnight
courier service, be effective one Business Day thereafter, and
(c) when sent by telegraph, telecopier or telex, be effective
when the same is confirmed by telephone, telecopier confirmation
or return telecopy or telex answerback, respectively, except
that notices and communications to the Agent pursuant to Article
II, III or VII shall not be effective until received by the
Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed
counterpart thereof. Delivery of a notice from any Borrower
pursuant to Section 5.03(a) shall be deemed, solely with respect
to such Section, notice from all Borrowers.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender Party or the Agent to exercise, and no delay
in exercising, any right hereunder or under any Note shall
operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrowers
jointly and severally agree to pay on demand (i) all costs and
expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment
of the Loan Documents (including, without limitation, (A) all
due diligence, collateral review, syndication, transportation,
computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Agent with
respect thereto, with respect to advising the Agent as to its
rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising
out of any Default or any events or circumstances that may give
rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto) and (ii)
all costs and expenses of the Agent and the Lender Parties in
connection with the enforcement of the Loan Documents, whether
in any action, suit or litigation, any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally
(including, without limitation, the reasonable fees and expenses
of counsel for the Agent and each Lender Party with respect
thereto); provided that, notwithstanding anything herein to the
contrary and pursuant to Section 8.16, each B-2 Borrower, each
Italian Borrower and the Canadian Borrower shall only be
responsible for such B-2 Borrower's, such Italian Borrower's or
the Canadian Borrower's Borrower's Share of such costs and
expenses.
(b) The Borrowers jointly and severally agree to
indemnify and hold harmless the Agent, each Lender Party and
each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by
or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related
to or in connection with (i) the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions
contemplated thereby, or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of
its Subsidiaries or any Environmental Action relating in any way
to any Loan Party or any of its Subsidiaries, except to the
extent such claim, damage, loss, liability or expense is found
in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.16, each B-2 Borrower, each Italian Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such Italian Borrower's or the Canadian Borrower's
Borrower's Share of such amount. In the case of any
investigation, litigation or other proceeding to which the
indemnity in this Section 8.04(b) applies, such indemnity shall
be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated. The
Borrowers also jointly and severally agree not to assert any
claim against the Agent, any Lender Party or any of their
Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions
contemplated thereby.
(c) If any payment of principal of, or Conversion
of, any Eurocurrency Rate Advance is made by any Borrower to or
for the account of a Lender Party other than on the last day of
the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.10(b)(i) or 2.12(a),
acceleration of the maturity of the Advances pursuant to Section
6.01 or for any other reason, or by an Eligible Assignee to a
Lender Party other than on the last day of the Interest Period
for such Advance upon an assignment of rights and obligations
under this Agreement pursuant to Section 8.07 as a result of a
demand by Crompton Corp. pursuant to Section 8.07(a), such
Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Agent), pay to the Agent for the account of
such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any
costs, expenses or other amounts payable by it under any Loan
Document, including, without limitation, fees and expenses of
counsel and indemnities, such amount may be paid on behalf of
such Loan Party by the Agent or any Lender Party, in its sole
discretion, and will result in an increase in the amount owing
by such Loan Party to the Agent or such Lender Party.
(e) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan
Document, the agreements and obligations of the Borrowers
contained in Sections 2.12 and 2.15 and this Section 8.04 shall
survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan
Documents.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default
and (b) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Agent to declare the
Advances due and payable pursuant to the provisions of Section
6.01, each Lender Party and each of its respective Affiliates is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply
any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at
any time owing by such Lender Party or such Affiliate to or for
the credit or the account of any Borrower against any and all of
the Obligations of such Borrower now or hereafter existing under
this Agreement and the Note or Notes (if any) held by such
Lender Party, irrespective of whether such Lender Party shall
have made any demand under this Agreement or such Note or Notes
and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify any Borrower after any such set-
off and application; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and
application. The rights of each Lender Party and its respective
Affiliates under this Section 8.05 are in addition to other
rights and remedies (including, without limitation, other rights
of set-off) that such Lender Party and its respective Affiliates
may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by each
Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender and each Initial Issuing Bank
that such Initial Lender and such Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to
the benefit of each Borrower, the Agent and each Lender Party
and their respective successors and assigns, except that no
Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the
Lender Parties.
SECTION 8.07. Assignments and Participations. (a)
Each Lender may (and, so long as no Default shall have occurred
and be continuing, if demanded by Crompton Corp. (following a
demand by such Lender pursuant to Section 2.12 or 2.15 or if
such Lender shall be a Defaulting Lender) assign to one or more
Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitment or Commitments, the Advances
owing to it and any Note or Notes held by it); provided,
however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations
under and in respect of all of the Facilities, (ii) except in
the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount
of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment)
shall in no event be less than US$20,000,000 or, if the
aggregate amount of the Commitment of such assigning Lender is
less than US$20,000,000, all of such Lender's Commitment, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each
such assignment made as a result of a demand by Crompton Corp.
pursuant to this Section 8.07(a) shall be arranged by Crompton
Corp. after consultation with the Agent and shall be either an
assignment of all of the rights and obligations of the assigning
Lender under this Agreement and the other Loan Documents or an
assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such
assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement and the
other Loan Documents, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by Crompton Corp.
pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the
applicable Borrowers or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together
with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender
under this Agreement, (vi) no such assignments shall be
permitted without the consent of the Agent until the Agent shall
have notified the Lender Parties that syndication of the
Commitments hereunder has been completed, and (vii) the parties
to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of US$3,500;
provided further that for the purposes of making Working Capital
B-2 Advances, any Working Capital B-2 Lender may assign its
rights and obligations under the Working Capital B-2 Facility to
any Affiliate of such Working Capital B-2 Lender.
(b) Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be
a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender
or Issuing Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Lender's or Issuing
Bank's rights and obligations under this Agreement, such Lender
or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Lender Party assignor thereunder and the
assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender Party
makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity,
enforceability or genuineness of, this Agreement or any other
Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (ii) such assigning Lender Party
makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any
Borrower or any other Loan Party or the performance or
observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished
pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such
assigning Lender Party or any other Lender Party and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to
be performed by it as a Lender or Issuing Bank, as the case may
be.
(d) The Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and
Acceptance and Italian Lender Joinder Agreement delivered to and
accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under
each Facility of, and principal amount of the Advances owing
under each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party
hereunder for all purposes of this Agreement. The Register
shall be available for inspection by any Borrower or any Lender
Party at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and
Acceptance and, in the case of an assignment of any Italian
Commitment, an Italian Lender Joinder Agreement, in each case
executed by an assigning Lender Party and an assignee, together
with any Note or Notes subject to such assignment, the Agent
shall, if each such Assignment and Acceptance and Italian Lender
Joinder Agreement (if applicable) has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance and such Italian Lender Joinder
Agreement (if applicable), (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrowers.
(f) Each Issuing Bank may assign to one or more
Eligible Assignees all or a portion of its rights and
obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) except in
the case of an assignment to a Person that immediately prior to
such assignment was an Issuing Bank or an assignment of all of
an Issuing Bank's rights and obligations under this Agreement,
the amount of the Letter of Credit Commitment of the assigning
Issuing Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than
US$10,000,000 and shall be in an integral multiple of
US$1,000,000 in excess thereof, (ii) each such assignment shall
be to an Eligible Assignee and (iii) the parties to each such
assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with a processing and recordation fee of
US$3,500.
(g) Each Lender Party may sell participations to
one or more Persons (other than any Loan Party or any of its
Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it
and the Note or Notes (if any) held by it); provided, however,
that (i) such Lender Party's obligations under this Agreement
(including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender Party shall remain the
holder of such Advances and any such Note for all purposes of
this Agreement, (iv) the Borrowers, the Agent and the other
Lender Parties shall continue to deal solely and directly with
such Lender Party in connection with such Lender Party's rights
and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or
any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Advances or any
fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed
for any payment of principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, in each case to the
extent subject to such participation.
(h) Any Lender Party may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant, any
information relating to the Borrowers furnished to such Lender
Party by or on behalf of the Borrowers; provided, however, that,
prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it
from such Lender Party.
(i) Notwithstanding any other provision set forth
in this Agreement, any Lender Party may at any time create a
security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to
it and any Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 8.08. Designated Subsidiaries and Designated
Italian Subsidiaries. Crompton Corp. may at any time, and from
time to time, by delivery to the Agent of a Designation Letter
duly executed by Crompton Corp. and the respective Subsidiary
and substantially in the form of Exhibit F hereto, designate
such Subsidiary as a "Designated Subsidiary" or a "Designated
Italian Subsidiary" for purposes of this Agreement and such
Subsidiary shall thereupon become a "Designated Subsidiary" or a
"Designated Italian Subsidiary", respectively, for purposes of
this Agreement and, as such, shall have all of the rights and
obligations of a Borrower hereunder; provided, however, that no
such Subsidiary incorporated under the laws of any United States
jurisdiction may be appointed a "Designated Subsidiary" or a
"Designated Italian Subsidiary". The Agent shall promptly
notify each Lender of each such designation by Crompton Corp.
and the identity of the respective Subsidiary.
SECTION 8.09. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 8.10. No Liability of the Issuing Banks.
Each Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither any Issuing Bank
nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee
in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such
Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure
of any documents to bear any reference or adequate reference to
the Letter of <PAGE>
Credit; or (d) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit, except that
the relevant Borrower shall have a claim against such Issuing
Bank, and such Issuing Bank shall be liable to such Borrower, to
the extent of any direct, but not consequential, damages
suffered by such Borrower that such Borrower proves were caused
by (i) such Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under any
Letter of Credit comply with the terms of the Letter of Credit
or (ii) such Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of
a draft and certificates strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank may accept
documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any
notice or information to the contrary.
SECTION 8.11. Confidentiality. Neither the Agent nor
any Lender Party shall disclose any Confidential Information to
any Person without the consent of Crompton Corp., other than (a)
to the Agent's or such Lender Party's Affiliates and their
officers, directors, partners, employees, agents and advisors
and to actual or prospective Eligible Assignees and
participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process,
provided that, other than with respect to Confidential
Information otherwise permitted to be disclosed pursuant to
clause (d) below, the Agent or such Lender Party shall, unless
prohibited by applicable law or regulation or court order, give
notice to Crompton Corp. of any such requirement to disclose
such Confidential Information, and, if practicable, such notice
shall be given prior to such disclosure, provided, however, that
the failure to give such notice shall not prohibit such
disclosure, (c) to any rating agency when required by it,
provided that, prior to any such disclosure, such rating agency
shall undertake to preserve the confidentiality of any
Confidential Information relating to the Borrowers received by
it from such Lender Party and (d) as requested or required by
any state, federal or foreign authority or examiner or the
National Association of Insurance Commissioners or any state or
federal authority regulating such Lender Party.
SECTION 8.12. Jurisdiction, Etc. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of
any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to
which it is a party, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such
federal court. Each Initial Borrower hereby agrees that service
of process in any such action or proceeding brought in any such
New York State court or in such federal court may be made upon
CT Corporation System at its offices at 1633 Broadway, New York,
New York 10019 (the "Process Agent") and each Designated
Subsidiary and Designated Italian Subsidiary hereby irrevocably
appoints the Process Agent its authorized agent to accept such
service of process, and agrees that the failure of the Process
Agent to give any notice of any such service shall not impair or
affect the validity of such service or of any judgment rendered
in any action or proceeding based thereon. Each Borrower hereby
further irrevocably consents to the service of process in any
action or proceeding in such courts by the mailing thereof by
any parties hereto by registered or certified mail, postage
prepaid, to such Borrower at its address specified pursuant to
Section 8.02. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to
this Agreement or any of the other Loan Documents in the courts
of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party in any New York State or
federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 8.13. Judgment. (a) If for the purposes of
obtaining judgment in any court it is necessary to convert a sum
due hereunder or under any Notes in US Dollars into another
currency, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures
the Agent could purchase US Dollars with such other currency at
Citibank's principal office in London at 11:00 A.M. (London
time) on the Business Day preceding that on which final judgment
is given.
(b) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder or
under any Notes in a Foreign Currency into US Dollars, the
parties agree to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could
purchase such Foreign Currency with US Dollars at Citibank's
principal office in London at 11:00 A.M. (London time) on the
Business Day preceding that on which final judgment is given.
(c) The obligation of any Borrower in respect of
any sum due from it to any Lender Party or the Agent hereunder
or under a Note held by such Lender Party shall, notwithstanding
any judgment in a currency other than US Dollars, be discharged
only to the extent that on the Business Day following receipt by
such Lender Party or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency, such Lender Party
or the Agent (as the case may be) may in accordance with normal
banking procedures purchase US Dollars with such other currency;
if the US Dollars so purchased are less than such sum due to
such Lender Party or the Agent (as the case may be) in US
Dollars, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender
Party or the Agent (as the case may be) against such loss, and
if the US Dollars so purchased exceed such sum due to any Lender
Party or the Agent (as the case may be) in US Dollars, such
Lender Party or the Agent (as the case may be) agrees to remit
to such Borrower such excess.
SECTION 8.14. Power of Attorney. Each Subsidiary of
Crompton Corp. may from time to time authorize and appoint
Crompton Corp. as its attorney-in-fact to execute and deliver
(a) any amendment, waiver or consent in accordance with Section
8.01 on behalf of and in the name of such Subsidiary and (b) any
notice or other communication hereunder, on behalf of and in the
name of such Subsidiary. Such authorization shall become
effective as of the date on which such Subsidiary delivers to
the Agent a power of attorney enforceable under applicable law
and any additional information to the Agent as necessary to make
such power of attorney the legal, valid and binding obligation
of such Subsidiary.
SECTION 8.15. Governing Law. This Agreement, each
Designation Letter and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York,
except as referred to in Section 8.17.
SECTION 8.16. Limitation on B-2 Borrower Obligations,
Italian Borrower Obligations and Canadian Borrower Obligations.
Notwithstanding anything herein to the contrary, to the extent a
B-2 Borrower, an Italian Borrower or the Canadian Borrower is
purported to owe any amounts hereunder, such B-2 Borrower, such
Italian Borrower or the Canadian Borrower, as the case may be,
shall only owe such amount solely with respect to its own
Obligations. In addition, if any of the undertakings or
obligations of any B-2 Borrower, any Italian Borrower or the
Canadian Borrower under this Agreement, the Loan Documents or
any contract, document or instrument entered into in connection
therewith or relating thereto would otherwise be or become
unenforceable in full or in part as a result of, or because of
any mandatorily applicable provisions of the law of the
jurisdiction under which such B-2 Borrower, such Italian
Borrower or the Canadian Borrower is incorporated, then such
undertakings and obligations of such B-2 Borrower, such Italian
Borrower or the Canadian Borrower shall be deemed to be limited
to the extent necessary to make them valid, legal and
enforceable under such law. For the avoidance of doubt, if any
of the obligations of any B-2 Borrower, any Italian Borrower or
the Canadian Borrower to make payments would otherwise be or
become invalid, illegal or unenforceable because of the
provisions contained in provisions of applicable statutory law
aimed at preserving such B-2 Borrower's, such Italian Borrower's
or the Canadian Borrower's share capital, such B-2 Borrower,
such Italian Borrower or the Canadian Borrower, respectively,
shall be obligated to make payments only to the extent it would
be legal for such payments to be made under such provision.
SECTION 8.17. Substitution of Currency. If any
countries parties to the Treaty on the European Economic and
Monetary Union adopts the Euro in substitution for its national
currency in effect on the date hereof, the regulations of the
European Commission relating to the Euro shall apply to this
Agreement and any Notes. The circumstances and consequences
described in this Section 8.17 entitle none of the Borrowers,
any other Loan Parties, the Agent nor any Lender to rescission,
notice, repudiation, adjustment or renegotiation of the terms
and conditions of this Agreement or any Notes or to raise other
defenses or to request any additional compensation claim, nor
will they affect any of the other obligations of any Borrower or
any other Loan Party under this Agreement and the Notes.
SECTION 8.18. Waiver of Jury Trial. Each of the
Borrowers, the Agent and the Lender Parties irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the actions of the Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above
written.
CROMPTON & KNOWLES CORPORATION
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
CROMPTON & KNOWLES COLORS INCORPORATED
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
DAVIS-STANDARD CORPORATION
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
INGREDIENT TECHNOLOGY CORPORATION
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
UNIROYAL CHEMICAL COMPANY, INC.
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
C & K SERVICES SA
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
DAVIS-STANDARD (DEUTSCHLAND) GMBH
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
DAVIS STANDARD (FRANCE) SARL
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
ER-WE-PA DAVIS-STANDARD GMBH
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
UNIROYAL CHEMICAL B.V.
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
UNIROYAL CHEMICAL CO.
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
UNIROYAL CHIMICA S.R.L..
By/s/Frank Manganella
Name: Frank Manganella
Title: Authorized Legal Representative
CITICORP USA, INC., as Agent
By/s/Robin F. Lenna
Name: Robin F. Lenna
Title: Attorney-In-Fact
Working Capital A Lenders
Working Capital B-1 Lenders
Working Capital Working Capital
A Commitment B-1 Commitment
$41,200,000 $13,800,000
CITICORP USA, INC.
By/s/Robin F. Lenna
Name: Robin F. Lenna
Title: Attorney-In-Fact
<PAGE>
Working Capital Working Capital
A Commitment B-1 Commitment
$31,300,000 $ 6,200,000
THE CHASE MANHATTAN BANK
By/s/Robert T. Sacks
Name: Robert T. Sacks
Title: Managing Director
$25,000,000 $ 5,000,000
ABN AMRO BANK N.V., NEW YORK BRANCH
By/s/Pauline McHugh
Name: Pauline McHugh
Title: Vice President
By/s/George Dugan
Name: George Dugan
Title: Vice President
$12,500,000 $0
BANCA COMMERCIALE ITALIANA - NEW YORK BRANCH
By/s/K. Purelis
Name: K. Purelis
Title: Vice President
By/s/Charles Dougherty
Name: Charles Dougherty
Title: Vice President
$25,000,000 $ 5,000,000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By/s/Donald J. Chin
Name: Donald J. Chin
Title: Managing Director
Working Capital Working Capital
A Commitment B-1 Commitment
$25,000,000 $ 5,000,000
THE BANK OF NEW YORK
By/s/ William G.C. Dakin
Name: William G.C. Dakin
Title: Vice President
$25,000,000 $ 5,000,000
BANK BOSTON, N.A.
By/s/JoAnn Keller
Name: JoAnn Keller
Title: Senior Vice President
$25,000,000 $ 5,000,000
BHF - BANK AKTIENGESELLSCHAFT
By/s/Linda Pace
Name: Linda Pace
Title: Vice President
By/s/Thomas Scifo
Name: Thomas Scifo
Title: Assistant Vice President
$25,000,000 $ 5,000,000
CIBC INC.
By/s/Timothy Doyle
Name: Timothy Doyle
Title: Managing Director
$25,000,000 $ 5,000,000
CORESTATES BANK, N.A.
By/s/Robert A. Brown
Name: Robert A. Brown
Title: Vice President
Working Capital Working Capital
A Commitment B-1 Commitment
$25,000,000 $ 5,000,000
CREDIT LYONNAIS NEW YORK BRANCH
By/s/Vladimir Labun
Name: Vladimir Labun
Title: First Vice President-Manager
$25,000,000 $ 5,000,000
FIRST UNION NATIONAL BANK
By/s/Reyno A. Giullonge, Jr.
Name: Reyno A. Giullonge
Title: SVP
$40,000,000 $ 5,000,000
FLEET NATIONAL BANK
By/s/Robert C. Rubino
Name: Robert C. Rubino
Title: Senior Vice President
$25,000,000 $ 5,000,000
TORONTO DOMINION (NEW YORK), INC.
By/s/Jorge A. Garcia
Name: Jorge A. Garcia
Title: Vice President
Working Capital B-2 Lenders
Working Capital
B-2 Commitment
$ 4,500,000 CITIBANK, N.A.
By/s/Harry W. Corkran
Name: harry W. Corkran
Title: Vice President
$ 3,750,000 THE CHASE MANHATTAN BANK
By/s/Robert T. Sacks
Name: Robert T. Sacks
Title: Managing Director
$ 6,750,000 ABN AMRO BANK N.V., NEW YORK BRANCH
By/s/Pauline McHugh
Name: Pauline McHugh
Title: Vice President
By/s/George Dugan
Name: George Dugan
Title: Vice President
$ 3,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By/s/Donald J. Chin
Name: Donald J. Chin
Title: Managing Director
$3,000,000 THE BANK OF NEW YORK
By/s/William G.C. Dakin
Name: William G.C. Dakin
Title: Vice President
Working Capital
B-2 Commitment
$ 3,000,000 BANK BOSTON, N.A.
By/s/JoAnn Keller
Name: JoAnn Keller
Title: Senior Vice President
$ 3,000,000 BHF - BANK AKTIENGESELLSCHAFT
By/s/Linda Pace
Name: Linda Pace
Title: Vice President
By/s/Thomas Scifo
Name: Thomas Scifo
Title: Assistant Vice President
$ 3,000,000 CIBC WOOD GUNDY PLC
By/s/Timothy Doyle
Name: Timothy Doyle
Title: Managing Director
$ 3,000,000 CORESTATES BANK, N.A.
By/s/Robert A. Brown
Name: Robert A. Brown
Title: Vice President
$ 3,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By/s/Vladimir Labun
Name: Vladimir Labun
Title: First Vice President-Manager
Working Capital
B-2 Commitment
$ 3,000,000 FIRST UNION NATIONAL BANK
By/s/Reyno A. Giallonge, Jr.
Name: Reyno A. Giallonge, Jr.
Title: SVP
$ 3,000,000 FLEET NATIONAL BANK
By/s/Robert C. Rubino
Name: Robert C. Rubino
Title: Senior Vice President
$ 3,000,000 TORONTO DOMINION (NEW YORK), INC.
By/s/Jorge A. Garcia
Name: Jorge A. Garcia
Title: Vice President
Italian Lenders
Italian Commitment
$6,750,000 CITIBANK, N.A., MILAN BRANCH
By/s/Nicoletta Zappatini
Name: Nicoletta Zappatini
Title: Vice President
Italian Commitment
$12,500,000 BANCA COMMERCIALE ITALIANA, LATINA BRANCH
By/s/Charles Dougherty
Name: Charles Dougherty, VP
Title: As Power of Attorney
By/s/Karen Purelis
Name: Karen Purelis, VP
Title: As Power of Attorney
$ 7,000,000 BANK OF AMERICA NT&SA, MILAN BRANCH
By/s/Luis A. Moncada
Name: Luis A. Moncada
Title: Vice President
$ 8,750,000 CHASE MANHATTAN BANK, MILAN BRANCH
By/s/Joseph E. Orza
Name: Joseph E. Orza
Title: Vice President
Canadian Lenders
Canadian Commitment
$18,750,000 CITIBANK CANADA
By/s/Eric
Name: Eric
Title: Vice President
$ 5,000,000 BANK OF AMERICA CANADA
By/s/Richard J. Hall
Name: Richard J. Hall
Title: Vice President
Canadian Commitment
$15,000,000 CANADIAN IMPERIAL BANK OF COMMERCE
By/s/Mauro Spagolo
Name: Mauro Spagolo
Title: Executive Director
$11,250,000 CHASE MANHATTAN BANK OF CANADA
By/s/Christine Chan
Name: Christine Chan
Title: Vice President
By/s/Arun K. Bery
Name: Arun K. Bery
Title: Vice President
$ 5,000,000 CREDIT LYONNAIS CANADA
By/s/Helen A. Thomas
Name: Helen A. Thomas
Title: Vice-President
By/s/David J. Farmer
Name: David J. Farmer
Title: Vice-President and Manager, Central Region
$15,000,000 TORONTO DOMINION
By/s/Jorge A. Garcia
Name: Jorge A. Garcia
Title: Mgr. Cr. Admin.
Initial Issuing Banks
Letter of Credit
Commitment (Facility)
$25,000,000 (A) CITIBANK, N.A.
By/s/Mary W. Corkran
Name: Mary W. Corkran
Title: Vice President
Letter of Credit
Commitment (Facility)
$25,000,000 (A) BANK BOSTON, N.A.
$10,000,000 (B-1)
By/s/JoAnn Keller
Name: JoAnn Keller
Title: Senior Vice President
$10,000,000 (B-1) CITIBANK, N.A., LONDON BRANCH
By/s/Mary W. Corkran
Name: Mary W. Corkran
Title: Vice President
SCHEDULE I
APPLICABLE LENDING OFFICES
Name Domestic Canadian Eurocur. Eurocur. Eurocur.
Eurocur.
of Lending/ Domestic Lending Lending Lending
Lending
Initial Issuing Lending Office Office Office Office
Lender/ Office Office For For For For
Initial Working Working Italian
Canadian
Issuing Capital Capital Borrower
Borrower
Bank A & B-1 B-2 Advances
Advances
Advances Advances
Citicorp USA, Inc.
399 Park Ave N/A 399 Park Ave N/A N/A
N/A
NY, NY 10043 NY, NY 10043
Attn Robin Lenna Attn Robin Lenna
TEL212-559-3974 TEL212-559-3974
FAX212-793-1290 0F AX212-793-1290
Citibank N.A.
399 Park Avenue N/A P.O. Box 12068 N/A
N/A
NY, NY 10043 Counting House
Attn Robin Lenna 53 Pooley Street
TEL212-559-3974 London SE12GA
FAX212-793-1290 Atn Ken Purchase/
David Williams
TEL44-171-500-9675
FAX44-171-500-9701
Citibank, N.A., Milan Branch
N/A N/A N/A N/A Foro Bounaparte 16
N/A
20121 Milan, Italy
Atn N.Nicoletta
Zappatini
TEL39-2-86474-583
FAX39-2-86474-200
Citibank Canada
N/A 123 Front St W N/A N/A N/A 123 Front St W
10th Fl. 10th Fl.
Toronto, Ontario Toronto,
Ontario
Canada M5J 2M3 Canada M5J
2M3
The Chase Manhattan Bank
270 Park Avenue N/A 270 Park Avenue 1 Chaseside N/A
N/A
NY, NY 10017 NY, NY 10017 Bournemouth, Dorset
Atn Robert Sacks Atn Robert Sacks BH77DB
TEL212-270-4118 TEL212-270-4118 Atn European Loans
FAX212-270-7939 FAX212-270-7939 TEL0120-234-2020
FAX0120-234-3706
The Chase Manhattan Bank, Milan Branch
N/A N/A N/A N/A Via Catena, No. 4
N/A
20121 Milan, Italy
Attn: Luca Preziose
TEL: 39-2-8895-2007
FAX: 39-2-8895-2567
The Chase Manhattan Bank of Canada
N/A 1 1st Canadian Pl N/A N/A N/A 1 1st Canadian Pl
100 King St West 100 King St West
Suite 6900 PO Box 106 Suite 6900 PO Box
106
Toronto, Ontario Toronto, Ontario
Canada M5X1A4 Canada M5X1A4
ABN AMRO Bank N.V., New York Branch
500 Park Ave N/A 500 Park Ave 500 Park Ave N/A N/A
NY, NY 10022 NY, NY 10022 NY, NY 10022
Atn: M. Jeter Atn: M. Jeter Atn M. Jeter
TEL212-446-4224 TEL212-446-4224 TEL212-446-4224
FAX212-832-7468 FAX212-832-7468 FAX212-832-7468
Banca Commerciale Italiana, New York Branch
1 William St N/A 1 William St N/A N/A N/A
NY, NY 10004 NY, NY 10004
Atn:B. Carlson Atn:B. Carlson
TEL212-607-3886 TEL212607-3886
FAX212-809-2124 FAX212809-2124
Banca Commerciale Italiana, Latina Branch
N/A N/A N/A N/A Via Cerveteri, 2 N/A
04100 Latina, Italy
Atn S. Barmucci
TEL:39-7-73-486-034
FAX:39-7-73-694-109
w/ copy to B. Carlson
1 William St
NY, NY 10004
Bank of America NT&SA
200 W Jackson Blvd N/A 200 W Jackson Blvd N/A N/A
N/A
Chicago, IL 60697 Chicago, IL 60697
Atn: R. DiMatteo Atn: R.DiMatteo
TEL312-828-1988 TEL312-828-1988
FAX312-974-9626 FAX312-974-9626
Bank of America NT&SA, London Branch
N/A N/A N/A 1 Alie Street N/A N/A
London E1 8DE England
Attn: Keith Thomas
TEL: 44-171-634-4436
FAX: 44-171-634-4707
Bank of America NT&SA, Milan Branch
N/A N/A N/A N/A Corso Matteotti, 10 N/A
20121 Milan, Italy
Attn: Louis Moncada
TEL: 39-2-760-69-341
FAX: 39-2-760-69-210
Bank of America Canada
N/A 200 Front St W, N/A N/A N/A 200 Front St W,
Suite 2700 Suite 2700
Toronto, Ontario Toronto,
Ontario
Canada M5V 8L2 Canada M5V 8L2
Bank of Boston
1 Landmark Sq N/A 1 Landmark Sq 1 Landmark Square N/A
N/A
20th Floor 20th Floor 20th Floor
Stamford, CT 06901 Stamford, CT 06901 Stamford, CT 06901
Atn: JoAnn Keller Atn: JoAnn Keller Atn: JoAnn Keller
TEL:(203) 973-1941 TEL:(203) 973-1941 TEL:(203) 973-1941
FAX:(203) 967-8169 FAX:(203) 967-8169 FAX:(203) 967-8169
The Bank of New York
1 Wall Street N/A 1 Wall Street 1 Wall Street N/A
N/A
22nd Floor 22nd Floor 22nd Floor
NY, NY 10286 NY, NY 10286 NY, NY 10286
Atn:David Judge Atn:David Judge NY, NY 10286
TEL:212635-6861 TEL:212635-6861 TEL:212635-6861
FAX:212635-6999 FAX:212635-6999 FAX:212635-6999
BHF-Bank Aktiengesellschaft
590 Madison Ave N/A 590 Madison Ave 590 Madison Ave N/A
N/A
NY, NY 10022 NY, NY 10022 NY, NY 10022
Atn: L. Pace Atn: L. Pace Atn: L. Pace
TEL212-756-5915 TEL212-756-5915 TEL212-756-5915
FAX212-756-5536 FAX212-756-5536 FAX212-756-5536
CIBC Inc.
2727 Paces Ferry Rd N/A 2727 Paces Ferry Road N/A N/A
N/A
Suite 1200 Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339
Attn:Sheila Hogan Attn: Sheila Hogan
TEL:(770) 319-4820 TEL:(770) 319-4820
FAX:(770) 319-4950 FAX:(770) 319-4950
CIBC Wood Gundy Plc
N/A N/A N/A CIBC, Cottons Centre N/A N/A
Cottons Lane
SE1 2QL London, England
Attn: Andy Rose
TEL:44-171-234-6151
FAX:44-171-234-6433
Canadian Imperial Bank of Commerce
N/A Commerce Court W, N/A N/A N/A Commerce Court W,
7th Floor 7th Floor
Toronto, Ontario Toronto, Ontario
Canada M5L 1A2 Canada M5L 1A2
CoreStates Bank, N.A.
1345 Chestnut St N/A 1345 Chestnut St 24 Monument St N/A
N/A
PO Box 7618 PO Box 7618 London EC3R 8AJ
Phil., PA 19101 Phil., PA 19101 England
Attn: Robert Brown Attn: Robert Brown Atn: Ruth Hunter
TEL:(215) 973-2372 TEL:(215) 973-2372 TEL:44-171-962-2821
FAX:(215) 973-7820 FAX:(215) 973-7820 FAX:44-171-962-2877
Credit Lyonnais, NY Branch
1301 Ave. N/A 1301 Ave. 1301 Ave. N/A N/A
of Americas of Americas of Americas
NY, NY 10019 NY, NY 10019 NY, NY 10019
Attn:T. Randolph Attn:T. Randolph Attn:T. Randolph
TEL:(212)261-7344 TEL:(212)261-7344 TEL:(212)261-7344
FAX:(212)459-3179 FAX:(212)459-3179 FAX:(212)459-3179
Credit Lyonnais Canada
N/A 1 Financial Pl N/A N/A N/A 1 Financial Pl
1 Adelaide St E, 1 Adelaide St E,
Suite 2505 Suite 2505
Toronto, Ontario Toronto, Ontario
Canada M5C 2V9 Canada M5C 2V9
First Union National Bank
550 Broad St, 550 Broad St, 550 Broad St, N/A
N/A
NJ1535 NJ1535 NJ1535
Newark, NJ 07102 Newark, NJ 07102 Newark, NJ 07102
Attn: Mary Tenore Attn: Mary Tenore Attn:Mary Tenore
TEL:(201)565-3607 TEL:(201)565-3607 TEL:(201)565-3607
FAX:(201)565-3978 FAX:(201)565-3978 FAX:(201)565-3978
Fleet National Bank
1 Landmark Sq 1 Landmark Sq 1 Landmark Sq N/A
N/A
12th Floor 12th Floor 12th Floor
Stamford, CT 06904 Stamford, CT 06904 Stamford, CT 06904
Attn: G. Rockwood Attn:G. Rockwood Attn:G. Rockwood
TEL:(203)358-6146 TEL:(203)358-6146 TEL:(203)358-6146
FAX:(203)358-6111 FAX:(203)358-6111 FAX:(203)358-6111
Societe Generale, New York Branch
1221 Ave. of N/A 1221 Ave. of N/A N/A N/A
Americas Americas
NY, NY 10020 NY, NY 10020
Attn:M. O'Donnell Attn:M. O'Donnell
TEL:(212) 278-6853 TEL:(212) 278-6853
FAX:(212) 278-7490 FAX:(212) 278-7490
Societe Generale, Milan Branch
N/A N/A N/A N/A Sedi di Milano N/A
Foro Bounparte, 66
20121 Milan, Italy
Attn: Mauro Lucchesi
TEL: 39-2-854-9320
FAX: 39-2-854-9245
with a copy to: Alan Zinser
1301 Ave. of the Americas
New York, NY 10020
Societe Generale (Canada)
N/A 100 Yonge Street N/A N/A N/A 100 Yonge Street
Suite 1002 Suite 1002
Toronto, Ontario Toronto, Ontario
Canada M5C 2W1 Canada M5C 2W1
Toronto Dominion (New York), Inc.
909 Fannin, Suite 1700 N/A 909 Fannin, Suite 1700 N/A N/A
N/A
Houston, TX 77010 Houston, TX 77010
Attn: Jorge Garcia Attn: Jorge Garcia
TEL: (713) 653-8242 TEL: (713) 653-8242
FAX: (713) 951-9921 FAX: (713) 951-9921
The Toronto-Dominion Bank
N/A P.O. Box 1 N/A Triton Court N/A P.O. Box 1
Toronto Dominion 14/18 Finsbury Sq Toronto
Dominion
Center London EC2A-1DB Center
55 King Street England 55 King Street
Toronto, Ontario Attn:D. Payne Toronto,
Canada M5K 1A2 TEL:011-44-171-920-0272 Ontario
FAX:011-44-171-638-2551 Canada
M5K 1A2
SCHEDULE II
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
PART I:
CROMPTON GUARANTORS
CK Holding Corporation
CNK Disposition Corp.
Crompton & Knowles Colors Incorporated
Davis-Standard Corporation
Ingredient Technology Corporation
Kem Manufacturing Corporation
PART II:
UNIROYAL GUARANTORS
Gustafson, Inc.
Gustafson International Company
Lokar enterprises, Inc.
Trace Chemicals, Inc.
Uniroyal Chemical Brazil Holding, Inc.
Uniroyal Chemical Company, Inc.
Uniroyal Chemical Corporation
Uniroyal Chemical Export Limited
Uniroyal Chemical International Company
Uniroyal Chemical Leasing Company, Inc.
SCHEDULE III
MINOR SUBSIDIARIES
CNK Disposition Corporation/ Florida
Crompton & Knowles Acceptance Corp./Massachusetts
Crompton & Knowles Chemical Realty/Pennsylvania
Crompton & Knowles International Inc./Virgin Islands
Killion Extruders, Inc. (Being dissolved)/New Jersey
Orlex Chemicals Corp. (Being dissolved)/New Jersey
C&K Specialities Holding B.V./ Netherlands
Crompton & Knowles (Espana) SL/Espain
Crompton & Knowles (Hong Kong) Ltd./Hong Kong
Crompton & Knowles (International) SARL/France
Crompton & Knowles (Italia) SRL/Italy
Crompton & Knowles (Korea) Ltd/Korea
Crompton & Knowles (Luxembourg) S.A./Luxembourg
Crompton & Knowles (Portugal) LDA/Portugal
Ifatex Chemische Produkte GmbH/Germany
9056-0921 Quebec Inc./Canada
CNK One B.V. (No assets-inactive)/Netherlands
CNK Two B.V. (No assets-inactive)/Netherlands
CNK S.R.L. (Liquidated)/Italy
Italiana S.R.L. (Being Liquidated)/Italy
Uniroyal Chemical Leasing Co., Inc./Delaware
Naugatuck Treatment Company/Connecticut
Interbel Trading, Inc./Florida
Uniroyal Chemical Specialties, Inc./Delaware
Uniroyal Chemical Asia, Ltd./Delaware
Lokar Enterprises, Inc./Delaware
Imobiliaria Hulquimex S.A. de C.V./Mexico
Uniroyal Quimica S.A.C.I./Argentina
Uniroyal Chemical Technology B.V./Netherlands
Uniroyal Chemical S.A.R.L./ Switzerland
Uniroyal Chemical S.A./Spain
Uniroyal Chem. International Sales Corp./Barbados
Uniroyal Chemical Limited/Scotland
Hancock Tire Company Limited/Canada
Uniroyal Chemical Asia Pte Ltd/Singapore
SCHEDULE IV
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
B-2 BORROWERS
Borrower Country of Incorporation
C & K Services SA Belgium
Davis-Standard (Deutschland) GmbH Germany
Davis Standard (France) SARL France
ER-WE-PA Davis-Standard GmbH Germany
Uniroyal Chemical B.V. Netherlands
Uniroyal Chemical Ltd. United Kingdom
SCHEDULE V
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
ITALIAN BORROWERS
Borrower Country of Incorporation
Uniroyal Chimica S.r.L. Italy
SCHEDULE VI
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
ITALIAN LENDERS
Citibank, N.A., Milan Branch
The Chase Manhattan Bank, Milan Branch
Bank of America NT & SA, Milan Branch
Banca Commerciale Italiana, Latina Branch
SCHEDULE VII
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
BORROWER'S ACCOUNTS
Borrower Currency Account No.
Crompton & Knowles U.S. Dollars 4070-6411
Corporation 399 Park Avenue
New York, NY 10043
Crompton & Knowles U.S. Dollars 4070-6438
Colors Incorporated 399 Park Avenue
New York, NY 10043
Davis-Standard U.S. Dollars 4070-6462
Corporation 399 Park Avenue
New York, NY 10043
Ingredient Technology U.S. Dollars 4070-6446
Corporation 399 Park Avenue
New York, NY 10043
Uniroyal Chemical U.S. Dollars 4049-8376
Company, Inc. 399 Park Avenue
New York, NY 10043
Uniroyal
Chimica S.P.A. Italian Lira 10789/04
c/o MONTE DEI PASCHI
DI SIENA, Latina
Branch
Uniroyal Italian Lira 0/114349/011
Chimica S.P.A. c/o CITIBANK MILAN
Uniroyal Chemical Co. Canadian Dollars
PAYMENT OFFICES
Working Capital B-2 Facility: Citibank, N.A., London Branch
P.O. Box 12068
Counting House
53 Pooley Street
London SE12GA
Attention: Ken Purchase/David Williams
Italian Facility: Citibank, N.A., Milan Branch
Foro Bounaparte 16
20121 Milan, Itlay
Attention: Nicoletta Zappatini
Canadian Facility Citibank Canada
123 Front Street West
10th Floor
Toronto, Ontario
Canada M5J 2M3
Attention: David Wingfelder
SCHEDULE 3.01 (b)
DISCLOSED LITIGATION
None, except as disclosed in the (i) Annual Report on Form 10K of
Crompton & Knowles Corporation for the fiscal year ended December
31, 1996, and the Quarterly Reports on Form 10Q of such company
for the quarters ended March, June and September of 1996, (ii)
Annual Report on Form 10K of Uniroyal Chemical Company, Inc. for
the fiscal year ended December 31, 1996, and the Quarterly
Reports on Form 10Q of such company for the quarters ended March,
June and September of 1996, (iii) the report of Beveridge and
Diamond, P.C. dated March 9, 1995, (iv) any report issued
pursuant to Section 3.01 of this Credit Agreement and (v)
Schedule 4.01(l).
SCHEDULE 3.02(b)(viii)
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
FOREIGN LOCAL COUNSEL
ITALY
GIANNI, ORIGONI & PARTNERS
BELGIUM
FRESHFIELDS
GERMANY
FRESHFIELDS
FRANCE
FRESHFIELDS
THE NETHERLANDS
LOEFF CLAEYS VERBEKE
SCOTLAND
DUNDAS & WILSON
SCHEDULE 4.01 (b)
SUBSIDIARIES
(UNIROYAL CHEMICAL CORPORATION)
Percentage
Shares of Securities
Number of Issued and Owned by its
Name/Place Shares/Class Outstanding Immediate
of Incorporation Authorized Capital Stock Parent
Uniroyal Chemical 1,000 Common
Corporation/Delaware Stock Shares 100 100%
Purchase Rights - None
Warrants - All warrants exercised on 1/03/98
Option - None
Domestic Subsidiaries
Uniroyal Chemical 2,500 Common
Company, Inc. / Stock Shares 100 Shares 100%
New Jersey (A)
Uniroyal Chemical 1,000 Common
Leasing Co., Inc./ Stock Shares 100 Shares 100%
Delaware (B)
Naugatuck Treatment 100 Common
Company/Connecticut(B) Stock Shares 100 Shares 100%
Interbel Trading, Inc. 50 Common 50 Shares 100%
/Florida (B) Stock Shares
Gustafson, Inc./ 150,000 Common 116,310 Shares 100%
Minnesota (B) Stock Shares
Uniroyal Chemical 100 Common 100 Shares 100%
Specialties, Inc./ Stock Shares
Delaware (B)
Uniroyal Chemical 1,000 Common 100 Shares 100%
Brazil Holding Inc./ Stock Shares
Delaware (B) 1,000 Preferred 0 0%
Stock Shares
Uniroyal Chemical 1,000 Common 176 Shares 100%
International Company/ Stock Shares
Texas (C) 1,000 Preferred 0 0%
Stock Shares
Gustafson International 100 Common 100 Shares 100%
Company/Texas (E) Stock Shares
Uniroyal Chemical Asia, 3,000 Common
Ltd. / Delaware (B) Stock Shares 100 Shares 100%
Lokar Enterprises, Inc./ 3,000 Common 100 Shares 100%
Delaware (A) Stock Shares
Trace Chemicals, Inc./ 1,000 Common 80 Shares 100%
Nevada (B) Stock Shares
Uniroyal Chemical 1,000 Common 100 Shares 100%
Export Ltd./Delaware(B) Stock Shares
Foreign Subsidiaries
Novaquim Holding S.A. 50,000 Series B 50,000 Shares 100%
de C.V. / Mexico (B) Capital Stock
Shares
Novaquim S.A. de C.V./ 5,150,750 5,150,750 100%
Mexico (D) Series B Shares
Capital Stock
Shares
683,255,080 683,255,080 100%
Shares of Shares
Sub-Series B
Capital Stock
Imobiliaria Hulquimex 250 Series A 250 Shares 100%
S.A. de C.V./Mexico(Q) Capital Stock
Shares
37,750 Series B 37,750 Shares 100%
Capital Stock Shares
Unicorb Limited/ 636,945 Common Stock 636,945 100%
England (B) Shares Shares
Uniroyal Quimica 3,000 Common 3,000 100%
S.A.C.I./Argentina (B) Stock Shares Shares
Uniroyal Chemical 1,000 Common 100 100%
Investment Ltd./ Stock Shares Shares
Canada (B)
Uniroyal Chemical Co./ 4,000,000 Common 450,500 100%
Canada (O) Stock Share
Uniroyal Chemical 2,700,996,670 2,700,996,670 100%
Participacoes Ltda./ Quotas Quotas
Brazil (F)
Uniroyal Quimica S.A./ 2,798,781,305 2,798,781,305 100%
Brazil (G) Common Shares
Stock Shares
Uniroyal Chemical Taiwan 3,970,740 Common 3,970,740 100%
Ltd./ Taiwan (B) Stock Shares Shares
Uniroyal Chemical 250,000 Common 50,000 100%
Holdings B.V. / Stock Shares Shares
The Netherlands (H)
Uniroyal Chimica S.r.L./ 10,000 Common 10,000 100%
Italy (I) Stock Shares Shares
Uniroyal Chemical 500,000 Common 296,500 100%
European Holdings Stock Shares Shares
B.V. / Netherlands
Uniroyal Chemical 500,000 Common 305,500 100%
Overseas B.V./ Stock Shares Shares
Netherlands
Uniroyal Chemical 500,000 Common 305,500 100%
Netherlands B.V./ Stock Shares Shares
Netherlands (P)
Uniroyal Chemical B.V./ 500 Common 500 100%
Netherlands (J) Stock Shares Shares
Uniroyal Chemical 2,000 Common 400 100%
Technology B.V./ Stock Shares Shares
Netherlands (B)
Uniroyal Chemical 25,000 Common 25,000 100%
(Proprietary) Ltd./ Stock Shares Shares
South Africa (B)
Uniroyal Chemical 20 Quota Units 20 Quota Units 100%
S.A.R.L. /
Switzerland (B)
Uniroyal Chemical S.A./ 10,000 Common 10,000 Shares 100%
Spain (B) Stock Shares
Uniroyal Chemical Pty. 1,000,000 Common 500,000 Shares 100%
Ltd / Australia (B) Stock Share
Hannaford Seedmaster 10,000 Common 10,000 Shares 100%
Services Pty./ Stock Shares
Australia (K)
Industrias Gustafson 50 Common 50 Shares 100%
S.A. de C.V./Mexico (L) Stock Shares
Uniroyal Chem. Unlimited number 1,000 Shares 100%
International Sales of Common Shares
Corp./Barbados (M)
Uniroyal Chemical 5,000,000 Common 1,697,372 100%
Limited/Scotland (B) Stock Shares Shares
Uniroyal Chemical 100,000 Common 4,000 Shares 100%
Co. Ltd /Bahamas/ Stock Shares
Delaware (B)
Hancock Tire Company 400 Common 3 Shares 100%
Limited. Canada (F) Stock Shares
15 Shares of 0
Preferred Stock
Uniroyal Chemical 1,000 Common 100 Shares 100%
Asia Pte Ltd/ Stock Shares
Singapore (N)
Domestic Affiliates
Monochem, Inc./ 500 Shares 500 Shares 100%(*)
Louisiana (B) of Class A
Common Stock
500 Shares
of Class B 500 Shares 0%
Common Stock
1,500,500 Shares
of Class C 501,020 Shares 33.1%
Common Stock
Rubicon Inc./ 5,000,000 Shares 400,000 100%(*)
Louisiana (B) of Class A Shares
Common Stock
500 Shares
of Class B 400,000 Shares 0%
Common Stock
NPC Services, Inc. 100 Common Stock 100 Shares 12.75%
/ Louisiana (B) Shares
Rapid, Inc. / 110,000 Common 110,000 0.0058%
Delaware (B) Stock Shares Shares
Foreign Affiliates
TOA UNI Chemical 490,000 Group A 490,000 Shares100%(*)
Manufacturing Ltd/ Shares
Thailand (B)
510,000 Group B 510,000 Shares 0%
Shares
TOA UNI Chemical Ltd.
/ Thailand (B) 14,700 Group 14,700 100 %(*)
Shares
15,300 Group 15,300 Shares 0%
A Shares
Orchem (Proprietary)
Limited
/ South Africa (B) 1,050,000 1,050,000
Shares of Class A Shares 0%
Common Shares
450,000 Shares of 450,000 100 %(*)
Class B Common Shares
Shares
Herdillia Unimers 35,000,000 Equity 33,000,000 10%
Limited / India (F) Shares Shares
Unikor Chemical Inc. 408,000 Common 408,000
/ Korea (B) Stock Shares Shares 50%
(A) Owned by Uniroyal Chemical Corporation
(B) Owned by Uniroyal Chemical Company Inc.
(C) 71.6% owned by Uniroyal Chemical Company, Ind. and 28.4%
by Uniroyal Chemical Brazil Holding, Inc.
(D) Owned by Novaquim Holdings, S.A. de C.V.
(E) Owned by Uniroyal Chemical International Company
(F) Owned by Uniroyal Chemical Co./Cie.
(G) Owned by Uniroyal Chemical Participacoes Ltda.
(H) 85% owned by Uniroyal Chemical European Holdings B.V.
and 15% by Uniroyal Chemical Co./Cie.
(I) Owned by Uniroyal Chemical Holdings B.V.
(J) Owned by Uniroyal Chimica S.r.L.
(K) Owned by Uniroyal Chemical Pty. Ltd.
(L) Owned by Gustafson, Inc.
(M) Owned by Uniroyal Chemical Export Limited
(N) Owned by Uniroyal Chemical Asia, Ltd.
(O) Owned by Uniroyal Chemical Netherlands B.V.
(P) Owned by Uniroyal Chemical European Holdings B.V.
(Q) Owned by Novaquim S.A. de C.V.
(*) Uniroyal Chemical Company, Inc. holds the following
combined voting power at entities indicated:
50% Monochem, Inc.
50% Rubicon Inc.
48.9% TOA UNI Chemical Manufacturing Ltd.
49% TOA UNI Chemical Ltd.
30% Orchem (Proprietary) Ltd.
SCHEDULE 4.01 (b)
SUBSIDIARIES
(CROMPTON & KNOWLES CORPORATION)
Percentage
Shares of Securities
Number of Issued and Owned by its
Name/Place Shares/Class Outstanding Immediate
of Incorporation Authorized Capital Stock Parent
Domestic Subsidiaries
CK Holding Corporaption/Delaware (A)
1,000 750 100%
CNK Disposition Corporation/Florida (A)
100 100 100%
Crompton & Knowles Acceptance Corp./Massachusets (A)
7,500 100 100%
Crompton & Knowles Chemical Realty/Pennsylvania (A)
100 100 100%
Crompton & Knowles Colors Incorp./Delaware (B)
1,000 500 100%
Davis-Standard Corporation/Delaware (B)
1,000 500 100%
Ingredient Technology Corporation/Delaware (B)
1,000 10 100%
KEM International Corporation/Delaware (E)
2,000 250 100%
KEM Manufacturing Corporation/Georgia (A)
1,000 100 100%
Crompton & Knowles International Inc./Virgin Islands (A)
100 100 100%
Killing Extruders, Inc. (Being dissolved)/New Jersey (C)
14,997,240 3,006,700 100%
Shares
1,400 Preferred 1,050 100%
"A"
1,360 Preferred 1,360 100%
"B"
Orlex Chemicals Corp. (Being dissolved)/New Jersey (A)
1,000 100 100%
Foreign Subsidiaries
C&K Services (Luxembourg) S.A./Luxembourg (D)
1,250 1,249 100%
C&K Specialities Holding B.V. / Netherlands (E)
1,000 100 100%
Crompton & Knowles of Canada Ltd/Canada (A)
Unlimited 150 100%
Crompton & Knowles (Deutschland) GmbH / Germany (D)
50 50 100%
Crompton & Knowles (Espana) SL/ Espain (I)
2,300,000 2,300,000 100%
Crompton & Knowles Europe S.P.R.L./Belgium (J)
60,000 60,000 100%
Crompton & Knowles (France) S.A./France (D)
1,021,470 1,021,464 100%
Crompton & Knowles (Hong Kong) Ltd./Hong Kong (D)
1 1 100%
Crompton & Knowles (International)SARL/France (A)
20 20 100%
Crompton & Knowles (Italia) SRL/Italy (H)
20,000 20,000 100%
Crompton & Knowles (Korea) Ltd/Korea (D)
20,000 10,000 100%
Crompton & Knowles (Luxembourg) S.A. /Luxembourg (D)
1,250 1,250 100%
Crompton & Knowles (Nederland) B.V. / Netherlands (D)
100 100 100%
Crompton & Knowles (Portugal) LDA / Portugal (L)
5,000,000 5,000,000 100%
Crompton & Knowles Services SPRL / Belgium (M)
150,000 150,000 100%
Crompton & Knowles (U.K.) / U.K. (N)
800,000 800,000 100%
Davis-Standard (Deutschland) GmbH / Germany (C)
1,000 500 100%
Davis-Standard (France) SARL / France (K)
7,326 7,326 100%
ER-WE-PA Davis-Standard GmbH / Germany (O)
10,000,000 10,000,000 100%
Ifatex Chemische Produkte GmbH / Germany (F)
4 4 100%
9056-0921 Quebec Inc. / Canada (G)
Unlimited Common 251 100%
Unlimited 1,000 100%
Preferred "A"
CNK One B.V. (No assets - inactive) / Netherlands
CNK Two B.V. (No assets - inactive) / Netherlands
CNK S.R.L. (Liquidated) / Italy
Italiana S.R.L. ( Being Liquidated) / Italy
(A) Owned by Crompton & Knowles Corporation
(B) Owned by CK Holding Corporation
(C) Owned by Davis-Standard Corporation
(D) Owned by Crompton & Knowles Europe S.P.R.L.
(E) Owned by KEM Manufacturing Corporation
(F) Owned by Crompton & Knowles (Deutschland) GmbH
(G) owned by Ingredient Technology Corporation
(H) 70% Owned by Crompton & Knowles Europe S.P.R.L. and 30%
by Crompton & Knowles (Nederland) B.V.
(I) 95% Owned by Crompton & Knowles Europe S.P.R.L. and 5%
by Crompton & Knowles (Nederland) B.V.
(J) 99% Owned by Uniroyal Chemical European Holding B.V. and
1% by Uniroyal Chemical Overseas B.V.
(K) 32.76% Owned by Crompton & Knowles Corporation and 67.24%
by 9056-0921 Quebec Inc.
(L) 70% Owned by Crompton & Knowles Europe S.P.R.L. and 30% by
Crompton & Knowles (Nederland) B.V.
(M) 76% Owned by Uniroyal Chemical Co./Cie.
23% Owned by Crompton & Knowles European Holdings B.V.
Less than 1% by Uniroyal Chemical European Holdings B.V.
(N) 99% Owned by Crompton & Knowles Europe S.P.R.L. and 1% by
Crompton & Knowles (Nederland) B.V.
(O) 99% Owned by Davis-Standard (Deutschland) GmbH and 1% by
ER-WE-PA Davis-Standard Beteiligungs GmbH
SCHEDULE 4.01 (d)
TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
None.
SCHEDULE 4.01 (l)
ENVIRONMENTAL DISCLOSURE
1. See (i) the environmental report of Beveridge & Diamond
dated March 9, 1995 ("B & D Report"), (ii) the public filings of
Uniroyal Chemical Corporation including but not limited to its
Annual Report on Form 10K for the fiscal year ended December 31,
1996, its Quarterly Reports on Form 10Q for the quarters ended
March, June and September of 1996 and Annual Report on Form 10 K
for the fiscal year ended December 27, 1997 and (iii) the public
filings of Crompton & Knowles Corporation ("C&K") including but
not limited to its Annual Report on Form 10K for the fiscal year
ended December 31, 1996 and its Quarterly Reports on Form 10Q for
the quarters ended March, June and September of 1996 and its
Annual Report on Form 10 K for the fiscal year ended December 27,
1997.
2. In connection with establishing appropriate reserves for
environmental liabilities, C&K regularly updates its estimates of
costs associated with the restoration of identified off-site and
on-site disposal sites and other environmental requirements. C&K
believes that the most likely future amount of its currently
known environmental liabilities is approximately $102.6 million
which was reserved as of December 27, 1997, for the cost
associated with liabilities for past off-site and on-site
disposal of hazardous materials, based on Crompton & Knowles'
interpretation of current environmental laws and regulations. C&K
intends to assert all meritorious legal defenses and all other
equitable factors which are available to it with respect to these
matters.
3. Uniroyal Chemical and its subsidiaries are involved in
claims, litigation, administrative proceedings and investigations
of various types in several jurisdictions. A number of such
matters involve claims for a material amount of damages relating
to or alleging environmental liabilities, including clean up
costs associated with hazardous waste disposal sites, property
damage and personal injuries.
a. Beacon Heights and Laurel Park - Uniroyal Chemical
is a member of the Beacon Heights Coalition, a group of entities
engaged in remedial work at the Beacon Heights site in the State
of Connecticut pursuant to a Consent Decree entered in 1987. The
actions required by this Consent Decree have been essentially
completed. There is a continuing requirement for operation and
maintenance at the site. Remedial construction began at the
Laurel Park site in July 1996, and is anticipated to be completed
in 1998.
b. Cleve Reber Uniroyal Chemical and three other
corporations named in an Administrative Order issued by the EPA
have complied with such Order which governs remediation of the
site located in the State of Louisiana. The cooperating parties
are negotiating a consent agreement with the EPA for operation
and maintenance of the site and to resolve all of the EPA's past
claims.
c. Petro Processors This matter relating to a site in
the State of Louisiana was initiated in 1981. Litigation was
instituted by the EPA against a number of parties, including
Uniroyal, Inc. (which Uniroyal Chemical has agreed to indemnify),
seeking cleanup of the Petro Processors site. A Consent Decree
was entered to settle the case in 1984, which required the
defendants to clean up the site to the satisfaction of the EPA
under supervision of the court. A settlement among the ten
defendants, dated December 16, 1983, defines the percentage to be
borne by each defendant of the currently estimated future cost of
$100 million to complete remediation of the site. Although the
allocations are subject to a confidentiality order, Uniroyal
Chemical believes that the amount it will pay will not be
material to its financial condition or results of operation.
d. Vertac Uniroyal Chemical and its Canadian
subsidiary, Uniroyal Chemical Co., were joined with others as
defendants in consolidated civil actions brought in the United
States District Court, Eastern District of Arkansas, Western
Division by the United States of America, the State of Arkansas
and Hercules Incorporated ("Hercules") relating to a Vertac
Chemical Corporation site in Jacksonville, Arkansas allegedly
contaminated by dioxins. Uniroyal Chemical has been dismissed
from the litigation. On May 21, 1997, the Court entered an order
finding that Uniroyal Chemical Co, is jointly and severally
liable to the United States, and finding that Hercules and
Uniroyal Chemical Co. are liable to each other in contribution.
The allocation phase of the proceedings has begun with discovery
ongoing and trial scheduled to begin in 1998. No ultimate
determination of the amount of Uniroyal Chemical Co.'s liability,
if any, is expected prior to the middle of 1999.
e. Sandor Canada Inc. On July 13, 1990, Sundor Canada
Inc. ("Sundor") instituted suit against Uniroyal Chemical Co.
("Uniroyal") and others including the Ontario Ministry of the
Environment and the Regional Municipality of Waterloo in the
Ontario Court of Justice (General Division) at Toronto claiming
that Uniroyal and others are responsible for losses resulting
from Sundor's recall of packaged juices and fruit due to Sundor's
use of the public water derived from Elmira groundwater which was
allegedly contaminated by Uniroyal. A tentative settlement has
been reached with Sundor by which the defendants, including
Uniroyal and its insurer will pay CD$3,500,000 in the aggregate
to Sundor.
f. Painesville Reference is made to Item 1 (i) of Part
II of the Registrants' Quarterly Report on Form 10-Q for the
quarterly period ended June 28, 1997, for information relating to
(a) Uniroyal Chemical's Painesville, Lake County, Ohio facility
which manufactures nitrile rubber and discharge of Painesville's
wastewater to the Lake County sanitary sewer system for treatment
at Lake County's Greater Mentor Wastewater Treatment Plant
("GMWTP") ; and (b) a proposed Local Limit aimed at regulating
the amount of substances which absorb at 230 manometers that are
discharged in wastewater to the GMWTP. From July 1996 through
December 31, 1997, Lake County has assessed against the
Painesville facility a total of $487,000 in administrative fines
and has ordered Uniroyal Chemical to reimburse it for $106,295 in
fines Lake County has paid to the State of Ohio for the GMWTP's
violations of its NPDES permit. The Painesville facility appealed
Lake County's Reimbursement Order and its initial assessment of
administrative fines to the Lake County Court of Common Pleas.
Since the parties commenced settlement negotiations in December
1996, all legal proceedings concerning the above-described
matters have been stayed voluntarily by agreement of the parties.
Uniroyal Chemical anticipates that any fines and/or
reimbursements paid to Lake County in connection with the
resolution of this matter will not exceed $175,000 in the
aggregate.
4. Crompton Corporation has been designated along with others
as a potentially responsible party under CERCLA or comparable
state statutes.
a. At the Industrial Solvent & Chemical Company solvent
reprocessing facility in York County, Pennsylvania, and the
Spectron waste site in Elkton Maryland. CNK Disposition Corp. has
been designated along with others as a potentially responsible
party under CERCLA or comparable state statutes, at the Taylor
Road Landfill and the Bay Drums drum recycling sites located in
Hillsborough County, Florida.
b. In CPS Chemical Co, Inc. v. Evor Phillips Leasing Co,
Inc., et al., the plaintiffs allege that hazardous substances
migrated from the Evor Phillips site to the adjoining property of
CPS Chemical Company, Inc. ("CPS Site"), contaminating the CPS
Site and the groundwater beneath it. The plaintiffs were required
by a 1988 consent order to perform remediation in connection with
contamination at the CPS Site.
In Adhesives Research v. American Inks & Coatings,
the plaintiffs seek to recover cleanup and other response costs
and to obtain contribution from Crompton Corporation and the
other defendants in connection with the Industrial Solvent &
Chemical Company solvents reprocessing facility located in York
County, Pennsylvania.
c. KEM Manufacturing Corporation ("KEM"), a wholly-owner
subsidiary of Crompton Corp. acquired in 1976, was named along
with others, a potentially responsible party under the New Jersey
Spill Compensation and Control Act by the New Jersey Department
of Environmental protection and Energy with respect to the Evor
Phillips waste disposal site located in central New Jersey ("Evor
Phillips Site"). It appears that KEM held title to the site
between 1970 and 1974, prior to the acquisition of KEM by
Crompton Corp., but that KEM did not own or operate any facility
at the site. On September 28, 1995, KEM was released by the State
of New Jersey as a potentially responsible party with respect to
the Evor Phillips Site upon payment to the state of $175,000.
SCHEDULE 4.01(o) - SURVIVING DEBT AS OF 2/28/98 - $000
DESCRIPTION LINE OUTSTANDING
I. BONDS
VARIOUS BONDHOLDERS 9% SENIOR SECURED 226,000 226,000
NOTES DUE 2000
VARIOUS BONDHOLDERS 10 1/2% SENIOR NOTES 217,000 217.000
DUE 2202
VARIOUS BONDHOLDERS 11% SENIOR SUBORDINATED 232,000 232,000
NOTES DUE 2003
VARIOUS BONDHOLDERS 12% SUBORDINATED DIS- 120,000 120,000
COUNT NOTES DUE 2005
II. REVOLVER CREDIT FACILITY
CROMPTON & KNOWLES TRANCHE A 300,000 25,000
CORPORATION
UNIROYAL CHEMICAL TRANCHE B-1 150,000 62,000
COMPANY
EUROPEAN TRANCHE TRANCHE B-2 45,000 3,000
ITALIAN TRANCHE TRANCHE B-3 35,000 20,219
UNIROYAL CHEMICAL CANADIAN TRANCHE 70,000 0
III. OTHER CREDIT FACILITIES
CROMPTON & KNOWLES CORPORATION
BANK OF NEW YORK UNSECURED SHORT-TERM DEBT 10,000 0
NEW ENGLAND LIFE LIFE INSURANCE POLICY 6,986 0
INS. CO, LOANS
CROMPTON & KNOWLES COLORS, INC.
DAVIS-STANDARD CORP &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN UNSECURED SHORT-TERM, 5,000 0
BANK DEBT
CROMPTON & KNOWLES EUROPE S.A.
CREDIT LYONNAIS NOTES PAYABLE & OVERDRAFT 15,363 0
BANK BRUSSELS NOTES PAYABLE & OVERDRAFT 2,048 0
LAMBERT
GENERAL DE BANQUE NOTES PAYABLE & OVERDRAFT 768 0
ER-WE-PA DAVIS STANDARD GmbH
COMMERZBANK NOTES PAYABLE & OVERDRAFT 4,200 0
WESTDEUTSCHE NOTES PAYABLE & OVERDRAFT 200 0
LANDESBANK
BHF NOTES PAYABLE & OVERDRAFT 10,000 0
DAVIS-STANDARD (FRANCE) S.A.R.L.
CITIBANK REVOLVING LINE 2,300 0
UNIROYAL CHEMICA S.p.A. (ITALY)
BANCO DI NAPOLI OVERDRAFT & CURRENCY LOANS 557 1
MONTE DEI PASCHE OVERDRAFT & CURRENCY LOANS 4,178 111
DI SIENA
BANCA COMMERCIAL OVERDRAFT & CURRENCY LOANS 2,785
ITALIANA
BANCA DI ROMA OVERDRAFT & CURRENCY LOANS 2,785
ISTITUTO BACARIO OVERDRAFT & CURRENCY LOANS 4,345
S. PAOLO DI TORINO
BANCA NAZIONALE DEL OVERDRAFT & CURRENCY LOANS 2,785
LAVORO
BANCA NAZIONALE DEL LONG TERM-DEBT 3,289 2,941
LAVORO (**)
UNIROYAL CHEMICAL, LIMITED (U.K.)
NATIONAL WESTMINSTER OVERDRAFT FACILITY 850 0
UNIROYAL CHEMICAL, LTD. (CANADA)
ROYAL BANK OF REVOLVER 7,000 0
CANADA(**)
PREMIER CHEMICAL, LTD, (TAIWAN)
ROYAL BANK OF MULTI-PURPOSE 2,000 2,000
CANADA
HONG KONG BANK MULTI-PURPOSE 545 405
UNIROYAL CHEMICAL PTY, LTD. (AUSTRALIA)
NATIONAL AUSTRALIA OVERDRAFT 789 0
BANK
HANNAFORD SEEDMASTER SERVICES
PTY. LTD (AUSTRALIA)
WESTPAC OVERDRAFT 1,066 0
WESTPAC(**) EQUIPMENT FINANCE 395 0
WESTPAC REMITTANCE L/C 8 0
WESTPAC BANKERS' UNDERTAKING 8 0
WESTPAC FORWARD EXCHANGE CONTRACT(S) 494 0
WESTPAC TAPE NEGOTIATION AUTHORITY 40 0
UNIROYAL QUIMICA S.A. (BRAZIL)
ITAU SHORT-TERM DEBT 200 39
CITIBANK RURAL CREDIT 1,000 0
UNIROYAL CHEMICAL B.V.
ABN-AMRO UNSECURED OVERDRAFT FACILITY 1,200 0
TOTAL DEBT CROMPTON & KNOWLES CORPORATION 1,488,184 910,716
IV. LETTERS OF CREDIT AMOUNT OF L/C
CROMPTON & KNOWLES CORPORATION
NEW JERSEY DEPT. OF EPA 3,558
PENNSYLVANIA DEPT. OF EPA 3,504
ENVIRONMENTAL PROTECTION AGENCY 196
CONTINENTAL CASUALTY COMPANY 2,800
HARTFORD INSURANCE COMPANY 20
BARCLAY'S BANK, LTD. 27
COPERTRADING COMERCIO 1,761
VARIOUS - CUSTOMERS/VENDORS 489
______
12,355
UNIROYAL CHEMICAL COMPANY, INC. (USA)
NATIONAL UNION FIRE INS. 2,411
NATIONAL UNION FIRE INS. 964
PREMIER/BAYOU SORREL TRUST 229
NUCLEAR REGULATORY COMMISSION 150
KREDIETBANK/CHEMICAL FORWARDERS 150
KREDIETBANK/CHEMICAL FORWARDERS 175
L. MARQUEZ 10
BADC (BANGLADSH AGRICULTURAL PERFORMANCE BOND 4
DEVELOPMENT CO) _____
4,093
PREMIER CHEMICAL COMPANY LTD, (TAIWAN)
ROYAL BANK OF CANADA USANCE 381
TOTAL LETTERS OF CREDIT CROMPTON & KNOWLES CORPORATION 16,829
V. LETTERS OF GUARANTY DESCRIPTION AMOUNT OF
CROMPTON & KNOWLES CORPORATION
CHASE MANHATTAN BANK UNSECURED S-T SUB LOANS 5,000
CITIBANK UNIROYAL QUIMICA S/A - 1,000
RURAL CREDIT
BHF-BANK ER-WE-PA GERMANY 10,000
CROMPTON & KNOWLES COLORS INC.,
DAVIS STANDARD CORP, &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK L/C'S ISSUED FOR CROMPTON 6,827
& KNOWLES CORP.
DAVIS-STANDARD (FRANCE) S.A.R.L.
BANK NATIONAL PARIS VARIOUS CUSTOMERS 2,300
BANK POPULAIRE VARIOUS CUSTOMERS 100
UNIROYAL CHEMICAL COMPANY, INC. (USA)
ICI (RUBICON/RCRA) LA. EPA OBLIGATIONS 2,780
CITIBANK UNIKOR LOCAL LINES OF 1,800
CREDIT
SIAM COMMERCIAL BANK THAILAND J.V.- OVERDRAFT 490
& SHORT-TERM LOAN
SIAM COMMERCIAL BANK THAILAND J.V.- OVERDRAFT 98
SIAM COMMERCIAL BANK THAILAND J.V.- SHORT-TERM 588
LOAN
SIAM COMMERCIAL BANK THAILAND J.V.- L/C TRUST 392
RECEIPT
SIAM COMMERCIAL BANK THAILAND J.V. - OFFSHORE 2,940
LOAN
SIAM COMMERCIAL BANK THAILAND J.V. - LEGAL 98
GUARANTY
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCA NAZIONALE DEL LAVORO METAN GAS USAGE 50
BANCA NAZIONALE DEL LAVORO CUSTOM DUTY VAT - ANTWERP 39
BANCA NAZIONALE DEL LAVORO REGIONE LAZIO (LOCAL 29
GOVERNMENT)
ISITUTO BANCARIO S. PAOLO CUSTOM DUTY VAT - ROME 84
DI TORINA
ISITUTO BANCARIO S. PAOLO CUSTOM DUTY VAT - APRILIA 168
DI TORINA
ISTITUTO BANCARIO S. PAOLO WASTE DISPOSAL (LOCAL 112
DI TORINA GOVERNMENT)
ISITUTO BANCARIO S. PAOLO GOVERNMENT RAILWAYS 6
DI TORINA
BANCO DI NAPOLI TELEX EXPENSES COVERAGE 1
IN FAVOR OF POST &
TELECOMMUNICATIONS IND.
UNIROYAL CHEMICAL, LTD. (U.K.)
NATIONAL WESTMNSTER BANK MINISTRY OF AGRICULTURE 204
PISCO ESTABLISHMENT 137
PISCO ESTABLISHMENT 35
H.M. CUSTOMS & EXCUSE 600
UNIROYAL CHEMICAL B.V. (HOLLAND)
ABN - AMRO BANK SONAPRA COTUSION 68
ASSC. TEHERAN 10
ENVIRONMENTAL DEPARTMENT 22
TAX DEPARTMENT (VAT) 21
CUSTOMS 97
TOTAL LETTERS OF GUARANTY CROMPTON & KNOWLES CORPORATION 35,878
SCHEDULE 4.01 (p)
MATERIAL SUBSIDIARES
Crompton & Knowles Corporation Subsidiaries
CK Holding Corporation/Delaware
Crompton & Knowles Colors Incorp./Delaware
Davis-Standard Corporation/Delaware
Ingredient Technology Corporation/Delaware
KEM International Corporation/Delaware
KEM Manufacturing Corporation/Georgia
C&K Services (Luxembourg) S.A./Luxembourg
Crompton & Knowles of Canada Ltd/Canada
Crompton & Knowles (Deutschland) GmbH/Germany
Crompton & Knowles Europe S.P.R.L./Belgium
Crompton & Knowles (France) S.A./France
Crompton & Knowles (Nederland) B.V./Netherlands
Crompton & Knowles Services SPRL/Belgium
Davis-Standard (Deutschland)GmbH/Germany
Davis-Standard (France) SARL/France
ER-WE-PA Davis-Standard GmbH/Germany
Uniroyal Chemical Corporation Subsidiaries
Uniroyal Chemical Company, Inc./New Jersey
Gustafson, Inc./Minnesota
Uniroyal Chemical Brazil Holding Inc./Delaware
Uniroyal Chemical International Company/Texas
Gustafson International Company/Texas
Trace Chemicals Inc./Nevada
Uniroyal Chemical Export Ltd./Delaware
Novaquim Holding S.A. de C.V./Mexico
Novaquim S.A. de C.V./Mexico
Unicorb Limited/England
Uniroyal Chemical Investment Ltd./Canada
Uniroyal Chemical Co./Canada
Uniroyal Chemical Participacoes Ltda./Brazil
Uniroyal Quimica S.A./Brazil
Uniroyal Chemical Taiwan Ltd./Taiwan
Uniroyal Chemical Holdings B.V./ The Netherlands
Uniroyal Chimica S.r.L./Italy
Uniroyal Chemical European Holdings B.V./Netherlands
Uniroyal Chemical Overseas B.V./Netherlands
Uniroyal Chemical Netherlands B.V./Netherlands
Uniroyal Chemical B.V./Netherlands
Uniroyal Chemical (Proprietary) Ltd./South Africa
Uniroyal Chemial Pty. Ltd/Australia
Hannford Seedmaster Services Pty./Australia
Industrias Gustafson S.A. de C.V./Mexico
Uniroyal Chemical Co. Ltd/Bahamas/Delaware
SCHEDULE 5.02 (a)
EXISTING LIENS
Index Filing Filing Secured
Jurisdiction Date Date Number Party Collateral
North Carolina-
Mecklemburg
County 08/09/96 07/10/90 346323 Cyclone Machanic
Roofing Lien Claim
company of $15,962
Minnesota-
Hennepin
County 06/07/96 12/23/87 87-23337 Larue, Judgement
Nancy A. of $1,308
et al.
New York- 07/24/96 05/14/91 099755 Internal Federal
Sec. Of Revenue Tax Lien
State Service of
$2,471.19
Various Vendors Specified
and Equipments
Leasing
Companies
Liens Securing Debt identified on Schedule 4.01 (o) by the
designation (**)
SCHEDULE 5.02(e)
INVESTMENTS
(as of February 28, 1998)
Crompton & Knowles Corporation
Investee Amount $
Ingretec S.A. de C.V. Mexico 215,000
Uniroyal Chemical Company
Investee Amount $
Rubicon 29,954
Monochem 3,539
Naugatuck Treatment Co. 2
Rapid Inc. 23
Orchem 540
Herdillia 1,305
Toa Uni Ltd. -560
Toa Uni Mfg. -916
Unikor 805
TOTAL 25,701
EXHIBIT A-1
FORM OF WORKING CAPITAL A NOTE
$_______________Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [CROMPTON & KNOWLES
CORPORATION] [CROMPTON & KNOWLES COLORS INCORPORATED] [DAVIS-
STANDARD CORPORATION] [INGREDIENT TECHNOLOGY CORPORATION], a
[Massachusetts] [Delaware] corporation (the "Borrower"), HEREBY
PROMISES TO PAY to the order of _________________________ (the
"Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the aggregate
principal amount of the Working Capital A Advances (as defined
below) owing to the Lender by the Borrower pursuant to the Third
Amended and Restated Credit Agreement dated as of March 31, 1998
(as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; terms defined therein being used
herein as therein defined) among the Borrower, certain other
borrowers party thereto, the Lender and certain other lender
parties party thereto, Citicorp Securities, Inc., as Arranger,
Citicorp USA, Inc., as Agent for the Lender and such other lender
parties, and The Chase Manhattan Bank, as Managing Agent, on the
Termination Date.
The Borrower promises to pay interest on the unpaid
principal amount of each Working Capital A Advance from the date
of such Working Capital A Advance until such principal amount is
paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citicorp USA, Inc., as Agent,
at 399 Park Avenue, New York, New York 10043 in same day funds.
Each Working Capital A Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making
of advances (the "Working Capital A Advances") by the Lender to
the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each
such Working Capital A Advance being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Obligations of the Borrower under this Promissory Note, and
the Obligations of the other Loan Parties under the Loan
Documents, are secured by the Collateral as provided in the Loan
Documents.
[CROMPTON & KNOWLES CORPORATION]
[CROMPTON &KNOWLES COLORS INCORPORATED]
[DAVIS-STANDARD CORPORATION]
[INGREDIENT TECHNOLOGY CORPORATION]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Working Amount of Unpaid
Capital A Principal Paid Principal Notation
Date Advance Or Prepaid Balance Made By
EXHIBIT A-2
FORM OF WORKING CAPITAL B-1 NOTE
$_______________Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, UNIROYAL CHEMICAL
COMPANY, INC., a New Jersey corporation (the "Borrower"), HEREBY
PROMISES TO PAY to the order of _________________________ (the
"Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the aggregate
principal amount of the Working Capital B-1 Advances (as defined
below) owing to the Lender by the Borrower pursuant to the Third
Amended and Restated Credit Agreement dated as of March 31, 1998
(as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; terms defined therein being used
herein as therein defined) among the Borrower, certain other
borrowers party thereto, the Lender and certain other lender
parties party thereto, Citicorp Securities, Inc., as Arranger,
Citicorp USA, Inc., as Agent for the Lender and such other lender
parties, and The Chase Manhattan Bank, as Managing Agent, on the
Termination Date.
The Borrower promises to pay interest on the unpaid
principal amount of each Working Capital B-1 Advance from the
date of such Working Capital B-1 Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citicorp USA, Inc., as Agent,
at 399 Park Avenue, New York, New York 10043 in same day funds.
Each Working Capital B-1 Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making
of advances (the "Working Capital B-1 Advances") by the Lender to
the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each
such Working Capital B-1 Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein
specified. The Obligations of the Borrower under this Promissory
Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the
Loan Documents.
UNIROYAL CHEMICAL
COMPANY, INC.
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Working Amount of Unpaid
Capital B-1 Principal Paid Principal Notation
Date Advance Or Prepaid Balance Made By
EXHIBIT A-3
FORM OF WORKING CAPITAL B-2 NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [NAME OF B-2
BORROWER] ("Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Working
Capital B-2 Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Third Amended and Restated Credit
Agreement dated as of March 31, 1998 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement", the terms defined therein being
used herein as therein defined) among the Borrower, certain other
borrowers party thereto, the Lender, certain other Lender Parties
party thereto, Citicorp USA, Inc., as Agent for the Lender
Parties, and The Chase Manhattan Bank, as Managing Agent, on the
dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid
principal amount of each Working Capital B-2 Advance from the
date of such Working Capital B-2 Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each of the
Working Capital B-2 Advances (i) in Dollars are payable in lawful
money of the United States of America to Citicorp USA, as Agent,
at its account maintained at 399 Park Avenue, New York, New York,
10043, in same day funds and (ii) in any Foreign Currency are
payable in such currency at the applicable Payment Office in same
day funds. Each Working Capital B-2 Advance owing to the Lender
by the Borrower pursuant to the Credit Agreement, and all
payments made on account of principal thereof, shall be recorded
by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making
of Working Capital B-2 Advances by the Lender to the Borrower
from time to time in an aggregate amount not to exceed at any
time outstanding the Dollar amount first above mentioned or the
Equivalent thereof in one or more Foreign Currencies, the
indebtedness of the Borrower resulting from each such Working
Capital B-2 Advance being evidenced by this Promissory Note, (ii)
contains provisions for determining the Dollar Equivalent of
Working Capital B-2 Advances denominated in Foreign Currencies
and (iii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The
Obligations of the Borrower under this Promissory Note, and the
Obligations of the other Loan Parties under the Loan Documents,
are secured by the Collateral as provided in the Loan Documents.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
This promissory note shall be governed by, and construed
in accordance with the laws of the State of New York.
[NAME OF B-2 BORROWER]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Unpaid
Type of Advance in Interest Paid Principal Notation
Date Advance Currency Rate or Prepaid Balance Made By
EXHIBIT A-4
FORM OF ITALIAN BORROWER NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [NAME OF ITALIAN
BORROWER] ("Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Italian
Borrower Advances (as defined below) owing to the Lender by the
Borrower pursuant to the Third Amended and Restated Credit
Agreement dated as of March 31, 1998 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement", the terms defined therein being
used herein as therein defined) among the Borrower, certain other
borrowers party thereto, the Lender, certain other Lender Parties
party thereto, Citicorp USA, Inc., as Agent for the Lender
Parties, and The Chase Manhattan Bank, as Managing Agent, on the
dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid
principal amount of each Italian Borrower Advance from the date
of such Italian Borrower Advance until such principal amount is
paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest in respect of each of the
Italian Borrower Advances are payable in like funds advanced at
the applicable Payment Office, in same day funds. Each Italian
Borrower Advance owing to the Lender by the Borrower pursuant to
the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making
of Italian Borrower Advances by the Lender to the Borrower from
time to time in an aggregate amount not to exceed at any time
outstanding the Dollar amount first above mentioned or the
Equivalent thereof in one or more Foreign Currencies, the
indebtedness of the Borrower resulting from each such Italian
Borrower Advance being evidenced by this Promissory Note, (ii)
contains provisions for determining the Dollar Equivalent of
Italian Borrower Advances denominated in Foreign Currencies and
(iii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The
Obligations of the Borrower under this Promissory Note, and the
Obligations of the other Loan Parties under the Loan Documents,
are secured by the Collateral as provided in the Loan Documents.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
This promissory note shall be governed by, and construed
in accordance with the laws of the State of New York.
[NAME OF ITALIAN BORROWER]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Unpaid
Type of Advance in Interest Paid Principal Notation
Date Advance Currency Rate or Prepaid Balance Made By
EXHIBIT A-5
FORM OF CANADIAN BORROWER NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, UNIROYAL CHEMICAL
CO. (the "Canadian Borrower"), HEREBY PROMISES TO PAY to the
order of _________________________ (the "Lender") for the account
of its Applicable Lending Office (as defined in the Credit
Agreement referred to below) the aggregate principal amount of
the Canadian Borrower Advances (as defined below) owing to the
Lender by the Canadian Borrower pursuant to the Third Amended and
Restated Credit Agreement dated as of March 31, 1998 (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Credit Agreement", the terms
defined therein being used herein as therein defined) among the
Canadian Borrower, certain other borrowers party thereto, the
Lender, certain other Lender Parties party thereto, Citicorp USA,
Inc., as Agent for the Lender Parties, and The Chase Manhattan
Bank, as Managing Agent, on the dates and in the amounts
specified in the Credit Agreement.
The Canadian Borrower promises to pay interest on the
unpaid principal amount of each Canadian Borrower Advance from
the date of such Canadian Borrower Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each of the
Canadian Borrower Advances are payable in like funds advanced at
the applicable Payment Office, in same day funds. Each Canadian
Borrower Advance owing to the Lender by the Canadian Borrower
pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making
of the "Canadian Borrower Advances" by the Lender to the Canadian
Borrower from time to time in an aggregate amount not to exceed
at any time outstanding the US Dollar amount first above
mentioned or the Equivalent thereof in Canadian Dollars, the
indebtedness of the Canadian Borrower resulting from each such
Canadian Borrower Advance being evidenced by this Promissory
Note, (ii) contains provisions for determining the US Dollar
Equivalent of Canadian Borrower Advances denominated in Canadian
Dollars and (iii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Obligations of the Canadian Borrower under this Promissory
Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the
Loan Documents.
The Canadian Borrower hereby waives presentment, demand,
protest and notice of any kind. No failure to exercise, and no
delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
This promissory note shall be governed by, and construed
in accordance with the laws of the State of New York.
UNIROYAL CHEMICAL CO.
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Unpaid
Type of Advance in Interest Paid Principal Notation
Date Advance US Dollars Rate or Prepaid Balance Made By
EXHIBIT A-6
FORM OF DRAFT
BANKERS' ACCEPTANCE
DUE_______________ No. BA___
Toronto, Canada
_____________, 19__
ON ___________________________, (WITHOUT GRACE), FOR VALUE
RECEIVED PAY TO THE ORDER OF THE UNDERSIGNED DRAWER THE SUM OF
$ DOLLARS
TO: [NAME OF BANK]
UNIROYAL CHEMICAL CO.
Per:
Authorized Signing Officer
EXHIBIT B-1
FORM OF NOTICE OF BORROWING
Citicorp USA, Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue [Date]
New York, NY 10022
Attention: Robin Lenna
[for Working Capital B-2 Borrowings]
[Citibank, N.A., London Branch
P.O. Box 12068
Counting House
53 Pooley Street
London SE12GA
Attention: Ken Purchase/David Williams]
[for Italian Borrowings]
[Citibank, N.A., Milan Branch
Foro Bounaparte 16
20121 Milan, Italy
Attention: Nicoletta Zappatini]
[for Canadian Borrowings]
[Citibank Canada
123 Front Street West
10th Floor
Toronto, Ontario
Canada M5J 2M3
Attention: David Wingfelder]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Third
Amended and Restated Credit Agreement, dated as of March 31, 1998
among Crompton & Knowles Corporation, a Massachusetts
corporation, Crompton & Knowles Colors Incorporated, a Delaware
corporation, Davis-Standard Corporation, a Delaware corporation,
Ingredient Technology Corporation, a Delaware corporation,
Uniroyal Chemical Company, Inc., a New Jersey corporation, the B-
2 Borrowers named therein, the Italian Borrowers named therein,
Uniroyal Chemical Co., a corporation organized under the laws of
Nova Scotia, Canada, certain Lender Parties party thereto,
Citicorp USA, Inc., as Agent for the Lender Parties, and The
Chase Manhattan Bank, as Managing Agent., and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________.
(ii) Facility under which the Proposed Borrowing is
requested is the _________ Facility.1
(iii) The Type of Advances comprising the Proposed
Borrowing is [Base Rate Advances] [Eurocurrency Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
[$_______________] [for a Proposed Borrowing in a Foreign
Currency, list currency and amount of Borrowing].
[(v) The initial Interest Period for each Eurocurrency
Rate Advance made as part of the Proposed Borrowing is _____
month[s].]
[(vi) The Proposed Borrowing is comprised of [Working
Capital B-2 [Italian] [Canadian] Advances.]
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the proposed Borrowing:
1. For Working capital A Advances and Working Capital B-1
Advances only.
(A) the representations and warranties contained in
each Loan Document are correct on and as of the date of the
Proposed Borrowing, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to
a specific date other than the date of the Proposed Borrowing, in
which case, as of such specific date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of
the proceeds therefrom, that constitutes a Default.
Very truly yours,
[NAME OF BORROWER]
By
Title:
EXHIBIT B-2
FORM OF NOTICE OF DRAWING
Citicorp USA, Inc.
Agent under the Credit Agreement
referred to below
Attention: ________________________
Ladies and Gentlemen:
The undersigned, UNIROYAL CHEMICAL CO., a corporation
organized under the laws of Nova Scotia, Canada, refers to the
Third Amended and Restated Credit Agreement dated as of March 31,
1998 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; terms defined therein unless
otherwise defined herein being used herein as therein defined)
among the undersigned, Crompton & Knowles Corporation, a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the Italian
Borrowers named therein and the undersigned, the Lender Parties
parties thereto, Citicorp USA, Inc., as agent for the Lender
Parties, and the Chase Manhattan Bank, as Managing Agent, and
hereby gives you notice, irrevocably, pursuant to Section 2.04 of
the Credit Agreement that the undersigned hereby requests a
Drawing under the Credit Agreement and, in that connection, sets
forth below the information relating to such Drawing (the
"Proposed Drawing") as required by Section 2.04(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Drawing is
___________, ____.
(ii) The aggregate Face Amount of the Proposed Drawing
is CN$__________.
(iii) The initial Maturity Date for each Banker's
Acceptance comprising part of the Proposed Drawing is
[one][[two][three][six] months.
The undersigned hereby certifies that the following
statements are true on the date hereof and will be true on the
date of the Proposed Drawing:
(A) the representations and warranties contained in
each Loan Document are complete and correct on and as of the date
of the Proposed Drawing, before and after
giving effect to such Proposed Drawing and to the
application of the proceeds therefrom, as though made on and as
of such date other than any such representations and warranties
that, by their terms, refer to a specific date other than the
date of the Proposed Drawing, in which case, as of such specific
date; and
(B) no event has occurred and is continuing, or would
result from the Proposed Drawing or from the application of the
proceeds therefrom, that constitutes a Default.
Very truly yours,
UNIROYAL CHEMICAL CO.
By_______________________________________
Name:
Title
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Third Amended and Restated
Credit Agreement dated as of March 31, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among Crompton & Knowles Corporation, a Massachusetts
corporation ("Crompton Corp."), Crompton & Knowles Colors
Incorporated, a Delaware corporation ("Crompton Colors"), Davis-
Standard Corporation, a Delaware corporation ("Davis- Standard"),
Ingredient Technology Corporation, a Delaware corporation
("ITC"), Uniroyal Chemical Company, Inc., a New Jersey
corporation, the B-2 Borrowers named therein, the Italian
Borrowers named therein and Uniroyal Chemical Co., a corporation
organized under the laws of Nova Scotia, Canada (collectively,
the "Borrowers"), the Lender Parties (as defined in the Credit
Agreement), Citicorp Securities, Inc., as Arranger, Citicorp USA,
Inc., as agent for the Lender Parties (the "Agent"), and The
Chase Manhattan Bank, as Managing Agent. Terms defined in the
Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule
1 hereto agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and
obligations under the Credit Agreement as of the date hereof
equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit
Agreement Facility or Facilities specified on Schedule 1 hereto.
After giving effect to such sale and assignment, the Assignee's
Commitments and the amount of the Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created
or purported to be created under or in connection with, the Loan
Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant thereto; and (iv)
attaches the Note or Notes held by the Assignor and requests that
the Agent exchange such Note or Notes for a new Note or Notes
payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto or new Notes
payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the
Assignor in an amount equal to the Commitments retained by the
Assignor under the Credit Agreement, respectively, as specified
on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor
or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations
that by the terms of the Credit Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be;
and (vi) attaches any U.S. Internal Revenue Service forms
required under Section 2.13 of the Credit Agreement.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance and
recording by the Agent. The effective date for this Assignment
and Acceptance (the "Effective Date") shall be the date of
acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as
of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender Party
thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent,
from and after the Effective Date, the Agent shall make all
payments under the Credit Agreement and the Notes in respect of
the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
New York.
8. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
As to the _____Facility in respect of which an interest is being
assigned:
Percentage interest assigned: __________%
Assignor's Commitment assigned to Assignee: $__________
Aggregate outstanding principal amount of
Advances assigned: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date (if other than date of acceptance by Agent):
2 ________ __, ____
[NAME OF ASSIGNOR], as Assignor
By
Title:
Dated: _________ __, ____
[NAME OF ASSIGNEE], as Assignee
By
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
2 This date should be no earlier than five Business Days after
the delivery of this Assignment.
Accepted 3 [and Approved] this ____
day of ___________, ____
CITICORP USA, INC.
By
Title:
2 [Approved this ____ day
of _____________, ____
CROMPTON & KNOWLES CORPORATION
By
Title: ]
3 Required if the Assignee is an Eligible Assignee solely by
reason of clause (a)(iii) or (b) of the definition of Eligible
Assignee.
EXHIBIT D-1
FORM OF CONSENT
Dated as of March 31, 1998
The undersigned, (a) Crompton & Knowles Corporation,
("Crompton Corp."), the Parent Guarantor under the Parent
Guaranty and (b) each of the Guarantors under the Subsidiary
Guaranty and designated on the signature pages hereof as a
"Subsidiary Guarantor", in each case in favor of the Agent, for
its benefit and the benefit of the Lender Parties party to the
Existing Credit Agreement as amended and restated by the Third
Amended and Restated Credit Agreement dated as of March 31, 1998
(as amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Third Amended and Restated
Credit Agreement"; terms not otherwise defined herein shall have
the meaning herein as therein ascribed to them) among Crompton
Corp., Crompton & Knowles Colors Incorporated, a Delaware
corporation, Davis-Standard Corporation, a Delaware corporation,
Ingredient Technology Corporation, a Delaware corporation,
Uniroyal Chemical Company, Inc., a New Jersey corporation, B-2
Borrowers named therein, the Italian Borrowers named therein and
Uniroyal Chemical Co., a corporation organized under the laws of
Nova Scotia, Canada, the Lender Parties party thereto, Citicorp
USA, Inc., as Agent for the Lender Parties, and The Chase
Manhattan Bank, as Managing Agent, hereby consent to such Third
Amended and Restated Credit Agreement and hereby confirm and
agree that notwithstanding the effectiveness of such Third
Amended and Restated Credit Agreement, each of the Parent
Guaranty and the Subsidiary Guaranty shall continue to be in full
force and effect and is hereby ratified and confirmed in all
respects, except that, on and after the effectiveness of such
Third Amended and Restated Credit Agreement, each reference in
the Parent Guaranty and the Subsidiary Guaranty to the "Credit
Agreement", "thereunder", "thereof" or words of like import shall
mean and be a reference to the Third Amended and Restated Credit
Agreement.
CROMPTON & KNOWLES
CORPORATION
By_________________________
Title:
SUBSIDIARY GUARANTORS
CK HOLDING CORPORATION
By_________________________
Title:
CNK DISPOSITION CORP.
By_________________________
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By_________________________
Title:
CROMPTON & KNOWLES OVERSEAS
CORPORATION
By_________________________
Title:
DAVIS-STANDARD CORPORATION
By_________________________
Title:
INGREDIENT TECHNOLOGY CORPORATION
By_________________________
Title:
GUSTAFSON, INC.
By_________________________
Title:
GUSTAFSON INTERNATIONAL COMPANY
By_________________________
Title:
KEM MANUFACTURING CORPORATION
By_________________________
Title:
LOKAR ENTERPRISES, INC.
By_________________________
Title:
TRACE CHEMICALS, INC.
By_________________________
Title:
UNIROYAL CHEMICAL BRAZIL HOLDING, INC.
By_________________________
Title:
UNIROYAL CHEMICAL COMPANY, INC.
By_________________________
Title:
UNIROYAL CHEMICAL CORPORATION
By_________________________
Title:
UNIROYAL CHEMICAL EXPORT LIMITED
By_________________________
Title:
UNIROYAL CHEMICAL INTERNATIONAL
COMPANY
By_________________________
Title:
UNIROYAL CHEMICAL LEASING
COMPANY, INC.
By_________________________
Title:
EXHIBIT D-2
[SEE EXHIBIT D-1]
EXHIBIT E-1
May 5, 1998
To the Initial Lenders party to the
Credit Agreement referred
to below and to Citicorp USA, Inc.,
as Agent
Ladies and Gentlemen:
We have acted as special New York counsel to Citicorp
USA, Inc., as Agent, in connection with the preparation,
execution and delivery of the Third Amended and Restated Credit
Agreement dated as of March 31, 1998 (the "Credit Agreement"),
among Crompton & Knowles Corporation, a Massachusetts
corporation, Crompton & Knowles Colors Incorporated, a Delaware
corporation, Ingredient Technology Corporation, a Delaware
corporation, Uniroyal Chemical Company, Inc., a New Jersey
corporation, the B-2 Borrowers parties thereto, the Italian
Borrowers parties thereto, Uniroyal Chemical Co., a corporation
organized under the laws of Nova Scotia, Canada (collectively,
the "Borrowers"), and each of you (each a "Lender"). Unless
otherwise defined herein, terms defined in the Credit Agreement
are used herein as therein defined.
In that connection, we have examined a counterpart of
the Credit Agreement executed by each of the Borrowers and, to
the extent relevant to our opinion expressed below, the other
documents delivered by the Borrowers pursuant to Section 3.01 of
the Credit Agreement.
In our examination of the Credit Agreement and such
other documents, we have assumed, without independent
investigation (a) the due execution and delivery of the Credit
Agreement by all parties thereto, (b) the genuineness of all
signatures, (c) the authenticity of the originals of the
documents submitted to us and (d) the conformity to originals of
any documents submitted to us as copies.
In addition, we have assumed, without independent
investigation, that (i) each of the Borrowers is duly organized
and validly existing under the laws of the jurisdiction of its
organization and has full power and authority (corporate and
otherwise) to execute, deliver and perform the Credit Agreement
and (ii) the execution, delivery and performance by each of the
Borrowers of the Credit Agreement have been duly authorized by
all necessary action (corporate or otherwise) and do not (A)
contravene the certificate of incorporation, bylaws or other
constituent documents of any Borrower, (B) conflict with or
result in the breach of any document or instrument binding on any
Borrower or (C) violate or require any governmental or regulatory
authorization or other action under any law, rule or regulation
applicable to any Borrower other than New York law or United
States federal law applicable to borrowers generally or, assuming
the correctness of the Borrowers' statements made as
representations and warranties in Section 4.01(d) of the Credit
Agreement, applicable to any Borrower. We have also assumed that
the Credit Agreement is the legal, valid and binding obligation
of each Lender, enforceable against such Lender in accordance
with its terms.
Based upon the foregoing examination and assumptions
and upon such other investigation as we have deemed necessary and
subject to the qualifications set forth below, we are of the
opinion that the Credit Agreement is the legal, valid and binding
obligation of each Borrower, enforceable against each such
Borrower in accordance with its terms.
Our opinion above is subject to the following
qualifications:
(i) Our opinion above is subject to the
effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar law affecting creditors'
rights generally.
(ii) Our opinion above is also subject to the
effect of general principles of equity, including (without
limitation) concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether considered in a
proceeding in equity or at law).
(iii) We express no opinion as to the
enforceability of the indemnification provisions set forth in
Section 8.04 of the Credit Agreement to the extent enforcement
thereof is contrary to public policy regarding the application of
this opinion letter at such time.
Very truly yours,
EB:SLH
EXHIBIT E-2
March 31, 1998
To the Initial Lenders party to the Credit
Agreement referred to below and to
Citicorp USA, Inc., as Agent for
the Lender Parties and The Chase
Manhattan Bank, as Managing Agent
CROMPTON & KNOWLES CORPORATION
and
UNIROYAL CHEMICAL CORPORATION
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to
Section 3.01(f)(xi) of the Third Amended and Restated Credit
Agreement dated as of the date hereof (the "Credit Agreement")
among Crompton & Knowles Corporation, a Massachusetts corporation
("Crompton"), Crompton & Knowles Colors Incorporated, a Delaware
corporation ("Crompton Colors"), Davis- Standard Corporation, a
Delaware corporation ("Davis-Standard"), Ingredient Technology
Corporation, a Delaware corporation ("ITC", and together with
Crompton, Crompton Colors and Davis-Standard, the "Crompton
Borrowers"), Uniroyal Chemical Company, Inc. ("Uniroyal"), the B-
2 Borrowers named therein, the Italian Borrowers named therein
and Uniroyal Chemical Co., the Lender Parties party thereto,
Citicorp USA, Inc., as Agent (the "Agent") and The Chase
Manhattan Bank, Corestates Bank N.A. and First Union National
Bank, as Managing Agents. Terms defined in the Credit Agreement
and in the Crompton Security Agreement referred to therein,
unless otherwise defined herein, are used herein as therein
defined.
I am the General Counsel of Crompton and have acted as
counsel to the Loan Parties in connection with (a) the Credit
Agreement, (b) the Subsidiary Guaranty, dated as of August 21,
1996 (the "Subsidiary Guaranty") made by the Guarantors party
thereto in favor of the Guaranteed Parties, (c) the Parent
Guaranty, dated as of August 21, 1996 (the "Parent Guaranty"),
made by Crompton in favor of the Guaranteed Parties, (d) each of
the consents executed by the Loan Parties in connection with the
Credit Agreement (the "Consents", and together with the Credit
Agreement, the Subsidiary Guaranty, and the Parent Guaranty, the
"Agreements") and (e) certain other instruments and documents
related to the Agreements.
In connection with this opinion, I have examined (i)
the Agreements and (ii) the certificates of incorporation and by-
laws of Crompton and Uniroyal. I have also examined such records
of the Loan Parties and such other documents, certificates and
records as I have deemed necessary or appropriate as a basis for
the opinions set forth herein.
In my examination of the documents referred to above, I
have assumed (i) the due execution and delivery, pursuant to due
authorization, of each of the documents referred to above by all
parties thereto other than the Loan Parties, (ii) the
authenticity of all documents submitted to me as originals and
(iii) the conformity to originals of all documents submitted to
me as copies.
I am qualified to practice law in the Commonwealth of
Pennsylvania and in rendering the opinions expressed herein I
express no opinion as to the laws of any jurisdiction other than
the laws of the Commonwealth of Pennsylvania.
Based on the foregoing and upon such investigation as I
have deemed necessary in my capacity as General Counsel, I am of
the opinion that:
1. None of the execution, delivery or
performance by each of the Loan Parties of the Agreements to
which it is a party, nor the consummation of the transactions
contemplated thereby will violate, or be in conflict with, or
constitute a default under, or permit the termination of, any
agreement or instrument to which such Loan Party is a party or by
which such Loan Party (or its properties) is bound which,
individually or in the aggregate, would have a material adverse
effect on Crompton and its Subsidiaries, taken as a whole.
2. To the best of my knowledge, except as
disclosed in the Credit Agreement or the Schedules thereto, there
is no action, proceeding or investigation pending or threatened
against any of the Loan Parties that (i) could reasonably be
expected to result in any material adverse effect on the
business, operations or financial condition of Crompton and its
Subsidiaries taken as a whole or (ii) purports to affect the
legality, validity or enforceability of any Loan Document to
which any Loan Party is a party or any of the transactions
contemplated by the Credit Agreement.
3. Each of Crompton and Uniroyal (a) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and (b)
has all requisite corporate power and authority to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
4. The execution, delivery and performance by
Crompton and Uniroyal of each Loan Document to which it is a
party, and the consummation of the other transactions
contemplated by the Credit Agreement are within each such party's
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene each such party's charter
or by-laws.
5. No authorization or approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery, recordation, filing or performance by Crompton or
Uniroyal of any Loan Document to which it is a party, or for the
consummation of the other transactions contemplated thereby.
6. Each Loan Document to which any of Crompton
or Uniroyal is a party has been duly executed and delivered by
such party.
This opinion is limited to the matters stated herein, and no
opinion is implied or may be inferred beyond the matters
expressly stated. This opinion is being furnished only to you
and is solely for your benefit and is not to be used, circulated,
quoted, relied upon or otherwise referred to by any other person
or for any other purpose without my prior written consent,
provided, a copy of this letter may be delivered by you to any
Eligible Assignee in accordance with the provisions of the Credit
Agreement, and such Eligible Assignee may rely on the opinions
expressed above as if this opinion letter were addressed and
delivered to such Eligible Assignee on the date hereof.
Very truly yours,
EXHIBIT F
FORM OF DESIGNATION LETTER
[DATE]
To each of the Lenders
parties to the Credit Agreement
(as defined below), to Citicorp USA, Inc.
as Agent for such Lenders and to
The Chase Manhattan Bank, as
Managing Agent
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated
Credit Agreement dated as of March 31, 1998 (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Credit Agreement") among Crompton
& Knowles Corporation ("Crompton Corp."), a Massachusetts
corporation, Crompton & Knowles Colors Incorporated, a Delaware
corporation, Davis-Standard Corporation, a Delaware corporation,
Ingredient Technology Corporation, a Delaware corporation,
Uniroyal Chemical Company, Inc., a New Jersey corporation, the B-
2 Borrowers named therein, the Italian Borrowers named therein
and Uniroyal Chemical Co., a corporation organized under the laws
of Nova Scotia, Canada (collectively, the "Borrowers"), certain
Lender Parties party thereto, Citicorp USA, Inc., as Agent for
the Lender Parties, and The Chase Manhattan Bank, as Managing
Agent. Terms used herein and defined in the Credit Agreement
shall have the respective meanings ascribed to such terms in the
Credit Agreement.
Please be advised that Crompton Corp hereby designates
its undersigned Subsidiary, ____________ ("Designated [Italian]
Subsidiary"), as a "Designated [Italian] Subsidiary" under and
for all purposes of the Credit Agreement.
The Designated [Italian] Subsidiary, in consideration of
each Lender's agreement to extend credit to it under and on the
terms and conditions set forth in the Credit Agreement, does
hereby assume each of the obligations imposed upon a ["Designated
Subsidiary" and a "B-2 Borrower" ]["Designated Italian
Subsidiary" and an "Italian Borrower"] under the Credit Agreement
and agrees to be bound by the terms and conditions of the Credit
Agreement. In furtherance of the foregoing, the Designated
[Italian] Subsidiary hereby represents and warrants, solely with
respect to itself, to each Lender Party as follows:
(a) The Designated [Italian] Subsidiary, to the
extent applicable under the laws of the jurisdiction of
incorporation, (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure
to so qualify or be licensed would not have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock
of the Borrowers has been validly issued and is fully paid and
non-assessable.
(b) Set forth on Schedule I hereto is a complete and
accurate list as of the date hereof of all Subsidiaries of the
Designated [Italian] Subsidiary, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital
stock authorized, and the number outstanding, on the date hereof
and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by such Designated [Italian]
Subsidiary and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock
of all of such Subsidiaries to the extent owned by the Designated
[Italian] Subsidiary and its Subsidiaries has been validly
issued, is fully paid and non-assessable and is owned by such
Designated [Italian] Subsidiary or one or more of its
Subsidiaries free and clear of all Liens, except those created
under the Loan Documents. Each such Subsidiary (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (ii) is
duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed
would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without
limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted.
(c) The execution, delivery and performance by the
Designated [Italian] Subsidiary of this Agreement, the Notes,
each other Loan Document and each Related Document to which it is
or is to be a party, and the other transactions contemplated
hereby, are within such Designated [Italian] Subsidiary's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Designated
[Italian] Subsidiary's charter or bylaws, (ii) violate any law,
rule, regulation (including, without limitation, Regulation X of
the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default
under, any loan agreement, indenture, mortgage, deed of trust or
other instrument or material contract or material lease binding
on or affecting the Designated [Italian] Subsidiary, any of its
Subsidiaries or any of their properties or (iv) except for the
Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of
the properties of the Designated [Italian] Subsidiary or any of
its Subsidiaries. The Designated [Italian] Subsidiary or any of
its Subsidiaries is not in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such loan agreement,
indenture, mortgage, deed of trust or other instrument or
material contract or material lease, the violation or breach of
which would have a Material Adverse Effect.
(d) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by
the Designated [Italian] Subsidiary of this Agreement, the Notes,
any other Loan Document or any Related Document to which it is or
is to be a party, or for the transactions contemplated hereby,
(ii) the grant by the Designated [Italian] Subsidiary of the
Liens granted by it pursuant to the Collateral Documents, (iii)
the perfection or maintenance of the Liens created by the
Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for
the authorizations, approvals, actions, notices and filings
listed on Schedule 4.01(d), all of which have been duly obtained,
taken, given or made and are in full force and effect.
(e) This Agreement has been, and each of the Notes,
each other Loan Document and each Related Document when delivered
hereunder will have been, duly executed and delivered by the
Designated [Italian] Subsidiary party thereto. This Agreement
is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal,
valid and binding obligation of the Designated [Italian]
Subsidiary party thereto, enforceable against such Designated
[Italian] Subsidiary in accordance with its terms.
(f) There is no action, suit, investigation,
litigation or proceeding affecting the Designated [Italian]
Subsidiary or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other
Loan Document or any Related Document or the consummation of the
transactions contemplated hereby, and there has been no material
adverse change in the status, or financial effect on the
Designated [Italian] Subsidiary or any of its Subsidiaries, of
the Disclosed Litigation from that described on Schedule 3.01(f).
(g) (i) Except as disclosed in Part I of
Schedule 4.01(o) to the Credit Agreement, the operations and
properties of the Designated [Italian] Subsidiary and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-
compliance with such Environmental Laws and Environmental Permits
has been resolved without material ongoing obligations or costs,
and no circumstances exist that would be reasonably likely to (i)
form the basis of an Environmental Action against the Designated
[Italian] Subsidiary or any of its Subsidiaries or any of their
properties that could have a Material Adverse Effect or (ii)
cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability
under any Environmental Law in effect on the date hereof.
(ii) Except as disclosed in Part II of
Schedule 4.01(o) to the Credit Agreement or as would not,
individually or in the aggregate, result in a Material Adverse
Effect, none of the properties currently or formerly owned or
operated by the Designated [Italian] Subsidiary or any of its
Subsidiaries is listed or, to the best knowledge of the
Designated [Italian] Subsidiary, proposed for listing on the NPL
or on the CERCLIS or any analogous foreign, state or local list
or is adjacent to any such property; there are no and never have
been any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by the
Designated [Italian] Subsidiary or any of its Subsidiaries or, to
the best of its knowledge, on any property formerly owned or
operated by the Designated [Italian] Subsidiary or any of its
Subsidiaries; there is no asbestos or asbestos-containing
material on any property currently owned or operated by the
Designated [Italian] Subsidiary or any of its Subsidiaries; and
Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or
operated by the Designated [Italian] Subsidiary or any of its
Subsidiaries.
(iii) Except as disclosed in Part III of Schedule
4.01(o) to the Credit Agreement, neither the Designated [Italian]
Subsidiary nor any of its Subsidiaries is undertaking, and has
not completed, either individually or together with other
potentially responsible parties, any investigation or assessment
or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials
at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law; and all Hazardous
Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned
or operated by the Designated [Italian] Subsidiary or any of its
Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to the Designated
[Italian] Subsidiary or any of its Subsidiaries.
(h) The Designated [Italian] Subsidiary is,
individually and together with its Subsidiaries, Solvent.
(i) The Designated [Italian] Subsidiary is
incorporated under the laws of a jurisdiction other than the
United States of America.
THIS DESIGNATION LETTER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
This Designation Letter may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of this Designation Letter by telecopier shall be
effective as delivery of a manually executed counterpart of this
Designation Letter.
Very truly yours,
CROMPTON & KNOWLES CORPORATION
By _________________________
Name:
Title:
[DESIGNATED [ITALIAN] SUBSIDIARY]
By__________________________
Name:
Title:
EXHIBIT G
FORM OF ACCEPTANCE BY PROCESS AGENT
[Letterhead of Process Agent]
[Date]
To each of the Lenders parties
to the Credit Agreement
(as defined below), to
Citicorp USA, Inc., as Agent for
said Lenders and The Chase
Manhattan Bank, as Managing Agent
[Name of Designated [Italian] Subsidiary]
Ladies and Gentlemen:
Reference is made to (i) that certain Third Amended and
Restated Credit Agreement dated as of March 31, 1998 among
Crompton & Knowles Corporation ("Crompton Corp."), a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the Italian
Borrowers named therein and Uniroyal Chemical Co., a corporation
organized under the laws of Nova Scotia, Canada (collectively,
the "Borrowers"), certain Lender Parties party thereto, Citicorp
USA, Inc., as Agent for the Lender Parties, and The Chase
Manhattan Bank, as Managing Agent (such Credit Agreement as it
may hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement"; the terms defined
therein being used herein as therein defined), and (ii) to the
Designation Letter, dated _________, pursuant to which __________
(the "Designated [Italian] Subsidiary") has become [a B-2
Borrower][an Italian Borrower].
Pursuant to Section 8.08 of the Credit Agreement to which
the Designated [Italian] Subsidiary has become subject pursuant
to its Designation Letter, the Designated [Italian] Subsidiary
has appointed _______________ (with an office on the date hereof
at _______________, Attention: __________) as Process Agent to
receive on behalf of the Designated [Italian] Subsidiary and its
property service of copies of the summons and complaint and any
other process which may be served in any action or proceeding in
any New York State or Federal court sitting in New York City
arising out of or relating to the Credit Agreement.
The undersigned hereby accepts such appointment as
Process Agent and agrees with each of you that (i) the
undersigned will maintain an office in ________________ through
the Termination Date and will give the Agent prompt notice of any
change of address of the undersigned, (ii) the undersigned will
perform its duties as Process Agent to receive on behalf of the
Designated [Italian] Subsidiary and its property service of
copies of the summons and complaint and any other process which
may be served in any action or proceeding in any New York State
or Federal court sitting in New York City arising out of or
relating to the Credit Agreement and (iii) the undersigned will
forward forthwith to the Designated [Italian] Subsidiary at its
address at ________________ or, if different, its then current
address, copies of any summons, complaint and other process which
the undersigned receives in connection with its appointment as
Process Agent.
This acceptance and agreement shall be binding upon the
undersigned and all successors of the undersigned.
Very truly yours,
[NAME OF PROCESS AGENT]
By_______________________
EXHIBIT H
FORM OF OPINION OF COUNSEL
TO A DESIGNATED [ITALIAN] SUBSIDIARY
[Effective Date]
To each of the Lenders parties
to the Credit Agreement referred to below,
to Citicorp USA, Inc., as Agent and to
The Chase Manhattan Bank, as
Managing Agent
[Name of Designated [Italian] Subsidiary]
Ladies/Gentlemen:
This opinion is furnished to you at the direction of our
client, Crompton & Knowles Corporation ("Crompton Corp."),
pursuant to Section 3.03 of the Third Amended and Restated Credit
Agreement dated as of March 31, 1998 among Crompton Corp., a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the Italian
Borrowers named therein and Uniroyal Chemical Co., a corporation
organized under the laws of Nova Scotia, Canada (collectively,
the "Borrowers"), certain Lender Parties party thereto, Citicorp
USA, Inc., as Agent for the Lender Parties, and The Chase
Manhattan Bank, as Managing Agent (such Credit Agreement as it
may hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein as therein defined.
We have acted as counsel for __________ (the "Designated
[Italian] Subsidiary") in connection with the preparation,
execution and delivery of the Designation Letter executed by the
Designated [Italian] Subsidiary.
In that connection we have examined:
(1) the Designation Letter executed by the Designated
[Italian] Subsidiary;
(2) the Credit Agreement;
(3) the documents furnished by the Designated
[Italian] Subsidiary pursuant to Article III of the Credit
Agreement;
(4) the Certificate of Incorporation (or analogous
authorizations) of the Designated [Italian] Subsidiary and all
amendments thereto (the "Charter"); and
(5) the by-laws (or analogous authorizations) of the
Designated [Italian] Subsidiary and all amendments thereto (the
"By-laws").
We have also examined the originals, or copies certified to our
satisfaction, of the documents listed in a certificate of the
chief financial officer of the Designated [Italian] Subsidiary,
dated the date hereof (the "Certificate"), certifying that the
documents listed in such certificate are all of the indentures,
loan or credit agreements, leases, mortgages, security
agreements, bonds, notes and other agreements or instruments, and
all of the orders, writs, judgments, awards, injunctions and
decrees, which affect or purport to affect the Designated
[Italian] Subsidiary's right to borrow money or the Designated
[Italian] Subsidiary's obligations under the Credit Agreement,
its Designation Letter or its [Working Capital B-2][Italian
Borrower] Notes. In addition, we have examined the originals, or
copies certified to our satisfaction, of such other corporate
records of the Designated [Italian] Subsidiary, certificates of
public officials and of officers of the Designated [Italian]
Subsidiary, and agreements, instruments and documents, as we have
deemed necessary as a basis for the opinions hereinafter
expressed. As to questions of fact material to such opinions, we
have, when relevant facts were not independently established by
us, relied upon certificates of the Designated [Italian]
Subsidiary or its officers or of public officials (including
telex and telephone confirmations of such certificates), and in
such instances we have made no independent inquiry with respect
to such factual matters.
In our examination of the documents referred to above, we
have assumed (i) the due execution and delivery, pursuant to due
authorization, of each of the documents referred to above by all
parties thereto other than the Designated [Italian] Subsidiary,
(ii) the authenticity of all documents submitted to us as
originals and (iii) the conformity to originals of all documents
submitted to us as copies.
We are qualified to practice law in [name of country] and
we do not purport to be experts on any laws other than the laws
of [name of country].
Based upon the foregoing and upon such investigation as
we have deemed necessary, we are of the following opinion:
1. The Designated [Italian] Subsidiary (a) is a
corporation duly organized, validly existing and in good standing
under the laws of [name of country] and (b) has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
2. The execution, delivery and performance by
the Designated [Italian] Subsidiary of each Loan Document and
each Related Document to which it is a party, and the
consummation of the other transactions contemplated by the Credit
Agreement are within the Designated [Italian] Subsidiary's
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene the Designated
[Italian] Subsidiary's charter or bylaws.
3. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery,
recordation, filing or performance by the Designated [Italian]
Subsidiary of any Loan Document or any Related Document to which
it is a party, or for the consummation of the other transactions
contemplated thereby.
4. Each Loan Document and each Related Document
to which the Designated [Italian] Subsidiary is a party has been
duly executed and delivered by the Designated [Italian]
Subsidiary.
5. The appointment of Crompton Corp. as the
Designated [Italian] Subsidiary's attorney-in-fact pursuant to
Section 8.15 of the Credit Agreement constitutes the legal, valid
and binding obligation of the Designated [Italian] Subsidiary
under [name of country]'s law, enforceable against such [B-2]
[Italian] Borrower in accordance with its terms.
6. To the best of my knowledge, there are no
pending or overtly threatened actions or proceedings against the
Designated [Italian] Subsidiary or any of its subsidiaries before
any court, governmental agency or arbitrator which are likely to
materially adversely affect (i) the financial condition or
operations of the Designated [Italian] Subsidiary or any of its
Subsidiaries or (ii) the ability of the Designated [Italian]
Subsidiary to perform its obligations under the Loan Documents or
Related Documents to which it is a party, or which purport to
affect the legality, validity, binding effect or enforceability
of such Loan Documents or Related Documents.
7. The submission to the jurisdiction of the New
York State and Federal courts sitting in New York City (and any
appellate court from any thereof) contained in Section 8.13 of
the Credit Agreement and contained in the other Loan Documents to
which the Designated [Italian] Subsidiary is a party are
irrevocably binding on the Designated [Italian] Subsidiary.
8. In any action or proceeding arising out of or
relating to the Credit Agreement or any other Loan Document to
which the Designated [Italian] Subsidiary is a party in any court
sitting in [name of country], such court would recognize and give
effect to the provisions of Section 8.16 of the Credit Agreement
and such identical provisions contained in such other Loan
Documents wherein the Designated [Italian] Subsidiary agrees that
the Credit Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, U.S.A.
Without limiting the generality of the foregoing, a court sitting
in the [name of country] would apply the usury law of the State
of New York, and would not apply the usury law of [name of
country], to the Credit Agreement and such Loan Documents.
However, if a court were to hold that the Credit Agreement or
such Loan Documents are governed by, and are to be construed in
accordance with, the laws of [name of country], the Credit
Agreement and such Loan Documents would be, under the laws of the
[name of country], the legal, valid and binding obligations of
the Designated [Italian] Subsidiary enforceable against the
Designated [Italian] Subsidiary in accordance with their terms,
subject, however, to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and (ii) the effect of general
principles of equity.
A copy of this letter may be delivered by you to any
Eligible Assignee in accordance with the provisions of the Credit
Agreement, and such Eligible Assignee may rely on the opinions
expressed above as if this opinion letter were addressed and
delivered to such Eligible Assignee on the date hereof.
Delivery of an executed copy of this opinion letter by
telecopier shall be effective as delivery of a manually executed
copy of this opinion letter.
Very truly yours,
EXHIBIT I
FORM OF ITALIAN
LENDER JOINDER AGREEMENT
ITALIAN LENDER JOINDER AGREEMENT, dated as of _______, ___,
19__, made by the Italian Lender named below (the "Italian
Lender") and the Eligible Assignee named below (the "Eligible
Assignee") pursuant to the Third Amended and Restated Credit
Agreement dated as of March 31, 1998 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement") among Crompton & Knowles
Corporation, a Massachusetts corporation, Crompton & Knowles
Colors Incorporated, a Delaware corporation, Davis-Standard
Corporation, a Delaware corporation, Ingredient Technology
Corporation, a Delaware corporation, Uniroyal Chemical Company,
Inc., a New Jersey corporation, the B-2 Borrowers named therein,
the Italian Borrowers named therein and Uniroyal Chemical Co., a
corporation organized under the laws of Nova Scotia, Canada
(collectively, the "Borrowers"), certain Lender Parties party
thereto, Citicorp USA, Inc., as Agent for the Lender Parties, and
The Chase Manhattan Bank, as Managing Agent. Terms used herein
and defined in the Credit Agreement shall have the respective
meanings ascribed to such terms in the Credit Agreement.
For good and valid consideration, the sufficiency of which
hereby is acknowledged, the undersigned Eligible Assignee hereby
agrees (for the benefit of the Lender Parties and the Loan
Parties) that it shall serve as an "Italian Lender" under the
Credit Agreement upon the terms and subject to the conditions set
forth therein.
The undersigned hereby:
(a) represents and warrants that it is legally authorized
to enter into this Italian Lender Joinder Agreement
and is an Eligible Assignee under the Credit
Agreement;
(b) represents and warrants that it is located in Italy;
(c) confirms that is has received and reviewed a copy of
the Credit Agreement and the other Loan Documents
relevant to it; and
(d) agrees that it will (i) be bound by the provisions of
the Credit Agreement and each other Loan Document, in
each case, applicable to it as an Italian Lender and
(ii) perform all obligations which are required to be
performed by it as an Italian Lender pursuant to the
Credit Agreement and each other Loan Document.
From and after Effective Date set forth on Schedule I hereto
the undersigned shall (a) be an "Italian Lender" with respect to
the Currency set forth on Schedule I hereto for all purposes
under the Loan Documents and (b) have the rights and obligations
of an Italian Lender thereunder and under the other Loan
Documents and (c) be bound by the provisions of the Loan
Documents.
THIS ITALIAN LENDER JOINDER AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have caused this Italian
Lender Joinder Agreement to be executed by a duly authorized
officer as of the date set forth above.
[NAME OF ITALIAN LENDER]
By:
Title:
[NAME OF ELIGIBLE ASSIGNEE]
By:
Title:
ACKNOWLEDGED AND AGREED:
CITICORP USA, INC. as Agent
By:
Title:
SCHEDULE I
TO EXHIBIT I
DATE OF ITALIAN LENDER JOINDER AGREEMENT:
NAME OF DESIGNATED ITALIAN LENDER:
JURISDICTION:
AMOUNT OF OUTSTANDING ITALIAN
ADVANCES ASSIGNED: ____________[Foreign
Currency][US$]
NAME OF DESIGNATED [ITALIAN] SUBSIDIARY:
EFFECTIVE DATE OF ITALIAN
LENDER JOINDER AGREEMENT:
Exhibit 4.1
AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT, dated as of January 20, 1998, to the Rights Agreement,
dated as of July 20, 1988, as amended March 28, 1991, and October 1, 1992,
(the "Rights Agreement"), between Crompton & Knowles Corporation, a
Massachusetts corporation (the "Company"), and Mellon Bank, N.A., as Rights
Agent (the "Rights Agent").
The Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement. Pursuant to Section 27 of the Rights
Agreement, the Company and the Rights Agent may from time to time supplement
or amend the Rights Agreement in accordance with the provisions of Section 27
thereof. All acts and things necessary to make this Amendment a valid
agreement, enforceable according to its terms, have been done and performed,
and the execution and delivery of this Amendment by the Company and the Rights
Agent have been in all respects duly authorized by the Company and the Rights
Agent.
In consideration of the foregoing and the mutual agreements set
forth herein, the parties agree as follows:
1. Section 7 (a) (i) shall be deleted in its entirety and replaced
with the following:
(i) the close of business on August 4, 2008 (the "Final Expiration
Date")
2. Section 7(b) shall be deleted in its entirety and replaced with
the following:
(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall initially be $800, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
3. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts and
for all purposes shall be governed by and construed with the laws of such
Commonwealth applicable to contracts to be made and performed entirely within
such Commonwealth.
4. This Amendment to the Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed an original and all such counterparts shall together constitute but one
and the same instrument. Terms not defined herein shall, unless the context
otherwise requires, have the meanings assigned to such terms in the Rights
Agreement.
5. Except as expressly noted herein, this Amendment to the Rights
Agreement shall not be implication or otherwise alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements
contained in the Rights Agreement, all of which are ratified and affirmed in
all respects and shall continue in full force and effect.
6. If any term, provision, covenant or restriction of this
Amendment to the Rights Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment to the Rights
Agreement, and of the Rights Agreement, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
7. This Amendment and the Rights Agreement constitute the entire
agreement among the parties with respect to the subject matter thereof and
supersedes all prior agreements and understandings, both oral and written,
among the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the date and year first written
above.
Attest: CROMPTON & KNOWLES CORPORATION
By: /s/Elizabeth K. Krumeich By: /s/Marvin H. Happel
Attest: RIGHTS AGENT
By: /s/Lee Tinto, A.V.P. By: /s/Tracie Vicki
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
Quarters Ended Six Months Ended
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
BASIC
Earnings
Earnings before extraordinary
loss $ 39,795 $ 31,768 $ 71,738 $ 58,379
Extraordinary loss on early extinguishment
of debt (13,843) (1,227) (15,794) (1,227)
Net earnings $ 25,952 $ 30,541 $ 55,944 $ 57,152
Shares
Weighted average shares
outstanding 74,430 73,341 74,267 73,210
Per share
Earnings before extraordinary
loss $ .53 $ .44 $ .96 $ .80
Extraordinary loss on early extinguishment
of debt (.18) (.02) (.21) (.02)
Net earnings $ .35 $ .42 $ .75 $ .78
DILUTED
Earnings
Earnings before extraordinary
loss $ 39,795 $ 31,768 $ 71,738 $ 58,379
Extraordinary loss on early extinguishment
of debt (13,843) (1,227) (15,794) (1,227)
Net earnings $ 25,952 $ 30,541 $ 55,944 $ 57,152
Shares
Weighted average shares
outstanding 74,430 73,341 74,267 73,210
Common stock
equivalents 2,383 1,834 2,346 1,738
Average shares
outstanding 76,813 75,175 76,613 74,948
Per share
Earnings before extraordinary
loss $ .52 $ .43 $ .94 $ .78
Extraordinary loss on early extinguishment
of debt (.18) (.02) (.21) (.02)
Net earnings $ .34 $ .41 $ .73 $ .76
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000025757
<NAME> CROMPTON & KNOWLES CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-END> JUN-27-1998
<CASH> 14,831
<SECURITIES> 0
<RECEIVABLES> 268,786
<ALLOWANCES> 9,640
<INVENTORY> 359,307
<CURRENT-ASSETS> 717,768
<PP&E> 467,457
<DEPRECIATION> 442,246
<TOTAL-ASSETS> 1,531,283
<CURRENT-LIABILITIES> 364,801
<BONDS> 832,578
0
0
<COMMON> 7,733
<OTHER-SE> 33,026
<TOTAL-LIABILITY-AND-EQUITY> 1,531,283
<SALES> 951,556
<TOTAL-REVENUES> 951,556
<CGS> 594,556
<TOTAL-COSTS> 794,753
<OTHER-EXPENSES> (1,547)
<LOSS-PROVISION> 1,857
<INTEREST-EXPENSE> 44,118
<INCOME-PRETAX> 114,232
<INCOME-TAX> 42,494
<INCOME-CONTINUING> 71,738
<DISCONTINUED> 0
<EXTRAORDINARY> (15,794)
<CHANGES> 0
<NET-INCOME> 55,994
<EPS-PRIMARY> 0.75<F1>
<EPS-DILUTED> 0.73
<FN>
<F1>Reflects Basic earnings per share.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000025757
<NAME> CROMPTON & KNOWLES CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-END> JUN-28-1997
<CASH> 28,637
<SECURITIES> 0
<RECEIVABLES> 291,765
<ALLOWANCES> 8,493
<INVENTORY> 362,149
<CURRENT-ASSETS> 768,583
<PP&E> 476,768
<DEPRECIATION> 398,259
<TOTAL-ASSETS> 1,635,136
<CURRENT-LIABILITIES> 355,079
<BONDS> 993,237
0
0
<COMMON> 7,733
<OTHER-SE> (57,392)
<TOTAL-LIABILITY-AND-EQUITY> 1,635,136
<SALES> 968,015
<TOTAL-REVENUES> 968,015
<CGS> 617,010
<TOTAL-COSTS> 819,540
<OTHER-EXPENSES> 781
<LOSS-PROVISION> 1,093
<INTEREST-EXPENSE> 53,534
<INCOME-PRETAX> 94,160
<INCOME-TAX> 35,781
<INCOME-CONTINUING> 58,379
<DISCONTINUED> 0
<EXTRAORDINARY> (1,227)
<CHANGES> 0
<NET-INCOME> 57,152
<EPS-PRIMARY> 0.78<F1>
<EPS-DILUTED> 0.76<F2>
<FN>
<F1>Reflects Basic earnings per share. Restated for FAS 128.
<F2>Restated for FAS 128.
</FN>
</TABLE>
