Exhibit (b)
CHASE
June 20, 2000
Senior Credit Facilities
------------------------
Commitment Letter
-----------------
ISP Opco Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road Wayne, New Jersey 07470
Attention: Susan Yoss, Treasurer/Senior Vice President
Ladies and Gentlemen:
You have advised The Chase Manhattan Bank ("Chase") and
Chase Securities Inc. ("CSI") that ISP Opco Holdings Inc., a Delaware
corporation (the "Borrower"), will require credit facilities in order to finance
the acquisition (the "Acquisition") by a newly formed direct or indirect
wholly-owned subsidiary of the Borrower ("Newco") of all of the outstanding
capital stock (the "Target Stock") of Dexter Corporation, a Connecticut
corporation (the "Target"). The Transaction will be effected through a tender
offer (the "Tender Offer") by Newco for the Target Stock followed by a merger
(the "Merger") of Newco with and into the Target (collectively, the "Two-Step
Acquisition"), for a price per share of $45. In that connection, you have
requested that CSI agree to structure, arrange and syndicate senior credit
facilities in an aggregate amount of up to $1,775,000,000 (the "Facilities") and
that Chase commit to provide the Facilities and to serve as administrative agent
for the Facilities. References herein to the "Transaction" shall include the
Two-Step Acquisition and the financings described herein and all transactions
related thereto.
CSI is pleased to advise you that it is willing to act as
advisor, lead arranger and book manager for the Facilities.
Furthermore, Chase is pleased to advise you of its
commitment to provide the entire amount of the Facilities upon the terms and
subject to the conditions set forth or referred to in this commitment letter
(the "Commitment Letter") and in the Summary of Terms and Conditions attached
hereto as Exhibit A (the "Term Sheet").
It is agreed that Chase will act as the exclusive
administrative agent, and that CSI will act as an advisor, lead arranger and
book manager, for the Facilities, and each will, in such capacities, perform the
duties and exercise the authority customarily performed and exercised by it in
such roles. You and we agree that no other agents, co-agents or arrangers will
be appointed, no other titles will be awarded and no compensation (other than
that expressly contemplated by the Term Sheet and the Fee Letter referred to
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below) will be paid in connection with the Facilities without mutual
consultation and agreement among you, Chase and CSI.
We intend to syndicate the Facilities to a group of
financial institutions (together with Chase, the "Lenders") identified by us and
you. The timing, and any staging, of the syndication efforts would be determined
by CSI in consultation with you, and you agree actively to assist CSI in
completing a syndication satisfactory to it. Such assistance shall include (a)
your using commercially reasonable efforts to ensure that the syndication
efforts benefit materially from your existing lending relationships and, to the
extent possible, the existing lending relationships of the Target, (b) direct
contact between senior management and advisors of International Specialty
Products Inc. (the "Parent"), the Borrower and the proposed Lenders, (c)
assistance in the preparation of a Confidential Information Memorandum and other
marketing materials to be used in connection with the syndication and (d) the
hosting, with CSI, of one or more meetings of prospective Lenders.
In cooperation with you, CSI will manage the syndication,
including decisions to be made with you as to the selection of institutions to
be approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocations of the
commitments among the Lenders and the amount and distribution of fees among the
Lenders. To assist CSI in its syndication efforts, you agree promptly to prepare
and provide to CSI and Chase all information with respect to Parent, the
Borrower, the Target and the Transaction, including all financial information
and projections (the "Projections"), as we may reasonably request in connection
with the arrangement and syndication of the Facilities, the distribution of such
Projections in the arrangement and syndication of the Facilities being subject
to confidentiality provisions between you and the Target. You hereby represent
and covenant that (a) all information other than the Projections (the
"Information") that has been or will be made available to Chase or CSI by you or
any of your representatives is or will be, when furnished, complete and correct
in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances under which such statements are made and (b) the
Projections that have been or will be made available to Chase or CSI by you or
any of your representatives have been or will be prepared in good faith based
upon reasonable assumptions. You understand that in arranging and syndicating
the Facilities we may use and rely on the Information and Projections without
independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's
agreement to perform the services described herein, you agree to pay to Chase
the nonrefundable fees set forth in Annex I to the Term Sheet and in the Fee
Letter dated the date hereof and delivered herewith (the "Fee Letter").
Chase's commitment hereunder and CSI's agreement to perform
the services described herein are subject to (a) there not occurring or becoming
known to us any material adverse condition or material adverse change in or
affecting the business, operations or financial condition of the Borrower and
its subsidiaries, taken as a whole, or the Target and its subsidiaries, taken as
a whole, (b) our not becoming aware after the date hereof of any information or
other matter (including any matter relating to financial models and underlying
assumptions relating to the Projections) affecting Parent or the Target or their
respective subsidiaries or the Transaction that in our reasonable judgment is
inconsistent in a material and adverse manner with any such information or other
matter disclosed to us prior to the date hereof, and which is not known by any
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of our officers who are working with you on the Transaction prior to the date
hereof, (c) there not having occurred a material disruption of or material
adverse change in financial, banking or capital market conditions that, in our
judgment, could materially impair the syndication of the Facilities, (d) our
satisfaction that prior to and during the syndication of the Facilities there
shall be no competing offering, placement or arrangement of any material debt
securities or bank financing by or on behalf of the Parent or any of its
subsidiaries, (e) the negotiation, execution and delivery of definitive
documentation with respect to the Facilities reasonably satisfactory to Chase
and its counsel on or before October 31, 2000, (f) the Borrower having delivered
a notice (the "Closing Notice") to Chase and CSI at least 30 days prior to the
Tender Closing Date (as defined in the Term Sheet) to the effect that the Tender
Closing Date may occur on or after such 30 th day and (g) the other conditions
set forth or referred to in the Term Sheet. Any matters that are not covered by
the provisions hereof and of the Term Sheet are subject to the approval and
agreement of Chase, CSI and the Borrower.
You agree (a) to indemnify and hold harmless Chase, CSI,
their affiliates and their respective officers, directors, employees, advisors,
and agents (each, an "Indemnified Person") from and against any and all losses,
claims, damages and liabilities to which any such Indemnified Person may become
subject arising out of or in connection with this Commitment Letter, the
Facilities, the use of the proceeds thereof, the Transaction or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any Indemnified Person is a party thereto, and to
reimburse each Indemnified Person upon demand for any reasonable and documented
legal or other expenses incurred in connection with investigating or defending
any of the foregoing, provided that the foregoing indemnity will not, as to any
Indemnified Person, apply to losses, claims, damages, liabilities or related
expenses to the extent they are found by a final, non-appealable judgment of a
court to arise from the bad faith, willful misconduct or gross negligence of
such Indemnified Person, breach of law or agreement with the Parent or its
subsidiaries ("Non-Indemnifiable Losses"), and (b) to reimburse Chase, CSI and
their affiliates on demand for all reasonable and documented out-of-pocket
expenses (including due diligence expenses, syndication expenses, consultant's
fees and expenses, travel expenses, and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Facilities and any
related documentation (including this Commitment Letter, the Term Sheet, the Fee
Letter and the definitive financing documentation) or the administration,
amendment, modification or waiver thereof. No Indemnified Person shall be liable
for any damages arising from the use by unauthorized persons of Information or
other materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons or for any special,
indirect, consequential or punitive damages in connection with the Facilities,
except to the extent arising from a Non-Indemnifiable Loss.
You acknowledge that Chase and its affiliates (the term
"Chase" as used below in this paragraph being understood to include such
affiliates) may be providing debt financing, equity capital or other services
(including financial advisory services) to other companies in respect of which
you may have conflicting interests regarding the Transaction and otherwise.
Chase will not use confidential information obtained from you by virtue of the
Transaction or its other relationships with you in connection with the
performance by Chase of services for other companies, and Chase will not furnish
any such information to other companies. You also acknowledge that Chase has no
obligation to use in connection with the Transaction, or to furnish to you,
confidential information obtained from other companies.
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This Commitment Letter shall not be assignable by you
without the prior written consent of Chase and CSI (and any purported assignment
without such consent shall be null and void), is intended to be solely for the
benefit of the parties hereto and is not intended to confer any benefits upon,
or create any rights in favor of, any person other than the parties hereto and
the Indemnified Persons.
This Commitment Letter may not be amended or waived except
by an instrument in writing signed by you, Chase and CSI. This Commitment Letter
may be executed in any number of counterparts, each of which shall be an
original, and all of which, when taken together, shall constitute one agreement.
Delivery of an executed signature page of this Commitment Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Commitment Letter, the Term Sheet, the Fee Letter, the "highly
confident letter" and the related indemnification agreement are the only
agreements that have been entered into among us with respect to the Facilities
and set forth the entire understanding of the parties with respect thereto. This
Commitment Letter shall be governed by, and construed in accordance with, the
laws of the State of New York.
This Commitment Letter is delivered to you on the
understanding that neither this Commitment Letter, the Term Sheet or the Fee
Letter nor any of their terms or substance shall be disclosed, directly or
indirectly, to any other person except (a) to your officers directors,
employees, agents, consultants and advisors who are directly involved in the
consideration of this matter or (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by applicable law, rules and
regulations, including, without limitation, tender offer rules and regulations
(in which case you agree to inform us promptly thereof), provided, that the
foregoing restrictions shall cease to apply (except in respect of the Fee Letter
and its terms and substance) after this Commitment Letter has been accepted by
you.
The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall remain
in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or Chase's commitment hereunder.
This Commitment Letter supercedes and replaces in its
entirety the Commitment Letter, dated March 23, 2000, between us and you, as
previously amended (other than the reimbursement, indemnification and
confidentiality provisions thereof).
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to us executed counterparts hereof and of the Fee Letter,
together with the amounts agreed upon pursuant to the Fee Letter to be payable
upon the acceptance hereof, not later than 5:00 p.m., New York City time, on
June 20, 2000. Chase's commitment and CSI's agreements herein will expire at
such time in the event Chase has not received such executed counterparts and
such amounts in accordance with the immediately preceding sentence.
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Chase and CSI are pleased to have been given the
opportunity to assist you in connection with this important financing.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ Lawrence Palumbo, Jr.
---------------------------------
Name: Lawrence Palumbo, Jr.
Title: Vice President
CHASE SECURITIES INC.
By: /s/ Christopher Iannaccone
---------------------------------
Name: Christopher Iannaccone
Title: Managing Director
Accepted and agreed to as of the date first written above by:
ISP OPCO HOLDINGS INC.
By: /s/ Susan B. Yoss
------------------------------------
Name: Susan B. Yoss
Title: Senior Vice President
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Exhibit A
SENIOR CREDIT FACILITIES
Summary of Terms and Conditions
June 20, 2000
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ISP Opco Holdings Inc., a Delaware corporation (the
"Borrower"), will require credit facilities in order to finance the acquisition
(the "Acquisition") by a newly formed direct or indirect wholly-owned subsidiary
of the Borrower ("Newco") of all of the outstanding capital stock (the "Target
Stock") of Dexter Corporation, a Connecticut corporation (the "Target"). The
Transaction will be effected through a tender offer (the "Tender Offer") by
Newco for the Target Stock followed by a merger (the "Merger") of Newco with and
into the Target (collectively, the "Two-Step Acquisition"), for a price per
share of $45. In that connection, you have requested that CSI agree to
structure, arrange and syndicate senior credit facilities in an aggregate amount
of up to $1,775,000,000 (the "Facilities") and that Chase commit to provide the
Facilities and to serve as administrative agent for the Facilities. This is the
Summary of Terms and Conditions for the Facilities required for the Transaction
to be effected as a "Two-Step Acquisition". References herein to the
"Transaction" shall include the Acquisition and the financings described herein
and all transactions related thereto.
I. Parties
Borrower: ISP Opco Holdings Inc.
Guarantors: ISP Chemicals Inc., ISP Technologies
Inc. and Newco and each of the other
existing and future direct and indirect
domestic wholly owned subsidiaries of
International Specialty Products Inc.
(the "Parent"), including the Target and
its wholly owned domestic subsidiaries
after the Target becomes a wholly owned
direct or indirect subsidiary of the
Parent (the "Guarantors"; the Borrower
and the Guarantors, collectively, the
"Loan Parties"). The Parent shall also
become a Guarantor if at the Tender
Closing Date or the Merger Closing Date
(each as defined below) in the
reasonable judgment of the Parent its
Indenture would unquestionably permit it
to become a Guarantor.
Advisor, Lead Arranger and Book
Manager: Chase Securities Inc. (in such capacity,
the "Arranger").
Administrative Agent: The Chase Manhattan Bank ("Chase" and,
in such capacity, the "Administrative
Agent").
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Other Agents: To be determined.
Lenders: A syndicate of banks, financial
institutions and other entities,
including Chase (collectively, the
"Lenders").
II. Types and Amounts of Credit Facilities
A. Tender Facilities
1. Tender Term Facility
Type and Amount of Facility: Nine-month term loan facility (the
"Tender Term Facility") in an amount to
be determined (the loans thereunder, the
"Tender Term Loans").
Availability: The Tender Term Loans shall be made in
multiple drawings and in minimum amounts
to be determined, during the period
commencing on the Tender Closing Date
(as defined below) and ending on the
earlier of the date nine months
thereafter and the date of the
consummation of the Merger (the "Tender
Termination Date").
Amortization: The Tender Term Loans shall be repayable
on the Tender Termination Date.
Purpose: The proceeds of the Tender Term Loans
shall be used to finance the Tender
Offer, to refinance existing
indebtedness of the Target and its
subsidiaries by means of intercompany
loans and to pay related fees and
expenses.
2. Tender Revolving Facility
Type and Amount of Facility: Nine-month revolving credit facility
(the "Tender Revolving Facility";
together with the Tender Term Facility,
the "Tender Facilities") in an amount to
be determined (the loans thereunder, the
"Tender Revolving Loans").
Availability: The Tender Revolving Facility shall be
available on a revolving basis during
the period commencing on the Tender
Closing Date and ending on the Tender
Termination Date.
Letters of Credit: A portion of the Tender Revolving
Facility not in excess of $75,000,000
shall be available for the issuance of
letters of credit (the "Tender Letters
of Credit") by Chase or, subject to
certain restrictions, any other Lenders
designated by the Borrower (in such
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capacity, the "Issuing Lenders"). No
Tender Letter of Credit shall have an
expiration date after the date that is
five business days prior to the Tender
Termination Date, provided that Tender
Letters of Credit as to which the
Borrower agrees to post cash collateral
on the Tender Termination Date (if the
Merger Closing Date does not occur) may
have an expiration date of up to 12
months from the date of issuance and may
then be continued as Merger Letters of
Credit under the Merger Revolving
Facility (as such terms are defined
below).
Drawings under any Tender Letter of
Credit shall be reimbursed by the
Borrower (whether with its own funds or
with the proceeds of Tender Revolving
Loans) on the same business day. To the
extent that the Borrower does not so
reimburse the Issuing Lender, the
Lenders under the Tender Revolving
Facility shall be irrevocably and
unconditionally obligated to reimburse
such Issuing Lender on a pro rata basis.
Swingline Loans: A portion of the Tender Revolving
Facility not in excess of $5,000,000
shall be available for swingline loans
(the "Tender Swingline Loans") from
Chase (in such capacity, the "Swingline
Lender") on same-day notice. Any such
Tender Swingline Loans will reduce
availability under the Tender Revolving
Facility on a dollar-for-dollar basis.
Each Lender under the Tender Revolving
Facility shall acquire, under certain
circumstances, an irrevocable and
unconditional pro rata participation in
each Tender Swingline Loan.
Maturity: The Tender Termination Date.
Purpose: The proceeds of the Tender Revolving
Loans and the Tender Letters of Credit
shall be used to finance the
Transaction, to refinance existing
indebtedness of the Borrower and its
subsidiaries (including under the
$400,000,000 credit agreement, dated as
of July 26, 1996, among ISP Chemicals
Inc., ISP Technologies Inc., the Parent,
certain subsidiaries of the Parent, the
lenders named therein and Chase, as
agent (the "Existing Credit Agreement"))
and to finance the working capital needs
and general corporate purposes of the
Borrower and its subsidiaries in the
ordinary course of business.
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B. Merger Facilities
1. Merger Term I Facility
Type and Amount of Facility: Seven-year term loan facility (the
"Merger Term I Facility") in an amount
to be determined (the loans thereunder,
the "Merger Term I Loans").
Availability: The Merger Term I Loans shall be made in
a single drawing on the Merger Closing
Date (as defined below).
Amortization: The Merger Term I Loans shall be
repayable in consecutive semi-annual
installments, commencing on a date
approximately 4 months after the Merger
Closing Date (the "First Installment
Date"), in an aggregate amount for each
date to be agreed.
Purpose: The proceeds of the Merger Term I Loans
shall be used to finance the
Transaction, to refinance existing
indebtedness of the Borrower and the
Target and their subsidiaries (including
under the Tender Facilities) and to pay
related fees and expenses.
2. Merger Revolving Facility
Type and Amount of Facility: Seven-year revolving credit facility
(the "Merger Revolving Facility") in an
amount to be determined (the loans
thereunder, the "Merger Revolving
Loans"; together with the Tender
Revolving Loans, the "Revolving Loans").
Availability: The Merger Revolving Facility shall be
available on a revolving basis during
the period commencing on the Merger
Closing Date and ending on the seventh
anniversary thereof (the "Merger
Revolving Termination Date").
Letters of Credit: A portion of the Merger Revolving
Facility not in excess of $75,000,000
shall be available for the issuance of
Letters of Credit (the "Merger Letters
of Credit"; together with the Tender
Letters of Credit, the "Letters of
Credit") by the Issuing Lenders. No
Merger Letter of Credit shall have an
expiration date after the earlier of (a)
12 months after the date of issuance and
(b) five business days prior to the
Merger Revolving Termination Date,
provided that any Merger Letter of
Credit may provide for the renewal
thereof for additional periods of up to
12 months (which shall in no event
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extend beyond the date referred to in
clause (b) above).
Drawings under any Merger Letter of
Credit shall be reimbursed by the
Borrower (whether with its own funds or
with the proceeds of Merger Revolving
Loans) on the same business day. To the
extent that the Borrower does not so
reimburse the Issuing Lender, the
Lenders under the Merger Revolving
Facility shall be irrevocably and
unconditionally obligated to reimburse
such Issuing Lender on a pro rata basis.
Swingline Loans: A portion of the Merger Revolving
Facility not in excess of $5,000,000
shall be available for swingline loans
(the "Merger Swingline Loans"; together
with the Tender Swingline Loans, the
"Swingline Loans") from the Swingline
Lender on same-day notice. Any such
Merger Swingline Loans will reduce
availability under the Merger Revolving
Facility on a dollar-for-dollar basis.
Each Lender under the Merger Revolving
Facility shall acquire, under certain
circumstances, an irrevocable and
unconditional pro rata participation in
each Merger Swingline Loan.
Competitive Loans: After the repayment in full of the
Merger Term II Loans (as defined below),
the Borrower shall have the option under
the Merger Revolving Facility to request
that the Lenders bid for loans
("Competitive Loans") bearing interest
at an absolute rate or a margin over the
eurodollar rate, with specified
maturities ranging from 7 to 360 days.
Each Lender shall have the right, but
not the obligation, to submit bids at
its discretion. The Borrower, by notice
given four business days in advance in
the case of eurodollar rate bids and one
business day in advance in the case of
absolute rate bids, shall specify the
proposed date of borrowing, the interest
period, the amount of the Competitive
Loan and the maturity date thereof, the
interest rate basis to be used by the
Lenders in bidding and such other terms
as the Borrower may specify. The
Administrative Agent shall advise the
Lenders of the terms of the Borrower's
notice, and, subject to acceptance by
the Borrower, bids shall be allocated to
each Lender in ascending order from the
lowest bid to the highest bid acceptable
to the Borrower. While Competitive Loans
are outstanding, the available
commitments under the Merger Revolving
Facility shall be reduced by the
aggregate amount of such Competitive
Loans.
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Maturity: The Merger Revolving Termination Date.
Purpose: The proceeds of the Merger Revolving
Loans and the Merger Letters of Credit
shall be used to finance the
Transaction, to refinance existing
indebtedness of the Borrower and the
Target and their subsidiaries (including
the Tender Facilities) and to finance
the working capital needs and general
corporate purposes of the Borrower and
its subsidiaries in the ordinary course
of business.
3. Merger Term II Facility
Type and Amount of Facility: An 18-month term loan facility (the
"Merger Term II Facility"; together with
the Merger Term I Facility and the
Merger Revolving Facility, the "Merger
Facilities" and, together with the
Tender Facilities, the "Facilities") in
an aggregate principal amount to be
determined (the loans thereunder, the
"Merger Term II Loans"). The Merger Term
II Loans shall be repayable on the date
that is 18 months after the Merger
Closing Date.
Availability: The Merger Term II Loans shall be made
in a single drawing on the Merger
Closing Date.
Purpose: The proceeds of the Merger Term II Loans
shall be used to finance the
Transaction, to refinance existing
indebtedness of the Borrower and the
Target and their subsidiaries and to pay
related fees and expenses.
III. Certain Payment Provisions
Fees and Interest Rates: As set forth on Annex I.
Optional Prepayments and Commitment
Reductions: Loans may be prepaid and commitments may
be reduced by the Borrower in minimum
amounts to be agreed upon, provided that
Competitive Loans may not be prepaid
without the consent of the relevant
Lender. Each of the Merger Term I Loans
and the Merger Term II Loans may also be
optionally prepaid, and optional
prepayments of the Merger Term I Loans
shall be applied, first, at the option
of the Borrower to the next two
succeeding installments thereof and,
thereafter, ratably to the remaining
installments thereof. Optional
prepayments of the Tender Term Loans,
the Merger Term I Loans and the Merger
Term II Loans may not be reborrowed.
Optional reductions of the Tender Term
Facility and prepayments of the Tender
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Term Loans shall be applied to
correspondingly reduce the commitments
for the Merger Term I Facility and the
Merger Term II Facility in a manner
determined by the Borrower. Optional
reductions of the Tender Revolving
Facility shall correspondingly reduce
the commitments for the Merger Revolving
Facility.
Mandatory Prepayments and Commitment
Reductions: The following amounts shall be applied
(i) until the Merger Closing Date, to
prepay the Tender Term Loans (and to
correspondingly reduce the commitments
for the Merger Term I Facility and the
Merger Term II Facility) and to reduce
the Tender Revolving Facility (and to
correspondingly reduce the commitments
for the Merger Revolving Facility) and
(ii) thereafter, to prepay the Merger
Term I Loans and the Merger Term II
Loans and reduce the Merger Revolving
Facility as set forth below:
(a) until the Merger Term II Loans have
been fully prepaid, 50% of the net
proceeds of any sale or issuance of
equity, and 100% of the net proceeds of
any issuance or incurrence of certain
indebtedness, after the Tender Closing
Date by Parent or the Borrower or any of
its subsidiaries (subject to certain
exceptions to be agreed on); and
(b) 100% (until the Merger Term II Loans
have been fully prepaid) or 50%
(thereafter) of the net proceeds of any
sale or other disposition (including as
a result of casualty or condemnation) by
Parent or the Borrower or any of its
subsidiaries of any assets (except for
the sale of inventory in the ordinary
course of business and certain other
dispositions to be agreed on, including
dispositions for aggregate net proceeds
of up to $20,000,000 (until the Merger
Term II Loans have been fully prepaid)
or $100,000,000 (thereafter)).
All such amounts shall be applied,
first, to the prepayment of the Tender
Term Loans (and the corresponding
reduction of the commitments for the
Merger Term I Facility and the Merger
Term II Facility) or of the Merger Term
I Loans and the Merger Term II Loans, as
the case may be, in an order to be
agreed and, second, to the permanent
reduction of the Tender Revolving
Facility (and the corresponding
reduction of the commitments for the
Merger Revolving Facility) or the Merger
Revolving Facility, as the case may be.
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Any prepayments to be applied to the
Merger Term I Loans shall be applied
ratably to the remaining installments
thereof. Mandatory prepayments of the
Tender Term Loans, the Merger Term I
Loans and the Merger Term II Loans may
not be reborrowed. The Tender Revolving
Loans or the Merger Revolving Loans
shall be prepaid and the Letters of
Credit shall be cash collateralized or
replaced to the extent such extensions
of credit exceed the amount of the
Tender Revolving Facility or the Merger
Revolving Facility, as the case may be.
Special Mandatory Prepayment
and Commitment Termination: All Loans shall be prepaid and the
Facilities shall be terminated upon a
sale or transfer of the specialty
chemicals business of the Borrower and
its subsidiaries.
IV. Collateral The obligations of each Loan Party in
respect of the Facilities and any
interest rate or other permitted swap
liabilities with any Lender (or any
affiliate of a Lender) shall be secured
by a perfected first priority security
interest in (i) all of the capital stock
of each of the direct and indirect
existing and future domestic
subsidiaries of the Borrower and 65% of
the capital stock of first-tier foreign
subsidiaries of the Borrower, (ii) all
existing and future capital stock of the
Target and Life Technologies Inc.
("LifeTech") owned by the Borrower and
each of the direct and indirect
subsidiaries of the Borrower, including
the capital stock of the Target and
LifeTech owned by the Borrower and its
subsidiaries (other than the Target)
before the Merger and owned by the
Borrower and its subsidiaries (including
the Target) thereafter and (iii) all
intercompany loans (other than
short-term advances in the ordinary
course of business).
The foregoing collateral shall be
released upon the occurrence of certain
events to be agreed.
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V. Certain Conditions
Initial Tender Conditions: The availability of the Tender
Facilities shall be conditioned upon
satisfaction of, among other things, the
following conditions precedent (the date
upon which all such conditions precedent
shall be satisfied, the "Tender Closing
Date") on or before October 31, 2000:
(a) Each Loan Party shall have executed
and delivered definitive financing
documentation with respect to the
Facilities reasonably satisfactory to
the Administrative Agent and its counsel
(the "Credit Documentation").
(b) The Tender Offer shall have been
consummated in accordance with
applicable law and pursuant to an offer
to purchase and other documentation
reasonably satisfactory to the
Administrative Agent (including as to
the maximum price per share and the
minimum share tender condition), and no
provision of such documentation
(including as to the maximum price per
share and the minimum share tender
condition) shall have been waived,
amended, supplemented or otherwise
modified in any material respect. The
existing indebtedness of the Borrower
and its subsidiaries contemplated to be
repaid shall have been repaid on
satisfactory terms, and the Existing
Credit Agreement shall have been
terminated. The capital structure of
each Loan Party shall be reasonably
satisfactory to the Administrative
Agent, including as contemplated after
the Merger.
(c) No shareholders rights plan or
statutory provision that would impede or
limit consummation of the Tender Offer
or the Merger in the proposed manner
shall be in effect, and any material
conditions or requirements to or for the
consummation of the Merger (including
the receipt of all necessary government
and third party approvals for the
Merger) shall have been satisfied or
shall be reasonably capable of being
satisfied.
(d) The Tender Facilities shall be in
compliance with the margin regulations
of the Board of Governors of the Federal
Reserve System and appropriate forms
with respect thereto shall have been
provided.
(e) The Lenders, the Administrative
Agent and the Arranger shall have
received all fees required to be paid,
and reimbursement for all expenses for
9
<PAGE>
which invoices have been presented
required to be reimbursed, on or before
the Tender Closing Date.
(f) All governmental and third party
approvals necessary in connection with
the Tender Offer, the financing
contemplated hereby and the continuing
operations of Parent and its
subsidiaries shall have been obtained
and be in full force and effect, and all
applicable waiting periods shall have
expired without any action being taken
or threatened by any competent authority
that would restrain, prevent or
otherwise impose material adverse
conditions on the Tender Offer or the
financing thereof.
(g) The Lenders shall have received
reasonably satisfactory unaudited
interim consolidated financial
statements of the Borrower and the
Target for each quarterly period ended
subsequent to the date of the most
recent fiscal year ended prior to the
Tender Closing Date as to which such
financial statements are available. It
is agreed that the unaudited interim
consolidated financial statements of the
Borrower and the Target for the
quarterly period ended on March 31, 2000
are satisfactory. Such financial
statements of the Target shall only be
required to the extent publicly
available.
(h) The Lenders shall have received and
be reasonably satisfied with the pro
forma consolidated balance sheet of
Holdings as at the date of the most
recent consolidated balance sheet
delivered pursuant to paragraph (g)
above, adjusted to give effect to the
consummation of the Transaction and the
financings contemplated hereby as if
such transactions had occurred on such
date. It is agreed that the pro forma
consolidated balance sheet of Holdings
as at March 31, 2000 is satisfactory.
(i) The Lenders shall have received and
be reasonably satisfied with financial
projections (including the assumptions
upon which such projections are based)
for Holdings and its subsidiaries for
the period from the Tender Closing Date
through the final maturity of the Term
Loans. It is agreed that the financial
projections received as of the date
hereof are satisfactory.
(j) The Lenders shall have received the
results of a recent lien search in each
relevant jurisdiction with respect to
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<PAGE>
the Borrower and its subsidiaries, and
such search shall reveal no liens on any
of the assets of either the Borrower or
its subsidiaries except for liens
permitted by the Credit Documentation or
liens to be discharged on or prior to
the Closing Date pursuant to
documentation reasonably satisfactory to
the Administrative Agent.
(k) The Lenders shall have received such
legal opinions (including opinions (i)
from counsel to the Borrower (which
shall include an opinion to the effect
that the public indebtedness of Parent
may remain outstanding after the Tender
Offer and the Merger and the financings
contemplated hereby) and (ii) from such
special and local counsel as may be
reasonably required by the
Administrative Agent), documents and
other instruments as are customary for
transactions of this type or as they may
reasonably request.
Initial Merger Conditions: The availability of the Merger
Facilities shall be conditioned upon
satisfaction of, among other things, the
following conditions precedent (the date
upon which all such conditions precedent
shall be satisfied, the "Merger Closing
Date") on or before the date nine months
after the Tender Closing Date (with
references to the Borrower and its
subsidiaries in this paragraph being
deemed to refer to and include the
Target and its subsidiaries after giving
effect to the Transaction):
(a) The conditions to the availability
of the Tender Facilities shall have been
satisfied or waived, and the Tender Term
Loans shall have been made.
(b) The Merger shall have been
consummated in accordance with
applicable law, including the receipt of
all necessary governmental and third
party approvals. The existing
indebtedness of the Borrower and its
subsidiaries contemplated to be repaid
(including under the Tender Facilities)
shall have been repaid, or arrangements
for the repayment thereof shall have
been made, on satisfactory terms.
On-Going Conditions: The making of each extension of credit
shall be conditioned upon
(a) the accuracy in all material
respects of all representations and
warranties in the Credit Documentation
(including, without limitation, the
material adverse change and litigation
11
<PAGE>
representations) and (b) there being no
default or event of default in existence
at the time of, or after giving effect
to the making of, such extension of
credit. As used herein and in the Credit
Documentation a "material adverse
change" shall mean any event,
development or circumstance that has had
or could reasonably be expected to have
a material adverse effect on (a) the
Transaction, (d) the business,
operations or financial condition of the
Borrower and its subsidiaries taken as a
whole or (c) the validity or
enforceability of any of the Credit
Documentation or the rights and remedies
of the Administrative Agent and the
Lenders thereunder.
VI. Certain Documentation Matters
The Credit Documentation shall contain
representations, warranties, covenants
and events of default customary for
financings of this type and other terms
deemed reasonably appropriate by the
Lenders, including, without limitation:
Representations and Warranties: Representations and warranties
substantially similar to those in the
Existing Credit Agreement (corporate
existence; financial condition
(including pro forma financial
statements); litigation; no breach;
action; approvals; use of credit; ERISA;
taxes; Investment Company Act; Public
Utility Holding Company Act;
Indebtedness and Liens; hazardous
materials; subsidiaries; patents,
trademarks, etc.; and property); and,
additionally, representations and
warranties relating to solvency; and
creation and perfection of security
interests.
Affirmative Covenants: Affirmative covenants substantially
similar to those in the Existing Credit
Agreement (delivery of financial
statements, reports, accountants'
letters, projections, officers'
certificates and other information
requested by the Lenders; notices of
defaults, litigation and other material
events; continuation of business and
maintenance of existence and material
rights and privileges; compliance with
laws; maintenance of property and
insurance; maintenance of books and
records; right of the Lenders to inspect
property and books and records; and use
of proceeds); and, additionally,
affirmative covenants relating to
further assurances (including, without
limitation, with respect to security
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<PAGE>
interests in after-acquired property);
and agreement to promptly consummate the
Merger after the Tender Closing Date.
Financial Covenants: Financial covenants as follows (with
initial levels and step-ups and
step-downs to be agreed):
(a) A minimum ratio of EBITDA to
interest expense for each four-quarter
period (or such shorter period since the
first day of the first quarter
commencing on or following the Tender
Closing Date).
(b) A maximum ratio of consolidated debt
at the end of each quarter to EBITDA for
the four-quarter period then ended.
The definition of "EBITDA" shall exclude
certain one-time charges to be agreed
upon and shall include for a period to
be determined the pro forma effect of
certain synergies to be agreed upon and
the definition of "interest expense"
shall exclude the amortization of
upfront costs associated with the
Facilities.
Negative Covenants: Negative covenants of a type
substantially similar to those in the
Existing Credit Agreement (limitations
on indebtedness (including guarantee
obligations); investments, loans and
advances; mergers, consolidations,
liquidations and dissolutions; liens
(including liens relating to accounts
receivable financings); dividends and
other payments in respect of capital
stock ("Restricted Payments"); Linden
property; changes in lines of business;
transactions with affiliates; amendments
to other documents; designated
subsidiaries; and unfriendly
acquisitions); and, additionally, sale
and leasebacks; and changes in passive
holding company status of Parent. The
limitation on Restricted Payments shall
comply with the covenants in the
Parent's Indenture. The terms of the
following negative covenants shall
depend on whether the collateral has
been released and the Merger Term II
Loans have been repaid in full:
(i) indebtedness-- prior thereto, to
include only a limited basket to be
agreed upon and, thereafter, to be
substantially similar to those in the
Existing Credit Agreement;
(ii) investments, loans and advances--
prior thereto, to include a total
limitation of only $50,000,000 and,
thereafter, to be substantially similar
to those in the Existing Credit
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<PAGE>
Agreement, with certain adjustments to
be agreed;
(iii) mergers, consolidations,
liquidations and dissolutions-- prior
thereto, to be very limited and,
thereafter, to be substantially similar
to those in the Existing Credit
Agreement;
(iv) liens-- prior thereto, to be very
limited and, thereafter, to be
substantially similar to those in the
Existing Credit Agreement; and (v) sale
and leasebacks-- prior thereto, not to
exceed $100,000,000 cumulatively and,
thereafter, not to be specifically
limited.
Events of Default: Events of default substantially similar
to those in the Existing Credit
Agreement (nonpayment of principal when
due; nonpayment of interest, fees or
other amounts after a grace period of
three days; cross-default; material
inaccuracy of representations and
warranties; violation of covenants
(subject, in the case of certain
affirmative covenants, to a grace
period); insolvency; bankruptcy events;
material judgments; certain ERISA
events; certain environmental events;
change of control; and change in tax
consolidation); and, additionally,
actual or asserted invalidity of any
guarantee or security document or
security interest.
Voting: Amendments and waivers with respect to
the Credit Documentation shall require
the approval of Lenders holding not less
than a majority of the aggregate amount
of the Credit Facilities, except that
(a) the consent of each Lender directly
affected thereby shall be required with
respect to (i) reductions in the amount
or extensions of the scheduled date of
amortization or maturity of any Loan,
(ii) reductions in the rate of interest
or any fee or extensions of any due date
thereof and (iii) increases in the
amount or extensions of the expiry date
of any Lender's commitment and (b) the
consent of 100% of the Lenders shall be
required with respect to (i)
modifications to any of the voting
percentages and (ii) releases of all or
substantially all of the Guarantors or
all or substantially all of the
collateral, except as otherwise
expressly provided. In addition, "class"
voting requirements will apply to
modifications affecting certain payment
matters.
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<PAGE>
Assignments and Participations: The Lenders shall be permitted to assign
and sell participations in their loans
under each Facility (the "Loans") and
commitments, subject, in the case of
assignments (other than to another
Lender (which shall be another Revolving
Credit Lender, in the case of an
assignment under the Revolving Credit
Facility) or to an affiliate of a
Lender), to the consent of the
Administrative Agent and the Borrower
(which consent in each case shall not be
unreasonably withheld). A $3,500
administrative fee shall be paid to the
Administrative Agent in connection with
each assignment. Non-pro rata
assignments shall be permitted. In the
case of partial assignments (other than
to another Lender or to an affiliate of
a Lender), the minimum assignment amount
shall be $5,000,000, and, after giving
effect thereto, the assigning Lender
shall have commitments and Loans
aggregating at least $5,000,000, unless
otherwise agreed by the Borrowers and
the Administrative Agent. Participants
shall have the same benefits as the
Lenders with respect to yield protection
and increased cost provisions. Voting
rights of participants shall be limited
to those matters with respect to which
the affirmative vote of the Lender from
which it purchased its participation
would be required as described under
"Voting" above. Pledges of Loans in
accordance with applicable law shall be
permitted without restriction.
Promissory notes shall be issued under
the Credit Facilities only upon request.
Yield Protection: The Credit Documentation shall contain
customary provisions (a) protecting the
Lenders against increased costs or loss
of yield resulting from changes in
reserve, tax, capital adequacy and other
requirements of law and from the
imposition of or changes in withholding
or other taxes and (b) indemnifying the
Lenders for "breakage costs" incurred in
connection with, among other things, any
prepayment of a Eurodollar Loan (as
defined in Annex I) on a day other than
the last day of an interest period with
respect thereto.
Expenses and Indemnification: The Borrowers shall pay (a) all
reasonable and documented out-of-pocket
expenses of the Administrative Agent and
the Arranger associated with the
syndication of the Credit Facilities and
the preparation, execution, delivery and
administration of the Credit
Documentation and any amendment or
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<PAGE>
waiver with respect thereto (including
the reasonable fees, disbursements and
other charges of counsel) and (b) all
reasonable and documented out-of-pocket
expenses of the Administrative Agent and
the Lenders (including the reasonable
and documented fees, disbursements and
other charges of counsel) in connection
with the enforcement of the Credit
Documentation.
The Administrative Agent, the Arranger
and the Lenders (and their affiliates
and their respective officers,
directors, employees, advisors and
agents) will have no liability for, and
will be indemnified and held harmless
against, any losses, claims, damages,
liabilities or reasonable and documented
expenses incurred in respect of the
financing contemplated hereby or the use
or the proposed use of proceeds thereof,
except to the extent they are found by a
final, non-appealable judgment of a
court to arise from the bad faith, gross
negligence or willful misconduct of the
indemnified party or breach of
applicable law or agreement with the
Parent.
Governing Law and Forum: State of New York.
Counsel to the Administrative
Agent and the Arranger: Simpson Thacher & Bartlett.
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Annex I
Interest and Certain Fees
-------------------------
Interest Rate Options: The Borrower may elect that the Loans
(other than Competitive Loans)
comprising each borrowing bear interest
at a rate per annum equal to:
the ABR plus the Applicable Margin; or
the Eurodollar Rate plus the
Applicable Margin;
provided that all Swingline Loans shall
bear interest based upon the ABR.
As used herein:
"ABR" means the higher of (i) the rate
of interest publicly announced by Chase
as its prime rate in effect at its
principal office in New York City (the
"Prime Rate") and (ii) the federal funds
effective rate from time to time plus
0.5%.
"Applicable Margin" means (a) with
respect to the Tender Term Loans and the
Tender Revolving Loans, (i) 1.50% in the
case of ABR Loans (as defined below) and
(ii) 2.50% in the case of Eurodollar
Loans (as defined below), (b) with
respect to the Merger Term I Loans and
the Merger Revolving Loans, a percentage
determined in accordance with the
pricing grid attached to the Fee Letter
as Annex I thereto and (c) with respect
to the Merger Term II Loans, (i) 1.50%
in the case of ABR Loans and (ii) 2.50%,
in the case of Eurodollar Loans.
"Eurodollar Rate" means the rate
(adjusted for statutory reserve
requirements for eurocurrency
liabilities) for eurodollar deposits for
a period equal to one, two, three or six
months (as selected by the Borrower)
appearing on Page 3750 of the Telerate
screen.
Interest Payment Dates: In the case of Loans bearing interest
based upon the ABR ("ABR Loans"),
quarterly in arrears. In the case of
<PAGE>
Loans bearing interest based upon the
Eurodollar Rate ("Eurodollar Loans"), on
the last day of each relevant interest
period and, in the case of any interest
period longer than three months, on each
successive date three months after the
first day of such interest period.
Commitment Fees: The Borrower shall pay a commitment fee
on the average daily unused portion of
(a) until the Merger Closing Date, the
Tender Revolving Facility and the Tender
Term Facility and (b) thereafter, the
Merger Revolving Facility, payable
quarterly in arrears. The commitment fee
rate shall be 0.50% per annum until the
Merger Closing Date and thereafter a
percentage determined in accordance with
the pricing grid attached to the Fee
Letter as Annex I thereto. In
determining the average daily unused
portion of the Tender Revolving Facility
or the Merger Revolving Facility,
Swingline Loans and Competitive Loans
shall be treated as though they were not
outstanding.
Letter of Credit Fees: The Borrower shall pay a fee on all
outstanding Letters of Credit at a per
annum rate equal to the Applicable
Margin then in effect with respect to
Eurodollar Loans under the Tender
Revolving Facility or the Merger
Revolving Facility, as the case may be,
on the face amount of each such Letter
of Credit. Such fee shall be shared
ratably among the Lenders participating
in such Facility and shall be payable
quarterly in arrears. A fronting fee
equal to 0.25% per annum on the face
amount of each Letter of Credit shall be
payable quarterly in arrears to the
Issuing Lender thereof for its own
account. In addition, customary
administrative, issuance, amendment,
payment and negotiation charges shall be
payable to such Issuing Lender for its
own account.
Default Rate: At any time when the Borrower is
in default in the payment of any amount
of principal due under the Facilities,
such amount shall bear interest at 2%
above the rate otherwise applicable
thereto. Overdue interest, fees and
other amounts shall bear interest at 2%
above the rate applicable to ABR Loans.
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Rate and Fee Basis: All per annum rates shall be calculated
on the basis of a year of 360 days (or
365/366 days, in the case of ABR Loans
the interest rate payable on which is
then based on the Prime Rate) for actual
days elapsed.
3
