================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)
------------------------------
DEXTER CORPORATION
(Name of Issuer)
COMMON STOCK, $1.00 PAR VALUE PER SHARE 252165105
(Title of class of securities) (CUSIP number)
RICHARD A. WEINBERG, ESQ.
C/O ISP MANAGEMENT COMPANY, INC.
1361 ALPS ROAD
WAYNE, NEW JERSEY 07470
(973) 628-4000
(Name, address and telephone number of person authorized
to receive notices and communications)
WITH A COPY TO:
STEPHEN E. JACOBS, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153-0119
(212) 310-8000
MARCH 23, 2000
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act. (However, see the
Notes.)
(Continued on following pages)
(Page 1 of 44 Pages)
NY2:\892137\02\j4dl02!.DOC\54104.0016
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------- --------------------------------------------------------
CUSIP No. 252165105 13D Page 2 of 44 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON ISP OPCO HOLDINGS INC.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- ------------------------------------------------------------------------------------ ------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ]
(b) [X]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
3 SEC USE ONLY
- ---------------------- ------------------------------------------------------------------------------------ ------------------
4 SOURCE OF FUNDS: OO
- ---------------------- ------------------------------------------------------------------------------------ ------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware
- ---------------------- ------------------------------------------------------------------------ ------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------------------- ------------------------------------------------ ------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 2,299,200
OWNED BY
------------------- ------------------------------------------------ ------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------------------- ------------------------------------------------ ------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 2,299,200
- ---------------------- ------------------------------------------------------------------------ ------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
2,299,200
- ---------------------- ------------------------------------------------------------------------ ------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
- ---------------------- ------------------------------------------------------------------------ ------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.98%
- ---------------------- ------------------------------------------------------------------------ ------------------------------
14 TYPE OF REPORTING PERSON: CO
- ---------------------- ------------------------------------------------------------------------ ------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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CUSIP No. 252165105 13D Page 3 of 44 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON ISP INVESTMENTS INC.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- ------------------------------------------------------------------------------------ ------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ]
(b) [X]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
3 SEC USE ONLY
- ---------------------- ------------------------------------------------------------------------------------ ------------------
4 SOURCE OF FUNDS: WC, OO
- ---------------------- ------------------------------------------------------------------------------------ ------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware
- ---------------------- ------------------------------------------------------------------------ ------------------------------
NUMBER OF 7 SOLE VOTING POWER: 2,299,200
SHARES
------------------- ------------------------------------------------ ------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------------------- ------------------------------------------------ ------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 2,299,200
REPORTING
------------------- ------------------------------------------------ ------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ---------------------- ------------------------------------------------------------------------ ------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
2,299,200
- ---------------------- ------------------------------------------------------------------------ ------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
- ---------------------- ------------------------------------------------------------------------ ------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.98%
- ---------------------- ------------------------------------------------------------------------ ------------------------------
14 TYPE OF REPORTING PERSON: CO
- ---------------------- ------------------------------------------------------------------------ ------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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CUSIP No. 252165105 13D Page 4 of 44 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON INTERNATIONAL SPECIALTY
S.S. OR I.R.S. IDENTIFICATION NO. PRODUCTS INC.
OF ABOVE PERSON
- ---------------------- ------------------------------------------------------------------------------------ ------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ]
(b) [X]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
3 SEC USE ONLY
- ---------------------- ------------------------------------------------------------------------------------ ------------------
4 SOURCE OF FUNDS: OO
- ---------------------- ------------------------------------------------------------------------------------ ------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ---------------------- ------------------------------------------------------------------------------------ ------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware
- ---------------------- ------------------------------------------------------------------------ ------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------------------- ------------------------------------------------ ------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 2,299,200
OWNED BY
------------------- ------------------------------------------------ ------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------------------- ------------------------------------------------ ------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 2,299,200
- ---------------------- ------------------------------------------------------------------------ ------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
2,299,200
- ---------------------- ------------------------------------------------------------------------ ------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
- ---------------------- ------------------------------------------------------------------------ ------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.98%
- ---------------------- ------------------------------------------------------------------------ ------------------------------
14 TYPE OF REPORTING PERSON: CO
- ---------------------- ------------------------------------------------------------------------ ------------------------------
</TABLE>
<PAGE>
This Amendment No. 9 ("Amendment No. 9") amends the
Statement on Schedule 13D (the "Schedule 13D") filed on April 22, 1999, as
amended by Amendment No. 1 filed on August 11, 1999, Amendment No. 2 filed on
September 8, 1999, Amendment No. 3 filed on September 27, 1999, Amendment No. 4
filed on December 14, 1999, Amendment No. 5 filed on December 16, 1999,
Amendment No. 6 filed on January 27, 2000, Amendment No. 7 filed on February 11,
2000, and Amendment No. 8 filed on February 24, 2000, by and on behalf of ISP
Opco Holdings Inc. ("ISP Opco"), ISP Investments Inc. ("ISP Investments") and
International Specialty Products Inc. ("ISP" and together with ISP Investments
and ISP Opco, the "Reporting Persons") with respect to their ownership of common
stock, par value $1.00 per share (the "Common Stock"), of Dexter Corporation
(the "Company"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Schedule 13D, as amended.
ITEM 4. PURPOSE OF THE TRANSACTION
On March 23, 2000, Samuel J. Heyman, Chairman of the Board
of ISP, sent the following letter to K. Grahame Walker, Chairman of the Board
and Chief Executive Officer of the Company:
Dear Grahame:
Based upon our evaluation to date, ISP's Board has
authorized an increase in the price of ISP's cash merger
proposal to $50 per share. If we receive the proper cooperation
from Dexter in connection with the balance of the due diligence
process and Dexter can demonstrate that the value of the Company
would justify a higher price, we would consider increasing this
price as well.
You should know that ISP has, on this date, executed a
commitment letter in which Chase has committed to raise all the
financing necessary for the acquisition, a copy of which I have
attached. You should note that Chase's commitment for $1.825
billion contains provision for a tender facility so that Dexter
shareholders can receive cash payments promptly.
Grahame, we are most interested in concluding this
transaction and are prepared to proceed promptly. However,
should Dexter be inclined to proceed on a different course, I
sincerely hope that it will allow the Company's shareholders to
make the ultimate decision as to what is in their best
interests.
We are still awaiting the due diligence information which
we requested in our March 8th letter.
Sincerely,
/s/ Samuel J. Heyman
5
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On March 23, 2000, ISP Opco obtained a commitment from The
Chase Manhattan Bank (the "Commitment Letter") to provide, subject to the
satisfaction of certain customary conditions described therein, senior credit
facilities in the aggregate amount of $1,825,000,000 in order to finance the
acquisition of the Company, refinance certain existing indebtedness of ISP's
subsidiaries, the Company and the Company's subsidiaries, and to provide working
capital for the combined companies following the acquisition. A copy of the
Commitment Letter is attached hereto as Exhibit 1.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit No. 1: Commitment Letter.
[The remainder of this page intentionally left blank.]
6
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SIGNATURES
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Dated: March 23, 2000
ISP OPCO HOLDINGS INC.
ISP INVESTMENTS INC.
INTERNATIONAL SPECIALTY PRODUCTS INC.
By: /s/ Randall R. Lay
-------------------------------------
Randall R. Lay
Executive Vice President and
Chief Financial Officer
7
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EXHIBIT INDEX
Exhibit No. Document Page No.
- ---------- -------- -------
1 Commitment Letter. 9
8
Exhibit 1
---------
[Letterhead of The Chase Manhattan Bank]
March 23, 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 either (a) 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") or (b) directly through the Merger (the "One-Step
Acquisition"), in each case for a price per share of $50. In that connection,
you have requested that CSI agree to structure, arrange and syndicate senior
credit facilities in an aggregate amount of up to $1,825,000,000 (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 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 respective Summaries of Terms and
Conditions attached hereto as Exhibit A and B (the "Term Sheets"). The Term
Sheet attached as Exhibit A describes the Facilities as they would apply in the
case of a Two-Step Acquisition, and the Term Sheet attached as Exhibit B
describes the Facilities as they would apply in the case of a One-Step
Acquisition.
9
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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 relevant Term Sheet and the Fee Letter
referred to 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. 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. Chase and CSI acknowledge that, unless additional
information is made available by the Target, all information with respect to the
Target provided by you will be information made publicly available by the
Target. 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 relevant 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
10
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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, (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 (or, in the
case of a One-Step Acquisition, on or before December 31, 2000, provided that
Chase has completed on or before October 31, 2000 its syndication of the
Facilities), (f) the Borrower having delivered a notice (the "Closing Notice")
to Chase and CSI at least 30 days prior to the Tender Closing Date or Closing
Date (each as defined in the relevant Term Sheet), as applicable, to the effect
that the Tender Closing Date or the Closing Date, as applicable, may occur on or
after such 30th day and (g) the other conditions set forth or referred to in the
relevant Term Sheet. Any matters that are not covered by the provisions hereof
and of the relevant 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 Sheets, 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
11
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obligation to use in connection with the Transaction, or to furnish to you,
confidential information obtained from other companies.
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 Sheets,
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 Sheets 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.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheets 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 March 31, 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.
12
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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/ Peter Dedousis
----------------------------------
Name: Peter Dedousis
Title: Managing Director
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
and Treasurer
13
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Exhibit A
SENIOR CREDIT FACILITIES
Summary of Terms and Conditions
March 23, 2000
-----------------------------
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 either (a) 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") or (b)
directly through the Merger (the "One-Step Acquisition"), in each case for a
price per share of $50. In that connection, you have requested that CSI agree to
structure, arrange and syndicate senior credit facilities in an aggregate amount
of up to $1,825,000,000 (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 in the event that the
Transaction will 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").
Other Agents: To be determined.
Lenders: A syndicate of banks, financial institutions and
other entities, including Chase (collectively, the
"Lenders").
14
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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 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
15
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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.
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).
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Amortization: The Merger Term I Loans shall be repayable in
consecutive semi-annual installments, commencing
on a date approximately 18 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 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
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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.
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
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<PAGE>
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 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
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<PAGE>
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.
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
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<PAGE>
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.
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.
(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 shall have been
satisfied or shall be reasonably capable of being
satisfied.
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(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
which invoices have been presented required to be
reimbursed, on or before the Tender Closing Date.
(f) All governmental and third party approvals
necessary or, in the reasonable discretion of the
Administrative Agent, advisable 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 Merger or the financing
thereof.
(g) The Lenders shall have received (i)
satisfactory audited consolidated financial
statements of the Borrower and the Target for the
two most recent fiscal years ended prior to the
Tender Closing Date as to which such financial
statements are available and (ii) satisfactory
unaudited interim consolidated financial
statements of the Borrower and the Target for each
quarterly period ended subsequent to the date of
the latest financial statements delivered pursuant
to clause (i) of this paragraph as to which such
financial statements are available. 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.
(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.
(j) The Lenders shall have received the results of
a recent lien search in each relevant jurisdiction
with respect to the Borrower and its subsidiaries,
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<PAGE>
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 be reasonably satisfied with
the sufficiency of amounts available under the
Tender Revolving Facility to meet the ongoing
working capital needs of the Borrower and its
subsidiaries following the Tender Offer and the
consummation of the other transactions
contemplated hereby.
(l) The Lenders shall be reasonably satisfied with
the tax sharing arrangements among the Parent and
its subsidiaries.
(m) 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), (ii) if any, delivered to any Loan Party
by counsel to the Target, accompanied by reliance
letters in favor of the Lenders (to the extent
agreed to by such counsel) and (iii) 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 and pursuant to a
merger agreement and other documentation
reasonably satisfactory to the Administrative
Agent, and no provision of such documentation
shall have been waived, amended, supplemented or
otherwise modified in any material respect. The
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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. The
capital structure of each Loan Party shall be
reasonably satisfactory to the Administrative
Agent.
(c) No shareholders rights plan or statutory
provision that would impede or limit consummation
of the Merger in the proposed manner shall be in
effect.
(d) The Lenders, the Administrative Agent and the
Arranger shall have received all fees required to
be paid, and reimbursement for all expenses for
which invoices have been presented required to be
reimbursed, on or before the Merger Closing Date.
(e) All governmental and third party approvals
necessary or, in the reasonable discretion of the
Administrative Agent, advisable in connection with
the Merger, 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 Transaction or the financing thereof.
(f) 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), (ii) if any, delivered to
any Loan Party by counsel to the Target,
accompanied by reliance letters in favor of the
Lenders (to the extent agreed to by such counsel)
and (iii) 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.
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 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, (b) the business, operations or
24
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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 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).
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(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 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:
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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.
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
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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 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 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.
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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.
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.
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Exhibit B
SENIOR CREDIT FACILITIES
Summary of Terms and Conditions
March 23, 2000
---------------------
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 the outstanding capital stock (the "Target
Stock") of Dexter Corporation, a Connecticut corporation (the "Target"). The
Transaction will be effected either (a) 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") or (b)
directly through the Merger (the "One-Step Acquisition"), in each case for a
price per share of $50. In that connection, you have requested that CSI agree to
structure, arrange and syndicate senior credit facilities in an aggregate amount
of up to $1,825,000,000 (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 in the event that the
Transaction will be effected as a One-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 Closing Date (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").
Other Agents: To be determined.
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Lenders: A syndicate of banks, financial institutions and
other entities, including Chase (collectively, the
"Lenders").
II. Types and Amounts of Credit Facilities
A. Term I Facility
Type and Amount of
Facility: Seven-year term loan facility (the "Term I
Facility") in an amount to be determined (the
loans thereunder, the "Term I Loans").
Availability: The Term I Loans shall be made in a single drawing
on the Closing Date (as defined below).
Amortization: The Term I Loans shall be repayable in consecutive
semi-annual installments, commencing on a date
approximately 18 months after the Closing Date
(the "First Installment Date"), in an aggregate
amount for each date to be agreed.
Purpose: The proceeds of the Term I 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.
B. Revolving Facility
Type and Amount of
Facility: Seven-year revolving credit facility (the
"Revolving Facility") in an amount to be
determined (the loans thereunder, the "Revolving
Loans").
Availability: The Revolving Facility shall be available on a
revolving basis during the period commencing on
the Closing Date and ending on the seventh
anniversary thereof (the "Revolving Termination
Date").
Letters of Credit: A portion of the Revolving Facility not in excess
of $75,000,000 shall be available for the issuance
of letters of credit (the "Letters of Credit") by
Chase or, subject to certain restrictions, any
other Lenders designated by the Borrower (in such
capacity, the "Issuing Lenders"). No 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
Revolving Termination Date, provided that any
Letter of Credit may provide for the renewal
thereof for additional periods of up to 12 months
(which shall in no event extend beyond the date
referred to in clause (b) above).
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Drawings under any Letter of Credit shall be
reimbursed by the Borrower (whether with its own
funds or with the proceeds of Revolving Loans) on
the same business day. To the extent that the
Borrower does not so reimburse the Issuing Lender,
the Lenders under the Revolving Facility shall be
irrevocably and unconditionally obligated to
reimburse such Issuing Lender on a pro rata basis.
Swingline Loans: A portion of the Revolving Facility not in excess
of $5,000,000 shall be available for swingline
loans (the "Swingline Loans") from Chase (in such
capacity, the "Swingline Lender") on same-day
notice. Any such Swingline Loans will reduce
availability under the Revolving Facility on a
dollar-for-dollar basis. Each Lender under the
Revolving Facility shall acquire, under certain
circumstances, an irrevocable and unconditional
pro rata participation in each Swingline Loan.
Competitive Loans: After the repayment in full of the Term II Loans
(as defined below), the Borrower shall have the
option under the 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
Revolving Facility shall be reduced by the
aggregate amount of such Competitive Loans.
Maturity: The Revolving Termination Date.
Purpose: The proceeds of the Revolving Loans and the
Letters of Credit shall be used to finance the
Transaction, to refinance existing indebtedness of
the Borrower and the Target and their 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
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capital needs and general corporate purposes of
the Borrower and its subsidiaries in the ordinary
course of business.
C. Term II Facility
Type and Amount of
Facility: An 18-month term loan facility (the "Term II
Facility"; together with the Term I Facility and
the Revolving Facility, the "Facilities") in an
aggregate principal amount to be determined (the
loans thereunder, the "Term II Loans"). The Term
II Loans shall be repayable on the date that is 18
months after the Closing Date.
Availability: The Term II Loans shall be made in a single
drawing on the Closing Date.
Purpose: The proceeds of the 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 Term I Loans and the Term II
Loans may also be optionally prepaid, and optional
prepayments of the 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 Term I Loans
and the Term II Loans may not be reborrowed.
Mandatory Prepayments and
Commitment Reductions: The following amounts shall be applied to prepay
the Term I Loans and the Term II Loans and reduce
the Revolving Facility as set forth below:
(a) until the 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, by Parent or the Borrower or any of
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its subsidiaries (subject to certain exceptions to
be agreed on); and
(b) 100% (until the 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 Term II Loans have been
fully prepaid) or $100,000,000 (thereafter)).
All such amounts shall be applied, first, to the
prepayment of the Term I Loans and the Term II
Loans, in an order to be agreed and, second, to
the permanent reduction of the Revolving Facility.
Any prepayments to be applied to the Term I Loans
shall be applied ratably to the remaining
installments thereof. Mandatory prepayments of the
Term I Loans and the Term II Loans may not be
reborrowed.
The 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 Revolving Facility.
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 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 Conditions: The availability of the 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 "Closing Date") on or
before January 31, 2001 (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
Merger):
(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") on or prior to December
31, 2000.
(b) The Merger shall have been consummated in
accordance with applicable law and pursuant to a
merger agreement and other documentation
reasonably satisfactory to the Administrative
Agent, and no provision of such documentation
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, or arrangements for the repayment
thereof shall have been made, 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.
(c) No shareholders rights plan or statutory
provision that would impede or limit consummation
of the Merger in the proposed manner shall be in
effect, and any material conditions or
requirements to or for the consummation of the
Merger shall have been satisfied or shall be
reasonably capable of being satisfied.
(d) The Lenders, the Administrative Agent and the
Arranger shall have received all fees required to
be paid, and reimbursement for all expenses for
which invoices have been presented required to be
reimbursed, on or before the Closing Date.
(e) All governmental and third party approvals
necessary or, in the reasonable discretion of the
Administrative Agent, advisable in connection with
the Merger, 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
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<PAGE>
authority that would restrain, prevent or
otherwise impose material adverse conditions on
the Merger or the financing thereof.
(f) The Lenders shall have received (i)
satisfactory audited consolidated financial
statements of the Borrower and the Target for the
two most recent fiscal years ended prior to the
Closing Date as to which such financial statements
are available and (ii) satisfactory unaudited
interim consolidated financial statements of the
Borrower and the Target for each quarterly period
ended subsequent to the date of the latest
financial statements delivered pursuant to clause
(i) of this paragraph as to which such financial
statements are available. Such financial
statements of the Target shall only be required to
the extent publicly available.
(g) 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 (f) 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.
(h) 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 Closing Date
through the final maturity of the Term Loans.
(i) The Lenders shall have received the results of
a recent lien search in each relevant jurisdiction
with respect to 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.
(j) The Lenders shall be reasonably satisfied with
the sufficiency of amounts available under the
Revolving Facility to meet the ongoing working
capital needs of the Borrower and its subsidiaries
following the Merger and the consummation of the
other transactions contemplated hereby.
(k) The Lenders shall be reasonably satisfied with
the tax sharing arrangements among the Parent and
its subsidiaries.
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(l) 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 Merger and the
financings contemplated hereby), (ii) if any,
delivered to any Loan Party by counsel to the
Target, accompanied by reliance letters in favor
of the Lenders (to the extent agreed to by such
counsel) and (iii) 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.
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 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, (b) 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.
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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 interests in after-acquired
property); and agreement to promptly consummate
the Merger after the 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 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 Term II Loans
have been repaid in full:
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(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 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"
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voting requirements will apply to modifications
affecting certain payment matters.
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 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
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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
Term I Loans and the Revolving Loans, a percentage
determined in accordance with the pricing grid
attached to the Fee Letter as Annex II thereto and
(b) with respect to the 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 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 the Facilities,
payable quarterly in arrears. The commitment fee
rate shall be 0.50% per annum until the Closing
Date and thereafter a percentage determined in
accordance with the pricing grid attached to the
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Fee Letter as Annex II thereto. In determining the
average daily unused portion of the 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 Revolving Facility, 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.
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.
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