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