<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1994
Commission File Number 1-3720
W. R. GRACE & CO.
New York 13-3461988
-------------------------- -----------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
One Town Center Road
Boca Raton, Florida 33486-1010
(407) 362-2000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
----- -----
94,030,497 shares of Common Stock, $1.00 par value, were outstanding at October
31, 1994.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
W. R. GRACE & CO. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE NO.
--------
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Operations I-1
Consolidated Statement of Cash Flows I-2
Consolidated Balance Sheet I-3
Notes to Consolidated Financial Statements I-4 to I-7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition I-8 to I-14
PART II. Other Information
Item 1. Legal Proceedings II-1
Item 5. Other Information II-1
Item 6. Exhibits and Reports on Form 8-K II-3
As used in this Report, the term "Company" refers to W. R. Grace & Co., and the
term "Grace" refers to the Company and/or one or more of its subsidiaries.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
W. R. Grace & Co. and Subsidiaries Three Months Ended Nine Months Ended
Consolidated Statement of Operations (Unaudited) September 30, September 30,
- -------------------------------------------------------------- --------------------- --------------------
Dollars in millions, except per share 1994 1993 1994 1993
- -------------------------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales and revenues . . . . . . . . . . . . . . . . . . . . . . $1,306.7 $1,136.1 $3,620.4 $3,216.4
Other income . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 5.6 41.9 33.5
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,312.1 1,141.7 3,662.3 3,249.9
-------- -------- -------- --------
Cost of goods sold and operating expenses. . . . . . . . . . . 755.4 660.1 2,157.5 1,896.6
Selling, general and administrative expenses . . . . . . . . . 300.9 259.7 858.4 758.5
Depreciation and amortization. . . . . . . . . . . . . . . . . 64.2 55.9 184.8 167.3
Interest expense and related financing costs . . . . . . . . . 30.2 22.5 75.9 63.8
Research and development expenses. . . . . . . . . . . . . . . 34.9 35.1 100.9 107.5
Provision relating to asbestos-related
insurance coverage . . . . . . . . . . . . . . . . . . . . -- 475.0 316.0 475.0
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,185.6 1,508.3 3,693.5 3,468.7
-------- -------- -------- --------
Income/(loss) from continuing operations before
income taxes . . . . . . . . . . . . . . . . . . . . . . . 126.5 (366.6) (31.2) (218.8)
Provision/(benefit) for income taxes . . . . . . . . . . . . . 50.5 (130.2) (11.1) (68.0)
-------- -------- -------- --------
Income/(loss) from continuing operations . . . . . . . . . . . 76.0 (236.4) (20.1) (150.8)
Loss from discontinued operations. . . . . . . . . . . . . . . -- -- -- (108.4)
-------- -------- -------- --------
Net income/(loss). . . . . . . . . . . . . . . . . . . . . . . $ 76.0 $ (236.4) $ (20.1) $ (259.2)
-------- -------- -------- --------
-------- -------- -------- --------
- ----------------------------------------------------------------------------------------------------------------
Earnings/(loss) per share:
Continuing operations. . . . . . . . . . . . . . . . . . . . $ .81 $ (2.56) $ (.22) $ (1.66)
Net income/(loss). . . . . . . . . . . . . . . . . . . . . . $ .81 $ (2.56) $ (.22) $ (2.86)
Fully diluted earnings per share:
Continuing operations. . . . . . . . . . . . . . . . . . . . $ .80 $ --(1) $ --(1) $ --(1)
Net income/(loss). . . . . . . . . . . . . . . . . . . . . . $ .80 $ --(1) $ --(1) $ --(1)
Dividends declared per common share. . . . . . . . . . . . . . $ .35 $ .35 $ 1.05 $ 1.05
- ----------------------------------------------------------------------------------------------------------------
<FN>
(1) Not presented as the effect is anti-dilutive.
</TABLE>
The Notes to Consolidated Financial Statements
are an integral part of this statement.
I-1
<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co. and Subsidiaries Nine Months Ended
Consolidated Statement of Cash Flows (Unaudited) September 30,
- ------------------------------------------------------------------------------------------ -------------------
Dollars in millions 1994 1993
- ------------------------------------------------------------------------------------------ ------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Loss from continuing operations before income taxes. . . . . . . . . . . . . . . . . . . $ (31.2) $(218.8)
Reconciliation to cash provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184.8 167.3
Provision relating to asbestos-related insurance coverage. . . . . . . . . . . . . . . 316.0 475.0
Changes in assets and liabilities, excluding businesses
acquired/divested and foreign exchange effect:
Increase in notes and accounts receivable, net . . . . . . . . . . . . . . . . . . . (82.5) (90.5)
Increase in inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32.8) (55.5)
Net proceeds from asbestos-related insurance settlements . . . . . . . . . . . . . . 111.3 63.6
Net expenditures for asbestos-related litigation . . . . . . . . . . . . . . . . . . (124.7) (117.2)
Decrease in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99.2) (30.0)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.0) (1.0)
------- -------
Net pretax cash provided by operating activities
of continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235.7 192.9
Net pretax cash provided by/(used for) operating activities
of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.3 (45.9)
------- -------
Net pretax cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . 270.0 147.0
Income taxes paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82.4) (64.3)
------- -------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . 187.6 82.7
------- -------
INVESTING ACTIVITIES
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (279.0) (188.1)
Businesses acquired in purchase transactions, net of cash acquired . . . . . . . . . . . (206.7) (268.2)
Net proceeds from divestments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191.5 418.6
Net proceeds from sale/leaseback transactions. . . . . . . . . . . . . . . . . . . . . . - 67.4
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.6 (6.4)
------- -------
Net cash (used for)/provided by investing activities . . . . . . . . . . . . . . . . . . (264.6) 23.3
------- -------
FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99.0) (96.0)
Repayments of borrowings having original maturities in excess of three months. . . . . . (82.9) (503.8)
Increase in borrowings having original maturities in excess of three months. . . . . . . 458.8 358.2
Net (decrease)/increase in borrowings having original maturities
of less than three months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (208.3) 195.6
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9 .6
------- -------
Net cash provided by/(used for) financing activities . . . . . . . . . . . . . . . . . . 85.5 (45.4)
------- -------
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . .7 (2.5)
------- -------
Increase in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9.2 $ 58.1
------- -------
------- -------
</TABLE>
The Notes to Consolidated Financial Statements
are integral parts of these statements.
I-2
<PAGE>
<TABLE>
<CAPTION>
W. R. Grace & Co. and Subsidiaries
Consolidated Balance Sheet (Unaudited)
- --------------------------------------------------------------------------------
September 30, December 31,
Dollars in millions, except par value 1994 1993
- -------------------------------------------------------------------------------- ------------- ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56.8 $ 47.6
Notes and accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . 789.9 657.4
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496.8 441.0
Net assets of discontinued operations. . . . . . . . . . . . . . . . . . . . . 608.8 761.3
Deferred income taxes, current . . . . . . . . . . . . . . . . . . . . . . . . 36.6 31.8
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.2 36.2
-------- --------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,050.1 1,975.3
Properties and equipment, net of accumulated depreciation and amortization
of $1,457.6 and $1,323.7, respectively . . . . . . . . . . . . . . . . . . . 1,587.2 1,454.1
Goodwill, less accumulated amortization of $65.2 and $53.2, respectively . . . . 609.8 481.6
Asbestos-related insurance receivable. . . . . . . . . . . . . . . . . . . . . . 560.0 962.3
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292.7 1,235.3
-------- --------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,099.8 $6,108.6
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 413.3 $ 532.6
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267.1 414.6
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.6 126.5
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 730.3 621.9
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297.0 297.0
-------- --------
Total Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 1,838.3 1,992.6
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,468.2 1,173.5
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 639.4 613.8
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.2 97.4
Noncurrent liability for asbestos-related litigation . . . . . . . . . . . . . . 616.0 713.7
-------- --------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,656.1 4,591.0
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stocks, $100 par value . . . . . . . . . . . . . . . . . . . . . . . 7.4 7.4
Common stock, $1 par value . . . . . . . . . . . . . . . . . . . . . . . . . . 94.1 93.5
Paid in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304.5 287.8
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,077.1 1,196.2
Cumulative translation adjustments . . . . . . . . . . . . . . . . . . . . . . (39.4) (67.3)
-------- --------
Total Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . 1,443.7 1,517.6
-------- --------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,099.8 $6,108.6
-------- --------
-------- --------
</TABLE>
The Notes to Consolidated Financial Statements
are integral parts of these statements.
I-3
<PAGE>
W. R. Grace & Co. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
(a) The financial statements in this Report at September 30, 1994 and 1993 and
for the three- and nine-month interim periods then ended are unaudited and
should be read in conjunction with the consolidated financial statements in
the Company's 1993 Annual Report on Form 10-K. Such interim financial
statements reflect all adjustments that, in the opinion of management, are
necessary for a fair presentation of the results of the interim periods
presented; all such adjustments are of a normal recurring nature. Certain
amounts in the prior periods' consolidated financial statements have been
reclassified to conform to the current periods' basis of presentation.
The results of operations for the three- and nine-month interim periods
ended September 30, 1994 are not necessarily indicative of the results of
operations for the fiscal year ending December 31, 1994.
(b) As previously reported, Grace is a defendant in lawsuits relating to
previously sold asbestos-containing products and anticipates that it will
be named as a defendant in additional asbestos-related lawsuits in the
future. Grace was a defendant in approximately 38,100 asbestos-related
lawsuits at both September 30, 1994 (73 involving claims for property
damage and the remainder involving approximately 61,700 claims for personal
injury) and December 31, 1993 (92 involving claims for property damage and
the remainder involving approximately 56,600 claims for personal injury).
During the first nine months of 1994, 5 property damage lawsuits against
Grace were dismissed; judgment was entered in favor of Grace in 2 property
damage cases (one of which had been on appeal and is now final); 19
additional property damage lawsuits were settled for a total of $28; and 7
new property damage lawsuits were filed. During this period, Grace also
recorded settlements of approximately 3,900 personal injury claims for
$13.3 and dismissals of approximately 2,200 personal injury claims.
On September 1, 1993, the U.S. Court of Appeals for the Second Circuit
issued a decision that had the effect of reducing the amount of insurance
coverage available to Grace with respect to asbestos property damage
litigation and claims. Grace recorded a non-cash charge of $475 ($300 after
taxes) in the 1993 third quarter to reflect this reduction, but reversed
$316 ($200 after taxes) of the charge in the 1993 fourth quarter, after the
Court withdrew its September 1993 decision and agreed to rehear the case.
On May 16, 1994, the Court issued a new decision confirming its September
1, 1993 decision. As a result, Grace recorded a non-cash charge of $200
after taxes in the second quarter of 1994 to reflect the reduction in
asbestos property damage insurance coverage.
In July 1994, a South Carolina state court judge dismissed the claims of
most class members from a purported nationwide class action asbestos
property damage lawsuit pending in a South Carolina state court (ANDERSON
MEMORIAL HOSPITAL, ET AL. V. W. R. GRACE & CO., ET AL.). In his ruling, the
judge determined that a South Carolina statute prohibits non-residents from
pursuing claims in the South Carolina state courts with respect to
buildings located outside the state. The plaintiffs have requested the
Court to reconsider its decision.
I-4
<PAGE>
W. R. Grace & Co. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
In August 1994, Grace entered into an agreement to settle IN RE: ASBESTOS
SCHOOL LITIGATION, a nationwide class action pending in the U. S. District
Court for the Eastern District of Pennsylvania on behalf of all public and
private elementary and secondary schools that contain friable asbestos
materials (other than schools that have "opted out" of the class). The
terms of the settlement agreement (which is subject to judicial review and
approval after class members have an opportunity to be heard) are not
expected to have a significant effect on Grace's consolidated results of
operations or its financial position.
In Grace's opinion (based upon and subject to the factors discussed in Note
2 to Grace's consolidated financial statements for the year ended December
31, 1993), it is probable that the personal injury and property damage
lawsuits pending at September 30, 1994 can be disposed of for a total of
$716, inclusive of legal fees and expenses, of which Grace has recorded
$616 as a noncurrent liability and $100 as a current liability. This
compares to the estimated liability (current and noncurrent) of $813.7 at
December 31, 1993, the decrease being attributable to payments made by
Grace in the first nine months of 1994. In addition, Grace has recorded a
receivable of $560 for the insurance proceeds it expects to receive in
reimbursement for prior payments and estimated future payments to dispose
of asbestos-related litigation. The amount of this receivable has declined
from $962.3 at December 31, 1993 due to the net insurance proceeds received
during the first nine months of 1994 and the special non-cash charge
recorded in the second quarter of 1994 as a result of the May 16, 1994
decision referred to above.
In the first nine months of 1994, Grace received a total of $136.6 pursuant
to settlements with certain insurance carriers in reimbursement for monies
previously paid by Grace in connection with asbestos-related litigation; of
this amount, $25 was received pursuant to settlements entered into in 1993,
which amount had been classified as notes receivable in the financial
statements. A portion of the $136.6 has been paid to plaintiffs in
previously settled asbestos-related lawsuits.
Grace continues to be involved in litigation with certain of its insurance
carriers, including an affiliated group of carriers that had agreed to a
settlement and had made a series of payments under that agreement in 1993.
The group of carriers subsequently notified Grace that it would no longer
honor the agreement (which had not been executed) due to the September 1,
1993 U.S. Court of Appeals decision discussed above. Grace believes that
the settlement agreement (which involves approximately $200 of the
asbestos-related receivable of $560 at September 30, 1994) is binding and
initiated action to enforce the settlement agreement. In January 1994, the
U.S. District Court for the Eastern District of Texas held the agreement to
be enforceable. The affiliated group of carriers has appealed this ruling
to the U.S. Court of Appeals for the Fifth Circuit and has sought to attack
it in a collateral action in the U.S. District Court for the Southern
District of New York; however, Grace has successfully stayed this
collateral attack.
Grace's ultimate exposure in respect of its asbestos-related lawsuits and
claims will depend on the extent to which its insurance will cover damages
for which it may be held liable, amounts paid in settlement and litigation
costs. In Grace's opinion, it is probable that recoveries from its
insurance carriers (reflected in the receivable discussed above), along
I-5
<PAGE>
W. R. Grace & Co. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
with other funds, will be available to satisfy the personal injury and
property damage lawsuits and claims pending at September 30, 1994.
Consequently, Grace believes that the resolution of its asbestos-related
litigation will not have a material effect on its consolidated results of
operations or financial position.
For additional information, see Note 2 to the consolidated financial
statements in the Company's 1993 Annual Report on Form 10-K.
(c) Minority interests consists primarily of a limited partnership interest in
Grace Cocoa Associates, L.P. (LP). LP's assets consist of Grace's worldwide
cocoa and chocolate business, long-term notes and demand loans due from
various Grace entities and guaranteed by the Company and its principal
operating subsidiary, and cash. LP is a separate and distinct legal entity
from each of the Grace entities and has separate assets, liabilities,
business functions and operations. For financial reporting purposes, the
assets, liabilities, results of operations and cash flows of LP are
included in Grace's consolidated financial statements and the outside
investors' interest in LP is reflected as a minority interest. The
intercompany notes held by LP are eliminated in preparing the consolidated
financial statements and, therefore, have not been classified as pertaining
to discontinued operations.
The net assets of Grace's discontinued operations (excluding intercompany
assets) at September 30, 1994 were as follows:
<TABLE>
<CAPTION>
Battery
Separators Grace
Cocoa and EMS Energy Other Total
------ ---------- ------ ------ --------
<S> <C> <C> <C> <C> <C>
Current assets $290.9 $100.9 $ 11.7 $ 16.1 $ 419.6
Properties and equipment, net 178.5 134.6 127.4 19.5 460.0
Investments in and advances to
affiliated companies -- 5.5 4.1 36.2 45.8
Other noncurrent assets 46.9 22.1 11.0 34.8 114.8
------ ------ ------ ------ --------
Total assets $516.3 $263.1 $154.2 $106.6 $1,040.2
------ ------ ------ ------ --------
Current liabilities $184.4 $ 60.2 $ 14.9 $ 15.9 $ 275.4
Other noncurrent liabilities 83.4 51.2 20.2 1.2 156.0
------ ------ ------ ------ --------
Total liabilities $267.8 $111.4 $ 35.1 $ 17.1 $ 431.4
------ ------ ------ ------ --------
Net assets $248.5 $151.7 $119.1 $ 89.5 $ 608.8
------ ------ ------ ------ --------
------ ------ ------ ------ --------
</TABLE>
I-6
<PAGE>
W. R. Grace & Co. and Subsidiaries
Notes to Consolidated Financial Statements
------------------------------------------
(Dollars in millions)
(d) Inventories consist of:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- ------------
<S> <C> <C>
Raw and packaging materials $126.1 $111.4
In process 73.2 59.9
Finished products 337.2 310.3
------ ------
536.5 481.6
Less: Adjustment of certain inventories
to a last-in/first-out (LIFO) basis (39.7) (40.6)
------ ------
Total Inventories $496.8 $441.0
------ ------
------ ------
</TABLE>
(e) Earnings per share are calculated on the basis of the following weighted
average number of common shares outstanding:
Three Months Ended September 30:
1994 - 93,995,000
1993 - 92,295,000
Nine Months Ended September 30:
1994 - 93,893,000
1993 - 90,829,000
I-7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
(a) REVIEW OF OPERATIONS
(1) OVERVIEW:
In the third quarter and first nine months of 1994, sales and revenues
Increased 15% and 13%, respectively, over the comparable periods of 1993.
Income from continuing operations for the third quarter and first nine
months of 1994 increased 19% and 21%, to $76 million and $179.9 million,
respectively, as compared to the 1993 periods, excluding non-cash charges
of $200 million and $300 million after taxes ($316 million and $475 million
pretax) recorded in the 1994 second quarter and 1993 third quarter,
respectively, to reflect a reduction in insurance coverage for asbestos
property damage lawsuits and claims (see Note (b) to the consolidated
financial statements in this Report). Including the provision recorded in
the second quarter, Grace reported a loss from continuing operations of
$20.1 million for the first nine months of 1994.
(2) OPERATING RESULTS:
The following table compares segment results for the 1994 third quarter and
first nine months to results for the comparable periods of 1993:
<TABLE>
<CAPTION>
W. R. Grace & Co. and Subsidiaries Three Months Ended Nine Months Ended
Operating Results September 30, September 30,
- ----------------------------------- -------------------------- ------------------------
Dollars in millions 1994 1993 1994 1993
- ----------------------------------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Sales and Revenues
- -------------------
Specialty Chemicals $ 815.5 $ 734.7 $2,273.8 $2,112.7
Health Care 491.2 401.4 1,346.6 1,103.7
--------- --------- -------- --------
Total $ 1,306.7 $ 1,136.1 $3,620.4 $3,216.4
--------- --------- -------- --------
--------- --------- -------- --------
Operating Income Before Taxes (i)
- -----------------------------------
Specialty Chemicals $ 90.5 $ 80.4 $ 209.6 $ 188.9
Health Care 66.4 54.0 168.0 135.4
--------- --------- -------- --------
Total $ 156.9 $ 134.4 $ 377.6 $ 324.3
--------- --------- -------- --------
--------- --------- -------- --------
<FN>
(i) Segment results for the 1993 periods have been reclassified to conform to
the 1994 basis of presentation. Segment results reflect the allocation of
corporate overhead and corporate research expenses. Corporate interest,
financing costs and nonallocable expenses (such as those associated with
divested businesses) are not included in the segment results.
</TABLE>
I-8
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
SPECIALTY CHEMICALS
In the third quarter and first nine months of 1994, sales and revenues increased
11% and 8%, respectively, over the comparable 1993 periods, reflecting favorable
volume variances estimated at 9% and 7% for the third quarter and first nine
months of 1994, respectively, a favorable price/product mix variance estimated
at 1% for the first nine months of 1994 (the price/product mix variance was
negligible for the third quarter of 1994), and a favorable currency translation
variance estimated at 2% for the third quarter of 1994 (the currency translation
variance was negligible for the first nine months of 1994). Volume increases
were experienced by all core product lines, except for fluid cracking catalysts
in North America caused by customers' cracking better quality crude (requiring
fewer catalysts) and an increase versus 1993 in customer maintenance shutdowns.
The volume increases in packaging were due to improved sales of bags, films and
laminates; those in construction products reflected the acquisition of concrete
admixture businesses in the first quarter of 1994 and improving construction
markets in North America and Europe; those in water treatment were due to
improving conditions in the paper industry process chemicals business in Europe
and strong seasonal sales to the sugar and alcohol industries in Latin America;
those in container were due to improvement in market share in Latin America;
those in polyolefin catalysts were due to improving market conditions in Europe
and Asia Pacific; and those in silica products in North America were due to
strong sales of dentifrice silica.
Operating income before taxes increased 13% in the third quarter of 1994
compared to the third quarter of 1993. North American results were down in the
1994 quarter, primarily due to reduced profitability in fluid cracking catalysts
(due to the volume decreases noted above), partially offset by strong growth in
construction products (primarily concrete products, due to the volume increases
noted above); North American results in packaging were flat versus the 1993
quarter due to one-time printing costs associated with revised U. S. Food and
Drug Administration (FDA) nutritional labeling requirements, increased raw
material prices and start-up and production support costs for new production
capacity. European results were favorable versus the 1993 third quarter,
primarily due to improvements in fluid cracking catalysts (reflecting
improvement in market share) and polyolefin catalysts, paper industry process
chemicals business and packaging (due to the volume increases noted above),
partially offset by costs associated with streamlining packaging operations in
Europe. In Asia Pacific, favorable results were achieved versus the 1993 third
quarter, primarily in fluid cracking catalysts (reflecting improvement in market
share) and container products (due to improvement in market share and savings
achieved from cost containment efforts). Latin American results were favorable
to those for the 1993 third quarter, primarily in packaging (due to volume
increases in bags, films and laminates), water treatment (due to the volume
increases noted above) and container (due to the volume increases noted above
and cost containment efforts); Latin American results also benefited from
improving economic conditions in Brazil.
For the first nine months of 1994, operating income increased 11% over the
comparable period of 1993, primarily due to the significant growth in packaging
and construction products discussed above, partially offset by unfavorable
results in water treatment, primarily due to costs associated with streamlining
operations in Europe.
I-9
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
HEALTH CARE
Sales and revenues for both the third quarter and first nine months of 1994
increased by 22% over the comparable periods of 1993. These improvements were
due to increases of 26% and 25%, respectively, in kidney dialysis services and
37% and 51%, respectively, in home health care operations, offset by decreases
of 5% and 9%, respectively, in medical products operations. The decrease in
medical products operations in the third quarter primarily reflects a decline in
renal products sales, while the decrease for the first nine months was primarily
due to a decline in bloodline sales resulting from import alerts issued in the
1993 second quarter (see discussion below). 1994 third quarter and nine month
kidney dialysis services results include centers acquired since the third
quarter of 1993, and home health care operations include the results of Home
Nutritional Services, Inc. (HNS), a national provider of home infusion therapy
services acquired in April 1994. The number of centers providing dialysis and
related services increased 9%, from 493 at September 30, 1993 to 539 at
September 30, 1994 (499 in North America, 37 in Europe , 2 in Latin America and
1 in Asia Pacific).
Operating income before taxes in the third quarter and first nine months of 1994
increased by 23% and 24%, respectively, over the 1993 periods. 1994 third
quarter and first nine months results for all health care businesses benefited
from the acquisitions made in the fourth quarter of 1993 and first nine months
of 1994, and continued improvements in cost controls, operating efficiencies
and/or capacity utilization. These favorable results were partially offset by
the costs of improving and expanding quality assurance systems for medical
products manufacturing operations (see discussion below).
In 1993, the FDA issued import alerts with respect to (1) hemodialysis
bloodlines manufactured at the plant of National Medical Care, Inc. (NMC),
Grace's principal health care subsidiary, located in Reynosa, Mexico and (2)
hemodialyzers manufactured in NMC's Dublin, Ireland facility. Products subject
to FDA import alerts may not enter the U. S. until the FDA approves the quality
assurance systems of the facility at which such products are manufactured. In
January 1994, NMC entered into a consent decree providing for the resumption of
importation of bloodlines and hemodialyzers following certification by NMC that
the relevant facility complies with FDA regulations and successful completion of
an FDA inspection to verify such compliance. In accordance with the consent
decree, NMC certified compliance to the FDA with respect to the Reynosa, Mexico
facility in January 1994, and the FDA lifted the bloodline import alert in March
1994 following a thorough reinspection by the FDA and a commitment by NMC to
finish certain studies by May 1994 and, in the interim, to perform additional
product testing. NMC has completed the studies, as requested. Certification of
compliance at the Dublin, Ireland facility was submitted to the FDA in April
1994. The consent decree also requires NMC to certify and maintain compliance
with applicable FDA device manufacturing laws and regulations at all of its
U.S. manufacturing facilities. NMC has conducted a full review of its facilities
and upgraded, as necessary, all of its quality assurance systems. No fines or
penalties were imposed on NMC as a result of any of the FDA's actions relating
to the import alerts or in connection with the consent decree. Neither the
import alerts nor previously reported recalls of certain NMC products are
expected to have a material effect on Grace's consolidated results of operations
or financial position.
I-10
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
(3) STATEMENT OF OPERATIONS:
OTHER INCOME
Other income includes, among other things, interest income, dividends, royalties
from licensing agreements, and equity in earnings of affiliated companies. Other
income for the first nine months of 1994 also includes a $27 million gain (pre-
and after-tax) from the January 1994 sale of Grace's remaining interest in The
Restaurant Enterprise Group, Inc. (REG).
INTEREST EXPENSE AND RELATED FINANCING COSTS
Interest expense and related financing costs increased by 34% and 19% in the
third quarter and first nine months of 1994, respectively, versus the comparable
1993 periods, primarily due to higher debt levels and higher average short-term
interest rates, coupled with an increase in related financing costs.
Grace enters into various types of interest rate hedge agreements to manage
interest costs and risks associated with changing interest rates; most of these
agreements effectively convert underlying fixed-rate debt into variable-rate
debt. Exposure to market risk on interest rate hedge agreements results from
actual or expected future fluctuations in floating rate indices during the
periods in which the agreements are outstanding.
See "Financial Condition: Liquidity and Capital Resources" below for information
on borrowings.
Research and Development Expenses
Research and development spending decreased by 1% and 6% in the third quarter
and first nine months of 1994, respectively, versus the 1993 periods. Research
and development spending is now directed primarily toward Grace's core specialty
chemicals and health care businesses.
INCOME TAXES
The effective tax rate for the third quarter of 1994 was 39.9%. The effective
tax rate for the first nine months of 1994 was also 39.9%, excluding the
asbestos-related provision and the gain on the REG transaction, discussed above,
and a $26 million provision ($40 million pretax) for environmental costs and
workforce reductions recorded in the first quarter of 1994. The effective tax
rates for the third quarter and first nine months of 1993 were 41.3% and 41.8%,
respectively, excluding the provision for asbestos-related litigation and claims
discussed above.
I-11
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
LOSS FROM DISCONTINUED OPERATIONS
In the second quarter of 1993, Grace restated its financial statements to
reflect the classification of certain businesses as discontinued operations. For
additional information, see Note 6 to the consolidated financial statements in
the Company's 1993 Annual Report on Form 10-K.
(b) FINANCIAL CONDITION; LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of 1994, the net pretax cash flow provided by
Grace's continuing operating activities was $235.7 million, versus $192.9
million in the first nine months of 1993, with the increase primarily due to
improved operating results. Net pretax cash provided by operating activities in
the first nine months of 1994 and 1993 also reflects net cash outflows of $13.4
million and $53.6 million, respectively, reflecting amounts paid for the defense
and disposition of asbestos-related property damage and personal injury
litigation, net of settlements with certain insurance carriers (see discussion
below). After giving effect to discontinued operations and payments of income
taxes, the net cash provided by operating activities was $187.6 million in the
first nine months of 1994 versus $82.7 million in the first nine months of 1993.
Investing activities used $264.6 million of cash in the first nine months of
1994, largely reflecting capital expenditures and business acquisitions and
investments, primarily the acquisitions of HNS (for approximately $90 million
exclusive of cash acquired and assumed debt of approximately $30 million),
kidney dialysis centers, and concrete admixture businesses. These investing
activities were offset by net proceeds of $191.5 million from divestments,
primarily the disposition of Grace's remaining interest in REG in the first
quarter of 1994; the second quarter 1994 divestments of Grace's blow-molded
plastic case business; its Endura Products Division, a custom saturator and
coater of specialty papers for the tape industry; and its Diamonite Products
Division, a manufacturer of technical ceramics for a broad range of industrial
applications; and the third quarter 1994 divestments of Grace's American
Breeders Service and Caribbean Fertilizer businesses and Chomerics, Inc., a
manufacturer of electromagnetic interference shielding materials and thermal
interface products.
Net cash provided by financing activities in the first nine months of 1994 was
$85.5 million, primarily reflecting an increase in total debt from year-end
1993, offset by the payment of $99 million of dividends. Total debt was
approximately $1.9 billion at September 30, 1994, an increase of $175.4 million
from December 31, 1993. Grace's total debt as a percentage of total capital
(debt ratio) increased from 52.9% at December 31, 1993 to 56.6% at September 30,
1994, as a result of the $200 million provision recorded in the 1994 second
quarter, as discussed in Note (b) to the consolidated financial statements in
this Report, and the increase in total debt.
I-12
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
In April 1994, Grace entered into a Selling Agency Agreement relating to the
offering from time to time of up to $300 million (issue price) of Medium-Term
Notes, Series A (MTNs). Through September 30, 1994, Grace issued $128.5 million
principal amount of MTNs and applied the net proceeds therefrom to reduce
commercial paper and/or bank borrowings. The MTNs mature at various dates from
1996 to 1999 and bear interest at rates ranging from 6.55% to 7.84% per annum,
or at rates based upon Eurodollar rates.
In August 1994, Grace sold $300 million principal amount of 8% Notes Due 2004.
The net proceeds from the sale of these Notes were used to reduce commercial
paper and/or bank borrowings.
Effective September 1, 1994, Grace replaced its $1,225 million bank revolving
credit agreement with new credit agreements under which it may borrow up to $750
million at interest rates based upon the prevailing prime, federal funds and/or
Eurodollar rates. Of that amount, $375 million is available under a 364-day
credit agreement that terminates on August 31, 1995, and $375 million is
available under a long-term revolving credit agreement that terminates on
September 1, 1999.
Grace expects to satisfy its 1994 cash requirements from the following sources:
(1) funds generated by operations, (2) proceeds from divestments and (3)
financings. Such financings are expected to include new borrowings, the
availability and cost of which will depend upon general economic and market
conditions.
On October 19, 1994, Grace announced that it had entered into a definitive
agreement to sell its printing products business. Grace's printing product
business produces photopolymer printing plates, offset printing blankets and
rubber-based covers for industrial rollers. Completion of the transaction is
subject to various conditions and is expected to occur in the fourth quarter of
1994. Grace has also announced a definitive agreement to sell its battery
separators business and an agreement on the principal terms of the sale of
substantially all of its interest in Colowyo Coal Company. Grace expects these
transactions to be completed in the 1994 fourth quarter, with total proceeds
approximating $450 million.
On November 7, 1994, Grace announced that it had acquired for approximately $40
million Schurpack Multiflex GmbH, a German company that produces and sells
flexible plastic packaging materials in the form of laminates, bags and pouches
to the food processing industry in Europe.
ASBESTOS-RELATED MATTERS
As reported in Note (b) to the consolidated financial statements in this Report,
Grace is a defendant in lawsuits relating to previously sold asbestos-containing
products and is involved in related litigation with certain of its insurance
carriers. In the first nine months of 1994, Grace paid $13.4 million in
connection with the defense and disposition of asbestos-related property damage
and personal injury litigation, net of amounts received from settlements with
certain insurance carriers. During the second quarter of 1994, Grace recorded a
non-cash charge of $200 million after taxes to reflect a court decision that had
the effect of reducing Grace's insurance coverage for asbestos property damage
lawsuits and claims.
I-13
<PAGE>
Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
The balance sheet at September 30, 1994 includes a receivable due from insurance
carriers, subject to litigation, of $560 million. Grace has also recorded notes
receivable of approximately $89 million for amounts to be received in 1994 to
1999 pursuant to settlement agreements previously entered into with certain
insurance carriers.
Although Grace cannot precisely estimate the amounts to be paid in 1994 in
respect of asbestos-related lawsuits and claims, Grace expects that it will be
required to expend approximately $50 million (pretax) in 1994 to defend and
dispose of such lawsuits and claims (after giving effect to payments to be
received from certain insurance carriers, as discussed above and in Note (b) to
the consolidated financial statements in this Report). As indicated therein, the
amounts reflected in the consolidated financial statements with respect to the
probable cost of disposing of pending asbestos lawsuits and claims and probable
recoveries from insurance carriers represent estimates; neither the outcomes of
such lawsuits and claims nor the outcomes of Grace's ongoing litigations with
certain of its insurance carriers can be predicted with certainty.
ENVIRONMENTAL MATTERS
In the first quarter of 1994, Grace recorded a charge primarily to provide for
future environmental costs relating to a previously divested business. No other
significant developments relating to environmental liabilities occurred in the
first nine months of 1994.
For additional information relating to environmental liabilities, see Note 11 to
the consolidated financial statements in the Company's 1993 Annual Report on
Form 10-K.
I-14
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
(a) Note (b) to the Consolidated Financial Statements in Part I of this
Report is incorporated herein by reference.
(b) Reference is made to the Company's 1993 Annual Report on Form 10-K for
information concerning a lawsuit relating to Grace's 1991 demolition of a mill
in Libby, Montana. In May 1994, Grace signed a Consent Decree pursuant to which
it would pay penalties of $510,000 and implement certain procedures under the
Clean Air Act at 28 facilities. The Consent Decree is subject to final approval
by the United States District Court for the District of Montana, Great Falls
Division, which is expected in the fourth quarter of 1994.
ITEM 5. OTHER INFORMATION.
(a) On August 4, 1994, Grace announced that it had entered into a
definitive agreement to sell its battery separators business to a subsidiary of
The InterTech Group, Inc., a privately held company. Grace's battery separators
business involves the production of microporous insulating sheets placed between
the reactive components in automotive, industrial and consumer batteries.
Completion of the transaction is subject to various conditions and is expected
to occur in the fourth quarter of 1994.
II-1
<PAGE>
(b) On August 9, 1994, Grace completed the public offering of $300 million
of 8% Notes Due 2004 ("Notes") at an initial public offering price of 99.794% of
their principal amount. The net proceeds of the Notes were used to reduce
commercial paper and bank borrowings incurred to finance capital expenditures
and working capital requirements.
(c) On August 16, 1994, Grace announced that it had completed the
previously announced sale of its American Breeders Service and Caribbean Fer-
tilizer businesses to a company owned by an investor group organized by Ard-
shiel, Inc. for a combined purchase price of approximately $39 million in cash,
subject to a post-closing adjustment.
(d) On October 3, 1994, Grace announced that it had completed the sale of
its Chomerics, Inc. unit, a manufacturer of electromagnetic interference
shielding materials and thermal interface products, to Parker-Hannifin Corpo-
ration for approximately $40 million in cash, subject to a post-closing ad-
justment.
(e) On October 19, 1994, Grace announced that it had entered into a
definitive agreement to sell its printing products business to Print Tech
International, Inc., a new company to be formed by the management of the busi-
ness and by an investor group, and that it had reached an agreement in principle
to sell a related printing products unit to a third party. The combined
purchase price for these transactions is approximately $144 million, and Grace
expects the transactions to be completed by the end of 1994.
(f) On November 7, 1994, Grace announced that it had acquired for approxi-
mately $40 million Schurpack Multiflex GmbH, a German company that produces and
II-2
<PAGE>
sells flexible plastic packaging materials in the form of laminates, bags and
pouches to the food processing industry in Europe.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS. The following are being filed as exhibits to this Report:
-- 364-Day Credit Agreement, dated as of September 1, 1994, among
the Company, its principal operating subsidiary, the several
banks parties thereto and Chemical Bank, as agent for such banks;
-- Credit Agreement, dated as of September 1, 1994, among the
Company, its principal operating subsidiary, the several banks
parties thereto and Chemical Bank, as agent for such banks;
-- weighted average number of shares and earnings used in per share
computations;
-- computation of ratio of earnings to fixed charges and combined
fixed charges and preferred stock dividends; and
-- financial data schedule.
(b) REPORTS ON FORM 8-K. The Company filed a Report on Form 8-K dated
July 26, 1994 regarding the announcement of its consolidated results of opera-
tions for the quarter ended June 30, 1994. The Company also filed a Report on
Form 8-K dated August 8, 1994 relating to the offering of the Notes referred to
in Item 5(b) above.
II-3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the un-
dersigned thereunto duly authorized.
W. R. GRACE & CO.
-----------------------
(Registrant)
Date: November 10, 1994 By /s/ Richard N. Sukenik
----------------------------
Richard N. Sukenik
Vice President and Controller
(Principal Accounting Officer)
II-4
<PAGE>
W. R. GRACE & CO.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ------------
4.1 364-Day Credit Agreement, dated as of September 1, 1994, among
the Company, its principal operating subsidiary, the several
banks parties thereto and Chemical Bank, as agent for such banks.
4.2 Credit Agreement, dated as of September 1, 1994, among the
Company, its principal operating subsidiary, the several banks
parties thereto and Chemical Bank, as agent for such banks.
11 Weighted average number of shares and earnings used in per share
computations
12 Computation of ratio of earnings to fixed charges and combined
fixed charges and preferred stock dividends
27 Financial Data Schedule
<PAGE>
364-DAY CREDIT AGREEMENT, dated as of September 1, 1994, among W. R.
GRACE & CO.-CONN., a Connecticut corporation (the "COMPANY"), W. R. GRACE & CO.,
a New York corporation and sole shareholder of the Company ("GRACE NEW YORK"),
the several banks from time to time parties to this Agreement (the "BANKS") and
CHEMICAL BANK, a New York banking corporation, as agent for the Banks hereunder
(in such capacity, the "AGENT").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"ADDITIONAL BANK": as defined in subsection 2.4(b).
"AFFILIATE": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any Person who is a
director, officer, shareholder or partner (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in the preceding
clause (a). For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (i) vote 10% or more of the
securities having ordinary voting power for the election of directors of
such Person or (ii) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT": this 364-Day Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"AGGREGATE OUTSTANDING BILATERAL OPTION LOANS": at any time, (i) the
aggregate outstanding principal amount of all Dollar Bilateral Loans and
(ii) the aggregate Dollar Equivalents at such time with respect to all
outstanding Alternative Currency Bilateral Loans.
"ALTERNATE BASE RATE": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. "PRIME RATE" shall mean the
rate of interest per annum publicly announced from time to time by the
Agent as its prime rate in effect at its principal office in New York City.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the
<PAGE>
2
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Agent from three federal funds brokers of recognized standing selected
by it. If for any reason the Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable
to ascertain the Federal Funds Effective Rate, for any reason, including,
the inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"ALTERNATIVE CURRENCY": any currency other than Dollars which is
freely transferable and convertible into Dollars.
"ALTERNATIVE CURRENCY BILATERAL LOAN": a Loan made by a Bank to any
Borrower in an Alternative Currency pursuant to Section 3.
"APPLICABLE MARGIN": for any day on which the long term senior
unsecured debt of the Company is rated by both S&P and Moody's, the rate
per annum under the caption "Margin" (a "Margin Rate") set forth below
opposite the S&P and Moody's ratings applicable to such debt on such day
(or, if such ratings are set opposite two different Margin Rates, then the
Applicable Margin shall be the lower of said two Margin Rates):
Margin S&P Moody's
------ --- -------
.450% BB+ or lower Ba1 or lower
.325% BBB- Baa3
.300% BBB Baa2
.270% BBB+ Baa1
.240% A- or higher A3 or higher
PROVIDED that if on any day the long term senior unsecured debt of the
Company is rated by only one of either S&P or Moody's, the Applicable
Margin will be determined based on the rating by such rating agency, and
PROVIDED, FURTHER,
<PAGE>
3
that if on any day the long term senior unsecured debt of the Company is
rated by neither S&P nor Moody's, the Applicable Margin will be determined
based on the rating of such debt by Duff & Phelps, Fitch or another
nationally recognized statistical rating organization agreed to by and
among the Company, the Agent and the Majority Banks (each, a "SUBSTITUTE
RATING AGENCY") and will be the Margin Rate set forth above opposite the
S&P and Moody's ratings comparable to such Substitute Rating Agency's
rating of such debt on such date, and PROVIDED, FURTHER, that if on any
day the long term senior unsecured debt of the Company is rated by none
of S&P, Moody's or any Substitute Rating Agency, the Company, the Agent
and the Banks will negotiate in good faith to determine an alternative
basis for calculating the Applicable Margin consistent with the table set
forth above and, if agreement on such alternative basis is not reached
within 30 days, the Applicable Margin will be calculated on an alternative
basis determined by the Agent and the Banks in their reasonable discretion
consistent with the table above, and until such alternative basis is
determined the Applicable Margin will be the Applicable Margin last
determined as provided in the table above.
"AVAILABLE COMMITMENT": as to any Bank at any time, an amount equal
to the excess, if any, of (a) the amount of such Bank's Commitment over (b)
the Loan Outstandings of such Bank at such time.
"BID LOAN": each Bid Loan made pursuant to Section 4.
"BID LOAN BANKS": Banks which have outstanding Bid Loans or which are
making Bid Loans.
"BID LOAN CONFIRMATION": each confirmation by the Borrower of its
acceptance of Bid Loan Offers, which Bid Loan Confirmation shall be
substantially in the form of Exhibit C.
"BID LOAN NOTE": as defined in subsection 4.5; collectively, the "BID
LOAN NOTES".
"BID LOAN OFFER": each offer by a Bank to make Bid Loans pursuant to
a Bid Loan Request, which Bid Loan Offer shall contain the information
specified in Exhibit D.
"BID LOAN REQUEST": each request by a Borrower for Banks to submit
bids to make Bid Loans at a fixed rate, which shall contain the information
in respect of such requested Bid Loans specified in Exhibit E and shall be
delivered to the Agent.
"BILATERAL OPTION LOAN": a Loan made by a Bank to a Borrower pursuant
to Section 3. Bilateral Option Loans may
<PAGE>
4
be either Dollar Bilateral Loans or Alternative Currency Bilateral Loans.
"BILATERAL OPTION LOAN REPORT": as defined in subsection 3.2.
"BOARD": The Board of Governors of the Federal Reserve System or any
successor thereto.
"BORROWER": the Company and any Subsidiary of the Company with
respect to which a Notice of Additional Borrower has been given and all
conditions precedent to the effectiveness thereof have been satisfied.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.3 and 4.2, as a date on which a Borrower requests the Banks to
make Loans hereunder, or any date that a Bilateral Option Loan is made in
accordance with subsection 3.1.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"CAPITALIZED LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required to be
capitalized in accordance with GAAP.
"CHANGE OF CONTROL DATE": (i) the first day on which the Company
determines that any Person or group of related Persons has direct or
indirect beneficial ownership of 30% or more of the outstanding capital
stock of Grace New York having ordinary voting power (other than stock
having such power only by reason of the happening of a contingency) for the
election of a majority of the board of directors of Grace New York or (ii)
the first day on which any Person or group of related Persons shall acquire
all or substantially all of the assets of Grace New York.
"CHEMICAL": Chemical Bank.
"CLOSING DATE": the first date on which the conditions set forth in
subsection 7.1 have been satisfied or waived.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT": as to any Bank, the obligation of such Bank to make
Revolving Credit Loans hereunder to the Borrowers in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Bank's name on Schedule I under the heading "Commitment".
<PAGE>
5
"COMMITMENT PERCENTAGE": as to any Bank at any time, the percentage
of the aggregate Commitments then constituted by such Bank's Commitment.
"COMMITMENT PERIOD": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of
Section 4001(a)(14) of ERISA or is part of a group which includes the
Company and which is treated as a single employer under subsection (b) or
(c) of Section 414 of the Code.
"CONSOLIDATED ADJUSTED NET WORTH": at a particular date, with respect
to Grace New York and its Subsidiaries, and without duplication, the sum of
all amounts which would, in accordance with GAAP, be set forth opposite the
captions "Total Shareholders' Equity", "Minority interests, current" and
"Minority interests, noncurrent" (or the equivalent captions) on a
consolidated balance sheet of Grace New York and its Subsidiaries prepared
as of such date, PLUS (a) non-cash after-tax charges arising from: (1)
asset disposals (excluding the retirement of property, plant and equipment
in the ordinary course of business) by Grace New York and its Subsidiaries,
(2) the implementation or modified application of financial accounting
standards applicable to Grace New York and its Subsidiaries, and (3) other
special non-recurring transactions (including charges relating to
Restructuring Activities, discontinued operations and asbestos property
damage litigation and claims), in each case referred to in this clause (a)
occurring after June 30, 1994, plus (b) any payments received in respect of
non-cash after-tax gains referred to in clause (c) of this definition,
MINUS (c) non-cash after-tax gains arising from: (1) asset disposals
(excluding the retirement of property, plant and equipment in the ordinary
course of business) by Grace New York and its Subsidiaries, (2) the
implementation or modified application of financial accounting standards
applicable to Grace New York and its Subsidiaries, and (3) other special
non-recurring transactions (including gains relating to Restructuring
Activities, discontinued operations and asbestos property damage litigation
and claims), in each case referred to in this clause (c) occurring after
June 30, 1994, MINUS (d) any payments made in respect of non-cash after-tax
charges referred to in clause (a) of this definition.
"CONSOLIDATED INTEREST EXPENSE": for any period, with respect to
Grace New York and its Subsidiaries, the amount which, in conformity with
GAAP, would be set forth opposite
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6
the caption "Interest expense and related financing costs" (or the
equivalent caption) on a consolidated statement of operations of Grace
New York and its Subsidiaries for such period.
"CONSOLIDATED DEBT": at a particular date, with respect to Grace New
York and its Subsidiaries, and without duplication, the sum of the amounts
set forth on a consolidated balance sheet of Grace New York and its
Subsidiaries prepared as of such date in accordance with GAAP opposite the
captions (1) "Long-term debt" (or the equivalent caption) and (2) "Short-
term debt" (or the equivalent caption) but always to include all
indebtedness for borrowed money of Grace New York and its Subsidiaries in
accordance with GAAP.
"CONTINUING BANKS": as defined in subsection 2.4(b).
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DOLLAR BILATERAL LOAN": a Bilateral Option Loan denominated in
Dollars.
"DOLLAR EQUIVALENT": on any date of determination by the Agent
pursuant to subsection 3.2(b) or 3.2(c), as applicable, in respect of any
Alternative Currency Bilateral Loan the amount of Dollars obtained by
converting the outstanding amount of currency of such Alterative Currency
Bilateral Loan, as specified in the then most recent Bilateral Option Loan
Report, into Dollars at the spot rate for the purchase of Dollars with such
currency as quoted by the Agent at its principal foreign exchange trading
operations office in New York City on such date.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of Grace New York other than a
Foreign Subsidiary.
"DOMESTIC INDEBTEDNESS": any Indebtedness of Grace New York and any
Domestic Subsidiary.
"DUFF & PHELPS": Duff & Phelps, Inc.
<PAGE>
7
"EBIT": for any period, with respect to Grace New York and its
Subsidiaries, (a) all amounts which would be set forth opposite the caption
"Income from continuing operations before income taxes" (or the equivalent
caption) on a consolidated statement of income of Grace New York and its
Subsidiaries prepared in accordance with GAAP for such period PLUS (b) non-
cash pre-tax charges arising from: (1) asset disposals (excluding the
retirement of property, plant and equipment in the ordinary course of
business) by Grace New York and its Subsidiaries, (2) the implementation or
modified application of financial accounting standards applicable to Grace
New York and its Subsidiaries, and (3) other special non-recurring
transactions (including charges relating to Restructuring Activities,
discontinued operations and asbestos property damage litigation and claims)
(to the extent that such amounts have been deducted in determining the
amount set forth opposite the caption "Income from continuing operations"
(or the equivalent caption) for such period), PLUS (c) Consolidated
Interest Expense for such period, PLUS (d) any payments received in such
period in respect of non-cash pre-tax gains referred to in clause (e) of
this definition, MINUS (e) non-cash pre-tax gains arising from: (1) asset
disposals (excluding the retirement of property, plant and equipment in the
ordinary course of business) by Grace New York and its Subsidiaries, (2)
the implementation or modified application of financial accounting
standards applicable to Grace New York and its Subsidiaries, and (3) other
special non-recurring transactions (including charges relating to
Restructuring Activities, discontinued operations and asbestos property
damage litigation and claims) (to the extent that such amounts have been
added in determining the amount set forth opposite the caption "Income from
continuing operations" (or the equivalent caption) for such period), MINUS
(f) any payments made in such period in respect of non-cash pre-tax charges
referred to in clause (b) of this definition.
"ENVIRONMENTAL LAWS": any and all federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning environmental
protection matters, including without limitation, Hazardous Materials, as
now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of any reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the
<PAGE>
8
Board of Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chemical is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans,
the Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 10,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"EXISTING CREDIT AGREEMENT": the Credit Agreement, dated as of
September 1, 1992, among the Company, Grace New York, the banks thereto and
Chemical, as agent, as it may have been amended, supplemented or otherwise
modified from time to time.
"EXISTING TERMINATION DATE": as defined in subsection 2.4(a).
"FASB 5": Statement of Financial Accounting Standards No. 5,
Accounting for Contingencies, of the Financial Accounting Standards Board,
as the same may be from time to time supplemented, amended or interpreted
by such Board.
"FITCH": Fitch Investors Service Inc.
"FOREIGN SUBSIDIARY": any Subsidiary of Grace New York (i) that is
organized under the laws of any jurisdiction other than any state
(including the District of Columbia), territory or possession of the United
States of America (a "foreign jurisdiction"), or (ii) more than 50 percent
of the
<PAGE>
9
book value of the assets of which (as of the end of the most recent
fiscal period for which financial statements are required to have been
provided pursuant to subsection 8.1(a) or (b)) are located in one or more
foreign jurisdictions, or (iii) more than 50 percent of the Net Sales and
Revenues of which (for the most recent fiscal year for which financial
statements are required to have been provided pursuant to subsection
8.1(a)) were from sales made and/or services provided in one or more
foreign jurisdictions, or (iv) more than 50 percent of the book value
of the assets of which (as of the end of the most recent fiscal period for
which financial statements are required to have been provided pursuant to
subsection 8.1(a) or (b)) consists of equity interests in and/or
Indebtedness of one or more Subsidiaries that are "Foreign Subsidiaries"
within clauses (i), (ii), (iii) or (iv) of this definition.
"FOREIGN SUBSIDIARY INDEBTEDNESS": any Indebtedness of any Foreign
Subsidiary.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HAZARDOUS MATERIALS": any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such
in or under any Environmental Law.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under Capitalized Leases,
and (c) without duplication, all "loss contingencies" of such Person of the
types described in paragraph 12 of FASB 5, whether or not disclosed or
required to be disclosed on the financial statements or footnotes thereto
of such Person pursuant to GAAP.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
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10
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the fifteenth day of
each March, June, September and December to occur while such Loan is
outstanding and, if different, the Termination Date, and (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
day of such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, if any, as agreed by the Borrower
of such Loan and the Banks.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, or such
other period as may be requested by the Borrower and agreed to by the
Banks making such Loan, as selected by the Borrower of such Loan in
its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, or such other period
as may be requested by the Borrower and agreed to by the Banks making
such Loan, as selected by such Borrower by irrevocable notice to the
Agent and the Banks which made such Eurodollar Loan not less than two
Business Days prior to the last day of the then current Interest
Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at
<PAGE>
11
the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"LIEN": any mortgage, pledge, hypothecation, assignment as security,
security deposit arrangement, encumbrance, lien (statutory or other),
conditional sale or other title retention agreement or other similar
arrangement.
"LOAN": any loan made by any Bank pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Notes and the Notices of
Additional Borrower.
"LOAN OUTSTANDINGS": as to any Bank at any time, the sum of (a) the
aggregate principal amount of all Revolving Credit Loans made by such Bank
then outstanding, and (b) such Bank's Commitment Percentage multiplied by
the aggregate principal amount of all Bid Loans then outstanding.
"LOAN PARTIES": the collective reference to the Company, the other
Borrowers, and Grace New York.
"MAJORITY BANKS": at any time, Banks the Commitment Percentages of
which aggregate (or, if at such time all of the Commitments shall have been
terminated, Banks the Commitment Percentages of which immediately prior to
such termination aggregated) at least 51%.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, properties, or condition (financial or otherwise) of
Grace New York and its Subsidiaries taken as a whole, (b) the ability of
the Company, or any Borrower or Grace New York to perform their respective
obligations hereunder and under the other Loan Documents to which such
Person is a party, or (c) the validity or enforceability of the Loan
Documents or the rights or remedies of the Agent or the Banks hereunder or
thereunder.
"MOODY'S": Moody's Investors Services, Inc.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET SALES AND REVENUES": with respect to any Person for any period,
all sales and operating revenues of such Person during such period computed
in accordance with GAAP after deducting therefrom sales returns, discounts
and allowances.
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12
"NOTES": the collective reference to the Revolving Credit Notes and
the Bid Loan Notes, if any.
"NOTICE OF ADDITIONAL BORROWER": as defined in subsection 13.15(a).
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to Grace New York or any of the Borrowers, whether or not a claim for post-
filing or post-petition interest is allowed in such proceeding) the Loans
and the Notes, if any, and all other obligations and liabilities of Grace
New York or the Borrowers to the Agent or to the Banks, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, the Notes, any other Loan Document and any other document
made, delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Agent or to the Banks that are required to
be paid by Grace New York and/or the Borrowers pursuant to the terms of
this Agreement) or any other obligation hereunder or thereunder.
"PARTICIPANT": as defined in subsection 13.6(b).
"PAYMENT SHARING NOTICE": a written notice from the Company or any
Bank informing the Agent that an Event of Default has occurred and is
continuing and directing the Agent to allocate payments thereafter received
from the Borrower in accordance with subsection 5.9(c).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PREPAYMENT DATE": as defined in subsection 5.3(b).
<PAGE>
13
"PRINCIPAL SUBSIDIARY": (a) any Borrower and (b) any other Subsidiary
if it shall have Total Assets at the end of the most recent fiscal year for
which financial statements are required to have been furnished pursuant to
subsection 8.1(a) in excess of $75,000,000 or have had during such year Net
Sales and Revenues in excess of $75,000,000.
"PURCHASING BANKS": as defined in subsection 13.6(c).
"REGISTER": as defined in subsection 13.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System.
"REGULATION X": Regulation X of the Board of Governors of the Federal
Reserve System.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"REQUESTED BANK": as defined in subsection 3.1(a).
"REQUESTED TERMINATION DATE": as defined in subsection 2.4(a).
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president,
the chief financial officer or the treasurer, assistant treasurer or
controller of Grace New York.
"RESTRUCTURING ACTIVITIES": all reductions in carrying value of
assets or investments and provisions for the termination and/or relocation
of operations and employees.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1(a).
"REVOLVING CREDIT NOTES": as defined in subsection 2.2.
<PAGE>
14
"SEC": the Securities and Exchange Commission, and any successor or
analogous federal Governmental Authority.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard & Poor's Ratings Group.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity which is required to be consolidated with such Person in accordance
with GAAP; PROVIDED, that any such corporation, partnership or other entity
which is controlled by a receiver or trustee under any bankruptcy,
insolvency or similar law shall continue to be a "Subsidiary" of such
Person for purposes of this Agreement. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of Grace New York.
"SUBSTITUTE RATING AGENCY": as defined in the definition of
"Applicable Margin".
"TERMINATING BANKS: as defined in subsection 2.4(b).
"TERMINATION DATE": August 31, 1995, or such later date to which the
Termination Date may be extended pursuant to subsection 2.4.
"TOTAL ASSETS": with respect to any Person at any time, the total of
all assets appearing on the asset side of the balance sheet of such Person
prepared in accordance with GAAP as of such time.
"TOTAL CAPITALIZATION": at a particular date, the sum of Consolidated
Debt and Consolidated Adjusted Net Worth.
"TRANSFEREE": as defined in subsection 13.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, if any, or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Notes, if any, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
Grace New York and its Subsidiaries not defined in subsection 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
<PAGE>
15
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement, unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 COMMITMENTS. (a) Subject to the terms and conditions hereof,
each Bank severally agrees to make revolving credit loans ("REVOLVING CREDIT
LOANS") to any Borrower from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed the amount
of such Bank's Commitment, PROVIDED that no Bank shall make any Revolving Credit
Loan if, after giving effect to such Loan, the aggregate Loan Outstandings of
all of the Banks plus the Aggregate Outstanding Bilateral Option Loans would
exceed the aggregate Commitments.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower thereof and notified to the Agent in accordance with subsections
2.3 and 5.5, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan maturing after the Termination Date.
2.2 OBLIGATIONS OF BORROWERS; REVOLVING CREDIT NOTES. (a) Each
Borrower agrees that each Revolving Credit Loan made by each Bank to such
Borrower pursuant hereto shall constitute the promise and obligation of such
Borrower to pay to the Agent, on behalf of such Bank, at the office of the Agent
specified in subsection 13.2, in lawful money of the United States of America
and in immediately available funds the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Bank to such Borrower pursuant to subsection
2.1, which amounts shall be due and payable (whether at maturity or by
acceleration) as set forth in this Agreement and, in any event, on the
Termination Date.
(b) Each Borrower agrees that each Bank and the Agent are authorized
to record (i) the date, amount and Type of each Revolving Credit Loan made by
such Bank to such Borrower pursuant to subsection 2.1, (ii) the date of each
continuation thereof pursuant to subsection 5.5(b), (iii) the date of each
conversion of all or a portion thereof to another Type pursuant to subsection
5.5(a), (iv) the date and amount of each payment or prepayment of principal of
each such Revolving Credit Loan and (v) in the case of each such Revolving
Credit Loan which is a Eurodollar Loan, the length of each Interest Period and
the Eurodollar Rate with respect thereto, in the books and records of
<PAGE>
16
such Bank or the Agent, as the case may be, and in such manner as is
reasonable and customary for such Bank or the Agent, as the case may be, and a
certificate of an officer of such Bank or the Agent, as the case may be,
setting forth in reasonable detail the information so recorded, shall constitute
PRIMA FACIE evidence of the accuracy of the information so recorded; PROVIDED
that the failure to make any such recording shall not in any way affect the
obligations of such Borrower hereunder.
(c) Each Borrower agrees that, upon the request to the Agent by any
Bank at any time, the Revolving Credit Loans made by such Bank to such Borrower
shall be evidenced by a promissory note of such Borrower, substantially in the
form of Exhibit A with appropriate insertions as to Borrower, payee, date and
principal amount (a "REVOLVING CREDIT NOTE"), payable to the order of such Bank
and in a principal amount equal to the lesser of (a) the amount of the initial
Commitment of such Bank and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Bank to such Borrower. Upon the request to
the Agent by any such Bank at any time, such Borrower shall execute and deliver
to such Bank a Revolving Credit Note conforming to the requirements hereof and
executed by a duly authorized officer of such Borrower. Each Bank is hereby
authorized to record the date, Type and amount of each Revolving Credit Loan
made by such Bank to such Borrower, each continuation thereof, each conversion
of all or a portion thereof to another Type, the date and amount of each payment
or prepayment of principal thereof and, in the case of Eurodollar Loans, the
length of each Interest Period and the Eurodollar Rate with respect thereto, on
the schedule annexed to and constituting a part of its Revolving Credit Note and
any such recordation shall constitute PRIMA FACIE evidence of the accuracy of
the information so recorded; PROVIDED that the failure to make any such
recording shall not in any way affect the obligations of such Borrower hereunder
or thereunder. Each Revolving Credit Note shall (x) be dated the Closing Date,
(y) be stated to mature on the Termination Date and (z) provide for the payment
of interest in accordance with subsection 5.1.
2.3 PROCEDURE FOR REVOLVING CREDIT BORROWING. Any Borrower may
borrow under the Commitments from all Banks during the Commitment Period on any
Business Day, PROVIDED that such Borrower shall give the Agent irrevocable
notice (which notice must be received by the Agent (a) prior to 4:00 P.M., New
York City time, three Business Days prior to the requested Borrowing Date, if
all or any part of the requested Revolving Credit Loans are to be initially
Eurodollar Loans, or (b) prior to 10:00 A.M., New York City time, on the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor.
<PAGE>
17
Each borrowing under the Commitments shall be in an amount equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, in the case
of ABR Loans, if the amount of the Available Commitments minus the Aggregate
Outstanding Bilateral Option Loans is less than $5,000,000, such lesser amount).
Upon receipt of such notice from such Borrower, the Agent shall promptly notify
each Bank thereof. Each Bank will make the amount of its pro rata share of each
such borrowing available to the Borrower at the office of the Agent specified in
subsection 13.2 prior to 12:00 noon, New York City time, on the Borrowing Date
requested by such Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to such Borrower on the books of such
office with the aggregate of the amounts made available to the Agent by the
Banks and in like funds as received by the Agent.
2.4 EXTENSION OF TERMINATION DATE. (a) The Company may request, in a
notice given as herein provided to the Agent and each of the Banks not less than
60 days and not more than 90 days prior to the Termination Date then in effect
("EXISTING TERMINATION DATE"), that the Termination Date be extended, which
notice shall specify a date (which shall be the Existing Termination Date) as of
which the requested extension is to be effective (the "EFFECTIVE DATE"), and the
new Termination Date to be in effect following such extension (the "REQUESTED
TERMINATION DATE"), which date shall be no more than 364 days after the
effectiveness of such extension (with the Effective Date being counted as the
first day). Each Bank shall, not later than a date 30 days prior to the
Effective Date, notify the Company and the Agent of its election to extend or
not to extend the Termination Date with respect to its Commitment.
Notwithstanding any provision of this Agreement to the contrary, any notice by
any Bank of its willingness to extend the Termination Date with respect to its
Commitment shall be revocable by such Bank in its sole and absolute discretion
at any time more than 30 days prior to the Effective Date. Any Bank which shall
not timely notify the Company and the Agent of its election to extend the
Termination Date shall be deemed to have elected not to extend the Termination
Date with respect to its Commitment.
(b) If any one or more Banks shall timely notify the Company and the
Agent pursuant to paragraph (a) of this subsection 2.4 of their election not to
extend their Commitments or shall be deemed to have elected not to extend their
Commitments, (such Banks being called "TERMINATING BANKS"), then the Company may
(i) designate from the Banks other than Terminating Banks (the "CONTINUING
BANKS") one or more such Continuing Banks to increase their Commitments, which
Continuing Banks shall have given notice to the Company and the Agent of their
willingness to so increase their Commitments, (ii) with notice to the Agent,
designate one or more other banking institutions willing to extend Commitments
until the Requested Termination Date (any such banking institution, an
"ADDITIONAL BANK"), or (iii) any combination thereof, the aggregate amount of
<PAGE>
18
the increases of such Continuing Banks' Commitments and the amount of such
Additional Banks' Commitments not to exceed the aggregate of the Commitments of
the Terminating Banks. Any such increase in the Commitment of a Continuing Bank
shall be evidenced by a written instrument executed by such Continuing Bank, the
Company and the Agent, and shall take effect on the Existing Termination Date.
Any Additional Bank shall, on the Existing Termination Date, execute and deliver
to the Company and the Agent a "Commitment Transfer Supplement", satisfactory to
the Company and the Agent, setting forth the amount of such Additional Bank's
Commitment and containing its agreement to become, and to perform all the
obligations of, a Bank hereunder, and the Commitment of such Additional Bank
shall become effective on the Existing Termination Date.
(c) The Company and each other Borrower, if any, shall deliver to
each Continuing Bank and each Additional Bank which shall have requested
Revolving Credit Notes pursuant to subsection 2.2(c), on the Existing
Termination Date in exchange for each Revolving Credit Note, if any, of each of
the Borrowers held by such Bank, new Revolving Credit Notes, maturing on the
Requested Termination Date, in the principal amount of such Bank's Commitment
after giving effect to the adjustments made pursuant to this subsection 2.4.
(d) If some of or all the Banks shall have elected to extend their
Commitments as provided in this subsection 2.4, then (i) the Commitments of the
Continuing Banks and any Additional Banks shall continue until the Requested
Termination Date specified in the notice from the Company, and as to such Banks
the term "Termination Date", as used herein shall on and after the Effective
Date mean such Requested Termination Date; (ii) the Commitments of the
Terminating Banks shall continue until the Termination Date in effect prior to
such extension, and shall then terminate, and as to the Terminating Banks, the
term "Termination Date", as used herein, shall continue to mean such Existing
Termination Date; and (iii) from and after the Termination Date in effect prior
to such extension, the term "Banks" shall be deemed to include the Additional
Banks.
SECTION 3. BILATERAL OPTION LOANS
3.1 REQUESTS FOR OFFERS. (a) From time to time during the period
from the Closing Date until the Termination Date, any Borrower may request any
or all of the Banks (each such Bank to which such a request is made, a
"REQUESTED BANK") to make offers to make Bilateral Option Loans, PROVIDED that
immediately after making any such Bilateral Option Loan, the aggregate Loan
Outstandings of all the Banks plus the Aggregate Outstanding Bilateral Option
Loans will not exceed the aggregate Commitments. Any such request shall specify
the principal amount and maturity date of the Bilateral Option Loans for which
such Borrower is
<PAGE>
19
requesting offers, whether such Bilateral Option Loans are requested to be
Dollar Bilateral Loans or Alternative Currency Bilateral Loans, the time by
which offers to make such Bilateral Option Loans must be made by such Requested
Bank and by which such offers shall be accepted or rejected by such Borrower,
and if all or any part of the requested Bilateral Option Loans are requested
to be made as Alternative Currency Bilateral Loans, the Alternative Currency
to be applicable thereto. Each Requested Bank may, but shall have no obligation
to, make such offers on such terms and conditions as are satisfactory to such
Requested Bank, and such Borrower may, but shall have no obligation to, accept
any such offers. No Bilateral Option Loan may mature after the Termination
Date.
(b) Each Borrower and Requested Bank shall separately agree as to the
procedures, documentation, lending office and other matters relating to any
Bilateral Option Loan.
3.2 REPORTS TO AGENT; DETERMINATION OF DOLLAR EQUIVALENTS. (a) The
Borrower shall deliver to the Agent a report in respect of each Bilateral Option
Loan (a "BILATERAL OPTION LOAN REPORT") by 2:00 P.M. (New York City time) on the
date on which the applicable Borrower accepts any Bilateral Option Loan, on the
date on which any principal amount thereof is repaid prior to the scheduled
maturity date, or on the scheduled maturity date if payment thereof is not made
on such scheduled maturity date, specifying for such Bilateral Option Loan the
date on which such Bilateral Option Loan was or will be made, such amount of
principal is or will be repaid or such payment was not made as the case may be;
in the case of Alternative Currency Bilateral Loans, the Alternative Currency
thereof; and the principal amount of such Bilateral Option Loan or principal
prepayment or repayment or the amount paid (in the case of any Alternative
Currency Bilateral Loan, expressed in the Alternative Currency therefor).
(b) Upon receipt of a Bilateral Option Loan Report with respect to
the acceptance of a Bilateral Option Loan, the Agent shall determine the Dollar
Equivalent thereof.
(c) If on any Borrowing Date on which after giving effect to the
Loans made on such date, the sum of the aggregate Loan Outstandings of all the
Banks plus the Aggregate Outstanding Bilateral Option Loans exceeds 85% of the
aggregate Commitments, then the Agent shall redetermine as of such Borrowing
Date, on the basis of the most recently delivered Bilateral Option Loan Report
for each Bilateral Option Loan, the Dollar Equivalent of each Alternative
Currency Bilateral Loan then outstanding. In addition, for so long as the
condition specified in the preceding sentence remains in effect, the Agent shall
determine, at the end of each fiscal quarter of the Company, on the basis of the
most recently delivered Bilateral Option Loan Report for each Bilateral Option
Loan, the Dollar Equivalent of each Alternative Currency Bilateral Loan then
outstanding.
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20
(d) The Agent shall promptly notify the Company of each Dollar
Equivalent under this subsection 3.2.
3.3 JUDGMENT CURRENCY. If for the purpose of obtaining judgment in
any court, it is necessary to convert a sum due from any Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "SPECIFIED CURRENCY") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency at the Agent's New York office on the Business Day preceding that on
which final judgment is given. The obligations of each Borrower in respect of
any sum due to any Bank or the Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be) of any sum adjudged to be so due in such
other currency such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the specified currency with such other
currency; if the amount of the specified currency so purchased is less than the
sum originally due to such Bank or the Agent, as the case may be, in the
specified currency, each Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
difference, and if the amount of the specified currency so purchased exceeds:
(a) the sum originally due to any Bank or the Agent, as the case may
be, and
(b) any amounts shared with other Banks as a result of allocations of
such excess as a disproportionate payment to such Bank under subsection
13.7,
such Bank or the Agent, as the case may be, agrees to remit such excess to the
applicable Borrower.
3.4 REPAYMENTS. Each Borrower shall repay to each Bank which has
made a Bilateral Option Loan on the maturity date of each Bilateral Option Loan
(such maturity date being that specified in the documentation referred to in
subsection 3.1(a)) the then unpaid principal amount of such Bilateral Option
Loan.
SECTION 4. BID LOANS
4.1 THE BID LOANS. Any Borrower may borrow Bid Loans from time to
time on any Business Day during the period from the Closing Date until the
Termination Date, in the manner set forth in this Section 4 and in amounts such
that the aggregate Loan Outstandings of all the Banks at any time plus the
Aggregate
<PAGE>
21
Outstanding Bilateral Option Loans at such time will not exceed the aggregate
Commitments at such time, and PROVIDED, FURTHER, that no such Bid Loan shall be
made if, after giving effect thereto, any Bid Loans would mature after the
Termination Date.
4.2 PROCEDURE FOR BID LOANS. (a) A Borrower shall request Bid Loans
by delivering a Bid Loan Request to the Agent, in writing, by telex or facsimile
transmission, or by telephone, confirmed by telex or facsimile transmission, not
later than 1:00 P.M. (New York City time) one Business Day prior to the proposed
Borrowing Date. Each Bid Loan Request may solicit bids for Bid Loans in an
aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and for not more than three alternative maturity dates for such
Bid Loans. The Agent shall promptly notify each Bank by telex or facsimile
transmission of the contents of each Bid Loan Request received by it.
(b Upon receipt of notice from the Agent of the contents of a Bid
Loan Request, any Bank that elects, in its sole discretion, to do so, shall
irrevocably offer to make one or more Bid Loans at a rate of interest determined
by such Bank in its sole discretion for each such Bid Loan. Any such
irrevocable offer shall be made by delivering a Bid Loan Offer to the Agent, by
telephone, immediately confirmed by telex or facsimile transmission, before 9:30
A.M. (New York City time) on the proposed Borrowing Date, setting forth the
maximum amount of Bid Loans for each maturity date, and the aggregate maximum
amount for all maturity dates, which such Bank would be willing to make (which
amounts may, subject to subsection 4.1, exceed such Bank's Commitments) and the
rate of interest at which such Bank is willing to make each such Bid Loan; the
Agent shall advise the Borrower before 10:00 A.M. (New York City time) on the
proposed Borrowing Date of the contents of each such Bid Loan Offer received by
it. If the Agent in its capacity as a Bank shall, in its sole discretion, elect
to make any such offer, it shall advise the Borrower of the contents of its Bid
Loan Offer before 9:15 A.M. (New York City time) on the proposed Borrowing Date.
(c) The Borrower shall before 10:30 A.M. (New York City time) on the
proposed Borrowing Date, in its absolute discretion, either:
(i) cancel such Bid Loan Request by giving the Agent telephone
notice to that effect, and the Agent shall give prompt telephone
notice thereof to the Banks and the Bid Loans requested thereby
shall not be made; or
(ii) accept one or more of the offers made by any Bank or Banks
by giving telephone notice to the Agent (confirmed as soon as
practicable thereafter by delivery to the Agent of a Bid Loan
Confirmation in writing, by telex or by facsimile
<PAGE>
22
transmission) of the amount of Bid Loans for each relevant maturity
date to be made by each Bank (which amount for each such maturity date
shall be equal to or less than the maximum amount for such maturity
date specified in the Bid Loan Offer of such Bid Loan Bank, and
for all maturity dates included in such Bid Loan Offer shall be
equal to or less than the aggregate maximum amount specified in
such Bid Loan Offer for all such maturity dates) and reject any
remaining offers made by Banks; PROVIDED, HOWEVER, that (x) the
Borrower may not accept offers for Bid Loans for any maturity
date in an aggregate principal amount in excess of the maximum
principal amount requested in the related Bid Loan Request, (y)
if the Borrower accepts any of such offers, it must accept offers
strictly based upon pricing for such relevant maturity date and
no other criteria whatsoever and (z) if two or more Banks submit
offers for any maturity date at identical pricing and the
Borrower accepts any of such offers but does not wish to (or by
reason of the limitations set forth in subsection 4.1 or in
clause (x) of this proviso, cannot) borrow the total amount
offered by such Banks with such identical pricing, the Borrower
shall accept offers from all of such Banks in amounts allocated
among them PRO RATA according to the amounts offered by such
Banks.
(d) If the Borrower accepts pursuant to clause (c) (ii) above one or
more of the offers made by any Bid Loan Bank or Bid Loan Banks, the Agent shall
notify before 11:00 A.M. (New York City time) each Bid Loan Bank which has made
such an offer, of the aggregate amount of such Bid Loans to be made on such
Borrowing Date for each maturity date and of the acceptance or rejection of any
offers to make such Bid Loans made by such Bid Loan Bank. Each Bid Loan Bank
which is to make a Bid Loan shall, before 12:00 Noon (New York City time) on the
Borrowing Date specified in the Bid Loan Request applicable thereto, make
available to the Agent at its office set forth in subsection 13.2 the amount of
Bid Loans to be made by such Bid Loan Bank, in immediately available funds. The
Agent will make such funds available to the Borrower at or before 2:00 P.M. (New
York City time) on such date at the Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the Agent shall notify each Bank of the
aggregate amount of Bid Loans advanced on such Borrowing Date and the respective
maturity dates thereof.
4.3 REPAYMENTS. Each Borrower shall repay to the Agent for the
account of each Bid Loan Bank which has made a Bid Loan on the maturity date of
each Bid Loan (such maturity date being that specified by the Borrower for
repayment of such Bid Loan in the related Bid Loan Request) the then unpaid
principal amount of such Bid Loan. The Borrowers shall not have the right
<PAGE>
23
to prepay any principal amount of any Bid Loan without the prior written consent
of the Bid Loan Bank which made such Bid Loan.
4.4 INTEREST ON BID LOANS. Each Borrower which shall have borrowed a
Bid Loan shall pay interest on the unpaid principal amount of such Bid Loan from
the Borrowing Date to the stated maturity date thereof, at the rate of interest
determined pursuant to subsection 4.2 above (calculated on the basis of a 360
day year for actual days elapsed), payable on the interest payment date or dates
specified by such Borrower for such Bid Loan in the related Bid Loan Request.
If all or a portion of the principal amount of any Bid Loan shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue principal amount shall, without limiting any rights of any Bank under
this Agreement, bear interest from the date on which such payment was due at a
rate per annum which is 2% above the rate which would otherwise be applicable to
such Bid Loan until the scheduled maturity date with respect thereto, and for
each day thereafter at a rate per annum which is 2% above the Alternate Base
Rate until paid in full (as well after as before judgment).
4.5 OBLIGATIONS OF BORROWERS; BID LOAN NOTES. (a) Each Borrower
agrees that each Bid Loan made by each Bid Loan Bank to such Borrower pursuant
hereto shall constitute the promise and obligation of such Borrower to pay to
the Agent, on behalf of such Bid Loan Bank, at the office of the Agent specified
in subsection 13.2, in lawful money of the United States of America and in
immediately available funds the aggregate unpaid principal amount of each Bid
Loan made by such Bid Loan Bank to such Borrower pursuant to subsection 4.2,
which amounts shall be due and payable (whether at maturity or by acceleration)
as set forth in the Bid Loan Request related to such Bid Loan and in this
Agreement.
(b) Each Borrower agrees that each Bid Loan Bank and the Agent are
authorized to record (i) the date and amount of each Bid Loan made by such Bid
Loan Bank to such Borrower pursuant to subsection 4.2, and (ii) the date and
amount of each payment or prepayment of principal of each such Bid Loan, in the
books and records of such Bid Loan Bank or the Agent, as the case may be, and in
such manner as is reasonable and customary for such Bank or the Agent, as the
case may be, and a certificate of an officer of such Bid Loan Bank or the Agent,
as the case may be, setting forth in reasonable detail the information so
recorded, shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded; PROVIDED that the failure to make any such recording
shall not in any way affect the obligations of such Borrower hereunder.
(c) Each Borrower agrees that, upon the request to the Agent by any
Bid Loan Bank at any time, the Bid Loans made by such Bid Loan Bank to any
Borrower shall be evidenced by a promissory note of such Borrower, substantially
in the form of
<PAGE>
24
Exhibit B with appropriate insertions (a "BID LOAN NOTE"),
payable to the order of such Bid Loan Bank and representing the obligation of
such Borrower to pay the unpaid principal amount of all Bid Loans made by such
Bid Loan Bank, with interest on the unpaid principal amount from time to time
outstanding of each Bid Loan evidenced thereby as prescribed in subsection 4.4.
Upon the request to the Agent by any such Bid Loan Bank at any time, such
Borrower shall execute and deliver to such Bid Loan Bank a Bid Loan Note
conforming to the requirements hereof and executed by a duly authorized officer
of such Borrower. Each Bid Loan Bank is hereby authorized to record the date
and amount of each Bid Loan made by such Bank, the maturity date thereof, the
date and amount of each payment of principal thereof and the interest rate with
respect thereto on the schedule annexed to and constituting part of its Bid Loan
Note, and any such recordation shall constitute PRIMA FACIE evidence of the
accuracy of the information so recorded; PROVIDED, HOWEVER, that the failure to
make any such recordation shall not affect the obligations of such Borrower
hereunder or under any Bid Loan Note. Each Bid Loan Note shall be dated the
Closing Date and each Bid Loan evidenced thereby shall bear interest for the
period from and including the Borrowing Date thereof on the unpaid principal
amount thereof from time to time outstanding at the applicable rate per annum
determined as provided in, and such interest shall be payable as specified in,
subsection 4.4.
SECTION 5. LOAN FACILITY COMMON PROVISIONS
5.1 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a fluctuating rate per annum
equal to the Alternate Base Rate.
(c) Except as otherwise provided in subsection 4.4, if all or a
portion of (i) the principal amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, the rate described in
paragraph (b) of this subsection plus 2%, in each case from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
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25
(e) Subject to the limitations set forth herein, each Borrower may
use the Loans by borrowing, prepaying and reborrowing the Loans, all in
accordance with the terms and conditions hereof.
5.2 FACILITY FEE. (a) The Company agrees to pay to the Agent for the
account of each Bank a facility fee for the period from and including the date
hereof to the Termination Date, computed at the rate per annum determined as set
forth in paragraph (c) of this subsection on the average daily amount of the
Commitment of such Bank during the period for which payment is made, payable
quarterly in arrears on the fifteenth day of each March, June, September and
December and on the Termination Date or such earlier date as the Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof.
(b) The rate per annum at which such facility fee under paragraph (a)
above shall be computed (the "APPLICABLE FACILITY FEE RATE"), for any day on
which the long term senior unsecured debt of the Company is rated by both S&P
and Moody's, shall be the rate per annum under the caption "Facility Fee Rate"
(a "FACILITY FEE RATE") set forth below opposite the S&P and Moody's ratings
applicable to such debt on such day (or, if such ratings are set opposite two
different rates under said caption, then the Applicable Facility Fee Rate shall
be the lower of said two Facility Fee Rates):
FACULITY FEE
RATE S&P MOODY'S
------------ --- --------
.1500% BB+ or lower Ba1 or lower
.1250% BBB- Baa3
.1000% BBB Baa2
.0800% BBB+ Baa1
.0600% A- or higher A3 or higher
PROVIDED that if on any day the long term senior unsecured debt of the Company
is rated by only one of S&P or Moody's, such rate will be determined based on
the rating by such rating agency, and PROVIDED, FURTHER, that if on any day the
long term senior unsecured debt of the Company is rated by neither S&P nor
Moody's, the Applicable Facility Fee Rate will be determined based on the rating
of such debt by a Substitute Rating Agency and will be the Facility Fee Rate set
forth above opposite the S&P and Moody's ratings comparable to the Substitute
Rating Agency's rating of such debt on such date, and PROVIDED, FURTHER, that if
on any day the long term senior unsecured debt of the Company is rated by none
of S&P, Moody's or any Substitute Rating Agency, the Company, the Agent and the
Banks will negotiate in
<PAGE>
26
good faith to determine an alternative basis for calculating such rate
consistent with the table set forth above and, if agreement on such alternative
basis is not reached with 30 days, such rate will be calculated on an
alternative basis determined by the Agent and the Banks in their reasonable
discretion consistent with the table above, and until such alternative basis
is determined such rate will be the rate last determined as provided in the
table above.
5.3 TERMINATION OR REDUCTION OF COMMITMENTS; CHANGE OF CONTROL DATE.
(a) The Company shall have the right, upon not less than five Business Days'
notice to the Agent, to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments, PROVIDED that no such termination or
reduction shall be permitted to the extent that, after giving effect thereto and
to any prepayments of Loans made on the effective date thereof, the sum of the
aggregate Loan Outstandings of all the Banks, plus the Aggregate Outstanding
Bilateral Option Loans would exceed the Commitments then in effect. Any such
partial reduction shall be in an amount equal to $5,000,000 or a whole multiple
of $1,000,000 in excess thereof and shall reduce permanently the Commitments
then in effect.
(b) (i) In the event that a Change of Control Date shall occur, (A)
the Company shall, within 10 days after such Change of Control Date, give each
Bank notice thereof in writing describing in reasonable detail the facts and
circumstances giving rise thereto, and (B) such Bank, by written notice given to
the Company not later than 30 days after the Change of Control Date, may declare
the Commitments of such Bank to be terminated in full or reduced as of the date
of (or as of a later date specified in) such notice to the Company, and may
require that the Borrowers prepay as provided in this subsection 5.3 any Loans
payable to such Bank and outstanding on such date to the extent the principal
amount thereof exceeds such Bank's Commitment, if any, remaining after such
termination or reduction. To the extent such Bank so requires, the Borrowers
shall prepay such Loans on the 75th day after the date of the Company's notice
or, in the event such 75th day is not a Business Day, the Business Day next
succeeding such 75th day ("PREPAYMENT DATE").
(ii) On the Prepayment Date, the Borrowers shall prepay the unpaid
principal amount of the Loans payable to such Bank, without premium or penalty,
together with accrued interest on the amount prepaid to the Prepayment Date.
(iii) Subsections 5.9(a), (b) and (c) shall not apply to prepayments
under this subsection 5.3(b).
(iv) Paragraph (a) of this subsection 5.3 hereof shall not apply to
any Commitment reductions pursuant to this paragraph (b).
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27
(v) In the event that a Change of Control Date shall occur, the
Company shall not thereafter, without the prior written consent of the Majority
Banks, borrow any additional Loan (other than a Bilateral Option Loan) in order
to make, directly or indirectly, any payment or prepayment on any Indebtedness
subordinated as to the payment of principal and interest or on liquidation to
the prior payment of any of the Obligations.
5.4 PREPAYMENTS. (a) Any Borrower may at any time and from time to
time upon at least four Business Days' irrevocable notice to the Agent, in the
case of Eurodollar Loans, or upon at least one Business Day's irrevocable notice
to the Agent, in the case of ABR Loans, prepay the Loans (other than Bid Loans),
in whole or in part, without premium or penalty (subject to subsection 5.13),
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice the
Agent shall promptly notify each Bank thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein. Partial prepayments shall be in an aggregate principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.
(b) If at any time, the Agent shall determine (which determination
shall be conclusive in the absence of manifest error) that the sum of the
aggregate Loan Outstandings of all the Banks plus the Aggregate Outstanding
Bilateral Option Loans exceeds the aggregate Commitments, the Borrowers shall
immediately prepay the Loans in an aggregate principal amount equal to such
excess.
5.5 CONVERSION AND CONTINUATION OPTIONS. (a) Any Borrower may elect
at any time and from time to time (subject to subsection 5.13) to convert its
Eurodollar Loans to ABR Loans by giving the Agent at least two Business Days'
prior irrevocable notice of such election. Any Borrower may elect at any time
and from time to time to convert its ABR Loans to Eurodollar Loans by giving the
Agent irrevocable notice of such election (which notice must be received by the
Agent prior to 4:00 P.M., New York City time, three Business Days prior to the
requested conversion date). Any such notice of conversion to Eurodollar Loans
shall specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall promptly notify each
Bank thereof. All or any part of outstanding Eurodollar Loans and ABR Loans may
be converted as provided herein, PROVIDED that (i) no Loan may be converted into
a Eurodollar Loan when any Event of Default has occurred and is continuing and
the Agent or the Majority Banks have determined that such a conversion is not
appropriate, and (ii) any such conversion may only be made if, after giving
effect thereto, subsection 5.6 shall not have been contravened.
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28
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower thereof
giving notice to the Agent, in accordance with the applicable provisions of the
term "Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent or the Majority Banks have determined that such a
continuation is not appropriate, or (ii) if, after giving effect thereto,
subsection 5.6 would be contravened and PROVIDED, FURTHER, that if any Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
5.6 MINIMUM AMOUNTS OF EURODOLLAR TRANCHES. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.
5.7 COMPUTATION OF INTEREST AND FEES. (a) Interest on ABR Loans, and
facility fees shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed. Interest on Eurodollar Loans
shall be calculated on the basis of a 360-day year for the actual days elapsed.
The Agent shall as soon as practicable notify the Borrowers and the Banks of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Prime Rate shall become effective as of the
opening of business on the day on which such change in the Prime Rate is
announced. The Agent shall as soon as practicable notify the Borrowers and the
Banks of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrowers
and the Banks in the absence of manifest error. The Agent shall, at the request
of the Company, deliver to the Company a statement showing in reasonable detail
the quotations and calculations used by the Agent in determining any interest
rate pursuant to subsections 5.1 and 5.7(a).
5.8 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to
the first day of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the
<PAGE>
29
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Majority Banks that
the Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Banks (as
conclusively certified by such Banks) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telex, telecopy or telephonic notice thereof to the
Borrowers and the Banks as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall any Borrower have the right to convert
Loans to Eurodollar Loans.
5.9 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by any
Borrower of Revolving Credit Loans from the Banks hereunder, each payment by the
Company on account of any facility fee or utilization fee hereunder, and any
reduction of the Commitments of the Banks shall be made pro rata according to
the respective Commitment Percentages of the Banks.
(b) Whenever any payment received by the Agent or any Bank under this
Agreement or any Note is insufficient to pay in full all amounts then due and
payable to the Agent and the Banks under this Agreement and the Notes, and the
Agent has not received a Payment Sharing Notice (or if the Agent has received a
Payment Sharing Notice but the Event of Default specified in such Payment
Sharing Notice has been cured or waived), such payment shall be distributed and
applied by the Agent and the Banks in the following order: FIRST, to the
payment of fees and expenses due and payable to the Agent in its capacity as
Agent under and in connection with this Agreement; SECOND, to the payment of all
expenses due and payable under subsection 13.5, ratably among the Banks in
accordance with the aggregate amount of such payments owed to each such Bank;
THIRD, to the payment of fees due and payable under subsections 5.2(a), (b), (c)
and (d), ratably among the Banks in accordance with their Commitment
Percentages; FOURTH, to the payment of interest then due and payable on the
Loans, ratably among the Banks in accordance with the aggregate amount of
interest owed to each such Bank; and FIFTH, to the payment of the principal
amount of the Loans which is then due and payable, ratably among the Banks in
accordance with the aggregate principal amount owed to each such Bank.
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30
(c) After the Agent has received a Payment Sharing Notice which
remains in effect, all payments received by the Agent under this Agreement or
any Note shall be distributed and applied by the Agent and the Banks in the
following order: FIRST, to the payment of all amounts described in clauses
FIRST through THIRD of the foregoing paragraph (b), in the order set forth
therein; and SECOND, to the payment of the interest accrued on and the principal
amount of all of the Loans, regardless of whether any such amount is then due
and payable, ratably among the Banks in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Bank.
(d) All payments (including prepayments) to be made by any Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without set-off or counterclaim and shall be made
prior to 3:00 P.M., New York City time, on the due date thereof (i) in the case
of fees and Loans other than Bilateral Option Loans, to the Agent, for the
account of the Banks, at the Agent's office specified in subsection 13.2, and
(ii) in the case of Bilateral Option Loans made by any Bank, to such Bank, at
the Bank's office specified in Schedule I (or, with respect to Alternative
Currency Bilateral Loans, if different, at such other office of the Bank that it
shall designate), in each case in Dollars (or, with respect to Alternative
Currency Bilateral Loans, in the relevant Alternative Currency) and in
immediately available funds. If any payment hereunder becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day (unless, with respect to any payment on a Eurodollar
Loan, the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day), and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(e) Unless the Agent shall have been notified in writing by the Bank
prior to a Borrowing Date that such Bank will not make the amount of any Loan it
has committed to make on such date available to the Agent, the Agent may assume
that such Bank has made such amount available to the Agent on such Borrowing
Date, and the Agent may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. If such amount is made available to
the Agent on a date after such Borrowing Date, such Bank shall pay to the Agent
on demand an amount equal to the product of (i) the daily average Federal Funds
Effective Rate during such period, times (ii) the amount of the Loan such Bank
was committed to make, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such Borrowing Date to the date on
which such Bank's Loan shall have become immediately available to the Agent and
the denominator of which is 360. A certificate of the Agent submitted to any
Bank with respect to any amounts owing under this subsection shall be conclusive
in the absence of manifest error. If such Bank's Commitment Percentage of such
borrowing is
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31
not in fact made available to the Agent by such Bank within three Business Days
of such Borrowing Date, the Agent shall be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans hereunder, on
demand, from such Borrower.
5.10 ILLEGALITY. Notwithstanding any other provision herein, if any
change after the date hereof in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Bank hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Bank's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower of such Loan shall pay to such Bank such amounts, if any,
as may be required pursuant to subsection 5.13.
5.11 REQUIREMENTS OF LAW. (a) In the event that any change after
the date hereof in any Requirement of Law or in the interpretation or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Bank in respect thereof
(except for taxes covered by subsection 5.12 and changes in taxes based
upon or measured by income of such Bank);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank which is not otherwise included in the determination of
the Eurodollar Rate hereunder; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems in its reasonable judgment to be material, of
making, converting into, continuing or maintaining Eurodollar Loans or to reduce
any amount receivable hereunder in respect thereof then, in any such case, the
Company shall promptly pay such Bank, upon its demand, any
<PAGE>
32
additional amounts necessary to compensate such Bank for such increased cost or
reduced amount receivable. If any Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Company,
through the Agent, of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this subsection
setting forth the calculation thereof in reasonable detail (as determined by
such Bank in its reasonable discretion) submitted by such Bank, through the
Agent, to the Company shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment
of the Notes and all other amounts payable hereunder.
(b) In the event that any Bank shall have determined that any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of return on
such Bank's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, after
submission by such Bank to the Company (with a copy to the Agent) of a written
request therefor, the Company shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction. A certificate as to
any additional amount payable pursuant to this subsection setting forth the
calculation thereof in reasonable detail (as determined by such Bank in its
reasonable discretion) through the Agent, to the Company shall be conclusive in
the absence of manifest error.
(c) Upon request by any Bank, through the Agent, from time to time,
the Borrowers shall pay the cost of all Eurocurrency Reserve Requirements
applicable to the Eurodollar Loans made by such Bank. If a Bank is or becomes
entitled to receive payments in respect of Eurocurrency Reserve Requirements,
pursuant to this subsection 5.11(c), it shall promptly notify the Borrowers
thereof through the Agent. A certificate as to the amount of such Eurocurrency
Reserve Requirements setting forth the calculation thereof in reasonable detail
(as determined by such Bank in its reasonable discretion) submitted by such
Bank, through the Agent, to the Borrowers shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
5.12 TAXES. (a) All payments made by any Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of,
<PAGE>
33
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding, in
the case of the Agent and each Bank, net income taxes and franchise taxes
(imposed in lieu of net income taxes) that would not have been imposed on the
Agent or such Bank, as the case may be, in the absence of a present or former
connection between the jurisdiction of the government or taxing authority
imposing such tax and the Agent or such Bank (other than a connection arising
solely from the Agent or such Bank having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Notes) or any political subdivision or taxing authority thereof or therein
(all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
and withholdings being hereinafter called "TAXES"). If any Taxes are required
to be withheld from any amounts payable to the Agent or any Bank hereunder or
under any Notes, the amounts so payable to the Agent or such Bank shall be
increased to the extent necessary to yield to the Agent or such Bank (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the Notes. Whenever
any Taxes are payable by any Borrower in respect of any payment made hereunder,
as promptly as possible thereafter any Borrower shall send to the Agent for its
own account or for the account of such Bank, as the case may be, a certified
copy of an original official receipt received by such Borrower showing payment
thereof. If such Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, such Borrower shall indemnify the Agent and the
Banks for any incremental taxes, interest or penalties that may become payable
by the Agent or any Bank as a result of any such failure. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Notes and all other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Company
and the Agent (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form.
Each such Bank also agrees to deliver to the Company and the Agent two further
copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Company, and such extensions or renewals thereof as may
reasonably be requested by the Company or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such
<PAGE>
34
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank so advises the Company and the Agent.
Such Bank shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of
a Form W-8 or W-9, that it is entitled to an exemption from United States
backup withholding tax.
5.13 INDEMNITY. Each Borrower agrees to indemnify each Bank and to
hold each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of (a) default by any Borrower in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) default by any
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after such Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (c) default by any Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a payment or prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, including, without limitation, in each case, any such loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained. This
covenant shall survive the termination of this Agreement and the payment of the
Loans or Notes, if any, and all other amounts payable hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement, each of the Company
and Grace New York represents and warrants to the Agent and each Bank that:
6.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party (a) is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (b) is duly qualified and in good
standing in each jurisdiction wherein, in the opinion of the Company and Grace
New York, the conduct of its business or the ownership of its properties
requires such qualification and (c) is in compliance with all Requirements of
Law, except to the extent that the failure to comply with paragraph (a), (b) or
(c) of this subsection would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
6.2 CORPORATE POWER, AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority to make, deliver and perform
its obligations under the Loan Documents to which it is or will be a party, and
has taken
<PAGE>
35
all necessary corporate action to authorize (i) in the case of the Borrowers,
the borrowings under this Agreement and any Notes to which it is or will be a
party on the terms and conditions hereof and thereof and (ii) the execution,
delivery and performance of this Agreement and the Loan Documents to which it
is or will be a party. This Agreement has been, and any Note and the other
Loan Documents to which it is or will be a party will be, duly executed and
delivered on behalf of each relevant Loan Party. This Agreement constitutes,
and each of the Notes, if any, and the other Loan Documents when executed and
delivered will constitute, a legal, valid and binding obligation of the Loan
Party thereto, and enforceable against such Loan Party in accordance with its
terms, such enforceability subject to limitations under any applicable
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights and
by general equitable principles (whether applied in a proceeding in equity or at
law). No consent of any other party (including stockholders of Grace New York)
and no consent, license, approval or authorization of, or registration or
declaration with, any Governmental Authority is required to be obtained by any
Loan Party in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and any Notes.
6.3 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, the borrowings hereunder and
the use of the proceeds thereof, will not violate or contravene any material
provision of any Requirement of Law or material Contractual Obligation of Grace
New York, the Company or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any material Lien (other than Liens
permitted under subsection 9.2) on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation.
6.4 NO MATERIAL LITIGATION. There is no legal action, administrative
proceeding or arbitration (whether or not purportedly on behalf of Grace New
York or the Company or any of its Subsidiaries) presently pending, or to the
knowledge of Grace New York or the Company threatened, against or affecting
Grace New York or the Company or any of its Subsidiaries which would reasonably
be expected to have a Material Adverse Effect.
6.5 OWNERSHIP OF PROPERTIES. Each of Grace New York, the Company and
its Subsidiaries is the tenant under valid leases or has good title to
substantially all its properties and assets, real and personal (except defects
in title and other matters that would not reasonably be expected to have a
Material Adverse Effect), subject to no Lien except as permitted to exist under
subsection 9.2.
6.6 FINANCIAL CONDITION. The consolidated balance sheets of Grace
New York and its Subsidiaries as at December 31, 1993 and December 31, 1992 and
the related consolidated statements of operations, shareholders' equity and of
cash flows
<PAGE>
36
(together with the related notes), included or incorporated in Grace New York's
Annual Report on Form 10-K filed with the SEC for the fiscal year ended December
31, 1993, present fairly in all material respects the financial position of
Grace New York and its Subsidiaries as at such dates and the results of their
operations and their cash flows for the fiscal years then ended. The unaudited
consolidated balance sheet of Grace New York and its Subsidiaries as at June 30,
1994 and the related unaudited consolidated statement of operations for the
three- and six-month interim periods, and the related unaudited consolidated
statement of cash flows for the six-month interim period, ended on such date,
included in Grace New York's Quarterly Report on Form 10-Q filed with the SEC
for such period, present fairly in all material respects the financial position
of Grace New York and its Subsidiaries as at such date and the results of their
operations and their cash flows for the three- and six-month periods,
respectively, then ended. All of such financial statements, including the notes
to such financial statements, have been prepared in conformity with GAAP
(subject, in the case of interim statements, to normal year-end adjustments and
to the fact that such financial statements may be abbreviated and may omit
footnotes or contain incomplete footnotes) consistently applied throughout the
periods involved except as stated therein.
6.7 DISCLOSURE OF CONTINGENT LIABILITIES. To the best of the
knowledge and belief of Grace New York, neither Grace New York nor any of its
Subsidiaries has any contingent obligation, liability for taxes, long-term
leases, unusual forward or other liabilities, which are material in amount in
relation to the consolidated financial condition of Grace New York and its
Subsidiaries taken as a whole and which are not disclosed in the financial
statements (including the related notes) described in subsection 6.6 above.
6.8 ERISA. Each Plan that is intended to qualify under Section
401(a) of the Code satisfies in all material respects the applicable
requirements for qualification under that Code Section. No Reportable Event has
occurred and is continuing with respect to any such Plan, and neither Grace New
York nor any of its Subsidiaries has incurred any liability to the PBGC under
Section 4062 of ERISA with respect to any such Plan that would reasonably be
expected to have a Material Adverse Effect.
6.9 CERTAIN FEDERAL REGULATIONS. Neither the Company nor any of its
Subsidiaries is engaged in or will engage in the business of extending credit
for the purposes of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board,
and no part of the proceeds of any Loan will be used for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation U or
X of the Board.
6.10 NO DEFAULT. Neither Grace New York nor any of its Subsidiaries
is in default under or with respect to any of
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37
its Contractual Obligations in any respect which would reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
6.11 TAXES. (a) Each of Grace New York and its Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of Grace
New York, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which adequate reserves to the extent required in conformity
with GAAP, have been provided on the books of Grace New York or its
Subsidiaries, as the case may be) except insofar as the failure to make such
filings or payments would not reasonably be expected to have a Material Adverse
Effect; and (b) no tax Lien (other than a Lien permitted under subsection
9.2(a)) has been filed, and, to the knowledge of Grace New York, no claim is
being asserted, with respect to any such tax, fee or other charge which would
reasonably be expected to have a Material Adverse Effect.
6.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. None of Grace
New York, the Company or any of its Subsidiaries is an "investment company", or
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. None of Grace New York, the Company
or any other Borrower is subject to regulation under any Federal or State
statute or regulation which limits its ability to incur Indebtedness.
6.13 PURPOSE OF LOANS. The proceeds of the Loans shall be used by
the Borrowers for general corporate purposes.
6.14 ENVIRONMENTAL MATTERS. To the best of the knowledge of Grace
New York, the operations of Grace New York and its Subsidiaries and all parcels
of real estate owned or operated by Grace New York or its Subsidiaries are in
compliance with all Environmental Laws, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect.
6.15 PRINCIPAL SUBSIDIARIES. Set forth on Schedule III are all of
the Principal Subsidiaries as of the date hereof.
SECTION 7. CONDITIONS PRECEDENT
7.1 CONDITIONS TO EFFECTIVENESS. The parties hereto acknowledge that
the effectiveness of this Agreement is subject to the satisfaction of the
following conditions precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized
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38
officer of each of the Loan Parties, with a counterpart for each Bank,
(ii) for the account of each Bank so requesting, a Revolving Credit Note
and a Bid Loan Note conforming to the requirements hereof and executed by
a duly authorized officer of the Borrowers and (iii) an incumbency
certificate of each of the Loan Parties which covers such officers.
(b) CORPORATE PROCEEDINGS. The Agent shall have received, with a
counterpart for each Bank, a copy of the resolutions, in form and substance
satisfactory to the Agent, of the Board of Directors of each of the Loan
Parties authorizing (i) the execution, delivery and performance of the Loan
Documents to which it is or will be a party and (ii) the borrowings
contemplated hereunder (in the case of each Borrower), certified by the
Secretary or an Assistant Secretary of such Loan Party as of the Closing
Date, which certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded and shall be in form
and substance satisfactory to the Agent.
(c) FEES. The Agent shall have received the fees to be received on
the Closing Date referred to in subsection 5.2.
(d) LEGAL OPINIONS. The Agent shall have received, with a
counterpart for each Bank, the following executed legal opinions:
(i) the executed legal opinion of counsel to the
Company and Grace New York, who may be the General Counsel
of the Company, substantially in the form of Exhibit F-1;
(ii) to the extent required pursuant to subsection
13.15(a)(ii), the executed legal opinion of counsel to any
other Borrower, in form and substance reasonably
satisfactory to the Agent; and
(iii) the executed legal opinion of Simpson Thacher &
Bartlett, counsel to the Agent, substantially in the form of
Exhibit F-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require.
(e) EXISTING CREDIT AGREEMENT. All Commitments of the lenders under
the Existing Credit Agreement shall have been terminated, all outstanding
loans thereunder shall have been
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39
repaid in full and such agreement shall
have been terminated.
(f) OFFICER'S CERTIFICATE. The Agent shall have received, with a
counterpart for each Bank, a certificate respecting accuracy of
representations and warranties, the absence of events having a Material
Adverse Effect and the absence of Defaults and Events of Default,
substantially in the form of Exhibit G hereto, signed by a Responsible
Officer on behalf of the Company and Grace New York.
(g) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Agent, and the Agent shall have received such other
documents and legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably request.
7.2 CONDITIONS TO EACH LOAN. The agreement of each Bank to make any
Loan requested to be made by it on any date is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by each of the Loan Parties in or pursuant to subsections
6.1, 6.2, 6.3, 6.5, 6.9, 6.10, 6.11, 6.12 and 6.13 of this Agreement and in
or pursuant to any other Loan Document to which it is or will be a party,
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, and the representation and warranty made
pursuant to subsection 6.6 shall be true and correct in all material
respects with respect to the financial statements most recently delivered
pursuant to subsection 8.1, MUTATIS MUTANDIS, as if such financial
statements delivered pursuant to subsection 8.1 were the financial
statements referred to in subsection 6.6.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Loan Parties as of the date of such Loan that the conditions
contained in this subsection 7.2 have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
Each of the Company and Grace New York hereby agrees that, so long as
the Commitments remain in effect, any Note
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40
remains outstanding and unpaid or any other amount is owing to any Bank or the
Agent hereunder, each of the Company and Grace New York shall and the Company
(except in the case of delivery of financial information, reports and notices)
shall cause each of its Principal Subsidiaries to:
8.1 FINANCIAL STATEMENTS. Furnish to each Bank:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of Grace New York, a copy of the consolidated
balance sheet of Grace New York and its Subsidiaries as at the end of such
year and the related consolidated statements of operations, shareholders'
equity and cash flows for such year (as included or incorporated by
reference in Grace New York's Annual Report on Form 10-K or successor form
filed with the SEC for each such fiscal year), setting forth in each case
in comparative form the figures for the previous year, reported on without
a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Price Waterhouse or other
independent certified public accountants of nationally recognized standing
not unacceptable to the Majority Banks; and
(b) as soon as available, but in any event not later than 75 days
after the end of each of the first three quarterly periods of each fiscal
year of Grace New York, the unaudited consolidated balance sheet of Grace
New York and its Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of operations for such quarter and the
related unaudited consolidated statements of operations and cash flows for
the portion of the fiscal year through the end of such quarter (as included
in Grace New York's Quarterly Report on Form 10-Q or successor form filed
with the SEC for each such period), setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of Grace
New York and its Subsidiaries.
All such financial statements shall be prepared in conformity with GAAP
(subject, in the case of interim statements, to normal year-end adjustments and
to the fact that such financial statements may be abbreviated and may omit
footnotes or contain incomplete footnotes) applied consistently throughout the
periods reflected therein and with prior periods (except as disclosed therein).
8.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate
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41
of the independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate.
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and 8.1(b), a certificate of a
Responsible Officer of Grace New York in his capacity as such officer
stating that, to the best of such Officer's knowledge, each of the
Borrowers and Grace New York during such period has observed or performed
all of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and in the Notes and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and showing in detail the
calculation of compliance with subsections 9.1 and 9.2;
(c) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a list of the Principal Subsidiaries as
of the corresponding fiscal year end, certified by a Responsible Officer in
his capacity as such officer;
(d) within ten Business Days after the same are sent, copies of all
financial statements and reports which Grace New York sends to its
shareholders generally relating to the business of Grace New York and its
Subsidiaries, and within ten Business Days after the same are filed, copies
of all reports on Forms 10-K, 10-Q, 8-K, 8 and 10, and Schedules 13D, 13E-
3, 13E-4, 13-G, 14D-1 and 14D-9, or successor forms or schedules, and the
final prospectus in each effective registration statement (other than
registration statements on Form S-8) and each post-effective amendment to
such registration statement which Grace New York may make to, or file with,
the SEC; and
(e) promptly, subject to reasonable confidentiality requirements
agreed to by the Company and such Bank, such additional financial and other
information as any Bank may from time to time reasonably request.
8.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves,
to the extent required in conformity with GAAP with respect thereto, have been
provided on the books of Grace New York or its Subsidiaries, as the case may be,
and except to the extent that the failure to so pay, discharge or otherwise
satisfy
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42
such obligations would not result in a Default or Event of Default under
Section 10(e)(i).
8.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all corporate rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except as
otherwise permitted pursuant to subsection 9.3; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.5 INSURANCE. Maintain with financially sound and reputable
insurance companies (which may include, without limitation, captive insurers),
such insurance coverage as is reasonable for the business activities of Grace
New York and its Subsidiaries; and furnish to the Agent, upon written request,
such information as the Agent may reasonably request as to its insurance
program.
8.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS; DISCUSSIONS. Permit
representatives of any Bank (subject to reasonable safety and confidentiality
requirements) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of Grace New York and its Subsidiaries with
officers and employees of Grace New York and its Subsidiaries and, provided
representatives of Grace New York are given an opportunity to participate, with
its independent certified public accountants.
8.7 NOTICES. Promptly give notice to the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Grace New York or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Grace New
York or any of its Subsidiaries and any Governmental Authority, which in
either case, would reasonably be expected to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting Grace New York or any of
its Subsidiaries in which the then reasonably anticipated exposure of Grace
New York and its Subsidiaries is $10,000,000 or more and not covered by
insurance, or in which injunctive or similar relief is sought which is then
reasonably anticipated to have an adverse economic effect on Grace New York
and its Subsidiaries of $10,000,000 or more;
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43
(d) the following events, as soon as possible and in any event within
30 days after the Company or Grace New York knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan, or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Company or Grace New York or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan, where in connection with any of
the events described in (i) or (ii) above the liability to the Company or a
Commonly Controlled Entity would reasonably be expected to be $10,000,000
or more;
(e) any upgrading, downgrading or cessation in the rating of the long
term senior unsecured debt of the Company by the rating agency or agencies
whose rating on such debt is then being used to determine the Applicable
Margin and the Facility Fee Rate; and
(f) a development or event which would reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action each of the Company and Grace New York proposes to take
with respect thereto.
8.8 ENVIRONMENTAL LAWS.
(a) Comply with all Environmental Laws and obtain and comply with and
maintain any and all licenses, approvals, registrations or permits required by
Environmental Laws, except to the extent that failure to do so would not be
reasonably expected to have a Material Adverse Effect; and
(b) Defend, indemnify and hold harmless the Agent and the Banks, and
their respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of or noncompliance with
any Environmental Laws applicable to the real property owned or operated by the
Company, Grace New York or any of the Company's Subsidiaries, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, attorney's and consultant's fees, investigation and
laboratory fees, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor.
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44
SECTION 9. NEGATIVE COVENANTS
Grace New York hereby agrees that, so long as the Commitments remain
in effect, any Note remains outstanding and unpaid or any other amount is owing
to any Bank or the Agent hereunder, it shall not, and (except with respect to
subsections 9.1 and 9.5(b)) shall not permit any of its Subsidiaries to,
directly or indirectly:
9.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED DEBT TO TOTAL CAPITALIZATION. Permit the ratio of
Consolidated Debt to Total Capitalization at the end of any fiscal quarter after
the Closing Date to be greater than 60%.
(b) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending on the last day of any fiscal quarter of the Company
commencing with September 30, 1994 the ratio of EBIT to Consolidated Interest
Expense to be less than 2.0 to 1.0.
9.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues (which property, assets or
revenues are or would be reflected from time to time on the consolidated
financial statements of Grace New York and its Subsidiaries in accordance with
GAAP), whether now owned or hereafter acquired, except for:
(a) Liens for taxes or other governmental charges not yet due or
which are being contested in good faith by appropriate proceedings,
PROVIDED that adequate reserves with respect thereto are maintained on the
books of Grace New York or its Subsidiaries, as the case may be, to the
extent required in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, vendors', landlords', brokers', bankers' and other like Liens
arising in the ordinary course of business relating to obligations which
are not overdue for a period of more than 60 days or which are being
contested in good faith and Liens arising out of judgments or awards that
are either discharged within 60 days after entry or execution of which has
been stayed pending the outcome of appeal or review proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
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45
(d) pledges, deposits and similar arrangements in connection with or
to secure performance of bids, tenders, leases and other deposits to secure
the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business and contractual rights of other Persons to make set-offs and to
require security in connection with letters of credit, currency, commodity
and interest rate contracts, surety bonds, leases, banking and brokerage
agreements and other transactions in the ordinary course of business;
(e) leases, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which would not
reasonably be expected to have a Material Adverse Effect;
(f) Liens on the property, assets or revenues of a Person which
becomes a Subsidiary after the date hereof, to the extent that (i) such
Liens existed at the time such Person became a Subsidiary and were not
created in anticipation thereof, (ii) any such Lien is not extended to
cover any property, assets or revenues of such Person after the time such
Person becomes a Subsidiary, and (iii) the amount of Indebtedness secured
thereby is not thereafter increased;
(g) Liens arising in connection with (i) industrial development,
pollution control or other tax exempt financing transactions, PROVIDED that
such Liens do not at any time encumber any property other than the property
financed by such transaction and other property, assets or revenues related
to the property so financed on which Liens are customarily granted in
connection with such transactions, or (ii) conveyances of any production
payment or other obligation to make a production payment (A) which is to be
made solely from production from oil, gas or other underground mineral
properties dedicated thereto or (B) as to which production payment amount
the obligee's sole recourse is to such properties;
(h) Liens (including, without limitation, Liens incurred in
connection with Capitalized Leases, operating leases and sale-leaseback
transactions) securing Indebtedness of Grace New York and its Subsidiaries
incurred to finance the acquisition of fixed or capital assets, and
refinancings thereof, PROVIDED that (i) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness
and other property, assets or revenues related to the property so financed
on which Liens are customarily granted in connection with such financings
or refinancings, and (ii) the principal amount of Indebtedness secured by
any such Lien shall at no time
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46
exceed 100% of the greater of the original purchase price of such property
at the time it was acquired and the fair market value of such property as
reasonably determined by a Responsible Officer of the Company in good faith
thereafter, PLUS fees and other costs related to the financing or
refinancing thereof which have been agreed upon in an arm's length manner;
(i) Liens incurred in connection with accounts receivable sale
transactions entered into by Grace New York or its Subsidiaries;
(j) Liens securing Contractual Obligations of any Subsidiary to Grace
New York, the Company or any Domestic Subsidiary;
(k) Liens on the property, assets or revenues of any Foreign
Subsidiary; and
(l) Liens (not otherwise permitted hereunder) which secure
obligations in an aggregate amount at any time outstanding not exceeding an
amount equal to 5% of the amount recorded opposite the caption "Properties
and equipment, net" (or the equivalent caption) on the consolidated balance
sheet of Grace New York and its Subsidiaries most recently delivered to the
Agent pursuant to subsection 8.1.
9.3 LIMITATION ON FUNDAMENTAL CHANGES. Convey, sell, lease, assign,
transfer or otherwise dispose of (including by merger, consolidation, sale of
stock, liquidation or dissolution) all or substantially all of the property,
assets or business of Grace New York and its Subsidiaries taken as a whole.
9.4 LIMITATION ON ASSET TRANSFERS TO FOREIGN SUBSIDIARIES. With
respect to Grace New York or any Domestic Subsidiary, convey, sell, lease,
assign, transfer or otherwise dispose of (collectively, a "transfer") any of its
property, business or assets (including, without limitation leasehold
interests), whether now owned or hereafter acquired, to any Foreign Subsidiary,
except such transfers which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
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47
9.5 LIMITATION ON SUBORDINATED DEBT. Permit any Subsidiary of Grace
New York (other than the Company) to create, incur, assume or suffer to exist
any subordinated indebtedness other than (a) subordinated indebtedness of a
Person which becomes a Subsidiary after the date hereof to the extent such
indebtedness existed at the time such Person became a Subsidiary and was not
incurred in anticipation thereof and any refinancings of such indebtedness after
such time so long as the principal amount thereof is not increased or (b)
subordinated indebtedness of such Subsidiary held by Grace New York or any other
Subsidiary of Grace New York.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan or Note
when due in accordance with the terms thereof or hereof; or any Borrower
shall fail to pay any interest on any Loan or Note, or any other amount
payable hereunder, within five Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made, or pursuant to subsection
7.2, deemed made, by any Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement
shall prove to have been incorrect in any material adverse respect on or as
of the date made or deemed made; or
(c) Grace New York or any Subsidiary shall default in the observance
or performance of any agreement contained in subsection 9.1, 9.3, 9.4 or
9.5; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) Grace New York or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on, or any other amount payable
with respect to, any (A) Domestic Indebtedness (other than the Notes and
Loans) in an aggregate principal amount for all such Domestic Indebtedness
of $10,000,000 or more, or (B) Foreign Subsidiary Indebtedness (other than
the Notes and Loans) in an aggregate principal amount for all such Foreign
Subsidiary Indebtedness of $20,000,000 or more, beyond the period of grace
(not to exceed 30 days), if any, provided in
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48
the instrument or agreement under which such Indebtedness was created; or
(ii) default in the observance or performance of any other agreement
relating to any such Indebtedness in the amounts specified in clause (i)
above or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist in any
case which continues uncured or unwaived (and, if waived, without any
change in the material terms of such Indebtedness) after the expiration of
all applicable grace periods, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, with the giving of notice if required, such Indebtedness to become
due prior to its stated maturity;
(f) (i) Grace New York or any Principal Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or Grace New York or any such Principal Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Grace New York or any such Principal Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
any Grace New York or any such Principal Subsidiary any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) Grace New York or any such
Principal Subsidiary shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii) or (iii) above; or (v) Grace New York or any such
Principal Subsidiary shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA
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49
or Section 4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, (iii) a Reportable Event
shall occur with respect to, or judicial proceedings shall commence to have
a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement
of judicial proceedings or appointment of a trustee is, in the reasonable
opinion of the Majority Banks, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Majority Banks is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist, with
respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if
any, could reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities which in the
aggregate would have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against Grace
New York or any of its Subsidiaries in aggregate amounts (not paid or fully
covered by insurance) of $10,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
(i) Grace New York shall cease to own directly or indirectly of
record and beneficially free and clear of Liens at least 75% of the shares
of the issued and outstanding capital stock of the Company;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) above with respect to any of the
Borrowers, automatically the Commitments to such Borrower shall immediately
terminate and the Loans made to such Borrower hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes of such
Borrower shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Majority Banks, the Agent may, or upon the request
of the Majority Banks, the Agent shall, by notice to the Company declare the
Commitments of any or all of the Borrowers to be terminated forthwith, whereupon
such Commitments shall immediately terminate; and (ii) with the consent of the
Majority Banks, the Agent may, or upon the request of the Majority Banks, the
Agent shall, by notice of default to the Company and Grace New York, declare the
Loans hereunder made to any or all of the Borrowers
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50
(with accrued interest thereon) and all other amounts owing by such Borrower
under this Agreement and the Notes of such Borrower to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 11. THE AGENT
11.1 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints Chemical as the Agent of such Bank under this Agreement and the other
Loan Documents, and each such Bank irrevocably authorizes Chemical, as the Agent
for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
11.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
11.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the Notes or any other Loan Document or for
any failure of any Loan Party to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained
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51
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.
11.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company, Grace New York or any other
Borrower), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes and the other Loan Documents in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks and
all future holders of the Notes.
11.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or any Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Majority Banks; PROVIDED that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
11.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made
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52
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Bank also represents that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties. Except for notices, reports
and other documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Loan Parties which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
11.7 INDEMNIFICATION. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Loan Parties and without
limiting the obligation of Grace New York, the Company and any other Borrower to
do so), ratably according to the respective amounts of their Commitments as in
effect on the date on which the claim for indemnity by the Agent is sought, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; PROVIDED that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.
11.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Grace New York, the Company or any other Borrower as though the
Agent were not the Agent hereunder and under the other Loan Documents. With
respect to its Loans made or renewed by it and any Note issued to it, the Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Bank and may exercise the
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same as though it were not the Agent, and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
11.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10 days'
notice to the Banks. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Majority Banks shall appoint from among
the Banks a successor agent for the Banks, which successor agent shall be
approved by the Company, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes. After any retiring Agent's resignation as Agent,
the provisions of this subsection shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.
SECTION 12. GUARANTEES
12.1 GRACE NEW YORK GUARANTEE. Grace New York hereby unconditionally
and irrevocably guarantees to the Agent and the Banks the prompt and complete
payment and performance by each of the Borrowers when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing to the Agent
and the Banks by such Borrowers. This guarantee (the "GRACE NEW YORK
GUARANTEE") shall remain in full force and effect until the Obligations of each
of the Borrowers are indefeasibly paid in full, notwithstanding that from time
to time prior thereto any Borrower may be free from any Obligations. Grace New
York agrees that whenever, at any time, or from time to time, it shall make any
payment to the Agent or any Bank on account of its liability under this Grace
New York Guarantee, it will notify the Agent and such Bank in writing that such
payment is made under this Grace New York Guarantee for such purpose. No
payment or payments made by any Borrower or any other Person or received or
collected by the Agent or any Bank from any Borrower or any other Person by
virtue of any action or proceeding or any offset or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Obligations of such Borrower shall be deemed to modify, reduce, release or
otherwise affect the liability of Grace New York under this Grace New York
Guarantee, which shall remain obligated under this Grace New York Guarantee,
notwithstanding any such payment or payments until the Obligations are paid in
full.
12.2 COMPANY GUARANTEE. The Company hereby unconditionally and
irrevocably guarantees to the Agent and the Banks, the prompt and complete
payment and performance by each of the other Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations owing to the
Agent
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54
and the Banks by such Borrowers. This guarantee (the "COMPANY GUARANTEE")
shall remain in full force and effect until the Obligations of each such
Borrower are indefeasibly paid in full, notwithstanding that from time to time
prior thereto any such Borrower may be free from any Obligations. The Company
agrees that whenever, at any time, or from time to time, it shall make any
payment to the Agent or any Bank on account of its liability under this Company
Guarantee, it will notify the Agent and such Bank in writing that such payment
is made under this Company Guarantee for such purpose. No payment or payments
made by any such Borrower or any other Person or received or collected by the
Agent or any Bank from any such Borrower or any other Person by virtue of any
action or proceeding or any offset or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Obligations of such
Borrowers shall be deemed to modify, reduce, release or otherwise affect the
liability of the Company under this Company Guarantee, which shall remain
obligated under this Company Guarantee, notwithstanding any such payment or
payments until the Obligations of such Borrowers are paid in full.
12.3 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in the Grace New York Guarantee and the
Company Guarantee (together, the "GUARANTEES", each a "GUARANTEE"), each of
Grace New York and the Company (together, the "GUARANTEEING PARTIES," each a
"GUARANTEEING PARTY") hereby irrevocably waives all rights which may have arisen
in connection with its Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section 509 thereof, under
common law or otherwise) of the Agent or any Bank against the Company or any
other Borrowers (together, the "GUARANTEED PARTIES", each a "GUARANTEED PARTY")
for the payment of the Obligations. Each Guaranteeing Party hereby further
irrevocably waives all contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or any similar right)
from or against any Guaranteed Party or Parties or any other Person which may
have arisen in connection with its Guarantee. So long as the Obligations remain
outstanding, if any amount shall be paid by or on behalf of any Guaranteed Party
to the Guaranteeing Party on account of any of the rights waived in this
subsection, such amount shall be held by such Guaranteeing Party in trust,
segregated from other funds of such Guaranteeing Party, and shall, forthwith
upon receipt by such Guaranteeing Party, be turned over to the Agent in the
exact form received by such Guaranteeing Party (duly endorsed by such
Guaranteeing Party to the Agent, if required), to be applied against the
Obligations of such Guaranteed Party or Parties, whether matured or unmatured,
in such order as the Agent may determine. The provisions of this subsection as
they apply to each of the Guaranteeing Parties shall survive the payment in full
of the Obligations of its Guaranteed Party or Parties.
<PAGE>
55
12.4 AMENDMENTS, ETC., WITH RESPECT TO THE OBLIGATIONS. Each
Guaranteeing Party shall remain obligated under its Guarantee notwithstanding
that, without any reservation of rights against such Guaranteeing Party, and
without notice to or further assent by such Guaranteeing Party, any demand for
payment of any of the Obligations made by the Agent or any Bank may be rescinded
by the Agent or such Bank, and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Agent or any Bank, and this Agreement, the Notes and the other Loan
Documents may be amended, modified, supplemented or terminated, in whole or in
part, as the Agent or the Banks (or the Majority Banks, as the case may be) may
deem advisable from time to time in accordance with the provisions of subsection
13.1(a), and any collateral security, guarantee or right of set-off at any time
held by the Agent or any Bank for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Agent nor any Bank
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for the obligations of either
Guaranteeing Party under its Guarantee or any property subject thereto.
12.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guaranteeing Party
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Agent or any Bank
upon its Guarantee or acceptance of its Guarantee; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred
in reliance upon the Guarantees; and all dealings between the Borrowers and
Grace New York, on the one hand, and the Agent and the Banks, on the other,
shall likewise be conclusively presumed to have been had or consummated in
reliance upon the Guarantees. Each Guaranteeing Party waives diligence,
presentment, protest, notice of intent to accelerate, notice of acceleration,
demand for payment and notice of default or nonpayment to or upon any Guaranteed
Party or such Guaranteeing Party with respect to the Obligations. The
Guarantees shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of
this Agreement, any Note, any other Loan Document, any of the Obligations or any
collateral security therefor or guarantee or right of set-off with respect
thereto at any time or from time to time held by the Agent or any Bank, (b) any
defense, offset or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by any of the Guaranteed
Parties against the Agent or any Bank or (c) any other circumstance whatsoever
(with or without notice to or knowledge of any of the Guaranteed Parties or such
Guaranteeing Party) which constitutes, or might be construed to constitute, an
equitable or legal discharge of any
<PAGE>
56
of the Guaranteed Parties for the
Obligations of such Guaranteed Party, or of such Guaranteeing Party under its
Guarantee, in bankruptcy or in any other instance. When the Agent is pursuing
its rights and remedies hereunder against either Guaranteeing Party, the Agent
or any Bank may, but shall be under no obligation to, pursue such rights and
remedies as it may have against its Guaranteed Party or any other Person or
against any collateral security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Agent or any Bank to pursue
such other rights or remedies or to collect any payments from such Guaranteed
Party or such other Person or to realize upon any such collateral security or
guarantee or to exercise such right of offset or any release of such Guaranteed
Party or such other Person or of any such collateral security, guarantee or
right of offset, shall not relieve such Guaranteeing Party of any liability
under its Guarantee, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Agent and the
Banks against such Guaranteeing Party.
12.6 REINSTATEMENT. Each Guarantee shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations of any Guaranteed Party thereunder is
rescinded or must otherwise be restored or returned by the Agent or any Bank
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
such Guaranteed Party or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, such Guaranteed
Party or any substantial part of any of its property, or otherwise, all as
though such payments had not been made.
12.7 PAYMENTS. Each Guaranteeing Party hereby agrees that the
Obligations will be paid to the Agent for the benefit of the Agent and the
Banks, as the case may be, without set-off or counterclaim in Dollars or
Alternative Currency, as appropriate, in immediately available funds at the
office of the Agent located at 270 Park Avenue, New York, New York 10017.
SECTION 13. MISCELLANEOUS
13.1 AMENDMENTS AND WAIVERS; REPLACEMENT OF BANKS. (a) Neither this
Agreement, any Note, any other Loan Document, nor any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this subsection. With the written consent of the Majority Banks,
the Agent, Grace New York and the Company may, from time to time, enter into
written amendments, supplements or modifications hereto and to the Notes, if
any, and the other Loan Documents for the purpose of adding any provisions to
this Agreement or the Notes, if any, or the other Loan Documents or changing in
any manner the rights of the Banks, Grace New York or of the Borrowers hereunder
or thereunder or waiving, on such terms and
<PAGE>
57
conditions as the Agent may specify in such instrument, any of the requirements
of this Agreement or the Notes, if any, or the other Loan Documents or any
Default or Event of Default and its consequences; PROVIDED, HOWEVER, that no
such waiver and no such amendment, supplement or modification shall (a) reduce
the amount or extend the maturity of any Loan or Note or any installment
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any fee payable to any Bank hereunder, or change the amount of any
Bank's Commitment, in each case without the consent of the Bank affected
thereby, or (b) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Majority Banks, or consent
to the assignment or transfer by Grace New York or any Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents, or
amend, modify or waive any provision of Section 12, in each case without the
written consent of all the Banks, or (c) amend, modify or waive any provision
of Section 11 without the written consent of the then Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Banks and shall be binding upon Grace New York, the Borrowers, the Banks,
the Agent, all future holders of the Notes, if any, and all future obligees
under the Loans. In the case of any waiver, Grace New York, the Borrowers,
the Banks and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans or Notes, if any, and any other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
(b) Notwithstanding anything to the contrary contained in subsection
13.1(a), so long as no Default or Event of Default has occurred and is
continuing the Borrowers and Grace New York shall be permitted in their
discretion (but, if any Revolving Credit Loans are then outstanding, with the
consent of the Majority Banks (which consent shall not be unreasonably
withheld)) to amend this Agreement to replace one or more Banks without the
consent of any Bank to be so replaced pursuant to this subsection 13.1(b) (a
"REPLACED BANK") and to provide for (w) the termination of the Commitments of
such Replaced Bank, (x) the addition to this Agreement of one or more other
banking institutions, or an increase in the Commitments of one or more of the
other Banks (with the consent of such other Banks), so that the total
Commitments after giving effect to such amendment shall be in the same amount as
the total Commitments immediately before giving effect to such amendment, (y) if
any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new financial institutions or other Bank or Banks, as
the case may be, as may be necessary to repay in full the outstanding Loans of
such Replaced Bank together with interest thereon and all accrued fees and
indemnities with respect thereto immediately before giving effect to such
amendment and (z) such
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58
other modifications to this Agreement as may be necessary to effect the
replacement of such Replaced Bank.
(c) Notwithstanding anything to the contrary contained in paragraph
(a) or (b) of this subsection 13.1, if as a result of a change in any
Requirement of Law after the date hereof any Borrower or Grace New York has
become obligated to, or reasonably believes that it will become obligated to pay
to any Bank any increased amount pursuant to subsection 5.11, 5.12 or 5.13, and
such Bank shall not have waived payment of such increased amounts, then the
Borrowers and Grace New York may, if no Default or Event of Default has occurred
and is continuing and payment of any such increased amounts as have become due
has been made or appropriately provided for, upon five Business Days' notice to
the Agent and such Bank, amend this Agreement, without the consent of any Bank
or the Agent, to replace any one or more of the Banks to which such increased
amounts have become payable or would become payable and to provide for the
matters referred to in clauses (w), (x), (y) and (z) of subsection 13.1(b), and
such replaced Bank or Banks shall be deemed to be Replaced Banks for purposes of
such clauses.
13.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made on receipt, addressed as follows
in the case of the Company, Grace New York and the Agent, as set forth in
paragraph 5 of the Notice of Additional Borrower relating to any Borrower other
than the Company, in the case of such other Borrower, and as set forth in
Schedule I in the case of the other parties hereto, or to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes, if any, or any future obligees under the Loans:
The Company: W. R. Grace & Co.-Conn
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
Telex: TXT 1177786
Answerback: WRGUT
Telecopy: (407) 362-1944
Telephone: (407) 362-1949
Grace New
York: W. R. Grace & Co.
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
Telex: TXT 1177786
Answerback: WRGUT
Telecopy: (407) 362-1944
Telephone: (407) 362-1949
<PAGE>
59
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: R. Terry Kennon
Telecopy: (212) 270-5453
Telephone: (212) 270-2112
13.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
13.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes, if any.
13.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and any Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Bank and the
Agent for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, any Notes, the other Loan
Documents and any such other documents, including, without limitation, fees and
disbursements of counsel to the Agent and to the several Banks, and (c) to pay,
indemnify, and hold each Bank and the Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other transactional taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, any Notes, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Bank and the Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery and performance by the Loan Parties, and
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60
administration and enforcement by the Agent and the Banks of this Agreement, any
Notes and the other Loan Documents and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"), PROVIDED, that the
Company shall have no obligation hereunder to the Agent or any Bank with respect
to indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Bank, (ii) legal proceedings commenced
against the Agent or any such Bank by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, or (iii) legal proceedings commenced
against the Agent or any such Bank by any other Bank or by any Transferee (as
defined in subsection 13.6). The agreements in this subsection shall survive
repayment of the Loans or Notes, if any, and all other amounts payable
hereunder.
13.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS.
(a) This Agreement shall be binding upon and inure to the benefit of
Grace New York, the Borrowers, the Banks, the Agent, all future holders of the
Notes, if any, all future obligees under the Loans and their respective
successors and assigns, except that neither Grace New York nor any Borrower may
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("PARTICIPANTS") participating interests in any Loan
owing to such Bank, any Note held by such Bank, any Commitments of such Bank or
any other interest of such Bank hereunder and under the other Loan Documents.
In the event of any such sale by a Bank of participating interests to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Note, if any, and the obligee under any such Loan for all purposes
under this Agreement and the other Loan Documents, and Grace New York, the
Borrowers and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the other Loan Documents. Each of Grace New York and each of the Borrowers
agrees that if amounts outstanding under this Agreement and the Loans or the
Notes, if any, are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement and any Loan or
Note to the same extent as if the amount of its participating interest were
owing directly to it as a Bank under this Agreement or any Loan or Note,
PROVIDED that such Participant shall only be entitled to such right of set-off
if it shall have agreed in the agreement
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61
pursuant to which it shall have acquired its participating interest to share
with the Banks the proceeds thereof as provided in subsection 13.7. Each of
Grace New York and each of the Borrowers also agrees that each Participant shall
be entitled to the benefits of subsections 5.11, 5.12, 5.13 and 13.5 with
respect to its participation in the Commitments and the Loans outstanding from
time to time; PROVIDED, that no Participant shall be entitled to receive any
greater amount pursuant to such subsections than the transferor Bank would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant had no such transfer
occurred.
(c) Any Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to any Bank or
any affiliate thereof and, with the consent of the Company and upon notice to
the Agent, to one or more additional banks or financial institutions
("PURCHASING BANKS") all or any part of its rights and obligations under this
Agreement and the Loans or the Notes, if any, pursuant to a Commitment Transfer
Supplement, substantially in the form of Exhibit H, executed by such Purchasing
Bank, such transferor Bank (and, in the case of a Purchasing Bank that is not
then a Bank or an affiliate thereof, by the Company and the Agent) and delivered
to the Agent for its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and after the Transfer
Effective Date determined pursuant to such Commitment Transfer Supplement, (x)
the Purchasing Bank thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations
of a Bank hereunder with a Commitment as set forth therein, and (y) the
transferor Bank thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Bank's rights and obligations under this Agreement, such
transferor Bank shall cease to be a party hereto). Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Bank and the
resulting adjustment of Commitment Percentages arising from the purchase by such
Purchasing Bank of all or a portion of the rights and obligations of such
transferor Bank under this Agreement and the Loan or the Notes, if any. On or
prior to the Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, the relevant Borrower, at its own expense, if the
Purchasing Bank so requests, shall execute and deliver to the Agent in exchange
for any surrendered Revolving Credit Note and Bid Loan Note a new Revolving
Credit Note and Bid Loan Note to the order of such Purchasing Bank in an amount
equal to the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, if the transferor Bank has retained a Commitment hereunder, new
Notes to the order of the transferor Bank in an amount equal to the Commitment
retained by
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62
it hereunder. Such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Notes replaced thereby. Any Notes surrendered
by the transferor Bank shall be returned by the Agent to the Company marked
"cancelled".
(d) The Agent shall maintain at its address referred to in subsection
13.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Banks and the Commitment of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and Grace New York, the Borrowers, the Agent and the
Banks may treat each Person whose name is recorded in the Register as the owner
of the Loan recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by Grace New York, the Borrowers or any Bank
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by
a transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank
that is not then a Bank or an affiliate thereof, by the Company and the Agent)
together with payment to the Agent of a registration and processing fee of $500,
the Agent shall (i) promptly accept such Commitment Transfer Supplement (ii) on
the Transfer Effective Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Banks and the Company.
(f) Each of Grace New York and the Borrowers authorizes each Bank to
disclose to any Participant or Purchasing Bank (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such Bank's
possession concerning such Borrower and its affiliates which has been delivered
to such Bank by or on behalf of Grace New York, the Company or such Borrower
pursuant to this Agreement or which has been delivered to such Bank by or on
behalf of Grace New York, the Company or such Borrower in connection with such
Bank's credit evaluation of such Borrower and its affiliates prior to becoming a
party to this Agreement.
(g) If, pursuant to this subsection, any interest in this Agreement
or any Note is transferred to any Transferee which is organized under the laws
of any jurisdiction other than the United States or any state thereof, the
transferor Bank shall cause such Transferee, concurrently with the effectiveness
of such transfer, (i) to represent to the transferor Bank (for the benefit of
the transferor Bank, the Agent, Grace New York and the Borrowers) that under
applicable law and treaties no taxes will be required to be withheld by the
Agent, Grace New York, the Borrowers or the transferor Bank with respect to any
payments to be made to such Transferee in respect of the Loans, (ii) to furnish
to the transferor Bank (and, in the case of any
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63
Purchasing Bank registered in the Register, the Agent, Grace New York and the
Company) either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and (iii) to agree (for the benefit of the transferor Bank, the Agent, Grace
New York and the Company) to provide the transferor Bank (and, in the case of
any Purchasing Bank registered in the Register, the Agent, Grace New York and
the Company) a new Form 4224 or Form 1001 upon the expiration or obsolescence
of any previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such Transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.
(h) Nothing herein shall prohibit any Bank from pledging or assigning
any Note to any Federal Reserve Bank in accordance with applicable law.
13.7 ADJUSTMENTS; SET-OFF.
(a) If any Bank (a "BENEFITTED BANK") shall at any time receive any
payment of all or part of its Revolving Credit Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 10(f), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Bank, if any, in respect of such other
Bank's Revolving Credit Loans, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loan, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. Each
Borrower agrees that each Bank so purchasing a portion of another Bank's Loan
may exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, each Bank shall have the right, without prior notice to Grace New York and
the Borrowers, any such notice being expressly waived by Grace New York and the
Borrowers, to the extent permitted by applicable law, upon any amount not being
paid when due and payable by any Borrower hereunder or under the Notes (whether
at the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such
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64
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank or any branch or
agency thereof to or for the credit or the account of Grace New York or such
Borrower. Each Bank agrees promptly to notify Grace New York, the Borrowers
and the Agent after any such set-off and application made by such Bank, PROVIDED
that the failure to give such notice shall not affect the validity of such
set-off and application.
13.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with Grace New York, the Company and the Agent.
13.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 INTEGRATION. This Agreement represents the agreement of Grace
New York, each Borrower, the Agent and the Banks with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Agent or any Bank relative to subject matter hereof not
expressly set forth or referred to herein, in the other Loan Documents or in any
documentation entered into pursuant to subsection 3.1(b).
13.11 GOVERNING LAW. THIS AGREEMENT (INCLUDING SECTION 12) AND THE
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
13.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) Each of Grace New
York, each Borrower, the Agent and the Banks hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York sitting in New York County, the courts of the United
States of America for the Southern
<PAGE>
65
District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Grace New
York or such Borrower at its address set forth in subsection 13.2 or, with
respect to Borrowers other than the Company, the Notice of Additional
Borrower relating to such Borrower or at such other address of which the
Agent shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
(b) Each Borrower other than the Company hereby appoints and empowers
each of Grace New York and the Company, 1114 Avenue of the Americas, New York,
New York 10036-7794, Attention: Treasurer, as its authorized agent (the
"PROCESS AGENT") to receive on behalf of such Borrower service of any and all
process and documents in any such legal action or proceeding brought in a New
York state or federal court sitting in New York City. It is understood that a
copy of such process served on the Process Agent will be promptly hand delivered
or mailed (by registered or certified airmail if available), postage prepaid, to
such Borrower at its address set forth in paragraph 5 of such Borrower's Notice
of Additional Borrower, but the failure of such Borrower to receive such copy
shall not affect in any way the service of such process on the Process Agent.
If the Process Agent shall refuse or be prevented from acting as agent, notice
thereof shall immediately be given by such Borrowers to the Agent by registered
or certified airmail (if available), postage prepaid, and such Borrowers agree
promptly to designate another agent in New York City, satisfactory to the Agent,
to serve in place of the Process Agent and deliver to the Agent written evidence
of such substitute agent's acceptance of such designation.
<PAGE>
66
13.13 ACKNOWLEDGMENTS. Each of Grace New York, each Borrower, the
Agent and the Banks hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Bank has any fiduciary relationship
with or duty to Grace New York or such Borrower, as the case may be,
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between Agent and Banks, on one hand,
and Grace New York and the Borrowers, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) as to any matter relating to any Loan Documents, no joint venture
exists among the Banks or among Grace New York, the Borrowers and the
Banks.
13.14 WAIVERS OF JURY TRIAL. GRACE NEW YORK, THE BORROWERS, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
13.15 ADDITIONAL BORROWERS. (a) Any Subsidiary of the Company shall
have the right to become a "Borrower" hereunder, and to borrow hereunder subject
to the terms and conditions hereof applicable to a Borrower and to the following
additional conditions:
(i) the Company shall deliver a notice in substantially the form of
Exhibit I hereto (a "NOTICE OF ADDITIONAL BORROWER") signed by such
Subsidiary and countersigned by Grace New York and the Company to the Agent
and the Banks stating that such Subsidiary desires to become a "Borrower"
under this Agreement and agrees to be bound by the terms hereof. From the
time of receipt of such Notice of Additional Borrower by the Agent and the
Banks and subject to the satisfaction of each condition precedent contained
in such Notice of Additional Borrower, such Subsidiary shall be a
"Borrower" hereunder with all of the rights and obligations of a Borrower
hereunder; PROVIDED, HOWEVER, that the Company may revoke a Notice of
Additional Borrower with respect to any Subsidiary (other than the Company)
upon five Business Days' written notice to the Agent, so long as such
Borrower has no Obligations outstanding. No Notice of Additional Borrower
relating to a Subsidiary may be revoked as to amounts owed by such
Subsidiary to the Banks under this Agreement or any Notes or when an
irrevocable notice pursuant to subsection 2.3, or a notice of acceptance
pursuant to subsection 3.1 or 4.2, has
<PAGE>
67
been given by such Subsidiary as a Borrower and is effective;
(ii) if such Subsidiary is a Foreign Subsidiary, if reasonably
requested by the Majority Banks, such Notice of Additional Borrower shall
be accompanied by an opinion of counsel for such Subsidiary as specified in
paragraph 4(a)(ii) of such Notice of Additional Borrower;
(iii) and the other conditions set forth in such Notice of Additional
Borrower shall have been satisfied (including the representations and
warranties contained therein being true and correct as of the date
thereof).
(b) Promptly, upon receipt of any Notice of Additional Borrower by
the Agent, the Agent shall notify each Bank thereof, and shall deliver to each
Bank copies of each document delivered to the Agent pursuant to such Notice of
Additional Borrower.
<PAGE>
68
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
W. R. GRACE & CO.-CONN.
By____________________________
Title:
W. R. GRACE & CO.
By____________________________
Title:
CHEMICAL BANK, as Agent and as
a Bank
By____________________________
Title:
ABN AMRO BANK N.V.
By____________________________
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By____________________________
Title:
THE BANK OF NOVA SCOTIA
By____________________________
Title:
<PAGE>
69
BARCLAYS BANK PLC
By____________________________
Title:
THE CHASE MANHATTAN BANK, N.A.
By____________________________
Title:
CITIBANK, N.A.
By____________________________
Title:
COMMERZBANK AG, ATLANTA AGENCY
By____________________________
Title:
CREDIT LYONNAIS ATLANTA AGENCY
By____________________________
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By____________________________
Title:
By____________________________
Title:
<PAGE>
70
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
By____________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By____________________________
Title:
NATIONSBANK OF FLORIDA, N.A.
By____________________________
Title:
SWISS BANK CORPORATION-NEW
YORK BRANCH
By____________________________
Title:
UNION BANK OF SWITZERLAND
By____________________________
Title:
<PAGE>
71
SCHEDULE I
BANK COMMITMENT
Chemical Bank $25,000,000
ABN AMRO Bank $25,000,000
Bank of America National
Trust and Savings Assoc. $25,000,000
The Bank of Nova Scotia $25,000,000
Barclays Bank PLC $25,000,000
The Chase Manhattan Bank, N.A. $25,000,000
Citibank, N.A. $25,000,000
Commerzbank AG, Atlanta Agency $25,000,000
Credity Lyonnais,
Atlanta Agency $25,000,000
Dresdner Bank AG $25,000,000
The Hongkong and Shanghai
Banking Corporation Limited $25,000,000
Morgan Guaranty Trust Company
of New York $25,000,000
NationsBank of Florida, N.A. $25,000,000
Swiss Bank Corporation
New York Branch $25,000,000
Union Bank of Switzerland $25,000,000
-----------
$375,000,000,000
----------------
----------------
<PAGE>
72
LENDING OFFICES; ADDRESS FOR NOTICES
CHEMICAL BANK
Domestic Lending
Office: Chemical Bank
270 Park Avenue
New York, New York 10017
Eurodollar Lending
Office: Chemical Bank
270 Park Avenue
New York, New York 10017
Address for Notices: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: B. Joseph Lillis
Telephone: (212) 270-6502
Telecopy: (212) 270-2625
Address for Bid Loan
Notices: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: B. Joseph Lillis
Telephone: (212) 270-6502
Telecopy: (212) 270-2625
ABN AMRO BANK N.V.
Domestic Lending
Office: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Eurodollar Lending
Office: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Address for Notices: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Attention: Laura G. Fazio
Telephone: (212) 446-4158
Telecopy: (212) 832-7179
Address for Bid
Loan Notices: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Attention: Laura G. Fazio
Telephone: (212) 446-4158
Telecopy: (212) 832-7179
<PAGE>
73
THE CHASE MANHATTAN BANK, N.A.
Domestic Lending
Office: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Eurodollar Lending
Office: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Address for Notices: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Attention: Dwight Bush
Telephone: (212) 552-4400
Telecopy: (212) 552-7773
Address for Bid
Loan Notices: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Attention: Frank Angelico
Telephone: (212) 552-7482
Telecopy: (212) 552-2783
CITIBANK, N.A.
Domestic Lending
Office: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Eurodollar Lending
Office: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Address for Notices: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: James N. Simpson
Telephone: (212) 559-7773
Telecopy: (212) 319-8082
Address for Bid Loan
Notices: Citibank, N.A.
55 Water Street
New York, New York 10043
Attention: Sam Becklar
Telephone: (212) 291-7871
Telecopy: (212) 291-3454
<PAGE>
74
COMMERZBANK AG, ATLANTA AGENCY
Domestic Lending
Office: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Eurodollar Lending
Office: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Address for Notices: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Andreas Bremer
Telephone: (404) 888-6500
Telecopy: (404) 888-6539
Address for Bid Loan
Notices: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Andreas Bremer
Telephone: (404) 888-6500
Telecopy: (404) 888-6539
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Domestic Lending
Office: Morgan Guaranty Trust Company of
New York
60 Wall Street
New York, New York 10260-0060
Eurodollar Lending
Office: Morgan Guaranty Trust Company of
New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
<PAGE>
75
Address for Notices: Morgan Guaranty Trust Company of
New York
60 Wall Street
New York, New York 10260-0060
Attention: Karen Sharf
Telephone: (212) 648-7733
Telecopy: (212) 648-5336
Address for Bid Loan
Notices: J.P. Morgan Securities, Inc.
60 Wall Street
New York, New York 10260-0060
Attention: Jerry J. Fall
Telephone: (212) 648-0767
Telecopy: (212) 648-5918
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
Domestic Lending
Office: Bank of America National Trust and
Savings Association
1850 Gateway Boulevard
Concord, California 94520
Eurodollar Lending
Office: Bank of America National Trust and
Savings Association
1850 Gateway Boulevard
Concord, California 94520
Address for Notices:
Bank of America National Trust and
Savings Association
1230 Peachtree Street, N.E.
Suite 3600
Atlanta, Georgia 30309
Attention: Robert A. Kilgannon
Telephone: (404) 249-6901
Telecopy: (404) 249-6938
Address for Bid Loan
Notices:
Bank of America National Trust and
Savings Association
555 California Street - 10th Floor
San Francisco, California 94104
Attention: Carolyn D. Alberts
Telephone: (415) 622-2020
Telecopy: (415) 622-2237
THE BANK OF NOVA SCOTIA
<PAGE>
76
Domestic Lending
Office:
The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Eurodollar Lending
Office:
The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Address for Notices:
The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Attention: Lauren Bianchi
Telephone: (404) 877-1559
Telecopy: (404) 888-8998
Address for Bid Loan
Notices:
The Bank of Nova Scotia
1 Liberty Plaza
New York, New York 10006
Attention: Sarah Schramm/Money
Market Department
Telephone: (212) 225-5550
Telecopy: (212) 225-5517
BARCLAYS BANK PLC
Domestic Lending
Office:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Eurodollar Lending
Office:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Address for Notices:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Robert M. Bowen II
Telephone: (212) 412-7520
Telecopy: (212) 412-7589
Address for Bid Loan
Notices:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Greg Hurley
Telephone: (212) 412-2091
Telecopy: (212) 412-5002
<PAGE>
77
CREDIT LYONNAIS ATLANTA AGENCY
Domestic Lending
Office:
Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Eurodollar Lending
Office:
Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Address for Notices:
Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Attention: Pascal Seris
Telephone: (404) 524-3700
Telecopy: (404) 584-5249
Address for Bid Loan
Notices:
Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Attention: Pascal Seris
Telephone: (404) 524-3700
Telecopy: (404) 584-5249
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES
Domestic Lending
Office:
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Eurodollar Lending
Office:
Dresdner Bank AG Grand Cayman
Branch
c/o Dresdner Bank AG New York
Branch
75 Wall Street
New York, New York 10005-2889
Address for Notices:
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Attention: Robert Grella
Telephone: (212) 574-0252
Telecopy: (212) 574-0130
<PAGE>
78
Address for Bid Loan Notices:
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Attention: Robert Grella
Telephone: (212) 574-0252
Telecopy: (212) 574-0130
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
Domestic Lending
Office:
The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway
New York, New York 10005
Eurodollar Lending
Office:
The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway
New York, New York 10005
Address for Notices:
The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway - 4th Floor
New York, New York 10005
Attention: Christopher J. Casey
Telephone: (212) 658-5116
Telecopy: (212) 658-5109
Address for Bid Loan
Notices:
The Hongkong and Shanghai Banking
Corporation Limited
254 Canal Street
New York, New York 10005
Attention: David Liu
Telephone: (212) 925-8880
Telecopy: (212) 966-1281
SWISS BANK CORPORATION - NEW YORK BRANCH
Domestic Lending
Office:
Swiss Bank Corporation - New York
Branch
10 East 50th Street
New York, New York 10022
Eurodollar Lending
Office:
Swiss Bank Corporation - Cayman
Islands Branch
10 East 50th Street
New York, New York 10022
<PAGE>
79
Address for Notices:
Swiss Bank Corporation - New York
Branch
P.O. Box 395/Church Street Station
New York, New York 10008
Attention: Sue Waterhouse
Telephone: (212) 574-3067
Telecopy: (212) 574-3852/4395
Address for Bid Loan
Notices:
Swiss Bank Corporation - New York
Branch
P.O. Box 395/Church Street Station
New York, New York 10008
Attention: Sue Waterhouse
Telephone: (212) 574-3067
Telecopy: (212) 574-3852/4395
UNION BANK OF SWITZERLAND
Domestic Lending
Office:
Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Eurodollar Lending
Office:
Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Address for Notices:
Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telephone: (212) 715-3329
Telecopy: (212) 715-3878
Address for Bid Loan
Notices:
Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telephone: (212) 715-3329
Telecopy: (212) 715-3878
<PAGE>
80
NATIONSBANK OF FLORIDA, N.A.
Domestic Lending
Office:
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Attention: Steve Apodaca
Assistant Vice President
Telephone: (305) 577-5746
Fax: (305) 577-5745
Eurodollar Lending
Office:
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Attention: Steve Apodaca
Assistant Vice President
Telephone: (305) 577-5746
Fax: (305) 577-5745
Address for Notices:
NationsBank of Florida, N.A.
One NationsBank Plaza
NC1-002-06-09
Charlotte, NC
Attention: Charlie Franklin
Telephone: (704) 386-4199
Fax: (704) 386-8694
COPY: Steve Apodaca
Assistant Vice President
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Telephone: (305) 577-5746
Fax: (305) 577-5745
Address for Bid Loan
Notices:
NationsBank of Florida, N.A.
One NationsBank Plaza
NC1-002-06-09
Charlotte, NC
Attention: Charlie Franklin
Telephone: (704) 386-4199
Fax: (704) 386-8694
COPY: Steve Apodaca
Assistant Vice President
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Telephone: (305) 577-5746
Fax: (305) 577-5745
<PAGE>
81
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
PROMISSORY NOTE
$______________ New York, New York
September __, 1994
FOR VALUE RECEIVED, the undersigned, _____________________________ , a
_____________ corporation (the "Borrower"), hereby unconditionally promises to
pay on the Termination Date to the order of __________________________________
(the "BANK") at the office of Chemical Bank located at 270 Park Avenue, New
York, New York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of (a) _______________ DOLLARS
($_____________), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Bank to the Borrower pursuant to subsection
2.1 of the Credit Agreement hereinafter referred to (the "CREDIT AGREEMENT").
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time from the date hereof at the
rates and on the dates specified in subsection 5.1 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof (the "GRID") the date, Type and amount of
each Revolving Credit Loan made pursuant to subsection 2.1 of the Credit
Agreement, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, which endorsement shall constitute PRIMA
FACIE evidence of the accuracy of the information endorsed; PROVIDED, HOWEVER,
that the failure to make any such endorsement shall not affect the obligations
of the Borrower in respect of such Revolving Credit Loan.
This Note is one of the Revolving Credit Notes referred to in the 364-Day
Credit Agreement dated as of September 1, 1994, among the Borrower, [W. R. Grace
& Co.-Conn., a Connecticut corporation ("GRACE-CONN."),] W. R. Grace & Co., a
New York corporation, any [other] subsidiary of [Grace-Conn.][the Borrower]
which has previously delivered a Notice of Additional Borrower, the Bank, the
other banks parties thereto and Chemical Bank, as Agent, and is entitled to the
benefits thereof and is subject to optional and mandatory prepayment as set
forth therein.
<PAGE>
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and, except as otherwise provided in the Credit
Agreement, all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
[NAME OF BORROWER]
By _______________________________
Title:
<PAGE>
Schedule 1 to
REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND PAYMENTS OF ABR LOANS
DATE AMOUNT OF AMOUNT OF AMOUNT OF ABR AMOUNT OF NOTATION
---- LOANS PRINCIPAL LOANS EURODOLLAR MADE BY
----- REPAID CONVERTED LOANS -------
------ INTO CONVERTED
EURODOLLAR INTO ABR
LOANS LOANS
----- -----
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
Schedule 2 to
REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND PAYMENTS OF EURODOLLAR LOANS
DATE AMOUNT AMOUNT OF AMOUNT OF AMOUNT OF EURO- NOTATION
---- OF PRINCIPAL EURODOLLAR ABR LOANS DOLLAR MADE BY
LOANS REPAID LOANS CONVERTED RATE AND -------
----- ------ CONVERTED INTO LENGTH
INTO ABR EURODOLLAR OF
LOANS LOANS INTEREST
----- ----- PERIOD
------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
EXHIBIT B
FORM OF BID LOAN NOTE
PROMISSORY NOTE
$______________ New York, New York
, 199_
FOR VALUE RECEIVED, the undersigned, _______________________________ , a
______________ corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of _________________________________ (the "BANK") at the office
of Chemical Bank located at 270 Park Avenue, New York, New York 10017, in lawful
money of the United States of America and in immediately available funds, the
principal amount of (a) _______________ DOLLARS ($__________), or, if less, (b)
the aggregate unpaid principal amount of each Bid Loan which is made by the Bank
to the Borrower pursuant to Section 4 of the Credit Agreement hereinafter
referred to (the "CREDIT AGREEMENT"). The principal amount of each Bid Loan
evidenced hereby shall be payable on the maturity date therefor set forth on the
schedule annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof (the "GRID"). The
Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount of each Bid Loan evidenced hereby, at the rate per annum
set forth in respect of such Bid Loan on the Grid, calculated on the basis of a
year of 360 days and actual days elapsed from the date of such Bid Loan until
the due date thereof (whether at the stated maturity, by acceleration or
otherwise) and thereafter at the rates determined in accordance with subsection
4.4 of the Credit Agreement. Interest on each Bid Loan evidenced hereby shall
be payable on the date or dates set forth in respect of such Bid Loan on the
Grid. Bid Loans evidenced by this Note may not be prepaid without the consent
of the Bank.
The holder of this Note is authorized to endorse on the Grid the date,
amount, interest rate, interest payment dates and maturity date in respect of
each Bid Loan made pursuant to subsection 4.2 of the Credit Agreement, each
payment of principal with respect thereto, which endorsement shall constitute
PRIMA FACIE evidence of the accuracy of the information endorsed; PROVIDED,
HOWEVER, that the failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Bid Loan.
This Note is one of the Bid Loan Notes referred to in the 364-Day Credit
Agreement dated as of September 1, 1994, among the Borrower, [W. R. Grace & Co.-
Conn., a Connecticut corporation ("GRACE-CONN."),] W. R. Grace & Co., a New York
corporation, any [other] subsidiary of [Grace-Conn.][the Borrower] which has
<PAGE>
2
previously delivered a Notice of Additional Borrower, the Bank, the other banks
parties thereto and Chemical Bank, as Agent, and is entitled to the benefits
thereof.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and, except as otherwise provided in the Credit
Agreement, all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
[NAME OF BORROWER]
By _______________________________
Title:
<PAGE>
SCHEDULE OF BID LOANS
Amount Interest
Date of of Interest Payment Maturity Payment Author-
Loan Loan Rate Dates Date Date ization
- ------ ------ -------- -------- -------- ------- --------
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
______ ______ ________ ________ ________ _______ ________
<PAGE>
EXHIBIT C
FORM OF BID LOAN CONFIRMATION
____________________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the 364-Day Credit Agreement, dated as of
September 1, 1994, among the undersigned, W. R. Grace & Co.-Conn., the other
Borrowers from time to time parties thereto, W. R. Grace & Co., the Banks named
therein, and Chemical Bank, as Agent (as the same may be amended, supplemented
or otherwise modified, the "CREDIT AGREEMENT"). Terms defined in the Credit
Agreement are used herein as therein defined.
In accordance with subsection 4.2 of the Credit Agreement, the
undersigned accepts the offers by Bid Loan Bank(s) to make Bid Loans to the
undersigned on _________, 19__ [Bid Loan Date] under said subsection 4.2 in the
(respective) amount(s) set forth on the attached list of Bid Loans offered.
Very truly yours,
[NAME OF BORROWER]
By ____________________
Title:
[Borrower to attach Bid Loan offer list prepared by Agent with accepted amount
entered by the Borrower to right of each Bid Loan offer.]
<PAGE>
EXHIBIT D
FORM OF BID LOAN OFFER
____________________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the 364-Day Credit Agreement, dated as of
September 1, 1994, among W. R. Grace & Co.-Conn., the other Borrowers from time
to time parties thereto W. R. Grace & Co., the Banks named therein, and Chemical
Bank, as Agent (as the same may be amended, supplemented or otherwise modified,
the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein
as therein defined.
In accordance with subsection 4.2 of the Credit Agreement, the
undersigned Bank offers to make Bid Loans thereunder in the following amounts
with the following maturity dates:
Bid Loan Date:____________ , 19__
Aggregate Maximum Amount: $____________
MATURITY DATE 1 ____: MATURITY DATE 2 ____: MATURITY DATE 3 ____:
Maximum Amount $____ Maximum Amount $____ Maximum Amount $____
Rate ____ % Rate ____ % Rate ____ %
Very truly yours,
[NAME OF BIDDING BANK]
By:___________________________
Name:
Title:
Telephone No.:
Fax No.:
<PAGE>
EXHIBIT E
FORM OF BID LOAN REQUEST
____________________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the 364-Day Credit Agreement, dated as of
September 1, 1994, among the undersigned, [W. R. Grace & Co.-Conn.,] W. R. Grace
& Co., the Banks named therein and Chemical Bank, as Agent for such Banks (as
the same may be amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used herein as therein
defined.
This is a Bid Loan Request made pursuant to subsection 4.2 of the
Credit Agreement requesting quotes for the following Bid Loans (1):
Aggregate Principal Amount $______ $______ $______
Bid Loan Date ______ ______ ______
Interest Period ______ ______ ______
Maturity Date ______ ______ ______
Interest Payment Dates ______ ______ ______
Very truly yours,
[NAME OF BORROWER]
By: ____________________
Title:
_______________
(1) Pursuant to the Credit Agreement, a Bid Loan Request may be transmittted
in writing, by telex, or by facsimile transmission, or by telephone,
immediately confirmed by telex or facsimile transmission. In any case, a Bid
Loan Request shall contain the information specified in the second paragraph
of this form.
<PAGE>
EXHIBIT F-1
FORM OF OPINION OF COUNSEL TO THE COMPANY AND GRACE NEW YORK
____________________, 19__
To each Bank from time to time
party to the 364-Day Credit Agreement
dated as of September 1, 1994
among W. R. Grace & Co.-Conn.,
W. R. Grace & Co., the other
Borrowers from time to time
party thereto, the Banks named
therein and Chemical Bank,
as Agent
Ladies and Gentlemen:
As General Counsel of W. R. Grace & Co., a New York corporation
("GRACE NEW YORK"), and W. R. Grace & Co.-Conn., a Connecticut corporation
("COMPANY"), I have been requested to render my opinion in connection with the
364-Day Credit Agreement dated as of September 1, 1994 among you, the Company,
the other Borrowers from time to time party thereto, and Grace New York ("CREDIT
AGREEMENT"). I am rendering this opinion pursuant to subsection 7.1(d)(i) of
the Credit Agreement. All terms used in this opinion that are defined in the
Credit Agreement have the respective meanings assigned to them therein.
I have examined or caused to be examined the Restated Certificate of
Incorporation and the By-laws of the Company, each as amended to date, the
Certificate of Incorporation and the By-laws of Grace New York, each as amended
to date, the records of the meetings and other corporate proceedings of the
Company and of Grace New York, the Credit Agreement, any Notes being delivered
to you this day, and such other corporate records, agreements, certificates and
documents as I deem necessary for the purposes of the opinion hereinafter
expressed. For purposes of this opinion I have assumed that all Notes issued
from time to time hereafter will be issued in accordance with the terms of the
Credit Agreement.
Based upon the foregoing, and subject to the qualifications stated
below, I am of the following opinion:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of Connecticut, and has the corporate power and
authority under such laws, and is duly qualified and in good standing in each
jurisdiction in which, in the opinion of the Company, such qualification is
required, to own and operate its properties, to carry on its
<PAGE>
2
business and to execute, deliver and perform its obligations under the Credit
Agreement and the Notes.
2. Grace New York is a corporation duly organized and validly
existing in good standing under the laws of New York and has the corporate power
and authority under such laws, and is duly qualified and in good standing in
each jurisdiction in which, in the opinion of Grace New York, such qualification
is required, to own and operate its properties, to carry on its business and to
execute, deliver and perform its obligations under the Credit Agreement.
3. The execution, delivery and performance by the Company of the
Credit Agreement and any Notes made by the Company, the borrowings by the
Company thereunder and the consummation of the other transactions contemplated
thereby have been duly and validly authorized by all necessary corporate action
of the Company.
4. The execution, delivery and performance by Grace New York of the
Credit Agreement and the consummation of the transactions contemplated thereby,
including, without limitation, the guaranty by Grace New York of the Company's
Obligations, have been duly and validly authorized by all necessary corporate
action of Grace New York.
5. The Credit Agreement has been duly executed and delivered by duly
authorized officers of the Company and Grace New York and each of the Notes, if
any, of the Company being delivered to you today has been duly executed and
delivered by a duly authorized officer of the Company.
6. The Credit Agreement and the Notes made by the Company
constitute, and each other Note executed and delivered to you from time to time
by the Company hereafter will constitute, legal, valid and binding obligations
of the Company and Grace New York, as the case may be, enforceable in accordance
with their respective terms.
7. No consent of any other party (including, without limitation,
stockholders of the Company or of Grace New York), and no authorization,
license, consent or approval from any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof, is required in connection
with the execution, delivery and performance by the Company and Grace New York,
as the case may be, or the validity or enforceability, of the Credit Agreement
or the Notes.
8. The execution, delivery and the performance by the Company and
Grace New York of the Credit Agreement and any Notes made by the Company, as the
case may be, will not (A) to the best of my knowledge, violate any law or
regulation applicable to the Company or Grace New York, (B) conflict with, or
result in a
<PAGE>
3
breach or violation of, the Restated Certificate of Incorporation or By-Laws,
each as amended, of the Company, the Certificate of Incorporation or By-laws,
each as amended, of Grace New York or, to the best of my knowledge, any material
indenture, loan agreement or other agreement or instrument to which the Company
or Grace New York is a party or under which the Company or Grace New York or any
of their respective properties are or may be bound, or (C) to the best of my
knowledge, violate any order, award, judgment, determination, writ, injunction
or decree applicable to the Company or Grace New York of any regulatory,
administrative or other governmental or public body or authority, arbitrator or
court of the United States or any state or other jurisdiction hereof.
9. To the best of my knowledge, no litigation, proceeding,
investigation or inquiry is pending or threatened with respect to the
transactions contemplated by the Credit Agreement.
10. Neither Grace New York nor the Company is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications:
(a) My opinion set forth in paragraph 6 above is subject to the
qualification that the enforceability of the Company's and Grace New York's
obligations under the Credit Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(b) I express no opinion as to the enforceability of the provisions
of the Credit Agreement that purport to establish evidentiary standards or to
make determinations conclusive.
(c) I express no opinion as to the enforceability of the provisions
of the Credit Agreement insofar as they relate to post-judgment interest rates.
(d) I express no opinion as to the enforceability of subsection
3.3 of the Credit Agreement. I note that (i) a New York statute provides that
with respect to a foreign currency obligation a New York State court shall
render a judgment or decree in such foreign currency and such judgment or decree
shall be converted into currency of the United States at the rate of exchange
prevailing on the date of entry of such judgment or decree and (ii) with respect
to a foreign currency obligation a federal court of the United States sitting in
New York may award
<PAGE>
4
judgment in U.S. dollars, provided that I express no opinion
as to the rate of exchange that such court would apply.
(e) I express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit Agreement, or any consent or
authorization thereunder, relating to the rights of the Company or Grace New
York, or duties owing to any of them, existing or arising as a matter of law.
(f) I express no opinion as to the provisions in subsection
13.6(b) of the Credit Agreement purporting to grant a right of set-off to
Participants.
(g) I express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) I express no opinion as to any indemnification obligations of
the Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
(i) I express no opinion as to any laws other than those of the
states of Connecticut and New York and the federal laws of the United States.
This opinion is limited to the specific issues addressed herein and
is limited in all respects to laws and interpretations thereof and other matters
existing on the date hereof. I do not undertake to update this opinion for
changes in such laws, interpretations or matters. This opinion is furnished
solely for your benefit in connection with the transactions contemplated by the
Credit Agreement, is not to be relied upon for any other purpose and may not be
made available to any other person, firm or entity (other than a Transferee or a
prospective Transferee referred to in subsection 13.6(f) of the Credit
Agreement) without my express prior written consent, except as may be required
by law or in response to any judicial or regulatory requirement, order or
decree.
Very truly yours,
<PAGE>
5
EXHIBIT F-2
FORM OF OPINION OF SIMPSON THACHER & BARTLETT
__________ __, 1994
To the banks listed on Schedule I hereto
Ladies and Gentlemen:
We have acted as special New York counsel to Chemical Bank, as agent,
in connection with the preparation, execution and delivery of the 364-Day Credit
Agreement, dated as of September 1, 1994 (the "Credit Agreement"), among W. R.
Grace & Co.-Conn., W. R. Grace & Co., the banks from time to time party thereto
and Chemical Bank, as agent for said banks.
This opinion is delivered to you pursuant to the Credit Agreement.
Terms used herein which are defined in the Credit Agreement shall have the
respective meanings set forth in the Credit Agreement, unless otherwise defined
herein.
We have examined the following documents:
(j) a copy of the Credit Agreement; and
(k) a copy of the opinion of the General Counsel of the Company
and Grace New York, addressed to you and dated the date hereof, in respect
of the Credit Agreement.
In such examination we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
To the extent that our opinion expressed below relates to matters not
expressly covered hereby that are set forth in the above-mentioned opinion of
the General Counsel of the Company and Grace New York, we have assumed without
independent investigation the correctness of the matters set forth in such
opinion, our opinion being subject to the assumptions, qualifications and
limitations set forth in such opinion with respect thereto.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we hereby advise you that in our opinion, the Credit
Agreement constitutes a valid and legally binding obligation of each of the
Company and Grace New York enforceable against each of them in accordance with
its terms.
<PAGE>
6
Our opinion is subject to the following qualifications:
(a) Our opinion set forth above is subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law),
and an implied covenant of good faith and fair dealing.
(b) We express no opinion as to the enforceability of the
provisions of the Credit Agreement that purport to establish evidentiary
standards or to make determinations conclusive.
(c) We express no opinion as to the enforceability of the
provisions of the Credit Agreement insofar as they relate to post-judgment
interest rates.
(d) We express no opinion as to the enforceability of subsection
3.3 of the Credit Agreement. We note that (i) a New York statute provides that
with respect to a foreign currency obligation a New York State court shall
render a judgment or decree in such foreign currency and such judgment or decree
shall be converted into currency of the United States at the rate of exchange
prevailing on the date of entry of such judgment or decree and (ii) with respect
to a foreign currency obligation a U.S. Federal court sitting in New York may
award judgment in U.S. dollars, provided that we express no opinion as to the
rate of exchange that such court would apply.
(e) We express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit Agreement, or any consent or
authorization thereunder, relating to the rights of the Company or Grace New
York, or duties owing to any of them, existing or arising as a matter of law.
(f) We express no opinion as to the provisions in subsection
13.6(b) of the Credit Agreement purporting to grant a right of set-off to
Participants.
(g) We express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) We express no opinion as to any indemnification obligations
of the Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other
<PAGE>
7
than the law of the State of New York, the federal law of the United States.
This opinion is rendered to you in connection with the above-
described transactions. This opinion may not be relied upon by you for any
other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT G
W. R. GRACE & CO.-CONN.
W. R. GRACE & CO.
OFFICER'S CERTIFICATE
In accordance with subsection 7.1(f) of that certain 364-Day Credit
Agreement (the "CREDIT AGREEMENT"), dated as of September 1, 1994 among W. R.
Grace & Co.-Conn. (the "COMPANY"), W. R. Grace & Co. ("GRACE NEW YORK"), the
Banks named therein (the "BANKS") and Chemical Bank, as Agent, each of the
undersigned Company and Grace New York hereby certifies to the Banks that:
1. Each of the representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and correct on and
as of the date hereof as if made on and as of such date.
2. Since December 31, 1993, there has been no development or event
which has had or would reasonably be expected to have a Material Adverse Effect.
3. No Default or Event of Default has occurred and is continuing on
the date hereof or shall have occurred and be continuing after giving effect to
the Loans to be made on the date hereof.
Capitalized terms used in this Certificate and not defined herein
shall have the meanings ascribed thereto in the Credit Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this
Certificate to be executed by its officer thereunto duly
authorized as of the ___ day of September, 1994.
W. R. GRACE & CO.-CONN.
By __________________________
[Name and Title]
W. R. GRACE & CO.
By __________________________
[Name and Title]
<PAGE>
EXHIBIT H
FORM OF COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set forth in
Item 1 of Schedule I hereto, between the Transferor Bank set forth in Item 2 of
Schedule I hereto (the "TRANSFEROR BANK"), each Purchasing Bank set forth in
Item 3 of Schedule I hereto (each, a "PURCHASING BANK"), * [CHEMICAL BANK, as
agent for the Banks under the Credit Agreement described below (in such
capacity, the "AGENT") and the other Banks parties hereto].
W I T N E S S E T H :
WHEREAS, this Commitment Transfer Supplement is being executed and
delivered in accordance with subsection 13.6(c) of the 364-Day Credit Agreement
dated as of September 1, 1994, among W. R. Grace & Co.-Conn., a Connecticut
corporation (the "COMPANY"), W. R. Grace & Co., a New York corporation ("GRACE
NEW YORK"), any subsidiary of the Company which has previously delivered a
Notice of Additional Borrower, the Transferor Bank and the other Banks parties
thereto and [Chemical Bank, as agent for the Banks under the Credit Agreement
(in such capacity, the "AGENT")] [the Agent] (as from time to time amended,
supplemented or otherwise modified in accordance with the terms thereof, the
"CREDIT AGREEMENT"; terms defined therein being used herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already a Bank party to
the Credit Agreement) wishes to become a Bank party to the Credit Agreement; and
WHEREAS, the Transferor Bank is selling and assigning to each
Purchasing Bank, rights, obligations and commitments under the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by the Agent of five counterparts of this Commitment
Transfer Supplement, to each of which is attached a fully completed Schedule I
and Schedule II, and each of which has been executed by the Transferor Bank and
each Purchasing Bank (and any other person required by the Credit Agreement to
execute
- -------------------
* A replacement of a Bank pursuant to subsection 13.1(b) of the Credit
Agreement requires the consent of the Majority Banks (but not the
Replaced Bank, in any case) if any Revolving Credit Loans are then
oustanding. All other transfers of Commitments do not require such
consent.
<PAGE>
2
this Commitment Transfer Supplement), the Agent will transmit to the Company,
the Transferor Bank and each Purchasing Bank a Transfer Effective Notice,
substantially in the form of Schedule III to this Commitment Transfer Supplement
(a "TRANSFER EFFECTIVE NOTICE"). Such Transfer Effective Notice shall set
forth, INTER ALIA, the date on which the transfer effected by this Commitment
Transfer Supplement shall become effective (the "TRANSFER EFFECTIVE DATE").
From and after the Transfer Effective Date each Purchasing Bank shall be a
Bank party to the Credit Agreement for all purposes thereof.
2. At or before 12:00 Noon, local time of the Transferor Bank, on
the Transfer Effective Date, each Purchasing Bank shall pay to the Transferor
Bank, in immediately available funds, an amount equal to the purchase price, as
agreed between the Transferor Bank and such Purchasing Bank (the "PURCHASE
PRICE"), of the portion being purchased by such Purchasing Bank (such Purchasing
Bank's "PURCHASED PERCENTAGE") of the outstanding [Revolving Credit] Loans and
other amounts owing to the Transferor Bank under the Credit Agreement.
Effective upon receipt by the Transferor Bank of the Purchase Price from a
Purchasing Bank, the Transferor Bank hereby irrevocably sells, assigns and
transfers to such Purchasing Bank, without recourse, representation or warranty,
and each Purchasing Bank hereby irrevocably purchases, takes and assumes from
the Transferor Bank, such Purchasing Bank's Purchased Percentage of the
Commitments and the presently outstanding [Revolving Credit] Loans and other
amounts owing to the Transferor Bank under the Credit Agreement together with
all instruments, documents and collateral security pertaining thereto.
3. The Transferor Bank has made arrangements with each Purchasing
Bank with respect to (i) the portion, if any, to be paid, and the date or dates
for payment, by the Transferor Bank to such Purchasing Bank of any fees
heretofore received by the Transferor Bank pursuant to the Credit Agreement
prior to the Transfer Effective Date and (ii) the portion, if any, to be paid,
and the date or dates for payment, by such Purchasing Bank to the Transferor
Bank of fees or interest received by such Purchasing Bank pursuant to the Credit
Agreement from and after the Transfer Effective Date.
4. (a) All principal payments that would otherwise be payable from
and after the Transfer Effective Date to or for the account of the Transferor
Bank pursuant to the Credit Agreement and the Notes, if any, shall, instead, be
payable to or for the account of the Transferor Bank and the Purchasing Banks,
as the case may be, in accordance with their respective interests as reflected
in this Commitment Transfer Supplement.
(b) All interest, fees and other amounts that would otherwise accrue
for the account of the Transferor Bank from and after the Transfer Effective
Date pursuant to the Credit Agreement and the Notes, if any, shall, instead,
accrue for the
<PAGE>
3
account of, and be payable to, the Transferor Bank and the Purchasing Banks,
as the case may be, in accordance with their respective interests as reflected
in this Commitment Transfer Supplement. In the event that any amount of
interest, fees or other amounts accruing prior to the Transfer Effective Date
was included in the Purchase Price paid by any Purchasing Bank, the Transferor
Bank and each Purchasing Bank will make appropriate arrangements for payment
by the Transferor Bank to such Purchasing Bank of such amount upon receipt
thereof from the Borrower.
5. On or prior to the Transfer Effective Date, the Transferor Bank
will deliver to the Agent its Notes, if any. If requested to do so by any
Purchasing Bank pursuant to subsections 2.2(c) and 4.5(c), on or prior to the
Transfer Effective Date, the Borrowers will deliver to the Agent Revolving
Credit Notes and Bid Loan Notes for such Purchasing Bank and the Transferor
Bank, in each case in principal amounts reflecting, in accordance with the
Credit Agreement, their Commitments (as adjusted pursuant to this Commitment
Transfer Supplement). As provided in subsection 13.6(c) of the Credit
Agreement, each such new Note shall be dated the Closing Date. Promptly after
the Transfer Effective Date, the Agent will send to each of the Transferor Bank
and the Purchasing Banks its new Note, if any, and will send to the Borrower the
superseded Note, if any, of the Transferor Bank, marked "Cancelled".
6. Concurrently with the execution and delivery hereof, the
Transferor Bank will provide to each Purchasing Bank (if it is not already a
Bank party to the Credit Agreement) copies of all documents delivered to such
Transferor Bank on the Effective Date in satisfaction of the conditions
precedent set forth in the Credit Agreement.
7. Each of the parties to this Commitment Transfer Supplement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer Supplement,
the Transferor Bank and each Purchasing Bank confirm to and agree with each
other and the Agent and the Banks as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, the Transferor Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the Notes or any
other Loan Document or other instrument or document furnished pursuant thereto;
(ii) the Transferor Bank makes no
<PAGE>
4
representation or warranty and assumes no responsibility with respect to the
financial condition or creditworthiness of any Loan Party or the performance or
observance by any Loan Party of any of their respective obligations under the
Credit Agreement, the Notes or any other Loan Document or other instrument or
document furnished pursuant thereto; (iii) each Purchasing Bank confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in subsection 6.6 of the Credit Agreement,
the financial statements delivered pursuant to subsection 8.1 of the Credit
Agreement, if any, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Commitment Transfer Supplement; (iv) each Purchasing Bank will, independently
and without reliance upon the Agent, the Transferor Bank or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (v) each Purchasing Bank appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Agreement as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto, all in accordance with
Section 7 of the Credit Agreement; and (vi) each Purchasing Bank agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a Bank.
9. Each party hereto represents and warrants to and agrees with the
Agent that it is aware of and will comply with the provision of subsection
13.6(g) of the Credit Agreement.
10. Schedule II hereto sets forth the revised Commitments of the
Transferor Bank and each Purchasing Bank as well as administrative information
with respect to each Purchasing Bank.
11. This Commitment Transfer Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment
Transfer Supplement to be executed by their respective duly authorized officers
on Schedule I hereto as of the date set forth in item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO
COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Re: Credit Agreement, dated as of September 1, 1994, with W. R. Grace & Co.-
Conn and _____________ as Borrower[s].
Item 1 (Date of Commitment
Transfer Supplement):
Item 2 (Transferor Bank):
Item 3 (Purchasing Bank):
Item 4 (Signatures of Parties
to Commitment Transfer Supplement):
____________________ , as
Transferor Bank
By: ____________________
Title:
________________________, as a
Purchasing Bank
By: ____________________
Title:
<PAGE>
2
CONSENTED TO AND ACKNOWLEDGED:
W. R. GRACE & CO.-CONN.
By: __________________________
Title:
W. R. GRACE & CO.
By: __________________________
Title:
*[CHEMICAL BANK, as Agent
By: __________________________
Title:
*[MAJORITY BANKS]
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Agent
By: __________________________
Title:
<PAGE>
SCHEDULE II
TO
COMMITMENT
TRANSFER
SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
REVISED COMMITMENT AMOUNTS:
REVISED COMMITMENT PERCENTAGE:
NEW COMMITMENT AMOUNTS:
NEW COMMITMENT PERCENTAGE:
ADDRESS FOR NOTICES:
ADDRESS FOR BID LOAN NOTICES:
EURODOLLAR LENDING OFFICE:
__________________________
__________________________
__________________________
DOMESTIC LENDING OFFICE:
__________________________
__________________________
__________________________
<PAGE>
SCHEDULE III
TO
COMMITMENT
TRANSFER
SUPPLEMENT
[Form of Transfer Effective Notice]
To: W. R. Grace & Co.-Conn.
W. R. Grace & Co.
[Transferor Bank]
[each Purchasing Bank]
The undersigned, as Agent [delegate of the Agent performing
administrative functions of the Agent] under the Credit Agreement, dated as of
September 1, 1994, among W. R. Grace & Co.-Conn., a Connecticut corporation, W.
R. Grace & Co., a New York corporation, any subsidiary of the Company which has
previously delivered a Notice of Additional Borrower, the Transferor Bank and
the other Banks parties thereto and Chemical Bank, as agent for the Banks under
the Credit Agreement (in such capacity, the "AGENT") acknowledges receipt of
five executed counterparts of a completed Commitment Transfer Supplement, dated
the date and between the parties described in Schedule I hereto. [Note: Attach
copy of Schedule I from Commitment Transfer Supplement.] Terms defined in such
Commitment Transfer Supplement are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you are advised
that the Transfer Effective Date will be ______.
2. Pursuant to such Commitment Transfer Supplement, the Transferor
Bank is required to deliver to the Agent on or before the Transfer Effective
Date its [Revolving Credit] Note[s], if any.
[3. Pursuant to such Commitment Transfer Supplement, the Borrower is
[are] required to deliver to the Agent on or before the Transfer Effective Date
the following Note, each dated ______.]
[Describe each new Note, if any, for Transferor Bank and Purchasing
Bank as to principal amount, payee and type of Note.]
4. Pursuant to such Commitment Transfer Supplement each Purchasing
Bank is required to pay its purchase price to the Transferor Bank at or before
12:00 Noon on the Transfer Effective Date in immediately available funds.
Very truly yours,
CHEMICAL BANK
By:__________________________
Title:
<PAGE>
EXHIBIT I
NOTICE OF ADDITIONAL BORROWER
[Dated ____________, 199_]
The undersigned, _____________, a __________________ corporation and a
subsidiary of the Company (as defined below) (the "SUBSIDIARY"), hereby:
1. Confirms that this Notice of Additional Borrower is being
delivered pursuant to subsection 13.15(a) of that certain 364-Day Credit
Agreement, dated as of September 1, 1994, (the "AGREEMENT"; terms defined
therein being used herein as therein defined), among W. R. Grace &
Co.-Conn., a Connecticut corporation (the "COMPANY"), W. R. Grace & Co., a
New York corporation, any other subsidiary of the Company which has
previously delivered a notice of additional borrower substantially similar
to this Notice of Additional Borrower, the several banks from time to time
parties thereto (the "BANKS"), and Chemical Bank, a New York banking
corporation, as agent for the Banks thereunder (in such capacity, the
"AGENT").
2. States that it desires to become a "Borrower" under the Agreement
and agrees to be bound by each of the terms and provisions of the Agreement
as a "Borrower" thereunder and that, subject to the satisfaction of the
conditions to the effectiveness set forth in paragraph 4 hereof, upon
delivery of this Notice of Additional Borrower to the Agent such Subsidiary
shall be a party to the Agreement.
3. Represents and warrants as follows as of the date hereof:
(a) The representations and warranties contained in subsections
6.1, 6.2, 6.3, 6.4, 6.5, 6.9, 6.10, 6.11, 6.12 and 6.13 of the
Agreement, the provisions of said subsections of the Agreement and all
terms defined in the Agreement and appearing in said subsections shall
by this reference be deemed incorporated in the Notice of Additional
Borrower. For purposes of this paragraph (a) reference to Grace New
York, the Company and the Subsidiaries in said subsections and
definitions shall be deemed, MUTATIS MUTANDIS, to be references to
such Subsidiary.
<PAGE>
2
(b) * There are no Taxes imposed by [insert country where
Subsidiary is organized] or any political subdivision thereof or
taxing authority therein due or payable either on or by virtue of the
execution and delivery by such Subsidiary, the Agent or the Banks of
any Loan Document to which such Subsidiary is a party or on any
payment to be made by such Subsidiary pursuant thereto, except
for _____________.
(c) The aggregate value of all of the assets of such Subsidiary,
at a fair valuation, exceeds the total liabilities of such Subsidiary
(including contingent, subordinated, unmatured and unliquidated
liabilities). Such Subsidiary has the ability to pay its debts as
they mature and does not have unreasonably small capital with which
to conduct its business. For purposes of this paragraph (c), the
"fair valuation" of such assets shall be determined on the basis of
that amount which may be realized within a reasonable time, in any
manner through realization of the value of or dispositions of such
assets at the regular market value, conceiving the latter as the
amount which could be obtained for the property in question within
such period by a capable and diligent business person from an
interested buyer who is willing to purchase under ordinary selling
conditions.
4. Agrees that the effectiveness of this Notice of Additional
Borrower, such Subsidiary becoming a party to the Agreement and the ability
of such Subsidiary to borrow thereunder are subject to the satisfaction of
the following conditions precedent:
(a) The Agent has received (i) an opinion from counsel to the
Company and Grace New York, who may be the General Counsel of the
Company, substantially in the form of the opinion attached hereto as
Exhibit I-1, and (ii) if such Subsidiary is a Foreign Subsidiary, and
if reasonably requested by the Majority Banks, an opinion of counsel
for such Subsidiary to the effect that neither the Agent nor any Bank
is or will be deemed to be resident, domiciled, carrying on business
or subject to taxation in the jurisdiction where Subsidiary is
organized by reason only of the execution, performance or enforcement
of the Notice, the Agreement or the Notes made by the Subsidiary, and
that the performance by the Agent or any Bank of any action required
or permitted under the Agreement or the Notes made by the Subsidiary
will not violate any law or regulation of the jurisdiction where
Subsidiary is organized.
________________
* To be made by Foreign Subsidiaries.
<PAGE>
3
(b) The Agent has received for the account of each Bank who so
requests, Notes made by such Subsidiary conforming to the requirements
of the Agreement and executed by a duly authorized officer of such
Subsidiary.
(c) The Agent has received, with an executed counterpart for
each Bank, an incumbency certificate of such Subsidiary dated the date
hereof, satisfactory in form and substance to the Agent, executed by
the officers of such Subsidiary executing any Loan Document to which
such Subsidiary is a party and the Secretary or Assistant Secretary of
such Subsidiary.
(d) The Agent has received, with a counterpart for each Bank, a
copy of the resolutions, in form and substance satisfactory to the
Agent, of the Board of Directors of such Subsidiary authorizing (i)
the execution, delivery and performance of the Agreement, this Notice
of Additional Borrower, any Notes and the other Loan Documents to
which it is a party, and (ii) the borrowings contemplated under the
Agreement, certified by the Secretary or an Assistant Secretary of
such Subsidiary as of the date hereof, which certificate states that
the resolutions thereby certified have not been amended, modified,
revoked or rescinded and shall be in form and substance satisfactory
to the Agent.
(e) The Agent has received, with a counterpart for each Bank,
true and complete copies of the certificate of incorporation and
by-laws of such Subsidiary, certified as of the date hereof as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of the Subsidiary.
(f) The performance by the Agent or the Banks of the Agreement,
this Notice of Additional Borrower, the Notes and the other Loan
Documents to which such Subsidiary is a party not cause any Bank to be
in violation of any law, rule, regulation, treaty or order.
(g) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with this Notice of
Additional Borrower and such Subsidiary as a Borrower shall be
satisfactory in form and substance to the Agent.
5. Agrees that all notices, requests and demands to or upon such
Subsidiary in connection with the Agreement and the other Loan Documents
shall be effective if made in
<PAGE>
4
the manner provided in subsection 13.2 of the Agreement
to such Subsidiary at the following address or to such other address as may be
hereinafter notified by such Subsidiary to the Agent:
[Subsidiary]
_______________________________________
_______________________________________
Attention: ____________________________
Telex: ________________________________
Answerback: ___________________________
Telecopy: _____________________________
[Name of Subsidiary]
__________________________________
By _______________________________
Title:
The undersigned hereby confirm and agree to the foregoing Notice of
Additional Borrower delivered pursuant to subsection 13.15(a) of the Agreement.
W. R. GRACE & CO.-CONN.
By __________________________
Title:
W. R. GRACE & CO.
By __________________________
Title:
<PAGE>
EXHIBIT I-1 TO NOTICE
OF ADDITIONAL BORROWER
FORM OF OPINION OF COUNSEL TO THE COMPANY AND GRACE NEW YORK
__________________________ , 19__
To each Bank from time to time
party to the 364-Day Credit
Agreement dated as of
September 1, 1994 among
W. R. Grace & Co.-Conn.,
W. R. Grace & Co., the other
Borrowers from time to time
party thereto, the Banks named
therein and Chemical Bank,
as Agent
Ladies and Gentlemen:
As General Counsel of W. R. Grace & Co., a New York corporation
("GRACE NEW YORK"), and W. R. Grace & Co.-Conn., a Connecticut corporation
("COMPANY"), I have been requested to render my opinion in connection with the
Notice of Additional Borrower dated _______, 19__ ("Notice") relating to [NAME
OF SUBSIDIARY] ("Subsidiary") delivered pursuant to the 364-Day Credit Agreement
dated as of September 1, 1994 among you, the Company, the other Borrowers from
time to time party thereto, and Grace New York (as modified by the Notice and as
otherwise amended, supplemented or otherwise modified prior to the date hereof,
the "CREDIT AGREEMENT"). I am rendering this opinion pursuant to subsection
13.15(a) of the Credit Agreement and subsection 4(a)(i) of the Notice. All
terms used in this opinion that are defined in the Credit Agreement have the
respective meanings assigned to them therein.
I have examined or caused to be examined the Restated Certificate of
Incorporation and the By-laws of the Company, each as amended to date, the
Certificate of Incorporation and the By-laws of Grace New York, each as amended
to date, the records of the meetings and other corporate proceedings of the
Company and of Grace New York, the Credit Agreement, the Notice, and such other
corporate records, agreements, certificates and documents as I deem necessary
for the purposes of the opinion hereinafter expressed. For purposes of this
opinion I have assumed that all Notes issued from time to time hereafter will be
issued in accordance with the terms of the Credit Agreement.
Based upon the foregoing, and subject to the qualifications stated
below, I am of the following opinion:
<PAGE>
2
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of Connecticut, and has the corporate power and
authority under such laws, and is duly qualified and in good standing in each
jurisdiction in which, in the opinion of the Company, such qualification is
required, to own and operate its properties, to carry on its business and to
perform its obligations under the Credit Agreement.
2. Grace New York is a corporation duly organized and validly
existing in good standing under the laws of New York and has the corporate power
and authority under such laws, and is duly qualified and in good standing in
each jurisdiction in which, in the opinion of Grace New York, such qualification
is required, to own and operate its properties, to carry on its business and to
perform its obligations under the Credit Agreement.
3. The performance by the Company of the Credit Agreement and the
consummation of the transactions contemplated thereby, including, without
limitation, the guaranty by the Company of the Subsidiary's Obligations, have
been duly and validly authorized by all necessary corporate action of the
Company.
4. The performance by Grace New York of the Credit Agreement and the
consummation of the transactions contemplated thereby, including, without
limitation, the guaranty by Grace New York of the Company's and the Subsidiary's
respective Obligations, have been duly and validly authorized by all necessary
corporate action of Grace New York.
5. The Credit Agreement constitutes the legal, valid and binding
obligation of the Company and Grace New York, as the case may be, enforceable in
accordance with its terms.
6. No consent of any other party (including, without limitation,
stockholders of the Company or of Grace New York), and no authorization,
license, consent or approval from any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof, is required in connection
with the performance by the Company and Grace New York, as the case may be, or
the validity or enforceability, of the Credit Agreement or any Notes.
7. The performance by the Company and Grace New York of the Credit
Agreement will not (A) to the best of my knowledge, violate any law or
regulation applicable to the Company or Grace New York, (B) conflict with, or
result in a breach or violation of, the Restated Certificate of Incorporation or
By-Laws, each as amended, of the Company, the Certificate of Incorporation or
By-laws, each as amended, of Grace New York or, to the best of my knowledge, any
material indenture, loan agreement or other
<PAGE>
3
agreement or instrument to which the Company or Grace New York is a party or
under which the Company or Grace New York or any of their respective properties
are or may be bound, or (C) to the best of my knowledge, violate any order,
award, judgment, determination, writ, injunction or decree applicable to the
Company or Grace New York of any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof.
8. To the best of my knowledge, no litigation, proceeding,
investigation or inquiry is pending or threatened with respect to the
transactions contemplated by the Credit Agreement.
9. Neither Grace New York nor the Company is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications:
(a) My opinion set forth in paragraph 5 above is subject to the
qualification that the enforceability of the Company's and Grace New York's
obligations under the Credit Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(b) I express no opinion as to the enforceability of the provisions
of the Credit Agreement that purport to establish evidentiary standards or to
make determinations conclusive.
(c) I express no opinion as to the enforceability of the provisions
of the Credit Agreement insofar as they relate to post-judgment interest rates.
(d) I express no opinion as to the enforceability of subsection 3.3
of the Credit Agreement. I note that (i) a New York statute provides that with
respect to a foreign currency obligation a New York State court shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) with respect to a
foreign currency obligation a federal court of the United States sitting in New
York may award judgment in U.S. dollars, provided that I express no opinion as
to the rate of exchange that such court would apply.
(e) I express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit
<PAGE>
4
Agreement, or any consent or
authorization thereunder, relating to the rights of the Company or Grace New
York, or duties owing to any of them, existing or arising as a matter of law.
(f) I express no opinion as to the provisions in subsection 13.6(b)
of the Credit Agreement purporting to grant a right of set-off to Participants.
(g) I express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) I express no opinion as to any indemnification obligations of the
Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
(i) I express no opinion as to any laws other than those of the
states of Connecticut and New York and the federal laws of the United States.
This opinion is limited to the specific issues addressed herein and is
limited in all respects to laws and interpretations thereof and other matters
existing on the date hereof. I do not undertake to update this opinion for
changes in such laws, interpretations or matters. This opinion is furnished
solely for your benefit in connection with the transactions contemplated by the
Credit Agreement and the Notice, is not to be relied upon for any other purpose
and may not be made available to any other person, firm or entity (other than a
Transferee or a prospective Transferee referred to in subsection 13.6(f) of the
Credit Agreement) without my express prior written consent, except as may be
required by law or in response to any judicial or regulatory requirement, order
or decree.
Very truly yours,
<PAGE>
CREDIT AGREEMENT, dated as of September 1, 1994, among W. R. GRACE &
CO.-CONN., a Connecticut corporation (the "COMPANY"), W. R. GRACE & CO., a New
York corporation and sole shareholder of the Company ("GRACE NEW YORK"), the
several banks from time to time parties to this Agreement (the "BANKS") and
CHEMICAL BANK, a New York banking corporation, as agent for the Banks hereunder
(in such capacity, the "AGENT").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"AFFILIATE": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any Person who is a
director, officer, shareholder or partner (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in the preceding
clause (a). For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (i) vote 10% or more of the
securities having ordinary voting power for the election of directors of
such Person or (ii) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"AGGREGATE OUTSTANDING BILATERAL OPTION LOANS": at any time, (i) the
aggregate outstanding principal amount of all Dollar Bilateral Loans and
(ii) the aggregate Dollar Equivalents at such time with respect to all
outstanding Alternative Currency Bilateral Loans.
"ALTERNATE BASE RATE": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. "PRIME RATE" shall mean the
rate of interest per annum publicly announced from time to time by the
Agent as its prime rate in effect at its principal office in New York City.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so
<PAGE>
2
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it. If for
any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including, the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"ALTERNATIVE CURRENCY": any currency other than Dollars which is
freely transferable and convertible into Dollars.
"ALTERNATIVE CURRENCY BILATERAL LOAN": a Loan made by a Bank to any
Borrower in an Alternative Currency pursuant to Section 3.
"APPLICABLE MARGIN": for any day on which the long term senior
unsecured debt of the Company is rated by both S&P and Moody's, the rate
per annum under the caption "Margin" (a "Margin Rate") set forth below
opposite the S&P and Moody's ratings applicable to such debt on such day
(or, if such ratings are set opposite two different Margin Rates, then the
Applicable Margin shall be the lower of said two Margin Rates):
Margin S&P Moody's
------ --- -------
.450% BB+ or lower Ba1 or lower
.325% BBB- Baa3
.300% BBB Baa2
.270% BBB+ Baa1
.240% A- or higher A3 or higher
PROVIDED that if on any day the long term senior unsecured debt of the
Company is rated by only one of either S&P or Moody's, the Applicable
Margin will be determined based on the rating by such rating agency, and
PROVIDED, FURTHER, that if on any day the long term senior unsecured debt
of the Company is rated by neither S&P nor Moody's, the Applicable Margin
will be determined based on the rating of
<PAGE>
3
such debt by Duff & Phelps, Fitch or another nationally recognized
statistical rating organization agreed to by and among the Company, the
Agent and the Majority Banks (each, a "SUBSTITUTE RATING AGENCY") and will
be the Margin Rate set forth above opposite the S&P and Moody's ratings
comparable to such Substitute Rating Agency's rating of such debt on such
date, and PROVIDED, FURTHER, that if on any day the long term senior
unsecured debt of the Company is rated by none of S&P, Moody's or any
Substitute Rating Agency, the Company, the Agent and the Banks will
negotiate in good faith to determine an alternative basis for calculating
the Applicable Margin consistent with the table set forth above and, if
agreement on such alternative basis is not reached within 30 days, the
Applicable Margin will be calculated on an alternative basis determined by
the Agent and the Banks in their reasonable discretion consistent with the
table above, and until such alternative basis is determined the Applicable
Margin will be the Applicable Margin last determined as provided in the
table above.
"AVAILABLE COMMITMENT": as to any Bank at any time, an amount equal
to the excess, if any, of (a) the amount of such Bank's Commitment over (b)
the Loan Outstandings of such Bank at such time.
"BID LOAN": each Bid Loan made pursuant to Section 4.
"BID LOAN BANKS": Banks which have outstanding Bid Loans or which are
making Bid Loans.
"BID LOAN CONFIRMATION": each confirmation by the Borrower of its
acceptance of Bid Loan Offers, which Bid Loan Confirmation shall be
substantially in the form of Exhibit C.
"BID LOAN NOTE": as defined in subsection 4.5; collectively, the "BID
LOAN NOTES".
"BID LOAN OFFER": each offer by a Bank to make Bid Loans pursuant to
a Bid Loan Request, which Bid Loan Offer shall contain the information
specified in Exhibit D.
"BID LOAN REQUEST": each request by a Borrower for Banks to submit
bids to make Bid Loans at a fixed rate, which shall contain the information
in respect of such requested Bid Loans specified in Exhibit E and shall be
delivered to the Agent.
"BILATERAL OPTION LOAN": a Loan made by a Bank to a Borrower pursuant
to Section 3. Bilateral Option Loans may be either Dollar Bilateral Loans
or Alternative Currency Bilateral Loans.
<PAGE>
4
"BILATERAL OPTION LOAN REPORT": as defined in subsection 3.2.
"BOARD": The Board of Governors of the Federal Reserve System or any
successor thereto.
"BORROWER": the Company and any Subsidiary of the Company with
respect to which a Notice of Additional Borrower has been given and all
conditions precedent to the effectiveness thereof have been satisfied.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.3 and 4.2, as a date on which a Borrower requests the Banks to
make Loans hereunder, or any date that a Bilateral Option Loan is made in
accordance with subsection 3.1.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"CAPITALIZED LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required to be
capitalized in accordance with GAAP.
"CHANGE OF CONTROL DATE": (i) the first day on which the Company
determines that any Person or group of related Persons has direct or
indirect beneficial ownership of 30% or more of the outstanding capital
stock of Grace New York having ordinary voting power (other than stock
having such power only by reason of the happening of a contingency) for the
election of a majority of the board of directors of Grace New York or (ii)
the first day on which any Person or group of related Persons shall acquire
all or substantially all of the assets of Grace New York.
"CHEMICAL": Chemical Bank.
"CLOSING DATE": the first date on which the conditions set forth in
subsection 7.1 have been satisfied or waived.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT": as to any Bank, the obligation of such Bank to make
Revolving Credit Loans hereunder to the Borrowers in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Bank's name on Schedule I under the heading "Commitment".
"COMMITMENT PERCENTAGE": as to any Bank at any time, the percentage
of the aggregate Commitments then constituted by such Bank's Commitment.
<PAGE>
5
"COMMITMENT PERIOD": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of
Section 4001(a)(14) of ERISA or is part of a group which includes the
Company and which is treated as a single employer under subsection (b) or
(c) of Section 414 of the Code.
"CONSOLIDATED ADJUSTED NET WORTH": at a particular date, with respect
to Grace New York and its Subsidiaries, and without duplication, the sum of
all amounts which would, in accordance with GAAP, be set forth opposite the
captions "Total Shareholders' Equity", "Minority interests, current" and
"Minority interests, noncurrent" (or the equivalent captions) on a
consolidated balance sheet of Grace New York and its Subsidiaries prepared
as of such date, PLUS (a) non-cash after-tax charges arising from: (1)
asset disposals (excluding the retirement of property, plant and equipment
in the ordinary course of business) by Grace New York and its Subsidiaries,
(2) the implementation or modified application of financial accounting
standards applicable to Grace New York and its Subsidiaries, and (3) other
special non-recurring transactions (including charges relating to
Restructuring Activities, discontinued operations and asbestos property
damage litigation and claims), in each case referred to in this clause (a)
occurring after June 30, 1994, plus (b) any payments received in respect of
non-cash after-tax gains referred to in clause (c) of this definition,
MINUS (c) non-cash after-tax gains arising from: (1) asset disposals
(excluding the retirement of property, plant and equipment in the ordinary
course of business) by Grace New York and its Subsidiaries, (2) the
implementation or modified application of financial accounting standards
applicable to Grace New York and its Subsidiaries, and (3) other special
non-recurring transactions (including gains relating to Restructuring
Activities, discontinued operations and asbestos property damage litigation
and claims), in each case referred to in this clause (c) occurring after
June 30, 1994, MINUS (d) any payments made in respect of non-cash after-tax
charges referred to in clause (a) of this definition.
"CONSOLIDATED INTEREST EXPENSE": for any period, with respect to
Grace New York and its Subsidiaries, the amount which, in conformity with
GAAP, would be set forth opposite the caption "Interest expense and related
financing costs" (or the equivalent caption) on a consolidated statement of
operations of Grace New York and its Subsidiaries for such period.
<PAGE>
6
"CONSOLIDATED DEBT": at a particular date, with respect to Grace New
York and its Subsidiaries, and without duplication, the sum of the amounts
set forth on a consolidated balance sheet of Grace New York and its
Subsidiaries prepared as of such date in accordance with GAAP opposite the
captions (1) "Long-term debt" (or the equivalent caption) and (2) "Short-
term debt" (or the equivalent caption) but always to include all
indebtedness for borrowed money of Grace New York and its Subsidiaries in
accordance with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DOLLAR BILATERAL LOAN": a Bilateral Option Loan denominated in
Dollars.
"DOLLAR EQUIVALENT": on any date of determination by the Agent
pursuant to subsection 3.2(b) or 3.2(c), as applicable, in respect of any
Alternative Currency Bilateral Loan the amount of Dollars obtained by
converting the outstanding amount of currency of such Alterative Currency
Bilateral Loan, as specified in the then most recent Bilateral Option Loan
Report, into Dollars at the spot rate for the purchase of Dollars with such
currency as quoted by the Agent at its principal foreign exchange trading
operations office in New York City on such date.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of Grace New York other than a
Foreign Subsidiary.
"DOMESTIC INDEBTEDNESS": any Indebtedness of Grace New York and any
Domestic Subsidiary.
"DUFF & PHELPS": Duff & Phelps, Inc.
"EBIT": for any period, with respect to Grace New York and its
Subsidiaries, (a) all amounts which would be set forth opposite the caption
"Income from continuing operations before income taxes" (or the equivalent
caption) on a consolidated statement of income of Grace New York and its
Subsidiaries prepared in accordance with GAAP for such period PLUS (b) non-
cash pre-tax charges arising from: (1) asset disposals (excluding the
retirement of property, plant
<PAGE>
7
and equipment in the ordinary course of business) by Grace New York and its
Subsidiaries, (2) the implementation or modified application of financial
accounting standards applicable to Grace New York and its Subsidiaries, and
(3) other special non-recurring transactions (including charges relating to
Restructuring Activities, discontinued operations and asbestos property
damage litigation and claims) (to the extent that such amounts have been
deducted in determining the amount set forth opposite the caption "Income
from continuing operations" (or the equivalent caption) for such period),
PLUS (c) Consolidated Interest Expense for such period, PLUS (d) any
payments received in such period in respect of non-cash pre-tax gains
referred to in clause (e) of this definition, MINUS (e) non-cash pre-tax
gains arising from: (1) asset disposals (excluding the retirement of
property, plant and equipment in the ordinary course of business) by Grace
New York and its Subsidiaries, (2) the implementation or modified
application of financial accounting standards applicable to Grace New York
and its Subsidiaries, and (3) other special non-recurring transactions
(including charges relating to Restructuring Activities, discontinued
operations and asbestos property damage litigation and claims) (to the
extent that such amounts have been added in determining the amount set
forth opposite the caption "Income from continuing operations" (or the
equivalent caption) for such period), MINUS (f) any payments made in such
period in respect of non-cash pre-tax charges referred to in clause (b) of
this definition.
"ENVIRONMENTAL LAWS": any and all federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning environmental
protection matters, including without limitation, Hazardous Materials, as
now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of any reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
<PAGE>
8
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chemical is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans,
the Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 10,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"EXISTING CREDIT AGREEMENT": the Credit Agreement, dated as of
September 1, 1992, among the Company, Grace New York, the banks thereto and
Chemical, as agent, as it may have been amended, supplemented or otherwise
modified from time to time.
"FASB 5": Statement of Financial Accounting Standards No. 5,
Accounting for Contingencies, of the Financial Accounting Standards Board,
as the same may be from time to time supplemented, amended or interpreted
by such Board.
"FITCH": Fitch Investors Service Inc.
"FOREIGN SUBSIDIARY": any Subsidiary of Grace New York (i) that is
organized under the laws of any jurisdiction other than any state
(including the District of Columbia), territory or possession of the United
States of America (a "foreign jurisdiction"), or (ii) more than 50 percent
of the book value of the assets of which (as of the end of the most recent
fiscal period for which financial statements are required to have been
provided pursuant to subsection 8.1(a) or (b)) are located in one or more
foreign jurisdictions, or (iii) more than 50 percent of the Net Sales and
Revenues of which (for the most recent fiscal year for which financial
statements are required to have been provided pursuant to subsection
8.1(a)) were from sales made and/or services provided in one or more
foreign jurisdictions, or (iv) more than 50 percent of the book value of
the assets of which (as
<PAGE>
9
of the end of the most recent fiscal period for which financial statements
are required to have been provided pursuant to subsection 8.1(a) or (b))
consists of equity interests in and/or Indebtedness of one or more
Subsidiaries that are "Foreign Subsidiaries" within clauses (i), (ii),
(iii) or (iv) of this definition.
"FOREIGN SUBSIDIARY INDEBTEDNESS": any Indebtedness of any Foreign
Subsidiary.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HAZARDOUS MATERIALS": any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such
in or under any Environmental Law.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under Capitalized Leases,
and (c) without duplication, all "loss contingencies" of such Person of the
types described in paragraph 12 of FASB 5, whether or not disclosed or
required to be disclosed on the financial statements or footnotes thereto
of such Person pursuant to GAAP.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the fifteenth day of
each March, June, September and December to occur while such Loan is
outstanding and, if different, the Termination Date, and (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
day of such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, if any, as agreed by the Borrower
of such Loan and the Banks.
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10
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, or such
other period as may be requested by the Borrower and agreed to by the
Banks making such Loan, as selected by the Borrower of such Loan in
its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, or such
other period as may be requested by the Borrower and agreed to by the
Banks making such Loan, as selected by such Borrower by irrevocable
notice to the Agent and the Banks which made such Eurodollar Loan not
less than two Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"LIEN": any mortgage, pledge, hypothecation, assignment as security,
security deposit arrangement, encumbrance, lien (statutory or other),
conditional sale or other title retention agreement or other similar
arrangement.
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11
"LOAN": any loan made by any Bank pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Notes and the Notices of
Additional Borrower.
"LOAN OUTSTANDINGS": as to any Bank at any time, the sum of (a) the
aggregate principal amount of all Revolving Credit Loans made by such Bank
then outstanding, and (b) such Bank's Commitment Percentage multiplied by
the aggregate principal amount of all Bid Loans then outstanding.
"LOAN PARTIES": the collective reference to the Company, the other
Borrowers, and Grace New York.
"MAJORITY BANKS": at any time, Banks the Commitment Percentages of
which aggregate (or, if at such time all of the Commitments shall have been
terminated, Banks the Commitment Percentages of which immediately prior to
such termination aggregated) at least 51%.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, properties, or condition (financial or otherwise) of
Grace New York and its Subsidiaries taken as a whole, (b) the ability of
the Company, or any Borrower or Grace New York to perform their respective
obligations hereunder and under the other Loan Documents to which such
Person is a party, or (c) the validity or enforceability of the Loan
Documents or the rights or remedies of the Agent or the Banks hereunder or
thereunder.
"MOODY'S": Moody's Investors Services, Inc.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET SALES AND REVENUES": with respect to any Person for any period,
all sales and operating revenues of such Person during such period computed
in accordance with GAAP after deducting therefrom sales returns, discounts
and allowances.
"NOTES": the collective reference to the Revolving Credit Notes and
the Bid Loan Notes, if any.
"NOTICE OF ADDITIONAL BORROWER": as defined in subsection 13.15(a).
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any
<PAGE>
12
insolvency, reorganization or like proceeding, relating to Grace New York
or any of the Borrowers, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) the Loans and the Notes,
if any, and all other obligations and liabilities of Grace New York or the
Borrowers to the Agent or to the Banks, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, the Notes, any other Loan Document and any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements
of counsel to the Agent or to the Banks that are required to be paid by
Grace New York and/or the Borrowers pursuant to the terms of this
Agreement) or any other obligation hereunder or thereunder.
"PARTICIPANT": as defined in subsection 13.6(b).
"PAYMENT SHARING NOTICE": a written notice from the Company or any
Bank informing the Agent that an Event of Default has occurred and is
continuing and directing the Agent to allocate payments thereafter received
from the Borrower in accordance with subsection 5.9(c).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PREPAYMENT DATE": as defined in subsection 5.3(b).
"PRINCIPAL SUBSIDIARY": (a) any Borrower and (b) any other Subsidiary
if it shall have Total Assets at the end of the most recent fiscal year for
which financial statements are required to have been furnished pursuant to
subsection 8.1(a) in excess of $75,000,000 or have had during such year Net
Sales and Revenues in excess of $75,000,000.
"PURCHASING BANKS": as defined in subsection 13.6(c).
"REGISTER": as defined in subsection 13.6(d).
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13
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System.
"REGULATION X": Regulation X of the Board of Governors of the Federal
Reserve System.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"REQUESTED BANK": as defined in subsection 3.1(a).
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president,
the chief financial officer or the treasurer, assistant treasurer or
controller of Grace New York.
"RESTRUCTURING ACTIVITIES": all reductions in carrying value of
assets or investments and provisions for the termination and/or relocation
of operations and employees.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1(a).
"REVOLVING CREDIT NOTES": as defined in subsection 2.2.
"SEC": the Securities and Exchange Commission, and any successor or
analogous federal Governmental Authority.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard & Poor's Ratings Group.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity which is required to be consolidated with such Person in accordance
with GAAP; PROVIDED, that any such corporation, partnership or other entity
which is controlled by a receiver or trustee under
<PAGE>
14
any bankruptcy, insolvency or similar law shall continue to be a
"Subsidiary" of such Person for purposes of this Agreement. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of Grace New
York.
"SUBSTITUTE RATING AGENCY": as defined in the definition of
"Applicable Margin".
"TERMINATION DATE": September 1, 1999.
"TOTAL ASSETS": with respect to any Person at any time, the total of
all assets appearing on the asset side of the balance sheet of such Person
prepared in accordance with GAAP as of such time.
"TOTAL CAPITALIZATION": at a particular date, the sum of Consolidated
Debt and Consolidated Adjusted Net Worth.
"TRANSFEREE": as defined in subsection 13.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, if any, or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Notes, if any, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
Grace New York and its Subsidiaries not defined in subsection 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement, unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 COMMITMENTS. (a) Subject to the terms and conditions hereof,
each Bank severally agrees to make revolving credit loans ("REVOLVING CREDIT
LOANS") to any Borrower from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed the amount
of
<PAGE>
15
such Bank's Commitment, PROVIDED that no Bank shall make any Revolving Credit
Loan if, after giving effect to such Loan, the aggregate Loan Outstandings of
all of the Banks plus the Aggregate Outstanding Bilateral Option Loans would
exceed the aggregate Commitments.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower thereof and notified to the Agent in accordance with subsections
2.3 and 5.5, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan maturing after the Termination Date.
2.2 OBLIGATIONS OF BORROWERS; REVOLVING CREDIT NOTES. (a) Each
Borrower agrees that each Revolving Credit Loan made by each Bank to such
Borrower pursuant hereto shall constitute the promise and obligation of such
Borrower to pay to the Agent, on behalf of such Bank, at the office of the Agent
specified in subsection 13.2, in lawful money of the United States of America
and in immediately available funds the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Bank to such Borrower pursuant to subsection
2.1, which amounts shall be due and payable (whether at maturity or by
acceleration) as set forth in this Agreement and, in any event, on the
Termination Date.
(b) Each Borrower agrees that each Bank and the Agent are authorized
to record (i) the date, amount and Type of each Revolving Credit Loan made by
such Bank to such Borrower pursuant to subsection 2.1, (ii) the date of each
continuation thereof pursuant to subsection 5.5(b), (iii) the date of each
conversion of all or a portion thereof to another Type pursuant to subsection
5.5(a), (iv) the date and amount of each payment or prepayment of principal of
each such Revolving Credit Loan and (v) in the case of each such Revolving
Credit Loan which is a Eurodollar Loan, the length of each Interest Period and
the Eurodollar Rate with respect thereto, in the books and records of such Bank
or the Agent, as the case may be, and in such manner as is reasonable and
customary for such Bank or the Agent, as the case may be, and a certificate of
an officer of such Bank or the Agent, as the case may be, setting forth in
reasonable detail the information so recorded, shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded; PROVIDED that the
failure to make any such recording shall not in any way affect the obligations
of such Borrower hereunder.
(c) Each Borrower agrees that, upon the request to the Agent by any
Bank at any time, the Revolving Credit Loans made by such Bank to such Borrower
shall be evidenced by a promissory note of such Borrower, substantially in the
form of Exhibit A with appropriate insertions as to Borrower, payee, date and
principal amount (a "REVOLVING CREDIT NOTE"), payable to the order of such Bank
and in a principal amount equal to the lesser of (a) the amount of the initial
Commitment of such Bank and (b) the aggregate unpaid principal amount of all
Revolving Credit
<PAGE>
16
Loans made by such Bank to such Borrower. Upon the request to the Agent by any
such Bank at any time, such Borrower shall execute and deliver to such Bank a
Revolving Credit Note conforming to the requirements hereof and executed by a
duly authorized officer of such Borrower. Each Bank is hereby authorized to
record the date, Type and amount of each Revolving Credit Loan made by such Bank
to such Borrower, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period and the Eurodollar Rate with respect thereto, on the schedule
annexed to and constituting a part of its Revolving Credit Note and any such
recordation shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded; PROVIDED that the failure to make any such recording
shall not in any way affect the obligations of such Borrower hereunder or
thereunder. Each Revolving Credit Note shall (x) be dated the Closing Date, (y)
be stated to mature on the Termination Date and (z) provide for the payment of
interest in accordance with subsection 5.1.
2.3 PROCEDURE FOR REVOLVING CREDIT BORROWING. Any Borrower may
borrow under the Commitments from all Banks during the Commitment Period on any
Business Day, PROVIDED that such Borrower shall give the Agent irrevocable
notice (which notice must be received by the Agent (a) prior to 4:00 P.M., New
York City time, three Business Days prior to the requested Borrowing Date, if
all or any part of the requested Revolving Credit Loans are to be initially
Eurodollar Loans, or (b) prior to 10:00 A.M., New York City time, on the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Commitments shall be in an amount equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, in the case
of ABR Loans, if the amount of the Available Commitments minus the Aggregate
Outstanding Bilateral Option Loans is less than $5,000,000, such lesser amount).
Upon receipt of such notice from such Borrower, the Agent shall promptly notify
each Bank thereof. Each Bank will make the amount of its pro rata share of each
such borrowing available to the Borrower at the office of the Agent specified in
subsection 13.2 prior to 12:00 noon, New York City time, on the Borrowing Date
requested by such Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to such Borrower on the books of such
office with the aggregate of the amounts made available to the Agent by the
Banks and in like funds as received by the Agent.
<PAGE>
17
SECTION 3. BILATERAL OPTION LOANS
3.1 REQUESTS FOR OFFERS. (a) From time to time during the period
from the Closing Date until the Termination Date, any Borrower may request any
or all of the Banks (each such Bank to which such a request is made, a
"REQUESTED BANK") to make offers to make Bilateral Option Loans, PROVIDED that
immediately after making any such Bilateral Option Loan, the aggregate Loan
Outstandings of all the Banks plus the Aggregate Outstanding Bilateral Option
Loans will not exceed the aggregate Commitments. Any such request shall specify
the principal amount and maturity date of the Bilateral Option Loans for which
such Borrower is requesting offers, whether such Bilateral Option Loans are
requested to be Dollar Bilateral Loans or Alternative Currency Bilateral Loans,
the time by which offers to make such Bilateral Option Loans must be made by
such Requested Bank and by which such offers shall be accepted or rejected by
such Borrower, and if all or any part of the requested Bilateral Option Loans
are requested to be made as Alternative Currency Bilateral Loans, the
Alternative Currency to be applicable thereto. Each Requested Bank may, but
shall have no obligation to, make such offers on such terms and conditions as
are satisfactory to such Requested Bank, and such Borrower may, but shall have
no obligation to, accept any such offers. No Bilateral Option Loan may mature
after the Termination Date.
(b) Each Borrower and Requested Bank shall separately agree as to the
procedures, documentation, lending office and other matters relating to any
Bilateral Option Loan.
3.2 REPORTS TO AGENT; DETERMINATION OF DOLLAR EQUIVALENTS. (a) The
Borrower shall deliver to the Agent a report in respect of each Bilateral Option
Loan (a "BILATERAL OPTION LOAN REPORT") by 2:00 P.M. (New York City time) on the
date on which the applicable Borrower accepts any Bilateral Option Loan, on the
date on which any principal amount thereof is repaid prior to the scheduled
maturity date, or on the scheduled maturity date if payment thereof is not made
on such scheduled maturity date, specifying for such Bilateral Option Loan the
date on which such Bilateral Option Loan was or will be made, such amount of
principal is or will be repaid or such payment was not made as the case may be;
in the case of Alternative Currency Bilateral Loans, the Alternative Currency
thereof; and the principal amount of such Bilateral Option Loan or principal
prepayment or repayment or the amount paid (in the case of any Alternative
Currency Bilateral Loan, expressed in the Alternative Currency therefor).
(b) Upon receipt of a Bilateral Option Loan Report with respect to
the acceptance of a Bilateral Option Loan, the Agent shall determine the Dollar
Equivalent thereof.
(c) If on any Borrowing Date on which after giving effect to the
Loans made on such date, the sum of the aggregate
<PAGE>
18
Loan Outstandings of all the Banks plus the Aggregate Outstanding Bilateral
Option Loans exceeds 85% of the aggregate Commitments, then the Agent shall
redetermine as of such Borrowing Date, on the basis of the most recently
delivered Bilateral Option Loan Report for each Bilateral Option Loan, the
Dollar Equivalent of each Alternative Currency Bilateral Loan then outstanding.
In addition, for so long as the condition specified in the preceding sentence
remains in effect, the Agent shall determine, at the end of each fiscal quarter
of the Company, on the basis of the most recently delivered Bilateral Option
Loan Report for each Bilateral Option Loan, the Dollar Equivalent of each
Alternative Currency Bilateral Loan then outstanding.
(d) The Agent shall promptly notify the Company of each Dollar
Equivalent under this subsection 3.2.
3.3 JUDGMENT CURRENCY. If for the purpose of obtaining judgment in
any court, it is necessary to convert a sum due from any Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "SPECIFIED CURRENCY") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency at the Agent's New York office on the Business Day preceding that on
which final judgment is given. The obligations of each Borrower in respect of
any sum due to any Bank or the Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be) of any sum adjudged to be so due in such
other currency such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the specified currency with such other
currency; if the amount of the specified currency so purchased is less than the
sum originally due to such Bank or the Agent, as the case may be, in the
specified currency, each Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
difference, and if the amount of the specified currency so purchased exceeds:
(a) the sum originally due to any Bank or the Agent, as the case may
be, and
(b) any amounts shared with other Banks as a result of allocations of
such excess as a disproportionate payment to such Bank under subsection
13.7,
such Bank or the Agent, as the case may be, agrees to remit such excess to the
applicable Borrower.
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19
3.4 REPAYMENTS. Each Borrower shall repay to each Bank which has made a
Bilateral Option Loan on the maturity date of each Bilateral Option Loan (such
maturity date being that specified in the documentation referred to in
subsection 3.1(a)) the then unpaid principal amount of such Bilateral Option
Loan.
SECTION 4. BID LOANS
4.1 THE BID LOANS. Any Borrower may borrow Bid Loans from time to
time on any Business Day during the period from the Closing Date until the
Termination Date, in the manner set forth in this Section 4 and in amounts such
that the aggregate Loan Outstandings of all the Banks at any time plus the
Aggregate Outstanding Bilateral Option Loans at such time will not exceed the
aggregate Commitments at such time, and PROVIDED, FURTHER, that no such Bid Loan
shall be made if, after giving effect thereto, any Bid Loans would mature after
the Termination Date.
4.2 PROCEDURE FOR BID LOANS. (a) A Borrower shall request Bid Loans
by delivering a Bid Loan Request to the Agent, in writing, by telex or facsimile
transmission, or by telephone, confirmed by telex or facsimile transmission, not
later than 1:00 P.M. (New York City time) one Business Day prior to the proposed
Borrowing Date. Each Bid Loan Request may solicit bids for Bid Loans in an
aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and for not more than three alternative maturity dates for such
Bid Loans. The Agent shall promptly notify each Bank by telex or facsimile
transmission of the contents of each Bid Loan Request received by it.
(b) Upon receipt of notice from the Agent of the contents of a Bid
Loan Request, any Bank that elects, in its sole discretion, to do so, shall
irrevocably offer to make one or more Bid Loans at a rate of interest determined
by such Bank in its sole discretion for each such Bid Loan. Any such
irrevocable offer shall be made by delivering a Bid Loan Offer to the Agent, by
telephone, immediately confirmed by telex or facsimile transmission, before 9:30
A.M. (New York City time) on the proposed Borrowing Date, setting forth the
maximum amount of Bid Loans for each maturity date, and the aggregate maximum
amount for all maturity dates, which such Bank would be willing to make (which
amounts may, subject to subsection 4.1, exceed such Bank's Commitments) and the
rate of interest at which such Bank is willing to make each such Bid Loan; the
Agent shall advise the Borrower before 10:00 A.M. (New York City time) on the
proposed Borrowing Date of the contents of each such Bid Loan Offer received by
it. If the Agent in its capacity as a Bank shall, in its sole discretion, elect
to make any such offer, it shall advise the Borrower of the contents of its Bid
Loan Offer before 9:15 A.M. (New York City time) on the proposed Borrowing Date.
<PAGE>
20
(c) The Borrower shall before 10:30 A.M. (New York City time) on the
proposed Borrowing Date, in its absolute discretion, either:
(i) cancel such Bid Loan Request by giving the Agent
telephone notice to that effect, and the Agent shall give prompt
telephone notice thereof to the Banks and the Bid Loans requested
thereby shall not be made; or
(ii) accept one or more of the offers made by any Bank
or Banks by giving telephone notice to the Agent (confirmed as
soon as practicable thereafter by delivery to the Agent of a Bid
Loan Confirmation in writing, by telex or by facsimile
transmission) of the amount of Bid Loans for each relevant
maturity date to be made by each Bank (which amount for each such
maturity date shall be equal to or less than the maximum amount
for such maturity date specified in the Bid Loan Offer of such
Bid Loan Bank, and for all maturity dates included in such Bid
Loan Offer shall be equal to or less than the aggregate maximum
amount specified in such Bid Loan Offer for all such maturity
dates) and reject any remaining offers made by Banks; PROVIDED,
HOWEVER, that (x) the Borrower may not accept offers for Bid
Loans for any maturity date in an aggregate principal amount in
excess of the maximum principal amount requested in the related
Bid Loan Request, (y) if the Borrower accepts any of such offers,
it must accept offers strictly based upon pricing for such
relevant maturity date and no other criteria whatsoever and (z)
if two or more Banks submit offers for any maturity date at
identical pricing and the Borrower accepts any of such offers but
does not wish to (or by reason of the limitations set forth in
subsection 4.1 or in clause (x) of this proviso, cannot) borrow
the total amount offered by such Banks with such identical
pricing, the Borrower shall accept offers from all of such Banks
in amounts allocated among them PRO RATA according to the amounts
offered by such Banks.
(d) If the Borrower accepts pursuant to clause (c) (ii) above one or
more of the offers made by any Bid Loan Bank or Bid Loan Banks, the Agent shall
notify before 11:00 A.M. (New York City time) each Bid Loan Bank which has made
such an offer, of the aggregate amount of such Bid Loans to be made on such
Borrowing Date for each maturity date and of the acceptance or rejection of any
offers to make such Bid Loans made by such Bid Loan Bank. Each Bid Loan Bank
which is to make a Bid Loan shall, before 12:00 Noon (New York City time) on the
Borrowing Date specified in the Bid Loan Request applicable thereto, make
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21
available to the Agent at its office set forth in subsection 13.2 the amount of
Bid Loans to be made by such Bid Loan Bank, in immediately available funds. The
Agent will make such funds available to the Borrower at or before 2:00 P.M. (New
York City time) on such date at the Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the Agent shall notify each Bank of the
aggregate amount of Bid Loans advanced on such Borrowing Date and the respective
maturity dates thereof.
4.3 REPAYMENTS. Each Borrower shall repay to the Agent for the
account of each Bid Loan Bank which has made a Bid Loan on the maturity date of
each Bid Loan (such maturity date being that specified by the Borrower for
repayment of such Bid Loan in the related Bid Loan Request) the then unpaid
principal amount of such Bid Loan. The Borrowers shall not have the right to
prepay any principal amount of any Bid Loan without the prior written consent of
the Bid Loan Bank which made such Bid Loan.
4.4 INTEREST ON BID LOANS. Each Borrower which shall have borrowed a
Bid Loan shall pay interest on the unpaid principal amount of such Bid Loan from
the Borrowing Date to the stated maturity date thereof, at the rate of interest
determined pursuant to subsection 4.2 above (calculated on the basis of a 360
day year for actual days elapsed), payable on the interest payment date or dates
specified by such Borrower for such Bid Loan in the related Bid Loan Request.
If all or a portion of the principal amount of any Bid Loan shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue principal amount shall, without limiting any rights of any Bank under
this Agreement, bear interest from the date on which such payment was due at a
rate per annum which is 2% above the rate which would otherwise be applicable to
such Bid Loan until the scheduled maturity date with respect thereto, and for
each day thereafter at a rate per annum which is 2% above the Alternate Base
Rate until paid in full (as well after as before judgment).
4.5 OBLIGATIONS OF BORROWERS; BID LOAN NOTES. (a) Each Borrower
agrees that each Bid Loan made by each Bid Loan Bank to such Borrower pursuant
hereto shall constitute the promise and obligation of such Borrower to pay to
the Agent, on behalf of such Bid Loan Bank, at the office of the Agent specified
in subsection 13.2, in lawful money of the United States of America and in
immediately available funds the aggregate unpaid principal amount of each Bid
Loan made by such Bid Loan Bank to such Borrower pursuant to subsection 4.2,
which amounts shall be due and payable (whether at maturity or by acceleration)
as set forth in the Bid Loan Request related to such Bid Loan and in this
Agreement.
(b) Each Borrower agrees that each Bid Loan Bank and the Agent are
authorized to record (i) the date and amount of each Bid Loan made by such Bid
Loan Bank to such Borrower pursuant to subsection 4.2, and (ii) the date and
amount of each
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22
payment or prepayment of principal of each such Bid Loan, in the books and
records of such Bid Loan Bank or the Agent, as the case may be, and in such
manner as is reasonable and customary for such Bank or the Agent, as the case
may be, and a certificate of an officer of such Bid Loan Bank or the Agent, as
the case may be, setting forth in reasonable detail the information so recorded,
shall constitute PRIMA FACIE evidence of the accuracy of the information so
recorded; PROVIDED that the failure to make any such recording shall not in any
way affect the obligations of such Borrower hereunder.
(c) Each Borrower agrees that, upon the request to the Agent by any
Bid Loan Bank at any time, the Bid Loans made by such Bid Loan Bank to any
Borrower shall be evidenced by a promissory note of such Borrower, substantially
in the form of Exhibit B with appropriate insertions (a "BID LOAN NOTE"),
payable to the order of such Bid Loan Bank and representing the obligation of
such Borrower to pay the unpaid principal amount of all Bid Loans made by such
Bid Loan Bank, with interest on the unpaid principal amount from time to time
outstanding of each Bid Loan evidenced thereby as prescribed in subsection 4.4.
Upon the request to the Agent by any such Bid Loan Bank at any time, such
Borrower shall execute and deliver to such Bid Loan Bank a Bid Loan Note
conforming to the requirements hereof and executed by a duly authorized officer
of such Borrower. Each Bid Loan Bank is hereby authorized to record the date
and amount of each Bid Loan made by such Bank, the maturity date thereof, the
date and amount of each payment of principal thereof and the interest rate with
respect thereto on the schedule annexed to and constituting part of its Bid Loan
Note, and any such recordation shall constitute PRIMA FACIE evidence of the
accuracy of the information so recorded; PROVIDED, HOWEVER, that the failure to
make any such recordation shall not affect the obligations of such Borrower
hereunder or under any Bid Loan Note. Each Bid Loan Note shall be dated the
Closing Date and each Bid Loan evidenced thereby shall bear interest for the
period from and including the Borrowing Date thereof on the unpaid principal
amount thereof from time to time outstanding at the applicable rate per annum
determined as provided in, and such interest shall be payable as specified in,
subsection 4.4.
SECTION 5 LOAN FACILITY COMMON PROVISIONS
5.1 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a fluctuating rate per annum
equal to the Alternate Base Rate.
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23
(c) Except as otherwise provided in subsection 4.4, if all or a
portion of (i) the principal amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, the rate described in
paragraph (b) of this subsection plus 2%, in each case from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
(e) Subject to the limitations set forth herein, each Borrower may
use the Loans by borrowing, prepaying and reborrowing the Loans, all in
accordance with the terms and conditions hereof.
5.2 COMMITMENT FEE, OTHER FEES. (a) The Company agrees to pay to
the Agent for the account of each Bank a commitment fee for the period from and
including the date hereof to the Termination Date, computed at the rate per
annum determined as set forth in paragraph (c) of this subsection on the average
daily amount of the Available Commitment of such Bank during the period for
which payment is made, payable quarterly in arrears on the fifteenth day of each
March, June, September and December and on the Termination Date or such earlier
date as the Commitments shall terminate as provided herein, commencing on the
first of such dates to occur after the date hereof.
(b) The Company agrees to pay to the Agent for the account of each
Bank a facility fee for the period from and including the date hereof to the
Termination Date, computed at the rate per annum determined as set forth in
paragraph (c) of this subsection on the average daily amount of the Commitment
of such Bank during the period for which payment is made, payable quarterly in
arrears on the fifteenth day of each March, June, September and December and on
the Termination Date or such earlier date as the Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof.
(c) The rate per annum at which such commitment fee under paragraph
(a) above shall be computed (the "APPLICABLE COMMITMENT FEE RATE") and such
facility fee under paragraph (b) above shall be computed (the "APPLICABLE
FACILITY FEE RATE"), for any day on which the long term senior unsecured debt of
the Company is rated by both S&P and Moody's, shall be the rate per annum under
the caption "Commitment Fee Rate" (a "COMMITMENT FEE RATE") for the commitment
fee and "Facility Fee Rate" (a
<PAGE>
24
"FACILITY FEE RATE") for the facility fee, as the case may be, set forth below
opposite the S&P and Moody's ratings applicable to such debt on such day (or, if
such ratings are set opposite two different rates under said caption, then the
Applicable Commitment Fee Rate and Applicable Facility Fee Rate shall be the
lower of said two Commitment Fee Rates and Facility Fee Rates):
COMMITMENT FACILITY FEE
FEE RATE RATE S&P MOODY'S
- --------- ------------ --- -------
.0625% .1500% BB+ or lower Ba1 or lower
.0500% .1250% BBB- Baa3
.0500% .1000% BBB Baa2
.0400% .0800% BBB+ Baa1
.0400% .0600% A- or higher A3 or higher
PROVIDED that if on any day the long term senior unsecured debt of the Company
is rated by only one of S&P or Moody's, such rate will be determined based on
the rating by such rating agency, and PROVIDED, FURTHER, that if on any day the
long term senior unsecured debt of the Company is rated by neither S&P nor
Moody's, the Applicable Commitment Fee Rate and the Applicable Facility Fee Rate
will be determined based on the rating of such debt by a Substitute Rating
Agency and will be the Commitment Fee Rate and Facility Fee Rate set forth above
opposite the S&P and Moody's ratings comparable to the Substitute Rating
Agency's rating of such debt on such date, and PROVIDED, FURTHER, that if on any
day the long term senior unsecured debt of the Company is rated by none of S&P,
Moody's or any Substitute Rating Agency, the Company, the Agent and the Banks
will negotiate in good faith to determine an alternative basis for calculating
such rate consistent with the table set forth above and, if agreement on such
alternative basis is not reached with 30 days, such rate will be calculated on
an alternative basis determined by the Agent and the Banks in their reasonable
discretion consistent with the table above, and until such alternative basis is
determined such rate will be the rate last determined as provided in the table
above.
5.3 TERMINATION OR REDUCTION OF COMMITMENTS; CHANGE OF CONTROL DATE.
(a) The Company shall have the right, upon not less than five Business Days'
notice to the Agent, to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments, PROVIDED that no such termination or
reduction shall be permitted to the extent that, after giving effect thereto and
to any prepayments of Loans made on the effective date thereof, the sum of the
aggregate Loan Outstandings of all the Banks, plus the Aggregate Outstanding
Bilateral Option Loans would exceed the Commitments then in effect. Any such
partial reduction shall be in an amount equal to $5,000,000 or a whole
<PAGE>
25
multiple of $1,000,000 in excess thereof and shall reduce permanently the
Commitments then in effect.
(b) (i) In the event that a Change of Control Date shall occur, (A)
the Company shall, within 10 days after such Change of Control Date, give each
Bank notice thereof in writing describing in reasonable detail the facts and
circumstances giving rise thereto, and (B) such Bank, by written notice given to
the Company not later than 30 days after the Change of Control Date, may declare
the Commitments of such Bank to be terminated in full or reduced as of the date
of (or as of a later date specified in) such notice to the Company, and may
require that the Borrowers prepay as provided in this subsection 5.3 any Loans
payable to such Bank and outstanding on such date to the extent the principal
amount thereof exceeds such Bank's Commitment, if any, remaining after such
termination or reduction. To the extent such Bank so requires, the Borrowers
shall prepay such Loans on the 75th day after the date of the Company's notice
or, in the event such 75th day is not a Business Day, the Business Day next
succeeding such 75th day ("PREPAYMENT DATE").
(ii) On the Prepayment Date, the Borrowers shall prepay the
unpaid principal amount of the Loans payable to such Bank, without premium or
penalty, together with accrued interest on the amount prepaid to the Prepayment
Date.
(iii) Subsections 5.9(a), (b) and (c) shall not apply to
prepayments under this subsection 5.3(b).
(iv) Paragraph (a) of this subsection 5.3 hereof shall not
apply to any Commitment reductions pursuant to this paragraph (b).
(v) In the event that a Change of Control Date shall occur, the
Company shall not thereafter, without the prior written consent of the Majority
Banks, borrow any additional Loan (other than a Bilateral Option Loan) in order
to make, directly or indirectly, any payment or prepayment on any Indebtedness
subordinated as to the payment of principal and interest or on liquidation to
the prior payment of any of the Obligations.
5.4 PREPAYMENTS. (a) Any Borrower may at any time and from time to
time upon at least four Business Days' irrevocable notice to the Agent, in the
case of Eurodollar Loans, or upon at least one Business Day's irrevocable notice
to the Agent, in the case of ABR Loans, prepay the Loans (other than Bid Loans),
in whole or in part, without premium or penalty (subject to subsection 5.13),
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice the
Agent shall promptly notify each Bank thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein. Partial prepayments shall
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26
be in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
(b) If at any time, the Agent shall determine (which determination
shall be conclusive in the absence of manifest error) that the sum of the
aggregate Loan Outstandings of all the Banks plus the Aggregate Outstanding
Bilateral Option Loans exceeds the aggregate Commitments, the Borrowers shall
immediately prepay the Loans in an aggregate principal amount equal to such
excess.
5.5 CONVERSION AND CONTINUATION OPTIONS. (a) Any Borrower may elect
at any time and from time to time (subject to subsection 5.13) to convert its
Eurodollar Loans to ABR Loans by giving the Agent at least two Business Days'
prior irrevocable notice of such election. Any Borrower may elect at any time
and from time to time to convert its ABR Loans to Eurodollar Loans by giving the
Agent irrevocable notice of such election (which notice must be received by the
Agent prior to 4:00 P.M., New York City time, three Business Days prior to the
requested conversion date). Any such notice of conversion to Eurodollar Loans
shall specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall promptly notify each
Bank thereof. All or any part of outstanding Eurodollar Loans and ABR Loans may
be converted as provided herein, PROVIDED that (i) no Loan may be converted into
a Eurodollar Loan when any Event of Default has occurred and is continuing and
the Agent or the Majority Banks have determined that such a conversion is not
appropriate, and (ii) any such conversion may only be made if, after giving
effect thereto, subsection 5.6 shall not have been contravened.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower thereof
giving notice to the Agent, in accordance with the applicable provisions of the
term "Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent or the Majority Banks have determined that such a
continuation is not appropriate, or (ii) if, after giving effect thereto,
subsection 5.6 would be contravened and PROVIDED, FURTHER, that if any Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
5.6 MINIMUM AMOUNTS OF EURODOLLAR TRANCHES. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the
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27
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
5.7 COMPUTATION OF INTEREST AND FEES. (a) Interest on ABR Loans, and
commitment fees and facility fees shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed. Interest on
Eurodollar Loans shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Agent shall as soon as practicable notify the
Borrowers and the Banks of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Prime Rate shall
become effective as of the opening of business on the day on which such change
in the Prime Rate is announced. The Agent shall as soon as practicable notify
the Borrowers and the Banks of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrowers
and the Banks in the absence of manifest error. The Agent shall, at the request
of the Company, deliver to the Company a statement showing in reasonable detail
the quotations and calculations used by the Agent in determining any interest
rate pursuant to subsections 5.1 and 5.7(a).
5.8 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to
the first day of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Majority Banks that
the Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Banks (as
conclusively certified by such Banks) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telex, telecopy or telephonic notice thereof to the
Borrowers and the Banks as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor
<PAGE>
28
shall any Borrower have the right to convert Loans to Eurodollar Loans.
5.9 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by any
Borrower of Revolving Credit Loans from the Banks hereunder, each payment by the
Company on account of any commitment fee, facility fee or utilization fee
hereunder, and any reduction of the Commitments of the Banks shall be made pro
rata according to the respective Commitment Percentages of the Banks.
(b) Whenever any payment received by the Agent or any Bank under this
Agreement or any Note is insufficient to pay in full all amounts then due and
payable to the Agent and the Banks under this Agreement and the Notes, and the
Agent has not received a Payment Sharing Notice (or if the Agent has received a
Payment Sharing Notice but the Event of Default specified in such Payment
Sharing Notice has been cured or waived), such payment shall be distributed and
applied by the Agent and the Banks in the following order: FIRST, to the
payment of fees and expenses due and payable to the Agent in its capacity as
Agent under and in connection with this Agreement; SECOND, to the payment of all
expenses due and payable under subsection 13.5, ratably among the Banks in
accordance with the aggregate amount of such payments owed to each such Bank;
THIRD, to the payment of fees due and payable under subsections 5.2(a), (b), (c)
and (d), ratably among the Banks in accordance with their Commitment
Percentages; FOURTH, to the payment of interest then due and payable on the
Loans, ratably among the Banks in accordance with the aggregate amount of
interest owed to each such Bank; and FIFTH, to the payment of the principal
amount of the Loans which is then due and payable, ratably among the Banks in
accordance with the aggregate principal amount owed to each such Bank.
(c) After the Agent has received a Payment Sharing Notice which
remains in effect, all payments received by the Agent under this Agreement or
any Note shall be distributed and applied by the Agent and the Banks in the
following order: FIRST, to the payment of all amounts described in clauses
FIRST through THIRD of the foregoing paragraph (b), in the order set forth
therein; and SECOND, to the payment of the interest accrued on and the principal
amount of all of the Loans, regardless of whether any such amount is then due
and payable, ratably among the Banks in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Bank.
(d) All payments (including prepayments) to be made by any Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without set-off or counterclaim and shall be made
prior to 3:00 P.M., New York City time, on the due date thereof (i) in the case
of fees and Loans other than Bilateral Option Loans, to the Agent, for the
account of the Banks, at the Agent's office specified in subsection 13.2, and
(ii) in the case of Bilateral Option Loans
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29
made by any Bank, to such Bank, at the Bank's office specified in Schedule I
(or, with respect to Alternative Currency Bilateral Loans, if different, at such
other office of the Bank that it shall designate), in each case in Dollars (or,
with respect to Alternative Currency Bilateral Loans, in the relevant
Alternative Currency) and in immediately available funds. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (unless, with
respect to any payment on a Eurodollar Loan, the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day), and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(e) Unless the Agent shall have been notified in writing by the Bank
prior to a Borrowing Date that such Bank will not make the amount of any Loan it
has committed to make on such date available to the Agent, the Agent may assume
that such Bank has made such amount available to the Agent on such Borrowing
Date, and the Agent may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. If such amount is made available to
the Agent on a date after such Borrowing Date, such Bank shall pay to the Agent
on demand an amount equal to the product of (i) the daily average Federal Funds
Effective Rate during such period, times (ii) the amount of the Loan such Bank
was committed to make, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such Borrowing Date to the date on
which such Bank's Loan shall have become immediately available to the Agent and
the denominator of which is 360. A certificate of the Agent submitted to any
Bank with respect to any amounts owing under this subsection shall be conclusive
in the absence of manifest error. If such Bank's Commitment Percentage of such
borrowing is not in fact made available to the Agent by such Bank within three
Business Days of such Borrowing Date, the Agent shall be entitled to recover
such amount with interest thereon at the rate per annum applicable to ABR Loans
hereunder, on demand, from such Borrower.
5.10 ILLEGALITY. Notwithstanding any other provision herein, if any
change after the date hereof in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Bank hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Bank's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower of such Loan
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shall pay to such Bank such amounts, if any, as may be required pursuant to
subsection 5.13.
5.11 REQUIREMENTS OF LAW. (a) In the event that any change after
the date hereof in any Requirement of Law or in the interpretation or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by it,
or change the basis of taxation of payments to such Bank in respect thereof
(except for taxes covered by subsection 5.12 and changes in taxes based
upon or measured by income of such Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Bank which is not otherwise included in the determination of
the Eurodollar Rate hereunder; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems in its reasonable judgment to be material, of
making, converting into, continuing or maintaining Eurodollar Loans or to reduce
any amount receivable hereunder in respect thereof then, in any such case, the
Company shall promptly pay such Bank, upon its demand, any additional amounts
necessary to compensate such Bank for such increased cost or reduced amount
receivable. If any Bank becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Company, through the
Agent, of the event by reason of which it has become so entitled. A certificate
as to any additional amounts payable pursuant to this subsection setting forth
the calculation thereof in reasonable detail (as determined by such Bank in its
reasonable discretion) submitted by such Bank, through the Agent, to the Company
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) In the event that any Bank shall have determined that any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect
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31
of reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Bank
or such corporation could have achieved but for such change or compliance
(taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, after submission by such Bank to the Company (with a
copy to the Agent) of a written request therefor, the Company shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
reduction. A certificate as to any additional amount payable pursuant to this
subsection setting forth the calculation thereof in reasonable detail (as
determined by such Bank in its reasonable discretion) through the Agent, to the
Company shall be conclusive in the absence of manifest error.
(c) Upon request by any Bank, through the Agent, from time to time,
the Borrowers shall pay the cost of all Eurocurrency Reserve Requirements
applicable to the Eurodollar Loans made by such Bank. If a Bank is or becomes
entitled to receive payments in respect of Eurocurrency Reserve Requirements,
pursuant to this subsection 5.11(c), it shall promptly notify the Borrowers
thereof through the Agent. A certificate as to the amount of such Eurocurrency
Reserve Requirements setting forth the calculation thereof in reasonable detail
(as determined by such Bank in its reasonable discretion) submitted by such
Bank, through the Agent, to the Borrowers shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
5.12 TAXES. (a) All payments made by any Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding, in the case of the Agent and each Bank, net
income taxes and franchise taxes (imposed in lieu of net income taxes) that
would not have been imposed on the Agent or such Bank, as the case may be, in
the absence of a present or former connection between the jurisdiction of the
government or taxing authority imposing such tax and the Agent or such Bank
(other than a connection arising solely from the Agent or such Bank having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any Notes) or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions and withholdings being hereinafter called
"TAXES"). If any Taxes are required to be withheld from any amounts payable to
the Agent or any Bank hereunder or under any Notes, the amounts so payable to
the Agent or such Bank shall be increased to the extent necessary to yield to
the Agent or such Bank (after payment of all Taxes)
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32
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by any Borrower in respect of any payment made hereunder, as promptly as
possible thereafter any Borrower shall send to the Agent for its own account or
for the account of such Bank, as the case may be, a certified copy of an
original official receipt received by such Borrower showing payment thereof. If
such Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Agent and the Banks for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Bank as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Company
and the Agent (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form.
Each such Bank also agrees to deliver to the Company and the Agent two further
copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Company, and such extensions or renewals thereof as may
reasonably be requested by the Company or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank so advises the Company and the Agent. Such Bank shall certify (i) in
the case of a Form 1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to
an exemption from United States backup withholding tax.
5.13 INDEMNITY. Each Borrower agrees to indemnify each Bank and to
hold each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of (a) default by any Borrower in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) default by any
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after such Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (c) default by any Borrower in making any
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33
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a payment or prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, including, without limitation, in each case, any such loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained. This
covenant shall survive the termination of this Agreement and the payment of the
Loans or Notes, if any, and all other amounts payable hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement, each of the Company
and Grace New York represents and warrants to the Agent and each Bank that:
6.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party (a) is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (b) is duly qualified and in good
standing in each jurisdiction wherein, in the opinion of the Company and Grace
New York, the conduct of its business or the ownership of its properties
requires such qualification and (c) is in compliance with all Requirements of
Law, except to the extent that the failure to comply with paragraph (a), (b) or
(c) of this subsection would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
6.2 CORPORATE POWER, AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority to make, deliver and perform
its obligations under the Loan Documents to which it is or will be a party, and
has taken all necessary corporate action to authorize (i) in the case of the
Borrowers, the borrowings under this Agreement and any Notes to which it is or
will be a party on the terms and conditions hereof and thereof and (ii) the
execution, delivery and performance of this Agreement and the Loan Documents to
which it is or will be a party. This Agreement has been, and any Note and the
other Loan Documents to which it is or will be a party will be, duly executed
and delivered on behalf of each relevant Loan Party. This Agreement
constitutes, and each of the Notes, if any, and the other Loan Documents when
executed and delivered will constitute, a legal, valid and binding obligation of
the Loan Party thereto, and enforceable against such Loan Party in accordance
with its terms, such enforceability subject to limitations under any applicable
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights and
by general equitable principles (whether applied in a proceeding in equity or at
law). No consent of any other party (including stockholders of Grace New York)
and no consent, license, approval or authorization of, or registration or
declaration with, any Governmental Authority is required to be obtained by any
Loan
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34
Party in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and any Notes.
6.3 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, the borrowings hereunder and
the use of the proceeds thereof, will not violate or contravene any material
provision of any Requirement of Law or material Contractual Obligation of Grace
New York, the Company or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any material Lien (other than Liens
permitted under subsection 9.2) on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation.
6.4 NO MATERIAL LITIGATION. There is no legal action, administrative
proceeding or arbitration (whether or not purportedly on behalf of Grace New
York or the Company or any of its Subsidiaries) presently pending, or to the
knowledge of Grace New York or the Company threatened, against or affecting
Grace New York or the Company or any of its Subsidiaries which would reasonably
be expected to have a Material Adverse Effect.
6.5 OWNERSHIP OF PROPERTIES. Each of Grace New York, the Company and
its Subsidiaries is the tenant under valid leases or has good title to
substantially all its properties and assets, real and personal (except defects
in title and other matters that would not reasonably be expected to have a
Material Adverse Effect), subject to no Lien except as permitted to exist under
subsection 9.2.
6.6 FINANCIAL CONDITION. The consolidated balance sheets of Grace
New York and its Subsidiaries as at December 31, 1993 and December 31, 1992 and
the related consolidated statements of operations, shareholders' equity and of
cash flows (together with the related notes), included or incorporated in Grace
New York's Annual Report on Form 10-K filed with the SEC for the fiscal year
ended December 31, 1993, present fairly in all material respects the financial
position of Grace New York and its Subsidiaries as at such dates and the results
of their operations and their cash flows for the fiscal years then ended. The
unaudited consolidated balance sheet of Grace New York and its Subsidiaries as
at June 30, 1994 and the related unaudited consolidated statement of operations
for the three- and six-month interim periods, and the related unaudited
consolidated statement of cash flows for the six-month interim period, ended on
such date, included in Grace New York's Quarterly Report on Form 10-Q filed with
the SEC for such period, present fairly in all material respects the financial
position of Grace New York and its Subsidiaries as at such date and the results
of their operations and their cash flows for the three- and six-month periods,
respectively, then ended. All of such financial statements, including the notes
to such financial statements, have been prepared in conformity with GAAP
(subject, in the case of interim statements, to normal year-end adjustments and
to the
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35
fact that such financial statements may be abbreviated and may omit footnotes or
contain incomplete footnotes) consistently applied throughout the periods
involved except as stated therein.
6.7 DISCLOSURE OF CONTINGENT LIABILITIES. To the best of the
knowledge and belief of Grace New York, neither Grace New York nor any of its
Subsidiaries has any contingent obligation, liability for taxes, long-term
leases, unusual forward or other liabilities, which are material in amount in
relation to the consolidated financial condition of Grace New York and its
Subsidiaries taken as a whole and which are not disclosed in the financial
statements (including the related notes) described in subsection 6.6 above.
6.8 ERISA. Each Plan that is intended to qualify under Section
401(a) of the Code satisfies in all material respects the applicable
requirements for qualification under that Code Section. No Reportable Event has
occurred and is continuing with respect to any such Plan, and neither Grace New
York nor any of its Subsidiaries has incurred any liability to the PBGC under
Section 4062 of ERISA with respect to any such Plan that would reasonably be
expected to have a Material Adverse Effect.
6.9 CERTAIN FEDERAL REGULATIONS. Neither the Company nor any of its
Subsidiaries is engaged in or will engage in the business of extending credit
for the purposes of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board,
and no part of the proceeds of any Loan will be used for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation U or
X of the Board.
6.10 NO DEFAULT. Neither Grace New York nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
6.11 TAXES. (a) Each of Grace New York and its Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of Grace
New York, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which adequate reserves to the extent required in conformity
with GAAP, have been provided on the books of Grace New York or its
Subsidiaries, as the case may be) except insofar as the failure to make such
filings or payments would not reasonably be expected to have a Material Adverse
Effect; and (b) no tax Lien (other than a Lien permitted under subsection
9.2(a)) has been filed, and, to the knowledge of Grace New York, no claim is
being
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36
asserted, with respect to any such tax, fee or other charge which would
reasonably be expected to have a Material Adverse Effect.
6.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. None of Grace
New York, the Company or any of its Subsidiaries is an "investment company", or
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. None of Grace New York, the Company
or any other Borrower is subject to regulation under any Federal or State
statute or regulation which limits its ability to incur Indebtedness.
6.13 PURPOSE OF LOANS. The proceeds of the Loans shall be used by
the Borrowers for general corporate purposes.
6.14 ENVIRONMENTAL MATTERS. To the best of the knowledge of Grace
New York, the operations of Grace New York and its Subsidiaries and all parcels
of real estate owned or operated by Grace New York or its Subsidiaries are in
compliance with all Environmental Laws, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect.
6.15 PRINCIPAL SUBSIDIARIES. Set forth on Schedule III are all of
the Principal Subsidiaries as of the date hereof.
SECTION 7. CONDITIONS PRECEDENT
7.1 CONDITIONS TO EFFECTIVENESS. The parties hereto acknowledge that
the effectiveness of this Agreement is subject to the satisfaction of the
following conditions precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of each of
the Loan Parties, with a counterpart for each Bank, (ii) for the account of
each Bank so requesting, a Revolving Credit Note and a Bid Loan Note
conforming to the requirements hereof and executed by a duly authorized
officer of the Borrowers and (iii) an incumbency certificate of each of the
Loan Parties which covers such officers.
(b) CORPORATE PROCEEDINGS. The Agent shall have received, with a
counterpart for each Bank, a copy of the resolutions, in form and substance
satisfactory to the Agent, of the Board of Directors of each of the Loan
Parties authorizing (i) the execution, delivery and performance of the Loan
Documents to which it is or will be a party and (ii) the borrowings
contemplated hereunder (in the case of each Borrower), certified by the
Secretary or an Assistant Secretary of such Loan Party as of the Closing
Date, which certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded and shall be in form
and substance satisfactory to the Agent.
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37
(c) FEES. The Agent shall have received the fees to be received on
the Closing Date referred to in subsection 5.2.
(d) LEGAL OPINIONS. The Agent shall have received, with a
counterpart for each Bank, the following executed legal opinions:
(i) the executed legal opinion of counsel to the
Company and Grace New York, who may be the General Counsel
of the Company, substantially in the form of Exhibit F-1;
(ii) to the extent required pursuant to
subsection 13.15(a)(ii), the executed legal opinion of
counsel to any other Borrower, in form and substance
reasonably satisfactory to the Agent; and
(iii) the executed legal opinion of Simpson
Thacher & Bartlett, counsel to the Agent, substantially in
the form of Exhibit F-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require.
(e) EXISTING CREDIT AGREEMENT. All Commitments of the lenders under
the Existing Credit Agreement shall have been terminated, all outstanding
loans thereunder shall have been repaid in full and such agreement shall
have been terminated.
(f) OFFICER'S CERTIFICATE. The Agent shall have received, with a
counterpart for each Bank, a certificate respecting accuracy of
representations and warranties, the absence of events having a Material
Adverse Effect and the absence of Defaults and Events of Default,
substantially in the form of Exhibit G hereto, signed by a Responsible
Officer on behalf of the Company and Grace New York.
(g) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Agent, and the Agent shall have received such other
documents and legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably request.
7.2 CONDITIONS TO EACH LOAN. The agreement of each Bank to make any
Loan requested to be made by it on any date is
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38
subject to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by each of the Loan Parties in or pursuant to subsections
6.1, 6.2, 6.3, 6.5, 6.9, 6.10, 6.11, 6.12 and 6.13 of this Agreement and in
or pursuant to any other Loan Document to which it is or will be a party,
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, and the representation and warranty made
pursuant to subsection 6.6 shall be true and correct in all material
respects with respect to the financial statements most recently delivered
pursuant to subsection 8.1, MUTATIS MUTANDIS, as if such financial
statements delivered pursuant to subsection 8.1 were the financial
statements referred to in subsection 6.6.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Loan Parties as of the date of such Loan that the conditions
contained in this subsection 7.2 have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
Each of the Company and Grace New York hereby agrees that, so long as
the Commitments remain in effect, any Note remains outstanding and unpaid or any
other amount is owing to any Bank or the Agent hereunder, each of the Company
and Grace New York shall and the Company (except in the case of delivery of
financial information, reports and notices) shall cause each of its Principal
Subsidiaries to:
8.1 FINANCIAL STATEMENTS. Furnish to each Bank:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of Grace New York, a copy of the consolidated
balance sheet of Grace New York and its Subsidiaries as at the end of such
year and the related consolidated statements of operations, shareholders'
equity and cash flows for such year (as included or incorporated by
reference in Grace New York's Annual Report on Form 10-K or successor form
filed with the SEC for each such fiscal year), setting forth in each case
in comparative form the figures for the previous year, reported on without
a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Price Waterhouse or other
independent certified public
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39
accountants of nationally recognized standing not unacceptable to the
Majority Banks; and
(b) as soon as available, but in any event not later than 75 days
after the end of each of the first three quarterly periods of each fiscal
year of Grace New York, the unaudited consolidated balance sheet of Grace
New York and its Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of operations for such quarter and the
related unaudited consolidated statements of operations and cash flows for
the portion of the fiscal year through the end of such quarter (as included
in Grace New York's Quarterly Report on Form 10-Q or successor form filed
with the SEC for each such period), setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of Grace
New York and its Subsidiaries.
All such financial statements shall be prepared in conformity with GAAP
(subject, in the case of interim statements, to normal year-end adjustments and
to the fact that such financial statements may be abbreviated and may omit
footnotes or contain incomplete footnotes) applied consistently throughout the
periods reflected therein and with prior periods (except as disclosed therein).
8.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate.
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and 8.1(b), a certificate of a
Responsible Officer of Grace New York in his capacity as such officer
stating that, to the best of such Officer's knowledge, each of the
Borrowers and Grace New York during such period has observed or performed
all of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and in the Notes and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and showing in detail the
calculation of compliance with subsections 9.1 and 9.2;
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40
(c) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a list of the Principal Subsidiaries as
of the corresponding fiscal year end, certified by a Responsible Officer in
his capacity as such officer;
(d) within ten Business Days after the same are sent, copies of all
financial statements and reports which Grace New York sends to its
shareholders generally relating to the business of Grace New York and its
Subsidiaries, and within ten Business Days after the same are filed, copies
of all reports on Forms 10-K, 10-Q, 8-K, 8 and 10, and Schedules 13D, 13E-
3, 13E-4, 13-G, 14D-1 and 14D-9, or successor forms or schedules, and the
final prospectus in each effective registration statement (other than
registration statements on Form S-8) and each post-effective amendment to
such registration statement which Grace New York may make to, or file with,
the SEC; and
(e) promptly, subject to reasonable confidentiality requirements
agreed to by the Company and such Bank, such additional financial and other
information as any Bank may from time to time reasonably request.
8.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves,
to the extent required in conformity with GAAP with respect thereto, have been
provided on the books of Grace New York or its Subsidiaries, as the case may be,
and except to the extent that the failure to so pay, discharge or otherwise
satisfy such obligations would not result in a Default or Event of Default under
Section 10(e)(i).
8.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all corporate rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except as
otherwise permitted pursuant to subsection 9.3; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.5 INSURANCE. Maintain with financially sound and reputable
insurance companies (which may include, without limitation, captive insurers),
such insurance coverage as is reasonable for the business activities of Grace
New York and its Subsidiaries; and furnish to the Agent, upon written request,
such information as the Agent may reasonably request as to its insurance
program.
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41
8.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS; DISCUSSIONS. Permit
representatives of any Bank (subject to reasonable safety and confidentiality
requirements) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of Grace New York and its Subsidiaries with
officers and employees of Grace New York and its Subsidiaries and, provided
representatives of Grace New York are given an opportunity to participate, with
its independent certified public accountants.
8.7 NOTICES. Promptly give notice to the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Grace New York or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Grace New
York or any of its Subsidiaries and any Governmental Authority, which in
either case, would reasonably be expected to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting Grace New York or any of
its Subsidiaries in which the then reasonably anticipated exposure of Grace
New York and its Subsidiaries is $10,000,000 or more and not covered by
insurance, or in which injunctive or similar relief is sought which is then
reasonably anticipated to have an adverse economic effect on Grace New York
and its Subsidiaries of $10,000,000 or more;
(d) the following events, as soon as possible and in any event within
30 days after the Company or Grace New York knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan, or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Company or Grace New York or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan, where in connection with any of
the events described in (i) or (ii) above the liability to the Company or a
Commonly Controlled Entity would reasonably be expected to be $10,000,000
or more;
(e) any upgrading, downgrading or cessation in the rating of the long
term senior unsecured debt of the Company by the rating agency or agencies
whose rating on such debt is then being used to determine the Applicable
Margin, the Commitment Fee Rate and the Facility Fee Rate; and
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42
(f) a development or event which would reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action each of the Company and Grace New York proposes to take
with respect thereto.
8.8 ENVIRONMENTAL LAWS.
(a) Comply with all Environmental Laws and obtain and comply with and
maintain any and all licenses, approvals, registrations or permits required by
Environmental Laws, except to the extent that failure to do so would not be
reasonably expected to have a Material Adverse Effect; and
(b) Defend, indemnify and hold harmless the Agent and the Banks, and
their respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of or noncompliance with
any Environmental Laws applicable to the real property owned or operated by the
Company, Grace New York or any of the Company's Subsidiaries, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, attorney's and consultant's fees, investigation and
laboratory fees, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor.
SECTION 9. NEGATIVE COVENANTS
Grace New York hereby agrees that, so long as the Commitments remain
in effect, any Note remains outstanding and unpaid or any other amount is owing
to any Bank or the Agent hereunder, it shall not, and (except with respect to
subsections 9.1 and 9.5(b)) shall not permit any of its Subsidiaries to,
directly or indirectly:
9.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED DEBT TO TOTAL CAPITALIZATION. Permit the ratio of
Consolidated Debt to Total Capitalization at the end of any fiscal quarter after
the Closing Date to be greater than 60%.
(b) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending on the last day of any fiscal quarter of the Company
commencing with September 30, 1994 the
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43
ratio of EBIT to Consolidated Interest Expense to be less than 2.0 to 1.0.
9.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues (which property, assets or
revenues are or would be reflected from time to time on the consolidated
financial statements of Grace New York and its Subsidiaries in accordance with
GAAP), whether now owned or hereafter acquired, except for:
(a) Liens for taxes or other governmental charges not yet due or
which are being contested in good faith by appropriate proceedings,
PROVIDED that adequate reserves with respect thereto are maintained on the
books of Grace New York or its Subsidiaries, as the case may be, to the
extent required in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, vendors', landlords', brokers', bankers' and other like Liens
arising in the ordinary course of business relating to obligations which
are not overdue for a period of more than 60 days or which are being
contested in good faith and Liens arising out of judgments or awards that
are either discharged within 60 days after entry or execution of which has
been stayed pending the outcome of appeal or review proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) pledges, deposits and similar arrangements in connection with or
to secure performance of bids, tenders, leases and other deposits to secure
the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business and contractual rights of other Persons to make set-offs and to
require security in connection with letters of credit, currency, commodity
and interest rate contracts, surety bonds, leases, banking and brokerage
agreements and other transactions in the ordinary course of business;
(e) leases, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which would not
reasonably be expected to have a Material Adverse Effect;
(f) Liens on the property, assets or revenues of a Person which
becomes a Subsidiary after the date hereof, to the extent that (i) such
Liens existed at the time such
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44
Person became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not extended to cover any property, assets or
revenues of such Person after the time such Person becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not thereafter
increased;
(g) Liens arising in connection with (i) industrial development,
pollution control or other tax exempt financing transactions, PROVIDED that
such Liens do not at any time encumber any property other than the property
financed by such transaction and other property, assets or revenues related
to the property so financed on which Liens are customarily granted in
connection with such transactions, or (ii) conveyances of any production
payment or other obligation to make a production payment (A) which is to be
made solely from production from oil, gas or other underground mineral
properties dedicated thereto or (B) as to which production payment amount
the obligee's sole recourse is to such properties;
(h) Liens (including, without limitation, Liens incurred in
connection with Capitalized Leases, operating leases and sale-leaseback
transactions) securing Indebtedness of Grace New York and its Subsidiaries
incurred to finance the acquisition of fixed or capital assets, and
refinancings thereof, PROVIDED that (i) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness
and other property, assets or revenues related to the property so financed
on which Liens are customarily granted in connection with such financings
or refinancings, and (ii) the principal amount of Indebtedness secured by
any such Lien shall at no time exceed 100% of the greater of the original
purchase price of such property at the time it was acquired and the fair
market value of such property as reasonably determined by a Responsible
Officer of the Company in good faith thereafter, PLUS fees and other costs
related to the financing or refinancing thereof which have been agreed upon
in an arm's length manner;
(i) Liens incurred in connection with accounts receivable sale
transactions entered into by Grace New York or its Subsidiaries;
(j) Liens securing Contractual Obligations of any Subsidiary to Grace
New York, the Company or any Domestic Subsidiary;
(k) Liens on the property, assets or revenues of any Foreign
Subsidiary; and
(l) Liens (not otherwise permitted hereunder) which secure
obligations in an aggregate amount at any time
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45
outstanding not exceeding an amount equal to 5% of the amount recorded
opposite the caption "Properties and equipment, net" (or the equivalent
caption) on the consolidated balance sheet of Grace New York and its
Subsidiaries most recently delivered to the Agent pursuant to subsection
8.1.
9.3 LIMITATION ON FUNDAMENTAL CHANGES. Convey, sell, lease, assign,
transfer or otherwise dispose of (including by merger, consolidation, sale of
stock, liquidation or dissolution) all or substantially all of the property,
assets or business of Grace New York and its Subsidiaries taken as a whole.
9.4 LIMITATION ON ASSET TRANSFERS TO FOREIGN SUBSIDIARIES. With
respect to Grace New York or any Domestic Subsidiary, convey, sell, lease,
assign, transfer or otherwise dispose of (collectively, a "transfer") any of its
property, business or assets (including, without limitation leasehold
interests), whether now owned or hereafter acquired, to any Foreign Subsidiary,
except such transfers which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
9.5 LIMITATION ON SUBORDINATED DEBT. Permit any Subsidiary of Grace
New York (other than the Company) to create, incur, assume or suffer to exist
any subordinated indebtedness other than (a) subordinated indebtedness of a
Person which becomes a Subsidiary after the date hereof to the extent such
indebtedness existed at the time such Person became a Subsidiary and was not
incurred in anticipation thereof and any refinancings of such indebtedness after
such time so long as the principal amount thereof is not increased or (b)
subordinated indebtedness of such Subsidiary held by Grace New York or any other
Subsidiary of Grace New York.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan or Note
when due in accordance with the terms thereof or hereof; or any Borrower
shall fail to pay any interest on any Loan or Note, or any other amount
payable hereunder, within five Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made, or pursuant to subsection
7.2, deemed made, by any Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
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46
Agreement shall prove to have been incorrect in any material adverse
respect on or as of the date made or deemed made; or
(c) Grace New York or any Subsidiary shall default in the observance
or performance of any agreement contained in subsection 9.1, 9.3, 9.4 or
9.5; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) Grace New York or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on, or any other amount payable
with respect to, any (A) Domestic Indebtedness (other than the Notes and
Loans) in an aggregate principal amount for all such Domestic Indebtedness
of $10,000,000 or more, or (B) Foreign Subsidiary Indebtedness (other than
the Notes and Loans) in an aggregate principal amount for all such Foreign
Subsidiary Indebtedness of $20,000,000 or more, beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement relating to any such
Indebtedness in the amounts specified in clause (i) above or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist in any case which continues
uncured or unwaived (and, if waived, without any change in the material
terms of such Indebtedness) after the expiration of all applicable grace
periods, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity;
(f) (i) Grace New York or any Principal Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or Grace New York or any such Principal Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Grace New York or any such
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47
Principal Subsidiary any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against any Grace New York or any such Principal
Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) Grace New York or any such Principal Subsidiary shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) Grace New York or any such Principal Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to,
or judicial proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of judicial
proceedings or appointment of a trustee is, in the reasonable opinion of
the Majority Banks, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Majority Banks is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist, with
respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if
any, could reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities which in the
aggregate would have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against Grace
New York or any of its Subsidiaries in aggregate amounts (not paid or fully
covered by insurance) of $10,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
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48
(i) Grace New York shall cease to own directly or indirectly of
record and beneficially free and clear of Liens at least 75% of the shares
of the issued and outstanding capital stock of the Company;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) above with respect to any of the
Borrowers, automatically the Commitments to such Borrower shall immediately
terminate and the Loans made to such Borrower hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes of such
Borrower shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Majority Banks, the Agent may, or upon the request
of the Majority Banks, the Agent shall, by notice to the Company declare the
Commitments of any or all of the Borrowers to be terminated forthwith, whereupon
such Commitments shall immediately terminate; and (ii) with the consent of the
Majority Banks, the Agent may, or upon the request of the Majority Banks, the
Agent shall, by notice of default to the Company and Grace New York, declare the
Loans hereunder made to any or all of the Borrowers (with accrued interest
thereon) and all other amounts owing by such Borrower under this Agreement and
the Notes of such Borrower to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 11. THE AGENT
11.1 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints Chemical as the Agent of such Bank under this Agreement and the other
Loan Documents, and each such Bank irrevocably authorizes Chemical, as the Agent
for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
11.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or
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49
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
11.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the Notes or any other Loan Document or for
any failure of any Loan Party to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
11.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company, Grace New York or any other
Borrower), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes and the other Loan Documents in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks and
all future holders of the Notes.
11.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice
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50
from a Bank or any Loan Party referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the Agent shall
give notice thereof to the Banks. The Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Majority Banks; PROVIDED that unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
11.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Loan Parties which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
11.7 INDEMNIFICATION. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Loan Parties and without
limiting the obligation of Grace New York, the Company and any other Borrower to
do so), ratably according to the respective amounts of their Commitments as in
effect on the date on which the claim for indemnity by the Agent is sought, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the
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51
payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; PROVIDED that no
Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of the Notes and all other amounts payable hereunder.
11.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Grace New York, the Company or any other Borrower as though the
Agent were not the Agent hereunder and under the other Loan Documents. With
respect to its Loans made or renewed by it and any Note issued to it, the Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Bank and may exercise the same as though it were not the Agent,
and the terms "Bank" and "Banks" shall include the Agent in its individual
capacity.
11.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10 days'
notice to the Banks. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Majority Banks shall appoint from among
the Banks a successor agent for the Banks, which successor agent shall be
approved by the Company, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes. After any retiring Agent's resignation as Agent,
the provisions of this subsection shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.
SECTION 12. GUARANTEES
12.1 GRACE NEW YORK GUARANTEE. Grace New York hereby unconditionally
and irrevocably guarantees to the Agent and the Banks the prompt and complete
payment and performance by each of the Borrowers when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing to the Agent
and the Banks by such Borrowers. This guarantee (the "GRACE NEW YORK
GUARANTEE") shall remain in full force and effect until the Obligations of each
of the Borrowers are indefeasibly paid in full, notwithstanding that from time
to time prior thereto any
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52
Borrower may be free from any Obligations. Grace New York agrees that whenever,
at any time, or from time to time, it shall make any payment to the Agent or any
Bank on account of its liability under this Grace New York Guarantee, it will
notify the Agent and such Bank in writing that such payment is made under this
Grace New York Guarantee for such purpose. No payment or payments made by any
Borrower or any other Person or received or collected by the Agent or any Bank
from any Borrower or any other Person by virtue of any action or proceeding or
any offset or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations of such Borrower shall be deemed
to modify, reduce, release or otherwise affect the liability of Grace New York
under this Grace New York Guarantee, which shall remain obligated under this
Grace New York Guarantee, notwithstanding any such payment or payments until the
Obligations are paid in full.
12.2 COMPANY GUARANTEE. The Company hereby unconditionally and
irrevocably guarantees to the Agent and the Banks, the prompt and complete
payment and performance by each of the other Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations owing to the
Agent and the Banks by such Borrowers. This guarantee (the "COMPANY GUARANTEE")
shall remain in full force and effect until the Obligations of each such
Borrower are indefeasibly paid in full, notwithstanding that from time to time
prior thereto any such Borrower may be free from any Obligations. The Company
agrees that whenever, at any time, or from time to time, it shall make any
payment to the Agent or any Bank on account of its liability under this Company
Guarantee, it will notify the Agent and such Bank in writing that such payment
is made under this Company Guarantee for such purpose. No payment or payments
made by any such Borrower or any other Person or received or collected by the
Agent or any Bank from any such Borrower or any other Person by virtue of any
action or proceeding or any offset or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Obligations of such
Borrowers shall be deemed to modify, reduce, release or otherwise affect the
liability of the Company under this Company Guarantee, which shall remain
obligated under this Company Guarantee, notwithstanding any such payment or
payments until the Obligations of such Borrowers are paid in full.
12.3 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in the Grace New York Guarantee and the
Company Guarantee (together, the "GUARANTEES", each a "GUARANTEE"), each of
Grace New York and the Company (together, the "GUARANTEEING PARTIES," each a
"GUARANTEEING PARTY") hereby irrevocably waives all rights which may have arisen
in connection with its Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section 509 thereof, under
common law or otherwise) of the Agent or any Bank against the Company or any
other Borrowers (together, the "GUARANTEED PARTIES", each a
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53
"GUARANTEED PARTY") for the payment of the Obligations. Each Guaranteeing Party
hereby further irrevocably waives all contractual, common law, statutory or
other rights of reimbursement, contribution, exoneration or indemnity (or any
similar right) from or against any Guaranteed Party or Parties or any other
Person which may have arisen in connection with its Guarantee. So long as the
Obligations remain outstanding, if any amount shall be paid by or on behalf of
any Guaranteed Party to the Guaranteeing Party on account of any of the rights
waived in this subsection, such amount shall be held by such Guaranteeing Party
in trust, segregated from other funds of such Guaranteeing Party, and shall,
forthwith upon receipt by such Guaranteeing Party, be turned over to the Agent
in the exact form received by such Guaranteeing Party (duly endorsed by such
Guaranteeing Party to the Agent, if required), to be applied against the
Obligations of such Guaranteed Party or Parties, whether matured or unmatured,
in such order as the Agent may determine. The provisions of this subsection as
they apply to each of the Guaranteeing Parties shall survive the payment in full
of the Obligations of its Guaranteed Party or Parties.
12.4 AMENDMENTS, ETC., WITH RESPECT TO THE OBLIGATIONS. Each
Guaranteeing Party shall remain obligated under its Guarantee notwithstanding
that, without any reservation of rights against such Guaranteeing Party, and
without notice to or further assent by such Guaranteeing Party, any demand for
payment of any of the Obligations made by the Agent or any Bank may be rescinded
by the Agent or such Bank, and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Agent or any Bank, and this Agreement, the Notes and the other Loan
Documents may be amended, modified, supplemented or terminated, in whole or in
part, as the Agent or the Banks (or the Majority Banks, as the case may be) may
deem advisable from time to time in accordance with the provisions of subsection
13.1(a), and any collateral security, guarantee or right of set-off at any time
held by the Agent or any Bank for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Agent nor any Bank
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for the obligations of either
Guaranteeing Party under its Guarantee or any property subject thereto.
12.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guaranteeing Party
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Agent or any Bank
upon its Guarantee or acceptance of its Guarantee; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred
in reliance upon the Guarantees; and all
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54
dealings between the Borrowers and Grace New York, on the one hand, and the
Agent and the Banks, on the other, shall likewise be conclusively presumed to
have been had or consummated in reliance upon the Guarantees. Each Guaranteeing
Party waives diligence, presentment, protest, notice of intent to accelerate,
notice of acceleration, demand for payment and notice of default or nonpayment
to or upon any Guaranteed Party or such Guaranteeing Party with respect to the
Obligations. The Guarantees shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of this Agreement, any Note, any other Loan Document, any of the
Obligations or any collateral security therefor or guarantee or right of set-off
with respect thereto at any time or from time to time held by the Agent or any
Bank, (b) any defense, offset or counterclaim (other than a defense of payment
or performance) which may at any time be available to or be asserted by any of
the Guaranteed Parties against the Agent or any Bank or (c) any other
circumstance whatsoever (with or without notice to or knowledge of any of the
Guaranteed Parties or such Guaranteeing Party) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any of the
Guaranteed Parties for the Obligations of such Guaranteed Party, or of such
Guaranteeing Party under its Guarantee, in bankruptcy or in any other instance.
When the Agent is pursuing its rights and remedies hereunder against either
Guaranteeing Party, the Agent or any Bank may, but shall be under no obligation
to, pursue such rights and remedies as it may have against its Guaranteed Party
or any other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by the
Agent or any Bank to pursue such other rights or remedies or to collect any
payments from such Guaranteed Party or such other Person or to realize upon any
such collateral security or guarantee or to exercise such right of offset or any
release of such Guaranteed Party or such other Person or of any such collateral
security, guarantee or right of offset, shall not relieve such Guaranteeing
Party of any liability under its Guarantee, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Agent and the Banks against such Guaranteeing Party.
12.6 REINSTATEMENT. Each Guarantee shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations of any Guaranteed Party thereunder is
rescinded or must otherwise be restored or returned by the Agent or any Bank
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
such Guaranteed Party or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, such Guaranteed
Party or any substantial part of any of its property, or otherwise, all as
though such payments had not been made.
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55
12.7 PAYMENTS. Each Guaranteeing Party hereby agrees that the
Obligations will be paid to the Agent for the benefit of the Agent and the
Banks, as the case may be, without set-off or counterclaim in Dollars or
Alternative Currency, as appropriate, in immediately available funds at the
office of the Agent located at 270 Park Avenue, New York, New York 10017.
SECTION 13. MISCELLANEOUS
13.1 AMENDMENTS AND WAIVERS; REPLACEMENT OF BANKS. (a) Neither this
Agreement, any Note, any other Loan Document, nor any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this subsection. With the written consent of the Majority Banks,
the Agent, Grace New York and the Company may, from time to time, enter into
written amendments, supplements or modifications hereto and to the Notes, if
any, and the other Loan Documents for the purpose of adding any provisions to
this Agreement or the Notes, if any, or the other Loan Documents or changing in
any manner the rights of the Banks, Grace New York or of the Borrowers hereunder
or thereunder or waiving, on such terms and conditions as the Agent may specify
in such instrument, any of the requirements of this Agreement or the Notes, if
any, or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (a) reduce the amount or extend the maturity of
any Loan or Note or any installment thereof, or reduce the rate or extend the
time of payment of interest thereon, or reduce any fee payable to any Bank
hereunder, or change the amount of any Bank's Commitment, in each case without
the consent of the Bank affected thereby, or (b) amend, modify or waive any
provision of this subsection or reduce the percentage specified in the
definition of Majority Banks, or consent to the assignment or transfer by Grace
New York or any Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, or amend, modify or waive any provision
of Section 12, in each case without the written consent of all the Banks, or (c)
amend, modify or waive any provision of Section 11 without the written consent
of the then Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding upon
Grace New York, the Borrowers, the Banks, the Agent, all future holders of the
Notes, if any, and all future obligees under the Loans. In the case of any
waiver, Grace New York, the Borrowers, the Banks and the Agent shall be restored
to their former position and rights hereunder and under the outstanding Loans or
Notes, if any, and any other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
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56
(b) Notwithstanding anything to the contrary contained in subsection
13.1(a), so long as no Default or Event of Default has occurred and is
continuing the Borrowers and Grace New York shall be permitted in their
discretion (but, if any Revolving Credit Loans are then outstanding, with the
consent of the Majority Banks (which consent shall not be unreasonably
withheld)) to amend this Agreement to replace one or more Banks without the
consent of any Bank to be so replaced pursuant to this subsection 13.1(b) (a
"REPLACED BANK") and to provide for (w) the termination of the Commitments of
such Replaced Bank, (x) the addition to this Agreement of one or more other
banking institutions, or an increase in the Commitments of one or more of the
other Banks (with the consent of such other Banks), so that the total
Commitments after giving effect to such amendment shall be in the same amount as
the total Commitments immediately before giving effect to such amendment, (y) if
any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new financial institutions or other Bank or Banks, as
the case may be, as may be necessary to repay in full the outstanding Loans of
such Replaced Bank together with interest thereon and all accrued fees and
indemnities with respect thereto immediately before giving effect to such
amendment and (z) such other modifications to this Agreement as may be necessary
to effect the replacement of such Replaced Bank.
(c) Notwithstanding anything to the contrary contained in paragraph
(a) or (b) of this subsection 13.1, if as a result of a change in any
Requirement of Law after the date hereof any Borrower or Grace New York has
become obligated to, or reasonably believes that it will become obligated to pay
to any Bank any increased amount pursuant to subsection 5.11, 5.12 or 5.13, and
such Bank shall not have waived payment of such increased amounts, then the
Borrowers and Grace New York may, if no Default or Event of Default has occurred
and is continuing and payment of any such increased amounts as have become due
has been made or appropriately provided for, upon five Business Days' notice to
the Agent and such Bank, amend this Agreement, without the consent of any Bank
or the Agent, to replace any one or more of the Banks to which such increased
amounts have become payable or would become payable and to provide for the
matters referred to in clauses (w), (x), (y) and (z) of subsection 13.1(b), and
such replaced Bank or Banks shall be deemed to be Replaced Banks for purposes of
such clauses.
13.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made on receipt, addressed as follows
in the case of the Company, Grace New York and the Agent, as set forth in
paragraph 5 of the Notice of Additional Borrower relating to any Borrower other
than the Company, in the case of such other Borrower, and as set forth in
Schedule I in the case of the other parties hereto, or to such other address as
may be hereafter
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57
notified by the respective parties hereto and any future holders of the Notes,
if any, or any future obligees under the Loans:
The Company: W. R. Grace & Co.-Conn
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
Telex: TXT 1177786
Answerback: WRGUT
Telecopy: (407) 362-1944
Telephone: (407) 362-1949
Grace New
York: W. R. Grace & Co.
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
Telex: TXT 1177786
Answerback: WRGUT
Telecopy: (407) 362-1944
Telephone: (407) 362-1949
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: R. Terry Kennon
Telecopy: (212) 270-5453
Telephone: (212) 270-2112
13.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
13.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes, if any.
13.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and any Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and
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58
thereby, including, without limitation, the fees and disbursements of counsel to
the Agent, (b) to pay or reimburse each Bank and the Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, any Notes, the other Loan Documents and any such
other documents, including, without limitation, fees and disbursements of
counsel to the Agent and to the several Banks, and (c) to pay, indemnify, and
hold each Bank and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other transactional taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, any Notes, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Bank and the Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery and performance by the Loan Parties, and administration and
enforcement by the Agent and the Banks of this Agreement, any Notes and the
other Loan Documents and any such other documents (all the foregoing,
collectively, the "indemnified liabilities"), PROVIDED, that the Company shall
have no obligation hereunder to the Agent or any Bank with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Bank, (ii) legal proceedings commenced
against the Agent or any such Bank by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, or (iii) legal proceedings commenced
against the Agent or any such Bank by any other Bank or by any Transferee (as
defined in subsection 13.6). The agreements in this subsection shall survive
repayment of the Loans or Notes, if any, and all other amounts payable
hereunder.
13.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS.
(a) This Agreement shall be binding upon and inure to the benefit of
Grace New York, the Borrowers, the Banks, the Agent, all future holders of the
Notes, if any, all future obligees under the Loans and their respective
successors and assigns, except that neither Grace New York nor any Borrower may
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("PARTICIPANTS") participating interests in any Loan
owing to such Bank, any Note held by such Bank, any Commitments of such
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59
Bank or any other interest of such Bank hereunder and under the other Loan
Documents. In the event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Note, if any, and the obligee under any such Loan for all purposes
under this Agreement and the other Loan Documents, and Grace New York, the
Borrowers and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the other Loan Documents. Each of Grace New York and each of the Borrowers
agrees that if amounts outstanding under this Agreement and the Loans or the
Notes, if any, are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement and any Loan or
Note to the same extent as if the amount of its participating interest were
owing directly to it as a Bank under this Agreement or any Loan or Note,
PROVIDED that such Participant shall only be entitled to such right of set-off
if it shall have agreed in the agreement pursuant to which it shall have
acquired its participating interest to share with the Banks the proceeds thereof
as provided in subsection 13.7. Each of Grace New York and each of the
Borrowers also agrees that each Participant shall be entitled to the benefits of
subsections 5.11, 5.12, 5.13 and 13.5 with respect to its participation in the
Commitments and the Loans outstanding from time to time; PROVIDED, that no
Participant shall be entitled to receive any greater amount pursuant to such
subsections than the transferor Bank would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Bank
to such Participant had no such transfer occurred.
(c) Any Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to any Bank or
any affiliate thereof and, with the consent of the Company and upon notice to
the Agent, to one or more additional banks or financial institutions
("PURCHASING BANKS") all or any part of its rights and obligations under this
Agreement and the Loans or the Notes, if any, pursuant to a Commitment Transfer
Supplement, substantially in the form of Exhibit H, executed by such Purchasing
Bank, such transferor Bank (and, in the case of a Purchasing Bank that is not
then a Bank or an affiliate thereof, by the Company and the Agent) and delivered
to the Agent for its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and after the Transfer
Effective Date determined pursuant to such Commitment Transfer Supplement, (x)
the Purchasing Bank thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations
of a Bank hereunder with a Commitment as set forth therein, and (y) the
transferor Bank
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60
thereunder shall, to the extent provided in such Commitment Transfer Supplement,
be released from its obligations under this Agreement (and, in the case of a
Commitment Transfer Supplement covering all or the remaining portion of a
transferor Bank's rights and obligations under this Agreement, such transferor
Bank shall cease to be a party hereto). Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Bank and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Bank of all or a portion of the rights and obligations of such
transferor Bank under this Agreement and the Loan or the Notes, if any. On or
prior to the Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, the relevant Borrower, at its own expense, if the
Purchasing Bank so requests, shall execute and deliver to the Agent in exchange
for any surrendered Revolving Credit Note and Bid Loan Note a new Revolving
Credit Note and Bid Loan Note to the order of such Purchasing Bank in an amount
equal to the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, if the transferor Bank has retained a Commitment hereunder, new
Notes to the order of the transferor Bank in an amount equal to the Commitment
retained by it hereunder. Such new Notes shall be dated the Closing Date and
shall otherwise be in the form of the Notes replaced thereby. Any Notes
surrendered by the transferor Bank shall be returned by the Agent to the Company
marked "cancelled".
(d) The Agent shall maintain at its address referred to in subsection
13.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Banks and the Commitment of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and Grace New York, the Borrowers, the Agent and the
Banks may treat each Person whose name is recorded in the Register as the owner
of the Loan recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by Grace New York, the Borrowers or any Bank
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by
a transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank
that is not then a Bank or an affiliate thereof, by the Company and the Agent)
together with payment to the Agent of a registration and processing fee of $500,
the Agent shall (i) promptly accept such Commitment Transfer Supplement (ii) on
the Transfer Effective Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Banks and the Company.
(f) Each of Grace New York and the Borrowers authorizes each Bank to
disclose to any Participant or Purchasing
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61
Bank (each, a "TRANSFEREE") and any prospective Transferee any and all financial
information in such Bank's possession concerning such Borrower and its
affiliates which has been delivered to such Bank by or on behalf of Grace New
York, the Company or such Borrower pursuant to this Agreement or which has been
delivered to such Bank by or on behalf of Grace New York, the Company or such
Borrower in connection with such Bank's credit evaluation of such Borrower and
its affiliates prior to becoming a party to this Agreement.
(g) If, pursuant to this subsection, any interest in this Agreement
or any Note is transferred to any Transferee which is organized under the laws
of any jurisdiction other than the United States or any state thereof, the
transferor Bank shall cause such Transferee, concurrently with the effectiveness
of such transfer, (i) to represent to the transferor Bank (for the benefit of
the transferor Bank, the Agent, Grace New York and the Borrowers) that under
applicable law and treaties no taxes will be required to be withheld by the
Agent, Grace New York, the Borrowers or the transferor Bank with respect to any
payments to be made to such Transferee in respect of the Loans, (ii) to furnish
to the transferor Bank (and, in the case of any Purchasing Bank registered in
the Register, the Agent, Grace New York and the Company) either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
such Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the transferor Bank, the Agent, Grace New York and the Company) to
provide the transferor Bank (and, in the case of any Purchasing Bank registered
in the Register, the Agent, Grace New York and the Company) a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such Transferee, and
to comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
(h) Nothing herein shall prohibit any Bank from pledging or assigning
any Note to any Federal Reserve Bank in accordance with applicable law.
13.7 ADJUSTMENTS; SET-OFF.
(a) If any Bank (a "BENEFITTED BANK") shall at any time receive any
payment of all or part of its Revolving Credit Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 10(f), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Bank, if any, in respect of such other
Bank's Revolving Credit Loans, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loan,
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62
or shall provide such other Banks with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Bank to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Banks; PROVIDED, HOWEVER, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. Each Borrower agrees that
each Bank so purchasing a portion of another Bank's Loan may exercise all rights
of payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, each Bank shall have the right, without prior notice to Grace New York and
the Borrowers, any such notice being expressly waived by Grace New York and the
Borrowers, to the extent permitted by applicable law, upon any amount not being
paid when due and payable by any Borrower hereunder or under the Notes (whether
at the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank or any branch or agency thereof to or for the credit or the
account of Grace New York or such Borrower. Each Bank agrees promptly to notify
Grace New York, the Borrowers and the Agent after any such set-off and
application made by such Bank, PROVIDED that the failure to give such notice
shall not affect the validity of such set-off and application.
13.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with Grace New York, the Company and the Agent.
13.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 INTEGRATION. This Agreement represents the agreement of Grace
New York, each Borrower, the Agent and the Banks with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the
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63
Agent or any Bank relative to subject matter hereof not expressly set forth or
referred to herein, in the other Loan Documents or in any documentation entered
into pursuant to subsection 3.1(b).
13.11 GOVERNING LAW. THIS AGREEMENT (INCLUDING SECTION 12) AND THE
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
13.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) Each of Grace New
York, each Borrower, the Agent and the Banks hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York sitting in New York County, the courts of the United
States of America for the Southern District of New York, and the appellate
courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Grace New York or such Borrower at its address set forth in
subsection 13.2 or, with respect to Borrowers other than the Company, the
Notice of Additional Borrower relating to such Borrower or at such other
address of which the Agent shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
(b) Each Borrower other than the Company hereby appoints and empowers
each of Grace New York and the Company, 1114 Avenue of the Americas, New York,
New York 10036-7794,
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64
Attention: Treasurer, as its authorized agent (the "PROCESS AGENT") to receive
on behalf of such Borrower service of any and all process and documents in any
such legal action or proceeding brought in a New York state or federal court
sitting in New York City. It is understood that a copy of such process served
on the Process Agent will be promptly hand delivered or mailed (by registered or
certified airmail if available), postage prepaid, to such Borrower at its
address set forth in paragraph 5 of such Borrower's Notice of Additional
Borrower, but the failure of such Borrower to receive such copy shall not affect
in any way the service of such process on the Process Agent. If the Process
Agent shall refuse or be prevented from acting as agent, notice thereof shall
immediately be given by such Borrowers to the Agent by registered or certified
airmail (if available), postage prepaid, and such Borrowers agree promptly to
designate another agent in New York City, satisfactory to the Agent, to serve in
place of the Process Agent and deliver to the Agent written evidence of such
substitute agent's acceptance of such designation.
13.13 ACKNOWLEDGMENTS. Each of Grace New York, each Borrower, the
Agent and the Banks hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Bank has any fiduciary relationship
with or duty to Grace New York or such Borrower, as the case may be,
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between Agent and Banks, on one hand,
and Grace New York and the Borrowers, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) as to any matter relating to any Loan Documents, no joint venture
exists among the Banks or among Grace New York, the Borrowers and the
Banks.
13.14 WAIVERS OF JURY TRIAL. GRACE NEW YORK, THE BORROWERS, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
13.15 ADDITIONAL BORROWERS. (a) Any Subsidiary of the Company shall
have the right to become a "Borrower" hereunder, and to borrow hereunder subject
to the terms and conditions hereof applicable to a Borrower and to the following
additional conditions:
(i) the Company shall deliver a notice in substantially the form
of Exhibit I hereto (a "NOTICE OF
<PAGE>
65
ADDITIONAL BORROWER") signed by such Subsidiary and countersigned by Grace
New York and the Company to the Agent and the Banks stating that such
Subsidiary desires to become a "Borrower" under this Agreement and agrees
to be bound by the terms hereof. From the time of receipt of such Notice
of Additional Borrower by the Agent and the Banks and subject to the
satisfaction of each condition precedent contained in such Notice of
Additional Borrower, such Subsidiary shall be a "Borrower" hereunder with
all of the rights and obligations of a Borrower hereunder; PROVIDED,
HOWEVER, that the Company may revoke a Notice of Additional Borrower with
respect to any Subsidiary (other than the Company) upon five Business Days'
written notice to the Agent, so long as such Borrower has no Obligations
outstanding. No Notice of Additional Borrower relating to a Subsidiary may
be revoked as to amounts owed by such Subsidiary to the Banks under this
Agreement or any Notes or when an irrevocable notice pursuant to subsection
2.3, or a notice of acceptance pursuant to subsection 3.1 or 4.2, has been
given by such Subsidiary as a Borrower and is effective;
(ii) if such Subsidiary is a Foreign Subsidiary, if
reasonably requested by the Majority Banks, such Notice of Additional
Borrower shall be accompanied by an opinion of counsel for such Subsidiary
as specified in paragraph 4(a)(ii) of such Notice of Additional Borrower;
(iii) and the other conditions set forth in such Notice of
Additional Borrower shall have been satisfied (including the
representations and warranties contained therein being true and correct as
of the date thereof).
(b) Promptly, upon receipt of any Notice of Additional Borrower by
the Agent, the Agent shall notify each Bank thereof, and shall deliver to each
Bank copies of each document delivered to the Agent pursuant to such Notice of
Additional Borrower.
<PAGE>
66
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
W. R. GRACE & CO.-CONN.
By____________________________
Title:
W. R. GRACE & CO.
By____________________________
Title:
CHEMICAL BANK, as Agent and as
a Bank
By____________________________
Title:
ABN AMRO BANK N.V.
By____________________________
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By____________________________
Title:
THE BANK OF NOVA SCOTIA
By____________________________
Title:
<PAGE>
67
BARCLAYS BANK PLC
By____________________________
Title:
THE CHASE MANHATTAN BANK, N.A.
By____________________________
Title:
CITIBANK, N.A.
By____________________________
Title:
COMMERZBANK AG, ATLANTA AGENCY
By____________________________
Title:
CREDIT LYONNAIS ATLANTA AGENCY
By____________________________
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By____________________________
Title:
By____________________________
Title:
<PAGE>
68
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
By____________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By____________________________
Title:
NATIONSBANK OF FLORIDA, N.A.
By____________________________
Title:
SWISS BANK CORPORATION-NEW
YORK BRANCH
By____________________________
Title:
UNION BANK OF SWITZERLAND
By____________________________
Title:
<PAGE>
69
SCHEDULE I
BANK COMMITMENT
Chemical Bank $25,000,000
ABN AMRO Bank $25,000,000
Bank of America National
Trust and Savings Assoc. $25,000,000
The Bank of Nova Scotia $25,000,000
Barclays Bank PLC $25,000,000
The Chase Manhattan Bank, N.A. $25,000,000
Citibank, N.A. $25,000,000
Commerzbank AG, Atlanta Agency $25,000,000
Credity Lyonnais,
Atlanta Agency $25,000,000
Dresdner Bank AG $25,000,000
The Hongkong and Shanghai
Banking Corporation Limited $25,000,000
Morgan Guaranty Trust Company
of New York $25,000,000
NationsBank of Florida, N.A. $25,000,000
Swiss Bank Corporation
New York Branch $25,000,000
Union Bank of Switzerland $25,000,000
-----------
$375,000,000,000
----------------
----------------
<PAGE>
70
LENDING OFFICES; ADDRESS FOR NOTICES
CHEMICAL BANK
Domestic Lending Office: Chemical Bank
270 Park Avenue
New York, New York 10017
Eurodollar Lending Office: Chemical Bank
270 Park Avenue
New York, New York 10017
Address for Notices: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: B. Joseph Lillis
Telephone: (212) 270-6502
Telecopy: (212) 270-2625
Address for Bid Loan Notices: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: B. Joseph Lillis
Telephone: (212) 270-6502
Telecopy: (212) 270-2625
ABN AMRO BANK N.V.
Domestic Lending Office: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Eurodollar Lending Office: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Address for Notices: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Attention: Laura G. Fazio
Telephone: (212) 446-4158
Telecopy: (212) 832-7179
Address for Bid Loan Notices: ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Attention: Laura G. Fazio
Telephone: (212) 446-4158
Telecopy: (212) 832-7179
<PAGE>
71
THE CHASE MANHATTAN BANK, N.A.
Domestic Lending Office: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Eurodollar Lending Office: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Address for Notices: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Attention: Dwight Bush
Telephone: (212) 552-4400
Telecopy: (212) 552-7773
Address for Bid Loan Notices: The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081
Attention: Frank Angelico
Telephone: (212) 552-7482
Telecopy: (212) 552-2783
CITIBANK, N.A.
Domestic Lending Office: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Eurodollar Lending Office: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Address for Notices: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: James N. Simpson
Telephone: (212) 559-7773
Telecopy: (212) 319-8082
Address for Bid Loan Notices: Citibank, N.A.
55 Water Street
New York, New York 10043
Attention: Sam Becklar
Telephone: (212) 291-7871
Telecopy: (212) 291-3454
<PAGE>
72
COMMERZBANK AG, ATLANTA AGENCY
Domestic Lending Office: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Eurodollar Lending Office: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Address for Notices: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Andreas Bremer
Telephone: (404) 888-6500
Telecopy: (404) 888-6539
Address for Bid Loan Notices: Commerzbank AG, Atlanta Agency
Promenade Two, Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Andreas Bremer
Telephone: (404) 888-6500
Telecopy: (404) 888-6539
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Domestic Lending Office: Morgan Guaranty Trust Company of
New York
60 Wall Street
New York, New York 10260-0060
Eurodollar Lending Office: Morgan Guaranty Trust Company of
New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
<PAGE>
73
Address for Notices: Morgan Guaranty Trust Company of
New York
60 Wall Street
New York, New York 10260-0060
Attention: Karen Sharf
Telephone: (212) 648-7733
Telecopy: (212) 648-5336
Address for Bid Loan Notices: J.P. Morgan Securities, Inc.
60 Wall Street
New York, New York 10260-0060
Attention: Jerry J. Fall
Telephone: (212) 648-0767
Telecopy: (212) 648-5918
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
Domestic Lending Office: Bank of America National Trust and
Savings Association
1850 Gateway Boulevard
Concord, California 94520
Eurodollar Lending Office: Bank of America National Trust and
Savings Association
1850 Gateway Boulevard
Concord, California 94520
Address for Notices: Bank of America National Trust and
Savings Association
1230 Peachtree Street, N.E.
Suite 3600
Atlanta, Georgia 30309
Attention: Robert A. Kilgannon
Telephone: (404) 249-6901
Telecopy: (404) 249-6938
Address for Bid Loan Notices: Bank of America National Trust and
Savings Association
555 California Street - 10th Floor
San Francisco, California 94104
Attention: Carolyn D. Alberts
Telephone: (415) 622-2020
Telecopy: (415) 622-2237
THE BANK OF NOVA SCOTIA
<PAGE>
74
Domestic Lending Office: The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Eurodollar Lending Office: The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Address for Notices: The Bank of Nova Scotia
600 Peachtree Street
Suite 2700
Atlanta, Georgia 30308
Attention: Lauren Bianchi
Telephone: (404) 877-1559
Telecopy: (404) 888-8998
Address for Bid Loan Notices: The Bank of Nova Scotia
1 Liberty Plaza
New York, New York 10006
Attention: Sarah Schramm/Money
Market Department
Telephone: (212) 225-5550
Telecopy: (212) 225-5517
BARCLAYS BANK PLC
Domestic Lending Office: Barclays Bank PLC
222 Broadway
New York, New York 10038
Eurodollar Lending Office: Barclays Bank PLC
222 Broadway
New York, New York 10038
Address for Notices: Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Robert M. Bowen II
Telephone: (212) 412-7520
Telecopy: (212) 412-7589
Address for Bid Loan Notices: Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Greg Hurley
Telephone: (212) 412-2091
Telecopy: (212) 412-5002
<PAGE>
75
CREDIT LYONNAIS ATLANTA AGENCY
Domestic Lending Office: Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Eurodollar Lending Office: Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Address for Notices: Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Attention: Pascal Seris
Telephone: (404) 524-3700
Telecopy: (404) 584-5249
Address for Bid Loan Notices: Credit Lyonnais Atlanta Agency
235 Peachtree Street, Suite 1700
Atlanta, Georgia 30303
Attention: Pascal Seris
Telephone: (404) 524-3700
Telecopy: (404) 584-5249
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES
Domestic Lending Office: Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Eurodollar Lending Office: Dresdner Bank AG Grand Cayman Branch
c/o Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Address for Notices: Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Attention: Robert Grella
Telephone: (212) 574-0252
Telecopy: (212) 574-0130
<PAGE>
76
Address for Bid Loan Notices: Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005-2889
Attention: Robert Grella
Telephone: (212) 574-0252
Telecopy: (212) 574-0130
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
Domestic Lending Office: The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway
New York, New York 10005
Eurodollar Lending Office: The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway
New York, New York 10005
Address for Notices: The Hongkong and Shanghai Banking
Corporation Limited
140 Broadway - 4th Floor
New York, New York 10005
Attention: Christopher J. Casey
Telephone: (212) 658-5116
Telecopy: (212) 658-5109
Address for Bid Loan Notices: The Hongkong and Shanghai Banking
Corporation Limited
254 Canal Street
New York, New York 10005
Attention: David Liu
Telephone: (212) 925-8880
Telecopy: (212) 966-1281
SWISS BANK CORPORATION - NEW YORK BRANCH
Domestic Lending Office: Swiss Bank Corporation - New York
Branch
10 East 50th Street
New York, New York 10022
Eurodollar Lending Office: Swiss Bank Corporation - Cayman
Islands Branch
10 East 50th Street
New York, New York 10022
<PAGE>
77
Address for Notices: Swiss Bank Corporation - New York
Branch
P.O. Box 395/Church Street Station
New York, New York 10008
Attention: Sue Waterhouse
Telephone: (212) 574-3067
Telecopy: (212) 574-3852/4395
Address for Bid Loan Notices: Swiss Bank Corporation - New York
Branch
P.O. Box 395/Church Street Station
New York, New York 10008
Attention: Sue Waterhouse
Telephone: (212) 574-3067
Telecopy: (212) 574-3852/4395
UNION BANK OF SWITZERLAND
Domestic Lending Office: Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Eurodollar Lending Office: Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Address for Notices: Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telephone: (212) 715-3329
Telecopy: (212) 715-3878
Address for Bid Loan Notices: Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telephone: (212) 715-3329
Telecopy: (212) 715-3878
<PAGE>
78
NATIONSBANK OF FLORIDA, N.A.
Domestic Lending Office: NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Attention: Steve Apodaca
Assistant Vice President
Telephone: (305) 577-5746
Fax: (305) 577-5745
Eurodollar Lending Office: NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Attention: Steve Apodaca
Assistant Vice President
Telephone: (305) 577-5746
Fax: (305) 577-5745
Address for Notices: NationsBank of Florida, N.A.
One NationsBank Plaza
NC1-002-06-09
Charlotte, NC
Attention: Charlie Franklin
Telephone: (704) 386-4199
Fax: (704) 386-8694
COPY: Steve Apodaca
Assistant Vice President
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Telephone: (305) 577-5746
Fax: (305) 577-5745
Address for Bid Loan Notices: NationsBank of Florida, N.A.
One NationsBank Plaza
NC1-002-06-09
Charlotte, NC
Attention: Charlie Franklin
Telephone: (704) 386-4199
Fax: (704) 386-8694
COPY: Steve Apodaca
Assistant Vice President
NationsBank of Florida, N.A.
150 S.E. Third Ave., Suite 411
Miami, Florida 33131
Telephone: (305) 577-5746
Fax: (305) 577-5745
<PAGE>
79
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
PROMISSORY NOTE
$______________ New York, New York
September _, 1994
FOR VALUE RECEIVED, the undersigned, ________________________________,
a __________ corporation (the "Borrower"), hereby unconditionally promises to
pay on the Termination Date to the order of ________________________________
(the "BANK") at the office of Chemical Bank located at 270 Park Avenue, New
York, New York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of (a) _______________ DOLLARS
($________), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Bank to the Borrower pursuant to subsection
2.1 of the Credit Agreement hereinafter referred to (the "CREDIT AGREEMENT").
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time from the date hereof at the
rates and on the dates specified in subsection 5.1 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof (the "GRID") the date, Type and amount
of each Revolving Credit Loan made pursuant to subsection 2.1 of the Credit
Agreement, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, which endorsement shall constitute PRIMA
FACIE evidence of the accuracy of the information endorsed; PROVIDED, HOWEVER,
that the failure to make any such endorsement shall not affect the obligations
of the Borrower in respect of such Revolving Credit Loan.
This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of September 1, 1994, among the Borrower, [W. R. Grace
& Co.-Conn., a Connecticut corporation ("GRACE-CONN."),] W. R. Grace & Co., a
New York corporation, any [other] subsidiary of [Grace-Conn.][the Borrower]
which has previously delivered a Notice of Additional Borrower, the Bank, the
other banks parties thereto and Chemical Bank, as Agent, and is entitled to the
benefits thereof and is subject to optional and mandatory prepayment as set
forth therein.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then
<PAGE>
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and, except as otherwise provided in the Credit
Agreement, all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their
defined meanings unless otherwise defined herein. This Note shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York.
[NAME OF BORROWER]
By____________________________
Title:
<PAGE>
Schedule 1 to
REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND PAYMENTS OF ABR LOANS
DATE AMOUNT OF AMOUNT OF AMOUNT OF ABR AMOUNT OF NOTATION
---- LOANS PRINCIPAL LOANS EURODOLLAR MADE BY
----- REPAID CONVERTED LOANS -------
------ CONVERTED CONVERTED
INTO INTO
EURODOLLAR ABR
LOANS LOANS
----- -----
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<PAGE>
Schedule 2 to
REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND PAYMENTS OF EURODOLLAR LOANS
DATE AMOUNT AMOUNT OF AMOUNT OF AMOUNT OF EURO- NOTATION
---- OF PRINCIPAL EURODOLLAR ABR LOANS DOLLAR MADE BY
LOANS REPAID LOANS CONVERTED RATE AND -------
----- ------ CONVERTED INTO LENGTH
INTO ABR EURODOLLAR OF
LOANS LOANS INTEREST
----- ----- PERIOD
------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<PAGE>
EXHIBIT B
FORM OF BID LOAN NOTE
PROMISSORY NOTE
$______________ New York, New York
_____________, 199_
FOR VALUE RECEIVED, the undersigned, _______________________________,
a __________ corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of _________________________________ (the "BANK") at the office
of Chemical Bank located at 270 Park Avenue, New York, New York 10017, in lawful
money of the United States of America and in immediately available funds, the
principal amount of (a) _______________ DOLLARS ($________), or, if less, (b)
the aggregate unpaid principal amount of each Bid Loan which is made by the Bank
to the Borrower pursuant to Section 4 of the Credit Agreement hereinafter
referred to (the "CREDIT AGREEMENT"). The principal amount of each Bid Loan
evidenced hereby shall be payable on the maturity date therefor set forth on the
schedule annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof (the "GRID"). The
Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount of each Bid Loan evidenced hereby, at the rate per annum
set forth in respect of such Bid Loan on the Grid, calculated on the basis of a
year of 360 days and actual days elapsed from the date of such Bid Loan until
the due date thereof (whether at the stated maturity, by acceleration or
otherwise) and thereafter at the rates determined in accordance with subsection
4.4 of the Credit Agreement. Interest on each Bid Loan evidenced hereby shall
be payable on the date or dates set forth in respect of such Bid Loan on the
Grid. Bid Loans evidenced by this Note may not be prepaid without the consent
of the Bank.
The holder of this Note is authorized to endorse on the Grid the date,
amount, interest rate, interest payment dates and maturity date in respect of
each Bid Loan made pursuant to subsection 4.2 of the Credit Agreement, each
payment of principal with respect thereto, which endorsement shall constitute
PRIMA FACIE evidence of the accuracy of the information endorsed; PROVIDED,
HOWEVER, that the failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Bid Loan.
This Note is one of the Bid Loan Notes referred to in the Credit
Agreement dated as of September 1, 1994, among the Borrower, [W. R. Grace & Co.-
Conn., a Connecticut corporation ("GRACE-CONN."),] W. R. Grace & Co., a New York
corporation, any [other] subsidiary of [Grace-Conn.][the Borrower] which has
<PAGE>
2
previously delivered a Notice of Additional Borrower, the Bank, the other banks
parties thereto and Chemical Bank, as Agent, and is entitled to the benefits
thereof.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided therein.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and, except as otherwise provided in the Credit
Agreement, all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their
defined meanings unless otherwise defined herein. This Note shall be governed
by, and construed and interpreted in accordance with, the law of the State of
New York.
[NAME OF BORROWER]
By___________________________
Title:
<PAGE>
SCHEDULE OF BID LOANS
Amount Interest
Date of of Interest Payment Maturity Payment Author-
Loan Loan Rate Dates Date Date ization
- ------- ------ -------- -------- -------- ------- -------
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
_______ ______ ________ ________ ________ _______ _______
<PAGE>
EXHIBIT C
FORM OF BID LOAN CONFIRMATION
___________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Credit Agreement, dated as of September 1,
1994, among the undersigned, W. R. Grace & Co.-Conn., the other Borrowers from
time to time parties thereto, W. R. Grace & Co., the Banks named therein, and
Chemical Bank, as Agent (as the same may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are
used herein as therein defined.
In accordance with subsection 4.2 of the Credit Agreement, the
undersigned accepts the offers by Bid Loan Bank(s) to make Bid Loans to the
undersigned on __________, 19__ [Bid Loan Date] under said subsection 4.2 in the
(respective) amount(s) set forth on the attached list of Bid Loans offered.
Very truly yours,
[NAME OF BORROWER]
By___________________
Title:
[Borrower to attach Bid Loan offer list prepared by Agent with accepted amount
entered by the Borrower to right of each Bid Loan offer.]
<PAGE>
EXHIBIT D
FORM OF BID LOAN OFFER
__________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Credit Agreement, dated as of September 1,
1994, among W. R. Grace & Co.-Conn., the other Borrowers from time to time
parties thereto W. R. Grace & Co., the Banks named therein, and Chemical Bank,
as Agent (as the same may be amended, supplemented or otherwise modified, the
"CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein as
therein defined.
In accordance with subsection 4.2 of the Credit Agreement, the
undersigned Bank offers to make Bid Loans thereunder in the following amounts
with the following maturity dates:
Bid Loan Date: __________, 19__
Aggregate Maximum Amount: $___________
MATURITY DATE 1 ___: MATURITY DATE 2 ___: MATURITY DATE 3 ___:
Maximum Amount $___ Maximum Amount $___ Maximum Amount $___
Rate ___% Rate ___% Rate ___%
Very truly yours,
[NAME OF BIDDING BANK]
By: _________________________
Name:
Title:
Telephone No.:
Fax No.:
<PAGE>
EXHIBIT E
FORM OF BID LOAN REQUEST
__________, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Credit Agreement, dated as of September 1,
1994, among the undersigned, [W. R. Grace & Co.-Conn.,] W. R. Grace & Co., the
Banks named therein and Chemical Bank, as Agent for such Banks (as the same may
be amended, supplemented or otherwise modified, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein as therein defined.
This is a Bid Loan Request made pursuant to subsection 4.2 of the
Credit Agreement requesting quotes for the following Bid Loans(1):
Aggregate Principal Amount $_______ $_______ $_______
Bid Loan Date _______ _______ _______
Interest Period _______ _______ _______
Maturity Date _______ _______ _______
Interest Payment Dates _______ _______ _______
Very truly yours,
[NAME OF BORROWER]
By:__________________________
Title:
- ---------------
(1) Pursuant to the Credit Agreement, a Bid Loan Request may be transmitted in
writing, by telex or by facsimile transmission, or by telephone,
immediately confirmed by telex or facsimile transmission. In any case, a
Bid Loan Request shall contain the information specified in the second
paragraph of this form.
<PAGE>
EXHIBIT F-1
FORM OF OPINION OF COUNSEL TO THE COMPANY AND GRACE NEW YORK
________________, 19__
To each Bank from time to time
party to the Credit Agreement
dated as of September 1, 1994
among W. R. Grace & Co.-Conn.,
W. R. Grace & Co., the other
Borrowers from time to time
party thereto, the Banks named
therein and Chemical Bank,
as Agent
Ladies and Gentlemen:
As General Counsel of W. R. Grace & Co., a New York corporation
("GRACE NEW YORK"), and W. R. Grace & Co.-Conn., a Connecticut corporation
("COMPANY"), I have been requested to render my opinion in connection with the
Credit Agreement dated as of September 1, 1994 among you, the Company, the other
Borrowers from time to time party thereto, and Grace New York ("CREDIT
AGREEMENT"). I am rendering this opinion pursuant to subsection 7.1(d)(i) of
the Credit Agreement. All terms used in this opinion that are defined in the
Credit Agreement have the respective meanings assigned to them therein.
I have examined or caused to be examined the Restated Certificate of
Incorporation and the By-laws of the Company, each as amended to date, the
Certificate of Incorporation and the By-laws of Grace New York, each as amended
to date, the records of the meetings and other corporate proceedings of the
Company and of Grace New York, the Credit Agreement, any Notes being delivered
to you this day, and such other corporate records, agreements, certificates and
documents as I deem necessary for the purposes of the opinion hereinafter
expressed. For purposes of this opinion I have assumed that all Notes issued
from time to time hereafter will be issued in accordance with the terms of the
Credit Agreement.
Based upon the foregoing, and subject to the qualifications stated
below, I am of the following opinion:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of Connecticut, and has the corporate power and
authority under such laws, and is duly qualified and in good standing in each
jurisdiction in which, in the opinion of the Company, such qualification is
required, to own and operate its properties, to carry on its
<PAGE>
2
business and to execute, deliver and perform its obligations under the Credit
Agreement and the Notes.
2. Grace New York is a corporation duly organized and validly
existing in good standing under the laws of New York and has the corporate power
and authority under such laws, and is duly qualified and in good standing in
each jurisdiction in which, in the opinion of Grace New York, such qualification
is required, to own and operate its properties, to carry on its business and to
execute, deliver and perform its obligations under the Credit Agreement.
3. The execution, delivery and performance by the Company of the
Credit Agreement and any Notes made by the Company, the borrowings by the
Company thereunder and the consummation of the other transactions contemplated
thereby have been duly and validly authorized by all necessary corporate action
of the Company.
4. The execution, delivery and performance by Grace New York of the
Credit Agreement and the consummation of the transactions contemplated thereby,
including, without limitation, the guaranty by Grace New York of the Company's
Obligations, have been duly and validly authorized by all necessary corporate
action of Grace New York.
5. The Credit Agreement has been duly executed and delivered by duly
authorized officers of the Company and Grace New York and each of the Notes, if
any, of the Company being delivered to you today has been duly executed and
delivered by a duly authorized officer of the Company.
6. The Credit Agreement and the Notes made by the Company constitute,
and each other Note executed and delivered to you from time to time by the
Company hereafter will constitute, legal, valid and binding obligations of the
Company and Grace New York, as the case may be, enforceable in accordance with
their respective terms.
7. No consent of any other party (including, without limitation,
stockholders of the Company or of Grace New York), and no authorization,
license, consent or approval from any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof, is required in connection
with the execution, delivery and performance by the Company and Grace New York,
as the case may be, or the validity or enforceability, of the Credit Agreement
or the Notes.
8. The execution, delivery and the performance by the Company and
Grace New York of the Credit Agreement and any Notes made by the Company, as the
case may be, will not (A) to the best of my knowledge, violate any law or
regulation applicable to the Company or Grace New York, (B) conflict with, or
result in a
<PAGE>
3
breach or violation of, the Restated Certificate of Incorporation or By-Laws,
each as amended, of the Company, the Certificate of Incorporation or By-laws,
each as amended, of Grace New York or, to the best of my knowledge, any material
indenture, loan agreement or other agreement or instrument to which the Company
or Grace New York is a party or under which the Company or Grace New York or any
of their respective properties are or may be bound, or (C) to the best of my
knowledge, violate any order, award, judgment, determination, writ, injunction
or decree applicable to the Company or Grace New York of any regulatory,
administrative or other governmental or public body or authority, arbitrator or
court of the United States or any state or other jurisdiction thereof.
9. To the best of my knowledge, no litigation, proceeding,
investigation or inquiry is pending or threatened with respect to the
transactions contemplated by the Credit Agreement.
10. Neither Grace New York nor the Company is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications:
(a) My opinion set forth in paragraph 6 above is subject to the
qualification that the enforceability of the Company's and Grace New York's
obligations under the Credit Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(b) I express no opinion as to the enforceability of the provisions
of the Credit Agreement that purport to establish evidentiary standards or to
make determinations conclusive.
(c) I express no opinion as to the enforceability of the provisions
of the Credit Agreement insofar as they relate to post-judgment interest rates.
(d) I express no opinion as to the enforceability of subsection 3.3
of the Credit Agreement. I note that (i) a New York statute provides that with
respect to a foreign currency obligation a New York State court shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) with respect to a
foreign currency obligation a federal court of the United States sitting in New
York may award
<PAGE>
4
judgment in U.S. dollars, provided that I express no opinion as to the rate of
exchange that such court would apply.
(e) I express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit Agreement, or any consent or
authorization thereunder, relating to the rights of the Company or Grace New
York, or duties owing to any of them, existing or arising as a matter of law.
(f) I express no opinion as to the provisions in subsection 13.6(b)
of the Credit Agreement purporting to grant a right of set-off to Participants.
(g) I express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) I express no opinion as to any indemnification obligations of the
Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
(i) I express no opinion as to any laws other than those of the
states of Connecticut and New York and the federal laws of the United States.
This opinion is limited to the specific issues addressed herein and is
limited in all respects to laws and interpretations thereof and other matters
existing on the date hereof. I do not undertake to update this opinion for
changes in such laws, interpretations or matters. This opinion is furnished
solely for your benefit in connection with the transactions contemplated by the
Credit Agreement, is not to be relied upon for any other purpose and may not be
made available to any other person, firm or entity (other than a Transferee or a
prospective Transferee referred to in subsection 13.6(f) of the Credit
Agreement) without my express prior written consent, except as may be required
by law or in response to any judicial or regulatory requirement, order or
decree.
Very truly yours,
<PAGE>
5
EXHIBIT F-2
FORM OF OPINION OF SIMPSON THACHER & BARTLETT
__________ __, 1994
To the banks listed on Schedule I hereto
Ladies and Gentlemen:
We have acted as special New York counsel to Chemical Bank, as agent,
in connection with the preparation, execution and delivery of the Credit
Agreement, dated as of September 1, 1994 (the "Credit Agreement"), among W. R.
Grace & Co.-Conn., W. R. Grace & Co., the banks from time to time party thereto
and Chemical Bank, as agent for said banks.
This opinion is delivered to you pursuant to the Credit Agreement.
Terms used herein which are defined in the Credit Agreement shall have the
respective meanings set forth in the Credit Agreement, unless otherwise defined
herein.
We have examined the following documents:
(j) a copy of the Credit Agreement; and
(k) a copy of the opinion of the General Counsel of the Company and
Grace New York, addressed to you and dated the date hereof, in respect of
the Credit Agreement.
In such examination we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
To the extent that our opinion expressed below relates to matters not
expressly covered hereby that are set forth in the above-mentioned opinion of
the General Counsel of the Company and Grace New York, we have assumed without
independent investigation the correctness of the matters set forth in such
opinion, our opinion being subject to the assumptions, qualifications and
limitations set forth in such opinion with respect thereto.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we hereby advise you that in our opinion, the Credit
Agreement constitutes a valid and legally binding obligation of each of the
Company and Grace New York enforceable against each of them in accordance with
its terms.
<PAGE>
6
Our opinion is subject to the following qualifications:
(a) Our opinion set forth above is subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law),
and an implied covenant of good faith and fair dealing.
(b) We express no opinion as to the enforceability of the provisions
of the Credit Agreement that purport to establish evidentiary standards or to
make determinations conclusive.
(c) We express no opinion as to the enforceability of the provisions
of the Credit Agreement insofar as they relate to post-judgment interest rates.
(d) We express no opinion as to the enforceability of subsection 3.3
of the Credit Agreement. We note that (i) a New York statute provides that with
respect to a foreign currency obligation a New York State court shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) with respect to a
foreign currency obligation a U.S. Federal court sitting in New York may award
judgment in U.S. dollars, provided that we express no opinion as to the rate of
exchange that such court would apply.
(e) We express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit Agreement, or any consent or
authorization thereunder, relating to the rights of the Company or Grace New
York, or duties owing to any of them, existing or arising as a matter of law.
(f) We express no opinion as to the provisions in subsection 13.6(b)
of the Credit Agreement purporting to grant a right of set-off to Participants.
(g) We express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) We express no opinion as to any indemnification obligations of
the Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other
<PAGE>
7
than the law of the State of New York, the federal law of the United States.
This opinion is rendered to you in connection with the above-described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT G
W. R. GRACE & CO.-CONN.
W. R. GRACE & CO.
OFFICER'S CERTIFICATE
In accordance with subsection 7.1(f) of that certain Credit Agreement
(the "CREDIT AGREEMENT"), dated as of September 1, 1994 among W. R. Grace & Co.-
Conn. (the "COMPANY"), W. R. Grace & Co. ("GRACE NEW YORK"), the Banks named
therein (the "BANKS") and Chemical Bank, as Agent, each of the undersigned
Company and Grace New York hereby certifies to the Banks that:
1. Each of the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct on and as of
the date hereof as if made on and as of such date.
2. Since December 31, 1993, there has been no development or event
which has had or would reasonably be expected to have a Material Adverse
Effect.
3. No Default or Event of Default has occurred and is continuing on
the date hereof or shall have occurred and be continuing after giving
effect to the Loans to be made on the date hereof.
Capitalized terms used in this Certificate and not defined herein
shall have the meanings ascribed thereto in the Credit Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this
Certificate to be executed by its officer thereunto duly
authorized as of the ___ day of September, 1994.
W. R. GRACE & CO.-CONN.
By __________________________
[Name and Title]
W. R. GRACE & CO.
By __________________________
[Name and Title]
<PAGE>
EXHIBIT H
FORM OF COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set forth in Item
1 of Schedule I hereto, between the Transferor Bank set forth in Item 2 of
Schedule I hereto (the "TRANSFEROR BANK"), each Purchasing Bank set forth in
Item 3 of Schedule I hereto (each, a "PURCHASING BANK"), *[CHEMICAL BANK, as
agent for the Banks under the Credit Agreement described below (in such
capacity, the "AGENT") and the other Banks parties hereto].
W I T N E S S E T H :
WHEREAS, this Commitment Transfer Supplement is being executed and
delivered in accordance with subsection 13.6(c) of the Credit Agreement dated as
of September 1, 1994, among W. R. Grace & Co.-Conn., a Connecticut corporation
(the "COMPANY"), W. R. Grace & Co., a New York corporation ("GRACE NEW YORK"),
any subsidiary of the Company which has previously delivered a Notice of
Additional Borrower, the Transferor Bank and the other Banks parties thereto and
[Chemical Bank, as agent for the Banks under the Credit Agreement (in such
capacity, the "AGENT")] [the Agent] (as from time to time amended, supplemented
or otherwise modified in accordance with the terms thereof, the "CREDIT
AGREEMENT"; terms defined therein being used herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already a Bank party to
the Credit Agreement) wishes to become a Bank party to the Credit Agreement; and
WHEREAS, the Transferor Bank is selling and assigning to each
Purchasing Bank, rights, obligations and commitments under the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by the Agent of five counterparts of this Commitment
Transfer Supplement, to each of which is attached a fully completed Schedule I
and Schedule II, and each of which has been executed by the Transferor Bank and
each Purchasing Bank (and any other person required by the Credit Agreement to
execute this Commitment Transfer Supplement), the Agent will transmit to
- ---------------
* A replacement of a Bank pursuant to subsection 13.1(b) of the Credit
Agreement requires the consent of the Majority Banks (but not the Replaced
Bank, in any case) if any Revolving Credit Loans are then outstanding. All
other transfers of Commitments do not require such consent.
<PAGE>
2
the Company, the Transferor Bank and each Purchasing Bank a Transfer Effective
Notice, substantially in the form of Schedule III to this Commitment Transfer
Supplement (a "TRANSFER EFFECTIVE NOTICE"). Such Transfer Effective Notice
shall set forth, INTER ALIA, the date on which the transfer effected by this
Commitment Transfer Supplement shall become effective (the "TRANSFER EFFECTIVE
DATE"). From and after the Transfer Effective Date each Purchasing Bank shall
be a Bank party to the Credit Agreement for all purposes thereof.
2. At or before 12:00 Noon, local time of the Transferor Bank, on the
Transfer Effective Date, each Purchasing Bank shall pay to the Transferor Bank,
in immediately available funds, an amount equal to the purchase price, as agreed
between the Transferor Bank and such Purchasing Bank (the "PURCHASE PRICE"), of
the portion being purchased by such Purchasing Bank (such Purchasing Bank's
"PURCHASED PERCENTAGE") of the outstanding [Revolving Credit] Loans and other
amounts owing to the Transferor Bank under the Credit Agreement. Effective upon
receipt by the Transferor Bank of the Purchase Price from a Purchasing Bank, the
Transferor Bank hereby irrevocably sells, assigns and transfers to such
Purchasing Bank, without recourse, representation or warranty, and each
Purchasing Bank hereby irrevocably purchases, takes and assumes from the
Transferor Bank, such Purchasing Bank's Purchased Percentage of the Commitments
and the presently outstanding [Revolving Credit] Loans and other amounts owing
to the Transferor Bank under the Credit Agreement together with all instruments,
documents and collateral security pertaining thereto.
3. The Transferor Bank has made arrangements with each Purchasing
Bank with respect to (i) the portion, if any, to be paid, and the date or dates
for payment, by the Transferor Bank to such Purchasing Bank of any fees
heretofore received by the Transferor Bank pursuant to the Credit Agreement
prior to the Transfer Effective Date and (ii) the portion, if any, to be paid,
and the date or dates for payment, by such Purchasing Bank to the Transferor
Bank of fees or interest received by such Purchasing Bank pursuant to the Credit
Agreement from and after the Transfer Effective Date.
4. (a) All principal payments that would otherwise be payable from
and after the Transfer Effective Date to or for the account of the Transferor
Bank pursuant to the Credit Agreement and the Notes, if any, shall, instead, be
payable to or for the account of the Transferor Bank and the Purchasing Banks,
as the case may be, in accordance with their respective interests as reflected
in this Commitment Transfer Supplement.
(b) All interest, fees and other amounts that would otherwise accrue
for the account of the Transferor Bank from and after the Transfer Effective
Date pursuant to the Credit Agreement and the Notes, if any, shall, instead,
accrue for the account of, and be payable to, the Transferor Bank and the
<PAGE>
3
Purchasing Banks, as the case may be, in accordance with their respective
interests as reflected in this Commitment Transfer Supplement. In the event
that any amount of interest, fees or other amounts accruing prior to the
Transfer Effective Date was included in the Purchase Price paid by any
Purchasing Bank, the Transferor Bank and each Purchasing Bank will make
appropriate arrangements for payment by the Transferor Bank to such Purchasing
Bank of such amount upon receipt thereof from the Borrower.
5. On or prior to the Transfer Effective Date, the Transferor Bank
will deliver to the Agent its Notes, if any. If requested to do so by any
Purchasing Bank pursuant to subsections 2.2(c) and 4.5(c), on or prior to the
Transfer Effective Date, the Borrowers will deliver to the Agent Revolving
Credit Notes and Bid Loan Notes for such Purchasing Bank and the Transferor
Bank, in each case in principal amounts reflecting, in accordance with the
Credit Agreement, their Commitments (as adjusted pursuant to this Commitment
Transfer Supplement). As provided in subsection 13.6(c) of the Credit
Agreement, each such new Note shall be dated the Closing Date. Promptly after
the Transfer Effective Date, the Agent will send to each of the Transferor Bank
and the Purchasing Banks its new Note, if any, and will send to the Borrower the
superseded Note, if any, of the Transferor Bank, marked "Cancelled".
6. Concurrently with the execution and delivery hereof, the
Transferor Bank will provide to each Purchasing Bank (if it is not already a
Bank party to the Credit Agreement) copies of all documents delivered to such
Transferor Bank on the Effective Date in satisfaction of the conditions
precedent set forth in the Credit Agreement.
7. Each of the parties to this Commitment Transfer Supplement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer Supplement,
the Transferor Bank and each Purchasing Bank confirm to and agree with each
other and the Agent and the Banks as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, the Transferor Bank makes
no representation or warranty and assumes no responsibility with
<PAGE>
4
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, the
Notes or any other Loan Document or other instrument or document furnished
pursuant thereto; (ii) the Transferor Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition or
creditworthiness of any Loan Party or the performance or observance by any Loan
Party of any of their respective obligations under the Credit Agreement, the
Notes or any other Loan Document or other instrument or document furnished
pursuant thereto; (iii) each Purchasing Bank confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to in subsection 6.6 of the Credit Agreement, the financial statements
delivered pursuant to subsection 8.1 of the Credit Agreement, if any, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Commitment Transfer Supplement;
(iv) each Purchasing Bank will, independently and without reliance upon the
Agent, the Transferor Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (v)
each Purchasing Bank appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section 7 of the Credit
Agreement; and (vi) each Purchasing Bank agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank.
9. Each party hereto represents and warrants to and agrees with the
Agent that it is aware of and will comply with the provision of subsection
13.6(g) of the Credit Agreement.
10. Schedule II hereto sets forth the revised Commitments of the
Transferor Bank and each Purchasing Bank as well as administrative information
with respect to each Purchasing Bank.
11. This Commitment Transfer Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment
Transfer Supplement to be executed by their respective duly authorized officers
on Schedule I hereto as of the date set forth in item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO
COMMITMENT
TRANSFER
SUPPLEMENT
----------
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
-----------------------------
Re: Credit Agreement, dated as of September 1, 1994, with W. R. Grace & Co.-
Conn and ________ as Borrower[s].
Item 1 (Date of Commitment
Transfer Supplement):
Item 2 (Transferor Bank):
Item 3 (Purchasing Bank):
Item 4 (Signatures of Parties
to Commitment Transfer Supplement):
____________________, as
Transferor Bank
By:________________________
Title:
____________________, as a
Purchasing Bank
By: _______________________
Title:
<PAGE>
2
CONSENTED TO AND ACKNOWLEDGED:
W. R. GRACE & CO.-CONN.
By:___________________________
Title:
W. R. GRACE & CO.
By:___________________________
Title:
*[CHEMICAL BANK, as Agent
By:___________________________
Title:
*[MAJORITY BANKS]
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Agent
By:_____________________________
Title:
<PAGE>
SCHEDULE II
TO
COMMITMENT
TRANSFER
SUPPLEMENT
-----------
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
----------------------------------
REVISED COMMITMENT AMOUNTS:
REVISED COMMITMENT PERCENTAGE:
NEW COMMITMENT AMOUNTS:
NEW COMMITMENT PERCENTAGE:
ADDRESS FOR NOTICES:
ADDRESS FOR BID LOAN NOTICES:
EURODOLLAR LENDING OFFICE:
_________________________
_________________________
_________________________
DOMESTIC LENDING OFFICE:
________________________
________________________
________________________
<PAGE>
SCHEDULE III
TO
COMMITMENT
TRANSFER
SUPPLEMENT
------------
[Form of Transfer Effective Notice]
To: W. R. Grace & Co.-Conn.
W. R. Grace & Co.
[Transferor Bank]
[each Purchasing Bank]
The undersigned, as Agent [delegate of the Agent performing
administrative functions of the Agent] under the Credit Agreement, dated as of
September 1, 1994, among W. R. Grace & Co.-Conn., a Connecticut corporation, W.
R. Grace & Co., a New York corporation, any subsidiary of the Company which has
previously delivered a Notice of Additional Borrower, the Transferor Bank and
the other Banks parties thereto and Chemical Bank, as agent for the Banks under
the Credit Agreement (in such capacity, the "AGENT") acknowledges receipt of
five executed counterparts of a completed Commitment Transfer Supplement, dated
the date and between the parties described in Schedule I hereto. [Note: Attach
copy of Schedule I from Commitment Transfer Supplement.] Terms defined in such
Commitment Transfer Supplement are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you are advised
that the Transfer Effective Date will be ______.
2. Pursuant to such Commitment Transfer Supplement, the Transferor
Bank is required to deliver to the Agent on or before the Transfer Effective
Date its [Revolving Credit] Note[s], if any.
[3. Pursuant to such Commitment Transfer Supplement, the Borrower is
[are] required to deliver to the Agent on or before the Transfer Effective Date
the following Note, each dated ______.]
[Describe each new Note, if any, for Transferor Bank and Purchasing
Bank as to principal amount, payee and type of Note.]
4. Pursuant to such Commitment Transfer Supplement each Purchasing
Bank is required to pay its purchase price to the Transferor Bank at or before
12:00 Noon on the Transfer Effective Date in immediately available funds.
Very truly yours,
CHEMICAL BANK
By:______________________
Title:
<PAGE>
EXHIBIT I
NOTICE OF ADDITIONAL BORROWER
[Dated ____________, 199_]
The undersigned, _____________, a __________________ corporation and a
subsidiary of the Company (as defined below) (the "SUBSIDIARY"), hereby:
1. Confirms that this Notice of Additional Borrower is being
delivered pursuant to subsection 13.15(a) of that certain Credit Agreement,
dated as of September 1, 1994, (the "AGREEMENT"; terms defined therein
being used herein as therein defined), among W. R. Grace & Co.-Conn., a
Connecticut corporation (the "COMPANY"), W. R. Grace & Co., a New York
corporation, any other subsidiary of the Company which has previously
delivered a notice of additional borrower substantially similar to this
Notice of Additional Borrower, the several banks from time to time parties
thereto (the "BANKS"), and Chemical Bank, a New York banking corporation,
as agent for the Banks thereunder (in such capacity, the "AGENT").
2. States that it desires to become a "Borrower" under the Agreement
and agrees to be bound by each of the terms and provisions of the Agreement
as a "Borrower" thereunder and that, subject to the satisfaction of the
conditions to the effectiveness set forth in paragraph 4 hereof, upon
delivery of this Notice of Additional Borrower to the Agent such Subsidiary
shall be a party to the Agreement.
3. Represents and warrants as follows as of the date hereof:
(a) The representations and warranties contained in subsections
6.1, 6.2, 6.3, 6.4, 6.5, 6.9, 6.10, 6.11, 6.12 and 6.13 of the
Agreement, the provisions of said subsections of the Agreement and all
terms defined in the Agreement and appearing in said subsections shall
by this reference be deemed incorporated in the Notice of Additional
Borrower. For purposes of this paragraph (a) reference to Grace New
York, the Company and the Subsidiaries in said subsections and
definitions shall be deemed, MUTATIS MUTANDIS, to be references to
such Subsidiary.
<PAGE>
2
(b) *There are no Taxes imposed by [insert country where
Subsidiary is organized] or any political subdivision thereof or
taxing authority therein due or payable either on or by virtue of the
execution and delivery by such Subsidiary, the Agent or the Banks of
any Loan Document to which such Subsidiary is a party or on any
payment to be made by such Subsidiary pursuant thereto, except for
_____________.
(c) The aggregate value of all of the assets of such Subsidiary,
at a fair valuation, exceeds the total liabilities of such Subsidiary
(including contingent, subordinated, unmatured and unliquidated
liabilities). Such Subsidiary has the ability to pay its debts as
they mature and does not have unreasonably small capital with which to
conduct its business. For purposes of this paragraph (c), the "fair
valuation" of such assets shall be determined on the basis of that
amount which may be realized within a reasonable time, in any manner
through realization of the value of or dispositions of such assets at
the regular market value, conceiving the latter as the amount which
could be obtained for the property in question within such period by a
capable and diligent business person from an interested buyer who is
willing to purchase under ordinary selling conditions.
4. Agrees that the effectiveness of this Notice of Additional
Borrower, such Subsidiary becoming a party to the Agreement and the ability of
such Subsidiary to borrow thereunder are subject to the satisfaction of the
following conditions precedent:
(a) The Agent has received (i) an opinion from counsel to the
Company and Grace New York, who may be the General Counsel of the
Company, substantially in the form of the opinion attached as Exhibit
I-1 hereto, and (ii) if such Subsidiary is a Foreign Subsidiary, and
if reasonably requested by the Majority Banks, an opinion of counsel
for such Subsidiary to the effect that neither the Agent nor any Bank
is or will be deemed to be resident, domiciled, carrying on business
or subject to taxation in the jurisdiction where Subsidiary is
organized by reason only of the execution, performance or enforcement
of the Notice, the Agreement or the Notes made by the Subsidiary, and
that the performance by the Agent or any Bank of any action required
or permitted under the Agreement or the Notes made by the Subsidiary
will not violate any law or regulation of the jurisdiction where
Subsidiary is organized.
- ---------------
* To be made by Foreign Subsidiaries.
<PAGE>
3
(b) The Agent has received for the account of each Bank who so
requests, Notes made by such Subsidiary conforming to the requirements
of the Agreement and executed by a duly authorized officer of such
Subsidiary.
(c) The Agent has received, with an executed counterpart for
each Bank, an incumbency certificate of such Subsidiary dated the date
hereof, satisfactory in form and substance to the Agent, executed by
the officers of such Subsidiary executing any Loan Document to which
such Subsidiary is a party and the Secretary or Assistant Secretary of
such Subsidiary.
(d) The Agent has received, with a counterpart for each Bank, a
copy of the resolutions, in form and substance satisfactory to the
Agent, of the Board of Directors of such Subsidiary authorizing (i)
the execution, delivery and performance of the Agreement, this Notice
of Additional Borrower, any Notes and the other Loan Documents to
which it is a party, and (ii) the borrowings contemplated under the
Agreement, certified by the Secretary or an Assistant Secretary of
such Subsidiary as of the date hereof, which certificate states that
the resolutions thereby certified have not been amended, modified,
revoked or rescinded and shall be in form and substance satisfactory
to the Agent.
(e) The Agent has received, with a counterpart for each Bank,
true and complete copies of the certificate of incorporation and by-
laws of such Subsidiary, certified as of the date hereof as complete
and correct copies thereof by the Secretary or an Assistant Secretary
of the Subsidiary.
(f) The performance by the Agent or the Banks of the Agreement,
this Notice of Additional Borrower, the Notes and the other Loan
Documents to which such Subsidiary is a party not cause any Bank to be
in violation of any law, rule, regulation, treaty or order.
(g) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with this Notice of
Additional Borrower and such Subsidiary as a Borrower shall be
satisfactory in form and substance to the Agent.
5. Agrees that all notices, requests and demands to or upon such
Subsidiary in connection with the Agreement and the other Loan Documents shall
be effective if made in
<PAGE>
4
the manner provided in subsection 13.2 of the Agreement to such Subsidiary at
the following address or to such other address as may be hereinafter notified by
such Subsidiary to the Agent:
[Subsidiary]
_______________________________________
_______________________________________
Attention: ___________________________
Telex: _______________________________
Answerback: __________________________
Telecopy: ____________________________
[Name of Subsidiary]
-------------------------------
By____________________________
Title:
The undersigned hereby confirm and agree to the foregoing Notice of
Additional Borrower delivered pursuant to subsection 13.15(a) of the Agreement.
W. R. GRACE & CO.-CONN.
By____________________________
Title:
W. R. GRACE & CO.
By____________________________
Title:
<PAGE>
EXHIBIT I-1 to Notice
of Additional Borrower
----------------------
FORM OF OPINION OF COUNSEL TO THE COMPANY AND GRACE NEW YORK
_________________, 19__
To each Bank from time to time
party to the Credit Agreement
dated as of September 1, 1994
among W. R. Grace & Co.-Conn.,
W. R. Grace & Co., the other
Borrowers from time to time
party thereto, the Banks named
therein and Chemical Bank,
as Agent
Ladies and Gentlemen:
As General Counsel of W. R. Grace & Co., a New York corporation
("GRACE NEW YORK"), and W. R. Grace & Co.-Conn., a Connecticut corporation
("COMPANY"), I have been requested to render my opinion in connection with the
Notice of Additional Borrower dated _______, 19__ ("Notice") relating to [NAME
OF SUBSIDIARY] ("Subsidiary") delivered pursuant to the Credit Agreement dated
as of September 1, 1994 among you, the Company, the other Borrowers from time to
time party thereto, and Grace New York (as modified by the Notice and as
otherwise amended, supplemented or otherwise modified prior to the date hereof,
the "CREDIT AGREEMENT"). I am rendering this opinion pursuant to subsection
13.15(a) of the Credit Agreement and subsection 4(a)(i) of the Notice. All
terms used in this opinion that are defined in the Credit Agreement have the
respective meanings assigned to them therein.
I have examined or caused to be examined the Restated Certificate of
Incorporation and the By-laws of the Company, each as amended to date, the
Certificate of Incorporation and the By-laws of Grace New York, each as amended
to date, the records of the meetings and other corporate proceedings of the
Company and of Grace New York, the Credit Agreement, the Notice, and such other
corporate records, agreements, certificates and documents as I deem necessary
for the purposes of the opinion hereinafter expressed. For purposes of this
opinion I have assumed that all Notes issued from time to time hereafter will be
issued in accordance with the terms of the Credit Agreement.
Based upon the foregoing, and subject to the qualifications stated
below, I am of the following opinion:
<PAGE>
2
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of Connecticut, and has the corporate power and
authority under such laws, and is duly qualified and in good standing in each
jurisdiction in which, in the opinion of the Company, such qualification is
required, to own and operate its properties, to carry on its business and to
perform its obligations under the Credit Agreement.
2. Grace New York is a corporation duly organized and validly
existing in good standing under the laws of New York and has the corporate power
and authority under such laws, and is duly qualified and in good standing in
each jurisdiction in which, in the opinion of Grace New York, such qualification
is required, to own and operate its properties, to carry on its business and to
perform its obligations under the Credit Agreement.
3. The performance by the Company of the Credit Agreement and the
consummation of the transactions contemplated thereby, including, without
limitation, the guaranty by the Company of the Subsidiary's Obligations, have
been duly and validly authorized by all necessary corporate action of the
Company.
4. The performance by Grace New York of the Credit Agreement and the
consummation of the transactions contemplated thereby, including, without
limitation, the guaranty by Grace New York of the Company's and the Subsidiary's
respective Obligations, have been duly and validly authorized by all necessary
corporate action of Grace New York.
5. The Credit Agreement constitutes the legal, valid and binding
obligation of the Company and Grace New York, as the case may be, enforceable in
accordance with its terms.
6. No consent of any other party (including, without limitation,
stockholders of the Company or of Grace New York), and no authorization,
license, consent or approval from any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof, is required in connection
with the performance by the Company and Grace New York, as the case may be, or
the validity or enforceability, of the Credit Agreement or any Notes.
7. The performance by the Company and Grace New York of the Credit
Agreement will not (A) to the best of my knowledge, violate any law or
regulation applicable to the Company or Grace New York, (B) conflict with, or
result in a breach or violation of, the Restated Certificate of Incorporation or
By-Laws, each as amended, of the Company, the Certificate of Incorporation or
By-laws, each as amended, of Grace New York or, to the best of my knowledge, any
material indenture, loan agreement or other
<PAGE>
3
agreement or instrument to which the Company or Grace New York is a party or
under which the Company or Grace New York or any of their respective properties
are or may be bound, or (C) to the best of my knowledge, violate any order,
award, judgment, determination, writ, injunction or decree applicable to the
Company or Grace New York of any regulatory, administrative or other
governmental or public body or authority, arbitrator or court of the United
States or any state or other jurisdiction thereof.
8. To the best of my knowledge, no litigation, proceeding,
investigation or inquiry is pending or threatened with respect to the
transactions contemplated by the Credit Agreement.
9. Neither Grace New York nor the Company is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications:
(a) My opinion set forth in paragraph 5 above is subject to the
qualification that the enforceability of the Company's and Grace New York's
obligations under the Credit Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(b) I express no opinion as to the enforceability of the provisions
of the Credit Agreement that purport to establish evidentiary standards or to
make determinations conclusive.
(c) I express no opinion as to the enforceability of the provisions
of the Credit Agreement insofar as they relate to post-judgment interest rates.
(d) I express no opinion as to the enforceability of subsection 3.3
of the Credit Agreement. I note that (i) a New York statute provides that with
respect to a foreign currency obligation a New York State court shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) with respect to a
foreign currency obligation a federal court of the United States sitting in New
York may award judgment in U.S. dollars, provided that I express no opinion as
to the rate of exchange that such court would apply.
(e) I express no opinion as to the validity, binding effect or
enforceability of any waiver under the Credit
<PAGE>
4
Agreement, or any consent or authorization thereunder, relating to the rights of
the Company or Grace New York, or duties owing to any of them, existing or
arising as a matter of law.
(f) I express no opinion as to the provisions in subsection 13.6(b)
of the Credit Agreement purporting to grant a right of set-off to Participants.
(g) I express no opinion as to subsection 13.12 of the Credit
Agreement insofar as it relates to the waiver of any objection by the Company
and Grace New York to the venue of any legal action or proceeding brought in a
United States District Court for the Southern District of New York (and note
that such matters may be raised by such court).
(h) I express no opinion as to any indemnification obligations of the
Company or Grace New York under the Credit Agreement to the extent such
obligations might be deemed to be inconsistent with public policy.
(i) I express no opinion as to any laws other than those of the
states of Connecticut and New York and the federal laws of the United States.
This opinion is limited to the specific issues addressed herein and is
limited in all respects to laws and interpretations thereof and other matters
existing on the date hereof. I do not undertake to update this opinion for
changes in such laws, interpretations or matters. This opinion is furnished
solely for your benefit in connection with the transactions contemplated by the
Credit Agreement and the Notice, is not to be relied upon for any other purpose
and may not be made available to any other person, firm or entity (other than a
Transferee or a prospective Transferee referred to in subsection 13.6(f) of the
Credit Agreement) without my express prior written consent, except as may be
required by law or in response to any judicial or regulatory requirement, order
or decree.
Very truly yours,
<PAGE>
Exhibit 11
W. R. GRACE & CO. AND SUBSIDIARIES
WEIGHTED AVERAGE NUMBER OF SHARES AND EARNINGS USED IN PER SHARE COMPUTATIONS
(Unaudited)
The weighted average number of shares of Common Stock outstanding were as
follows (in thousands):
<TABLE>
<CAPTION>
3 Mos. Ended 9 Mos. Ended
9/30/94 - 9/30/93 9/30/94 - 9/30/93
------------------- --------------------
<S> <C> <C> <C> <C>
Weighted average number of shares of Common
Stock outstanding. . . . . . . . . . . . . . . . . . . 93,995 92,295 93,893 90,829
Conversion of convertible debt obligations . . . . . . -- 65 -- 65
Additional dilutive effect of outstanding options
(as determined by the application of the treasury
stock method). . . . . . . . . . . . . . . . . . . . . 660 513 756 544
------ ------ ------ ------
Weighted average number of shares of Common
Stock outstanding assuming full dilution . . . . . . . 94,655 92,873 94,649 91,438
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
Income/(loss) used in the computation of earnings per share were as follows
(in millions, except per share):
<TABLE>
<CAPTION>
3 Mos. Ended 9 Mos. Ended
9/30/94 - 9/30/93 9/30/94 - 9/30/93
------------------ ----------------------
<S> <C> <C> <C> <C>
Net income/(loss). . . . . . . . . . . . . . . . . . . $76.0 $(236.4) $(20.1) $(259.2)
Dividends paid on preferred stocks . . . . . . . . . . (.2) (.2) (.4) (.4)
----- -------- ------- --------
Income/(loss) used in per share computation of
earnings . . . . . . . . . . . . . . . . . . . . . . . 75.8 (236.6) (20.5) (259.6)
Interest, net of tax, on convertible debt
obligations. . . . . . . . . . . . . . . . . . . . . . -- -- -- --
----- -------- ------- --------
Income/(loss) used in per share computation of
earnings assuming full dilution. . . . . . . . . . . . $75.8 $(236.6) $(20.5) $(259.6)
----- -------- ------- --------
----- -------- ------- --------
Income/(loss) per share. . . . . . . . . . . . . . . . $ .81 $ (2.56) $ (.22) $ (2.86)
Income/(loss) per share assuming full dilution . . . . $ .80 $ (2.55) $ (.22) $ (2.84)
</TABLE>
<PAGE>
Exhibit 12
W. R. GRACE & CO. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(in millions except ratios)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
Years Ended December 31, (b) September 30, (b)
------------------------------------------------- -------------------
1993(c) 1992(d) 1991 1990 1989 1994(e) 1993(g)
------- -------- ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income/(loss) from continuing operations . . . . $134.4 $ 57.7 $201.7 $174.6 $145.9 $(20.1) $(150.8)
Add (deduct):
Provision/(benefit) for income taxes . . . . . . . 86.8 134.8 132.5 97.5 61.3 (11.1) (68.0)
Income taxes of 50%-owned companies. . . . . . . . .1 2.1 1.5 1.9 1.2 -- .1
Minority interest in income of
majority-owned subsidiaries. . . . . . . . . . . -- -- -- 1.2 .6 -- --
Equity in unremitted earnings of
less than 50%-owned companies. . . . . . . . . . (1.3) (1.8) (2.5) (2.1) (.3) (1.9) (.2)
Interest expense, including amortization
of capitalized interest. . . . . . . . . . . . . 119.8 152.9 198.4 235.7 224.8 79.0 81.3
Amortization of debt discount and expense. . . . . 4.3 1.5 2.1 1.9 1.9 1.4 .5
Estimated amount of rental expense
deemed to represent the interest factor. . . . . 21.3 26.6 21.7 21.0 19.1 25.3 21.4
------ -------- ------ ------ ------ ------- --------
Income/(loss) as adjusted. . . . . . . . . . . . . . $365.4 $373.8 $555.4 $531.7 $454.5 $72.6 $(115.7)
------ -------- ------ ------ ------ ------- --------
------ -------- ------ ------ ------ ------- --------
Combined fixed charges and preferred stock dividends:
Interest expense, including capitalized
interest. . . . . . . . . . . . . . . . . . . . $119.9 $166.5 $213.3 $244.7 $229.3 $ 81.6 $ 83.4
Amortization of debt discount and expense. . . . . 4.3 1.5 2.1 1.9 1.9 1.4 .5
Estimated amount of rental expense
deemed to represent the interest factor . . . . 21.3 26.6 21.7 21.0 19.1 25.3 21.4
------ -------- ------ ------ ------ ------- --------
Fixed charges. . . . . . . . . . . . . . . . . . . . 145.5 194.6 237.1 267.6 250.3 108.3 105.3
Preferred stock dividend requirements (a). . . . . . .9 .9 .9 .8 .7 .6 .6
------ -------- ------ ------ ------ ------- --------
Combined fixed charges and preferred
stock dividends . . . . . . . . . . . . . . . . . $146.4 $195.5 $238.0 $268.4 $251.0 $108.9 $105.9
------ -------- ------ ------ ------ ------- --------
------ -------- ------ ------ ------ ------- --------
Ratio of earnings to fixed charges . . . . . . . . . 2.51 1.92 2.34 1.99 1.82 (f) (f)
------ -------- ------ ------ ------ ------- --------
------ -------- ------ ------ ------ ------- --------
Ratio of earnings to combined fixed charges and
preferred stock dividends . . . . . . . . . . . . 2.50 1.91 2.33 1.98 1.81 (f) (f)
------ -------- ------ ------ ------ ------- --------
------ -------- ------ ------ ------ ------- --------
<FN>
(a) Preferred stock dividend requirements, increased to an amount
representing the pretax earnings that would be required to cover such
dividend requirements based on the effective tax rates for the periods
presented.
(b) Restated to conform to the 1994 presentation.
(c) Includes a provision of $159.0 relating to asbestos-related insurance
coverage.
(d) Includes a provision of $140.0 relating to a fumed silica plant in
Belgium.
(e) Includes a provision of $316.0 relating to asbestos-related insurance
coverage.
(f ) As a result of the loss incurred for the nine-month period ended
September 30, 1994 and 1993, Grace was unable to fully cover the
indicated fixed charges.
(g) Includes a provision of $475.0 relating to asbestos-related insurance
coverage.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 56,800
<SECURITIES> 0
<RECEIVABLES> 883,900
<ALLOWANCES> 94,000
<INVENTORY> 496,800
<CURRENT-ASSETS> 2,050,100
<PP&E> 3,044,800
<DEPRECIATION> 1,457,600
<TOTAL-ASSETS> 6,099,800
<CURRENT-LIABILITIES> 1,838,300
<BONDS> 1,468,200
<COMMON> 94,100
0
7,400
<OTHER-SE> 1,342,200
<TOTAL-LIABILITY-AND-EQUITY> 6,099,800
<SALES> 3,620,400
<TOTAL-REVENUES> 3,662,300
<CGS> 2,157,500
<TOTAL-COSTS> 2,157,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75,900
<INCOME-PRETAX> (31,200)<F1>
<INCOME-TAX> (11,100)
<INCOME-CONTINUING> (20,100)<F1>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,100)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
<FN>
<F1>Includes a pretax provision of $316 million ($200 million after tax) relating to
asbestos-related insurance coverage.
</FN>
</TABLE>
