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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)
Grow Group, Inc.
(Name of issuer)
Common Stock, par value $.10 per share
(Title of class of securities)
399820-10-9
(CUSIP Number)
Jose Gregorio Garcia
Corimon, S.A.C.A., Calle Hans Neumann
Edificion Corimon, Los Cortijos de Lourdes
Caracas, Venezuela 0171 011 (582) 203-5560
(Name, address and telephone number of person authorized
to receive notices and communications)
August 10, 1994
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
(Continued on following pages)
(Page 1 of 30 pages)
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CUSIP NO. 399820-10-9 13D Page 2 of 30 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon Corporation
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not Applicable
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 4,025,341 shares
SHARES ---------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,341 shares
WITH ---------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,341 shares
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
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14. TYPE OF REPORTING PERSON
CO
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* SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH
SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
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CUSIP NO. 399820-10-9 13D Page 3 of 30 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon International Holdings Limited
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not Applicable
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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7. SOLE VOTING POWER
NUMBER OF 4,025,341 shares
SHARES ---------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,341 shares
WITH ---------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,341 shares (possible indirect beneficial
ownership)
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
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14. TYPE OF REPORTING PERSON
HC, CO
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CUSIP NO. 399820-10-9 13D Page 4 of 30 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon, S.A.C.A.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not Applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
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7. SOLE VOTING POWER
NUMBER OF 4,025,341 shares
SHARES ---------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ---------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,341 shares
WITH ---------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,341 shares (possible indirect beneficial
ownership)
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, CO
- ------------------------------------------------------------
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Item 1 Security and Issuer
This statement relates to the common stock, par value $.10 per
share (the "Common Stock"), of Grow Group, Inc., a New York corporation,
(the "Company"). The principal executive offices of the Company are
located at 200 Park Avenue, New York, New York 10166.
Item 2 Identity and Background
This statement is filed on behalf of Corimon Corporation, a
Delaware corporation ("Corimon Corp."), which is a wholly-owned subsidiary
of Corimon International Holdings Limited, a Cayman Islands corporation
("Holdings"), which is a wholly-owned subsidiary of Corimon, S.A.C.A., a
Venezuelan corporation ("Corimon"). The principal executive offices of
Corimon Corp., Holdings and Corimon are located at Edificio Corimon, Calle
Hans Neumann, Los Cortijos de Lourdes, Caracas, Venezuela. Corimon Corp.,
Holdings and Corimon are herein referred to collectively as the "Reporting
Persons."
Corimon is a Venezuelan holding company with multinational
operations principally in the paint, coatings and related products
industries, and regional operations principally in the food and packaging
industries.
Holdings is a holding company whose principal activity is
holding stock in various subsidiaries of Corimon, its parent.
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Corimon Corp. is a holding company whose principal activity is
holding stock in various subsidiaries of Corimon, its parent, which include
shares of Common Stock.
The names, business addresses, principal occupations or
employment (and the names, principal businesses and addresses of any
corporation or other organization in which such occupations or employment
are conducted) and citizenship of the directors and executive officers of
Corimon Corp., Holdings and Corimon are set forth in Schedules A, B and C,
respectively, attached hereto and are incorporated herein by reference.
None of the Reporting Persons nor any other person controlling
the Reporting Persons, nor to the best knowledge of the Reporting Persons,
any of the persons named in Schedules A, B and C attached hereto has,
during the last five years, been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors).
None of the Reporting Persons nor any other person controlling
the Reporting Persons, nor to the best knowledge of the Reporting Persons,
any of the persons named in Schedules A, B and C attached hereto was,
during the last five years, a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or
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state securities laws or finding any violation with respect to such laws.
Item 3 Source and Amount of Funds and Other Consideration
Not applicable.
Item 4 Purpose of Transaction
The following descriptions of the Credit Agreement, Security
Agreement, Parent Guarantee, Stock Purchase Agreement, Standstill Agreement
and Registration Rights Agreement are subject to and qualified in their
entirety by reference to Exhibits 1, 2, 3 and 7 (including Exhibits C and D
to Exhibit 7) which are incorporated herein by reference.
Credit Agreement
Pursuant to the Credit Agreement, The Chase Manhattan Bank
(National Association) (the "Bank") has agreed to make loans ("Loans") to
Corimon Corp. and to issue letters of credit (each, a "Letter of Credit")
for the account of Corimon Corp., Corimon or any subsidiary of Corimon.
The aggregate principal amount of all Loans, together with the aggregate
principal amount of all Letter of Credit liabilities will not exceed the
amount of the commitment (the "Commitment") as in effect from time to time.
In addition, the outstanding aggregate amount of all
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Letter of Credit liabilities may not exceed $5,000,000. At August 10,
1994, the Commitment was $15,000,000, and the Bank's commitment to make
loans will expire on February 10, 1995 (the "Commitment Termination
Date"). The expiration date of any Letter of Credit may not extend beyond
the Commitment Termination Date in effect when such Letter of Credit was
issued. In addition, each Loan matures on the Commitment Termination Date.
Corimon Corp. has pledged Common Stock (as more fully described below) as
collateral for the Loans and Letter of Credit liabilities.
The aggregate unpaid principal amount of the Loans plus the
aggregate unpaid amount of all Letter of Credit liabilities must at all
times exceed 50% of the Market Value (as defined in the Credit Agreement)
of the Common Stock pledged under and in accordance with the Security
Agreement (as described below). In the event that the Market Value of the
pledged Common Stock decreases below the required value, Corimon Corp. must
(a) prepay the Loans (or, after prepayment of all outstanding Loans,
provide cover for Letter of Credit liabilities) and/or (b) pledge
additional Common Stock. In no event may Corimon Corp. pledge Common Stock
(a) that is subject to the Stock Purchase Agreement (as described below) or
(b) if, after giving effect to such pledge, the aggregate number of shares
of Common Stock pledged would exceed 10% of the issued and outstanding
shares of Common Stock of the Company.
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Corimon Corp. has agreed, among other things, to a limitation
on liens and not to declare or make any Dividend Payment (as defined in the
Credit Agreement) at any time.
Security Agreement
Pursuant to the Security Agreement, Corimon Corp. agreed to
pledge and grant to the Bank a security interest in all of its right, title
and interest in (a) 1,713,341 shares of Common Stock, (b) all shares,
securities, moneys or property representing a dividend, distribution or
return of capital upon or in respect of the pledged shares of Common Stock
or otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of the
pledged shares of Common Stock, (c) in the event of any consolidation or
merger in which the Company is not the surviving corporation, all shares of
each class of the capital stock of the successor corporation, (d) the
balance from time to time in the Collateral Account (as defined in the
Security Agreement) and (e) all proceeds of and to any of the property of
Corimon Corp. described in the (a), (b), (c) and (d), including, without
limitation, all causes of action, claims and warranties now or hereafter
held by Corimon Corp. in respect of any of (a), (b), (c) or (d). Unless
and until an Event of Default (as defined in the Security Agreement) has
occurred and is continuing, the Corimon Corp. will be
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entitled to receive and retain any dividends on the Collateral (as defined
in the Security Agreement) paid in cash out of earned surplus.
Corimon Corp. must at all times cause the Market Value of the
shares of Common Stock pledged under and in accordance with the Security
Agreement to be at least equal to 200% of the sum of (i) the aggregate
unpaid principal amount of the Loans plus (ii) the aggregate amount of the
Letter of Credit liabilities.
Under the Security Agreement, Corimon Corp. maintains the
right to exercise all voting, consensual and other powers of ownership
pertaining to any collateral for all purposes not inconsistent with the
terms of the Security Agreement, the Credit Agreement, the Note issued
pursuant to the Credit Agreement or any other instrument or agreement
referred to in the Security Agreement or the Credit Agreement so long as no
Event of Default has occurred and be continuing. If any Event of Default
occurs and so long as it continues, Corimon Corp. must, at the request of
the Bank, request the Company to register under the Securities Act of 1933,
as amended, the shares of Common Stock pledged by Corimon Corp. for
offering and sale in such manner as the Bank specifies.
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Parent Guarantee
Pursuant to the Parent Guarantee, Corimon guaranteed the
payment of principal and interest of all Loans and all Reimbursement
Obligations (as defined in the Credit Agreement) and interest thereon and
any other amounts due (the "Guaranteed Obligations") under the Credit
Agreement and the Note.
The obligations of Corimon under the Parent Guarantee are
direct and unconditional general obligations of Corimon and rank pari passu
with all of its other unsecured Indebtedness (as defined in the Credit
Agreement). Until the payment and satisfaction in full of the Guaranteed
Obligations and the expiration and termination of the Commitment and all
Letter of Credit liabilities of the Bank under the Credit Agreement,
Corimon has agreed, among other things, that, without the consent of the
Bank, it will not, nor will it permit Corimon Corp. or any other subsidiary
of Corimon, to request the Company to register any Registrable Securities
(as defined in the Registration Rights Agreement).
Stock Purchase Agreement
Pursuant to the Stock Purchase Agreement, Corimon Corp.
purchased 2,312,000 newly issued shares of the Common
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Stock (the "Shares") at a purchase price of $16.75 per share or an
aggregate purchase price of $38,726,000.
Under the Stock Purchase Agreement, as long as Corimon is
entitled to have at least one of its representatives on the Board of the
Company pursuant to the Standstill Agreement (the "Representation Period"),
as more fully described below, (A) Corimon is entitled to have its
representative attend meetings of the Safety, Health and Environmental
Committee of the Company and (B) the Company is entitled to have its
representative attend meetings of the Environmental Committee of Corimon.
During the Representation Period, the Company and Corimon have
agreed to discuss in good faith cross-licenses of patents and know-how;
joint funding, direction and use of research and development; exchanges of
staff-level managers; exchanges and cross-training of personnel; agreements
providing for the joint development of architectural and marine paint
markets in South America, Central America and the Caribbean; and agreements
designed to reduce their costs of doing business. Corimon and the Company
have also agreed to explore the possibility of joint acquisitions of paint
companies in Brazil and elsewhere in South America.
Standstill Agreement
The Standstill Agreement will be effective from the date of the
Closing pursuant to the Stock Purchase
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Agreement (the "Effective Date") until the earlier of (a) the date of the
Company's 1995 Annual Meeting or (b) October 31, 1995, but, if a Change of
Control (as defined in the Standstill Agreement) of Corimon has occurred,
then the later of (i) the two dates set forth in clauses (a) and (b) above
or (ii) the third anniversary of the date of the Change of Control of
Corimon, unless Corimon or Corimon Corp. (the "Shareholders") specify a
termination date in a Termination Notice (as defined below) delivered
pursuant to Section 3.1(e) of the Standstill Agreement in connection with a
Change of Control of the Company (the "Standstill Termination Date"; and
the period from the Effective Date to the Standstill Termination Date is
referred to as the "Standstill Period").
During the Standstill Period, but subject to certain
reductions as more particularly described below, the Shareholders are
entitled to two representatives on the Board of Directors ("Shareholder
Designees") and will be entitled to a third Shareholder Designee if for
60 consecutive days the Shareholders beneficially own greater than 27.5% of
Voting Securities (as defined in the Standstill Agreement) of the Company.
Shareholder Designees, other than executive officers of Corimon, shall be
reasonably acceptable to a majority of the non-Shareholder Designee Board
members.
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Pursuant to the Standstill Agreement, the Company
increased the size of the Board from eleven (11) to twelve (12) members.
If the Shareholders become entitled to a third
Shareholder Designee as described above, the third Shareholder Designee
shall be nominated no later than the first Annual Meeting following the
Shareholders' entitlement to, and request for, such third Shareholder
Designee other than an Annual Meeting to be held within 45 days of such
request, and in no event earlier than the 1993 Annual Meeting. During the
time that the Shareholders are entitled to a third Shareholder Designee,
such third Shareholder Designee, if not yet serving on the board, shall be
entitled to attend Board meetings as an observer.
The Company agrees to support the election to the Board
of any Shareholder Designee entitled to serve thereon pursuant to the
Standstill Agreement. And if any Shareholder Designee's term as a director
would expire before the Standstill Termination Date, the Company shall
nominate such Shareholder Designee for an additional term not to expire
prior to the Standstill Termination Date.
The Shareholders' entitlement to three Shareholder
Designees is subject to reduction by the Company's Board in the following
events:
1. If at any time the Shareholders' and their
Affiliates' aggregate ownership of shares of
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Voting Securities is less than 25% of the outstanding
Voting Securities and three Shareholder Designees are on
the Board, the Shareholders shall be entitled to only two
Shareholder Designees;
2. If at any time the Shareholders' and their
Affiliates' aggregate ownership of Voting Securities is
less than 16% of the outstanding Voting Securities, the
Shareholders shall be entitled to only one Shareholder
Designee on the Board; or
3. If at any time the Shareholders' and their
Affiliates' aggregate ownership of Voting Securities is
less than 8% of the outstanding Voting Securities, the
Shareholders shall not be entitled to any Shareholder
Designees on the Board
provided, however, that if the failure to meet the minimum ownership
conditions set forth in paragraphs 1, 2 and 3 above is solely the result of
the issuance by the Company of additional Voting Securities, the
Shareholders and their Affiliates shall not be deemed to have failed to
meet such minimum ownership condition until such time thereafter that they
sell, transfer or dispose of any Voting Securities and immediately after
such sale, transfer or disposition fail to meet any such minimum ownership
condition. At any time after the failure by the Shareholders to meet a
minimum ownership condition, the Board may request, and within five days
thereafter shall receive, the resignation from the
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Board of the Shareholder Designee no longer entitled to serve on the Board.
The Shareholder Designees on the Board shall be entitled
to one membership on each of the Audit Committee and the Compensation
Committee.
During the Standstill Period, the shareholders agree
that, without a prior written resolution by a majority of the
non-Shareholder Designee Board members, the Shareholders will not, and will
cause their Affiliates not to:
A. acquire, in any way or by any means (except by way
of stock dividends or other distributions or offerings
made available to holders of Voting Securities
generally), any Voting Securities, provided that the
Shareholders and their Affiliates may acquire additional
Voting Securities through open market purchases and
privately-negotiated transactions as long as the
Shareholders and their Affiliates, as a result thereof,
would not in the aggregate beneficially own more than 28%
of the outstanding Voting Securities and subject to the
condition that Purchaser or any Affiliate of the
Shareholders may acquire and hold Voting Securities only
if at all times (x) Purchaser or such Affiliate is an
indirect or direct wholly-owned subsidiary of Corimon,
(y) such subsidiary's voting securities
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and the shares of each subsidiary in the chain of
ownership of such subsidiary are held by its parent
corporation free of any encumbrances and (z) such
subsidiary has agreed in writing to be bound by all terms
and conditions of the Standstill Agreement;
B. make or participate in any proxy or consent
solicitation, shareholder proposal action or vote
influence action;
C. be involved in any way in any business combination,
securities transaction, asset sale or reorganization
involving the Company except as permitted pursuant to
paragraph A above and Section 4.1 of the Standstill
Agreement;
D. participate in any way in a group (as defined in
the Securities Exchange Act of 1934, as amended
("Exchange Act")) with respect to any Voting Securities
other than groups consisting of the Shareholders and
their Affiliates;
E. cause any Voting Securities to be subject to any
voting arrangement except as set forth in Section 3.4 of
the Standstill Agreement;
F. execute any written consent concerning the Company
or the Voting Securities except as set forth in Section
3.4 of the Standstill Agreement;
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G. act to control or influence the Company's
management, Board or policies;
H. seek representation on the Board except as allowed
by the Standstill Agreement; or
I. publicly discuss, or propose or disclose anything
inconsistent with, any of the foregoing
provided that, if the aggregate Voting Securities beneficially owned by the
Shareholders and their Affiliates is increased to greater than 28% of the
outstanding Voting Securities solely due to a recapitalization, share
repurchase or any other action taken by the Company or its Affiliates, such
increase shall not breach anything contained in paragraph A above or
require disposal of any Voting Securities.
The restrictions set forth above shall not affect in any
way Shareholder Designees acting lawfully in their capacities as directors
of the Company or in connection with any business relationship or
prospective business relationship between Corimon and the Company (or their
subsidiaries). In addition, notwithstanding any of the foregoing, if
during the Standstill Period the Board approves or recommends a Takeover
Proposal (as defined in the Standstill Agreement), the Shareholders and
their Affiliates may make a competing Takeover Proposal. Furthermore, upon
a Change of Control of the Company (as defined in the Standstill
Agreement), the Shareholders shall have the
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right upon prior written notice (the "Termination Notice") to the Company
at any time after such Change of Control to designate a Standstill
Termination Date earlier than that otherwise provided by the Standstill
Agreement provided that all Shareholder Designees resign from the Board by
such designated Standstill Termination Date.
The Shareholders will inform the Company of any contacts
with third parties concerning a Takeover Proposal or any other business
combination transaction involving the Company, its assets, businesses or
securities.
During the Standstill Period, the Shareholders will, and
will cause their Affiliates to, be present in person or by proxy at all
shareholder meetings and vote their Voting Securities in support of the
Board's recommendations for Board nominees and shareholder proposals
(except if any such proposal if approved would result in a Change of
Control of the Company). Otherwise, the Shareholders and their Affiliates
may vote their Voting Securities in their sole discretion on all other
matters.
Prior to January 1, 1994 the Shareholders will not, and
will cause their Affiliates not to, without a prior written resolution by a
majority of the non-Shareholder Designee Board members, transfer, pledge or
encumber, in any way, any Voting Securities except sales to an Affiliate of
the Shareholders, to the Company or to any person approved by the Board.
From January 1, 1994 through the Standstill
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Termination Date, the Shareholders will not, and will cause their
Affiliates not to, without a prior written resolution by a majority of the
non-Shareholder Designee Board members, transfer or encumber any Voting
Securities except for:
i. sales of the type permitted prior to January 1,
1994;
ii. sales pursuant to Rule 144 of the Securities Act of
1933, as amended (the "Securities Act");
iii. sales pursuant to an underwritten public offering
in accordance with the Registration Rights Agreement; or
iv. private sales exempt from registration under the
Securities Act;
provided, however, that no transfer pursuant to paragraphs ii, iii or iv
above shall be made if, to the knowledge of the Shareholders and their
Affiliates, immediately after such transaction the transferor and its
affiliates would beneficially own 3% or more of the Company's outstanding
Voting Securities; provided further, however, that the Shareholders or
their Affiliates may pledge or grant a security interest in Voting
Securities other than the Shares in connection with bona fide indebtedness
to a major brokerage firm or financial institution.
If, during the Standstill Period, the Company issues
Voting Securities for cash, the Company will give the Shareholders
sufficient prior notice so that the Share-
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holders may participate in such issuance, at the same price and on the same
terms and conditions as other purchasers, to enable the Shareholders and
their Affiliates to maintain their ownership percentage.
If there is a Change of Control of the Shareholders
during the Standstill Period, the Company will have the option for 120 days
after such Change of Control to buy all of the Shareholders' Voting
Securities, at a price based on the market price of the Voting Securities
(e.g., closing prices for 20 days preceding the date in question).
Registration Rights Agreement
Pursuant to the Registration Rights Agreement, after
January 1, 1994, the Company, upon the request of Corimon, Corimon Corp. or
any affiliate of Corimon permitted to own Common Stock pursuant to the
Standstill Agreement (a "Holder") with respect to Registrable Securities
(as defined in the Registration Rights Agreement) held by such Holder, will
use its best efforts to register under the Securities Act of 1933, as
amended (the "Securities Act"), any of the shares of Registrable Securities
which the Company has been requested to register by such Holder thereof.
The Company's obligation to register shares of Registrable Securities upon
the request of a Holder shall expire after registration statements filed
pursuant to such requests shall have become
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effective, in accordance with the requirements of the Registration Rights
Agreement, on two separate occasions.
The Company has also granted the Holders certain
"piggyback" registration rights with respect to the Registrable Securities.
The Reporting Persons intend to review continuously their
equity investment in the Company. Depending upon their ongoing evaluation
of the Company's business and prospects and upon future developments
(including, but not limited to, performance of the Common Stock in the
market, availability of funds and alternative uses thereof, and money,
stock market and general economic conditions), Corimon Corp. or Corimon,
depending upon such evaluation, (a) may dispose of, or purchase additional,
shares of Common Stock, in each case as permitted by the Standstill
Agreement, as described above in this Item 4, and take such other actions
with respect to the Company, the Common Stock and other securities of the
Company as permitted under the Stock Purchase Agreement, the Standstill
Agreement and the Registration Rights Agreement and (b) may, at the end of
the Standstill Period, propose a transaction pursuant to which Corimon or
Corimon Corp. would acquire control of the Company.
Except as set forth herein, none of the Reporting Persons
nor any other person controlling the Reporting Persons, nor, to the best of
their knowledge, any person
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named in Schedules A, B and C attached hereto has any plans or proposals
which relate to or would result in: (i) the acquisition by any person of
additional securities of the Company, or the disposition of securities of
the Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (iii) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries; (iv) any change in the present
Board of Directors or management of the Company; (v) any material change in
the present capitalization or dividend policy of the Company; (vi) any
other material change in the Company's business or corporate structure;
(vii) changes in the Company's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person; (viii) causing any class of securities of the
Company to be delisted from the New York Stock Exchange; (ix) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended; or (x) any action similar to any of those enumerated in
this Item 4.
Item 5. Interest in Securities of the Issuer
(a). Corimon Corp. is the direct beneficial owner of
4,025,341 shares (the "Total Shares") of Common Stock
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<PAGE> 24
(approximately 25% of the aggregate number of shares of Common Stock
outstanding). The foregoing percentage is calculated based on the
16,103,338 shares of Common Stock which the Company has represented to
Corimon Corp. and Corimon as being issued and outstanding as of the close
of business on August 10, 1994. By virtue of the relationships reported in
Item 2 of the Schedule 13D, each of Holdings and Corimon may be deemed to
be the indirect beneficial owner of the Total Shares. The filing of
Amendment No. 9 or of the Schedule 13D shall not be construed as an
admission by Holdings or Corimon that it is the direct or indirect
beneficial owner of the Total Shares. Except as set forth herein and in
the Schedule 13D, neither the Reporting Persons nor any other person
controlling the Reporting Persons nor, to the best of their knowledge, any
of the persons named in Schedules A, B and C to the Schedule 13D
beneficially owns any shares of Common Stock.
(b). Subject to the provisions of the Standstill
Agreement, Corimon Corp. has the direct power to vote and to direct the
disposition of the Total Shares of Common Stock acquired by it. By virtue
of the relationships described in Item 2 of the Schedule 13D, and subject
to the provisions of the Standstill Agreement, each of Holdings and Corimon
may be deemed to have and share the indirect power to vote and direct the
disposition of the Total Shares of Common Stock acquired by Corimon Corp.
The filing of this Amendment
<PAGE>
<PAGE> 25
No. 9 or of the Schedule 13D shall not be construed as an admission by
Holdings or Corimon that it currently has the sole or shared power to vote
or to direct the disposition of the Total Shares acquired by Corimon Corp.
Except as set forth herein and in the Schedule 13D, none of the Reporting
Persons has any sole or shared power to vote or to direct the vote of any
Common Stock nor sole or shared power to dispose of or direct the
disposition of any Common Stock.
(c). No transactions in the Common Stock have been
effected during the past 60 days by the Reporting Persons nor any other
person controlling the Reporting Persons nor, to the best of their
knowledge, any of the persons named in Schedules A, B and C hereto.
(d). Except as set forth herein, Corimon Corp. has the
right to receive, and power to direct the receipt of, dividends from, and
proceeds from the sale of, the Total Shares acquired by it. Except as set
forth herein, no other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, such Shares of Common Stock.
(e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Corimon executed a Non-Disclosure Agreement on
December 6, 1991 (the "Non-Disclosure Agreement") in favor
<PAGE>
<PAGE> 26
of the Company. Pursuant to the Non-Disclosure Agreement, Corimon agreed,
inter alia, that, for a period of five years from the date of the
Non-Disclosure Agreement, neither Corimon nor any of its affiliates,
including any person or entity directly or indirectly through one or more
intermediaries, controlling Corimon or controlled by or under common
control with Corimon, would purchase, offer or agree to purchase any
securities or assets of the Company, enter, or agree to enter into any
acquisition or other business combination, relating to the Company, or
make, or induce any other entity to make or negotiate or otherwise deal
with others for a tender or exchange offer of Shares of Common Stock of the
Company, solicit proxies, votes or consents other than for nominees
selected by the Company's Board, and proposals recommended by the Company's
Board, or otherwise seek to acquire control of the Company unless such
purchase, transaction, offer, agreement or proposal will have previously
been approved by the Company's Board. Pursuant to the Stock Purchase
Agreement, the Non-Disclosure Agreement survived the execution and delivery
of the Stock Purchase Agreement.
Except as set forth in Item 4 above and elsewhere herein,
there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 or between any of
such persons and any other person with respect to any securities of the
Company.
<PAGE>
<PAGE> 27
Item 7. Material to be Filed as Exhibits
Exhibit 1 Stock Purchase Agreement, dated
July 21, 1992, by and among Corimon
Corporation, Corimon C.A. S.A.C.A. (now
Corimon, S.A.C.A.) and Grow Group, Inc.
filed with Schedule 13D, dated July 31,
1992.
Exhibit 2 Standstill Agreement, dated July 21,
1992, by and among Grow Group, Inc.,
Corimon Corporation and Corimon S.A.
S.A.C.A. (now Corimon, S.A.C.A.) filed
with Schedule 13D, dated July 31,
1992.
Exhibit 3 Registration Rights Agreement, dated
August 7, 1992, by and between Grow
Group, Inc. and Corimon C.A. S.A.C.A.
(now Corimon, S.A.C.A.) filed with
Amendment Number 1 to Schedule 13D,
dated August 7, 1992.
Exhibit 7 Credit Agreement, dated as of
August 10, 1994, between Corimon
Corporation and The Chase Manhattan
Bank, N.A. (the "Bank") (including
Parent Guarantee, dated August 10,
1994, between Corimon, S.A.C.A. and the
Bank, and the Security Agreement, dated
August 10, 1994, between Corimon Corp.
and the Bank, as Exhibits C and D,
respectively).
<PAGE>
<PAGE> 28
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
CORIMON CORPORATION
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Director
Date: August 31, 1994
<PAGE>
<PAGE> 29
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
CORIMON INTERNATIONAL HOLDINGS
LIMITED
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: President
Date: August 31, 1994
<PAGE>
<PAGE> 30
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
CORIMON, S.A.C.A.
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Executive Vice President
By: /s/ Gustavo Mata-Borjas
Name: Gustavo Mata-Borjas
Title: General Counsel
Date: August 31, 1994
<PAGE>
<PAGE> 1
SCHEDULE A TO SCHEDULE 13D
Page 1 of 1
CORIMON CORPORATION
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations or
employment (and the names, principal businesses and addresses of any
corporation or other organization in which such occupations or employment
are conducted) of the directors and executive officers of Corimon
Corporation are set forth below. The business address of each person whose
principal occupation or employment is with Corimon Corporation or Corimon,
S.A.C.A. is Edificio Corimon, Calle Hans Neumann, Los Cortijos de Lourdes,
Caracas, Venezuela. Each person against whose name an asterisk appears is
a director of Corimon Corporation. Each person named below is a citizen of
Venezuela except Arthur W. Broslat, who is a citizen of the United States
of America.
Principal Occupation/Employment
Name and Business Address
Arthur W. Broslat* President and Principal Director
Corimon Corporation
AND
Executive Vice President and Chief Financial
Officer
Corimon, S.A.C.A.
Dr. Gustavo Mata-Borjas Secretary
Corimon Corporation
AND
Vice President and General Counsel
Corimon, S.A.C.A.
Bertha S. De Almeyda* Principal Director
Corimon Corporation
AND
General Manager
Corimon, S.A.C.A.
Martha B. de Hernandez* Principal Director
Corimon Corporation
AND
General Manager
Corimon, S.A.C.A.
<PAGE>
<PAGE> 1
SCHEDULE B TO SCHEDULE 13D
Page 1 of 3
CORIMON INTERNATIONAL HOLDINGS LIMITED
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations or
employment (and the names, principal businesses and addresses of any
corporation or other organization in which such occupations or employment
are conducted) of the directors and executive officers of Corimon
International Holdings Limited are set forth below. The business address
of each person whose principal occupation or employment is with Corimon
International Holdings Limited or Corimon, S.A.C.A. is Edificio Corimon,
Calle Hans Neumann, Los Cortijos de Lourdes, Caracas, Venezuela. Each
person against whose name an asterisk appears is a director of Corimon
International Holdings Limited. Arthur W. Broslat is a citizen of the
United States of America. Dr. Gustavo Mata-Borjas and Jose Luis Gomez
Gomez are citizens of Venezuela. CMC Directors (Cayman) Ltd. is a
corporation organized under the laws of the Cayman Islands whose principal
business activity consists of acting as a director for various
corporations, including Corimon International Holdings Limited. Corporate
Management & Consultants (Cayman) Ltd. is a corporation organized under the
laws of the Cayman Islands whose principal business activity involves the
formation and management of corporations. The business addresses of CMC
Directors (Cayman) Ltd. and of Corporate Management & Consultants (Cayman)
Ltd. are set forth below.
Principal Occupation/Employment
Name and Business Address
Arthur W. Broslat* President and Principal Director
Corimon International Holdings Limited
AND
Executive Vice President and Chief Financial
Officer
Corimon, S.A.C.A.
<PAGE>
<PAGE> 2
SCHEDULE B TO SCHEDULE 13D
Page 2 of 3
Principal Occupation/Employment
Name and Business Address
Martha B. de Hernandez* Principal Director
Corimon International Holdings Limited
AND
General Manager
Corimon, S.A.C.A.
Corporate Management
& Consultants Secretary
(Cayman) Ltd. Corimon International Holdings Limited
Elizabethan Square, 2nd floor
P.O. Box 847, George Town
Grand Cayman, Cayman Islands
British West Indies
Dr. Gustavo Principal Director
Mata-Borjas* Corimon International Holdings Limited
AND
Vice President and General Counsel
Corimon, S.A.C.A.
CMC Directors Elizabethan Square, 2nd floor
(Cayman) Ltd. P.O. Box 847, George Town
Grand Cayman, Cayman Islands
British West Indies
With respect to Corporate Management & Consultants
(Cayman) Ltd. and CMC Directors (Cayman) Ltd., the names, business
addresses, principal occupations or employment (and the names, principal
businesses and addresses of any corporation in which such occupations or
employment are conducted) of persons authorized as signatories for both of
those corporations are set forth below. Hans Sluyser, Michael Jones and
Robert Govaerts are directors of both CMC Directors (Cayman) Ltd. and
Corporate Management & Consultants (Cayman) Ltd. Richard Gorther is an
authorized representative for both CMC Directors (Cayman) Ltd. and
Corporate Management & Consultants (Cayman) Ltd. Richard Gorther is a
citizen of Australia, Hans Sluyser is a citizen of Netherlands, Michael
Jones is a citizen of Jamaica and Robert Govaerts is a citizen of Canada.
<PAGE>
<PAGE> 3
SCHEDULE B TO SCHEDULE 13D
Page 3 of 3
Principal Occupation/Employment
Name and Business Address
Richard Gorter Managing Director
Trident Trust Company (Cayman) Limited
Elizabethan Square
Grand Cayman, Cayman Islands
British West Indies
Hans Sluyser President
Corporate Trust (Curacao) N.V.
16 Pietermaai
Curacao, Netherlands Antilles
Michael Jones Senior Vice President
Corporate Trust (Curacao) N.V.
16 Pietermaai
Curacao, Netherlands Antilles
Robert Govaerts Managing Director
Corporate Trust (BVI) Limited
Road Town
Tortolla, British Virgin Islands
<PAGE>
<PAGE> 1
SCHEDULE C TO SCHEDULE 13D
Page 1 of 2
Corimon, S.A.C.A.
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations or
employment (and the names, principal businesses and addresses of any
corporation or other organization in which such occupations or employment
are conducted) of the directors and executive officers of Corimon, S.A.C.A.
are set forth below. The business address of each person whose principal
occupation or employment is with Corimon, S.A.C.A. is Edificio Corimon,
Calle Hans Neumann, Los Cortijos de Lourdes, Caracas, Venezuela. Each
person against whose name an asterisk appears is a director of Corimon,
S.A.C.A. Each person named below is a citizen of Venezuela, except
Arthur W. Broslat who is a citizen of the United States of America.
Principal Occupation/Employment
Name and Business Address
Hans Neumann* Chairman Emeritus of the Board
Corimon, S.A.C.A.
Philippe Erard* Chairman of the Board, President and
Chief Executive Officer
Corimon, S.A.C.A.
Jose Luis Gomez Gomez* Executive Vice President
Corimon, S.A.C.A.
Arthur W. Broslat* Executive Vice President and Chief Financial
Officer
Corimon, S.A.C.A.
Dr. Gustavo Vice President and General Counsel
Mata-Borjas* Corimon, S.A.C.A.
Eduardo J. Borberg* Attorney
Member of D'Empaire, Reyna y Bermudez
Edificio Polar
Plaza Venezuela
Caracas, Venezuela
Ramon Illaramendi Retired Chief Financial Officer and Member of
Ochoteco* the Advisory Council
Corimon, S.A.C.A.
<PAGE>
<PAGE> 2
SCHEDULE C TO SCHEDULE 13D
Page 2 of 2
Principal Occupation/Employment
Name and Business Address
Ramon Pinango* Academic Director
I.E.S.A.
Calle IESA
San Bernardino
Caracas, Venezuela
Henrique Machado President
Zuloago* Sivensa S.A.I.C.A. S.A.C.A.
Torre America
Avenue Venezuela - Bello Monte
Caracas, Venezuela
Francisco G. President
Aguerrevere* Electricidad de Caracas, C.A.
Edificio La Electricidad
Avenue Vollmer
San Bernardino
Caracas, Venezuela
Samuel Berner Advisor to Swiss Bank in Venezuela
Enrique Permuy Vice President
Corimon, S.A.C.A.
Teodosio Brea* Attorney
Member of Allende & Brea
Argentina
Malcolm Caplan* Attorney
Member of Baker & McKenzie
Venezuela
Moises Naim* Senior Associate
Carnegie Endowment
Washington, D.C.
Luis Augusto Vegas- Chairman of the Board and Chief
Benedetti* Financial Officer
Benedetti & Co.
Andre J. Cracco* Division Manager
World Bank International Finance Corporation
Santos Cohen Vice President and General Manager
Oxidor, Resimon and Cordetec
Rafael Lara Vice President and General Manager
MGC: Montana Grafica-Convepal and Grafis
<PAGE>
<PAGE> 1
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
1 Stock Purchase Agreement, dated
July 21, 1992, by and among
Corimon Corporation, Corimon C.A.
S.A.C.A. (now Corimon, S.A.C.A.)
and Grow Group, Inc. filed with
Schedule 13D amended hereby,
dated July 31, 1992.
2 Standstill Agreement, dated
July 21, 1992, by and among Grow
Group, Inc., Corimon Corporation
and Corimon S.A. S.A.C.A. (now
Corimon, S.A.C.A.) filed with the
Schedule 13D amended hereby dated
July 31, 1992.
3 Registration Rights Agreement,
dated August 7, 1992, by and
between Grow Group, Inc. and
Corimon C.A. S.A.C.A. (now
Corimon, S.A.C.A.) filed with
Amendment Number 1, dated
August 7, 1992, to the
Schedule 13D amended hereto.
7 Credit Agreement, dated as of
August 10, 1994, between Corimon
Corporation and The Chase
Manhattan Bank, N.A. (the "Bank")
(including Parent Guarantee,
dated August 10, 1994, between
Corimon, S.A.C.A. and the Bank,
and the Security Agreement, dated
August 10, 1994, between Corimon
Corp. and the Bank, as Exhibits C
and D, respectively).
<PAGE> COVER
EXHIBIT 7
************************************************************
CORIMON CORPORATION
_____________________________
CREDIT AGREEMENT
Dated as of August 10, 1994
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
************************************************************
<PAGE>
<PAGE> 1
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement
to which it is attached but is inserted for convenience of
reference only.
Page
Section 1. Definitions and Accounting Matters . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . 8
Section 2. The Commitment, Loans, Note and Prepayments . 9
2.01 Loans . . . . . . . . . . . . . . . . . . . . 9
2.02 Borrowings . . . . . . . . . . . . . . . . . 9
2.03 Letters of Credit . . . . . . . . . . . . . . 9
2.04 Changes of Commitment . . . . . . . . . . . . 11
2.05 Lending Offices . . . . . . . . . . . . . . . 12
2.06 Note . . . . . . . . . . . . . . . . . . . . 12
2.07 Optional Prepayments . . . . . . . . . . . . 12
2.08 Mandatory Prepayment or Pledge of Additional
Shares . . . . . . . . . . . . . . . . . . 12
Section 3. Payments of Principal and Interest . . . . . 13
3.01 Repayment of Loans . . . . . . . . . . . . . 13
3.02 Interest . . . . . . . . . . . . . . . . . . 13
Section 4. Payments; Computations; Etc. . . . . . . . . 14
4.01 Payments . . . . . . . . . . . . . . . . . . 14
4.02 Computations . . . . . . . . . . . . . . . . 14
4.03 Minimum Amounts . . . . . . . . . . . . . . . 15
4.04 Certain Notices . . . . . . . . . . . . . . . 15
4.05 Set-off . . . . . . . . . . . . . . . . . . . 15
Section 5. Yield Protection, Etc. . . . . . . . . . . . 15
5.01 Additional Costs . . . . . . . . . . . . . . 15
5.02 Additional Costs in Respect of Letters of
Credit . . . . . . . . . . . . . . . . . . 17
Section 6. Conditions Precedent . . . . . . . . . . . . 17
6.01 Initial Extension of Credit . . . . . . . . 17
6.02 Initial and Subsequent Extensions of Credit . 19
Section 7. Representations and Warranties . . . . . . . 20
7.01 Corporate Existence . . . . . . . . . . . . . 20
7.02 Financial Condition . . . . . . . . . . . . . 20
7.03 Litigation . . . . . . . . . . . . . . . . . 20
7.04 No Breach . . . . . . . . . . . . . . . . . . 20
7.05 Action . . . . . . . . . . . . . . . . . . . 21
7.06 Approvals . . . . . . . . . . . . . . . . . . 21
<PAGE>
<PAGE> 2
7.07 Use of Credit . . . . . . . . . . . . . . . . 21
7.08 Taxes . . . . . . . . . . . . . . . . . . . . 21
7.09 Investment Company Act . . . . . . . . . . . 22
7.10 Public Utility Holding Company Act . . . . . 22
Section 8. Covenants of the Company . . . . . . . . . . 22
8.01 Financial Statements Etc. . . . . . . . . . . 22
8.02 Litigation . . . . . . . . . . . . . . . . . 23
8.03 Existence, Etc. . . . . . . . . . . . . . . . 23
8.04 Insurance . . . . . . . . . . . . . . . . . . 24
8.05 Prohibition of Fundamental Changes . . . . . 24
8.06 Limitation on Liens . . . . . . . . . . . . . 25
8.07 [Intentionally Omitted] . . . . . . . . . . . 25
8.08 Dividend Payments . . . . . . . . . . . . . . 25
8.09 Use of Proceeds . . . . . . . . . . . . . . . 25
Section 9. Events of Default . . . . . . . . . . . . . . 25
Section 10. Miscellaneous . . . . . . . . . . . . . . . . 29
10.01 Waiver . . . . . . . . . . . . . . . . . . . 29
10.02 Notices . . . . . . . . . . . . . . . . . . . 29
10.03 Expenses, Etc. . . . . . . . . . . . . . . . 30
10.04 Amendments, Etc. . . . . . . . . . . . . . . 31
10.05 Successors and Assigns . . . . . . . . . . . 31
10.06 Assignments and Participations . . . . . . . 31
10.07 Survival . . . . . . . . . . . . . . . . . . 32
10.08 Captions . . . . . . . . . . . . . . . . . . 33
10.09 Counterparts . . . . . . . . . . . . . . . . 33
10.10 Governing Law; Submission to Jurisdiction . . 33
10.11 Waiver of Jury Trial . . . . . . . . . . . . 33
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Opinion of Special New York Counsel to
the Company and the Parent
EXHIBIT B-2 - Form of Opinion of Counsel to
the Parent
EXHIBIT C - Form of Parent Guarantee
EXHIBIT D - Form of Security Agreement
<PAGE>
<PAGE> 1
CREDIT AGREEMENT dated as of August 10, 1994
between: CORIMON CORPORATION, a corporation duly organized
and validly existing under the laws of the State of Delaware
(together with its successors and assigns, the "Company"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association (together with its successors and assigns,
the "Bank").
The Company has requested that the Bank extend
credit to it in an aggregate amount not exceeding $15,000,000
at any one time outstanding and the Bank is prepared to extend
such credit upon the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Applicable Lending Office" shall mean the Principal
Office or such other office of the Bank (or of an affiliate of
the Bank) as the Bank may from time to time specify to the
Company as the office by which the Loans are to be made and
maintained.
"Applicable Margin" shall mean 2% per annum.
"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.
"Base Rate" shall mean, for any day, a rate per
annum equal to the higher of (a) the Federal Funds Rate for
such day plus 1/2 of 1% and (b) the Prime Rate for such day.
Each change in any interest rate provided for herein based
upon the Base Rate resulting from a change in the Base Rate
shall take effect at the time of such change in the Base Rate.
"Basic Documents" shall mean, collectively, this
Agreement, the Note, the Letter of Credit Documents, the
Parent Guarantee and the Security Agreement.
"Basle Accord" shall have the meaning assigned to
such term in Section 5.01 hereof.
<PAGE>
<PAGE> 2
"Business Day" shall mean any day on which
commercial banks are not authorized or required to close in
New York City.
"Chase" shall mean The Chase Manhattan Bank
(National Association).
"Closing Date" shall mean the date upon which the
initial extension of credit hereunder is made.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Collateral Account" shall have the meaning assigned
to such term in Section 4.01 of the Security Agreement.
"Commitment" shall mean the obligation of the Bank
to make Loans, and to issue Letters of Credit pursuant to
Section 2.03 hereof, in an aggregate amount at any one time
outstanding up to but not exceeding $15,000,000 (as the same
may be reduced at any time or from time to time pursuant to
Section 2.04 hereof).
"Commitment Termination Date" shall mean the date
six months after the date hereof; provided that, if such date
is not a Business Day, the Commitment Termination Date shall
be the next preceding Business Day.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an
Event of Default.
"Dividend Payment" shall mean dividends (in cash,
Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for
a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any shares of
any class of stock of the Company or of any warrants, options
or other rights to acquire the same (or to make any payments
to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market
or equity value of the Company), but excluding dividends
payable solely in shares of common stock of the Company.
"Dollars" and "$" shall mean lawful money of the
United States of America.
"Environmental Claim" shall mean, with respect to
any Person, any written or oral notice, claim, demand or other
communication (collectively, a "claim") by any other Person
alleging or asserting such Person's liability for
investigatory
<PAGE>
<PAGE> 3
costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines
or penalties arising out of, based on or resulting from
(a) the presence, or release into the environment, of any
hazardous material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean any and all present
and future Federal, state, local and foreign laws, rules or
regulations, and any orders or decrees, in each case as now or
hereafter in effect, relating to the regulation or protection
of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants or toxic or
hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or
trade or business that is a member of any group of
organizations (i) described in Section 414(b) or (c) of the
Code of which the Company is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of
ERISA and Section 412(c)(11) of the Code and the lien created
under Section 302(f) of ERISA and Section 412(n) of the Code,
described in Section 414(m) or (o) of the Code of which the
Company is a member.
"ERISA Event" shall mean any of the following:
(a) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or
before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the
Code); and
<PAGE>
<PAGE> 4
any request for a waiver under Section 412(d) of the Code
for any Plan;
(b) the distribution under Section 4041 of ERISA of
a notice of intent to terminate any Plan or any action
taken by the Company or an ERISA Affiliate to terminate
any Plan;
(c) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; and
(d) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA, would result in the loss of tax-exempt status
of the trust of which such Plan is a part if the Company
or an ERISA Affiliate fails to timely provide security to
the Plan in accordance with the provisions of said
Sections.
"Event of Default" shall have the meaning assigned
to such term in Section 9 hereof.
"Federal Funds Rate" shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that
(a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day and
(b) if such rate is not so published for any Business Day, the
Federal Funds Rate for such Business Day shall be the average
rate charged to the Bank on such Business Day on such
transactions as determined by the Bank.
"Grow" shall mean Grow Group, Inc., together with
its successors.
"Guarantee" shall mean a guarantee, an endorsement,
a contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity
interests of any Person, or an agreement to purchase, sell or
lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a
debtor to make payment of such debtor's
<PAGE>
<PAGE> 5
obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the
ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.
"Indebtedness" shall mean, for any Person:
(a) obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt
securities or the sale of Property to another Person subject
to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price
of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such
trade accounts payable are payable within 90 days of the date
the respective goods are delivered or the respective services
are rendered; (c) Indebtedness of others secured by a Lien on
the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other
financial institutions for account of such Person; (e) Capital
Lease Obligations of such Person; and (f) Guarantees by such
Person of Indebtedness of others.
"Letter of Credit" shall have the meaning assigned
to such term in Section 2.03 hereof.
"Letter of Credit Documents" shall mean, with
respect to any Letter of Credit, collectively, any application
therefor and any other agreements, instruments, guarantees or
other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for
(a) the rights and obligations of the parties concerned or at
risk with respect to such Letter of Credit or (b) any
collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time
to time.
"Letter of Credit Interest" shall mean the Bank's
liability under Letters of Credit and its rights and interests
in Reimbursement Obligations and fees, interest and other
amounts payable in connection with Letters of Credit and
Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Letter of
Credit,
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<PAGE> 6
the sum of (a) the undrawn amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations at such time due and payable in
respect of all drawings made under such Letter of Credit.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such Property. For
purposes of this Agreement and the other Basic Documents, a
Person shall be deemed to own subject to a Lien any Property
that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Loans" shall mean the loans provided for in
Section 2.01 hereof.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations U and X.
"Market Value", per Share on any day of
determination, shall mean its last sale price on the New York
Stock Exchange on the next preceding Business Day or, if there
was no sale on that day, the last sale price on the New York
Stock Exchange on the next preceding Business Day on which
there was a sale.
"Material Adverse Effect" shall mean a material
adverse effect on (a) the Property, business, operations,
financial condition, prospects, liabilities or capitalization
of the Company or of the Parent and its subsidiaries taken
together, (b) the ability of either Obligor to perform its
obligations under any of the Basic Documents to which it is a
party, (c) the validity or enforceability of any of the Basic
Documents, (d) the rights and remedies of the Bank under any
of the Basic Documents or (e) the timely payment of the
principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection therewith.
"Obligors" shall mean the Company and the Parent.
"Note" shall mean the promissory note provided for
by Section 2.06 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same
shall be modified and supplemented and in effect from time to
time.
"Parent" shall mean Corimon, S.A.C.A., a Venezuelan
company.
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<PAGE> 7
"Parent Guarantee" shall mean a guarantee agreement,
substantially in the form of Exhibit C hereto, dated as of the
date hereof, between the Parent and the Bank, as the same may
be modified and supplemented and in effect from time to time.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any
agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA
Affiliate and that is covered by Title IV of ERISA, other than
a multiemployer plan defined as such in Section 3(37) of
ERISA.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan, any Reimbursement Obligation or any
other amount under this Agreement, the Note or any other Basic
Document that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment
or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such
amount is paid in full equal to 2% plus the Base Rate as in
effect from time to time plus the Applicable Margin.
"Prime Rate" shall mean the rate of interest from
time to time announced by the Bank at the Principal Office as
its prime commercial lending rate.
"Principal Office" shall mean the principal office
of Chase, located on the date hereof at 1 Chase Manhattan
Plaza, New York, New York 10081.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible.
"Registration Rights Agreement" shall mean the
Registration Rights Agreement made and entered into as of
July 21, 1992 by and between Grow and the Parent, as the same
may be modified and supplemented and in effect from time to
time.
"Regulations A, U and X" shall mean, respectively,
Regulations A, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.
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<PAGE> 8
"Regulatory Change" shall mean any change after the
date of this Agreement in Federal, state or foreign law or
regulations or the adoption or making after such date of any
interpretation, directive or request applying to a class of
banks including the Bank of or under any Federal, state or
foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or that may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by the Bank in respect
of any drawings under a Letter of Credit.
"Security Agreement" shall mean a security
agreement, substantially in the form of Exhibit D hereto,
dated as of the date hereof, between the Company and the Bank,
as the same may be modified and supplemented and in effect
from time to time.
"Shares" shall mean shares of the common stock, par
value $0.10, of Grow.
"Standstill Agreement" shall mean the Standstill
Agreement made and entered into as of July 21, 1992, by and
among Grow, the Parent and the Company, as the same may be
modified and supplemented and in effect from time to time.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State of
New York.
"U.S. GAAP" shall mean, at any time, generally
accepted accounting principles in the United States of America
at such time.
"Venezuelan GAAP" shall mean, at any time, generally
accepted accounting principles in the Republic of Venezuela at
such time.
1.02 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all financial statements and
certificates and reports as to financial matters required to
be furnished to the Bank hereunder shall be prepared in
accordance with Venezuelan GAAP, applied on a basis consistent
with that used in the audited consolidated financial
statements of the Parent referred to in Section 7.02 hereof.
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<PAGE> 9
Section 2. The Commitment, Loans, Note and
Prepayments.
2.01 Loans. The Bank agrees, on the terms and
conditions of this Agreement, to make loans to the Company in
Dollars during the period from and including the Closing Date
to but not including the Commitment Termination Date in an
aggregate principal amount at any one time outstanding up to
but not exceeding the amount of the Commitment as in effect
from time to time, provided that in no event shall the
aggregate principal amount of all Loans, together with the
aggregate amount of all Letter of Credit Liabilities, exceed
the amount of the Commitment as in effect from time to time.
Subject to the terms and conditions of this Agreement, during
such period the Company may borrow, repay and reborrow the
amount of the Commitment hereunder.
2.02 Borrowings. The Company shall give the Bank
notice of each borrowing hereunder as provided in Section 4.04
hereof. No later than 1:00 p.m. New York time on the date
specified for each borrowing hereunder, the Bank shall,
subject to the terms and conditions of this Agreement, make
available the amount of such borrowing to the Company by
depositing the same, in immediately available funds, in an
account of the Company maintained with the Bank at the
Principal Office designated by the Company.
2.03 Letters of Credit. Subject to the terms and
conditions of this Agreement, the Commitment may be utilized,
upon the request of the Company, in addition to the Loans
provided for by Section 2.01(a) hereof, by the issuance by the
Bank of letters of credit (collectively, "Letters of Credit")
for account of the Company (or the Parent or any subsidiary of
the Parent), provided that in no event shall (i) the aggregate
amount of all Letter of Credit Liabilities, together with the
aggregate principal amount of the Loans, exceed the amount of
the Commitment as in effect from time to time, (ii) the
outstanding aggregate amount of all Letter of Credit
Liabilities exceed $5,000,000 and (iii) the expiration date of
any Letter of Credit extend beyond the Commitment Termination
Date as in effect at the time of issuance of such Letter of
Credit. The following additional provisions shall apply to
Letters of Credit:
(a) The Company shall give the Bank at least three
Business Days' irrevocable prior notice (effective upon
receipt) specifying the Business Day (which shall be no
later than 10 days preceding the Commitment Termination
Date) each Letter of Credit is to be issued and the
account party or parties therefor and describing in
reasonable detail the proposed terms of such Letter of
Credit (including the beneficiary thereof) and the nature
of the
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<PAGE> 10
transactions or obligations proposed to be supported
thereby.
(b) Upon receipt from the beneficiary of any Letter
of Credit of any demand for payment under such Letter of
Credit, the Bank shall promptly notify the Company of the
amount to be paid by the Bank as a result of such demand
and the date on which payment is to be made by the Bank
to such beneficiary in respect of such demand.
Notwithstanding the identity of the account party for any
Letter of Credit, the Company hereby unconditionally
agrees to pay and reimburse the Bank for the amount of
each demand for payment under such Letter of Credit at or
prior to the date on which payment is to be made by the
Bank to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind.
(c) Forthwith upon its receipt of a notice referred
to in clause (b) of this Section 2.03, the Company shall
advise the Bank whether or not the Company intends to
borrow hereunder to finance its obligation to reimburse
the Bank for the amount of the related demand for payment
and, if it does, submit a notice of such borrowing as
provided in Section 4.04 hereof.
(d) The Company shall pay to the Bank a letter of
credit fee in respect of each Letter of Credit in an
amount equal to 2% per annum of the daily average undrawn
amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit
(i) in the case of a Letter of Credit that expires in
accordance with its terms, to and including such
expiration date and (ii) in the case of a Letter of
Credit that is drawn in full or is otherwise terminated
other than on the stated expiration date of such Letter
of Credit, to but excluding the date such Letter of
Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on the Commitment
Termination Date and to be calculated for any day after
giving effect to any payments made under such Letter of
Credit on such day).
(e) The issuance by the Bank of each Letter of
Credit shall, in addition to the conditions precedent set
forth in Section 6 hereof, be subject to the conditions
precedent that (i) such Letter of Credit shall be in such
form, contain such terms and support such transactions as
shall be satisfactory to the Bank consistent with its
then current practices and procedures with respect to
letters of credit of the same type and (ii) the Company
shall have executed and delivered such applications,
agreements and other
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<PAGE> 11
instruments relating to such Letter of Credit as the Bank
shall have reasonably requested consistent with its then
current practices and procedures with respect to letters
of credit of the same type, provided that in the event of
any conflict between any such application, agreement or
other instrument and the provisions of this Agreement or
the Security Agreement, the provisions of this Agreement
and the Security Agreement shall control.
(f) The issuance by the Bank of any modification or
supplement to any Letter of Credit hereunder shall be
subject to the same conditions applicable under this
Section 2.03 to the issuance of new Letters of Credit,
and no such modification or supplement shall be issued
hereunder unless either (i) the respective Letter of
Credit affected thereby would comply with such conditions
were it issued hereunder in such modified or supplemented
form on the date of such modification or supplement or
(ii) the Bank shall have consented thereto.
The Company hereby indemnifies and holds harmless the Bank
from and against any and all claims and damages, losses,
liabilities, costs or expenses that the Bank may incur (or
that may be claimed against the Bank by any Person whatsoever)
by reason of or in connection with the execution and delivery
or transfer of or payment or refusal to pay by the Bank under
any Letter of Credit; provided that the Company shall not be
required to indemnify the Bank for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross
negligence of the Bank in determining whether a request
presented under any Letter of Credit complied with the terms
of such Letter of Credit or (y) the Bank's failure to pay
under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of
such Letter of Credit. Nothing in this Section 2.03 is
intended to limit the other obligations of the Company or the
Bank under this Agreement.
2.04 Changes of Commitment.
(a) The Commitment shall be automatically reduced
to zero on the Commitment Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Loans or Letter of Credit
Liabilities are outstanding, to terminate the Commitment and
(ii) to reduce the unused amount of the Commitment (for which
purpose use of the Commitment shall be deemed to include the
aggregate amount of Letter of Credit Liabilities); provided
that (x) the Company shall give notice of each such
termination or
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<PAGE> 12
reduction as provided in Section 4.04 hereof and (y) each
partial reduction shall be in an amount at least equal to
$3,000,000 (or a larger multiple of $1,000,000).
(c) The Commitment once terminated or reduced may
not be reinstated.
2.05 Lending Offices. The Loans shall be made and
maintained at the Bank's Applicable Lending Office.
2.06 Note.
(a) The Loans shall be evidenced by a single
promissory note of the Company substantially in the form of
Exhibit A hereto, dated the date hereof, payable to the Bank
in a principal amount equal to the amount of the Commitment as
originally in effect and otherwise duly completed.
(b) The date and amount of each Loan made by the
Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books
and, prior to any transfer of the Note, endorsed by the Bank
on the schedule attached to the Note or any continuation
thereof; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing hereunder or under the Note in respect of the
Loans.
(c) The Bank shall not be entitled to have the Note
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a
permitted assignment of all or any portion of the Commitment,
Loans and Note pursuant to Section 10.06(b) hereof.
2.07 Optional Prepayments. Subject to Section 4.03
hereof, the Company shall have the right to prepay Loans at
any time or from time to time, provided that the Company shall
give the Bank notice of each such prepayment as provided in
Section 4.04 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become
due and payable hereunder).
2.08 Mandatory Prepayment or Pledge of Additional
Shares. If at any time the aggregate unpaid principal amount
of the Loans plus the aggregate amount Letter of Credit
Liabilities shall exceed 50% of the Market Value at such time
of the Shares pledged under and in accordance with the
Security Agreement, then the Company shall (a) prepay the
Loans (or, after the prepayment of all outstanding Loans,
provide cover for Letter of Credit Liabilities as specified in
the next sentence) and/or (b) subject
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<PAGE> 13
to Section 5.01(a) of the Security Agreement, pledge
additional Shares, in each case in such amounts as shall be
necessary so that, immediately after giving effect to such
prepayment or pledge, the aggregate unpaid principal amount of
the Loans plus the aggregate amount Letter of Credit
Liabilities does not exceed 50% of the Market Value at such
time of the Shares pledged under and in accordance with the
Security Agreement. In the event that the Company shall be
required pursuant to this Section 2.08 to provide cover for
Letter of Credit Liabilities, the Company shall effect the
same by paying to the Bank immediately available funds in an
amount equal to the required amount, which funds shall be
retained by the Bank in the Collateral Account (as provided
therein as collateral security in the first instance for the
Letter of Credit Liabilities) until such time as the Letters
of Credit shall have been terminated and all of the Letter of
Credit Liabilities paid in full.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company hereby
promises to pay to the Bank the entire outstanding principal
amount of the Loans, and each Loan shall mature, on the
Commitment Termination Date.
3.02 Interest. The Company hereby promises to pay
to the Bank interest on the unpaid principal amount of each
Loan for the period from and including the date of such Loan
to but excluding the date such Loan shall be paid in full, at
a rate per annum equal to the Base Rate (as in effect from
time to time) plus the Applicable Margin. Notwithstanding the
foregoing, the Company hereby promises to pay to the Bank
interest at the applicable Post-Default Rate on any principal
of any Loan, on any Reimbursement Obligation and on any other
amount payable by the Company hereunder or under the Note that
shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or
otherwise), for the period from and including the due date
thereof to but excluding the date the same is paid in full.
Accrued interest on each Loan shall be payable upon the
payment or prepayment thereof (but only on the principal
amount so paid or prepaid), except that interest payable at
the Post-Default Rate shall be payable from time to time on
demand. Promptly after the determination of any interest rate
provided for herein or any change therein, the Bank shall give
notice thereof to the Company.
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<PAGE> 14
Section 4. Payments; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest, Reimbursement Obligations
and other amounts to be made by the Company under this
Agreement and the Note, and, except to the extent otherwise
provided therein, all payments to be made by the Company under
any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or
counterclaim, to the Bank at the Principal Office, not later
than 1:00 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next
succeeding Business Day).
(b) The Bank may (but shall not be obligated to)
debit the amount of any such payment that is not made by such
time to any ordinary deposit account of the Company with the
Bank (with notice to the Company).
(c) The Company shall, at the time of making each
payment under this Agreement or the Note, specify to the Bank
the Loans, Reimbursement Obligations or other amounts payable
by the Company hereunder to which such payment is to be
applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is
continuing, the Bank may apply the amount of such payment
received by it in such manner as it may determine to be
appropriate).
(d) If the due date of any payment under this
Agreement or the Note would otherwise fall on a day that is
not a Business Day, such date shall be extended to the next
succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Computations. Interest on Loans and
Reimbursement Obligations shall be computed on the basis of a
year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable; letter of credit
fees shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but, except as
otherwise provided in Section 2.03(d) hereof, excluding the
last day) occurring in the period for which payable.
Notwithstanding the foregoing, for each day that the Base Rate
is calculated by reference to the Federal Funds Rate, interest
on Loans and Reimbursement Obligations shall be computed on
the basis of a year of 360 days and actual days elapsed.
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<PAGE> 15
4.03 Minimum Amounts. Each borrowing and partial
prepayment of principal of Loans shall be in an amount at
least equal to $1,000,000 or a larger multiple of $500,000.
4.04 Certain Notices. Notices by the Company to
the Bank of terminations or reductions of the Commitment and
of borrowings and optional prepayments of Loans shall be
irrevocable and shall be effective only if received by the
Bank not later than 10:00 a.m. New York time on the number of
Business Days prior to the date of the relevant termination,
reduction, borrowing or prepayment:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitment or borrowing
of Loans 2
Prepayment of Loans 1
Each such notice of termination or reduction shall specify the
amount of the Commitment to be terminated or reduced. Each
such notice of borrowing or optional prepayment shall specify
the Loans to be borrowed or prepaid and the amount (subject to
Section 4.03 hereof) of each Loan to be borrowed or prepaid
and the date of borrowing or optional prepayment (which shall
be a Business Day).
4.05 Set-off. The Company agrees that, in addition
to (and without limitation of) any right of set-off, banker's
lien or counterclaim the Bank may otherwise have, the Bank
shall be entitled, at its option, to offset balances held by
it for account of the Company at any of its offices, in
Dollars or in any other currency, against any principal of or
interest on any of the Loans, Reimbursement Obligations or any
other amount payable to the Bank hereunder, that is not paid
when due (regardless of whether such balances are then due to
the Company), in which case it shall promptly notify the
Company thereof, provided that the Bank's failure to give such
notice shall not affect the validity thereof.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay to the Bank from time to
time on request such amounts as the Bank may determine to be
<PAGE>
<PAGE> 16
necessary to compensate the Bank (or, without duplication, the
bank holding company of which the Bank is a subsidiary) for
any costs that it determines are attributable to the
maintenance by the Bank (or any Applicable Lending Office or
such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) of any court or governmental or
monetary authority (i) following any Regulatory Change or
(ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be
unlawful) hereafter issued by any government or governmental
or supervisory authority implementing at the national level
the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 208, Appendix A;
12 C.F.R. Part 225, Appendix A) and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in
respect of the Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of
return on assets or equity of the Bank (or any Applicable
Lending Office or such bank holding company) to a level below
that which the Bank (or any Applicable Lending Office or such
bank holding company) could have achieved but for such
Regulatory Change). For purposes of this Section 5.01(a) and
Section 5.02 hereof, "Basle Accord" shall mean the proposals
for risk-based capital framework described by the Basle
Committee on Banking Regulations and Supervisory Practices in
its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to
time or any replacement thereof.
(b) The Bank shall notify the Company of any event
occurring after the date of this Agreement entitling the Bank
to compensation under paragraph (a) of this Section 5.01 as
promptly as practicable, but in any event within 45 days,
after the Bank obtains actual knowledge thereof; provided that
(i) if the Bank fails to give such notice within 45 days after
it obtains actual knowledge of such an event, the Bank shall,
with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such
event, only be entitled to payment under this Section 5.01 for
costs incurred from and after the date 45 days prior to the
date that the Bank does give such notice and (ii) the Bank
will designate a different Applicable Lending Office for the
Loans affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of the Bank, be disadvantageous
to the Bank, except that the Bank shall have no obligation to
designate an Applicable Lending Office located
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<PAGE> 17
in the United States of America. The Bank will furnish to the
Company a certificate setting forth the basis and amount of
each request by the Bank for compensation under paragraph (a)
of this Section 5.01. Determinations and allocations by the
Bank for purposes of this Section 5.01 of the effect of
capital maintained pursuant to paragraph (a) of this
Section 5.01, on its costs or rate of return of maintaining
Loans, or on amounts receivable by it in respect of Loans, and
of the amounts required to compensate the Bank under this
Section 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
5.02 Additional Costs in Respect of Letters of
Credit. Without limiting the obligations of the Company under
Section 5.01 hereof (but without duplication), if as a result
of any Regulatory Change or any risk-based capital guideline
or other requirement hereafter issued by any government or
governmental or supervisory authority implementing at the
national level the Basle Accord there shall be imposed,
modified or deemed applicable any tax, reserve, special
deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit
issued or to be issued hereunder and the result shall be to
increase the cost to the Bank of issuing or maintaining its
obligation hereunder to issue any Letter of Credit hereunder
or reduce any amount receivable by the Bank hereunder in
respect of any Letter of Credit (which increases in cost, or
reductions in amount receivable, shall be the result of the
Bank's reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then, upon
demand by the Bank, the Company shall pay immediately to the
Bank, from time to time as specified by the Bank, such
additional amounts as shall be sufficient to compensate the
Bank for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount
incurred by the Bank, submitted by the Bank to the Company
shall be conclusive in the absence of manifest error as to the
amount thereof.
Section 6. Conditions Precedent.
6.01 Initial Extension of Credit . The obligation
of the Bank to make the initial extension of credit hereunder
(whether by making a Loan or issuing a Letter of Credit) is
subject to the conditions precedent that the Bank shall have
received the following documents, each of which shall be
satisfactory to the Bank in form and substance:
(a) Corporate Documents. Certified copies of the
charter and by-laws (or equivalent documents) of each
Obligor and of all corporate authority for each Obligor
<PAGE>
<PAGE> 18
(including, without limitation, board of director
resolutions and evidence of the incumbency of officers)
with respect to the execution, delivery and performance
of such of the Basic Documents to which it is intended to
be a party and each other document to be delivered by
each Obligor from time to time in connection herewith and
the extensions of credit hereunder (and the Bank may
conclusively rely on such certificate until it receives
notice in writing from each Obligor to the contrary).
(b) Form U-1. A purpose statement on Form U-1
under Regulation U, duly completed and executed by or on
behalf of the Company.
(c) Opinion of Special New York Counsel to the
Company and the Parent. An opinion, dated the Closing
Date, of Sullivan & Cromwell, special New York counsel to
the Company and the Parent, substantially in the form of
Exhibit B-1 hereto and covering such other matters as the
Bank may reasonably request (and the Company hereby
instructs such counsel to deliver such opinion to the
Bank).
(d) Opinion of Counsel to the Parent. An opinion,
dated the Closing Date, of Gustavo Mata-Borjas, Esq.,
General Counsel of the Parent, substantially in the form
of Exhibit B-2 hereto and covering such other matters as
the Bank may reasonably request.
(e) Note. The Note, duly completed and executed.
(f) Security Agreement. The Security Agreement,
duly executed and delivered by the Company and the Bank,
together with a Confirmation (as defined in the Security
Agreement) covering a number of Shares such that the
condition in clause (c) of the first sentence of
Section 6.02 hereof is satisfied. In addition, the
Company shall have taken such other action as the Bank
shall have requested in order to perfect the security
interests created pursuant to the Security Agreement.
(g) Parent Guarantee. The Parent Guarantee duly
executed and delivered by the Parent and the Bank.
(h) Consent of Process Agent. Evidence that the
Process Agent (as defined in the Parent Guarantee) shall
have consented to its appointment called for by
Section 6.05 of the Parent Guarantee.
<PAGE>
<PAGE> 19
(i) Other Documents. Such other documents as the
Bank or special New York counsel to the Bank may
reasonably request.
The obligation of the Bank to make the initial extension of
credit hereunder is also subject to the payment by the Company
of such fees as the Company shall have agreed to pay or
deliver to the Bank in connection herewith, including, without
limitation, the reasonable fees and expenses of Milbank,
Tweed, Hadley & McCloy, special New York counsel to the Bank
in connection with the negotiation, preparation, execution and
delivery of this Agreement and the Note and the other Basic
Documents and the extensions of credit hereunder (to the
extent that statements for such fees and expenses have been
delivered to the Company).
6.02 Initial and Subsequent Extensions of Credit.
The obligation of the Bank to make any Loan or otherwise
extend any credit to the Company upon the occasion of each
borrowing or other extension of credit hereunder (including
the initial borrowing) is subject to the further conditions
precedent that, both immediately prior to the making of such
Loan or other extension of credit and also after giving effect
thereto and to the intended use thereof:
(a) no Default shall have occurred and be
continuing;
(b) the representations and warranties made by each
Obligor in Section 7 hereof, and in each of the other
Basic Documents, shall be true and complete on and as of
the date of the making of such Loan or other extension of
credit with the same force and effect as if made on and
as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(c) the aggregate unpaid principal amount of the
Loans plus the aggregate amount Letter of Credit
Liabilities does not exceed 50% of the then Market Value
of the Shares pledged under and in accordance with the
Security Agreement.
Each notice of borrowing or request for the issuance of a
Letter of Credit by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice or
request and, unless the Company otherwise notifies the Bank
prior to the date of such borrowing or issuance, as of the
date of such borrowing or issuance).
<PAGE>
<PAGE> 20
Section 7. Representations and Warranties. The
Company represents and warrants to the Bank that:
7.01 Corporate Existence. Each Obligor: (a) is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power,
and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry
on its business as now being or as proposed to be conducted;
and (c) is qualified to do business and is in good standing in
all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where
failure so to qualify could (either individually or in the
aggregate) have a Material Adverse Effect.
7.02 Financial Condition. The Company has
heretofore furnished to the Bank the consolidated balance
sheet of the Parent and its subsidiaries as at March 31, 1994
and the related consolidated statements of income, movement in
shareholders' equity and cash flows of the Parent and its
subsidiaries for the fiscal year ended on said date, with the
opinion thereon of Espineira, Sheldon y Asociados, Price
Waterhouse. Such financial statements present fairly the
consolidated financial condition of the Parent and its
subsidiaries and the results of their operations and cash
flows in conformity with Venezuelan GAAP applied on a
consistent basis. None of the Parent nor any of its
subsidiaries has on the date hereof any material contingent
liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from
any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheet as at said
date. Since March 31, 1994, there has been no material
adverse change in the consolidated financial condition,
operations, business or prospects taken as a whole of the
Parent and its subsidiaries from that set forth in said
financial statements as at said date.
7.03 Litigation. There are no legal or arbitral
proceedings, or any proceedings by or before any governmental
or regulatory authority or agency, now pending or (to the
knowledge of the Company) threatened against the Parent or any
of its subsidiaries that, if adversely determined, is likely
(either individually or in the aggregate) to have a Material
Adverse Effect.
7.04 No Breach. None of the execution and delivery
of this Agreement and the Note and the other Basic Documents,
the consummation of the transactions herein and therein
contemplated or compliance with the terms and provisions
hereof and thereof will conflict with or result in a breach
of, or require any
<PAGE>
<PAGE> 21
consent under, the charter or by-laws of either Obligor, or
any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Parent or
any of its subsidiaries (including, without limitation, the
Company) is a party or by which any of them or any of their
Property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument,
or (except for the Liens created pursuant to the Security
Agreement) result in the creation or imposition of any Lien
upon any Property of the Parent or any of its subsidiaries
pursuant to the terms of any such agreement or instrument.
7.05 Action. Each Obligor has all necessary
corporate power, authority and legal right to execute, deliver
and perform its obligations under each of the Basic Documents
to which it is a party; the execution, delivery and
performance by each Obligor of each of the Basic Documents to
which it is a party have been duly authorized by all necessary
corporate action on its part (including, without limitation,
any required shareholder approvals); and this Agreement has
been duly and validly executed and delivered by the Company
and constitutes, and each of the Note and the other Basic
Documents to which either Obligor is a party when executed and
delivered (in the case of the Note, for value) will
constitute, the legal, valid and binding obligation of such
Obligor, enforceable against such Obligor in accordance with
its terms.
7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any
securities exchange, are necessary for the execution, delivery
or performance by either Obligor of the Basic Documents to
which it is a party or for the legality, validity or
enforceability hereof or thereof, except for filings by the
Company under Section 13(d) of the Securities Exchange Act of
1934, as amended, in connection with the pledge of Shares.
7.07 Use of Credit. None of the Parent nor any of
its subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for
the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock, and no part of the proceeds
of any extension of credit hereunder will be used to buy or
carry any Margin Stock.
7.08 Taxes. The Company has filed all Federal
income tax returns and all other material tax returns that are
required to be filed by it and has paid all taxes due pursuant
to such returns or pursuant to any assessment received by the
Company. The charges, accruals and reserves on the books of
the Company in
<PAGE>
<PAGE> 22
respect of taxes and other governmental charges are, in the
opinion of the Company, adequate. The Company has not given
or been requested to give a waiver of the statute of
limitations relating to the payment of Federal, state, local
and foreign taxes or other impositions.
7.09 Investment Company Act. Neither Obligor is an
"investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended.
7.10 Public Utility Holding Company Act. Neither
Obligor is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Bank that, so long as any
Commitment, Loan or Letter of Credit Liability is outstanding
and until payment in full of all amounts payable by the
Company hereunder:
8.01 Financial Statements Etc. The Company shall
deliver to the Bank:
(a) as soon as available and in any event within 45
days after the end of each quarterly fiscal period of
each fiscal year of the Parent, consolidated statements
of income, movement in shareholders' equity and cash
flows of the Parent and its subsidiaries for such period
and for the period from the beginning of the respective
fiscal year to the end of such period, and the related
consolidated balance sheet of the Parent and its
subsidiaries as at the end of such period, setting forth
in each case in comparative form the corresponding
consolidated figures for the corresponding periods in the
preceding fiscal year, accompanied by a certificate of a
senior financial officer of the Parent, which certificate
shall state that said consolidated financial statements
present fairly the consolidated financial position and
results of operations and cash flows of the Parent and
its subsidiaries, in accordance with Venezuelan GAAP,
consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 90
days after the end of each fiscal year of the Parent,
consolidated statements of income, movement in
shareholders' equity and cash flows of the Parent and its
subsidiaries for
<PAGE>
<PAGE> 23
such fiscal year and the related consolidated balance
sheet of the Parent and its subsidiaries as at the end of
such fiscal year, setting forth in each case in
comparative form the corresponding consolidated figures
for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public
accountants of recognized standing, which opinion shall
state that said consolidated financial statements present
fairly the consolidated financial position and results of
operations and cash flows of the Parent and its
subsidiaries as at the end of, and for, such fiscal year
in accordance with Venezuelan GAAP;
(c) promptly upon their becoming available, copies
of all registration statements and regular periodic
reports, if any, that the Parent or any of its
subsidiaries shall have filed with the Securities and
Exchange Commission (or any governmental agency
substituted therefor) or any national securities
exchange;
(d) promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all
financial statements, reports and proxy statements so
mailed;
(e) promptly after the Company knows or has reason
to believe that any Default has occurred, a notice of
such Default describing the same in reasonable detail
and, together with such notice or as soon thereafter as
possible, a description of the action taken or proposed
to be taken with respect thereto; and
(f) from time to time such other information
regarding the financial condition, operations, business
or prospects of the Parent or any of its subsidiaries as
the Bank may reasonably request.
8.02 Litigation. The Company will promptly give to
the Bank notice of all legal or arbitral proceedings, and of
all proceedings by or before any governmental or regulatory
authority or agency, and any material development in respect
of such legal or other proceedings, affecting the Parent or
any of its subsidiaries, except proceedings that, if adversely
determined, would not (either individually or in the
aggregate) have a Material Adverse Effect.
8.03 Existence, Etc. The Company will:
(a) preserve and maintain its legal existence and
all of its material rights, privileges, licenses and
franchises (provided that nothing in this Section 8.03
shall prohibit
<PAGE>
<PAGE> 24
any transaction expressly permitted under Section 8.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which
is being contested in good faith and by proper
proceedings and against which adequate reserves are being
maintained;
(d) maintain all of its Properties used or useful
in its business in good working order and condition,
ordinary wear and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with
U.S. GAAP consistently applied; and
(f) permit representatives of the Bank, during
normal business hours, to examine, copy and make extracts
from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with
its officers, all to the extent reasonably requested by
the Bank.
8.04 Insurance. The Company will maintain
insurance with financially sound and reputable insurance
companies, and with respect to Property and risks of a
character usually maintained by corporations engaged in the
same or similar business similarly situated, against loss,
damage and liability of the kinds and in the amounts
customarily maintained by such corporations.
8.05 Prohibition of Fundamental Changes. Without
the prior consent of the Bank (which will not be unreasonably
withheld), the Company will not: (a) enter into any
transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); (b) acquire any business or
Property from, or capital stock of, or be a party to any
acquisition of, any Person except for purchases of Property to
be sold or used in the ordinary course of business; or (c)
convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all
<PAGE>
<PAGE> 25
or a substantial part of its business or Property, whether now
owned or hereafter acquired.
8.06 Limitation on Liens. The Company will not
create, incur, assume or suffer to exist any Lien upon any of
its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security
Agreement;
(b) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are
being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with
U.S. GAAP;
(c) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business that are not overdue for
a period of more than 30 days or that are being contested
in good faith and by appropriate proceedings and Liens
securing judgments but only to the extent for an amount
and for a period not resulting in an Event of Default
under Section 9(h) hereof; and
(d) pledges or deposits under worker's
compensation, unemployment insurance and other social
security legislation.
8.07 [Intentionally Omitted.]
8.08 Dividend Payments. The Company will not
declare or make any Dividend Payment at any time.
8.09 Use of Proceeds. Subject to Section 7.07
hereof, the Company will use the proceeds of the Loans
hereunder for general corporate purposes (in compliance with
all applicable legal and regulatory requirements); provided
that the Bank shall not have any responsibility as to the use
of any of such proceeds.
Section 9. Events of Default. If one or more of
the following events (herein called "Events of Default") shall
occur and be continuing:
(a) The Company shall: (i) default in the payment
when due (whether at stated maturity or upon mandatory or
<PAGE>
<PAGE> 26
optional prepayment) of any principal of any Loan or any
Reimbursement Obligation payable by it hereunder; or (ii)
default in the payment when due of any interest on any
Loan, any fee or any other amount payable by it hereunder
or under any other Basic Document and such default shall
have continued unremedied for a period of two Business
Days or more days; or
(b) Either Obligor shall default in the payment
when due of any principal of or interest on any of its
Indebtedness aggregating $2,000,000 or more; or any event
specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness
shall occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its
stated maturity or to have the interest rate thereon
reset to a level so that securities evidencing such
Indebtedness trade at a level specified in relation to
the par value thereof; provided that any such event in
respect of any such Indebtedness shall not constitute an
Event of Default hereunder so long as there shall be in
effect an agreement of the holder of such Indebtedness
that such holder will not take any legal action to
enforce such Indebtedness; or
(c) Any representation, warranty or certification
made or deemed made herein or in any other Basic Document
(or in any modification or supplement hereto or thereto)
by either Obligor, or any certificate furnished to the
Bank pursuant to the provisions hereof or thereof, shall
prove to have been false or misleading as of the time
made or furnished in any material respect; or
(d) The Company shall default in the performance of
any of its obligations under any of Sections 8.01(e),
8.05, 8.06, 8.07 or 8.08 hereof or the Company shall
default in the performance of any of its obligations
under Section 4.02, 5.01(a), 5.02 or 5.04 of the Security
Agreement; or the Company shall default in the
performance of any of its obligations under Section 2.08
hereof and such default shall continue unremedied for a
period of two Business Days or more days; or the Parent
shall default in the performance of any of its
obligations under the Parent Guarantee; or the Company
shall default in the performance of any of its other
obligations in this Agreement or any other Basic Document
and such default shall continue
<PAGE>
<PAGE> 27
unremedied for a period of 10 or more days after notice
thereof to the Company by the Bank; or
(e) Either Obligor shall admit in writing its
inability to, or be generally unable to, pay its debts as
such debts become due; or
(f) Either Obligor shall (i) apply for or consent
to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of
itself or of all or a substantial part of its Property,
(ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment
of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under
the Bankruptcy Code or (vi) take any corporate action for
the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced,
without the application or consent of the affected
Obligor, in any court of competent jurisdiction, seeking
(i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the
like of such Obligor or of all or any substantial part of
its Property, or (iii) similar relief in respect of such
Obligor under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against either Obligor
shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment
of money in excess of $1,000,000 in the aggregate shall
be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against
either Obligor and the same shall not be discharged (or
provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and such Obligor
shall not, within said period of 30 days, or such longer
period during which execution of the
<PAGE>
<PAGE> 28
same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal; or
(i) One or more ERISA Events shall occur and, as a
result thereof, the Company or any ERISA Affiliate shall
incur or in the opinion of the Bank shall be reasonably
likely to incur a liability to a Plan or PBGC that, in
the determination of the Bank, would (either individually
or in the aggregate) have a Material Adverse Effect; or
(j) There shall have been asserted against the
Parent or any of its subsidiaries an Environmental Claim
that, in the judgment of the Bank is reasonably likely to
be determined adversely to the Parent or any of its
subsidiaries, and the amount thereof (either individually
or in the aggregate) is reasonably likely to have a
Material Adverse Effect (insofar as such amount is
payable by the Parent or any of its subsidiaries); or
(k) One or more of the Parent and its wholly owned
subsidiaries shall fail collectively to own (beneficially
and of record) and control all of the issued and
outstanding shares of capital stock (other than
directors' qualifying shares) of the Company; or any
"Change of Control" (as such term is defined in the
Standstill Agreement) shall have occurred and be
continuing; or
(l) The Liens created by the Security Agreement
shall at any time not constitute a valid and perfected
Lien on the collateral intended to be covered thereby (to
the extent perfection by filing, registration,
recordation or possession is required herein or therein)
in favor of the Bank, free and clear of all other Liens
or, except for expiration in accordance with its terms,
the Security Agreement shall for whatever reason be
terminated or cease to be in full force and effect, or
the enforceability thereof shall be contested by the
Company; or
(m) Any authorization, approval or consent of, or
filing or registration with, any governmental authority
or administrative body is or becomes necessary for the
making or performance by the Parent of the Parent
Guarantee and such has not been obtained or accomplished
within 10 days;
THEREUPON: (1) in the case of an Event of Default other than
one referred to in clause (f) or (g) of this Section 9 with
respect to the Company, the Bank may, by notice to the
Company, terminate the Commitment and/or declare the principal
amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other amounts
payable by the
<PAGE>
<PAGE> 29
Company hereunder and under the Note (including, without
limitation, any amounts payable under Section 5.02 hereof) to
be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are
hereby expressly waived by the Company; and (2) in the case of
the occurrence of an Event of Default referred to in
clause (f) or (g) of this Section 9 with respect to the
Company, the Commitment shall automatically be terminated and
the principal amount then outstanding of, and the accrued
interest on, the Loans, the Reimbursement Obligations and all
other amounts payable by the Company hereunder and under the
Note (including, without limitation, any amounts payable under
Section 5.02 hereof) shall automatically become immediately
due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly
waived by the Company.
In addition, upon the occurrence and during the
continuance of any Event of Default (if the Bank has declared
the principal amount then outstanding of, and accrued interest
on, the Loans and all other amounts payable by the Company
hereunder and under the Note to be due and payable), the
Company agrees that it shall, if requested by the Bank (and,
in the case of any Event of Default referred to in clause (f)
or (g) of this Section 9 with respect to the Company,
forthwith, without any demand or the taking of any other
action by the Bank) provide cover for the Letter of Credit
Liabilities by paying to the Bank immediately available funds
in an amount equal to the then aggregate undrawn amount of all
Letters of Credit, which funds shall be held by the Bank in
the Collateral Account as collateral security in the first
instance for the Letter of Credit Liabilities and be subject
to withdrawal only as therein provided.
Section 10. Miscellaneous.
10.01 Waiver. No failure on the part of the Bank
to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under
this Agreement or the Note shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power
or privilege under this Agreement or the Note preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
10.02 Notices. All notices, requests and other
communications provided for herein and under the Security
Agreement (including, without limitation, any modifications
of,
<PAGE>
<PAGE> 30
or waivers, requests or consents under, this Agreement) shall
be given or made in writing (including, without limitation, by
telecopy) delivered to the intended recipient at the "Address
for Notices" specified below its name on the signature pages
hereof); or, as to any party, at such other address as shall
be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
10.03 Expenses, Etc. The Company agrees to pay or
reimburse the Bank for: (a) all reasonable out-of-pocket
costs and expenses of the Bank (including, without limitation,
the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Bank) in connection
with (i) the negotiation, preparation, execution and delivery
of this Agreement and the other Basic Documents and the
extension of credit hereunder and (ii) the negotiation or
preparation of any modification, supplement or waiver of any
of the terms of this Agreement or any of the other Basic
Documents (whether or not consummated); (b) all reasonable
out-of-pocket costs and expenses of the Bank (including,
without limitation, the reasonable fees and expenses of legal
counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in
or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and
(z) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 10.03; and (c) all transfer,
stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Basic Documents
or any other document referred to herein or therein and all
costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or
perfection of any security interest contemplated by any Basic
Document or any other document referred to therein.
The Company hereby agrees to indemnify the Bank and
its directors, officers, employees, attorneys and agents from,
and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of
them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to
the extensions of
<PAGE>
<PAGE> 31
credit hereunder or any actual or proposed use by the Company
of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
10.04 Amendments, Etc. No provision of this
Agreement may be modified or supplemented except by an
instrument in writing signed by the Company and the Bank.
10.05 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
10.06 Assignments and Participations.
(a) The Company may not assign any of its rights or
obligations hereunder or under the Note without the prior
consent of the Bank.
(b) The Bank may assign any of the Loans, the Note,
and the Commitment (but only with the consent of, in the case
of the outstanding Commitment, the Company); provided that
(i) any such partial assignment shall be in an amount at least
equal to $1,000,000 and (ii) each such assignment by the Bank
of its Loans, Note, Commitment or Letter of Credit Interest
shall be made in such manner so that the same portion of its
Loans, Note, Commitment and Letter of Credit Interest is
assigned to the respective assignee. Upon execution and
delivery by the assignee to the Company of an instrument in
writing pursuant to which such assignee agrees to become a
"Bank" hereunder having the Commitment and Loans specified in
such instrument, and upon consent thereto by the Company, to
the extent required above, the assignee shall have, to the
extent of such assignment (unless otherwise provided in such
assignment with the consent of the Company), the obligations,
rights and benefits of the Bank hereunder holding the
Commitment, Loans and, if applicable, Letter of Credit
Interest (or portions thereof) assigned to it (in addition to
the Commitment, Loans and Letter of Credit Interest, if any,
theretofore held by such assignee) and the Bank shall, to the
extent of such assignment, be released from the Commitment (or
portion thereof) so assigned.
(c) The Bank may sell or agree to sell to one or
more other Persons a participation in all or any part of any
Loans or Letter of Credit Interest, or in the Commitment, in
which event each purchaser of a participation (a
"Participant") shall not
<PAGE>
<PAGE> 32
have any rights or benefits under this Agreement or the Note
or any other Basic Document (the Participant's rights against
the Bank in respect of such participation to be those set
forth in the agreements executed by the Bank in favor of the
Participant). All amounts payable by the Company to the Bank
under Section 5 hereof in respect of Loans, Letter of Credit
Interest, and the Commitment, shall be determined as if the
Bank had not sold or agreed to sell any participations in such
Loans, Letter of Credit Interest and Commitment, and as if the
Bank were funding each of such Loan, Letter of Credit Interest
and Commitment in the same way that it is funding the portion
of such Loan, Letter of Credit Interest and Commitment in
which no participations have been sold. In no event shall the
Bank agree with the Participant to take or refrain from taking
any action hereunder or under any other Basic Document except
that the Bank may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase
or extend the term, or extend the time or waive any
requirement for the reduction or termination, of the
Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which
interest is payable thereon, or any fee hereunder payable to
the Participant, to a level below the rate at which the
Participant is entitled to receive such interest or fee or
(v) alter the rights or obligations of the Company to prepay
the related Loans.
(d) In addition to the assignments and
participations permitted under the foregoing provisions of
this Section 10.06, the Bank may (without notice to the
Company) (i) assign and pledge all or any portion of its Loans
and its Note to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank and (ii) assign all or any
portion of its rights under this Agreement and its Loans and
its Note to an affiliate. No such assignment shall release
the Bank from its obligations hereunder.
(e) The Bank may furnish any information concerning
the Company or any of its subsidiaries in the possession of
the Bank from time to time to assignees and participants
(including prospective assignees and participants).
10.07 Survival. The obligations of the Company
under Sections 5.01, 5.02 and 10.03 hereof shall survive the
repayment of the Loans and Reimbursement Obligations and the
termination of the Commitment. In addition, each
representation and warranty made, or deemed to be made by a
notice of any extension of credit (whether by means of a Loan
or a Letter of Credit), herein or
<PAGE>
<PAGE> 33
pursuant hereto shall survive the making of such
representation and warranty, and the Bank shall not be deemed
to have waived, by reason of making any extension of credit
hereunder (whether by means of a Loan or a Letter of Credit),
any Default that may arise by reason of such representation or
warranty proving to have been false or misleading,
notwithstanding that the Bank may have had notice or knowledge
or reason to believe that such representation or warranty was
false or misleading at the time such extension of credit was
made.
10.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
10.09 Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together
shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such
counterpart.
10.10 Governing Law; Submission to Jurisdiction.
This Agreement and the Note shall be governed by, and
construed in accordance with, the law of the State of New
York. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court
sitting in New York County for the purposes of all legal
proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. The Company irrevocably
waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of
the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
10.11 Waiver of Jury Trial. EACH OF THE COMPANY
AND THE BANK HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the day
and year first above written.
CORIMON CORPORATION
By_________________________
Title: President
Address For Notices
Corimon Corporation
c/o Corimon, S.A.C.A.
Calle Hans Neumann Edf. Corimon
Los Cortijos de Lourdes
Caracas, Venezuela
Attn: Mr. Arthur Broslat
Chief Financial Officer
Gustavo Mata-Borjas, Esq.
General Counsel
Telecopier No.: 582-203-5707
Telephone No.: 582-203-5518
<PAGE>
<PAGE> 35
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By_________________________
Title: Managing Director
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Francisco Calmet
Telecopier No.: 212-552-5366
Telephone No.: 212-552-7084
with a copy to:
The Chase Manhattan Bank
(National Association)
Torre Cremerca-PH
El Rosal, Caracas 1010-A
Venezuela
Attn: Blas Betancourt
Telecopier No.: 582-951-5134
Telephone No.: 582-951-2011
<PAGE>
<PAGE> 1
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$15,000,000 August __, 1994
New York, New York
FOR VALUE RECEIVED, CORIMON CORPORATION, a Delaware
corporation (the "Company"), hereby promises to pay to THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (the "Bank"), for
account of its Applicable Lending Office provided for by the
Credit Agreement referred to below, at its principal office at
1 Chase Manhattan Plaza, New York, New York 10081, the
principal sum of Fifteen Million Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of
the Loans made by the Bank to the Company under the Credit
Agreement), in lawful money of the United States of America
and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at
such office, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be
paid in full, at the rates per annum and on the dates provided
in the Credit Agreement.
The date and amount of each Loan made by the Bank to
the Company, and each payment made on account of the principal
thereof, shall be recorded by the Bank on its books and, prior
to any transfer of this Note, endorsed by the Bank on the
schedule attached hereto or any continuation thereof, provided
that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Company to
make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the
Bank.
This Note is the Note referred to in the Credit
Agreement dated as of August 10, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement") between the Company, and The Chase Manhattan Bank
(National Association), and evidences Loans made by the Bank
thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
<PAGE>
<PAGE> 2
The Credit Agreement provides for the acceleration
of the maturity of this Note upon the occurrence of certain
events and for prepayments of Loans upon the terms and
conditions specified therein.
Except as permitted by Section 10.06 of the Credit
Agreement, this Note may not be assigned by the Bank to any
other Person. This Note is entitled to the benefits afforded
by the Parent Guarantee and the Security Agreement referred to
in the Credit Agreement.
This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
CORIMON CORPORATION
By_________________________
Title: President
<PAGE>
<PAGE> 3
SCHEDULE OF LOANS
This Note evidences Loans made under the
within-described Credit Agreement to the Company, on the dates
and in the principal amounts set forth below, subject to the
payments and prepayments of principal set forth below:
Principal
Date Amount Amount Unpaid
of of Paid or Principal Notation
Loan Loan Prepaid Amount Made by
<PAGE>
<PAGE> 1
EXHIBIT B-1
[Form of Opinion of Special New York Counsel
to the Company and the Parent]
August __, 1994
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Ladies and Gentlemen:
We have acted as special New York counsel to
(a) Corimon Corporation (the "Company") in connection with (i)
the Credit Agreement (the "Credit Agreement") dated as of
August 10, 1994 between the Company and The Chase Manhattan
Bank (National Association), providing for extensions of
credit to be made to the Company in an aggregate amount not
exceeding $15,000,000 and (ii) the various other agreements
and instruments referred to in the next following paragraph
and (b) Corimon, S.A.C.A. (the "Parent") in connection with
the Parent Guarantee. Terms defined in the Credit Agreement
are used herein as defined therein. This opinion is being
delivered pursuant to Section 6.01(c) of the Credit Agreement.
In rendering the opinion expressed below, we have
examined the following agreements, instruments and other
documents:
(a) the Credit Agreement;
(b) the Note;
(c) the Security Agreement;
(d) the Parent Guarantee; and
(e) such corporate records of the Company and such
other documents as we have deemed necessary as
a basis for the opinions expressed below.
The agreements, instruments and other documents referred to in
the foregoing lettered clauses (other than clause (e) above)
are collectively referred to as the "Credit Documents". The
Company and the Parent are herein collectively referred to as
the "Obligors".
In our examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted
to us as originals and the conformity with authentic original
documents
<PAGE>
<PAGE> 2
of all documents submitted to us as copies. When relevant
facts were not independently established, we have relied upon
statements of governmental officials and upon representations
made in or pursuant to the Credit Documents and certificates
of appropriate representatives of the Obligors.
In rendering the opinions expressed below, we have
assumed, with respect to all of the documents referred to in
this opinion letter, that (except, to the extent expressly set
forth in the opinions below, as to the Obligors):
(i) such documents have been duly authorized by,
have been duly executed and delivered by, and
constitute legal, valid, binding and
enforceable obligations of, all of the parties
to such documents;
(ii) all signatories to such documents have been
duly authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the
power and authority (corporate or other) to
execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as we have deemed
necessary as a basis for the opinions expressed below, we are
of the opinion that:
1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of
the State of Delaware.
2. The Company has all requisite corporate power
and authority to execute and deliver, and to perform its
obligations under, the Credit Documents to which it is a
party. The Company has all requisite corporate power to
borrow under the Credit Agreement and to incur liability
in respect of Letters of Credit under the Credit
Agreement.
3. The execution, delivery and performance by the
Company of each Credit Document to which it is a party,
and the borrowings and incurrence of liability in respect
of Letters of Credit by the Company under the Credit
Agreement, have been duly authorized by all necessary
corporate action on the part of the Company.
<PAGE>
<PAGE> 3
4. Each Credit Document to which the Company is a
party has been duly executed and delivered by the
Company.
5. Each of the Credit Documents constitutes the
legal, valid and binding obligation of each Obligor party
thereto, enforceable against such Obligor in accordance
with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors
generally and except as the enforceability of the Credit
Documents is subject to the application of general
principles of equity (regardless of whether considered in
a proceeding in equity or at law), including, without
limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.
6. No authorization, approval or consent of, and no
filing or registration with, any governmental or
regulatory authority or agency of the United States of
America or the State of New York is required on the part
of either Obligor for the execution, delivery or
performance by either Obligor of any of the Credit
Documents or for the borrowings or the application for
and incurrence of liability in respect of any Letter of
Credit by the Company under the Credit Agreement, except
for filings by the Company under Section 13(d) of the
Securities Exchange Act of 1934, as amended, in
connection with the pledge of Shares.
7. The execution, delivery and performance by each
Obligor of, and the consummation by each Obligor of the
transactions contemplated by, the Credit Documents to
which such Obligor is a party do not and will not (a)
violate any provision of the charter or by-laws of the
Company or (b) violate any applicable law, rule or
regulation of the United States of America or the State
of New York.
8. The making and performance by the Company of,
and the exercise by the Bank of its rights and remedies
under, the Security Agreement do not violate any
provisions of the Standstill Agreement.
9. The Security Agreement is effective to create,
in favor of the Bank, a valid security interest under the
Uniform Commercial Code as in effect in the State of New
York (the "Uniform Commercial Code") in all of the right,
title and interest of the Company in, to and under the
Collateral (as defined in the Security Agreement) as
<PAGE>
<PAGE> 4
collateral security for the payment of the Secured
Obligations (as defined in the Security Agreement),
except that (a) such security interest will continue in
Collateral after its sale, exchange or other disposition
only to the extent provided in Section 9-306 of the
Uniform Commercial Code, (b) the security interest in
Collateral in which the Company acquires rights after the
commencement of a case under the Bankruptcy Code in
respect of the Company may be limited by Section 552 of
the Bankruptcy Code and (c) the creation of a security
interest in any Pledged Stock (as defined in the Security
Agreement) constituting a "security" (as defined in
Section 8-102 of the Uniform Commercial Code) requires
the transfer of said Pledged Stock to the Bank pursuant
to Section 8-313(1) of the Uniform Commercial Code, which
transfer in the case of a "certificated security" (as
defined in said Section 8-102) may be effected in the
manner contemplated by paragraph 10(b) below.
10. The security interest referred to in paragraph
9 above in the types of Collateral described below will
be perfected as described below:
(a) such security interest in that portion of
the Collateral consisting of Pledged Stock in
possession or control of a Financial Intermediary
(as defined in the Security Agreement) will be
created and perfected when (i) such Financial
Intermediary identifies by book-entry such Pledged
Stock as being subject to a security interest in
favor of the Bank and (ii) such Financial
Intermediary sends a confirmation to the Bank that
such Pledged Stock is in its possession or control
and is subject to a security interest in favor of
the Bank, and such perfected security interest will
remain perfected thereafter so long as (x) such
Pledged Stock remains in the possession or control
of such Financial Intermediary and (y) such Pledged
Stock is identified on the books and records of such
Financial Intermediary as being subject to a
security interest in favor of the Bank; and
(b) such security interest in that portion of
the Collateral consisting of "proceeds" (as defined
in the Uniform Commercial Code) may be perfected as
and to the extent provided in Section 9-306 of the
Uniform Commercial Code.
The foregoing opinions are subject to the following
comments and qualifications:
<PAGE>
<PAGE> 5
(A) The enforceability of Section 10.03 of the
Credit Agreement (and any similar provisions in any of
the other Credit Documents) may be limited by laws
rendering unenforceable (i) indemnification contrary to
Federal or state securities laws and the public policy
underlying such laws and (ii) the release of a party
from, or the indemnification of a party against,
liability for its own wrongful or negligent acts under
certain circumstances.
(B) The enforceability of provisions in the Credit
Documents to the effect that terms may not be waived or
modified except in writing may be limited under certain
circumstances.
(C) We express no opinion as to (i) the second
sentence of Section 10.10 of the Credit Agreement (and
any similar provisions in any of the other Credit
Documents), insofar as such sentence relates to the
subject matter jurisdiction of the United States District
Court for the Southern District of New York to adjudicate
any controversy related to the Credit Documents and (ii)
Sections 2.06 and 6.06 of the Parent Guarantee.
(D) We wish to point out that the obligations of
the Company, and the rights and remedies of the Bank,
under the Security Agreement may be subject to possible
limitations upon the exercise of remedial or procedural
provisions contained in the Security Agreement, provided
that such limitations do not, in our opinion, make the
remedies and procedures that will be afforded to the Bank
inadequate for the practical realization of the
substantive benefits purported to be provided to the Bank
by the Security Agreement.
(E) We express no opinion as to the existence of,
or the right, title or interest of the Company in, to or
under, any of the Collateral (as defined in the Security
Agreement).
(F) Except as expressly provided in paragraphs 9
and 10 above, we express no opinion as to the creation,
perfection or priority of any security interest in, or
other Lien on, the Collateral (as defined in the Security
Agreement).
The foregoing opinions are limited to matters
involving the Federal laws of the United States of America,
the Delaware General Corporation Law and the law of the State
of New York, and
<PAGE>
<PAGE> 6
we do not express any opinion as to the laws of any other
jurisdiction.
At the request of our clients, this opinion letter
is, pursuant to Section 6.01(c) of the Credit Agreement,
provided to you by us in our capacity as special New York
counsel to the Company and the Parent and may not be relied
upon by any Person for any purpose other than in connection
with the transactions contemplated by the Credit Agreement
without, in each instance, our prior written consent.
Very truly yours,
<PAGE>
<PAGE> 1
EXHIBIT B-2
[Form of Opinion of Venezuelan Counsel to the Parent]
August __, 1994
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Ladies and Gentlemen:
We have acted as counsel to Corimon, S.A.C.A. (the
"Parent") in connection with (i) the Credit Agreement (the
"Credit Agreement") dated as of August 10, 1994 between
Corimon Corporation (the "Company") and The Chase Manhattan
Bank (National Association) (the "Bank"), providing for
extensions of credit to be made to the Company in an aggregate
amount not exceeding $15,000,000 and (ii) the various other
agreements and instruments referred to in the next following
paragraph. Terms defined in the Credit Agreement are used
herein as defined therein. This opinion is being delivered
pursuant to Section 6.01(d) of the Credit Agreement.
In rendering the opinion expressed below, we have
examined the following agreements, instruments and other
documents:
(a) the Credit Agreement;
(b) the Note;
(c) the Security Agreement;
(d) the Parent Guarantee;
(e) such corporate records of the Parent and such
other documents as we have deemed necessary as
a basis for the opinions expressed below.
The agreements, instruments and other documents referred to in
the foregoing lettered clauses (other than clause (e) above)
are collectively referred to as the "Credit Documents".
In our examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted
to us as originals and the conformity with authentic original
documents of all documents submitted to us as copies. When
relevant facts were not independently established, we have
relied upon statements of governmental officials and upon
representations made in or pursuant to the Credit Documents
and certificates of appropriate representatives of the Parent.
<PAGE>
<PAGE> 2
In rendering the opinions expressed below, we have
assumed, with respect to all of the documents referred to in
this opinion letter, that (except, to the extent expressly set
forth in the opinions below, as to the Parent):
(i) such documents have been duly authorized by,
have been duly executed and delivered by, and
constitute legal, valid, binding and
enforceable obligations of, all of the parties
to such documents;
(ii) all signatories to such documents have been
duly authorized;
(iii) all of the parties to such documents are duly
organized and validly existing and have the
power and authority (corporate or other) to
execute, deliver and perform such documents;
and
(iv) the Parent Guarantee constitutes, under the law
of the State of New York, a valid, binding and
enforceable obligation of the parties thereto,
enforceable in accordance with its terms.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as we have deemed
necessary as a basis for the opinions expressed below, we are
of the opinion that:
1. The Parent is a company duly organized and
validly existing under the laws of the Republic of
Venezuela.
2. The Parent has all requisite corporate power and
authority to execute and deliver, and to perform its
obligations under, the Parent Guarantee.
3. The execution, delivery and performance by the
Parent of the Parent Guarantee have been duly authorized
by all necessary corporate action on the part of the
Parent.
4. The Parent Guarantee has been duly executed and
delivered by the Parent.
5. The Parent Guarantee constitutes the legal,
valid and binding obligation of the Parent, enforceable
against the Parent in accordance with its terms, except
as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating
to or affecting
<PAGE>
<PAGE> 3
the rights of creditors generally and except as the
enforceability of the Parent Guarantee is subject to the
application of general principles of equity (regardless
of whether considered in a proceeding in equity or at
law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief
or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
6. No authorization, approval, consent or license
of, and no filing or registration with, any governmental
or regulatory authority, body or agency of the Republic
of Venezuela is required on the part of either Obligor
for the execution, delivery, validity, effectiveness or
performance by, or for the enforceability against, either
Obligor of any of the Credit Documents or for the
borrowings or the application for and incurrence of
liability in respect of any Letter of Credit by the
Company under the Credit Agreement.
7. The execution, delivery and performance by each
Obligor of, and the consummation by each Obligor of the
transactions contemplated by, the Credit Documents to
which such Obligor is a party do not and will not (a)
violate any provision of the constitutional or
organizational documents of the Parent, (b) violate any
applicable law, rule or regulation of the Republic of
Venezuela, (c) violate any order, writ, injunction or
decree of any court or governmental authority or agency
or any arbitral award applicable to the Obligors or any
of their respective subsidiaries of which we have
knowledge (after due inquiry) or (d) result in a breach
of, constitute a default under, require any consent
under, or result in the acceleration or required
prepayment of any indebtedness pursuant to the terms of,
any agreement or instrument of which we have knowledge
(after due inquiry) to which the Obligors or any of their
respective subsidiaries is a party or by which any of
them is bound or to which any of them is subject, or
(except for the Liens created pursuant to the Security
Agreement) result in the creation or imposition of any
Lien upon any Property of either Obligor pursuant to, the
terms of any such agreement or instrument.
8. We have no knowledge (after due inquiry) of any
legal or arbitral proceedings, or any proceedings by or
before any governmental or regulatory authority or
agency, pending or threatened against or affecting the
Obligors or any of their respective subsidiaries or any
of their
<PAGE>
<PAGE> 4
respective Properties that, if adversely determined,
could have a Material Adverse Effect.
9. The obligations of the Parent under the Parent
Guarantee will be direct and unconditional general
obligations of the Parent and will rank in right of
payment at least pari passu with all its other unsecured
Indebtedness.
10. The Parent is subject to civil and commercial
law with respect to its obligations under the Parent
Guarantee, and the execution, delivery and performance by
the Parent of the Parent Guarantee constitute private and
commercial acts; and neither Parent nor any of its
properties or revenues are entitled to any right of
immunity from suit, court jurisdiction, attachment prior
to judgment, attachment in aid of execution of a
judgment, set-off, execution of a judgment or from any
other legal process with respect to its obligations under
the Parent Guarantee.
11. The execution and delivery of the Parent
Guarantee by the Parent are not subject to any tax, duty,
fee or other charge, including, without limitation, any
registration or transfer tax, stamp duty, mortgage
recordation tax or similar levy, imposed by or within
Venezuela or any political subdivision or taxing
authority thereof or therein.
12. No withholding in respect of any taxes imposed
by or within Venezuela or any taxing authority thereof or
therein is required to be made from any payment by the
Parent under the Parent Guarantee.
13. The Parent has the power to submit, and
pursuant to the Parent Guarantee has legally, validly,
effectively and irrevocably submitted, to the
jurisdiction of the Supreme Court of the State of New
York, County of New York, or in the U.S. District Court
for the Southern District of New York for the purpose of
any suit, action or proceeding against the Parent with
respect to the Parent Guarantee or any judgment by any
court in respect thereof. A judgment against the Parent
for the payment of money obtained in any court pursuant
to service of process in the manner specified in said
Parent Guarantee would be recognized, conclusive and
enforceable in the courts of Venezuela without
reconsideration of the merits, except that Venezuelan
courts might not consider service of process by mail to
the Parent or Process Agent (as defined in the Parent
Guarantee) as complying with due process of law and
therefore might not
<PAGE>
<PAGE> 5
recognize a judgment based on such service, and provided
that all procedural requirements for obtaining an
exequatur, as established in Title X of Book the Fourth
(IV) of the Venezuelan Procedural Code, have been
followed.
14. The choice of the law of the State of New York
as governing law of the Parent Guarantee is legal, valid
and binding.
15. The Parent may perform its obligations under
the Parent Guarantee to pay to the Bank any additional
amounts which may be required to be paid pursuant to
Section 5 of the Parent Guarantee.
16. No foreign exchange control approvals or other
authorizations, licenses, consents, approvals,
registrations or filing by, from or with Venezuela or any
governmental authority in Venezuela are required on the
part of the Bank in connection with the execution,
delivery, performance or enforcement of the Parent
Guarantee.
17. It is not necessary under the laws of Venezuela
(i) to enable the Bank to enforce its rights under or in
respect of the Parent Guarantee or (ii) by reason of
their enforcement, that the Bank should be licensed,
qualified or entitled to carry on business in Venezuela.
18. The Parent Guarantee is in proper legal form
under the laws of Venezuela for the enforcement thereof
against the Parent without further action on the part of
the Bank; and to ensure the legality, validity,
enforceability or admissibility in evidence of the Parent
Guarantee in Venezuela, it is not necessary that the
Parent Guarantee or any other document be filed or
recorded with any court or other authority in Venezuela
or that any stamp or similar tax be paid on or in respect
of the Parent Guarantee, except that to present any of
those documents as evidence before any Venezuelan court
or Venezuelan governmental authority, the documents have
to be accompanied by a translation into Spanish, made by
a registered public translator in Venezuela.
The foregoing opinions are limited to matters
involving the laws of the Republic of Venezuela, and we do not
express any opinion as to the laws of any other jurisdiction.
At the request of our clients, this opinion letter
is, pursuant to Section 6.01(d) of the Credit Agreement,
provided to you by us in our capacity as counsel to the Parent
and may not be
<PAGE>
<PAGE> 6
relied upon by any Person for any purpose other than in
connection with the transactions contemplated by the Credit
Agreement without, in each instance, our prior written
consent.
Very truly yours,<PAGE>
<PAGE> 1
EXHIBIT C
PARENT GUARANTEE
GUARANTEE AGREEMENT dated as of August 10, 1994
between CORIMON, S.A.C.A., a limited liability company duly
organized and validly existing under the laws of Venezuela
(together with its successors and assigns, the "Parent"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (together with
its successors and assigns, the "Bank").
Corimon Corporation, a Delaware corporation
(together with its successors and assigns, the "Company"), and
the Bank are parties to a Credit Agreement dated as of August
10, 1994 (as modified and supplemented and in effect from time
to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for extensions of credit (by
making of loans and issuing letters of credit) to be made by
the Bank to the Company in an aggregate amount not exceeding
$15,000,000.
To induce the Bank to enter into the Credit
Agreement and to extend credit thereunder, and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parent has agreed to
guarantee the Guaranteed Obligations (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms used but not defined
herein have the respective meanings given to such terms in the
Credit Agreement.
Section 2. The Guarantee.
2.01 The Guarantee. The Parent hereby guarantees
to the Bank and its successors and assigns the prompt payment
in full when due (whether at stated maturity, by acceleration
or otherwise) of (a) the principal of and interest on the
Loans made by the Bank to, and the Note held by the Bank of,
the Company, (b) all other amounts from time to time owing to
the Bank by the Company under the Credit Agreement and under
the Note and all Reimbursement Obligations and interest
thereon and (c) all principal, interest and other amounts from
time to time owing to the Company by any subsidiary of the
Parent in respect of any loans or other advances made by the
Company, in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Parent hereby further agrees
that if the Company or any subsidiary of the Parent shall fail
to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations
in respect of which it is obligated, the Parent will promptly
pay the same, without any demand or
<PAGE>
<PAGE> 2
notice whatsoever, and that in the case of any extension of
time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.
2.02 Obligations Unconditional. The obligations of
the Parent under Section 2.01 hereof are a guaranty of payment
and are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the
Credit Agreement, the Note or any other agreement or
instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of the occurrence of
any Event of Default, any change in the laws, rules or
regulations of Venezuela or any other circumstance (other than
complete, irrevocable payment) that might otherwise constitute
a legal or equitable discharge or defense of a surety or a
guarantor, it being the intent of this Section 2.02 that the
obligations of the Parent hereunder shall be absolute and
unconditional under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that
the occurrence of any one or more of the following shall not
alter or impair the liability of the Parent hereunder which
shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without
notice to the Parent, the time for any performance of or
compliance with any of the Guaranteed Obligations shall
be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the
provisions of the Credit Agreement or the Note or any
other agreement or instrument referred to herein or
therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the
Guaranteed Obligations shall be modified, supplemented or
amended in any respect, or any right under the Credit
Agreement or the Note or any other agreement or
instrument referred to herein or therein shall be waived
or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or
in favor of, the Bank as security for any of the
Guaranteed Obligations shall fail to be perfected.
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<PAGE> 3
The Parent hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any
requirement that the Bank exhaust any right, power or remedy
or proceed against the Company under the Credit Agreement or
the Note or any other agreement or instrument referred to
herein or therein or against any subsidiary of the Parent, or
against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations in respect of
which the Company or any subsidiary of the Parent is
obligated. The Parent hereby expressly waives the benefits of
"division", order or filing of claims with a court, and all
privileges and defenses (other than complete, irrevocable
payment) which may now or hereafter be available to a
guarantor or surety under applicable law.
2.03 Reinstatement. The obligations of the Parent
under this Section 2 shall be automatically reinstated if and
to the extent that for any reason any payment by or on behalf
of the Company or any subsidiary of the Parent, as the case
may be, in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise, and the Parent
agrees that it will indemnify the Bank on demand for all
reasonable costs and expenses (including, without limitation,
fees of counsel) incurred by the Bank in connection with such
rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar
law.
2.04 Subrogation. The Parent hereby waives all
rights of subrogation or contribution, whether arising by
contract or operation of law (including, without limitation,
any such right arising under the Federal Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the
provisions of this Section 2 and further agrees with the
Company for the benefit of each of its creditors (including,
without limitation, the Bank) that any such payment by it
shall constitute an investment by the Parent in the equity
capital of the Company (whether or not share certificates are
issued by the Company to the Parent with respect thereto).
2.05 Remedies. The Parent agrees that, as between
the Parent and the Bank, the obligations of the Company under
the Credit Agreement and the Note may be declared to be
forthwith due and payable as provided in Section 9 of the
Credit Agreement (and shall be deemed to have become
automatically due and payable in the circumstances provided in
said Section 9) for purposes of Section 2.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company
<PAGE>
<PAGE> 4
and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and
payable), such obligations (whether or not due and payable by
the Company) shall forthwith become due and payable by the
Parent for purposes of said Section 2.01.
2.06 Instrument for the Payment of Money. The
Parent hereby acknowledges that the guarantee in this
Section 2 constitutes an instrument for the payment of money,
and consents and agrees that the Bank, at its sole option, in
the event of a dispute by the Parent in the payment of any
moneys due hereunder, shall have the right to bring
motion-action under New York CPLR Section 3213.
2.07 Continuing Guarantee. The guarantee in this
Section 2 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
Section 3. Representations and Warranties. The
Parent represents and warrants to the Bank that:
3.01 Corporate Existence. The Parent: (a) is a
limited liability company duly organized and validly existing
under the laws of Venezuela; (b) has all requisite corporate
power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed
to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure so to
qualify would (either individually or in the aggregate) have a
material adverse effect on the consolidated financial
condition, operations, business or prospects taken as a whole
of the Parent and its subsidiaries.
3.02 Litigation. There are no legal or arbitral
proceedings or any proceedings by or before any governmental
or regulatory authority or agency, now pending or (to the
knowledge of the Parent) threatened against the Parent or any
of its subsidiaries that, if adversely determined, could
(either individually or in the aggregate) have a material
adverse effect on the consolidated financial condition,
operations, business or prospects taken as a whole of the
Parent and its subsidiaries.
3.03 No Breach. None of the execution and delivery
of this Guarantee Agreement, the consummation of the
transactions herein contemplated or compliance with the terms
and provisions hereof will conflict with or result in a breach
of, or require any consent under, the constitutional or
organizational documents of the Parent, or any applicable law
or regulation of Venezuela (or any political subdivision
thereof) presently in effect, or
<PAGE>
<PAGE> 5
any order, writ, injunction or decree of any court or
regulatory body or arbitral tribunal, or any agreement or
instrument to which the Parent or any of its subsidiaries is a
party or by which any of them is bound or to which any of them
is subject, or constitute a default under any such agreement
or instrument, or result in the creation or imposition of any
Lien upon any of the revenues or assets of the Parent or any
of its subsidiaries pursuant to the terms of any such
agreement or instrument.
3.04 Corporate Action. The Parent has all
necessary corporate power and authority to execute, deliver
and perform its obligations under this Guarantee Agreement;
the execution, delivery and performance by the Parent of this
Guarantee Agreement have been duly authorized by all necessary
corporate action on its part; and this Guarantee Agreement has
been duly and validly executed and delivered by the Parent and
constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms.
3.05 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental authority or administrative body are necessary
for the execution, delivery, validity, effectiveness or
performance by the Parent of this Guarantee Agreement or for
the validity or enforceability hereof.
3.06 Ranking. The obligations of the Parent
hereunder will be direct and unconditional general obligations
of such Parent and will rank in right of payment at least pari
passu with all other unsecured Indebtedness of the Parent.
3.07 Commercial Obligations. The Parent is subject
to civil and commercial law with respect to its obligations
under this Guarantee Agreement, and the execution, delivery
and performance by the Parent of this Guarantee Agreement
constitute private and commercial acts; and neither the Parent
nor any of its properties or revenues are entitled to any
right of immunity from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a
judgment, set-off, execution of a judgment or from any other
legal process with respect to its obligations under this
Guarantee Agreement.
3.08 Taxes. The Parent and each of its
subsidiaries have filed all tax returns which are required to
be filed and paid all taxes (including interest and penalties)
that are due and payable, and have provided adequate reserves
for payment of any tax the payment of which is being
contested. There are no questions or disputes between the
Parent or any of its subsidiaries and any governmental entity
in any jurisdiction with respect to any matter affecting taxes
payable by the Parent or such Subsidiary in such jurisdiction.
<PAGE>
<PAGE> 6
3.10 Enforceability. This Guarantee Agreement is
in proper legal form under the laws of Venezuela for the
enforcement thereof against the Parent in the courts of
Venezuela and it is not necessary, to ensure the
enforceability or admissibility in evidence of this Guarantee
Agreement, that the same be filed or recorded with any court
or other authority in Venezuela.
Section 4. Covenants. The Parent agrees that,
until the payment and satisfaction in full of the Guaranteed
Obligations and the expiration or termination of the
Commitment and all Letter of Credit Liabilities of the Bank
under the Credit Agreement, the Parent will, and will cause
each of its subsidiaries to: (a) preserve and maintain its
corporate existence and all of its material rights, privileges
and franchises; (b) comply with the requirements of all
present or future applicable laws, rules, regulations and
orders of governmental or regulatory authorities if failure to
comply with such requirements (i) could (either individually
or in the aggregate) materially and adversely affect the
consolidated financial condition, operations, business or
prospects taken as a whole of the Parent and its subsidiaries
or (ii) could impair the ability or right of the Parent to
perform its obligations hereunder; (c) pay and discharge all
taxes, assessments and governmental charges or levies imposed
on it or on its income or profits or on any of its property
prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper
proceedings and against which adequate reserves are being
maintained; (d) maintain all of its properties used or useful
in its business in good working order and condition, ordinary
wear and tear excepted; (e) permit representatives of the
Bank, during normal business hours, to examine, copy and make
extracts from its books and records, to inspect its
properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by the Bank;
and (f) keep insured by financially sound and reputable
insurers all property of a character usually insured by
corporations engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations and
carry such other insurance as is usually carried by such
corporations. In addition, the Parent agrees that, without
the consent of the Bank, it will not, nor will it permit the
Company or any other subsidiary of the Parent, to request
Grow, pursuant to Section 3 of the Registration Rights
Agreement, to register any Registrable Securities (as defined
in the Registration Rights Agreement).
Section 5. Taxes. The Parent covenants and agrees
that, whether or not the Loans are made:
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<PAGE> 7
(a) All amounts payable under this Guarantee
Agreement by the Parent to the Bank, including amounts
payable under paragraph (b) of this Section 5, shall be
made in Dollars, free and clear of and without reduction
by reason of any and all present and future income, stamp
and other taxes and levies, imposts, deductions, charges,
compulsory loans and withholdings whatsoever imposed,
assessed, levied or collected by Venezuela or any other
jurisdiction from or through which such payments are made
or any political subdivision or taxing authority thereof
or therein, together with interest thereon and penalties
with respect thereto, if any, on or in respect of this
Guarantee Agreement, the registration, notarization or
other formalization of any thereof, and any payments of
principal, interest, charges, fees or other amounts made
on, under or in respect thereof, excluding taxes imposed
on or measured by the net income of the Bank by the
jurisdiction (or any political subdivision of such
jurisdiction) under the laws of which the Bank or the
Applicable Lending Office is organized (all such non-
excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter called
"Taxes"), all of which will be paid by the Parent, for
its own account, prior to the date on which penalties
attach thereto.
(b) The Parent will indemnify the Bank against, and
reimburse the Bank on demand for, any Taxes and any loss,
liability, claim, or expense including interest,
penalties, and legal fees which the Bank may incur at any
time arising out of or in connection with any failure of
the Company to make any payments of Taxes when due.
(c) In the event that the Parent is required by
applicable law, decree or regulation to deduct or
withhold Taxes from any amounts payable on, under or in
respect of this Guarantee Agreement, the Parent shall pay
the Bank in Dollars such additional amounts as may be
required, after the deduction or withholding of Taxes, to
enable the Bank to receive from the Parent an amount
equal to the amount stated to be payable under this
Guarantee Agreement.
(d) The Parent shall furnish to the Bank original
tax receipts in respect of any withholding of Taxes
required under this Section 5 within 30 days after the
date of each payment of interest which is subject to any
Taxes, and the Parent shall promptly furnish to the Bank
any other information, documents and receipts that the
Bank may, in its sole discretion from time to time,
require to establish to its satisfaction that full and
timely payment has been made of all Taxes required to be
paid under this Section 5.
<PAGE>
<PAGE> 8
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Bank
to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise by the Bank of any right, power or remedy
hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
6.02 Notices and Delivery of Documents. Except as
otherwise specified herein, all notices and other
communications hereunder shall be in writing and shall be sent
by confirmed telecopy (with an undertaking to provide hard
copy) or delivered by hand or sent by a reputable overnight
courier service prepaid (with confirmation of receipt),
addressed to any party hereto at its address given below its
name on the signature pages hereto or at such other address of
which any party hereto shall have notified in writing the
party given such notice or (in the case of a telecopy message)
addressed to any party at any telecopy number which is
published as belonging to the addressee.
6.03 Immunity. To the extent that the Parent may
be entitled, in any jurisdiction in which judicial proceedings
may at any time be commenced with respect to this Guarantee
Agreement, to claim for itself or its revenues, assets or
properties immunity (whether by reason of sovereignty or
otherwise) from suit, from the jurisdiction of any court
(including but not limited to any court of the United States
of America or the State of New York), from attachment prior to
judgment, from set-off, from execution of a judgment or from
any other legal process, and to the extent that in any such
jurisdiction there may be attributed such an immunity (whether
or not claimed), the Parent hereby irrevocably agrees not to
claim and hereby irrevocably waives such immunity.
6.04 Governing Law. This Guarantee Agreement shall
be governed by and construed in accordance with the law of the
State of New York.
6.05 Jurisdiction, Service of Process. (a) Any
suit, action or proceeding against the Parent with respect to
this Guarantee Agreement or any judgment by any court in
respect thereof may be brought in the Supreme Court of the
State of New York, County of New York, or in the U.S. District
Court for the Southern District of New York, or in the courts
of Venezuela, as the Bank in its sole discretion may elect,
and the Parent hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit,
action or proceeding. The Parent hereby agrees that service
of all writs, process and summonses in
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<PAGE> 9
any such suit, action or proceeding brought in the State of
New York may be made upon it by service upon CT Corporation
System (the "Process Agent"), presently having an office at
1633 Broadway, New York, New York 10019 and the Parent hereby
irrevocably appoints the Process Agent its true and lawful
agent and attorney-in-fact in its name, place and stead to
accept such service of any and all such writs, process and
summonses, and agrees that the failure of the Process Agent to
give any notice of any such service of process to the Parent
shall not impair or affect the validity of such service or of
any judgment based thereon. The Parent agrees to maintain at
all times an agent in the State of New York to act as its
Process Agent. The Parent hereby further irrevocably consents
to the service of process in any suit, action or proceeding in
said courts by the mailing thereof by the Bank by registered
or certified mail, postage prepaid, to the Parent at the
address given below its name on the signature pages hereto.
(b) The Parent hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or
relating to this Guarantee Agreement brought in the Supreme
Court of the State of New York, County of New York or the U.S.
District Court for the Southern District of New York, and
hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARENT AND THE BANK HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.06 Judgment Currency. This is an international
loan transaction in which the specification of Dollars and
payment in New York, New York is of the essence, and Dollars
shall be the currency of account in all events. The payment
obligations of the Parent shall not be discharged by an amount
paid in another currency or in another place, whether pursuant
to a judgment or otherwise, to the extent that the amount so
paid on prompt conversion to Dollars and transfer to New York,
New York under normal banking procedures does not yield the
amount of Dollars in New York, New York due hereunder. If for
the purpose of obtaining judgment in any court it is necessary
to convert a sum due hereunder in Dollars into another
currency (in this Section 6.06 called the "second currency"),
the rate of exchange which shall be applied shall be that at
which in accordance with normal banking procedures the Bank
could purchase Dollars with the second currency on the
Business Day next preceding that on which such judgment is
rendered. The obligation of the Parent in respect of any such
sum due from it to the Bank hereunder shall,
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<PAGE> 10
notwithstanding the rate of exchange actually applied in
rendering such judgment, be discharged only to the extent that
on the Business Day following receipt by the Bank of any sum
adjudged to be due hereunder in the second currency the Bank
may in accordance with normal banking procedures purchase and
transfer to New York City Dollars with the amount of the
second currency so adjudged to be due; and the Parent hereby,
as a separate obligation and notwithstanding any such
judgment, agrees to indemnify the Bank against, and to pay the
Bank on demand, in Dollars in New York City, any difference
between the sum originally due to the Bank in Dollars and the
amount of Dollars so purchased and transferred.
6.07 Indemnification. The Parent hereby agrees to
indemnify the Bank and its directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them arising out of or by reason
of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other
proceedings) relating to the Loans or Letters of Credit or any
actual or proposed use by the Company or any other Person of
the Letters of Credit or the proceeds of the Loans, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the
Person to be indemnified), and the Parent hereby agrees not to
assert any claim against the Bank, any of its affiliates or
any of its directors, officers, employees, attorneys and
agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise
relating to any of the transactions contemplated by the Basic
Documents.
6.08 Expenses. The Parent agrees to reimburse the
Bank for all reasonable costs and expenses of the Bank
(including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default
and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of
participation in or other involvement with (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or
liquidation proceedings, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 6.08.
6.09 Amendments, Etc. The terms of this Guarantee
Agreement may be waived, altered or amended only by an
instrument in writing duly executed by the Parent and the
Bank. Any such
<PAGE>
<PAGE> 11
amendment or waiver shall be binding upon the Bank, each
holder of any of the Guaranteed Obligations and the Parent.
6.10 Successors and Assigns. This Guarantee
Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the Parent, the Bank
and each holder of any of the Guaranteed Obligations (provided
that the Parent shall not assign or transfer its rights
hereunder without the prior written consent of the Bank).
6.11 Captions. The captions and section headings
appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of
any provision of this Guarantee Agreement.
6.12 Counterparts. This Guarantee Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and
either of the parties hereto may execute this Guarantee
Agreement by signing any such counterpart.
6.13 Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions
hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the
Bank in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such
provision in any other jurisdiction.
6.14 Additional Guarantee. The Parent also agrees
with the Bank for the benefit of the Bank and the Company that
the Parent hereby guarantees the prompt payment when due of
all Indebtedness owing to the Company by any other subsidiary
of the Parent.
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<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused
this Guarantee Agreement to be duly executed and delivered as
of the day and year first above written.
CORIMON, S.A.C.A.
By ________________________________
Title:
By ________________________________
Title:
Address for Notices:
Corimon, S.A.C.A.
Calle Hans Neumann Edf. Corimon
Los Cortijos de Lourdes
Venezuela
Attn: Mr. Arthur Broslat
Chief Financial Officer
Gustavo Mata-Borjas, Esq.
Vice President and General
Counsel
Telecopier No.: 582-203-5707
Telephone No.: 582-203-5518
<PAGE>
<PAGE> 13
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By __________________________
Title: Managing Director
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Francisco Calmet
Telecopier No.: 212-552-5366
Telephone No.: 212-552-7084
with a copy to:
The Chase Manhattan Bank
(National Association)
Torre Cremerca-PH
El Rosal, Caracas 1010-A
Venezuela
Attn: Blas Betancourt
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Telephone No.: 582-951-2011<PAGE>
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EXHIBIT D
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 10, 1994
between CORIMON CORPORATION, a corporation duly organized and
validly existing under the laws of the State of Delaware
(together with its successors and assigns, the "Company"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (together with
its successors and assigns, the "Bank").
The Company and the Bank are parties to a Credit
Agreement dated as of August 10, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions
thereof, for extensions of credit (by making of loans and
issuing letters of credit) to be made by the Bank to the
Company in an aggregate amount not exceeding $15,000,000.
To induce the Bank to enter into the Credit
Agreement and to extend credit thereunder, and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company has agreed to
pledge and grant a security interest in the Collateral (as
hereinafter defined) as security for the Secured Obligations
(as so defined). Accordingly, the parties hereto agree as
follows:
Section 1. Definitions. Terms used but not defined
herein have the respective meanings given to such terms in the
Credit Agreement. In addition, as used herein:
"Collateral" shall have the meaning ascribed thereto
in Section 3 hereof.
"Collateral Account" shall have the meaning ascribed
thereto in Section 4.01 hereof.
"Confirmation" shall mean, with respect to any
Shares in the possession or control of a Financial
Intermediary that are to be pledged hereunder, a
confirmation sent by such Financial Intermediary to the
Bank confirming that (a) such Shares are in its
possession or control and are subject to a security
interest in favor of the Bank and (b) such Financial
Intermediary has identified by book-entry such Shares as
being subject to a security interest in favor of the
Bank.
"Financial Intermediary" shall mean a "financial
intermediary" (as defined in Section 8-313(4) of the
Uniform Commercial Code) located in the State of New
York.
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"Permitted Investments" shall mean: (a) direct
obligations of the United States of America, or of any
agency thereof, or obligations guaranteed as to principal
and interest by the United States of America, or of any
agency thereof, in either case maturing not more than 90
days from the date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of
America or any state thereof and having capital, surplus
and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition
thereof; and (c) commercial paper rated A-1 or better or
P-1 by Standard & Poor's Corporation or Moody's Investors
Services, Inc., respectively, maturing not more than 90
days from the date of acquisition thereof.
"Pledged Stock" shall have the meaning ascribed
thereto in Section 3(a) hereof.
"Registration Rights Agreement" shall mean the
Registration Rights Agreement made and entered into as of
July 21, 1992 by and between Grow and the Parent, as the
same may be modified and supplemented and in effect from
time to time.
"Secured Obligations" shall mean, collectively,
(a) the principal of and interest on the Loans made by
the Bank to, and the Note held by the Bank of, the
Company and all other amounts from time to time owing to
the Bank by the Company under the Basic Documents
including, without limitation, all Reimbursement
Obligations and interest thereon and (b) all obligations
of the Company to the Bank hereunder.
"Stock Collateral" shall have the meaning ascribed
thereto in Section 3(c) hereof.
"Stock Purchase Agreement" shall mean the Stock
Purchase Agreement dated July 21, 1992 by and among the
Company, the Parent and Grow, as the same may be modified
and supplemented and in effect from time to time.
Section 2. Representations and Warranties. The
Company represents and warrants to the Bank that:
(a) The Company will be the sole beneficial owner
of the Collateral at the time it becomes subject to the
Lien hereof.
(b) No Lien exists or will exist upon the
Collateral at any time (and no right or option to acquire
the same exists in favor of any other Person), except for
the pledge and security interest in favor of the Bank
created or
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provided for herein, which pledge and security interest
constitute a first priority perfected pledge and security
interest in and to all of the Collateral.
(c) All Pledged Stock in which the Company grants a
security interest pursuant to Section 3 hereof will be
duly authorized, validly existing, fully paid and
non-assessable, and none of such Pledged Stock is or will
be subject to any contractual restriction, or any
restriction under the charter or by-laws of Grow, upon
the transfer of such Pledged Stock (except for any such
restriction contained herein, in the Credit Agreement or
in the Standstill Agreement; provided that any such
restriction does not preclude the making or performance
by the Company of this Agreement or the exercise by the
Bank of any of its rights under this Agreement).
Section 3. The Pledge. As collateral security for
the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Secured
Obligations, the Company hereby pledges and grants to the Bank
a security interest in all of the Company's right, title and
interest in the following property, whether now owned by the
Company or hereafter acquired and whether now existing or
hereafter coming into existence (all being collectively
referred to herein as "Collateral"):
(a) the Shares identified in each Confirmation
delivered to the Bank (collectively, the "Pledged
Stock");
(b) all shares, securities, moneys or property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or
in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change
of the Pledged Stock or otherwise received in exchange
therefor, and any subscription warrants, rights or
options issued to the holders of, or otherwise in respect
of, the Pledged Stock;
(c) in the event of any consolidation or merger in
which Grow is not the surviving corporation, all shares
of each class of the capital stock of the successor
corporation (unless such successor corporation is the
Company itself) formed by or resulting from such
consolidation or merger (the Property described in
Sections 3(a), (b) and (c) hereof, collectively, the
"Stock Collateral");
(d) the balance from time to time in the Collateral
Account; and
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(e) all proceeds of and to any of the property of
the Company described in the preceding clauses of this
Section 3 (including, without limitation, all causes of
action, claims and warranties now or hereafter held by
the Company in respect of any of the items listed above).
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. The Bank may establish a
cash collateral account (the "Collateral Account") in the name
and under the control of the Bank into which there shall be
deposited from time to time the cash proceeds of any of the
Collateral required to be delivered to the Bank pursuant
hereto and into which the Company may from time to time
deposit any additional amounts that it wishes to pledge to the
Bank as additional collateral security hereunder. The balance
from time to time in the Collateral Account shall constitute
part of the Collateral hereunder and shall not constitute
payment of the Secured Obligations until applied as
hereinafter provided. Except as expressly provided in the
next sentence, the Bank shall remit the collected balance
standing to the credit of the Collateral Account to or upon
the order of the Company as the Company shall from time to
time instruct. However, at any time following the occurrence
and during the continuance of an Event of Default, the Bank
may in its discretion apply or cause to be applied (subject to
collection) the balance from time to time standing to the
credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof.
The balance from time to time in the Collateral Account shall
be subject to withdrawal only as provided herein. In addition
to the foregoing, the Company agrees that if the proceeds of
any Collateral hereunder shall be received by it, the Company
shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds
shall be held in trust by the Company for and as the property
of the Bank and shall not be commingled with any other funds
or property of the Company.
4.02 Investment of Balance in Collateral Account.
Amounts on deposit in the Collateral Account shall be invested
from time to time in such Permitted Investments as the Company
(or, after the occurrence and during the continuance of a
Default, the Bank) shall determine, which Permitted
Investments shall be held in the name and be under the control
of the Bank, provided that (i) at any time after the
occurrence and during the continuance of an Event of Default,
the Bank may in its discretion at any time and from time to
time elect to liquidate any such Permitted Investments and to
apply or cause to be applied the proceeds thereof to the
payment of the Secured Obligations in the manner specified in
Section 5.09 hereof and
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(ii) if requested by the Company, such Permitted Investments
may be held in the name and under the control of the Bank.
4.03 Cover for Letter of Credit Liabilities.
Amounts deposited into the Collateral Account as cover for
Letter of Credit Liabilities under the Credit Agreement
pursuant to Sections 2.08 or 11 thereof shall be held by the
Agent in a separate sub-account (designated "Letter of Credit
Liabilities Sub-Account") and all amounts held in such
sub-account shall constitute collateral security first for the
Letter of Credit Liabilities outstanding from time to time and
second as collateral security for the other Secured
Obligations hereunder.
Section 5. Further Assurances; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, the Company hereby agrees with
the Bank as follows:
5.01 Delivery and Other Perfection. The Company
shall:
(a) with respect to any quantity of Shares to be
subject to the Lien of this Agreement, cause a
Confirmation relating to such quantity of Shares to be
delivered to the Bank and thereafter to cause (i) the
Financial Intermediary that delivered such Confirmation
to retain such quantity of Shares and (ii) such quantity
of Shares to be identified on the books and records of
such Financial Intermediary for the sole and exclusive
account of the Bank; provided that any Shares that become
subjected to the Lien of this Agreement at any time shall
be such Shares as the Company shall at such time have
owned for the longest period of time (not including
Shares acquired under the Stock Purchase Agreement or
Shares theretofore subjected to the Lien of this
Agreement); provided further that the Company may not
subject to the Lien of this Agreement any Shares if,
after giving effect thereto, the number of Shares subject
to the Lien of this Agreement shall exceed 10% of the
issued and outstanding Shares;
(b) if any of the shares, securities, moneys or
property required to be pledged by the Company under
clauses (a), (b) and (c) of Section 3 hereof are received
by the Company (other than Shares), forthwith either
(i) transfer and deliver to the Bank such shares or
securities so received by the Company (together with the
certificates for any such shares and securities duly
endorsed in blank or accompanied by undated stock powers
duly executed in blank), all of which thereafter shall be
held by the Bank, pursuant to the terms of this
Agreement, as part of the Collateral or (ii) take such
other action as
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the Bank shall deem necessary or appropriate to duly
record the Lien created hereunder in such shares,
securities, moneys or property in said clauses (a), (b)
and (c);
(c) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document,
agreement or other papers that may be necessary or
desirable (in the judgment of the Bank) to create,
preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Bank to exercise
and enforce its rights hereunder with respect to such
pledge and security interest, including, without
limitation, causing any or all of the Collateral to be
transferred of record into the name of the Bank or its
nominee (and the Bank agrees that if any Collateral is
transferred into its name or the name of its nominee, the
Bank will thereafter promptly give to the Company copies
of any notices and communications received by it with
respect to the Collateral);
(d) keep full and accurate books and records
relating to the Collateral, and stamp or otherwise mark
such books and records in such manner as the Bank may
reasonably require in order to reflect the security
interests granted by this Agreement; and
(e) permit representatives of the Bank, upon
reasonable notice, at any time during normal business
hours to inspect and make abstracts from its books and
records pertaining to the Collateral, and permit
representatives of the Bank to be present at the
Company's place of business to receive copies of all
communications and remittances relating to the
Collateral, and forward copies of any notices or
communications received by the Company with respect to
the Collateral, all in such manner as the Bank may
require.
5.02 Other Financing Statements and Liens. Without
the prior written consent of the Bank, the Company shall not
file or suffer to be on file, or authorize or permit to be
filed or to be on file, in any jurisdiction, any financing
statement or like instrument with respect to the Collateral in
which the Bank is not named as the sole secured party.
5.03 Preservation of Rights. The Bank shall not be
required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
5.04 Collateral.
(1) The Company will at all times cause the Market
Value of the Shares pledged under and in accordance with this
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Agreement (including, without limitation, as provided in
Section 5.01(a) hereof) to be at least equal to 200% of the
sum of (i) the aggregate unpaid principal amount of the Loans
plus (ii) the aggregate amount Letter of Credit Liabilities.
(2) So long as no Event of Default shall have
occurred and be continuing, the Company shall have the right
to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral for all purposes not
inconsistent with the terms of this Agreement, the Credit
Agreement, the Note or any other instrument or agreement
referred to herein or therein, provided that the Company
agrees that it will not vote the Collateral in any manner that
is inconsistent with the terms of this Agreement, the Credit
Agreement, the Note or any such other instrument or agreement;
and the Bank shall execute and deliver to the Company or cause
to be executed and delivered to the Company all such proxies,
powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Company may reasonably
request for the purpose of enabling the Company to exercise
the rights and powers that it is entitled to exercise pursuant
to this Section 5.04(2).
(3) Unless and until an Event of Default has
occurred and is continuing, the Company shall be entitled to
receive and retain any dividends on the Collateral paid in
cash out of earned surplus.
(4) If any Event of Default shall have occurred,
then so long as such Event of Default shall continue, and
whether or not the Bank exercises any available right to
declare any Secured Obligation due and payable or seeks or
pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement,
the Note or any other agreement relating to such Secured
Obligation, all dividends and other distributions on the
Collateral shall be paid directly to the Bank and retained by
it in the Collateral Account as part of the Collateral,
subject to the terms of this Agreement, and, if the Bank shall
so request in writing, the Company agrees to execute and
deliver to the Bank appropriate additional dividend,
distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such
dividend or distribution theretofore paid to the Bank shall,
upon request of the Company (except to the extent theretofore
applied to the Secured Obligations), be returned by the Bank
to the Company.
(5) If any Event of Default shall have occurred and
so long as the same shall be continuing, the Company shall, at
the request of the Bank, request Grow in writing, pursuant to
Section 3 of the Registration Rights Agreement, to register
under the Securities Act of 1933, as amended, the Stock
Collateral then
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subject to the Lien of this Agreement for the offering and
sale thereof in such manner as the Bank shall specify.
5.05 Events of Default, Etc. During the period
during which an Event of Default shall have occurred and be
continuing:
(a) the Bank shall have all of the rights and
remedies with respect to the Collateral of a secured
party under the Uniform Commercial Code (whether or not
said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional
rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including,
without limitation, the right, to the maximum extent
permitted by law, to exercise all voting, consensual and
other powers of ownership pertaining to the Collateral as
if the Bank were the sole and absolute owner thereof (and
the Company agrees to take all such action as may be
appropriate to give effect to such right);
(b) the Bank in its discretion may, in its name or
in the name of the Company or otherwise, demand, sue for,
collect or receive any money or property at any time
payable or receivable on account of or in exchange for
any of the Collateral, but shall be under no obligation
to do so; and
(c) the Bank may, upon ten business days' prior
written notice to the Company of the time and place, with
respect to the Collateral or any part thereof that shall
then be or shall thereafter come into the possession,
custody or control of the Bank or any of its agents,
sell, lease, assign or otherwise dispose of all or any
part of such Collateral, at such place or places as the
Bank deems best, and for cash or for credit or for future
delivery (without thereby assuming any credit risk), at
public or private sale, without demand of performance or
notice of intention to effect any such disposition or of
the time or place thereof (except such notice as is
required above or by applicable statute and cannot be
waived), and the Bank or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of
the Collateral so disposed of at any public sale (or, to
the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim
or right of whatsoever kind, including any right or
equity of redemption (statutory or otherwise), of the
Company, any such demand, notice and right or equity
being hereby expressly waived and released. The Bank
may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for
the sale, and
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such sale may be made at any time or place to which the
sale may be so adjourned.
The proceeds of each collection, sale or other disposition
under this Section 5.05 shall be applied in accordance with
Section 5.09 hereof.
The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws, the Bank may be
compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account,
for investment and not with a view to the distribution or
resale thereof. The Company acknowledges that any such
private sales may be at prices and on terms less favorable to
the Bank than those obtainable through a public sale without
such restrictions, and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Bank
shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period
of time necessary to permit the issuer thereof to register it
for public sale.
5.06 Deficiency. If the proceeds of sale,
collection or other realization of or upon the Collateral
pursuant to Section 5.05 hereof are insufficient to cover the
costs and expenses of such realization and the payment in full
of the Secured Obligations, the Company shall remain liable
for any deficiency.
5.07 Removals, Etc. Without at least 30 days'
prior written notice to the Bank, the Company shall not
(i) maintain its chief executive office at any place other
than at the address indicated beneath the signature of the
Company to the Credit Agreement or (ii) change its name, or
the name under which it does business, from the name shown on
the signature pages hereto.
5.08 Private Sale. The Bank shall incur no
liability as a result of the sale of the Collateral, or any
part thereof, at any private sale pursuant to Section 5.05
hereof conducted in a commercially reasonable manner. The
Company hereby waives any claims against the Bank arising by
reason of the fact that the price at which the Collateral may
have been sold at such a private sale was less than the price
that might have been obtained at a public sale or was less
than the aggregate amount of the Secured Obligations, even if
the Bank accepts the first offer received and does not offer
the Collateral to more than one offeree.
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5.09 Application of Proceeds. Except as otherwise
herein expressly provided and except as provided below in this
Section 5.09, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant
hereto, and any other cash at the time held by the Bank under
Section 4 hereof or this Section 5, shall be applied by the
Bank:
First, to the payment of the costs and expenses of
such collection, sale or other realization, including
reasonable out-of-pocket costs and expenses of the Bank
and the fees and expenses of its agents and counsel, and
all expenses incurred and advances made by the Bank in
connection therewith;
Next, to the payment in full of the Secured
Obligations; and
Finally, to the payment to the Company, or its
successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or
other amounts held in the "Letter of Credit Liabilities
Sub-Account" of the Collateral Account pursuant to
Section 4.03 hereof shall be applied first to the Letter of
Credit Liabilities outstanding from time to time and second to
the other Secured Obligations in the manner provided above in
this Section 5.09.
As used in this Section 5, "proceeds" of Collateral
shall mean cash, securities and other property realized in
respect of, and distributions in kind of, Collateral,
including any thereof received under any reorganization,
liquidation or adjustment of debt of the Company or any issuer
of or obligor on any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights
or powers granted by this Agreement to the Bank while no Event
of Default has occurred and is continuing, upon the occurrence
and during the continuance of any Event of Default the Bank is
hereby appointed the attorney-in-fact of the Company for the
purpose of carrying out the provisions of this Section 5 and
taking any action and executing any instruments that the Bank
may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable
and coupled with an interest. Without limiting the generality
of the foregoing, so long as the Bank shall be entitled under
this Section 5 to make collections in respect of the
Collateral, the Bank shall have the right and power to
receive, endorse and collect all checks made payable to the
order of the Company representing any dividend, payment or
other distribution in respect of the
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Collateral or any part thereof and to give full discharge for
the same.
5.11 Termination. When all Secured Obligations
shall have been paid in full and the Commitment of the Bank
under the Credit Agreement and all Letter of Credit
Liabilities shall have expired or been terminated, this
Agreement shall terminate, and the Bank shall forthwith cause
to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect
thereof, to or on the order of the Company.
5.12 Further Assurances. The Company agrees that,
from time to time upon the written request of the Bank, the
Company will execute and deliver such further documents and do
such other acts and things as the Bank may reasonably request
in order fully to effect the purposes of this Agreement.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Bank
to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise by the Bank of any right, power or remedy
hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
6.02 Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or
delivered to the intended recipient at its "Address for
Notices" specified pursuant to Section 10.02 of the Credit
Agreement and shall be deemed to have been given at the times
specified in said Section 10.02.
6.03 Expenses. The Company agrees to reimburse the
Bank for all reasonable costs and expenses of the Bank
(including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default
and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of
participation in or other involvement with (w) performance by
the Bank of any obligations of the Company in respect of the
Collateral that the Company has failed or refused to perform,
(x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral, and for the
care of the Collateral and defending or asserting rights and
claims of the Bank in respect thereof, by litigation or
otherwise, (y) judicial or regulatory
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proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 6.03,
and all such costs and expenses shall be Secured Obligations
entitled to the benefits of the collateral security provided
pursuant to Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement
may be waived, altered or amended only by an instrument in
writing duly executed by the Company and the Bank. Any such
amendment or waiver shall be binding upon the Bank, each
holder of any of the Secured Obligations and the Company.
6.05 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Bank and each
holder of any of the Secured Obligations (provided that the
Company shall not assign or transfer its rights hereunder
without the prior written consent of the Bank).
6.06 Captions. The captions and section headings
appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of
any provision of this Agreement.
6.07 Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together
shall constitute one and the same instrument and either of the
parties hereto may execute this Agreement by signing any such
counterpart.
6.08 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the
State of New York.
6.09 Agents and Attorneys-in-Fact. The Bank may
employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good
faith.
6.10 Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions
hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the
Bank in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused
this Security Agreement to be duly executed and delivered as
of the day and year first above written.
CORIMON CORPORATION
By _________________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By _________________________
Title:
