FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-9753
GEORGIA GULF CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 58-1563799
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Perimeter Center Terrace, Suite 595
Atlanta, Georgia 30346
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 395-4500
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding as of
Class July 28, 1995
Common Stock, $0.01 par value................ 37,987,596 shares
<PAGE>
GEORGIA GULF CORPORATION
FORM 10-Q
QUARTERLY PERIOD ENDED JUNE 30, 1995
INDEX
Page Numbers
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of June 30, 1995 and
December 31, 1994 2
Condensed Consolidated Statements of
Income for the three and six months
ended June 30, 1995 and 1994 3
Condensed Consolidated Statements of
Cash Flows for the six months ended
June 30, 1995 and 1994 4
Notes to Condensed Consolidated Financial
Statements as of June 30, 1995 5-6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7-9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, December 31,
1995 1994
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 2,622 $ 1,216
Receivables 99,078 157,085
Inventories 79,658 70,667
Prepaid expenses 11,787 13,882
Deferred income taxes 7,069 7,069
Total current assets 200,214 249,919
Property, plant and equipment, at cost 479,690 447,986
Less accumulated depreciation 205,779 192,378
Property, plant and equipment, net 273,911 255,608
Other assets 3,151 2,920
Total assets $477,276 $508,447
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 75,757 $ 73,771
Interest payable 747 6,424
Accrued income taxes -- 21,537
Other accrued liabilities 25,856 21,519
Total current liabilities 102,360 123,251
Long-term debt 322,000 314,081
Deferred income taxes 43,702 39,977
Stockholders' equity
Common stock - $0.01 par value 379 420
Additional paid-in capital 59,409 185,984
Retained earnings (50,574) (155,266)
Total stockholders' equity 9,214 31,138
________ _________
Total liabilities and
stockholders' equity $477,276 $508,447
======== ========
Common shares outstanding 37,938,816 42,013,116
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $275,833 $208,188 $589,859 $401,094
________ ________ ________ ________
Operating costs and expenses
Cost of sales 174,073 156,342 369,912 310,062
Selling and administrative 12,273 11,472 23,856 21,359
________ ________ ________ ________
Total operating costs and expenses 186,346 167,814 393,768 331,421
________ ________ ________ ________
Operating income 89,487 40,374 196,091 69,673
Other income (expense)
Interest, net (6,973) (9,454) (15,685) (19,236)
________ ________ ________ ________
Income before income taxes 82,514 30,920 180,406 50,437
Provision for income taxes 31,721 10,968 69,456 17,755
________ ________ _________ ________
Net income $ 50,793 $ 19,952 $ 110,950 $ 32,682
======== ======== ========= ========
Net income per common share $ 1.30 $ 0.47 $ 2.74 $ 0.77
======== ======== ========= ==========
Weighted average common shares
and equivalents outstanding 39,028,538 42,406,419 40,435,708 42,389,301
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended
June 30
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $110,950 $32,682
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 16,114 13,861
Change in assets, liabilities and other 32,248 (10,566)
Net cash provided by operating activities 159,312 35,977
Cash flows from financing activities:
Net change in revolving credit loan 95,000 73,050
Proceeds from issuing long-term debt 104,000 1,000
Principal payments on long-term debt (191,081) (83,125)
Proceeds from issuance of common stock 911 3,306
Purchase and retirement of common stock (128,774) --
Dividends on common stock (6,258) --
Net cash used in financing activities (126,202) (5,769)
Cash flows from investing activities:
Capital expenditures (31,704) (30,480)
Net cash used in investing activities (31,704) (30,480)
Net change in cash and cash equivalents 1,406 (272)
Cash and cash equivalents at beginning of
period 1,216 3,099
Cash and cash equivalents at end of period $ 2,622 $ 2,827
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
Operating results for Georgia Gulf Corporation and its subsidiaries
(the "Company") for the three- and six- month periods ended June
30, 1995, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report for the
year ended December 31, 1994.
NOTE 2: RECEIVABLES
On May 12, 1995, the Company entered into an agreement, which
allows for the sale, without recourse, of fractional interests in
a defined pool of trade receivables for up to $50,000,000. This
agreement expires May 1996 but may be extended for additional one-
year terms by the mutual consent of the Company and the receivables
purchaser. At June 30, 1995, $50,000,000 had been sold under this
agreement, and the sale is reflected as a reduction of receivables
in the accompanying Condensed Consolidated Balance Sheet. The cash
proceeds were reported as cash flows from operating activities in
the accompanying Condensed Consolidated Statement of Cash Flows.
The costs of this program, which were $457,000 for the period ended
June 30, 1995, are charged to selling and administrative expense in
the accompanying Condensed Consolidated Statement of Income.
NOTE 3: INVENTORIES
The major classes of inventories are as follows (in thousands):
June 30, December 31,
1995 1994
Raw materials and supplies $ 25,987 $ 25,019
Finished goods 53,671 45,648
$ 79,658 $ 70,667
NOTE 4: LONG-TERM DEBT
On April 15, 1995, the Company redeemed, at par, the $191,081,000
15% Senior Subordinated Notes ("Notes"), which would have been due
April 2000. The redemption of the Notes was funded with
availability under a new $350,000,000 revolving credit agreement
dated March 1995. The write-off of the remaining unamortized debt
issuance costs related to the Notes was not material.
The Company entered into a $100,000,000 unsecured term loan
agreement on June 29, 1995, (the "Term Loan"). The terms and
conditions of the Term Loan are similar to the Company's revolving
credit agreement. Required principal payments under the Term Loan
are $25,000,000 to be paid in June 2001 and $75,000,000 to be paid
in June 2002. The interest rate on the Term Loan is subject to a
base London Interbank Offered Rate ("LIBOR") plus a spread ranging
from .40 percent to .725 percent. The Company has fixed the LIBOR
portion of the rate at 6.31 percent for seven years utilizing
interest rate swap agreements. The costs incurred in connection
with the term loan financing were not material.
As of June 30, 1995, the Company had availability of up to
$135,000,000 under the terms of its $350,000,000 revolving credit
agreement.
NOTE 5: STOCKHOLDERS' EQUITY
The Company purchased 4,185,000 shares of common stock for
$128,774,000 during the six months ended June 30, 1995. As of June
30, 1995, the Company is authorized to purchase up to an additional
3,785,000 shares under the current common stock repurchase program
announced in May of 1995.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Second Quarter of 1995 Compared with the Second Quarter of 1994:
For the second quarter ended June 30, 1995, net income per common
share was $1.30 on net income of $50.8 million and net sales of
$275.8 million. This compares to net income per common share of
$0.47, net income of $20.0 million and net sales of $208.2 million
for the second quarter of 1994.
Operating income for the second quarter of 1995 was $89.5 million,
an increase of 122 percent from $40.4 million for the same period
in 1994. The average sales price for products increased 22
percent, while sales volumes were up slightly. The increase in
sales prices outpaced higher raw material cost, which in turn
resulted in improved gross margins. For the quarter-to-quarter
comparison, the most significant improvement was from the caustic
soda and vinyl resin product lines.
Selling and administrative expenses were $12.3 million for the
second quarter of 1995, compared to $11.5 million for the second
quarter of 1994. The increase resulted primarily from charges
relating to the Company's profit sharing program and costs
associated with a new revolving trade receivables sales program.
Net interest expense declined $2.5 million when comparing the
second quarter of 1995 to the second quarter 1994. This decline
was attributable to $48.1 million of debt repayments over the past
twelve months and reduced interest rates in connection with the
redemption of the 15% Senior Subordinated Notes ("Notes") early in
the second quarter of 1995.
The effective income tax rate for the second quarter of 1995 was
38.4 percent, up from 35.5 percent in the second quarter of 1994.
The effective income tax rate increased in 1995 primarily as a
result of higher taxable income, which minimized the effect of
permanent tax differences.
Six Months Ended June 30, 1995, Compared With Six Months Ended June
30, 1994:
For the six months ended June 30, 1995, net income per common share
was $2.74 on net income of $111.0 million and net sales of $589.9
million. This compares to net income per common share of $0.77,
net income of $32.7 million and net sales of $401.1 million for the
same period in 1994.
Operating income for the six months ended June 30, 1995, was $196.1
million, an increase of 181 percent from $69.7 million for the same
period in 1994. For this period comparison, nearly all products
experienced higher pricing as demand increased overall sales prices
by 43 percent. Aromatic chemicals, vinyl resins and caustic soda
experienced the strongest improvements over the comparable prior
period.
Selling and administrative expenses were $23.9 million for the six
months ended June 30, 1995, compared to $21.4 million for the same
period in 1994. The increase resulted primarily from charges
relating to the Company's profit sharing program and costs
associated with the new revolving trade receivables sales program.
Net interest expense declined $3.6 million when comparing the first
six months of 1995 to the same period in 1994. This decline was
attributable to a lower debt balance during 1995 and reduced
interest rates in connection with the redemption of the Company's
Notes early in the second quarter of 1995.
The effective income tax rate for the six months ended June 30,
1995, was 38.5 percent, up from 35.2 percent for the same period in
1994 as a result of higher taxable income, which minimized the
effect of permanent tax differences.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1995, $159.3 million of cash
was generated by operating activities as compared to $36.0 million
for six months ended June 30, 1994. Cash flow increased due to
higher net income in 1995, along with working capital fluctuations.
The majority of the change in working capital in 1995 was related
to a $58.0 million reduction in receivables offset in part by a
decrease in accrued income taxes of $21.5 million. The reduction
in receivables was primarily attributable to a $50.0 million sale
of trade receivables under the revolving trade receivables sales
program.
Debt increased by $7.9 million during the six months ended June 30,
1995, to a level of $322.0 million, which consisted of revolving
credit loans of $217.0 million, a term loan of $100.0 million and
other debt of $5.0 million. The Company's $250 million revolving
credit facility was replaced by a new $350 million revolving credit
facility during the first quarter of 1995. The new revolving
credit facility contains more favorable terms, including reduced
interest rates, and fewer financial covenants and restrictions.
On April 15, 1995, the Company used availability under the new
revolving credit facility to redeem, at par, $191.1 million
principal amount of the Notes, which would have been due April
2000. On June 29, 1995, the Company entered into a $100.0 million
seven-year term loan agreement accompanied by interest rate swap
agreements, which fix the interest rate on the term loan at 6.31
percent plus a spread ranging from 0.40 percent to 0.725 percent.
Terms and conditions of the term loan are similar to the current
revolving credit facility.
Capital expenditures for the six months ended June 30, 1995, were
$31.7 million as compared to $30.5 million for the same 1994
period. Previously announced expansions to the Company's vinyl
compound, cumene and vinyl chloride monomer plants are all on
schedule for completion in 1996. On May 16, 1995, the Company
announced an expansion to the Plaquemine phenol/acetone plant,
which will increase phenol and acetone capacity by 60 million
pounds and 38 million pounds, respectively. Capital expenditures
will continue to increase over the next two quarters to an annual
level for 1995 of approximately $100 million.
The Company repurchased nearly 1.6 million shares of common stock
during the second quarter of 1995 at a cost of $50.5 million
completing a 10 percent stock buyback program initiated in December
1994. Approximately 4.17 million shares were repurchased under
this program at a total cost of $128.3 million for an average price
of $30.77 per share. Following the completion of this program, the
Company announced another 10 percent stock buyback program that
will eventually retire an additional 3.8 million shares of common
stock.
The Company declared an $0.08 per share dividend for each of the
first and second quarters of 1995, which totalled $6.3 million.
Management believes that cash provided by operations and the
availability of cash under the Company's current debt agreements
will provide sufficient funds to support planned capital
expenditures, dividends, stock repurchases, working capital
fluctuations and debt service requirements.
OUTLOOK
The financial results for the second quarter of 1995 were strong
even though the demand for some products declined from their record
highs in the first quarter. Looking forward to the third quarter,
the Company is hopeful that lower interest rates and the potential
for improved housing activities will lead to stabilization of
demand for those products that have shown recent weaknesses.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of shareholders was held May 16,
1995, in Atlanta, Georgia, for the following purposes: (i) to elect
two directors for a term of three years; (ii) to consider and take
action to approve and adopt the Company's 1995 Employee Stock
Purchase Plan; and (iii) to consider and take action upon the
ratification of the selection of Arthur Andersen, LLP to serve as
independent public accountants for the Company for the year ending
December 31, 1995.
The results of the voting by stockholders at the annual
meeting were as follows:
Broker Non-Votes
Director For Against or Abstentions
Alfred C. Eckert 33,382,242 674,574 0
Jerry R. Satrum 33,704,445 352,371 0
The Company's 1995 Employee Stock Purchase Plan was approved and
adopted by the following votes:
For Against Abstain Broker Non-Votes
33,093,574 236,092 727,150 0
The selection of Arthur Andersen, LLP to serve as independent
public accountants for the Company for the year ending December 31,
1995, was ratified by the following votes:
For Against Abstain Broker Non-Votes
33,712,850 16,462 327,504 0
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) The following exhibits are filed as part of this Form 10-Q
Quarterly Report.
EXHIBIT NO. DESCRIPTION
10(i) Receivables Transfer Agreement dated May
12, 1995, between the Company, as
Transferor, and Dynamic Funding
Corporation
10(ii) Term Loan Agreement dated June 29, 1995,
between the Company and The Industrial
Bank of Japan, Limited as Administrative
Agent
b) No reports on Form 8-K were filed with the Securities and
Exchange Commission during the second quarter of 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GEORGIA GULF CORPORATION
(Registrant)
Date August 2, 1995 /s/ Jerry R. Satrum
Jerry R. Satrum
President and Chief
Executive Officer
(Principal Executive Officer)
Date August 2, 1995 /s/ Richard B. Marchese
Richard B. Marchese
Vice President - Finance and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Exhibit 10(i)
RECEIVABLES TRANSFER AGREEMENT
between
GEORGIA GULF CORPORATION,
as Transferor,
and
DYNAMIC FUNDING CORPORATION.
Dated as of May 12, 1995
<PAGE> TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Terms. . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.3. Computation of Time Periods. . . . . . . . . . . . . 19
ARTICLE II
TRANSFERS AND SETTLEMENTS
SECTION 2.1. Assignment and Conveyance; Facility. . . . . . . . . 20
SECTION 2.2. Transfers. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.3. Selection of Tranche Periods
and Tranche Rates. . . . . . . . . . . . . . . . . 22
SECTION 2.4. Discount, Fees and Other Costs
and Expenses . . . . . . . . . . . . . . . . . . . 24
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures. . . . . . . . . . . . . . 24
SECTION 2.6. Liquidation Settlement Procedures. . . . . . . . . . 25
SECTION 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.8. Protection of Ownership of
the Company. . . . . . . . . . . . . . . . . . . . 26
SECTION 2.9. General Settlement Procedures. . . . . . . . . . . . 27
SECTION 2.10. Payments and Computations, Etc.. . . . . . . . . . . 28
SECTION 2.11. Reports. . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.12. Increase in and Reduction of
Facility Limit . . . . . . . . . . . . . . . . . . 29
SECTION 2.13. Optional Retransfer. . . . . . . . . . . . . . . . . 29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties . . . . . . . . . . . 30
SECTION 3.2. Reaffirmation of Representations
and Warranties . . . . . . . . . . . . . . . . . . 34
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. . . . . . . . . . . . . . . . 35
ARTICLE V
COVENANTS
SECTION 5.1. Financial Reporting. . . . . . . . . . . . . . . . . 37
SECTION 5.2. Negative Covenants of the
Transferor . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Responsibilities of the
Transferor . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.2. Duties of Collection Agent . . . . . . . . . . . . . 42
SECTION 6.3. Rights After Designation of
New Collection Agent . . . . . . . . . . . . . . . 44
SECTION 6.4. Responsibilities of the Transferor . . . . . . . . . 45
SECTION 6.5. Lock-Box Notices . . . . . . . . . . . . . . . . . . 45
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events . . . . . . . . . . . . . . . . . 47
SECTION 7.2. Termination. . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnities by the Transferor. . . . . . . . . . . . 50
SECTION 8.2. Tax Indemnification. . . . . . . . . . . . . . . . . 52
SECTION 8.3. Additional Costs . . . . . . . . . . . . . . . . . . 53
SECTION 8.4. Other Costs and Expenses . . . . . . . . . . . . . . 54
SECTION 8.5. Reconveyance Under Certain
Circumstances. . . . . . . . . . . . . . . . . . . 55
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Term of Agreement. . . . . . . . . . . . . . . . . . 57
SECTION 9.2. Waivers; Amendments. . . . . . . . . . . . . . . . . 57
SECTION 9.3. Notices. . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.4. Governing Law; Submission
to Jurisdiction; Integration . . . . . . . . . . . 58
SECTION 9.5. Severability; Counterparts . . . . . . . . . . . . . 59
SECTION 9.6. Assignments. . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.7. Confidentiality. . . . . . . . . . . . . . . . . . . 60
SECTION 9.8. No Bankruptcy Petition Against
the Company. . . . . . . . . . . . . . . . . . . . 60
SECTION 9.9. Limited Recourse; Waiver of Setoff . . . . . . . . . 60
SECTION 9.10. Characterization of the Trans-
actions Contemplated by this
Agreement. . . . . . . . . . . . . . . . . . . . . 61
EXHIBITS
EXHIBIT A Form of Contract . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B Credit and Collection Policy . . . . . . . . . . . .B-1
EXHIBIT C Schedule of Location of Records. . . . . . . . . . .C-1
EXHIBIT D Schedule of Corporate Names, Tradenames
or Assumed Names . . . . . . . . . . . . . . . . .D-1
EXHIBIT E List of Top Ten Obligors By Aging. . . . . . . . . .E-1
EXHIBIT F Form of Compliance Certificate . . . . . . . . . . .F-1
EXHIBIT G Form of Monthly Report . . . . . . . . . . . . . . .G-1
EXHIBIT H Form of Opinion of Special Counsel to
the Transferor . . . . . . . . . . . . . . . . . .H-1
EXHIBIT I List of Lock-Box Banks . . . . . . . . . . . . . . .I-1
EXHIBIT J Form of Lock-Box Notice. . . . . . . . . . . . . . .J-1
EXHIBIT K List of Actions/Suits. . . . . . . . . . . . . . . .K-1
EXHIBIT L Form of Tranche Selection Notice . . . . . . . . . .L-1
<PAGE>
RECEIVABLES TRANSFER AGREEMENT
RECEIVABLES TRANSFER AGREEMENT, dated as of May 15, 1995
(this "Agreement") between GEORGIA GULF CORPORATION, a Delaware
corporation (the "Transferor") and DYNAMIC FUNDING CORPORATION, a
Delaware corporation (the "Company").
PRELIMINARY STATEMENT
The Transferor desires to sell, from time to time,
undivided percentage interests in certain of its domestic accounts
receivable, and the Company desires to acquire such undivided
percentage interests, subject to the terms and conditions of this
Agreement.
The parties hereto agree as follows:
ARTICLE
DEFINITIONS
SECTION Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Additional Costs" shall have the meaning specified in Section
8.3(a).
"Administration Fee" shall mean the fee payable by the Transferor
to the New York Operating Agent pursuant to Section 2.7 hereof, the terms of
which are set forth in the Fee Letter.
"Adverse Claim" shall mean a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
another Person or a Subsidiary of such other Person. A Person shall be
deemed to control another Person if the controlling Person owns, directly or
indirectly, 10% or more of any class of voting securities of the controlled
Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether
through ownership of stock or otherwise.
"Aggregate Net Investment" shall mean the sum of the amounts paid
to the Transferor for each Transfer less the aggregate amount of Collections
(or payments, if any, pursuant to the first sentence of Section 2.6) received
and applied by the Company to reduce such Aggregate Net Investment pursuant
to Section 2.5 or 2.6; provided that the Aggregate Net Investment shall be
restored in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or is returned for
any reason.
"Aggregate Unpaids" shall mean, at any time, an amount equal to the
sum of (i) the aggregate accrued and unpaid Discount with respect to all
Tranche Periods at such time, (ii) the Aggregate Net Investment at such time
and (iii) all other amounts owed (whether due or accrued) hereunder by the
Transferor to the Company at such time.
"Allocated Net Investment" shall mean, with respect to any Tranche
Period, the portion of the Aggregate Net Investment allocated to such
Tranche Period.
"Arrangement Fee" shall mean the fee payable by the Transferor to
The Fuji Bank, Limited and The Fuji Bank and Trust Company pursuant to
Section 2.7 hereof, the terms of which are set forth in a separate letter
agreement between the Company, The Fuji Bank, Limited and The Fuji Bank and
Trust Company.
"Business Day" shall mean (i) with respect to any matters relating
to the Eurodollar Rate, a day on which banks are open for business in The
City of New York or Atlanta, Georgia and on which dealings in Dollars are
carried on in the London interbank market and (ii) for all other purposes,
any day other than a Saturday, Sunday or other day on which banking
institutions or trust companies in The City of New York or Atlanta, Georgia
are authorized or obligated by law, executive order or governmental decree to
be closed.
"Capitalized Lease" of a Person shall mean any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with generally accepted accounting principles.
"CBR Tranche" shall mean a Tranche as to which Discount is
calculated at the Corporate Base Rate.
"CBR Tranche Period" shall mean, with respect to a CBR Tranche,
prior to the Termination Date, a period of up to thirty (30) days (which
period shall be equal to the number of calendar days by which the date of
the related Transfer precedes the related Due Date for such Receivable)
commencing on a Business Day selected by the Transferor pursuant to this
Agreement, and after the Termination Date or the occurrence of the event
described in Section 7.1(e)(i) (exclusive of any days of grace), at the
Company's option pursuant to Section 2.3(b), up to thirty (30) days. If such
CBR Tranche Period would end on a day which is not a Business Day, such CBR
Tranche Period shall end on the next succeeding Business Day.
"Closing Date" shall mean May 12, 1995.
"Collateral Agent" shall have the meaning specified in Section
9.6(a).
"Collection Agent" shall mean, at any time, the Person then
authorized pursuant to Section 6.1 to service, administer and collect
Receivables.
"Collections" shall mean, with respect to each Receivable, all
cash collections and other cash proceeds of such Receivable, including,
without limitation, all Finance Charges and cash proceeds of Residual
Receivable Interest with respect to such Receivable, and any Collections of
such Receivable deemed to have been received pursuant to Section 2.9 hereof.
"Commercial Paper" shall mean the promissory notes of the Company
issued by the Company.
"Concentration Limit" shall mean, at any time for any Obligor and
its Subsidiaries, 2% of the Outstanding Balance of Total Receivables;
provided that with respect to Obligors rated at least Baa1 by Moody's
Investors Service, Inc. and BBB+ by Standard & Poor's Ratings Group the
Concentration Limit shall be 3% of the Outstanding Balance of Total
Receivables.
"Contract" shall mean any invoice in substantially the form of
Exhibit A hereto or any other written agreement relating thereto approved in
writing by the Company, pursuant to or under which an Obligor shall be
obligated to pay for goods and services purchased or otherwise obtained from
the Transferor.
"Corporate Base Rate" shall mean, prior to the occurrence of a
Termination Event, a rate per annum equal to the greater of (i) the sum of
(a) the Federal Funds Rate and (b) 1% or (ii) the corporate base rate of
interest announced by the Liquidity Bank from time to time, changing when and
as said rate changes. At all times after a Termination Event, the
"Corporate Base Rate" shall be the Corporate Base Rate specified above plus
2% per annum.
"Coverage Amount" shall mean, at any time, the amount equal to the
product of (i) the Coverage Percentage at such time and (ii) the Aggregate
Net Investment at such time.
"Coverage Percentage" shall mean, at any time, a percentage equal
to the sum of (i) 110% plus (ii) the Loss Percentage at such time.
"CP Rate" shall mean, with respect to any CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted average
of the rates) at which Commercial Paper having a term equal to such CP
Tranche Period is sold by any placement agent or commercial paper dealer
selected by the Company, as agreed between each such dealer or agent and the
Company, plus the amount of any placement agent or commercial agent fees.
"CP Tranche" shall mean a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" shall mean, with respect to a CP Tranche, a
period of up to ninety-five (95) days commencing on a Business Day requested
by the Transferor pursuant to Section 2.3. If such CP Tranche Period would
end on a day which is not a Business Day, such CP Tranche Period shall end on
the next succeeding Business Day.
"Credit Agreement" shall mean that certain Credit Agreement, dated
as of March 30, 1995, between the Transferor and The Chase Manhattan Bank
(National Association), as the same may from time to time be amended,
supplemented, or otherwise modified and in effect.
"Credit and Collection Policy" shall mean the Transferor's credit
and collection procedures and practices relating to its purchase and
collection of Contracts and Receivables existing on the date hereof and as
attached hereto as Exhibit B, as modified from time to time subject to the
terms hereof.
"Default Ratio" shall mean, for any date of determination, the
ratio (expressed as a percentage) of (i) the aggregate Outstanding Balance of
all Defaulted Receivables, to (ii) the average Outstanding Balance of all
Total Receivables on the last day of the month as determined three (3)
calendar months prior to such date of determination.
"Defaulted Receivable" shall mean that portion of a Total
Receivable: (i) as to which the payment related thereto, remains unpaid for
sixty-one (61) days or more from the original due date for such payment; (ii)
as to which the Transferor has notice that the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in Section
7.1(e) (as if references to the Transferor therein refer to such Obligor,
excluding any cure period); or (iii) which, consistent with the objective
requirements of the Credit and Collection Policy, would be written off the
Transferor's books as uncollectible.
"Delinquency Ratio" shall mean, for any date of determination, the
ratio (expressed as a percentage) of (i) the aggregate Outstanding Balance of
all Delinquent Receivables, to (ii) the average Outstanding Balance of all
Total Receivables on the last day of the month as determined two (2) calendar
months prior to such date of determination.
"Delinquent Receivable" shall mean that portion of a Total
Receivable as to which the payment related thereto, remains unpaid for more
than thirty (30) days but less than sixty-one (61) days from the due date for
such payment.
"Discount" shall mean, with respect to any Tranche Period:
TR x TA x AD/360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TA = the portion of the Aggregate Net Investment allocated to
such Tranche Period (provided, in the case of a CP
Tranche, Aggregate Net Investment shall be construed, for
purposes of this definition, as the face amount of
Commercial Paper).
AD = the actual number of days in such Tranche Period.
provided, however, that no provision of this Agreement shall require the
payment or permit the collection of Discount in excess of the maximum
permitted by applicable law; and provided further, that Discount shall not
be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"Discount Reserve" shall mean, on any date of determination, (A) if
the Transferor is the Collection Agent, the sum of the accrued and unpaid
Discount for all outstanding Tranche Periods and (B) if the Transferor is not
the Collection Agent, or if a Termination Event has occurred and is
continuing, the sum of (i) the accrued and unpaid Discount for all
outstanding Tranche Periods and (ii) the aggregate Discount to become due
(other than as specified in clause (i)) with respect to all outstanding
Tranche
Periods.
"Dollars" or "$" shall mean the lawful currency of the United
States of America.
"Early Collection Fee" shall mean, for any Tranche Period (such
Tranche Period to be determined without regard to the last sentence in
Section 2.3(a)) during which the Allocated Net Investment allocated to such
Tranche Period is reduced (other than by reason of a termination of a Tranche
Period by the Company pursuant to Section 7.2), the excess, if any, of
(i) the additional Discount that would have accrued during such Tranche
Period if such reductions had not occurred, minus (ii) the income, if any,
received by the Company from investing the proceeds of such reductions.
"Eligible Receivable" shall mean, at any date of determination,
any Receivable:
(1) which has been originated by the Transferor and to which
the
Transferor has good title thereto, free and clear of all
Adverse Claims;
(2) the Obligor of which is a resident of the United States of
America or its possessions or territories or any other
areas subject to its jurisdiction, is not an
Affiliate of any of the parties hereto, and is
not a government or a governmental subdivision
or agency;
(3) which is not a Defaulted Receivable;
(4) which is not a Delinquent or Defaulted Receivable at the
time of the initial creation of an interest of the Company
therein;
(5) which, according to the Contract related thereto, is
required to be paid in full within sixty (60) days of the
original billing date thereof or, in the case of
Contracts relating to the sale of polyvinyl
chloride resin, ninety (90) days of the original billing
date thereof;
(6) an acquisition of which by the Company with the proceeds
of
Commercial Paper would constitute a "current transaction"
within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended;
(7) which is either (A) an account receivable representing all
or part of the sales price of merchandise, insurance or
services within the meaning of Section 3(c)(5)
of the Investment Company Act of 1940, as
amended or (B) an "eligible asset" within the
meaning of Rule 3(a)-7 promulgated under the
Investment Company Act of 1940, as amended;
(8) which is an "account" or a "general intangible" within
the meaning of Section 9-106, or "chattel paper" within
the
meaning of Section 9-105, of the Relevant UCC;
(9) which is denominated and payable only in Dollars in the
United States of America;
(10) which is evidenced by a Contract as to which, together
with
such Receivable, is (A) in full force and effect and
constitutes the legal, valid and binding obligation of
the related Obligor, enforceable against such Obligor in
accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting
the enforcement of creditors' rights generally
and (B) subject to no rescission, setoff,
counterclaim or other defense;
(11) which, together with the Contract related thereto, the
Transferor has not received notice that such receivable
contravenes or violates in any material respect
any laws, rules or regulations applicable
thereto (including, without limitation, laws,
rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices
and privacy);
(12) which arises under a Contract which (A) does not require
the Obligor under such Contract to consent to the transfer
of the rights and duties of the Transferor
under such Contract (provided that breach of
any such consent provision shall not be deemed
to cause this condition to be breached unless
such breach causes the related Contract to be
unenforceable) and (B) does not contain a confidentiality
provision that purports to restrict the ability of the
Company to exercise its rights under this Agreement,
including, without limitation, its right to review the
Contract;
(13) which satisfies all applicable objective requirements of
the Credit and Collection Policy;
(14) the Obligor of which has been directed to make all
payments
to a specified account of the Collection Agent with
respect to which there shall be a Lock-Box
Agreement;
(15) as to which the Company has not notified the Transferor in
writing that such Receivable is not acceptable for
acquisition hereunder because of credit-related reasons
determined in the sole discretion of the Company;
(16) which was generated in the ordinary course of the
Transferor's business; and
(17) in which the Company has a perfected security interest
prior in right to the rights of any other Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Tranche Period, a rate per annum determined by the Liquidity Bank to be equal
to the sum of (a) 0.45 of 1% and (b) the quotient (expressed as a percentage
and rounded upwards, if necessary, to the nearest 1/100 of 1%) obtained by
dividing (i) LIBOR for such Eurodollar Tranche Period by (ii) 100% minus the
LIBOR Reserve Percentage for such Eurodollar Tranche Period, if any.
"Eurodollar Tranche" shall mean a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" shall mean, with respect to a
Eurodollar Tranche, a period of one month commencing on a Business Day as
requested by the Transferor and agreed to by the Company pursuant to Section
2.3. If such Eurodollar Tranche Period would end on a day which is not a
Business Day, such Eurodollar Tranche Period shall end on the next succeeding
Business Day, unless such extension would cause the last day of such Period to
occur in the next following calendar month, in which event the last day of
such Period shall occur on the next preceding Business Day.
"Excess Concentration Amount" shall mean, with respect to all
Obligors, the sum of all amounts by which the Outstanding Balance of all
Total Receivables of each such Obligor exceeds the Concentration Limit
related to such Obligor.
"Facility Limit" shall mean an amount equal to $50,000,000, as such
amount may be increased or reduced from time to time in accordance with
Section 2.12.
"Federal Funds Rate" shall mean, under a CBR Tranche Period, the
interest rate per annum equal to the weighted average of the rates on Federal
funds transactions equal to the CBR Tranche Period with members of the
Federal Reserve System arranged by Federal funds brokers, as published on
Telerate, page 333, for such day at 11:00 A.M. (New York time) (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the New York Operating Agent from three (3) Federal
funds brokers of recognized standing selected by it.
"Fee Letter" shall mean the letter agreement between the Transferor
and the New York Operating Agent, as from time to time amended, supplemented
or otherwise modified and in effect.
"Finance Charges" shall mean, with respect to a Contract, any
finance, interest, late or similar charges owing by the Obligor pursuant to
such Contract.
"Guaranty" of a Person shall mean any agreement by which such
Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or
working capital or other financial condition of any other Person or otherwise
assures any creditor of such other Person against loss, including, without
limitation, any comfort letter, administrative agreement or take-or-pay
contract and shall include, without limitation, the contingent liability of
such Person in connection with any application for a letter of credit.
"Indebtedness" of a Person shall mean such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price
of property other than accounts payable arising in the ordinary course of
such Person's business on terms customary in the trade, (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person,
(iv)
obligations which are evidenced by notes, acceptances, or other instruments,
(v) Capitalized Lease obligations and (vi) obligations for which such Person
is obligated pursuant to a Guaranty.
"Indemnified Amounts" shall have the meaning specified in Section
8.1.
"LIBOR" shall mean, with respect to any Eurodollar Tranche Period,
a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by the principal London branch of the Liquidity Bank at approximately
11:00 a.m. London time two (2) Business Days prior to the first day of such
Eurodollar Tranche Period as the rate which it is quoting to leading banks in
the London interbank market for the placement by the Liquidity Bank of United
States dollar deposits in immediately available funds for a period, and in an
amount, comparable to the Eurodollar Tranche Period and the principal amount
of such Eurodollar Tranche.
"LIBOR Reserve Percentage" shall mean, with respect to any
Eurodollar Tranche Period, the maximum reserve percentage, if any, applicable
to the Liquidity Bank under Regulation D during such Eurodollar Tranche
Period (or if more than one percentage shall be applicable, the daily average
of such percentages for those days in such Eurodollar Tranche Period during
which any such percentage shall be applicable) for determining the Liquidity
Bank's reserve requirement (including any marginal, supplemental or emergency
reserves) with respect to liabilities or assets having a term comparable to
such Eurodollar Tranche Period consisting or included in the computation of
Eurocurrency liabilities. Without limiting the effect of the foregoing, the
LIBOR Reserve Percentage shall reflect any other reserves required to be
maintained by the Liquidity Bank by reason of any Regulatory Change against
(a) any category of liabilities which includes deposits by reference to which
LIBOR is to be determined or (b) any category of extensions of credit or
other assets which include LIBOR-based credits or assets.
"Liquidity Bank" shall mean The Fuji Bank, Limited, acting through
its New York Branch.
"Liquidity Facility" shall mean that certain revolving liquidity
facility entered into between the Company and the Liquidity Bank pursuant to
which the Liquidity Bank has agreed to make certain liquidity loans from
time to time to the Company.
"Lock-Box Account" shall mean an account maintained by the
Collection Agent at a Lock-Box Bank for the purpose of receiving Collections
from Receivables.
"Lock-Box Bank" shall mean each of the banks set forth in Exhibit I
and such banks as may be added thereto or deleted therefrom pursuant to
Section 2.8.
"Lock-Box Notice" shall mean a notice in substantially the form of
Exhibit J from the Transferor to any Lock-Box Bank.
"Loss Percentage" shall mean, on any date of determination, 15%.
"Loss Reserve" shall mean, on any date of determination, an amount
equal to:
LP x (ANI + DR)
Where:
LP = the Loss Percentage at the close of business of the
Collection Agent on such day.
ANI = the Aggregate Net Investment at the close of business
of the Collection Agent on such day.
DR = the Discount Reserve at the close of business of the
Collection Agent on such day (in the case of a CP
Tranche, calculated in accordance with clause (B) of
the definition of Discount Reserve).
"Material Adverse Effect" shall mean a material adverse effect on
(i) the condition (financial or otherwise) or operations of the Transferor
and its Subsidiaries, taken as one enterprise, (ii) the ability of the
Transferor to perform its obligations under this Agreement, (iii) the
legality, validity or enforceability of this Agreement, (iv) the Company's
interest in the aggregate amount of Receivables or in any significant portion
of the Receivables, the Residual Receivable Interest or the Collections with
respect thereto, or (v) the collectibility of the aggregate amount of
Receivables or of any significant portion of the Receivables, other than such
Material Adverse Effects which are the direct result of actions or omissions
of the Company or its Affiliates.
"Monthly Report" shall mean a report, in substantially the form of
Exhibit G or in such other form as is mutually agreed to by the Transferor
and the Company, furnished by the Collection Agent to the Company pursuant to
Section 2.11.
"Net Receivables Balance" shall mean, at any time, the Outstanding
Balance of all Eligible Receivables at such time reduced by (i) the Excess
Concentration Amount and (ii) the Outstanding Balance of all Defaulted
Receivables and Delinquent Receivables at such time.
"New York Operating Agent" shall mean The Fuji Bank and Trust
Company, in its capacity as New York operating agent on behalf of the
Company, and its successors and assigns in such capacity.
"Obligor" shall mean any Person obligated to make payments to the
Transferor pursuant to a Contract.
"Other Costs" shall have the meaning specified in Section 8.4.
"Other Transferors" shall have the meaning specified in Section 8.1.
"Outstanding Balance" of any Receivable at any time shall mean the
then outstanding principal amount thereof including any accrued and
outstanding Finance Charges related thereto.
"Percentage Factor" shall mean the percentage computed at any time
of determination as follows:
(ANI + LR + DR)/OBR
Where:
ANI = the Aggregate Net Investment at the time of such computation.
LR = the Loss Reserve at the time of such computation.
DR = the Discount Reserve at the time of such computation
(in the case of a CP Tranche, calculated in accordance
with clause (B) of the definition of Discount Reserve).
OBR = the aggregate Outstanding Balance of Receivables.
Notwithstanding the foregoing computation, the Percentage Factor
shall not exceed one hundred percent (100%). The Percentage Factor shall be
calculated by the Collection Agent on the day of the initial incremental
Transfer hereunder. Thereafter, until the Termination Date, the Collection
Agent shall daily recompute the Percentage Factor and report such
recomputations to the Company monthly in the Monthly Report or as requested
by the Company. The Percentage Factor shall remain constant from the time as
of which any such computation or recomputation is made until the time as of
which the next such recomputation shall be made, notwithstanding any
additional
Receivables arising, any incremental Transfer made pursuant to Section 2.2(a)
or any reinvestment Transfer made pursuant to Section 2.2(b) and 2.5 during
any period between computations of the Percentage Factor. On and after the
Termination Date, the Percentage Factor shall be calculated as of the close
of business on the Business Day immediately preceding the Termination Date
(provided that clause (b) of the definition of Discount Reserve shall apply
for purposes of such calculation), shall remain constant at all times
thereafter until such time as the Company shall have received the
Aggregate Unpaids, at which time the Percentage Factor shall be recomputed
in accordance with Section 2.6.
"Person" shall mean any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization, enterprise,
government or any department or agency of any government.
"Potential Termination Event" shall mean an event which, but for
the lapse of time or the giving of notice or both, would constitute a
Termination Event.
"Proceeds" shall mean "proceeds" as defined in Section 9-306(1) of
the UCC.
"Receivable" shall mean indebtedness owed to the Transferor by an
Obligor with a mailing address in the United States under a Contract, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of products or services by the
Transferor, and includes the right of payment of any Finance Charges and
other obligations of the Obligor with respect thereto. Notwithstanding the
foregoing, once a Receivable has been deemed collected pursuant to Section
2.9 hereof, it shall no longer constitute a Receivable hereunder.
"Records" shall mean all Contracts and other documents,
books, records and other information (including without limitation computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained by the Transferor with respect to the
Receivables and the Obligors.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be amended or supplemented from
time
to time.
"Regulatory Change" shall mean any change after the date of this
Agreement in United States (federal, state or municipal), Japan or foreign
laws or regulations (including Regulation D) or the adoption or making after
such date of any interpretations, directives or requests applying to a class
of banks (including the Liquidity Bank) of or under any United States
(federal, state or municipal), Japan or foreign, laws or regulations (whether
or not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Relevant UCC" shall mean, with respect to any state, the Uniform
Commercial Code as from time to time in effect in such state.
"Residual Receivable Interest" shall mean with respect
to any Receivable:
(i) all of the Transferor's interest, if any, in
the product (including returned product), the sale of which by the
Transferor gave rise to such Receivable;
(ii) all other security interests or liens and
property subject thereto from time to time,if any, purporting to
secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all
financing statements signed by the Obligor describing any
collateral securing such Receivable;
(iii) all guarantees, insurance and other
agreements or arrangements of whatever character (including, without
limitation, the beneficial interest in any insurance policy or bill
of lading) from time to time supporting or securing payment of such
Receivable, whether pursuant to the Contract related to such
Receivable or otherwise;
(iv) all Records; and
(v) all Proceeds of the foregoing.
"Section 8.2 Costs" shall have the meaning specified in Section 8.2.
"Section 8.3 Costs" shall have the meaning specified in Section 8.3.
"Subsidiary" shall mean, for any Person, any corporation or other
business organization 50% or more of the outstanding voting securities of
which shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more such corporations or organizations or by such
Person and one or more such corporations or organizations, and any
partnership of which such Person or any such corporation or organization is a
general partner.
"Termination Date" shall mean the earliest to occur of (i) the date
that the Company terminates outstanding Tranche Periods pursuant to Section
7.2 hereof, (ii) that Business Day designated by the Transferor as the
Termination Date at any time following ninety (90) days' written notice to
the Company, (iii) May 6, 1996, unless extended from time to time upon written
agreement between the Company and the transferor, and (iv) May 15, 1998,
unless extended from time to time upon written agreement between the Company
and the Transferor.
"Termination Event" shall mean an event described in Section 7.1.
"Total Receivable" shall have the meaning set forth herein in the
definition of "Receivable", except that a Total Receivable shall include
indebtedness owed to the Transferor by Obligors with mailing addresses
outside the United States.
"Tranche" shall mean a portion of the Aggregate Net Investment
allocated to a Tranche Period pursuant to Section 2.3.
"Tranche Period" shall mean a CP Tranche Period, Eurodollar Tranche
Period or a CBR Tranche Period.
"Tranche Rate" shall mean the CP Rate, the Eurodollar Rate or the
Corporate Base Rate.
"Tranche Selection Notice" shall have the meaning set forth in
Section 2.2(a).
"Transfer" shall mean a transfer by the Transferor on each Transfer
Date of an undivided percentage ownership interest in each and every
Receivable, together with all Residual Receivable Interest, Collections and
Proceeds with respect thereto.
"Transfer Date" shall mean, with respect to each Transfer, either
(i) one, two or three Business Days as specified in Section 2.3(a) relating
to such Transfer pursuant to Section 2.2(a) hereof or (ii) each day on which
Collections are received by the Collection Agent and reinvested in accordance
with Section 2.2(b) hereof.
"Transfer Notice Date" shall mean, with respect to each Transfer
pursuant to Section 2.2(a) hereof, the Business Day indicated in a written
notice provided by the Transferor to the Company, which date is agreed to by
the Company.
"Transfer Price" shall mean, with respect to any Transfer, the
amount paid to the Transferor by the Company pursuant to Section 2.2(a).
"Transferred Interest" shall mean, at any time of determination, an
undivided percentage ownership interest in (i) each and every then
outstanding Receivable, (ii) all Residual Receivable Interest with respect to
each such Receivable, (iii) all Collections with respect thereto, and (iv)
other Proceeds of the foregoing, equal to the Percentage Factor at such time,
and only at such time (without regard to prior calculations).
SECTION 1 Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC, and not
specifically defined herein, are used herein as defined in such Article 9.
References herein to Articles, Sections, Exhibits and Schedules shall, unless
otherwise specified, refer respectively to Articles and Sections hereof and
Exhibits and Schedules hereto.
SECTION 2 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
<PAGE>
ARTICLE I
TRANSFERS AND SETTLEMENTS
SECTION 1 Assignment and Conveyance; Facility. Upon
the terms and subject to the conditions herein set forth, the
Transferor may transfer and assign to the Company, and the
Company shall, subject to its ability to obtain financing therefor
through the issuance of Commercial Paper or the obtaining of
liquidity loans pursuant to the Liquidity Facility (it being understood
that the Company shall have no obligation to obtain such financing
through the obtaining of a Eurodollar Tranche or CBR Tranche
unless financing is not available through a CP Tranche on such day),
acquire from the Transferor undivided percentage ownership interests
in Receivables, together with the Residual Receivable Interest and
Collections with respect thereto; provided, however, that no such
acquisition shall be made if, after giving effect to such acquisition,
the sum of the Aggregate Net Investment and the aggregate amount
of Discount applicable to all existing Tranches would exceed
the Facility Limit; provided further, however, that no such
acquisition shall be made unless such Transfer Price, together with
clause (B) of the definition of Discount Reserve (in the case of a
CP Tranche) is equal to at least $1,000,000, and no such acquisition
shall be made on or after the occurrence of a Termination Event.
The Company will pay the Transfer Price of any Transfer made pursuant
to Section 2.2(a) with the proceeds of (a) a CP Tranche or
(b) the obtaining of liquidity loans pursuant to the Liquidity
Facility.
SECTION 2 Transfers. (a) On each Transfer Notice
Date, the Transferor shall provide the Company with notice in
substantially the form of Exhibit L hereto (each, a "Tranche
Selection Notice") which shall specify, among other things, the
amount of commercial paper proposed to be issued by the Company;
provided that all Commercial Paper issued by the Company hereunder
shall have maturities no later than fifteen (15) days prior
to the scheduled Termination Date hereunder. Such Tranche
Selection Notice shall also contain the Tranche Period(s) and
Tranche Rate(s) requested by the Transferor as required by, and
subject to, the limitations of Sections 2.1 and 2.3. The Company
shall inquire as to the availability of such Tranche Period and
Tranche Rate and shall, if available and if the terms of the
transfer of such Receivables is otherwise satisfactory, transfer
such Receivables on the following Transfer Date. Following each
Transfer on a Transfer Date pursuant to this Section 2.2(a), the
Company shall deposit to the Transferor's account (No. 910-2-24310),
account name "Georgia Gulf Corporation" maintained at
the office of The Chase Manhattan Bank, N.A. in The City of New
York, in immediately available funds, an amount equal to the
Transfer Price for such Transfer. Each Tranche Selection Notice
shall be irrevocable and binding on the Transferor, and the
Transferor shall indemnify the Company against any loss or
expense incurred by the Company as a result of any failure by the
Transferor to complete such Transfer including, without
limitation, any loss or expense incurred by the Company by reason
of the liquidation or reemployment of funds acquired or requested
by the Company to fund such Transfer.
(b) Reinvestment Transfers. On each Business Day
occurring after the initial Transfer hereunder and prior to the
Termination Date, the Transferor hereby transfers and assigns to
the Company, and the Company hereby acquires from the Transferor,
undivided percentage ownership interests in each and every
Receivable, together with the Residual Receivable Interest and
Collections with respect thereto, to the extent the Collections
are available for such Transfer in accordance with Section 2.5,
such that, after giving effect to such Transfer, (i) the amount
of the Company's Aggregate Net Investment at the close of the
Company's business on such Business Day, shall be equal to the
amount of the Company's Aggregate Net Investment at the close of
the Company's business on the Business Day immediately preceding
such Business Day, plus the Transfer Price of any Transfer made
on such day, if any, and (ii) the Company's Transferred Interest
in each Receivable, together with the Residual Receivable
Interest and Collections with respect thereto, shall be equal to
its Transferred Interest in each other Receivable, together with
the Residual Receivable Interest and Collections with respect
thereto.
(c) All Transfers. Each Transfer shall
constitute an absolute transfer and assignment of undivided percentage
ownership interests in each and every Receivable, together with
the Residual Receivable Interest and Collections with respect
thereto then existing, as well as each and every Receivable,
together with the Residual Receivable Interest which arises
at any time after the date of such Transfer until the Termination
Date. The Company's aggregate undivided percentage ownership
interest in the Receivables, together with the Residual
Receivable Interest and Collections with respect thereto, shall
equal the Percentage Factor in effect from time to time. The
Transferred Interest in each Receivable, together with the
Residual Receivable Interest and Collections with respect thereto,
shall at all times be equal to the Transferred Interest in
each other Receivable, together with the Residual Receivable
Interest and Collections. To the extent that the Transferred
Interest shall decrease as a result of a recalculation of the
Percentage Factor, the Company shall be considered to have
reconveyed to the Transferor an undivided percentage ownership
interest in such Receivable, together with the Residual
Receivable Interest and Collections with respect thereto, in an
amount equal to such decrease such that, in each case, the
Transferred Interest in Receivable shall be equal to the
Transferred Interest in each other Receivable.
(d) Percentage Factor. The Percentage Factor
shall be initially computed as of the opening of business of the
Collection Agent on the date of the initial incremental Transfer
hereunder. Thereafter until the Termination Date, the Percentage
Factor shall be automatically recomputed as of the close of
business of the Collection Agent on each day (other than a day
after the Termination Date). The Percentage Factor shall remain
constant from the time as of which any such computation or
recomputation is made until the time as of which the next such
recomputation, if any, shall be made. The Percentage Factor, as
computed as of the day immediately preceding the Termination
Date, shall remain constant at all times on and after such
Termination Date until the date on which the Aggregate Net
Investment shall become zero.
SECTION 3 Selection of Tranche Periods and Tranche Rates.
(a) At all times hereafter, but prior to the
occurrence of a Termination Event, the Transferor shall, subject
to availability and the Company's approval as described in
Sections 2.1 and 2.2 and the limitations described below, request
Tranche Periods and Tranche Rates applicable thereto and allocate
each Transfer to each selected Tranche Period, so that the
aggregate amounts allocated to outstanding Tranche Periods at all
times shall equal the Aggregate Net Investment. The Company
shall promptly confirm to the Transferor the Tranche Rate(s) and
Tranche Period(s). In the case of any Tranche Period outstanding
at the time of the Company's notice of termination of all
outstanding Tranche Periods given pursuant to Section 7.2, such
Tranche Period shall end on the date of such notice. In the
Tranche Selection Notice, the Transferor shall give the Company
irrevocable notice of each new Tranche Period (i) with respect to
a CBR Tranche, by 12:00 P.M. (New York City time) on the day of
expiration of any then existing Tranche Period, (ii) with respect
to a Eurodollar Tranche, by 12:00 P.M. (New York City time) on a
Business Day not less than three (3) Business Days prior to the
expiration of any then existing Tranche Period and (iii) with
respect to a CP Tranche, by the close of business in New York City
not less than three (3) Business Days prior to the expiration of
any then existing Tranche Period; provided, however, that the
Company may select, in its sole discretion, any such new Tranche
Period and Tranche Rate if (i) the Transferor fails to provide
such notice on a timely basis or (ii) the Company determines, in
its sole discretion, that the Tranche Rate or Tranche Period
selected by the Transferor is unavailable; and provided further,
however, that any such Tranche Period chosen by the Company, in
its sole discretion, shall be for a term of one (1) day. The
Company shall promptly confirm to the Transferor the Tranche Rate
and Tranche Period. In the case of any Tranche Period outstanding
at the time of the Company's notice of termination of
all outstanding Tranche Periods given pursuant to Section 7.2,
such Tranche Period shall end on the date of such notice.
(b) At all times on and after the occurrence of a
Termination Event, (i) the Company shall select all Tranche
Periods and Tranche Rates (which shall be the Corporate Base
Rate) applicable thereto and (ii) the Facility Limit will be
reduced on each day thereafter to the Aggregate Unpaids as of
such day.
SECTION 4 Discount, Fees and Other Costs and Expenses.
The Transferor shall pay or cause to be paid, as and when due in
accordance with this Agreement (to the extent unpaid after giving
effect to any payments made pursuant to Section 2.5 or Section
2.6), all amounts payable as Discount, all fees hereunder, all
dealer commissions (if applicable), all amounts payable pursuant
to Article VIII, if any, and all Collection Agent costs, if any,
payable pursuant to Section 6.2. Discount shall accrue with
respect to each Tranche on each day occurring during the Tranche
Period related thereto. Discount accrued on each Tranche shall
be payable on the last day of the applicable Tranche Period. The
Transferor may, at its option and prior to the occurrence of a
Termination Event hereunder, satisfy its obligation to pay
Discount accrued on a Tranche by requesting a new CP Tranche
Period in accordance with Section 2.3(a). Such new Tranche will
increase the Aggregate Net Investment by the amount of such
accrued Discount which is allocated to such new CP Tranche Period
and will constitute a Transfer pursuant to Section 2.2(a). All
per annum fees shall be payable monthly. If any amount hereunder
shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
Discount and all per annum fees hereunder shall be calculated for
the actual days elapsed on the basis of 360-day year. Nothing in
this Agreement shall limit in any way the obligations of
Transferor to pay the amounts set forth in this Section 2.4.
SECTION 5 Non-Liquidation Settlement and Reinvestment
Procedures. On each day after the date of the initial Transfer,
but prior to the Termination Date, the Collection Agent shall,
out of the Percentage Factor of Collections received on such day
or prior to such day and not previously applied or accounted for,
allocate funds in the following order: (i) from and after the
request of the Company, set aside and hold in trust for the
Company, an amount equal to all Discount accrued through such day
and not previously set aside or paid and (ii) apply the balance
of such Percentage Factor of Collections remaining after
application as provided in clause (i) of this Section 2.5 to the
Transfer, for the benefit of the Company, of additional undivided
percentage interests in each Receivable, together with Residual
Receivable Interest and Collections with respect thereto,
pursuant to Section 2.2(b). On the last day of each Tranche
Period, from the amounts set aside as described in clause (i) of
the first sentence of this Section 2.5 if the Collection Agent is
not the Transferor, or from any other legally available source if
the Collection Agent is the Transferor, the Collection Agent
shall deposit to the Company's account an amount equal to the
accrued and unpaid Discount for such Tranche Period.
SECTION 6 Liquidation Settlement Procedures. (a) If,
on the Termination Date, the Net Receivables Balance is less than
the Coverage Amount, then the Transferor shall immediately pay to
the Company an amount equal to the quotient of (i) the difference
between the Coverage Amount and the Net Receivables Balance,
divided by (ii) 1.10, and such amount shall be applied to the
reduction of the Aggregate Net Investment of Tranche Periods
selected by the Company. On the Termination Date and on each day
thereafter, the Collection Agent shall set aside and hold in
trust for the Company, the Percentage Factor of all Collections
received on such day. On the last day of each Tranche Period to
occur on or after the Termination Date, the Collection Agent
shall deposit to the Company's account the amounts set aside
pursuant to the preceding sentence, together with any remaining
amounts set aside pursuant to Section 2.5(i) prior to the
Termination Date, but not to exceed the sum of (i) the accrued
Discount for such Tranche Period, (ii) the portion of the
Aggregate Net Investment allocated to such Tranche Period, and
(iii) the aggregate of all other amounts then owed (whether due
or accrued) hereunder by Transferor to the Company. If the
Collection Agent is the Transferor, the foregoing amounts
described in clauses (i), (ii) and (iii) shall be paid by the
Collection Agent from any legally available source up to the
amount that would have been set aside by the Collection Agent had
the Collection Agent been required to comply with the second
sentence of this Section 2.6.
(b) If there shall be insufficient funds on
deposit for the Collection Agent to distribute funds in payment
in full of the amounts described in Section 2.6(a), the
Collection Agent shall distribute funds first, in reduction of
the Aggregate Net Investment, second, in payment of all fees and
expenses payable to the Company, third, in payment of the accrued
Discount and fourth, in payment of all other amounts payable to
the Company. Following the date on which the Aggregate Net
Investment has been reduced to zero, all accrued Discount has
been paid in full and all other Aggregate Unpaids have been paid
in full, (i) the Collection Agent shall recompute the Percentage
Factor as zero, (ii) the Company shall be deemed to have
reconveyed to the Transferor any interest in the Receivables
(including the Transferred Interest), (iii) the Collection Agent
shall pay to the Transferor pursuant to the second sentence of
Section 2.6(a) and (iv) the Company shall promptly at the request
of the Transferor execute and deliver to the Transferor any
documents required or advisable to terminate its interest in the
Receivables and the Residual Receivable Interest.
SECTION 7 Fees. Notwithstanding any limitation on
recourse contained in this Agreement, the Transferor shall pay
the following fees:
(a) to the Company, on the first Business Day of
each month, the Administration Fee for the preceding month.
(b) to the Company, on the date of incurrence
thereof, any Early Collection Fee.
(c) to The Fuji Bank, Limited and The Fuji Bank
and Trust Company, on the Closing Date, the Arrangement Fee.
SECTION 8 Protection of Ownership of the Company. (a)
The Transferor agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents
and take all action that the Company may reasonably request in
order to perfect or protect the Transferred Interest or to enable
the Company to exercise or enforce any of its rights hereunder.
Without limiting the foregoing, the Transferor will, upon the
request of the Company, in order to accurately reflect this
transaction, execute and file such financing or continuation
statements or amendments thereto or assignments thereof (as
permitted pursuant to Section 9.6) as may be reasonably requested
by the Company and mark its master data processing records and
other documents with a legend describing the acquisition by the
Company of the Transferred Interest, as the Company may
reasonably request. To the fullest extent permitted by
applicable law, the Company shall be permitted to sign and file
continuation statements and amendments thereto and assignments
thereof without the Transferor's signature in such cases where
the Transferor is obligated hereunder to sign such statements,
amendments or assignments. Carbon, photographic or other
reproduction of this Agreement or any financing statement shall
be sufficient as a financing statement. The Transferor shall
neither change its name, identity or corporate structure (within
the meaning of Section 9-402(7) of the Relevant UCC) nor relocate
its chief executive office or any office where Records are kept
unless it shall have: (i) given the Company at least fifteen
(15) days' prior notice thereof and (ii) delivered to the Company
all financing statements, instruments and other documents
reasonably requested by the Company in connection with such
change or relocation.
(b) Each Contract shall instruct the Obligor with respect
thereto to cause all Collections to be deposited directly
with a Lock-Box Bank. The Transferor shall not add any bank as a
Lock-Box Bank to those listed on Exhibit I hereto unless the
Company shall have received notice of such addition and undated
executed copies of Lock-Box Notices to each new Lock-Box Bank.
The Transferor shall not terminate any bank as a Lock-Box Bank or
terminate any account as a Lock-Box Account unless the Company
shall have received thirty (30) days' prior notice of such
termination. If Transferor receives any Collections or is deemed
to receive any Collections pursuant to Section 2.9, the
Transferor shall immediately remit such Collections to the
Company.
SECTION 9 General Settlement Procedures. If on any
day the Outstanding Balance of a Receivable is either (x) reduced
as a result of any defective or rejected goods or services, any
cash discount or any adjustment by the Transferor or (y) reduced
or cancelled as a result of a setoff in respect of any claim by
any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction) or (z) cancelled
as a result of the Transferor exercising its right to assign a
Receivable back to the Obligor thereof, the Transferor shall be
deemed to have received on such day a Collection of such
Receivable in the amount of such reduction or cancellation. If
on any day any of the representations or warranties with respect
to the Receivables in Section 3.1(d), (i), (j), (k), (n) or (o)
is no longer true with respect to a Receivable, as the Transferor
or the Company shall notify the other, the Transferor shall be
deemed to have received on such day a Collection of such
Receivable in full, and the Aggregate Net Investment shall not be
deemed to be reduced hereunder until such time as such amount is
remitted and received by the Company. Any payment by an Obligor
in respect of any Receivable shall, except as otherwise specified
by such Obligor or otherwise required by contract or law, be
applied as a Collection of the Receivables of such Obligor
(starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to
any other Receivable of such Obligor.
SECTION 10 Payments and Computations, Etc. All
amounts to be paid or deposited by the Transferor or the
Collection Agent hereunder shall be paid or deposited in
accordance with the terms hereof no later than 11:00 A.M. (New York
City time) on the day when due in immediately available funds;
if such amounts are payable to the Company they shall be paid or
deposited to Account Number 001-051016, titled Dynamic Funding
Corporation General Account," and maintained at the offices of
The Fuji Bank and Trust Company, until otherwise notified by the
New York Operating Agent on behalf of the Company. The
Transferor shall, to the extent permitted by law, pay to the
Company upon demand, interest on all amounts not paid or deposited
when due to the Company hereunder at a rate equal to 2% per
annum plus the Corporate Base Rate. All computations of interest
hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the
last day) elapsed.
SECTION 11 Reports. Prior to the 20th day of each
month, the Collection Agent shall prepare and forward to the
Company (i) a Monthly Report, as of the close of business of the
Collection Agent on the last day of the immediately preceding
month, in the form attached hereto as Exhibit G, (ii) a listing
of the ten (10) largest Obligors by Receivables balance, together
with an aging of such Receivables, in substantially the form of
Exhibit E hereto and (iii) such other information as the Company
may reasonably request.
SECTION 12 Increase in and Reduction of Facility
Limit. The Transferor may, upon at least thirty (30) days' prior
written notice to the Company, and with the consent of the
Company, either (i) increase in part the Facility Limit or (ii)
terminate in whole or reduce in part the unused portion of the
Facility Limit; provided that each partial increase or reduction
of the Facility Limit shall be in an amount equal to $10,000,000
or an integral multiple thereof.
SECTION 13 Optional Retransfer. On any day after May
1, 1996 on which the Aggregate Unpaids falls below 10% of the
Facility Limit, then, in such event, the Transferor may, in its
sole discretion, direct the Company to retransfer the Transferred
Interest to the Transferor at a price equal to the Aggregate
Unpaids calculated as of the proposed date of such retransfer.
The Company further agrees to take on or prior to such transfer,
at the sole expense of the Transferor, any action reasonably
necessary to effectuate the transfer to the Transferor of all of
the Company's interest in, to and under the Receivables and the
Residual Receivable Interest and Collections with respect
thereto.
<PAGE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 1 Representations and Warranties. The
Transferor hereby represents and warrants to the Company that:
(a) Corporate Existence and Power. The
Transferor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has
all corporate power and all governmental licenses, authorizations,
consents and approvals required to carry on its business
in each jurisdiction in which its business is now conducted,
except where the failure to obtain such approval would not have a
Material Adverse Effect.
(b) Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Transferor of this Agreement are within the Transferor's corporate
powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with,
any governmental body, agency or official (except as contemplated
by Section 2.8), and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the
Certificate of Incorporation or Bylaws of the Transferor or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Transferor or result in the creation or
imposition of any lien on assets of the Transferor or any of its
Subsidiaries (except as contemplated by Section 2.8).
(c) Binding Effect of Agreement. This Agreement
constitutes the legal, valid and binding obligation of the
Transferor, enforceable against the Transferor in accordance with
the terms hereof, subject to the effect of bankruptcy,
insolvency, reorganization or other similar laws affecting
enforcement of creditors' rights generally.
(d) Perfection. Immediately preceding each
Transfer hereunder, the Transferor shall be the owner of all of
the Receivables. On or prior to each Transfer all financing
statements and other documents required to be recorded or filed
in order to protect the Transferred Interest against all
creditors of and purchasers from the Transferor (other than any
financing statements or assignments of financing statements
required to perfect the Transferred Interest) will have been duly
filed in each filing office necessary for such purpose and all
filing fees and taxes, if any, payable in connection with such
filings shall have been paid in full.
(e) Accuracy of Information. All information
heretofore furnished by the Transferor to the Company for
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter
furnished by the Transferor to the Company will be, true and
accurate in every material respect, on the date such information
is stated or certified.
(f) Tax Returns. The Transferor has filed or
properly extended all tax returns (federal, state and local)
required to be filed and has paid or made adequate provision for
the payment of all taxes, assessments and other government
charges, the failure by the Transferor to perform such
obligations may have a Material Adverse Effect.
(g) Actions, Suits. Except as set forth in
Exhibit K, there are no actions, suits or proceedings pending, or
to the knowledge of the Transferor threatened, against or
affecting the Transferor or any Affiliate of the Transferor or
their respective properties, in or before any court, arbitrator
or other body, which may have a Material Adverse Effect.
(h) Place of Business. The chief place of
business and chief executive office of the Transferor are located
at 400 Perimeter Center Terrace, Suite 595, Atlanta, Georgia
30346, and the offices where the Transferor keeps all its Records
are located at the address(es) described on Exhibit C or such
other locations notified to the Company in accordance with
Section 2.8 in jurisdictions where all action required by Section
2.8 has been taken and completed.
(i) Good Title. Upon each Transfer, the Company
shall acquire a valid and perfected first priority undivided
percentage ownership interest in each Receivable that exists on
the date of such Transfer and in the Residual Receivable Interest
and Collections with respect thereto, free and clear of any
Adverse Claim.
(j) Nature of Receivables; Use of Proceeds. Each
Receivable is (A) an account receivable representing all or part
of the sales price of merchandise, insurance or services (or an
"eligible asset" within the meaning of Rule 3(a)-7 under the
Investment Company Act of 1940, as amended) and the proceeds of
the Commercial Paper with which the Company will acquire
Receivables are to be used by the Transferor for current transactions
within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and (B) an Eligible Receivable. No proceeds of
any Transfer will be used by the Transferor to acquire any
security in any transaction which is subject to Section 13 or 14
of the Securities Exchange Act of 1934, as amended.
(k) Lock-Box Accounts. The names and addresses
of all the Lock-Box Banks, together with the account numbers of
the Transferor at such Lock-Box Banks are described on Exhibit I
or described in a notice provided by the Transferor to the
Company pursuant to Section 2.8. All Obligors have been
instructed to make payment directly to a Lock-Box Account, and
only Collections are deposited into the Lock-Box Accounts.
(l) No Material Adverse Change. Since December
31, 1994, there has been no change in the condition (financial or
otherwise), business, operations or prospects of the Transferor,
or in the ability of the Transferor to perform its obligations
hereunder or in the collectibility of the Receivables which
change might have a Material Adverse Effect.
(m) Tradenames. Except as described in Exhibit
D, the Transferor has not used any corporate names, tradenames or
assumed names other than its name set forth on the signature
pages of this Agreement and, within the last five (5) years, has
not changed its name, merged with or into or consolidated with
any other corporation or been the subject of any proceeding under
Title 11, United States Code (Bankruptcy).
(n) Binding Effect of Receivables and Contract.
Each Receivable and related Contract constitutes a legal, valid
and binding obligation of the Obligor enforceable against the
Obligor, subject to the effect of bankruptcy, insolvency,
reorganization or similar laws affecting enforcement of
creditors' rights generally.
(o) No Restriction on Transfer. No Contract
requires the prior written consent of an Obligor or contains
another restriction relating to the transfer or assignment of
rights of payment under such Contract which are legally
enforceable (other than a consent or waiver of such restriction
that has been obtained prior to the Closing Date).
(p) Restrictions on Chattel Paper. The
Transferor shall not permit any portion of the Transferred
Interest that constitutes chattel paper within the meaning of
Section 9-105 of the Relevant UCC to be transferred to or
possessed by any other party other than the Company or the
Transferor, as appropriate.
(q) Coverage Requirement. The Net Receivables
Balance equals or exceeds the Coverage Amount.
(r) Credit and Collection Policy. Since April
27, 1995, there have been no material changes in the Credit and
Collection Policy.
(s) No Termination Event. No event has occurred
and is continuing and no condition exists which constitutes a
Termination Event or a Potential Termination Event.
(t) Not an Investment Company. The Transferor is
not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions
of such Act.
(u) ERISA. The Transferor is in compliance in
all material respects with ERISA and no lien in favor of the Pension
Benefit Guaranty Corporation on any of the Receivables exists.
Any document, instrument, certificate or notice
delivered to the Company hereunder shall be deemed a
representation and warranty by the Transferor.
SECTION 2 Reaffirmation of Representations and Warranties.
On each day that a Transfer is made hereunder the
Transferor, by accepting the proceeds of such Transfer or
reinvestment pursuant to Section 2.2(b), shall be deemed to have
certified that (i) all representations and warranties described
in Section 3.1, as from time to time amended in accordance with
the terms hereof, are correct on and as of such day as though
made on and as of such day and (ii) no event has occurred or is
continuing, or would result from any such Transfer or
recomputation, which constitutes a Termination Event or a
Potential Termination Event.
<PAGE>
ARTICLE III
CONDITIONS PRECEDENT
SECTION 1 Conditions to Closing. This Agreement shall
become effective on the first date on which the Transferor shall
deliver to the Company the following documents and instruments,
all of which shall be in form and substance acceptable to the
Company:
(a) A Certificate of the Secretary of the
Transferor certifying (i) the names and signatures of the
officers and employees authorized on its behalf to execute this
Agreement and any other documents to be delivered by it hereunder
(on which Certificate the Company may conclusively rely until
such time as the Company shall receive from the Transferor a
revised Certificate meeting the requirements of this clause
(a)(i)), (ii) a copy of the Transferor's Certificate of
Incorporation, certified by the Secretary of State of the State
of Delaware, (iii) a copy of the Transferor's By-Laws, (iv) a
copy of resolutions of the Board of Directors of the Transferor
approving this transaction and (v) a certificate of the Secretary
of State of the State of Delaware certifying the Transferor's
good standing under the laws of the State of Delaware.
(b) Acknowledgment copies of proper financing
statements (Form UCC-1), dated a date reasonably near to the date
of the initial Transfer naming the Transferor as the transferor
of Receivables and the Company as acquiror or other similar
instruments or documents as may be necessary or in the opinion of
the Company desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Company's ownership
interest in all Receivables and the Residual Receivable Interest
with respect thereto.
(c) Acknowledgment copies of proper financing
statements (Form UCC-3) and lien releases, if any, necessary to
release all security interests and other rights of any person in
Receivables previously granted by the Transferor.
(d) Certified copies of request for information
or copies (Form UCC-11) (or a similar search report certified by
parties acceptable to the Company) dated a date reasonably near
the date of the initial Transfer listing all effective financing
statements which name the Transferor (under its present name and
any previous name) as transferor or debtor and which are filed in
appropriate jurisdictions together with copies of such financing
statements (none of which shall cover any Receivables or
Contracts).
(e) A favorable opinion of Jones, Day, Reavis and
Pogue, special counsel for the Transferor, as to such matters set
forth in Exhibit H hereto and as to other matters as the Company
may reasonably request.
(f) A certificate in the form of Exhibit F,
executed by the chief financial officer or corporate controller
of the Transferor.
(g) A Monthly Report relating to the Receivables
for the months of February 1995 and March 1995.
(h) Undated executed copies of Lock-Box Notices
to Lock-Box Banks.
(i) An executed copy of the Fee Letter, together
with evidence that the Arrangement Fee has been paid.
(j) Such other documents as the Company shall
reasonably request.
<PAGE>
ARTICLE IV
COVENANTS
SECTION 1 At all times from the date hereof to the
latest to occur of (i) the Termination Date or (ii) the date on
which the Company's Transferred Interest shall be equal to zero,
unless the Company shall otherwise consent in writing:
(a) Financial Reporting. The Transferor will
maintain, for itself and each Subsidiary, a system of accounting
established and administered in accordance with generally
accepted accounting principles as in effect in the United States,
and furnish to the Company:
(i) S.E.C. Filings. Within ninety-
five (95) days of filing thereof, copies of all registration
statements and annual (Form 10-K) reports and,
within fifty (50) days after the filing thereof, copies
of all quarterly (Form 10-Q), monthly or other regular
reports which the Seller or any Subsidiary files with
the Securities and Exchange Commission.
(ii) Compliance Certificate. Together
with the annual report and quarterly report required
above, a compliance certificate in substantially the
form of Exhibit F hereto signed by its chief financial
officer or corporate controller stating that no
Termination Event or Potential Termination Event exists,
or if any Termination Event or Potential Termination
Event exists, stating the nature and status thereof.
(iii) Change in Credit and Collection
Policy. Within thirty (30) days after the date any
material change in or amendment to the Credit and
Collection Policy is made (including, but not limited
to, changes in payment instructions to Obligors), a
copy of the Credit and Collection Policy then in effect
indicating such change or amendment.
(iv) Other Information. Such other
information (including non-financial information) as
the Company may from time to time reasonably request.
(b) The Transferor will notify the Company in writing
of any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable, the
steps being taken by the Person(s) affected with respect thereto:
(i) Notice of Termination Events or
Potential Termination Events. As soon as possible and
in any event within two (2) days after the occurrence
of each Termination Event or each Potential Termination
Event of which the Transferor has knowledge, a statement
of the chief financial officer or corporate controller of
the Transferor setting forth details of such Termination
Event or Potential Termination Event and the action which
the Transferor proposes to take with respect thereto.
(ii) Litigation. The institution of
any litigation, arbitration proceeding or governmental
proceeding which may have a Material Adverse Effect.
(iii) Judgment. The entry of any
judgment or decree against the Transferor or any of its
Subsidiaries if the aggregate amount of all judgments
or decrees then outstanding against the Transferor or
any of its Subsidiaries exceeds $5,000,000 after deducting
(A) the amount with respect to which the Transferor
or any of its Subsidiaries is insured and (B) the
amount for which the Transferor or such Subsidiary is
otherwise indemnified if the terms of such indemnification
are satisfactory to the Company.
(c) Conduct of Business. The Transferor will,
and will cause each of its Subsidiaries to, carry on and conduct
its business in substantially the same manner and in substantially
the same fields of enterprise as it is presently conducted and
will do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and will maintain all requisite
authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to obtain any
such approval would not have a Material Adverse Effect.
(d) Compliance with Laws. The Transferor will,
and will cause each of its Subsidiaries to, comply with all laws,
rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except where the
failure to comply with such laws and regulations would not have a
Material Adverse Effect.
(e) Furnishing of Information and Inspection of
Records. The Transferor will furnish to the Company from time to
time such information with respect to the Receivables as the
Company may reasonably request, including, without limitation,
listings identifying the Outstanding Balance for each Receivable.
The Transferor will at any time and from time to time during
regular business hours with prior written notice permit the
Company, or its agents or representatives, (i) to examine and
make copies of and abstracts from all Records and (ii) to visit
the offices and properties of the Transferor for the purpose of
examining such Records, and to discuss matters relating to
Receivables or the Transferor's performance hereunder with any of
the officers, directors, employees or independent public accountants
of the Transferor having knowledge of such matters.
(f) Keeping of Records and Books of Account. The
Transferor will maintain and implement administrative and
operating procedures (including, without limitation, an ability
to recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain, or
obtain, as and when required, all documents, books, records and
other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each
existing Receivable). The Transferor will give the Company
prompt notice of any change in the administrative and operating
procedures referred to in the previous sentence to the extent
such change may have a Material Adverse Effect.
(g) Performance and Compliance with Receivables
and Contracts. The Transferor will at its expense timely and
fully perform and comply with all provisions, covenants and other
promises required to be observed by it under the Contracts
related to the Receivables.
(h) Credit and Collection Policy. The Transferor
will comply with its Credit and Collection Policy in regard to
each Receivable and the related Contract.
(i) Collections. The Transferor shall instruct
all Obligors to cause all Collections to be deposited directly to
a Lock-Box Account.
SECTION 2 Negative Covenants of the Transferor.
During the term of this Agreement, unless the Company shall
otherwise consent in writing:
(a) No Sales, Transfers, Liens, etc. Except as
otherwise provided herein, the Transferor will not sell,
transfer, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon
(including, without limitation, the filing of any financing
statement) or with respect to, any Receivable or related
Contract, or upon or with respect to any account which
concentrates in a Lock-Box Bank to which any Collections of any
Receivable are sent, or assign any right to receive income in
respect thereof.
(b) No Extension or Amendment of Receivables.
The Transferor will not extend, amend or otherwise modify the
terms of any Receivable, or amend, modify or waive any term or
condition of any Contract related thereto, without the prior
written consent of the Company.
(c) Change in Business or Credit and Collection
Policy. The Transferor will not make any change in the character
of its business or in the Credit and Collection Policy, which
change might result in a Material Adverse Effect.
(d) Use of Proceeds. No proceeds of any Transfer
will be used by the Transferor to purchase or carry any margin
stock (as defined in Regulation U of the Board of Governors of
the Federal Reserve System) in violation of Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System.
(e) No Mergers, Etc. The Transferor will not (i)
consolidate or merge with or into any other Person, or (ii) sell,
lease or transfer all or substantially all of its assets to any
other person.
(f) Change in Payment Instructions to Obligors.
The Transferor will not add or terminate any bank as a Lock-Box
Bank or any account as a Lock-Box Account to or from those listed
in Exhibit I hereto or make any change in its instructions to
Obligors regarding payments to be made to any Lock-Box Account,
unless (i) such instructions are to deposit such payments to
another existing Lock-Box Account or (ii) the Company shall have
received written notice of such addition, termination or change
(including any change in the officer or agent of the Transferor
executing the related Lock-Box Notice) at least thirty (30) days
prior thereto and the Company shall have received a Lock-Box
Notice executed by each new Lock-Box Bank or an existing Lock-Box
Bank with respect to each new Lock-Box Account, as applicable.
(g) Deposits to Lock-Box Accounts. The
Transferor will not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account
cash or cash proceeds other than Collections of Receivables.
(h) Change of Name, Etc. The Transferor will not
change its name, identity or structure or its chief executive
office, unless, at least ten (10) days prior to the effective
date of any such change, the Transferor delivers to the Company
(i) UCC financing statements, executed by the Transferor,
necessary to reflect such change and to continue the perfection of the
Company's ownership interests or security interests in the Receivables
and the Residual Receivable Interest and Collections
with respect thereto and (ii) new or revised Lock-Box Notices
executed by the Lock-Box Banks which reflect such change and
enable the Company to continue to exercise its rights contained
in Section 2.8.
<PAGE>
ARTICLE V
ADMINISTRATION AND COLLECTIONS
SECTION 1 Appointment of Collection Agent. The servicing,
administering and collection of the Receivables shall be
conducted by such Person (the "Collection Agent") so designated
from time to time in accordance with this Section 6.1. Until the
Company gives notice to Georgia Gulf Corporation of the designation
of a new Collection Agent, Georgia Gulf Corporation is
hereby designated as, and hereby agrees to perform the duties and
obligations of, the Collection Agent pursuant to the terms
hereof. The Company may, upon the occurrence of a Termination
Event (other than a Termination Event solely with respect to
Section 7.1(m)) designate as Collection Agent any Person
(including itself) to succeed Georgia Gulf Corporation or any successor
Collection Agent, on the condition in each case that any such
Person so designated shall agree to perform the duties and
obligations of the Collection Agent pursuant to the terms hereof.
The Company may notify any Obligor of the Transferred Interest.
SECTION 2 Duties of Collection Agent.
(a) The Collection Agent shall take or cause to
be taken all such action as may be necessary or advisable to
collect each Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection
Policy. Each of the Transferor and the Company hereby appoints
as its agent the Collection Agent, from time to time designated
pursuant to Section 6.1, to enforce its respective rights and
interests in and under the Receivables, the Residual Receivable
Interest, the Collections and the Contracts. The Collection
Agent shall set aside for the account of the Transferor and the
Company their respective allocable shares of the Collections of
Receivables in accordance with Sections 2.5 and 2.6. The
Collection Agent shall segregate and deposit to the Company's account
the Company's allocable share of Collections of Receivables when
required pursuant to Article II hereof. The Transferor shall
deliver to the Collection Agent, and the Collection Agent shall
hold in trust for the Transferor and the Company in accordance
with their respective interests, all Records which evidence or
relate to Receivables, the Residual Receivable Interest or Collections.
Notwithstanding anything to the contrary contained
herein, the Company shall have the absolute and unlimited right
to direct the Collection Agent (whether the Collection Agent is
the Transferor or any other Person) to commence or settle any
legal action to enforce collection of any Receivable or to
foreclose upon or repossess any Residual Receivable Interest.
(b) The Collection Agent shall hold, for the
benefit of the Transferor, Collections received minus the
Percentage Factor of such Collections. On the last day of each
Tranche Period, the Collection Agent shall deduct from such
Collections and pay to the Company in reduction of the Aggregate
Net Investment and accrued Discount and any amounts due under
Section 2.9 hereof and unpaid from the Transferor and turn the
remainder of such Collections over to the Transferor. In
addition, the Collection Agent shall, as soon as practicable following
receipt thereof, turn over to the Transferor any collections of
any indebtedness of any Obligor which is not a Receivable.
The Collection Agent, if other than the Transferor, shall
as soon as practicable upon demand, deliver to the Transferor all
Records in its possession which evidence or relate to indebtedness
of an Obligor which is not a Receivable or the Residual
Receivable Interest.
(c) On or before ninety (90) days after the end
of each fiscal year of the Collection Agent, beginning with
December 31, 1995, the Collection Agent shall cause a firm of
nationally recognized independent public accountants (who may
also render other services to the Collection Agent or the
Transferor) to furnish a report to the Company substantially to
the effect that (i) such accountants have performed certain
procedures related to certain documents and records relating to
the servicing of Receivables under this Agreement, compared on a
test basis the information contained in the Monthly Reports
delivered pursuant to Section 2.11 during the period covered by
such reports with such documents and records and that, on the
basis of such procedures, and subject to such limitations and
qualifications as may be reasonably set forth in such report,
such accountants obtained no knowledge that the servicing had not
been conducted substantially in compliance with the terms and
conditions as set forth in this Agreement, except for such
exceptions as they believe to be immaterial and such other exceptions
as shall be set forth in such statement and (ii) such accountants
have compared on a test basis the mathematical calculations of
the amounts set forth in the Monthly Reports delivered pursuant
to Section 2.11 during the period covered by such reports with
the Transferor's computer reports which were the source of such
amounts and that on the basis of such comparison, such accountants
are of the opinion that such amounts are in agreement,
except for such exceptions as they believe to be immaterial and
such other exceptions as shall be set forth in such statement.
(d) Notwithstanding anything to the contrary
contained in this Article VI, the Collection Agent, if not the
Transferor, shall have no obligation to collect, enforce or take
any other action described in this Article VI with respect to any
Receivable that is not included in the Transferred Interest other
than to deliver to the Transferor the Collections and documents
with respect to any such Receivable as described in Section
6.2(b).
SECTION 3 Rights After Designation of New Collection
Agent. At any time following the designation of a Collection
Agent (other than the Transferor) pursuant to Section 6.1:
(i) The Company may direct that payment of
all amounts payable under any Receivable be made directly to
the Company or its designee.
(ii) The Transferor shall, at the Company's
request and at the Transferor's expense, give notice of the
Company's ownership of Receivables to each Obligor and
direct that payments be made directly to the Company or its
designee.
(iii) The Transferor shall, at the Company's
request, (A) assemble all of the Records, and shall make the
same available to the Company at a place selected by the
Company or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time
constituting Collections of Receivables in a manner acceptable
to the Company and shall, promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Company or its
designee.
(iv) The Transferor hereby authorizes the
Company to take any and all steps in the Transferor's name
and on behalf of the Transferor necessary or desirable, in
the determination of the Company, to collect all amounts due
under any and all Receivables, including, without limitation,
endorsing the Transferor's name on checks and other
instruments representing Collections and enforcing such
Receivables and the related Contracts.
SECTION 4 Responsibilities of the Transferor. Anything
herein to the contrary notwithstanding, the Transferor
shall (i) perform all of its obligations under the Contracts
related to the Receivables to the same extent as if such Receivables
had not been sold hereunder and the exercise by the Company
of its rights hereunder shall not relieve the Transferor from
such obligations and (ii) pay when due any taxes of the
Transferor, including without limitation, any sales taxes payable
in connection with the Receivables. The Company shall not have
any obligation or liability with respect to any Receivable or
related Contracts, nor shall it be obligated to perform any of
the obligations of the Transferor thereunder.
SECTION 5 Lock-Box Notices. From and after the occurrence
of a Potential Termination Event, the Company is hereby
authorized at any time to date, and to deliver to the Lock-Box
Banks, the Lock-Box Notices delivered hereunder; provided that
for so long as this Agreement is in full force and effect and a
Potential Termination Event has not occurred, the Company hereby
covenants and agrees with the Transferor that it will hold any
such Lock-Box Notice provided by the Transferor to the Company in
safekeeping. The Transferor hereby, when the Company shall
deliver the Lock-Box Notices to the Lock-Box Banks, transfers to
the Company the exclusive ownership and control of the accounts
to which the Obligors of Receivables shall make payments and in
which Collections may be concentrated, and shall take any further
action that the Company may reasonably request, to effect such
transfer. In case any authorized signatory of the Transferor
whose signature shall appear on any Lock-Box Notice shall cease
to have such authority before the delivery of such Lock-Box
Notice, such signature shall nevertheless be valid and sufficient
for all purposes as if such authority had remained in force at
the time of such delivery. Notwithstanding the delivery of such
Lock-Box Notices, the Collection Agent shall continue to comply
with the provisions of this Section 6.5.
<PAGE>
ARTICLE VI
TERMINATION EVENTS
SECTION 1 Termination Events. The occurrence of any
one or more of the following events shall constitute a Termination Event:
(a) the Transferor or the Collection Agent shall
fail to perform or observe any term, covenant, agreement or
undertaking hereunder (other than as referred to in clause (c)
below) and such failure shall remain unremedied for two (2)
Business Days after written notice thereof has been given to the
Transferor or the Collection Agent, as applicable, by the Company; or
(b) any representation, warranty, certification
or statement made by the Transferor in this Agreement or in any
other document delivered pursuant hereto or in connection
herewith shall prove to have been incorrect in any material respect
when made or deemed made and such condition shall continue
unremedied for a period of five (5) days; or
(c) either the Transferor or the Collection Agent
shall fail, for a period of two (2) Business Days, to make any
payment or deposit to be made by it hereunder when due; or
(d) (i) failure of the Transferor or any of its
Subsidiaries to pay any Indebtedness (other than Indebtedness
subject to a good faith dispute) when due; or (ii) any Indebtedness
(other than Indebtedness subject to a good faith dispute)
shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date
of maturity thereof (other than any acceleration arising out of a
good faith dispute), and such condition shall continue unremedied
for a period of two (2) Business Days; or
(e) (i) the Transferor or any of its Subsidiaries
shall generally not pay its debts as such debts become due
or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by the
Transferor or any of its Subsidiaries, or sixty (60) days shall
have elapsed since the commencement of any proceeding against the
Transferor or any of its Subsidiaries (which proceeding shall not
have been dismissed), seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or
other similar official for it or any substantial part of its
property, or (ii) the Transferor or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set
forth in clause (i) above in this subsection (e); or
(f) the institution of any litigation, arbitration
proceedings or governmental proceeding involving the
Transferor, any of its Subsidiaries or the Receivables which may
have a Material Adverse Effect; or
(g) the entry of any judgment or decree against
the Transferor or any of its Subsidiaries if the aggregate amount
of all judgments and decrees then outstanding against any of them
or their Subsidiaries for which insurance is not available and
the collection of which has not been stayed, might result in a
Material Adverse Effect; or
(h) a change in the majority ownership of the
voting stock of the Transferor shall have occurred, or the
Transferor shall enter into any transaction or merger whereby it
is not the surviving entity; or
(i) the Default Ratio (averaged over the previous
three (3) consecutive months) shall exceed 3%, the Delinquency
Ratio (averaged over the previous three (3) consecutive months)
shall exceed 3%; or
(j) the Net Receivables Balance shall be less
than the Coverage Amount and such failure shall remain unremedied
for five (5) consecutive Business Days thereafter; or
(k) the aggregate amount of Eligible Receivables
of the Transferor shall be less than the product of (i) the sum
of the Aggregate Net Investment, the Loss Reserve and the
Discount Reserve (as calculated in accordance with clause (B) of
the definition thereof) multiplied by (ii) 110%; or
(l) an Event of Default (as defined in the Credit
Agreement) under the Credit Agreement shall have occurred; or
(m) the Company is unable to obtain liquidity
loans under the Liquidity Facility in support of Commercial Paper
issued or to be issued by the Company in connection with the
transactions contemplated by this Agreement.
SECTION 2 Termination. If a Termination Event occurs,
(i) the Company may, by notice to the Transferor, declare all
outstanding Tranche Periods to be ended and designate the Tranche
Rate applicable to the Aggregate Net Investment plus the Discount
Reserve, (ii) the Facility Limit shall be reduced on each day
thereafter to the aggregate, as of such day, of the Aggregate Net
Investment plus the Discount Reserve, (iii) the Company may cease
to issue Commercial Paper or obtain liquidity loans for the
purpose of reinvestment from the Liquidity Bank under the Liquidity
Facility, (iv) if the Transferor is the Collection Agent at the
time, the Company may terminate the Transferor as Collection
Agent, and (v) the Company and the Collateral Agent shall have
all of the rights and remedies provided to a secured creditor or
a transferee under the Relevant UCC and applicable local law.
<PAGE>
ARTICLE VII
INDEMNIFICATION
SECTION 1 Indemnities by the Transferor. Without
limiting any other rights which the Company may have hereunder or
under applicable law, the Transferor hereby agrees to indemnify
the Company and its respective officers, directors, agents and
employees from and against any and all damages, losses, claims,
liabilities, costs and expenses, including reasonable attorneys'
fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred
by the Company arising out of or as a result of this Agreement or
the ownership, either directly or indirectly, by the Company of
the Transferred Interest excluding, however, (i) Indemnified
Amounts to the extent resulting from gross negligence or willful
misconduct on the part of the Company or (ii) recourse (except as
otherwise specifically provided in this Agreement) for
uncollectible Receivables. Without limiting the generality of
the foregoing, the Transferor shall indemnify the Company for
Indemnified Amounts relating to or resulting from:
(a) reliance on any representation or warranty
made by the Transferor (or any officers of the Transferor) under
or in connection with this Agreement or any other information or
report delivered by the Transferor pursuant hereto, which shall
have been false or incorrect in any material respect when made or
deemed made;
(b) the failure by the Transferor to comply with
any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of any
Receivable or the related Contract with any such applicable law,
rule or regulation;
(c) the failure to vest and maintain vested in
the Company or the Liquidity Bank when applicable, the
Transferred Interest in the Receivables free and clear of any
Adverse Claim;
(d) the failure to file, or delay in filing,
financing statements or other similar instruments or documents
under the UCC or the laws of any applicable jurisdiction or other
applicable laws with respect to any Receivable;
(e) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Receivable (including, without limitation, a
defense based on such Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of products or services
related to such Receivable or the furnishing or failure to
furnish such products or services;
(f) any failure of the Transferor, as Collection
Agent or otherwise, to perform its duties or obligations in
accordance with the provisions of this Agreement;
(g) any products liability claim or personal
injury or property damage suit or other similar or related claim
or action of whatever sort arising out of or in connection with
products or services which are the subject of any Receivable; or
(h) the transfer of an undivided percentage
ownership interest in any Receivable other than an Eligible
Receivable, if, on the date of such transfer the Net Receivables
Balance was less than the Coverage Amount.
If the Company enters into agreements for the transfer
of interests in receivables from one or more other Persons
("Other Transferors"), the Company shall allocate such Indemnified
Amounts which are attributable to the Transferor and to
the Other Transferors to the Transferor and each Other
Transferor; provided, however, that if such Indemnified Amounts
are attributable to the Transferor and not attributable to any
Other Transferor, the Transferor shall be solely liable for such
Indemnified Amounts or if such Indemnified Amounts are attributable
to Other Transferors and not attributable to the Transferor,
such Other Transferors shall be solely liable for such
Indemnified Amounts.
SECTION 2 Tax Indemnification. The Transferor hereby
agrees to pay, and to indemnify the Company from and against, any
taxes which may at any time be asserted in respect of this
transaction or the subject matter hereof or any funding agreement
or the subject matter thereof (including, without limitation, any
sales, gross receipts, general corporation, personal property,
privilege or license taxes, but not including any federal or
(except as provided below) other income taxes imposed upon the
Company, with respect to its net income or profits arising out of
the transactions contemplated hereby), whether arising by reason
of the acts to be performed by the Transferor hereunder or
imposed against the Transferor or the Company, the property
involved or otherwise. If any tax, fee or similar charge
measured by net income or profits is imposed or with respect to
any payment for the account of the Company provided for in this
Agreement by any State or political subdivision thereof (other
than income taxes of the Company), the Transferor will upon
demand by the Company pay an amount necessary to make the Company
whole, taking into account any tax consequences to the Company of
the payment of such tax and the receipt of the indemnity provided
for by this Section 8.2, including the effect of such tax or
refund on the amount of tax measured by net income or profits
which is or was payable by the Company in the jurisdiction in
which its principal executive office is located, provided,
however, that if the Company enters into agreements for the
transfer of interests in receivables from Other Transferors, the
Company shall allocate among the Transferor and such Other
Transferors any amounts owing under this Section 8.2 which are
attributable to the Transferor or to the Other Transferors
("Section 8.2 Costs"); provided, further, that if such Section 8.2
Costs are attributable to the Transferor and not attributable to
any Other Transferor, the Transferor shall be solely liable for
such Section 8.2 Costs or if such Section 8.2 Costs are
attributable to Other Transferors and not attributable to the Transferor,
such Other Transferors shall be solely liable for such Section
8.2 Costs; and provided, further, that such Section 8.2 Costs
shall include any amounts the Company must pay to the Liquidity
Bank pursuant to the Liquidity Facility on account of any tax
described in this Section 8.2 and applicable to the Liquidity
Bank.
SECTION 3 Additional Costs.
(a) The Transferor shall pay to the Company from
time to time on demand of the Company such amounts as the Company
may reasonably determine to be necessary to compensate it for any
increase in costs which the Company determines are attributable
to its making a Transfer or maintaining any Tranche under this
Agreement or its obligation to make any such Transfer or
reinvestment hereunder, or any reduction in any amount receivable
by the Company hereunder in respect of any such Tranche or such
obligation (such increases in costs, payments and reductions in
amounts receivable being herein called "Additional Costs")
resulting from any Regulatory Change which (i) changes the method
or basis of taxation of (A) any amounts payable to the Company
under this Agreement in respect of any such Tranche or (B) such
amounts when considered together with any amounts to be paid by
the Company in respect of its commercial paper notes relating to
such Tranche, (ii) imposes or modifies any reserve, special
deposit, deposit insurance or assessment, capital or similar
requirements relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, the banks that
are parties to the Liquidity Facility or (iii) imposes any other
condition affecting this Agreement (or any of such extensions of
credit or liabilities). The Company will notify the Transferor
of any event that will entitle the Company to compensation
pursuant to this Section 8.3(a) as promptly as practicable after
it obtains knowledge thereof.
(b) Without limiting the effect of the foregoing
provisions of this Section 8.3 (but without duplication), the
Transferor shall pay to the Company from time to time on demand
of the Company such amounts as the Company may reasonably
determine to be necessary to compensate it for any costs which
the Company determines are attributable to its making a Transfer
or maintaining any Tranche under this Agreement or its obligation
to make any transfers or reinvestments hereunder, in respect of
any amount of capital maintained by the banks that are parties to
the Liquidity Facility pursuant to any law or regulation of any
jurisdiction or any interpretation, directive or request (whether
or not having the force of law) of any court or governmental or
monetary authority, whether in effect on the date of this
Agreement or thereafter or in respect of any costs or expenses
incurred by the Company under the Liquidity Facility. The
Company will notify the Transferor if the Company is entitled to
compensation pursuant to this Section 8.3(b) as promptly as
practicable after it obtains knowledge of such event or condition.
(c) Determinations and allocations by the Company
for purposes of this Section 8.3 shall be conclusive, provided
that such determinations and allocations are made in good faith
and on a reasonable basis, reasonable evidence (including an
explanation of the applicable Regulatory Change and an accounting
for any amounts demanded) of which shall be provided to the
Transferor upon request.
(d) Anything in this Section 8.3 to the contrary
notwithstanding, if the Company enters into agreements for the
transfer of interests in receivables from Other Transferors, the
Company shall allocate the liability for any amounts under this
Section 8.3 ("Section 8.3 Costs") to the Transferor and each
Other Transferor which is attributable to the Transferor which
amounts shall be paid by the Transferor or to the Other
Transferors; and provided, further, that if such Section 8.3
Costs are attributable to the Transferor and not attributable to
any Other Transferor, the Transferor shall be solely liable for
such Section 8.3 Costs or if such Section 8.3 Costs are
attributable to Other Transferors and not attributable to the
Transferor, such Other Transferors shall be solely liable for
such Section 8.3 Costs.
SECTION 4 Other Costs and Expenses. The Transferor
shall pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration of this
Agreement, any operating agreement, any funding agreement by and
between the Company and any financial institution and the other
documents to be delivered hereunder, including without
limitation, reasonable fees and out-of-pocket expenses of legal
counsel for the Company, any operating agent and the financial
institution party to such funding agreement (which such counsel
may be employees of the Company, such operating agent or such
financial institution) with respect thereto and with respect to
advising the Company, such operating agent and such financial
institution as to its rights and remedies under this Agreement,
any operating agreement and any funding agreement, respectively,
and all costs and expenses, if any, including reasonable counsel
fees and expenses in connection with the enforcement or amendment
of this Agreement and the other documents delivered hereunder.
The Transferor shall reimburse the Company for any amounts the
Company must pay to any financial institution pursuant to any
funding agreement on account of any tax described in Section 8.2
and applicable to such financial institution. The Transferor
shall reimburse the Company for any and all commissions of
placement agents and commercial paper dealers in respect of
Commercial Paper issued to fund any CP Tranche hereunder. The
Transferor shall reimburse the Company on demand for all other
costs and expenses incurred by the Company, any operating agent
or any shareholder of the Company, including reasonable counsel
fees and expenses incurred in connection with the enforcement of,
or amendment to, this Agreement and any documents related hereto,
to the extent such fees, costs and expenses are incurred in
respect of such enforcement or amendment by or in respect of the
Transferor ("Other Costs") (provided that with respect to legal
fees of the Company and the new York Operating Agent incurred in
connection with the negotiation and implementation of this
Agreement, the Transferor shall be obligated to pay such fees
(which fees are estimated to be approximately $30,000 as of the
date hereof), together with any out-of-pocket expenses and
disbursements incurred by such counsel); provided, however, that
if the Company enters into agreements for the transfer of
interests in receivables from Other Transferors, the Company shall
allocate the liability for such Other Costs to the Transferor and
each Other Transferor; and provided, further, that if such Other
Costs are attributable to the Transferor and not attributable to
any Other Transferor, the Transferor shall be solely liable for
such Other Costs or if such Other Costs are attributable to Other
Transferors and not attributable to the Transferor, such Other
Transferors shall be solely liable for such Other Costs.
SECTION 5 Reconveyance Under Certain Circumstances.
The Transferor agrees to accept the reconveyance from the Company
of a particular portion of the Transferred Interest if the
Company notifies the Transferor of a breach of any representation
or warranty made or deemed made at the time of such Transfer
pursuant to Article III of this Agreement with respect to such
portion of the Transferred Interest and the Transferor shall fail
to cure such breach with respect to such portion within five
(5) days after becoming aware thereof. The reconveyance price
shall be paid by the Transferor to the Company in immediately
available funds on such day in an amount equal to the Outstanding
Balance of the Receivables related to such portion of the
Transferred Interest.
<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 1 Term of Agreement. This Agreement shall
terminate following the Termination Date when all Aggregate
Unpaids have been paid in full; provided, however, that (i) the
rights and remedies of the Company with respect to any
representation and warranty made or deemed to be made by
Transferor pursuant to this Agreement and (ii) the indemnification
and payment provisions of Article VIII, shall be continuing and
shall survive any termination of this Agreement, subject
to applicable statutes of limitation.
SECTION 2 Waivers; Amendments. No failure or delay on
the part of the Company in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any provision of this Agreement may be
amended if, but only if, such amendment is in writing and is
signed by the Transferor and the Company.
SECTION 3 Notices. Except as provided below, all
communications and notices provided for hereunder shall be in
writing (including bank wire, telex, telecopy or electronic
facsimile transmission or similar writing) and shall be given to
the other party at its address or facsimile set forth below.
Each such notice or other communication shall be effective if
given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section and the appropriate
answerback or written confirmation is received, if given by any
other means when received at the address specified in this
Section. However, anything in this Section to the contrary
notwithstanding, the Transferor hereby authorizes the Company to
effect Transfers, Tranche Period and Tranche Rate selections
based on telephonic notices made by any Person which the Company
in good faith believes to be acting on behalf of the Transferor.
The Transferor agrees to deliver promptly to the Company a
written confirmation of each telephonic notice signed by an
authorized officer of Transferor. However, the absence of such
confirmation shall not affect the validity of such notice. If
the written confirmation differs in any material respect from the
action taken by the Company, the records of the Company shall
govern absent manifest error.
If to the Company:
DYNAMIC FUNDING CORPORATION
c/o J H Management Corporation
One International Place
Boston, Massachusetts 02110
Attention: President
Telephone: (617) 951-7000
Telecopy: (617) 951-7050
(with a copy to the New York Operating Agent)
If to the Transferor:
Georgia Gulf Corporation
400 Perimeter Center Terrace, Suite 595
Atlanta, Georgia 30346
Attention: Donald P. Burke
Telephone: (404) 395-4533
Telecopy: (404) 395-4572
If to the New York Operating Agent:
THE FUJI BANK AND TRUST COMPANY
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Corporate Trust Department
Telephone: (212) 898-2509
Telecopy: (212) 321-2468
SECTION 4 Governing Law; Submission to Jurisdiction;
Integration. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. The
Transferor 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, New
York for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated
hereby. The Transferor hereby irrevocably waives, to the fullest
extent it may effectively do so, any objection which 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. Nothing in this Section 9.4 shall affect the
right of the Company to bring any action or proceeding against
the Transferor or its property in the courts of other
jurisdictions. This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the
entire Agreement among the parties hereto with respect to the
subject matter hereof superseding all prior oral or written
understandings.
SECTION 5 Severability; Counterparts. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same Agreement. Any
provisions of this Agreement which are prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 6 Assignments.
(a) This Agreement shall be binding on the
parties hereto and their respective successors and assigns;
provided, however, that the Transferor may not assign any of its
rights or delegate any of its duties hereunder without the prior
written consent of the Company. No provision on this Agreement
shall in any manner restrict the ability of the Company to
assign, participate, grant security interests in, or otherwise
transfer any portion of the Transferred Interest, to The Fuji
Bank, Limited, New York Branch, as collateral agent (in such
capacity, the "Collateral Agent") on behalf of the Liquidity Bank
and other secured parties.
(b) The Transferor hereby acknowledges the complete
assignment by the Company of all of its rights under this
Agreement and all of its interest in, to and under the
Transferred Interest to the Collateral Agent.
SECTION 7 Confidentiality. (a) The Transferor hereby
consents to the disclosure of any non-public information with
respect to it to (i) either the New York Operating Agent or the
Company by the other and (ii) the Liquidity Bank (or any
prospective or actual participant in the Liquidity Facility) by
the New York Operating Agent or the Company.
(b) The Transferor shall maintain, and shall cause
each of its officers, employees and agents to maintain, the
confidentiality of this Agreement, all documents related hereto
and all other confidential proprietary information with respect
to the Company, the New York Operating Agent and the Liquidity
Bank and each of their respective businesses obtained by them in
connection with the structuring, negotiation and execution of the
transactions contemplated herein, except for information that
has become publicly available and has been disclosed to (i) legal
counsel, accountants and other professional advisors to the
Transferor, (ii) as required by law, regulation or legal process
and (iii) in connection with any legal or regulatory proceeding
to which the Transferor is subject. Both the Company and the New
York Operating Agent hereby consent to the disclosure of
information in the manner and to the Persons set forth in clauses
(i) through (iii) above.
SECTION 8 No Bankruptcy Petition Against the Company.
The Transferor hereby covenants and agrees that, prior to the
date which is one year and one day after the date upon which all
outstanding commercial paper of the Company is paid in full, it
will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of any jurisdiction.
SECTION 9 Limited Recourse; Waiver of Setoff. (a)
Notwithstanding anything to the contrary contained herein, the
obligations of the Company under this Agreement are solely the
corporate obligations of the Company and shall be payable at such
time as funds are received from the Transferor and other
transferors or from any party to any agreement with the Company
in accordance with the terms thereof in excess of funds necessary
to pay matured and maturing Commercial Paper and, to the extent
funds are not available to pay such obligations, the claims
relating thereto shall continue to accrue. Each party hereto
agrees that the payment of any claim (as defined in Section 101
of Title 11 of the Bankruptcy Code) of any such party shall be
subordinated to the payment in full of all Commercial Paper. No
recourse shall be had for the payment of any amount owing in
respect of any obligation of, or claim against, the Company arising
out of or based upon this Agreement against any stockholder,
employee, officer, director or incorporator of the Company or any
Affiliate thereof or against any stockholder, employee, officer,
director, incorporator or Affiliate of the New York Operating
Agent; provided, however, that the foregoing shall not relieve
any such person or entity from any liability they might otherwise
have as a result of fraudulent actions or omissions taken by
them.
(b) The Transferor hereby agrees to waive any right of
setoff which it may have or to which it may be entitled against
the Company and its assets.
SECTION 10 Characterization of the Transactions
Contemplated by this Agreement. The Transferor and the Company
agree to treat the transactions contemplated by this Agreement as
a financing for tax purposes and further agree to file on a
timely basis all federal and other income tax returns consistent
with such treatment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Receivables Transfer Agreement to be executed and delivered by
their duly authorized officers as of the date hereof.
GEORGIA GULF CORPORATION,
as Transferor and Collection
Agent
By /S/ RICHARD B. MARCHESE
Name: Richard B. Marchese
Title: Vice President - Chief
Financial Officer
and Treasurer
DYNAMIC FUNDING
CORPORATION, as Company
By /S/ LANNHI TRAN
Name: Lannhi Tran
Title: Vice President
Accepted and agreed as of
the date first above written:
THE FUJI BANK AND TRUST COMPANY,
as New York Operating Agent
By: /S/ TETSUO OZAKI
Name: Tetsuo Ozaki
Title: Executive Vice President
<PAGE>
Exhibit 10(ii)
TERM LOAN AGREEMENT
TERM LOAN AGREEMENT dated as of June 29, 1995 among
GEORGIA GULF CORPORATION, a corporation duly organized and
validly existing under the laws of the State of Delaware
(together with its successors, the "Company"); each of the
lenders that is a signatory hereto (individually a "Lender" and,
collectively, the "Lenders"); and THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Administrative Agent").
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):
"Additional Costs" shall have the meaning assigned to
such term in Section 6.01(a).
"Affiliate" shall mean, as to any Person, any other
Person which directly or indirectly controls, or is under common
control with, or is controlled by, such Person and, if such
Person is an individual, any member of the immediate family
(including parents, siblings, spouse, children, stepchildren,
nephews, nieces and grandchildren) of such individual and any
trust whose principal beneficiary is such individual or one or
more members of such immediate family and any Person who is
controlled by any such member or trust. As used in this
definition, "control" (including, with correlative meanings,
"controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause
the direction of management or policies (whether through
ownership of securities or partnership or other ownership
interests, by contract or otherwise); provided that, in any
event, any Person which owns directly or indirectly more than 10%
of the securities having ordinary voting power for the election
of directors or other governing body of a corporation or more
than 10% of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or
more than 10% of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, no individual shall be
deemed to be an Affiliate of a corporation solely by reason of
his or her being an officer or director of such corporation, and
no Subsidiary of the Company shall be deemed to be an Affiliate
of the Company or any other Subsidiary of the Company.
"Agreement" shall mean this Term Loan Agreement, as
amended from time to time in accordance with the terms hereof.
"Applicable Lending Office" shall mean, for each
Lender, the Lending Office of such Lender (or of an affiliate of
such Lender) designated below its name on the signature pages
hereof or such other office of such Lender (or of an affiliate of
such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Company as the office at which its
Loans are to be made and maintained.
"Applicable Margin" shall mean, with respect to any
Loan and during any Performance Period (or portion thereof), the
percentage indicated below opposite the Applicable Pricing Ratio
for such Performance Period (or portion thereof):
Applicable Pricing Ratio Eurodollar Loans
Greater than 2.00:1.00 0.725%
Greater than 0.75:1 but less
than or equal to 2.00:1.00
0.50%
Less than or equal to
0.75:1.00 0.40%
"Applicable Pricing Ratio" shall mean, for any
Performance Period the ratio of (x) Indebtedness of the Company
and its consolidated subsidiaries, determined on a consolidated
basis as at the end of the fiscal quarter (the "statement
quarter") to which the financial statements received by the
Administrative Agent on the first day of such Performance Period
(or in the case of the first Performance Period, most recently
received prior to the Closing Date) relate, to (y) Cash Flow for
the period of four fiscal quarters ending at the end of the
statement quarter, as set forth in a certificate of the chief
financial officer or corporate controller of the Company
delivered to the Administrative Agent on the first day of such
Performance Period; provided that the Applicable Pricing Ratio
for any portion of any Performance Period that occurs on or after
the 45th day following the end of the fiscal quarter of the
Company during which such Performance Period commenced shall be
deemed to be greater than 2.00:1.00.
"Bankruptcy Code" shall mean the United States
Bankruptcy Code, as now or hereafter in effect, or any successor
statute.
"Base Rate" shall mean, with respect to any Base Rate
Loan for any day, the rate per annum equal to the higher as of
such day of (i) the Federal Funds Rate plus 1/2 of 1% or (ii) the
Prime Rate.
"Base Rate Loans" shall mean Loans which bear interest
at a rate based upon the Base Rate, which shall occur only by
operation of the first proviso to Section 4.02 hereof, Section 6
hereof or the Post-Default Rate.
"Basic Documents" shall mean this Agreement and the
Notes.
"Business Day" shall mean any day other than a day on
which commercial banks are authorized or required to close in New
York City and, where such term is used in the definition of
Interim Maturity Date , Maturity Date and "Quarterly Date" in
this Section 1.01 or if such day relates to the giving of notices
or quotes in connection with a borrowing of, a payment or
prepayment of principal of or interest on, a continuation of or
into, or an Interest Period for, a Eurodollar Loan or a notice by
the Company with respect to any such borrowing, payment,
prepayment, continuation or Interest Period, which is also a day
on which dealings in Dollar deposits are carried out in the
London interbank market.
"Capital Lease Obligations" shall mean, as to any
Person, the obligations of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the right
to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on
a balance sheet of such Person under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board) and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP (including such Statement No.
13).
"Cash Flow" shall mean, for any period, the sum
(without duplication), determined on a consolidated basis for the
Company and its Subsidiaries, of (i) net operating income of the
Company and its Subsidiaries (calculated before provision for
income taxes, interest expense, extraordinary items and income
attributable to equity in Affiliates) for such period plus (ii)
depreciation, amortization and other non-cash items (to the
extent deducted in determining operating income) for such period
plus (iii) accrued interest income (to the extent not included in
determining operating income) for such period, minus any income
attributable solely to the Company s COLI Program.
"Closing Date" shall mean the date on which the Loans
are made hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute.
COLI Program shall mean the Corporate Owned Life
Insurance Program, entered into between the Company and ITT
Hartford Insurance Group on December 29, 1994, pursuant to which
the Company offsets certain costs associated with its employee
benefits, as more fully described in Schedule III hereto.
"Commitment" shall mean, as to any Lender, the
obligation of such Lender to make one Loan to the Company in an
aggregate principal amount up to but not exceeding the amount set
forth opposite such Lender's name on the signature pages hereto
under the caption "Commitment".
"Controlled Group" shall mean all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with the Company, are treated as a single employer under
Section 414 of the Code.
"Default" shall mean an Event of Default or an event
which with notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" and $" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or
the release of any materials into the environment.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan, the rate per annum determined on the basis of
the offered rate for deposits in Dollars offered for a period
comparable to the Interest Period for such Loan which appears on
the display page designated as "LIBO Page" on the Reuter Monitor
Money Rates Service (or such other page as may replace LIBO Page
on that service) as of 11:00 A.M., London time, two Business Days
prior to the first day of such Interest Period; provided that (i)
if more than one such offered rate appears on such page, the
"Eurodollar Base Rate" will be the arithmetic mean (rounded
upward, if necessary, to the next higher 1/100th of 1%) of such
offered rates; and (ii) if no such offered rates appear on such
page, the "Eurodollar Base Rate" for such Interest Period will be
the arithmetic mean (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than two major
banks in New York City, selected by the Administrative Agent, at
approximately 10:00 A.M., New York City time, two Business Days
prior to the first day of such Interest Period, for deposits in
Dollars offered to leading European banks for a period comparable
to such Interest Period in an amount comparable to, in the case
of Eurodollar Loans, the principal amount of the Eurodollar Loan
of IBJ having such Interest Period.
"Eurodollar Loans" shall mean Loans the interest on
which is determined on the basis of rates referred to in the
definition of "Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan,
a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal
to (i) the Eurodollar Base Rate for such Loan for the Interest
Period for such Loan divided by (ii) 1 minus the Eurodollar
Reserve Requirement for such Loan for such Interest Period.
"Eurodollar Reserve Requirement" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the average
maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such
member banks by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to
which the Eurodollar Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or (ii)
any category of extensions of credit or other assets which
include Eurodollar Loans.
"Event of Default" shall have the meaning assigned to
such term in Section 10.01 hereof.
"Existing Credit Agreement" shall mean the Credit
Agreement dated as of March 30, 1995 among the Company, the
lenders listed on the signature pages thereof and The Chase
Manhattan Bank (National Association), as administrative agent
for such lenders, as amended and in effect from time to time.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100th
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 such day 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
no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average
rate charged to IBJ on such day on such transactions as
determined by the Administrative Agent.
"GAAP" shall mean generally accepted accounting
principles as in effect from time to time consistently applied.
"Gallman Indebtedness" shall mean all liabilities and
obligations of the Company in respect of $17,000,000 in aggregate
principal amount of industrial development revenue bonds issued
or to be issued by the Mississippi Business Finance Corporation,
the proceeds of which are to be used to finance the planned
expansion and improvements at the Company's Gallman, Mississippi
facility, including, without limitation, reimbursement
obligations and obligations in respect of letters of credit
issued in connection therewith, which liabilities and obligations
of the Company will be secured only by the Company s existing and
future real and personal property located at its Gallman,
Mississippi facility.
"Guaranty" by any Person shall mean any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Indebtedness of any other Person and, without
limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise, other than
agreements to purchase goods at an arm's length price in the
ordinary course of business) or (ii) entered into for the purpose
of assuring in any other manner the holder of such Indebtedness
of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part); provided that the term
Guaranty shall not include endorsements for collection or deposit
in the ordinary course of business. The term "Guarantee" used as
a verb has a corresponding meaning.
"Hazardous Substances" shall have the meaning set forth
in 42 U.S.C. Section 9601(14).
"IBJ" shall mean The Industrial Bank of Japan, Limited
and its successors.
"Incentive Equity Plan" shall mean the Company's 1990
Incentive Equity Plan, as the same shall be modified and
supplemented and in effect from time to time.
"Indebtedness" shall mean, as to any Person (determined
without duplication): (i) indebtedness of such Person for
borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase or acquisition price of
property or services, other than accounts payable (other than for
borrowed money) incurred in the ordinary course of business, with
the exception of non-recourse loans to the Company against the
cash surrender value of life insurance policies under the COLI
Program, but only so long as and to the extent that the lender of
such loans has no recourse of any kind to the Company or its
assets other than such life insurance policies; (ii) obligations
of such Person in respect of letters of credit or similar instru-
ments issued or accepted by banks and other financial insti-
tutions for the account of such Person; (iii) Capital Lease
Obligations of such Person; (iv) obligations of such Person to
redeem or otherwise retire shares of capital stock of such Person
or, in the case of the Company, any such obligation to redeem or
retire shares of capital stock of the Company prior to December
30, 2002 (other than any such obligation the payment of which
would constitute a Restricted Payment permitted by Section 9.13);
(v) indebtedness of others of the type described in clause (i),
(ii), (iii) or (iv) above secured by a Lien on the property of
such Person, whether or not the respective obligation so secured
has been assumed by such Person; (vi) indebtedness of others of
the type described in clause (i), (ii), (iii) or (iv) above
Guaranteed by such Person and (vii) deferred insurance premiums.
"Interest Expense" shall mean, for any period, the sum
(determined without duplication) of the aggregate amount of
interest accruing during such period on Indebtedness of the
Company and its Subsidiaries (on a consolidated basis), plus the
interest portion of payments under Capital Lease Obligations and
any capitalized interest, and minus amortization of debt discount
and expense.
"Interest Period" shall mean, with respect to any
Eurodollar Loan, the period commencing on the date such Loan is
made or continued or the last day of the next preceding Interest
Period with respect to such Loan and ending on the numerically
corresponding day in the third calendar month thereafter, except
that each such Interest Period which commences on the last
Business Day of a calendar month (or on any day for which there
is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; provided that (i) the
first Interest Period commencing on the Closing Date shall end on
the corresponding day in the week immediately following the
Closing Date, and shall be followed by a second Interest Period
commencing on the day such first Interest Period ends and ending
on the corresponding day in the week immediately thereafter, (ii)
any Interest Period that commences before and otherwise would end
after the Interim Maturity Date shall be divided into such
successive Interest Periods, the last of which shall end on the
Interim Maturity Date, as the Administrative Agent, in its sole
discretion (but in consultation with the Company), determines are
necessary or desirable for the efficient funding of the Loans and
(iii) the final Interest Period for any Loans under this
Agreement shall commence on the last day of the next preceding
Interest Period with respect to such Loans and end on the
Maturity Date.
Notwithstanding the foregoing: (i) each Interest Period which
would otherwise end on a day which is not a Business Day shall
end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day); and (ii) except as
expressly provided above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for
any such Loans would otherwise be a shorter period, such Loans
shall not be available hereunder.
Interim Maturity Date shall mean June 29, 2001, or if
such day is not a Business Day, the next succeeding Business Day
(unless such next succeeding Business Day falls in a different
calendar month, in which case the Interim Maturity Date shall be
the next preceding Business Day).
"Investments" shall have the meaning assigned to such
term in Section 9.12 hereof.
"Lender" and "Lenders" shall each have the meaning
assigned to such terms in the preamble hereto.
"Lien" shall mean, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset. For the purposes of this
Agreement, the Company and each of its Subsidiaries shall be
deemed to own subject to a Lien any asset which 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 relating to such asset.
"Liquid Investments" shall mean (a) time deposits
(including certificates of deposit) maturing within 90 days of
the acquisition thereof denominated in Dollars and issued by (i)
a Lender or (ii) a bank or trust company having combined capital
and surplus of at least $500,000,000 and which has (or which is a
Subsidiary of a bank holding company which has) publicly traded
debt securities rated AA or higher by Standard & Poor's Rating
Group or Aa-2 or higher by Moody's Investors Service, Inc.; (b)
obligations issued or guaranteed by the United States of America,
with maturities not more than one year after the date of issue;
and (c) commercial paper with maturities of not more than 90 days
and a published rating of not less than A-2 and P-2 (or the
equivalent rating).
"Loans" shall mean, as to any Lender, any loan made by
such Lender pursuant to Section 2.01(a) hereof.
"Majority Lenders" shall mean, at any time while no
Loans are outstanding, Lenders having at least 51% of the
aggregate amount of the Commitments and, at any time while Loans
are outstanding, Lenders holding at least 51% of the outstanding
aggregate principal amount of Loans.
Maturity Date shall mean June 29, 2002, or if such
day is not a Business Day, the next succeeding Business Day
(unless such next succeeding Business Day falls in a different
calendar month, in which case the Maturity Date shall be the next
preceding Business Day).
"Notes" shall mean the promissory notes of the Company
evidencing the Loans, substantially in the form of Exhibit A
hereto.
"Obligations" shall mean, as at any date of
determination thereof, the sum (determined without duplication)
of the aggregate principal amount of Loans outstanding hereunder.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Performance Period" shall mean each of the periods
commencing on a day that a complete set of all financial
statements required to be delivered to the Administrative Agent
under Section 9.01(b) is received by it and ending on a day
immediately preceding the day on which the next subsequent
complete set of all the financial statements required to be
delivered to the Administrative Agent under Section 9.01(b) is
received by it; provided that the first Performance Period shall
commence on the Closing Date and be based on the financial
statements for March 31, 1995.
"Person" shall mean an individual, a corporation, a
company, a voluntary association, a partnership, a trust, an
unincorporated organization or a government or any agency,
instrumentality or political subdivision thereof.
"Plan" shall mean an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (a)
maintained by the Company or any member of the Controlled Group
for employees of the Company or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one
employer makes contributions and to which the Company or any
member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five
plan years made contributions.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan or any other amount payable by the Company
under this Agreement which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum
during the period commencing on the due date until such amount is
paid in full equal to the sum of 2% plus the Base Rate as in
effect from time to time.
"Prime Rate" shall mean the rate of interest from time
to time announced by IBJ at the Principal Office as its prime
commercial lending rate. Each change in the interest rate
provided for herein resulting from a change in the Prime Rate
shall take effect at the time of such change in the Prime Rate.
"Principal Office" shall mean the principal office of
IBJ, New York Branch, presently located at 245 Park Avenue, New
York, New York 10167.
"Quarterly Dates" shall mean the last Business Day of
each [March, June, September and December].
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as the same may be
amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any
Lender, any change on or after the date of this Agreement in
United States federal, state or foreign laws or regulations
(including Regulation D) or the adoption or making on or after
such date of any interpretations, directives or requests applying
to a class of lenders including such Lender of or under any
United States federal or state, or any foreign, laws or
regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the
interpretation or administration thereof.
"Release" shall have the meaning set forth in 42 U.S.C.
Section 9601(22), but shall not include any "federally permitted
release" as defined in 42 U.S.C. Section 9601(10). The term
"Released" shall have a corresponding meaning.
"Restricted 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 the purchase, redemption, retirement or
other acquisition of, any shares of any class of capital stock of
the Company, or the exchange or conversion of any shares of any
class of capital stock of the Company for or into any obligations
of or shares of any other class of capital stock of the Company
or any other property, but excluding dividends payable solely
in, or exchanges or conversions for or into, shares of common
stock of the Company.
"Subsidiary" shall mean, with respect to any Person,
any corporation of which at least a majority of the outstanding
shares of stock having by the terms thereof ordinary voting power
to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more of the Subsidiaries of such Person or by
such Person and one or more of the Subsidiaries of such Person;
provided that Systronics, Inc. shall not be deemed to be a
Subsidiary of the Company for purposes hereof.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Unfunded Liabilities" shall mean, with respect to any
Plan, at any time, the amount (if any) by which (a) the present
value of all benefits under such Plan exceeds (b) the fair market
value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a
potential liability of the Company or any member of the
Controlled Group to the PBGC or such Plan under Title IV of
ERISA.
"Wholly-Owned Subsidiary" shall mean a subsidiary of
the Company all of whose outstanding shares of capital stock
(except directors' qualifying shares) are directly or indirectly
owned by the Company.
1.02 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in
accordance with GAAP; provided that if any change in GAAP in
itself materially affects the calculation of any financial
covenant in Section 9, the Company may by notice to the
Administrative Agent, or the Administrative Agent (at the request
of the Majority Lenders) may by notice to the Company, require
that such covenant thereafter be calculated in accordance with
GAAP as in effect, and applied by the Company, immediately before
such change in GAAP occurs. If such notice is given, the
compliance certificates delivered pursuant to Section 9.01 after
such change occurs shall be accompanied by reconciliations of the
difference between the calculation set forth therein and a
calculation made in accordance with GAAP as in effect from time
to time after such change occurs. To enable the ready
determination of compliance with the covenants set forth in
Section 9 hereof, the Company will not change from December 31 in
each year the date on which its fiscal year ends, nor from March
31, June 30 and September 30 the dates on which the first three
fiscal quarters in each fiscal year end.
1.03 Types of Loans. Loans are divided into "Types".
The "Type" of a Loan refers to the determination whether such
Loan is a Eurodollar Loan or a Base Rate Loan (it being
understood that Base Rate Loans are to be utilized only in the
circumstances contemplated by the first proviso to Section 4.02
hereof, Section 6 hereof or at any time when the Post-Default
Rate is in effect).
Section 9. Loans.
2.01 Loans. Each Lender severally agrees that it shall
make, subject to the terms of this Agreement, one loan to the
Company on any one Business Day on or prior to [July 14, 1995] in
the amount of its Commitment. Any portion of the Commitments not
borrowed on the date of the borrowing shall automatically
terminate.
2.02 Use of Proceeds. Proceeds of the Loans shall be
used by the Company for its general corporate purposes not
prohibited by this Agreement, including the repayment of amounts
outstanding under the Existing Credit Agreement. None of such
proceeds shall be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
any margin stock (within the meaning of Regulation U or X of the
Board of Governors of the Federal Reserve System).
2.03 Termination of Commitments. Whether or not any
Loans are made under this Agreement, the Commitments shall
terminate on July 14, 1995.
2.04 Administration Fee. The Company shall pay to the
Administrative Agent on each anniversary of the Closing Date,
until payment in full of all Loans hereunder and payment in full
of all interest thereon and all other amounts payable hereunder,
an annual non-refundable administration fee in the amount set
forth in the letter agreement (the "Fee Letter") dated as of June
28, 1995 between the Company and the Administrative Agent or as
otherwise from time to time agreed between the Company and the
Administrative Agent.
2.05 Lending Offices. The Loans made by each Lender
shall be made and maintained at such Lender's Applicable Lending
Office.
2.06 Several Obligations. The failure of any Lender to
make any Loan to be made by it on any date specified therefor
shall not relieve any other Lender of its obligation to make its
Loan on such date, but neither the Administrative Agent nor any
Lender shall be responsible for the failure of any other Lender
to make a Loan to be made by such other Lender.
2.07 Notes. The Loans made by each Lender shall be
evidenced by a single Note of the Company in substantially the
form of Exhibit A hereto, dated the date of this Agreement,
payable to the order of such Lender and otherwise duly completed.
Each Lender is hereby authorized by the Company to endorse on the
schedule (or a continuation thereof) attached to each Note of
such Lender, to the extent applicable, the date, amount, interest
rate, and the Interest Periods (if any) for each Loan made by
such Lender to the Company hereunder and evidenced by such Note,
and the date and amount of each payment or prepayment of
principal of such Loan received by such Lender; provided that any
failure by such Lender to make any such endorsement shall not
affect the obligations of the Company under such Note or
hereunder in respect of such Loan.
Section 10. Borrowings and Prepayments.
3.01 Borrowing. The Company shall give the
Administrative Agent notice of the borrowing of Loans to be made
hereunder as provided in Section 5.05 hereof. Not later than
11:00 a.m. New York time on the date specified for the borrowing
hereunder, each Lender shall make available the amount of the
Loan to be made by it on such date to the Administrative Agent,
at the Principal Office, in immediately available funds, for the
account of the Company. The amount so received by the
Administrative Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Company by depositing
the same, in immediately available funds, in an account
designated by the Company maintained with the Administrative
Agent at the Principal Office.
3.02 Prepayments. The Company shall have the right to
prepay Loans at any time or from time to time; provided that the
Company shall give the Administrative Agent notice of each such
prepayment as provided in Section 5.05 hereof. Amounts prepaid
shall be applied ratably to the remaining installments of
principal of the Loans outstanding, and may not be reborrowed.
Section 11. Payments of Principal and Interest.
4.01 Repayment of Loans. The Company shall repay the
Loans in two installments as follows: (i) an aggregate principal
amount of $25,000,000 shall be repaid on the Interim Maturity
Date, and (ii) all remaining amounts of principal of the Loans
shall be repaid on the Maturity Date. All payments of principal
shall be paid to the Administrative Agent for the ratable account
of each Lender and shall be applied ratably to each of the two
installments described above.
4.02 Interest. The Company shall pay to the
Administrative Agent for the account of each Lender interest on
the unpaid principal amount of each Loan made by such Lender for
the period commencing on the date of such Loan to but excluding
the date on which such Loan shall be paid in full, for each
Interest Period for such Loan at the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to
time; provided that if the Eurodollar Rate is not available for
any reason, such interest shall accrue at the Base Rate.
Notwithstanding any of the foregoing, the Company will pay to the
Administrative Agent for the account of each Lender interest at
the applicable Post-Default Rate on any principal of any Loan
made by such Lender and on any other amount payable by the
Company hereunder to or for the account of such Lender (but, if
such amount is interest, only to the extent legally enforceable),
which shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise), for the period
commencing on the due date thereof until the same is paid in
full.
Accrued interest on each Loan shall be payable (i) if
such Loan is a Eurodollar Loan, on the last day of the Interest
Period for such Loan, (ii) if such Loan is a Base Rate Loan, on
each Quarterly Date, and (iii) in any event, upon the payment or
prepayment thereof, but only on the principal so paid or prepaid;
provided that interest payable at the Post-Default Rate shall be
payable from time to time on demand of the Administrative Agent
or the Majority Lenders. Promptly after the determination of any
interest rate provided for herein or any change therein, the
Administrative Agent shall notify the Lenders and the Company
thereof.
Notwithstanding the foregoing provisions of this
Section 4.02, if at any time the rate of interest set forth above
on any Loan of any Lender (the "Stated Rate" for such Loan)
exceeds the maximum non-usurious interest rate permissible for
such Lender to charge commercial borrowers under applicable law
(the "Maximum Rate" for such Lender), the rate of interest
charged on such Loan of such Lender hereunder shall be limited to
the Maximum Rate for such Lender.
In the event the Stated Rate for any Loan of a Lender
that has theretofore been subject to the preceding paragraph at
any time is less than the Maximum Rate for such Lender, the
principal amount of such Loan shall bear interest at the Maximum
Rate for such Lender until the total amount of interest paid to
such Lender or accrued on its Loans hereunder equals the amount
of interest which would have been paid to such Lender or accrued
on such Lender's Loans hereunder if the Stated Rate had at all
times been in effect.
In the event, upon payment in full of all amounts
payable hereunder, the total amount of interest paid to any
Lender or accrued on such Lender's Loans under the terms of this
Agreement is less than the total amount of interest which would
have been paid to such Lender or accrued on such Lender's Loans
if the Stated Rate had, at all times, been in effect, then the
Company shall, to the extent permitted by applicable law, pay to
the Administrative Agent for the account of such Lender an amount
equal to the difference between (a) the lesser of (i) the amount
of interest which would have accrued on such Lender's Loans if
the Maximum Rate for such Lender had at all times been in effect
or (ii) the amount of interest which would have accrued on such
Lender's Loans if the Stated Rate had at all times been in effect
and (b) the amount of interest actually paid to such Lender or
accrued on its Loans under this Agreement.
In the event any Lender ever receives, collects or
applies as interest any sum in excess of the Maximum Rate for
such Lender, such excess amount shall be applied to the reduction
of the principal balance of its Loans or to other amounts (other
than interest) payable hereunder, and if no such principal is
then outstanding, such excess or part thereof remaining shall be
paid to the Company.
Section 12. Payments; Pro Rata Treatment,
Computations; Etc.
5.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to
be made by the Company hereunder and under the Notes shall be
made in Dollars, in immediately available funds, to the
Administrative Agent at the Principal Office, not later than
11:00 a.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). The Administrative Agent, or any Lender for whose
account any such payment is made, may (but shall not be obligated
to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Company with the
Administrative Agent or such Lender, as the case may be. The
Company shall, at the time of making each payment hereunder or
under any Note, specify to the Administrative Agent the Loans or
other amounts payable by the Company hereunder to which such
payment is to be applied (and in the event that it fails to so
specify, or if an Event of Default has occurred and is
continuing, the Administrative Agent may apply such payment as it
may elect in its sole discretion, but subject to the other terms
and conditions of this Agreement, including without limitation,
Section 5.02 hereof). Each payment received by the
Administrative Agent hereunder or under any Note for the account
of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable
Lending Office. If the due date of any payment hereunder or
under any Note would otherwise fall on a day which 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.
5.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) the borrowing from the Lenders
under Section 2.01 hereof shall be made from the Lenders pro rata
according to the Lenders' respective percentages of the
Commitments; and (b) each payment by the Company of principal of
or interest on Loans (other than payments in respect of Loans of
individual Lenders provided for by Section 6 hereof) shall be
made to the Administrative Agent for the account of the Lenders
pro rata in accordance with the respective unpaid principal
amounts of such Loans held by the Lenders.
5.03 Computations. Interest on Eurodollar Loans and
fees shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable and interest
on Base Rate Loans (if the Loans at any time are Base Rate Loans)
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.
5.04 Minimum and Maximum Amounts. Each prepayment of
principal of Loans shall be in an aggregate principal amount
equal to $5,000,000 (or a larger multiple of $1,000,000). The
borrowing of Loans shall be in the aggregate amount of the
Commitments.
5.05 Certain Notices. Notices to the Administrative
Agent of the borrowing and prepayments of Loans shall be
irrevocable and shall be effective only if received by the
Administrative Agent not later than 11:00 a.m. New York time on
the number of Business Days prior to the date of the relevant
borrowing or prepayment specified below:
Number of Business
Notice Days Prior
Borrowing or prepayment of Base Rate Loans same day
Borrowing or prepayment of, continuation of,
or duration of Interest Period for, Eurodollar
Loans 3
The notice of borrowing and any notice of prepayment shall
specify the amount of the Loans to be borrowed or prepaid
(subject to Sections 3.02 and 5.04 hereof), and the date of
borrowing or prepayment (which shall be a Business Day). No
written notice of continuation of Interest Periods following the
initial Interest Period shall be required, but the Company shall
automatically be deemed to have requested, on the date three
Business Days prior to the end of such preceding Interest Period,
a continuation of the Loans for another Interest Period as
provided in the definition of such term. The Administrative
Agent shall promptly notify the Lenders of the contents of the
notice of borrowing and any notice of prepayment.
5.06 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a
Lender or the Company (the "Payor") prior to the date on which
such Lender is to make payment to the Administrative Agent of the
proceeds of a Loan to be made by it hereunder or the Company is
to make a payment to the Administrative Agent for the account of
one or more of the Lenders, as the case may be (such payment
being herein called the "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact
made the Required Payment to the Administrative Agent, the
recipient of such payment shall, on demand, pay to the
Administrative Agent the amount made available to it together
with interest thereon in respect of the period commencing on the
date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for
such period.
5.07 Sharing of Payments, Etc. The Company agrees
that, in addition to (and without limitation of) any right of
set-off, bankers' lien or counterclaim a Lender (or any bank
controlled by such Lender) may otherwise have, each Lender (or
any bank controlled by such Lender) shall be entitled, at its
option, to offset balances held by it for the 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 such
Lender's Loans to the Company hereunder or other obligation of
the Company hereunder, which 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 and the Administrative Agent
thereof; provided that such Lender's failure to give such notice
shall not affect the validity thereof. If a Lender (or any bank
controlled by such Lender) shall obtain payment of any principal
of or interest on any Loans made by it under this Agreement or
other obligation then due to such Lender hereunder, through the
exercise of any right of set-off, banker's lien, counterclaim or
similar right, or otherwise, such Lender shall promptly purchase
from the other Lenders participations in the Loans made or other
obligations held, by the other Lenders in such amounts, and make
such other adjustments from time to time as shall be equitable to
the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender
in obtaining or preserving such benefit) pro rata in accordance
with the unpaid principal and interest on the Loans or other
obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Company agrees,
to the fullest extent it may effectively do so under applicable
law, that any Person purchasing a participation in the Loans made
or other obligations held, by another Person, whether or not
acquired pursuant to the foregoing arrangements, may exercise all
rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender
were a direct holder of Loans or other obligations in the amount
of such participation. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right
of any Lender to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness or
obligation of the Company.
Section 13. Yield Protection and Illegality.
6.01 Additional Costs.
(a) The Company shall pay to the Administrative Agent
for the account of each Lender from time to time such amounts as
such Lender may determine to be necessary to compensate it for
any costs incurred by such Lender which such Lender determines
are attributable to its making or maintaining of any Eurodollar
Loan hereunder or its obligation to make any of such Loans
hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), in each case
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Notes in
respect of any of such Loans (other than changes which
affect taxes measured by or imposed on the overall net
income of such Lender or of its Applicable Lending Office
for any of such Loans by the jurisdiction in which such
Lender has its principal office or such Applicable Lending
Office); or
(ii) imposes or modifies any reserve, special deposit,
insurance assessment or similar requirements relating to any
extensions of credit or other assets of, or any deposits
with or other liabilities of, such Lender (including any of
such Loans or any deposits referred to in the definition of
Eurodollar Base Rate in Section 1.01 hereof); or
(iii) imposes any other condition affecting this
Agreement (or any of such extensions of credit or
liabilities).
Each Lender will notify the Company through the Administrative
Agent of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this
Section 6.01(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
and (if so requested by the Company through the Administrative
Agent) will designate a different Applicable Lending Office for
the relevant Eurodollar Loan of such Lender if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall
have no obligation to so designate an Applicable Lending office
located in the United States of America). Each Lender will
furnish the Company with a statement setting forth the basis and
amount of each request by such Lender for compensation under this
Section 6.01(a). If any Lender requests compensation from the
Company under this Section 6.01(a), the Company may, by notice to
such Lender through the Administrative Agent, suspend the
obligation of such Lender to make additional Eurodollar Loans to
the Company until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of
Section 6.04 hereof shall be applicable). If the Company shall
be required to pay Additional Costs to any Lender pursuant to
6.01(a)(i) in respect of taxes deducted from any payment to such
Lender, the Company shall furnish to such Lender the original or
a certified copy of a receipt evidencing payment of such taxes.
(b) Without limiting the effect of the foregoing
provisions of this Section 6.01, in the event that, by reason of
any Regulatory Change, any Lender either (i) incurs Additional
Costs based on or measured by the excess above a specified level
of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the
interest rate on any Eurodollar Loan is determined as provided in
this Agreement or a category of extensions of credit or other
assets of such Lender which includes any Eurodollar Loan or (ii)
becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender
so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Lender to make
Eurodollar Loans hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (in which case the
provisions of Section 6.04 hereof shall be applicable).
(c) Determinations and allocations by any Lender for
purposes of this Section 6.01 of the effect of any Regulatory
Change on its costs of maintaining its obligations to make Loans
or of making or maintaining Loans or on amounts receivable by it
in respect of Loans, and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall
be conclusive absent manifest error; provided that such
determinations and allocations are made on a reasonable basis.
6.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, with respect to any Eurodollar
Loans:
(a) the Administrative Agent determines (which
determination shall be conclusive) that quotations of
interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof
are not being provided for the relevant maturities for
purposes of determining the rate of interest for such Loans
for Interest Periods therefor as provided in this Agreement;
or
(b) the Majority Lenders determine (which
determination shall be conclusive) and notify the
Administrative Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof upon the basis of which the rates of
interest for such Loans are to be determined do not
accurately reflect the cost to such Lenders of making or
maintaining such Loans for any Interest Period therefor;
then the Administrative Agent shall promptly notify the Company
and each Lender thereof, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make
Eurodollar Loans. Such Loans shall automatically, on the last
day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, convert into Base Rate Loans.
6.03 Illegality. Notwithstanding any other provision
of this Agreement to the contrary, in the event that it becomes
unlawful for any Lender or its Applicable Lending Office to (a)
honor its obligation to make Eurodollar Loans hereunder, or (b)
maintain Eurodollar Loans hereunder, then such Lender shall
promptly notify the Company thereof through the Administrative
Agent and such Lender's obligation to make Eurodollar Loans
hereunder shall be suspended until such time as such Lender may
again make and maintain Eurodollar Loans (in which case the
provisions of Section 6.04 hereof shall be applicable).
6.04 Substitute Base Rate Loans. If the obligation of
any Lender to make Eurodollar Loans shall be suspended pursuant
to Section 6.01, 6.02 or 6.03 hereof, all Loans made by such
Lender shall be made instead as Base Rate Loans (and, if an event
referred to in Section 6.01(b) or 6.03 hereof has occurred and
such Lender so requests by notice to the Company with a copy to
the Administrative Agent, each Loan of such Lender then
outstanding shall be automatically converted into a Base Rate
Loan on the date specified by such Lender in such notice) and, to
the extent that Eurodollar Loans are so made as (or converted
into) Base Rate Loans, all payments of principal which would
otherwise be applied to such Eurodollar Loans shall be applied
instead to such Base Rate Loans.
6.05 Compensation. The Company shall pay to the
Administrative Agent for the account of each Lender, upon the
request of such Lender through the Administrative Agent, such
amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment or prepayment of a Loan made by such
Lender, or conversion of a Loan of one Type into a Loan of
another Type (by reason of the operation of the first
proviso of Section 4.02, Section 6 or the Post-Default Rate)
, on a date other than the last day of an Interest Period
for such Loan; or
(b) any failure by the Company to borrow a Loan to be
made by such Lender on the date for such borrowing specified
in the relevant notice of borrowing under Section 5.05 or
3.03 hereof or to continue as a Eurodollar Loan any Loan
outstanding on the date scheduled for such continuation.
6.06 Capital Adequacy. If any Lender shall determine
that the adoption or implementation of any applicable law, rule,
regulation or treaty regarding capital adequacy, or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Lender (or its Applicable Lending office)
with any request or directive regarding capital adequacy (whether
or not having the force of law of any such authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Lender or any
Person controlling such Lender (a "Parent") as a consequence of
its obligations hereunder to a level below that which such Lender
(or its Parent) could have achieved but for such adoption, change
or compliance (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, within 15 days after
demand by such Lender (with a copy to the Administrative Agent),
the Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. A
statement of any Lender claiming compensation under this Section
and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive absent manifest error; provided
that the determination thereof is made on a reasonable basis. In
determining such amount, such Lender may use any reasonable
averaging and attribution methods.
6.07 Substitution of Lender. If (i) the obligation of
any Lender to make Eurodollar Loans has been suspended pursuant
to Section 6.01(b) or 6.03 or (ii) any Lender has demanded
compensation under Section 6.01(a) or 6.06, the Company shall
have the right, with the assistance of the Administrative Agent,
to seek a mutually satisfactory substitute lender or lenders
(which may be one or-more of the Lenders) to purchase the Loans
and assume the Commitment of such Lender.
Section 14. Conditions Precedent.
7.01 Basic Conditions. The obligation of each Lender
to make the Loan to be made by it hereunder is subject to the
following conditions precedent, each of which shall have been
fulfilled to the satisfaction of the Administrative Agent:
(a) Corporate Action. The Administrative Agent shall
have received certified copies of the certificate of
incorporation and by-laws of the Company and of all
corporate action taken by the Company authorizing the
execution, delivery and performance of this Agreement and
the Notes (including, without limitation, a certificate of
the Company setting forth the resolutions of its Board of
Directors authorizing the transactions contemplated
thereby).
(b) Incumbency. The Company shall have delivered to
the Administrative Agent a certificate in respect of the
name and signature of each of the officers or other
employees of the Company (i) who is authorized to sign on
its behalf of this Agreement and the Notes and (ii) who
will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for
the purposes of signing documents and giving notices and
other communications in connection with this Agreement and
the Notes. The Administrative Agent and each Lender may
conclusively rely on such certificates until it receives
notice in writing from the Company to the contrary.
(c) Notes. The Administrative Agent shall have
received Notes for each Lender, duly completed and executed.
(d) Fees and Expenses. The Company shall have paid to
the Administrative Agent, for its account and for the
account of the Lenders, the fees required by Section 2.04 to
be paid on the Closing Date and shall have in addition paid
to the Administrative Agent all amounts payable under
Section 12.03 hereof or otherwise on or before the Closing
Date.
(e) Opinion of Counsel to the Company. The
Administrative Agent shall have received an opinion of
Jones, Day, Reavis & Pogue, special New York, Georgia and
Delaware corporate counsel to the Company, substantially in
the form of Exhibit B hereto covering such other matters
relating to the transactions contemplated hereby as the
Majority Lenders may reasonably request.
(f) Officer's Certificate. The Administrative Agent
shall have received a certificate signed by the chief
financial officer of the Company to the effect that (i) no
Default shall have occurred and be continuing and (ii) each
of the representations and warranties made by the Company or
any Subsidiary in or pursuant to the Basic Documents are
true and correct in all material respects on and as of the
Closing Date.
(g) Counterparts. The Administrative Agent shall have
received counterparts of each of this Agreement executed and
delivered by or on behalf of each of the parties thereto
(or, in the case of any Lender as to which the
Administrative Agent shall not have received such a
counterpart, the Administrative Agent shall have received
evidence satisfactory to it of the execution and delivery by
such Lender of a counterpart hereof).
(h) Other Documents. The Administrative Agent shall
have received such other documents relating to the
transactions contemplated hereby as the Administrative Agent
may reasonably request.
7.02 Further Conditions. The obligation of each Lender
to make any Loan to be made by it hereunder is subject to the
additional conditions precedent that, as of the date of such
Loan, and before and after giving effect thereto: (a) no Default
shall have occurred and be continuing; and (b) the
representations and warranties made by the Company in this
Agreement shall be true on and as of the date of the making of
such Loan, with the same force and effect as if made on and as of
such date (except that any representation or warranty which is
expressly stated to be made only as of a specific date shall
speak only as of such date) . The notice of borrowing 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 Administrative Agent prior to the date of the
borrowing, as of the date of the borrowing).
Section 15. Representations and Warranties. The
Company represents and warrants to the Lenders and the
Administrative Agent as follows:
8.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation; (b) has all requisite corporate power, and
has all 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, except in the case
of such licenses, authorizations, consents and approvals, where
the failure to obtain them would not have a material adverse
effect on the condition (financial or otherwise), assets, nature
of assets, liabilities (including without limitation, tax, ERISA
and environmental liabilities) or prospects of the Company and
its Subsidiaries taken as a whole; 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 have a material adverse effect on the
condition, (financial or otherwise), assets, nature of assets,
liabilities (including, without limitation, tax, ERISA and
environmental liabilities) or prospects of the Company and its
Subsidiaries taken as a whole.
8.02 Information. (a) The information furnished by
the Company to the Administrative Agent or any Lender for
purposes of or in connection with this Agreement and identified
on Schedule II did not as of the date thereof and will not as of
the Closing Date contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements contained therein not misleading; provided that
although the management of the Company believes that the
projections presented therein are reasonable, the Company makes
no representation as to their attainability.
(b) Without limiting the generality of paragraph (a):
(i) The audited consolidated and consolidating
balance sheet of the Company and its Subsidiaries as of
December 31, 1994 and the audited consolidated statements of
income, changes in stockholders equity and cash flow for
the fiscal year ended December 31, 1994 and the unaudited
consolidated and consolidating balance sheet of the Company
and its Subsidiaries as of March 31, 1995 and the unaudited
consolidated statements of income and cash flow for the
three-month period ended March 31, 1995 (collectively, the
"Financial Statements"), have been prepared in accordance
with generally accepted accounting principles consistently
applied. The Financial Statements fairly present the
financial position of the Company and its Subsidiaries as of
December 31, 1994 and March 31, 1995, respectively, and the
results of their operations and their cash flows for the
fiscal year ended December 31, 1994 and the three-month
period ended March 31, 1995, respectively, in conformity
with generally accepted accounting principles (subject, in
the case of unaudited financial statements, to normal year-
end audit adjustments).
(ii) The Company and its Subsidiaries did not on the
respective dates of the balance sheets referred to in clause
(i) above, and will not on the Closing Date, have any
material contingent liabilities, material liabilities for
taxes, unusual and material forward or long-term commitments
or material unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected
or provided for in said balance sheets (including the
footnotes thereto).
(c) The Company has disclosed to the Lenders in
writing any and all facts (other than general economic and
industry conditions) which materially and adversely affect or may
affect (to the extent it can reasonably foresee) the condition
(financial or otherwise), assets, nature of assets, liabilities
(including, without limitation, tax, ERISA and environmental
liabilities) or prospects of the Company and its Subsidiaries,
taken as a whole, or the ability of the Company to perform its
obligations under each Basic Document.
(d) Since March 31, 1995 there has been no material
adverse change in the condition (financial or otherwise), assets,
nature of assets, liabilities (including, without limitation,
tax, ERISA and environmental liabilities) or prospects of the
Company or in the ability of the Company to perform its
obligations under each Basic Document.
8.03 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 or affecting the Company or
any of its Subsidiaries in which there is a reasonable
possibility of an adverse decision which could have a material
adverse effect on the condition (financial or otherwise), assets,
nature of assets, liabilities (including, without limitation,
tax, ERISA and environmental liabilities) or prospects of the
Company and its Subsidiaries, taken as a whole, or on the ability
of the Company to perform its obligations under each Basic
Document.
8.04 No Breach. None of the execution and delivery of
the Basic Documents, the consummation of the transactions therein
contemplated or compliance with the terms and provisions thereof
will conflict with or result in a breach of, or require any
consent under, the certificate of incorporation or by-laws of the
Company or any of its subsidiaries, or any applicable law or
regulation, or any order, writ, injunction or decree of any court
or governmental authority or agency, or any Basic Document or
other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which it is bound or to
which it is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens permitted by
this Agreement) result in the creation or imposition of any Lien
upon any of the revenues or assets of the Company or any of its
Subsidiaries pursuant to the terms of any such agreement or
instrument.
8.05 Corporate Action. The Company has all necessary
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Notes; the execution,
delivery and performance by the Company of this Agreement and the
Notes have been duly authorized by all necessary corporate
action; and this Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company and, on the Closing Date, each
of the Notes will constitute its legal, valid and binding
obligation, in each case enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to the enforcement of creditors, rights
generally and by general equitable principles.
8.06 Approvals. The Company has obtained all
authorizations, approvals and consents of, and has made all
filings and registrations with, any governmental or regulatory
authority or agency necessary for the execution, delivery or
performance by it of this Agreement and the Notes, or for the
validity or enforceability thereof.
8.07 Regulations U and X. Neither the Company nor any
of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the
meaning of Regulation U or X of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any Loan
hereunder will be used to purchase or carry any such margin
stock.
8.08 ERISA. The Company and each member of the
Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to
each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have
not incurred any liability to the PBGC or a Plan under Title IV
of ERISA (other than to make contributions or premium payments in
the ordinary course).
8.09 Taxes. Each of the Company and its Subsidiaries
has filed all United States Federal income tax returns and all
other material tax returns which are required (after giving
effect to all valid extensions in effect) to be filed by it and
has paid all taxes due pursuant to such returns or pursuant to
any assessment received by it, except to the extent the same may
be contested as permitted by Section 9.02 hereof. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Company, adequate in all material
respects.
8.10 Subsidiaries. Schedule I hereto is a complete and
correct list, as of the Closing Date, of all Subsidiaries of the
Company. The Company owns, free and clear of Liens, all
outstanding shares of its Subsidiaries and all such shares are
validly issued, fully paid and non-assessable and the Company (or
the respective Subsidiary of the Company) also owns, free and
clear of Liens, all such Investments.
8.11 Investment Company Act. Neither the Company nor
any of its Subsidiaries is an investment company within the
meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any
Person which is an investment company, within the meaning of said
Act.
8.12 Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries 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.
8.13 Ownership and Use of Properties. Each of the
Company and its Subsidiaries will have on the Closing Date and at
all times thereafter, legal title or ownership of, or the right
to use pursuant to enforceable and valid agreements or
arrangements, all tangible property, both real and personal and
all franchises, licenses, copyrights, patents and know-how used
as of the date hereof in the operation of its business, except to
the extent that failure to have any such title, ownership or
right would not result in a material adverse change in the
condition (financial or otherwise), assets, nature of assets,
liabilities (including, without limitation, environmental
liabilities), or prospects of the Company and its Subsidiaries,
taken as a whole.
8.14 Environmental Matters. The Company and each of
its Subsidiaries have obtained all permits, certificates,
licenses, approvals, registrations and other authorizations which
are required under all applicable Environmental Laws, except to
the extent failure to have any such permit, certificate, license,
approval, registration or authorization would not result in a
material adverse change in the condition (financial or
otherwise), assets, nature of assets, liabilities (including,
without limitation, environmental liabilities) or prospects of
the Company and its Subsidiaries taken as a whole. The Company
and each of its Subsidiaries are in compliance with the terms and
conditions of all such permits, certificates, licenses,
approvals, registrations and authorizations, and are also in
compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law or in
any notice or demand letter from any regulatory authority issued,
entered, promulgated or approved thereunder, other than any
notices or demand letters which the Company or such Subsidiary is
contesting in good faith, except to the extent failure to comply
would not result in a material adverse change in the condition
(financial or otherwise), assets, nature of assets, liabilities
(including, without limitation, environmental liabilities) or
prospects of the Company and its Subsidiaries, taken as a whole.
The Company and each of its Subsidiaries is and has been
conducting its business so as to comply in all respects with
applicable Environmental Laws, except to the extent any such
failure to so comply would not result in a material adverse
change in the condition (financial or otherwise), assets, nature
of assets, liabilities (including, without limitation,
environmental liabilities), or prospects of the Company and its
Subsidiaries, taken as a whole.
Section 16. Covenants. The Company agrees that, so
long as any of the Commitments are in effect and until payment in
full of all Loans hereunder all interest thereon and all other
amounts payable hereunder, unless the Majority Lenders shall
agree otherwise as contemplated by Section 12.05 hereof:
9.01 Reports. The Company shall deliver to each of the
Lenders:
(a) as soon as available and in any event within 90
days after the end of each fiscal year of the Company,
consolidated statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for such year
and the related consolidated balance sheet as at the end of
such year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, and
accompanied, in the case of said consolidated financial
statements, by an opinion thereon of Arthur Andersen & Co.
or other independent certified public accountants of
recognized national standing, which opinion shall state that
said consolidated financial statements fairly present the
consolidated financial condition and results of operations
of the Company and its Subsidiaries as at the end of, and
for, such fiscal year and stating that, in making the
examination necessary for their above-described opinion (but
without any special or additional procedures for that
purpose), they obtained no knowledge, except as specifically
stated, of any Default;
(b) as soon as available and in any event within 45
days after the end of each fiscal quarter of the Company,
consolidated statements of income and cash flow of the
Company and its Subsidiaries and other reports, at the
reasonable request of the Administrative Agent or any
Lender, in each case in a form satisfactory to the
Administrative Agent, for such fiscal quarter and for the
portion of the fiscal year ended at the end of such fiscal
quarter, and the related consolidated balance sheet as at
the end of such fiscal quarter, accompanied, in each case,
by a certificate of the chief financial officer or corporate
controller of the Company, which certificate shall state
that said consolidated financial statements fairly present
the consolidated financial condition and results of
operations of the Company in accordance with GAAP (except
for abbreviated footnotes of the type required by the
Securities and Exchange Commission to be included in
quarterly reports on Form 10-Q), consistently applied, as at
the end of, and for, such period (subject to normal year-end
audit adjustments);
(c) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(d) promptly upon the filing thereof, copies of all
registration statements (other than any registration
statements on Form S-8 or its equivalent) and any reports
which the Company shall have filed with the Securities and
Exchange Commission;
(e) if and when the Company or any member of the
Controlled Group (i) gives or is required to give notice to
the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC, (ii)
receives notice of complete or partial withdrawal liability
under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer the
Plan, a copy of such notice;
(f) promptly following the delivery thereof to the
Company or to the Board of Directors or management of the
Company, a copy of any management letter or written report
by independent public accountants with respect to the
financial condition, operations, business or prospects of
the Company;
(g) promptly after management of the Company knows
that any Default has occurred and is continuing, a notice of
such Default, describing the same in reasonable detail; and
(h) from time to time such other information regarding
the financial condition, operations, prospects or business
of the Company as the Administrative Agent or any Lender
through the Administrative Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of its chief executive officer, chief
financial officer or corporate controller (i) to the effect that,
to the best of his knowledge after due inquiry, no Default has
occurred and is continuing (or, if any Default has occurred and
is continuing, describing the same in reasonable detail) and (ii)
setting forth in reasonable detail the computations necessary to
determine whether it was in compliance with Sections 9.08 to
9.10, inclusive, and 9.13 hereof as of the end of the respective
fiscal quarter or fiscal year.
9.02 Taxes and Claims. The Company will pay and
discharge, and will cause each of its Subsidiaries to pay and
discharge, all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits,
or upon any property belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid,
might become a Lien upon the property of the Company or such
Subsidiary; provided that neither the Company nor such Subsidiary
shall be required to pay any such tax, assessment, charge, levy
or claim the payment of which is being contested in good faith
and by proper proceedings if it maintains reserves with respect
thereto in accordance with GAAP.
9.03 Insurance. The Company will maintain, and will
cause each of its Subsidiaries to maintain, such insurance in
such amounts and against such risks as is usually carried by
companies of established repute engaged in the same or similar
business, owning similar properties, and located in the same
general areas as the Company and its Subsidiaries. All such
insurance shall be written by financially responsible companies
of established repute selected by the Company that customarily
write insurance for the risks covered thereby in the amounts
contemplated thereby.
9.04 Maintenance of Existence; Conduct of Business.
The Company will preserve and maintain, and will cause each of
its Subsidiaries to preserve and maintain, its corporate
existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business, and
will conduct its business in a regular manner; provided that
nothing herein shall prevent the merger and dissolution of any
Subsidiary of the Company into the Company so long as the Company
is the surviving corporation or the sale of a Subsidiary not
prohibited by Section 9.10.
9.05 Maintenance of and Access to Properties. The
Company will keep, and will cause each of its Subsidiaries to
keep, all of its properties necessary in its business in good
working order and condition (having regard to the condition of
such properties at the time such properties were acquired by the
Company or such Subsidiary), ordinary wear and tear excepted, and
will permit representatives of the Lenders to inspect such
properties and, upon reasonable notice and at reasonable times,
to examine and make extracts and copies from the books and
records of the Company and any such Subsidiary; provided that if
and for so long as no Default shall have occurred and be
continuing, the Company shall not be required to permit more than
one such examination or inspection by each Lender during any
fiscal year of the Company.
9.06 Compliance with Applicable Laws. The Company will
comply, and will cause each of its Subsidiaries to comply, with
the requirements of all applicable laws, rules, regulations and
orders of any governmental body or regulatory authority
(including, without limitation, all Environmental Laws), a breach
of which would have a material adverse effect on the condition
(financial or otherwise), assets, nature of assets, liabilities
(including, without limitation, tax, ERISA and environmental
liabilities) or prospects of the Company and its Subsidiaries,
taken as a whole, except where contested in good faith and by
proper proceedings.
9.07 Litigation. The Company will promptly give to the
Administrative Agent (which shall promptly notify each Lender)
notice in writing of (i) all judgments against it or any of its
Subsidiaries which individually exceed $1,000,000 or in the
aggregate exceed $5,000,000 and (ii) all litigation and of all
proceedings of which it is aware before any courts, arbitrators
or governmental or regulatory agencies affecting the Company or
any of its Subsidiaries except litigation or proceedings which,
if adversely determined, would not in the reasonable opinion of
the Company materially and adversely affect the condition
(financial or otherwise), assets, nature of assets, liabilities
(including, without limitation, tax, ERISA and environmental
liabilities) or prospects of the Company and its subsidiaries,
taken as a whole.
9.08 Leverage Ratio. The Company will not permit the
ratio, calculated as at the end of each fiscal quarter for the
four fiscal quarters then ended, of (i) the principal amount of
Indebtedness of the Company and its Subsidiaries, determined on a
consolidated basis at such date, to (ii) Cash Flow for such
period to exceed 3.50 to 1.00.
9.09 Interest Coverage Ratio. The Company will not
permit the ratio, calculated as at the end of each fiscal quarter
for the four fiscal quarters then ended, of Cash Flow for such
period to Interest Expense for such period to be less than 2.50
to 1.00.
9.10 Mergers, Asset Dispositions and Acquisitions, Etc.
(a) The Company will not, and will not permit any of
its Subsidiaries to, sell, lease, assign, transfer or otherwise
dispose of any assets, or acquire assets from any Person, except:
(i) dispositions and acquisitions of inventory in the
ordinary course of business;
(ii) expenditures in respect of fixed or capital
assets;
(iii) acquisitions of Investments permitted under
Section 9.12 hereof;
(iv) dispositions of bonds issued in connection with
the Gallman Indebtedness;
(v) sales of accounts receivable from time to time;
provided that (x) the aggregate amount that third-party
transferees are entitled at any time to recover from
collections on such accounts receivable shall not exceed
$70,000,000 and (y) the aggregate outstanding balance of
accounts receivable sold to third-party transferees shall
not at any time exceed 115% of the aggregate amount of the
proceeds received by the Company and its Subsidiaries from
the sale of such accounts receivable;
(vi) Permitted Acquisitions; and
(vii) other dispositions of assets not permitted by
clauses (i) through (vi) above which, together with all
assets disposed of pursuant to this clause (vii) from and
after the Closing Date have, after giving effect to any
such disposition, an aggregate fair market value not
exceeding $70,000,000.
For purposes of this Section 9.10, a "Permitted
Acquisition" shall mean any acquisition of any asset or
Investment by the Company or any Subsidiary (including any such
acquisition by way of merger); provided that (x) after giving pro
forma effect to such acquisition, the Company would have been in
compliance with Sections 9.08, and 9.09 hereof on the last day of
the four fiscal quarters most recently ended prior to the date of
such acquisition (calculated on the assumption that such
acquisition occurred at the beginning of such four fiscal quarter
period) and (y) no Default or Event of Default has occurred and
is continuing or would result therefrom.
(b) The Company will not, nor will it permit any of
its Subsidiaries to, consolidate or merge with or into any other
Person; provided that (i) the Company or any Subsidiary may merge
with another Person if (x) such Person is organized under the
laws of the United States of America or one of its states, (y)
the Company or any of its Subsidiaries (except that the Company
shall be the remaining corporation upon a merger of a Subsidiary
of the Company with the Company) is the corporation surviving
such merger and (z) immediately after giving effect to such
merger, no Default shall have occurred and be continuing and (ii)
any Subsidiary of the Company may merge with any other Person in
connection with a Permitted Acquisition or a disposition of such
Subsidiary not prohibited by Section 9.10(a).
9.11 Liens. The Company will not, and will not permit
any of its Subsidiaries to, create or suffer to exist any Lien
upon any property or assets, now owned or hereafter acquired,
securing any Indebtedness or other obligation, except: (i) Liens
securing the Gallman Indebtedness in accordance with the
definition thereof; (ii) Liens existing on other assets at the
date of acquisition thereof or which attach to such assets
concurrently with or within 90 days after the acquisition
thereof, securing Indebtedness incurred to finance the
acquisition thereof; (iii) Liens on the cash surrender value of
life insurance policies under the COLI Program and (iv) other
Liens arising in the ordinary course of the business of the
Company or such Subsidiary which are not incurred in connection
with the borrowing of money or the obtaining of advances or
credit and which do not materially detract from the value of its
property or assets or materially impair the use thereof in the
operation of its business. For the avoidance of doubt, the
filing of UCC financing statements in connection with any sale by
the Company or any of its Subsidiaries of accounts receivable
permitted by Section 9.10 shall not constitute a Lien prohibited
by this Section 9.11.
9.12 Investments. The Company will not, and will not
permit any of its Subsidiaries to, make or permit to remain
outstanding any advances, loans or other extensions of credit or
capital contributions (other than prepaid expenses in the
ordinary course of business) to (by means of transfers of
property or assets or otherwise), or purchase or own any stocks,
bonds, notes, debentures or other securities of, any Person (all
such transactions being herein called "Investments"), except: (i)
operating deposit accounts; (ii) Liquid Investments; (iii)
subject to Section 9.14 hereof, Investments in accounts and
chattel paper (as defined in the Uniform Commercial Code), and
notes receivable acquired in the ordinary course of business as
presently conducted; (iv) Investments existing on the Closing
Date in Wholly-Owned Subsidiaries and in Systronics, Inc. and
Great River Oil & Gas Corporation, (v) Investments in life
insurance policies under the COLI Program and (vi) Investments
that constitute Permitted Acquisitions.
9.13 Restricted Payments. The Company will not, and
will not permit any of its Subsidiaries to, declare or make any
Restricted Payment, except that the Company may (i) purchase
shares of Restricted Stock (as defined in the Incentive Equity
Plan) from employees of the Company or its Subsidiaries upon
termination of such employees' employment, in accordance with the
Incentive Equity Plan in amounts not to exceed $1,000,000 during
any fiscal year and $7,000,000 in the aggregate during the term
of this Agreement and (ii) make Restricted Payments in addition
to the Restricted Payments permitted to be made pursuant to
clause (i) above if (a) no Default shall have occurred and be
continuing and (b) after giving effect to any such payment, the
cumulative amount of all payments made in reliance on this clause
(ii) does not exceed the sum of $50,000,000 plus 50% of
Cumulative Net Income on the date of such payment.
"Cumulative Net Income" shall mean, on any date, the
cumulative amount of the net income, if any (less the cumulative
amount of the net loss, if any) of the Company and its
Subsidiaries, determined on a consolidated basis, for each fiscal
quarter of the Company from (and including) the fiscal quarter
ending on March 31, 1994 to (and including) the fiscal quarter of
the Company most recently ended prior to such date.
9.14 Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly: (i)
except to the extent not prohibited by Section 9.12, make any
Investment in an Affiliate of the Company; (ii) transfer, sell,
lease, assign or otherwise dispose of any assets to an Affiliate
of the Company; (iii) merge into or consolidate with or purchase
or acquire assets from an Affiliate of the Company; or (iv) enter
into any other transaction directly or indirectly with or for the
benefit of an Affiliate of the Company (including, without
limitation, guarantees and assumptions of obligations of an
Affiliate of the Company); provided that (a) any Affiliate of the
Company who is an individual may serve as a director, officer or
employee of the Company and receive reasonable compensation or
indemnification in connection with his or her services in such
capacity; (b) the Company or a Subsidiary of the Company may
enter into any transaction with an Affiliate of the Company
providing for the leasing of property, the rendering or receipt
of services or the purchase or sale of inventory and other assets
in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as
advantageous to the Company or such Subsidiary as the monetary or
business consideration which would be obtained in a comparable
arm's length transaction with a Person not an Affiliate of the
Company; and (c) the Company may pay commissions to Georgia Gulf
Export Corporation on sales of qualified "Export Property" (as
defined in Section 927 of the Code) in accordance with Section
925 of the Code and the rules and regulations thereunder.
9.15 Lines of Businesses. Neither the Company nor any
of its Subsidiaries shall engage to any substantial extent in any
line or lines of business activity other than present or related
product lines.
9.16 Environmental Matters. The Company will promptly
give to the Lenders notice in writing of any complaint, order,
citation, notice or other written communication from any Person
with respect to, or if the Company becomes aware after due
inquiry of, (i) the existence or alleged existence of a violation
of any applicable Environmental Law or legal liability resulting
from any air emission, water discharge, noise emission, asbestos,
Hazardous Substance or any other environmental, health or safety
matter at, upon, under or within any property now or previously
owned, leased, operated or used by the Company or any of its
Subsidiaries or any part thereof, or due to the operations or
activities of the Company, any Subsidiary or any other Person on
or in connection with such property or any part thereof
(including receipt by the Company or any subsidiary of any notice
of the happening of any event involving the Release or cleanup of
any Hazardous Substance), (ii) any Release on such property or
any part thereof in a quantity that is reportable under any
applicable Environmental Law, (iii) the commencement of any
cleanup pursuant to or in accordance with any applicable
Environmental Law of any Hazardous Substances on or about such
property or any part thereof and (iv) any pending or threatened
proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law, in each
of cases (i), (ii), (iii) and (iv), which individually or in the
aggregate could have a material adverse effect on the condition
(financial or otherwise), assets, nature of assets, liabilities
(including, without limitation, environmental liabilities) or
prospects, taken as a whole, of the Company and its Subsidiaries.
Section 17. Defaults.
10.01 Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) default in the payment of (i) any principal of any
Loan when due, (ii) any interest on any Loan within one
Business Day of the due date thereof or (iii) any other
amount payable hereunder within three Business Days after
the due date thereof; or
(b) the Company or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on any Indebtedness having an outstanding principal
amount of at least $5,000,000 (other than the Loans); or any
event or condition shall occur which results in the
acceleration of the maturity of any such Indebtedness or
enables the holder of any such Indebtedness or any Person
acting on such holder's behalf to accelerate the maturity
thereof; or
(c) any representation or warranty made by the Company
herein or in any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof,
shall prove to have been false or misleading in any material
respect as of the time made; or
(d) (i) the Company shall default in the performance
of any of its obligations in Sections 9.08 through 9.16
hereof; or (ii) the Company shall default in the performance
of any of its other obligations in any Basic Document, and
such default described in this subclause (ii) shall continue
unremedied for a period of 30 days after notice thereof to
the Company by the Administrative Agent or the Majority
Lenders (through the Administrative Agent); or
(e) the Company or any of its Subsidiaries shall admit
in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or
(f) the Company or any of its Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee 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, 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 or partnership
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 Company or any of its
Subsidiaries in any court of competent jurisdiction, seeking
(i) its liquidation, reorganization, dissolution or winding-
up, or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian,
liquidator or the like of such Person or of all or any
substantial part of its assets, or (iii) similar relief in
respect of such Person 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
days; or an order for relief against such Person shall be
entered in an involuntary case under the Bankruptcy Code; or
(h) a final judgment or judgments for the payment of
money shall be rendered by a court or courts against the
Company or any of its Subsidiaries in excess of $4,000,000
in the aggregate, and (i) 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, or (ii) the Company or
such Subsidiary shall not, within said period of 30 days, or
such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal, or (iii) such
judgment or judgments shall not be discharged (or provisions
shall not be made for such discharge) within 30 days after a
decision has been reached with respect to such appeal and
the related stay has been lifted; or
(i) the Company or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating
in excess of $2,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans having
aggregate Unfunded Liabilities in excess of $2,000,000 shall
be filed under Title IV of ERISA by the Company or any
member of the Controlled Group, any plan administrator or
any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any such
Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans against the Company or
any member of the Controlled Group to enforce Section 515 or
4219(c)(5) of ERISA; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;
or
(j) (i) as a result of one or more transactions after
the date of this Agreement, any "person" or "group" of
persons shall have "beneficial ownership" (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended, and the applicable rules and
regulations thereunder) of 30% or more of the outstanding
common stock of the Company; or (ii) without limiting the
generality of the foregoing, during any period of 12
consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 12-month
period were directors of the Company shall cease for any
reason to constitute a majority of the board of directors of
the Company; provided that the relationships among the
respective shareholders of the Company on the Closing Date
shall not be deemed to constitute all or any combination of
them as a "group" for purposes of clause (j)(i);
THEREUPON: the Administrative Agent may (and, if directed by the
Majority Lenders, shall) (a) declare the Commitments terminated
(whereupon the Commitments shall be terminated) and/or (b)
declare the principal amount then outstanding of and the accrued
interest on the Loans and all other amounts payable hereunder and
under the Notes to be forthwith due and payable, whereupon such
amounts shall be and become immediately due and payable, without
notice (including, without limitation, notice of intent to
accelerate), presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the
Company; provided that in the case of the occurrence of an Event
of Default with respect to the Company referred to in clause (f)
or (g) of this Section 10.01, the Commitments shall be
automatically terminated and the principal amount then
outstanding of and the accrued interest on the Loans and all
other amounts payable hereunder and under the Notes shall be and
become automatically and immediately due and payable, without
notice (including, without limitation, notice of intent to
accelerate), presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the
Company.
Section 18. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each
Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder and the other
Basic Documents with such powers as are specifically delegated to
the Administrative Agent by the terms hereof and thereof,
together with such other powers as are reasonably incidental
thereto. The Administrative Agent (which term as used in this
Section 11 shall include reference to its affiliates and its own
and its respective affiliates' officers, directors, employees and
agents): (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Basic
Documents, and shall not by reason of this Agreement or any other
Basic Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or any
other Basic Document, or in any certificate or other document
referred to or provided for in, or received by any of them under,
this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Basic Document or any
other document referred to or provided for herein or therein or
for any failure by any Person to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or
under any other Basic Document except to the extent requested by
the Majority Lenders, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder, any other
Basic Document or any other document or instrument referred to or
provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful
misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care.
11.02 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Administrative Agent. As to any matters
not expressly provided for by this Agreement or any other Basic
Document, the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Majority
Lenders, and such instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.
11.03 Defaults. The Administrative Agent shall not
be deemed to have knowledge of the occurrence of a Default (other
than the non-payment of principal of or interest on Loans) unless
the Administrative Agent has received notice from a Lender or the
Company specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section
11.07 hereof) take such action with respect to such Default as
shall be directed by the Majority Lenders; provided that, unless
and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable
in the best interests of the Lenders.
11.04 Rights as a Lender. With respect to its
Commitments and the Loans made by it, IBJ in its capacity as a
Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were
not acting as the Administrative Agent and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include
the Administrative Agent in its individual capacity. The
Administrative Agent may (without having to account therefor to
any Lender) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the
Company (and any of its Affiliates) as if it were not acting as
the Administrative Agent and the Administrative Agent may accept
fees and other consideration from the Company (in addition to the
fees heretofore agreed to between the Company and the
Administrative Agent) for services in connection with this
Agreement or otherwise without having to account for the same to
the Lenders.
11.05 Indemnification. The Lenders agree to
indemnify the Administrative Agent (to the extent not reimbursed
under Section 12.03 or 12.04 hereof, but without limiting the
obligations of the Company under said Sections 12.03 and 12.04),
ratably in accordance with their respective Commitments (if any
Commitments are then in effect) or Loans (if the borrowing has
theretofore occurred), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of
this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Company is obligated
to pay under Sections 12.03 and 12.04 hereof but excluding,
unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided
that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct
of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and
other Lenders. Each Lender agrees that it has, independently and
without reliance on the Administrative Agent or any other Lender,
had based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under
this Agreement or any of the other Basic Documents. The
Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Company of
this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to
inspect the properties or books of the Company. Except for
notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative
Agent hereunder or the other Basic Documents, the Administrative
Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the
affairs, financial condition or business of the Company (or any
of its affiliates) which may come into the possession of the
Administrative Agent.
11.07 Failure to Act. Except for action expressly
required of the Administrative Agent hereunder and under the
other Basic Documents, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations
under Section 11.05 hereof against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action.
11.08 Resignation or Removal of Administrative
Agent. Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent
may resign at any time by giving notice thereof to the Lenders
and the Company and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Administrative Agent reasonably
acceptable to the Company. If no successor Administrative Agent
shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Administrative Agent
(the "Notice Date"), then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative
Agent reasonably acceptable to the Company. Any successor
Administrative Agent shall be (i) a Lender or (ii) if no Lender
has accepted such appointment within 40 days after the Notice
Date, a bank which has an office in New York, New York with a
combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of
this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while
it was acting as the Administrative Agent.
11.09 Consents under Basic Documents. Without the
prior written consent of the Majority Lenders, the Administrative
Agent will not consent to any modification, supplement or waiver
under any of the Basic Documents.
11.10 Administrative Agent's Office. The
Administrative Agent acts initially through the New York Branch
of The Industrial Bank of Japan, Limited, but may change the
office, branch or affiliate through which it performs its
activities as Administrative Agent at any time by giving prompt
subsequent notice thereof to the Company and the Lenders.
Section 19. Miscellaneous.
12.01 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
power or privilege under any Basic Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any
right, power or privilege thereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided in the Basic Documents
are cumulative and not exclusive of any remedies provided by law.
12.02 Notices. All notices and other
communications provided for herein (including, without
limitation, any modifications of, or waivers or consents under,
this Agreement) shall be given or made by telex, telegraph,
telecopy, cable or other writing and telexed, telecopied,
telegraphed, cabled, mailed or 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 the
Company and the Administrative Agent given in accordance with
this Section 12.02. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopier, delivered to
the telegraph or cable office or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Lenders and the Administrative Agent for
paying: (a) the reasonable fees and expenses of Christy & Viener,
special counsel to the Administrative Agent in connection with
(i) the preparation, execution and delivery of this Agreement
(including the Exhibits hereto) and the making of the Loans
hereunder, (ii) all reasonable costs relating to the syndication
(if any) of the Commitments and/or Loans under this Agreement
after the date of the borrowing hereunder, and (iii) any
modification, supplement or waiver of any of the terms of this
Agreement or any other Basic Document; (b) if an Event of Default
occurs, all reasonable costs and expenses of the Lenders and the
Administrative Agent (including reasonable counsels' fees)
incurred as a result of such Event of Default and collection,
enforcement, bankruptcy, insolvency and other proceedings
resulting therefrom; (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 other Basic Document or any other document referred to herein
or therein; and (d) all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated by this Agreement or any document referred to herein
or therein.
12.04 Indemnification. The Company shall indemnify
the Administrative Agent, the Lenders and each affiliate thereof
and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages
arise out of or result from any actual or proposed use by the
Company of the proceeds of any extension of credit by any Lender
hereunder or breach by the Company of this Agreement or any other
Basic Document or from any investigation, litigation or other
proceeding (including any threatened investigation or proceeding)
relating to the foregoing, and the Company shall reimburse the
Administrative Agent and each Lender, and each affiliate thereof
and their respective directors, officers, employees and agents,
upon demand for any expenses (including legal fees) incurred in
connection with any such investigation or proceeding; 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.
12.05 Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes, nor any consent to
any departure by the Company therefrom, shall in any event be
effective unless the same shall be agreed or consented to by the
Majority Lenders and the Company, and each such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given; provided, that (a) no
amendment, waiver or consent shall, unless in writing and signed
by all the Lenders, do any of the following: (i) increase any
Commitment of any of the Lenders or subject the Lenders to any
additional obligations; (ii) reduce the principal of, or interest
on, any Loan or fees hereunder; (iii) postpone any date fixed for
any payment of principal of, or interest on, any Loan or fee
hereunder pursuant to Sections 2.04, 4.01 or 4.02 hereof; (iv)
change the percentage of any of the Commitments or of the
aggregate unpaid principal amount of any of the Loans, or the
number of Lenders, which shall be required for the Lenders or any
of them to take any action under this Agreement; or (v) change
any provision contained in sections 2.02, 6, 12.03 or 12.04
hereof or this Section 12.05 or Section 12.08 hereof.
Notwithstanding anything in this Section 12.05 to the contrary,
no amendment, waiver or consent shall be made with respect to
Section 11 without the consent of the Administrative Agent.
12.06 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns except that the
Company may not assign its rights or obligations hereunder or
under the Notes without the prior written consent of all of the
Lenders. Each Lender may assign any Loan or Loans or all or any
part of its Loans or Commitments (i) to any affiliate thereof,
(ii) to any other Lender, or (iii) with the consent of the
Company and the Administrative Agent, which consents shall not be
unreasonably withheld, to any other bank or financial institution
(including a closed-end or other fund) (provided that (a) any
assignment pursuant to clause (i) or (ii) above shall not be less
than $1,000,000 and (b) any assignment or, if substantially
simultaneous, the aggregate amount of any assignments by one or
more Lenders pursuant to clause (iii) above to any one bank or
financial institution shall not be less than $10,000,000, unless,
in each case, such assignment constitutes an assignment of all of
such Lender's Commitments and Loans). Upon execution by the
assignor and the assignee of an instrument pursuant to which the
assignee assumes such rights and obligations, substantially in
the form of Exhibit C hereto, payment by such assignee to such
assignor of an amount equal to the purchase price agreed between
such assignor and such assignee and delivery to the
Administrative Agent and the Company of an executed copy of such
instrument together with payment by such assignee to the
Administrative Agent of a processing fee of $2,500, such assignee
shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would have
if it were a Lender hereunder and the assignor shall be, to the
extent of such assignment (unless otherwise provided therein)
released from its obligations under this Agreement. Each Lender
may (without the consent of any other party to this Agreement)
sell participations in all or any part of any Loan or Loans made
by it to another bank or other entity, in which event the
participant shall not have any rights under this Agreement
(except as provided in the next succeeding sentence hereof), or
in the case of a Loan, such Lender's Note (the participant's
rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor
of the participant relating thereto, which agreement shall not
give the participant the right to consent to any modification,
amendment or waiver other than one described in clause (i), (ii)
or (iii) of Section 12.05 hereof). The Company agrees that each
participant shall be entitled to the benefits of Sections 5.07
and 6 with respect to its participation; provided that no
participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such
participant had no such transfer occurred. Each Lender may
furnish any information concerning the Company and its
Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees
and participants) which have agreed in writing to be bound by the
provisions of Section 12.07 hereof. The Administrative Agent and
the Company may, for all purposes of this Agreement, treat any
Lender as the holder of any Note drawn to its order (and owner of
the Loans evidenced thereby) until written notice of assignment,
participation or other transfer shall have been received by them
from such Lender. Any Lender may at any time assign all or any
portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank without the consent of the Company or the
Administrative Agent. No such assignment shall release the
transferor Lender from its obligations hereunder.
12.07 Confidentiality. Each Lender agrees to
exercise all reasonable efforts to keep any information delivered
or made available by the Company to it which is clearly indicated
to be confidential information, confidential from anyone other
than persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided that nothing herein shall
prevent any Lender from disclosing such information (i) to any
other Lender, (ii) to its officers, directors, employees, agents,
attorneys and accountants who have a need to know such
information in accordance with customary banking practices and
who receive such information having been made aware of the
restrictions set forth in this Section, (iii) upon the order of
any court or administrative agency, (iv) upon the request or
demand of any regulatory agency or authority having jurisdiction
over such Lender, (v) which has been publicly disclosed, (vi) to
the extent reasonably required in connection with any litigation
to which the Administrative Agent, any Lender or their respective
affiliates may be a party, (vii) to the extent reasonably
required in connection with the exercise of any remedy hereunder,
(viii) to such Lender's legal counsel and independent auditors,
and (ix) to any actual or proposed participant or assignee of all
or part of its rights hereunder which has agreed in writing to be
bound by the provisions of this Section 12.07.
12.08 Survival. The obligations of the Company
under Sections 6.01, 6.05, 6.06, 6.07, 12.03 and 12.04 hereof and
the obligations of the Lenders under Section 11.05 shall survive
the repayment of the Loans and the termination of the
Commitments.
12.09 Captions. 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.
12.10 Counterparts; Integration; Severability.
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. This Agreement
constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and
understandings, oral and written, relating to the subject matter
hereof (except to the extent specific reference is made to any
such agreement in Section 2.04 hereof). In case any provision of
or obligation under this Agreement or the Notes shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION
WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE NOTES 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 CITY FOR 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 LAW, ANY OBJECTION WHICH 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. EACH OF
THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES 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.
[Remainder of page intentionally left blank.]
<PAGE>
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.
COMPANY
GEORGIA GULF CORPORATION
By /S/ RICHARD B. MARCHESE
Richard B. Marchese
Vice President - Finance
Address for Notices:
Georgia Gulf Corporation
400 Perimeter Center Terrace
Suite 595
Atlanta, Georgia 30346
Attention: Chief Financial Officer
With a copy to:
General Counsel
Georgia Gulf Corporation
400 Perimeter Center Terrace
Suite 595
Atlanta, Georgia 30346
Telephone Number: (404) 395-4533
Telex Number: 8107510027
Telecopy Number: (404) 390-9673
<PAGE>
LENDERS
Commitment:
$ 100,000,000
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /S/JUNRI ODA
Junri Oda
Senior Vice President & Senior Manager
Address for Notices:
The Industrial Bank of Japan, Limited
New York Branch
245 Park Avenue
New York, New York 10167
Attention: Mikihide Katsumata
Telephone Number: (212) 309-6452
Telex Number: 420802 (420802 KIGIUI)
Telecopy Number: (212) 692-2870
Lending Office:
New York Branch
245 Park Avenue
New York, New York 10167
<PAGE>
ADMINISTRATIVE AGENT
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Administrative Agent
By /S/ JUNRI ODA
Junri Oda
Senior Vice President & Senior
Manager
Address for Notices:
The Industrial Bank of Japan, Limited
New York Branch
245 Park Avenue
New York, New York 10167
Attention: Mikihide Katsumata
Telephone Number: (212) 309-6452
Telex Number: 420802 (420802 KIGIUI)
Telecopy Number: (212) 692-2870
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Georgia
Gulf
Corporation's Form 10-Q for the quarter ended June 30, 1995 and is qualified
in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,622
<SECURITIES> 0
<RECEIVABLES> 101,450
<ALLOWANCES> 2,372
<INVENTORY> 79,658
<CURRENT-ASSETS> 200,214
<PP&E> 479,690
<DEPRECIATION> 205,779
<TOTAL-ASSETS> 477,276
<CURRENT-LIABILITIES> 102,360
<BONDS> 322,000
<COMMON> 379
0
0
<OTHER-SE> 8,835
<TOTAL-LIABILITY-AND-EQUITY> 477,276
<SALES> 589,859
<TOTAL-REVENUES> 589,859
<CGS> 369,912
<TOTAL-COSTS> 369,912
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,685
<INCOME-PRETAX> 180,406
<INCOME-TAX> 69,456
<INCOME-CONTINUING> 110,950
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110,950
<EPS-PRIMARY> 2.74
<EPS-DILUTED> 2.74
</TABLE>
