SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Numbers 0-25586 and 33-66740
UNIROYAL CHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-1258925
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
UNIROYAL CHEMICAL COMPANY, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 06-1148490
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
BENSON ROAD
MIDDLEBURY, CONNECTICUT 06749
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code - (203)
573-2000
Indicate by check mark whether the registrants (1) have 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 registrants were required to
file such reports), and (2) have been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuers'
classes of common stock, as of August 22, 1997:
Uniroyal Chemical Corporation: 100 shares of Common Stock;
Uniroyal Chemical Company, Inc.: 100 shares of No Class Common
Stock.
Registrants meet the conditions set forth in General Instruction
(H)(1)(a) and (b) of Form 10-Q and are therefore filing this Form
with the reduced disclosure format.
THE REGISTRANTS ARE NOT REQUIRED BY SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 TO FILE THIS REPORT, WHICH IS
BEING FILED TO COMPLY WITH CERTAIN PROVISIONS OF THE INDENTURES
APPLICABLE TO THREE SERIES OF OUTSTANDING PUBLIC DEBT OF UNIROYAL
CHEMICAL CORPORATION AND ONE SERIES OF SUCH DEBT OF UNIROYAL
CHEMICAL COMPANY, INC. UNIROYAL CHEMICAL CORPORATION IS A
WHOLLY-OWNED SUBSIDIARY OF CROMPTON & KNOWLES CORPORATION.
UNIROYAL CHEMICAL COMPANY, INC. IS A WHOLLY-OWNED SUBSIDIARY OF
UNIROYAL CHEMICAL CORPORATION.
* * * * * * * * * * * * * * *
UNIROYAL CHEMICAL CORPORATION
UNIROYAL CHEMICAL COMPANY, INC.
FORM 10-Q
FOR THE QUARTER ENDED June 28, 1997
INDEX
PART I - FINANCIAL INFORMATION
Item 1 Condensed Financial Statements and Accompanying Notes
Consolidated Statements of Earnings (unaudited) for the
Quarters and Six Months Ended June 28, 1997 and June 30, 1996
Consolidated Balance Sheets June 28, 1997 (unaudited)
and December 28, 1996
Uniroyal Chemical Corporation
Uniroyal Chemical Company, Inc.
Consolidated Statements of Cash Flows (unaudited) for the
Six Months Ended June 28, 1997 and June 30, 1996
Notes to Consolidated Financial Statements - Quarter ended
June 28, 1997 (unaudited)
Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
Item 6 -- Exhibits and Reports on Form 8-K
Signatures
*Exhibit 4 -- $600,000,000 Second Amended and Restated Credit
Agreement
*Exhibit 27 -- Financial Data Schedule
* A copy of this Exhibit is annexed to this report on Form 10-Q
provided to the Securities and Exchange Commission.
UNIROYAL CHEMICAL CORPORATION UNAUDITED
UNIROYAL CHEMICAL COMPANY, INC.
Consolidated Statements of Earnings
Quarters and six months ended June 28, 1997 and June 30, 1996
(In thousands of dollars)
Quarters Ended Six Months Ended
------------------ ------------------
Jun. 28, Jun. 30, Jun. 28, Jun. 30,
1997 1996 1997 1996
-------- -------- -------- --------
Net sales $323,813 $302,063 $631,696 $597,691
Cost of products sold 195,041 180,032 382,727 360,974
Selling, general and
administrative 43,177 43,540 83,965 85,059
Depreciation and
amortization 15,931 17,640 31,755 34,222
Research and
development 9,872 9,922 19,693 19,504
-------- -------- -------- --------
Operating profit 59,792 50,929 113,556 97,932
Interest expense 24,579 26,742 49,336 53,696
Other expense
(income) 634 (400) 707 172
-------- -------- -------- --------
Earnings before
income taxes and
extraordinary loss 34,579 24,587 63,513 44,064
Income taxes 13,140 9,923 24,135 17,714
-------- -------- -------- --------
Earnings before
extraordinary loss 21,439 14,664 39,378 26,350
Extraordinary loss
on early
extinguishment of
debt (1,227) (137) (1,227) (441)
-------- -------- -------- --------
Net earnings $ 20,212 $ 14,527 $ 38,151 $ 25,909
======== ======== ======== ========
See accompanying notes to consolidated financial statements
UNIROYAL CHEMICAL CORPORATION JUNE 28, 1997 UNAUDITED
Consolidated Balance Sheets
June 28, 1997 and December 28, 1996
(In thousands of dollars)
Jun. 28, Dec. 28,
1997 1996
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 21,415 $ 21,015
Accounts receivable 171,329 137,238
Inventories 197,028 202,762
Other current assets 58,705 60,848
------------ ------------
Total current assets 448,477 421,863
NON-CURRENT ASSETS
Property, plant and equipment 353,991 367,962
Costs in excess of acquired net
assets 125,491 128,155
Other intangible assets 84,008 91,782
Other assets 109,990 123,545
------------ ------------
$1,121,957 $1,133,307
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term
debt $ - $ 731
Notes payable 2,973 8,595
Accounts payable 91,619 97,909
Accrued expenses 92,286 87,045
Income taxes payable 31,132 24,969
Other current liabilities 6,105 268
------------ ------------
Total current liabilities 224,115 219,517
NON-CURRENT LIABILITIES
Long-term debt 881,840 925,982
Accrued postretirement
liability 173,353 174,025
Other liabilities 143,435 150,615
STOCKHOLDERS' EQUITY (DEFICIT):
Additional paid-in capital 172,822 172,822
Accumulated deficit (442,256) (480,407)
Cumulative translation adjustment (28,592) (25,534)
Pension liability adjustment (2,760) (3,713)
------------ ------------
Total stockholders' deficit (300,786) (336,832)
------------ ------------
$1,121,957 $1,133,307
============ ============
See accompanying notes to consolidated financial statements
UNIROYAL CHEMICAL COMPANY, INC. JUNE 28, 1997 UNAUDITED
Consolidated Balance Sheets
June 28, 1997 and December 28, 1996
(In thousands of dollars)
Jun. 28, Dec. 28,
1997 1996
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 21,415 $ 21,015
Accounts receivable 171,329 137,238
Inventories 197,028 202,762
Other current assets 58,705 60,848
------------ ------------
Total current assets 448,477 421,863
NON-CURRENT ASSETS
Property, plant and equipment 353,991 367,962
Costs in excess of acquired net
assets 125,491 128,155
Other intangible assets 84,008 91,782
Other assets 109,990 123,545
------------ ------------
$1,121,957 $1,133,307
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term
debt $ - $ 731
Notes payable 2,973 8,595
Accounts payable 91,619 97,909
Accrued expenses 92,286 87,045
Income taxes payable 31,132 24,969
Other current liabilities 6,105 268
------------ ------------
Total current liabilities 224,115 219,517
NON-CURRENT LIABILITIES
Long-term debt 881,840 925,982
Accrued postretirement
liability 173,353 174,025
Other liabilities 143,435 150,615
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock 1 1
Additional paid-in capital 174,504 174,504
Accumulated deficit (443,939) (482,090)
Cumulative translation adjustment (28,592) (25,534)
Pension liability adjustment (2,760) (3,713)
------------ ------------
Total stockholders' deficit (300,786) (336,832)
------------ ------------
$1,121,957 $1,133,307
============ ============
See accompanying notes to consolidated financial statements
UNIROYAL CHEMICAL CORPORATION UNAUDITED
UNIROYAL CHEMICAL COMPANY, INC.
Consolidated Statements of Cash Flows
Six months ended June 28, 1997 and June 30, 1996
(In thousands of dollars)
Jun. 28, Jun. 30,
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 38,151 $ 25,909
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 31,755 34,222
Non-cash interest 6,946 8,362
Deferred income taxes 11,625 5,760
Changes in assets and liabilities,
net (20,545) (5,705)
------------ ------------
Net cash provided by operations 67,932 68,548
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (12,726) (13,283)
Other investing activities 682 (2,524)
------------ ------------
Net cash used by investing
activities (12,044) (15,807)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term
borrowings (49,827) (29,840)
Payments on short-term
borrowings (5,157) (6,550)
Other financing activities - 293
------------ ------------
Net cash used by financing
activities (54,984) (36,097)
CASH
Effect of exchange rates on cash (504) (1,444)
------------ ------------
Change in cash 400 15,200
Cash at beginning of period 21,015 16,043
------------ ------------
Cash at end of period $ 21,415 $ 31,243
============ ============
See accompanying notes to consolidated financial statements
UNIROYAL CHEMICAL CORPORATION
UNIROYAL CHEMICAL COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
Quarter Ended June 28, 1997
1. Presentation of Consolidated Financial Statements
Uniroyal Chemical Corporation ("UCC") is a wholly-owned
subsidiary of Crompton & Knowles Corporation. It is dependent on
cash flow from Uniroyal Chemical Company, Inc. ("Uniroyal
Chemical") and its subsidiaries. Accordingly, the consolidated
financial statements of Uniroyal Chemical set forth herein are
presented on a basis of accounting which reflects all of the
adjustments to account for the acquisition of Uniroyal Chemical
by UCC and all of the operations (primarily interest expense),
assets and liabilities of UCC. Herein, UCC and Uniroyal
Chemical, collectively, are referred to as the "Companies".
The information included in the foregoing consolidated
financial statements is unaudited but reflects all adjustments
(consisting only of normal, recurring adjustments) which are, in
the opinion of management, necessary for a fair statement of the
results for the interim periods presented. It is suggested that
the interim consolidated financial statements be read in
conjunction with the consolidated financial statements and notes
included in the Companies' fiscal 1996 Form 10-K.
Certain amounts in the accompanying consolidated financial
statements have been reclassified to conform to the current year
presentation.
Included in accounts receivable are allowances for doubtful
accounts of $5.1 million in 1997 and $3.7 million at December 28,
1996.
Accumulated depreciation amounted to $280.8 million at June
28, 1997 and $262.4 million at Dec. 28, 1996.
Accumulated amortization of costs in excess of acquired net
assets was $28.6 and $26.5 million and accumulated amortization
of other intangible assets was $114.0 and $106.7 million at June
28, 1997 and December 28, 1996, respectively.
Cash payments for the six months ended June 28, 1997 and June
30, 1996 include interest payments of $42.1 and $47.8 million and
income tax payments of $7.0 and $6.4 million, respectively.
2. Inventories
Components of inventories are as follows:
June 28, Dec. 28,
1997 1996
------------ ------------
(In thousands)
Finished goods $147,183 $148,552
Work in process 7,384 9,296
Raw materials and supplies 42,461 44,914
------------ ------------
$197,028 $202,762
============ ============
3. Environmental and Other Matters
The Companies are involved in claims, litigation,
administrative proceedings and investigations of various types in
a number of jurisdictions. A number of such matters involve
claims for a material amount of damages and relate to or allege
environmental liabilities, including clean-up costs associated
with hazardous waste disposal sites, natural resource damages,
property damage and personal injury. Uniroyal Chemical and some
of its subsidiaries have been identified by federal, state or
local governmental agencies, and by other potentially responsible
parties (each a "PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or
comparable state statutes, as a PRP with respect to costs
associated with waste disposal sites at various locations in the
United States. In addition, Uniroyal Chemical is involved with
environmental remediation and compliance activities at some of
its current and former sites in the United States and abroad.
Each quarter, Uniroyal Chemical evaluates and reviews
estimates for future remediation and other costs to determine
appropriate environmental reserve amounts. For each site, a
determination is made of the specific measures that are believed
to be required to remediate the site, the estimated total cost to
carry out the remediation plan, the portion of the total
remediation costs to be borne by Uniroyal Chemical and the
anticipated time frame over which payments toward the remediation
plan will occur. As of June 28, 1997, Uniroyal Chemical's
reserves for environmental remediation activities totaled $90.6
million. These estimates may subsequently change should
additional sites be identified, circumstances change with respect
to any site, the interpretation of current laws and regulations
be modified or additional environmental laws and regulations be
enacted.
Uniroyal Chemical intends to assert all meritorious legal
defenses and all other equitable factors which are available to
it with respect to the above matters. Uniroyal Chemical believes
that the resolution of these environmental matters will not have
a material adverse effect on the consolidated financial position
of Uniroyal Chemical. While Uniroyal Chemical believes it is
unlikely, the resolution of these environmental matters could
have a material adverse effect on its consolidated results of
operation in any given year if a significant number of these
matters are resolved unfavorably.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The response to this item has been limited to an analysis of
the results of operations for the six months ended June 28, 1997
as compared with the six months ended June 30, 1996 as
Registrants meet the conditions set forth in General Instruction
(H)(1)(a) and (b) of Form 10-Q.
Six Months Results
Overview
Consolidated net sales of $631.7 million for the first six
months of June 28, 1997 increased 6% from the comparable period
in 1996. The increase resulted primarily from improved unit
volume of 8% offset equally by lower pricing and foreign currency
translation. Net earnings before extraordinary losses on early
extinguishment of debt increased 49% to $39.4 million compared to
$26.4 million for the comparable 1996 period. Gross margin as a
percentage of net sales decreased slightly to 39.4% from 39.6%
for the first six months of 1996. Consolidated operating profit
increased 16% to $113.6 million as a result of higher unit volume
and lower operating costs.
Sales by Major Product Line
Chemicals and Polymers sales of $253.9 million rose 2% from
the first six months of 1996. Unit volume was higher by 6%, but
was offset in part by lower pricing of 3% and lower foreign
currency translation of 1%. Sales of rubber chemicals were lower
than 1996 primarily due to lower pricing. EPDM and nitrile
rubber sales increased primarily attributable to higher unit
volume offset in part by lower pricing.
Crop Protection sales of $219.7 million increased 9% from the
comparable 1996 period primarily attributable to higher unit
volume. Sales increases for miticides in the U.S. and strong
demand for insecticides and fungicides worldwide contributed to
the improvement.
Specialties sales of $157.6 million increased 9% from the six-month
period of 1996 primarily due to increased unit volume for
urethane prepolymers and additives for plastics and lubricants.
Other
Selling, general and administrative expenses of $84.0 million
decreased 1% versus the comparable period in 1996 due to planned
cost reductions offset by inflation and increased spending to
support a higher sales level. Depreciation and amortization of
$31.8 million decreased 7% versus the 1996 period as a result of
certain assets becoming fully depreciated or amortized. Research
and development costs of $19.7 million increased slightly from
$19.5 million in 1996. Interest expense of $49.3 million decreased 8%
from the comparable period in 1996 due to lower levels of
indebtedness. Other expense of $707 thousand increased from $172
thousand in 1996. The effective tax rate of 38.0% decreased from
40.2% in the comparable 1996 period.
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
(i) Uniroyal Chemical manufactures nitrile rubber at its
Painesville, Lake County, Ohio plant (the "Painesville Plant").
The Painesville Plant pretreats and discharges its process
wastewater to the Lake County sanitary sewer system for treatment
at Lake County's Greater Mentor Wastewater Treatment Plant
("GMWTP"). On June 15, 1993, Lake County submitted to the State
of Ohio Environmental Protection Agency ("Ohio EPA") a proposed
Local Limit aimed at regulating the amount of substances which
absorb at 230 nanometers that are discharged in wastewater to the
GMWTP. One of the principal ingredients in the Painesville
Plant's nitrile rubber manufacturing process, which is known as
Tamol, absorbs at 230 nanometers. Lake County claims that Tamol
interferes with the treatment process at the GMWTP and causes the
GMWTP to violate the 30-day average total suspended solids and
total phosphorus limits in its NPDES permit.
Ohio EPA approved the Local Limit on March 9, 1994.
The Painesville Plant appealed Ohio EPA's approval of the Local
Limit to the Ohio Environmental Board of Review (the "EBR").
Beginning in July 1996, Lake County began issuing Notices of
Violation and assessing $1,000 per day administrative fines for
the Painesville Plant's violation of the Local Limit. From July
1996 through April 30, 1997, Lake County has assessed against the
Painesville Plant a total of $266,000 in administration fines.
In addition, Lake County has ordered Uniroyal Chemical to
reimburse it for $106,295 in fines Lake County has paid the State
of Ohio for the GMWTP's violations of its NPDES permit. The
Painesville Plant appealed Lake County's Reimbursement Order and
its initial assessment of administrative fines to the Lake County
Court of Common Pleas.
In September 1996, the Painesville Plant submitted to
Lake County a proposed schedule for achieving compliance with the
Local Limit. Since December 1996, the Painesville Plant, Lake
County and Ohio EPA have been negotiating in an effort to settle
the above-described disputes. Since the parties commenced
settlement negotiations in December 1996, all legal proceedings
concerning the above-described matters have been stayed
voluntarily by agreement of the parties.
(ii) Reference is made to page 4 of the Registrants' 1996
Annual Report on Form 10-K for information pertaining to the
Vertac Chemical Corporation site in Jacksonville, Arkansas. On
May 21, 1997, the Court (a) ruled that the Registrants'
subsidiary, Uniroyal Chemical Ltd., is jointly and severally
liable with Hercules and Vertac for the contamination of the
Vertac plant site and the remediation costs associated with that
contamination; (b) sustained the jury's finding in favor of
Uniroyal Chemical Ltd. on its contribution claim against
Hercules; (c) reversed the jury's finding that Hercules was not
entitled to contribution from Uniroyal Chemical Ltd.; and (d)
reversed the jury's finding that the damages at the site which
were caused by Uniroyal Chemical Ltd. were divisible. As no
party to the decision has sought any interlocutory appeal, it is
anticipated that discovery within the allocation phase of the
proceedings will begin within the next three months. In an
action filed by several individuals seeking natural resource
damages, Uniroyal Chemical Ltd. filed a Motion to Dismiss and the
plaintiffs voluntarily withdrew the action, without prejudice.
In addition, the State of Arkansas has commenced an action for
natural resource damages which is currently pending in the State
court, but Uniroyal Chemical Ltd. has not been named a party in
that action.
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits
*4. $600,000,000 Second Amended and Restated Credit
Agreement dated as of July 25, 1997, by and among Crompton &
Knowles Corporation and certain of its subsidiaries (including
Uniroyal Chemical), as Borrowers, and various lenders, and
Citicorp USA, Inc., as Agent and The Chase Manhattan Bank as
Managing Agent.
*27. Financial data schedule
* A copy of this Exhibit is annexed to this report on Form 10-Q
as provided to the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNIROYAL CHEMICAL CORPORATION
UNIROYAL CHEMICAL COMPANY, INC.
(Registrants)
Date: August 27, 1997 By /s/ Charles J. Marsden
----------------- -----------------------------
Vice President and
Chief Financial Officer and
Director
(Principal Financial Officer)
EXECUTION COPY
US$600,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 25, 1997
Among
CROMPTON & KNOWLES CORPORATION,
CROMPTON & KNOWLES COLORS INCORPORATED,
DAVIS-STANDARD CORPORATION,
INGREDIENT TECHNOLOGY CORPORATION,
UNIROYAL CHEMICAL COMPANY, INC.,
THE B-2 BORROWERS NAMED HEREIN,
THE B-3 BORROWERS NAMED HEREIN
AND
UNIROYAL CHEMICAL LTD.
as Initial Borrowers
and
THE INITIAL LENDERS, INITIAL ISSUING BANKS AND
SWING LINE BANK NAMED HEREIN
as Initial Lenders, Initial Issuing Banks and Swing Line Bank
and
CITICORP USA, INC.
as Agent
and
THE CHASE MANHATTAN BANK
as Managing Agent
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . 44
1.03. Accounting Terms. . . . . . . . . . . . . . . . . 44
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances . . . . . . . . . . . . . . . . . . 44
2.02. Making the Advances . . . . . . . . . . . . . . . 50
2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit . . . . . . . . . . . . . . . . 54
2.04. Drawings of Bankers' Acceptances. . . . . . . . . 56
2.05. Repayment of Advances . . . . . . . . . . . . . . 60
2.06. Termination or Reduction of the Commitments . . . 62
2.07. Prepayments . . . . . . . . . . . . . . . . . . . 63
2.08. Interest . . . . . . . . . . . . . . . . . . . . 65
2.09. Fees . . . . . . . . . . . . . . . . . . . . . . 68
2.10. Conversion of Advances . . . . . . . . . . . . . 70
2.11. Renewal and Conversion of Bankers' Acceptances. . 71
2.12. Increased Costs, Etc. . . . . . . . . . . . . . . 73
2.13. Illegality . . . . . . . . . . . . . . . . . . . 76
2.14. Payments and Computations . . . . . . . . . . . . 77
2.15. Taxes . . . . . . . . . . . . . . . . . . . . . . 79
2.16. Sharing of Payments, Etc. . . . . . . . . . . . . 84
2.17. Use of Proceeds . . . . . . . . . . . . . . . . . 85
2.18. Defaulting Lenders. . . . . . . . . . . . . . . . 86
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Effectiveness of Amendment
and Restatement . . . . . . . . . . . . . . . . . 89
3.02. Conditions Precedent to Initial Extension of
Credit. . . . . . . . . . . . . . . . . . . . . . 91
3.03. Initial Extension of Credit to Each Designated
Subsidiary and Each Designated Italian Subsidiary 93
3.04. Conditions Precedent to Each Borrowing, Drawing
and Issuance. . . . . . . . . . . . . . . . . . . 95
3.05. Determinations Under Sections 3.01, 3.02
and 3.03. . . . . . . . . . . . . . . . . . . . . 96
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrowers . 97
4.02. Additional Representations and Warranties of the
Crompton A Borrowers and Uniroyal B-1 Borrower. . 103
ARTICLE V
COVENANTS OF THE BORROWERS
5.01. Affirmative Covenants . . . . . . . . . . . . . . 104
5.02. Negative Covenants . . . . . . . . . . . . . . . 110
5.03. Reporting Requirements. . . . . . . . . . . . . . 125
5.04. Financial Covenants . . . . . . . . . . . . . . . 129
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . 130
6.02. Actions in Respect of the Letters of Credit and
Bankers' Acceptances upon Default . . . . . . . . 135
6.03. Actions in Respect of Working Capital B-1
Commitments Reserved Pursuant to Section 2.01(j). 136
ARTICLE VII
THE AGENT
7.01. Authorization and Action. . . . . . . . . . . . . 136
7.02. Agent's Reliance, Etc.. . . . . . . . . . . . . . 136
7.03. Citicorp and Affiliates . . . . . . . . . . . . . 137
7.04. Lender Party Credit Decision . . . . . . . . . . 137
7.05. Indemnification . . . . . . . . . . . . . . . . . 138
7.06. Successor Agents . . . . . . . . . . . . . . . . 139
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.. . . . . . . . . . . . . . . . . 140
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . 142
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . 142
8.04. Costs and Expenses. . . . . . . . . . . . . . . . 142
8.05. Right of Set-off. . . . . . . . . . . . . . . . . 145
8.06. Binding Effect. . . . . . . . . . . . . . . . . . 145
8.07. Assignments and Participations . . . . . . . . . 145
8.08. Designated Subsidiaries and Designated Italian
Subsidiaries. . . . . . . . . . . . . . . . . . . 149
8.09. Execution in Counterparts . . . . . . . . . . . . 150
8.10. No Liability of the Issuing Banks . . . . . . . . 150
8.11. Release of Collateral . . . . . . . . . . . . . . 151
8.12. Confidentiality . . . . . . . . . . . . . . . . . 151
8.13. Jurisdiction, Etc. . . . . . . . . . . . . . . . 151
8.14. Judgment. . . . . . . . . . . . . . . . . . . . . 152
8.15. Power of Attorney . . . . . . . . . . . . . . . . 153
8.16. Governing Law . . . . . . . . . . . . . . . . . . 153
8.17. Limitation on B-2 Borrower Obligations, B-3
Borrower Obligations and Canadian Borrower
Obligations . . . . . . . . . . . . . . . . . . . 153
8.18. Waiver of Jury Trial. . . . . . . . . . . . . . . 154
SCHEDULES
Schedule I - Commitments and Applicable Lending
Offices
Schedule II - Subsidiary Guarantors
Schedule III - Minor Subsidiaries
Schedule IV - B-2 Borrowers
Schedule V - B-3 Borrowers
Schedule VI - Working Capital B-3 Lenders
Schedule VII - Borrowers' Accounts
Schedule 3.01(d) - Surviving Debt
Schedule 3.01(f) - Disclosed Litigation
Schedule 3.02(b)(viii) - Foreign Local Counsel
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions,
Notices and Filings
Schedule 4.01(o) - Environmental Disclosure
Schedule 4.01(t) - Existing Debt
Schedule 4.01(w) - Material Subsidiaries
Schedule 5.02(a) - Existing Liens
Schedule 5.02(f) - Investments
EXHIBITS
Exhibit A-1 - Form of Working Capital A Note
Exhibit A-2 - Form of Working Capital B-1 Note
Exhibit A-3 - Form of Working Capital B-2 Note
Exhibit A-4 - Form of Working Capital B-3 Note
Exhibit A-5 - Form of Canadian Borrower Note
Exhibit A-6 - Form of Generic Draft
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Drawing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Crompton Security Agreement
Pledgors' Consent
Exhibit D-2 - Form of Uniroyal Security Agreement
Pledgors' Consent
Exhibit D-3 - Form of Louisiana Undertaking
Pledgors' Consent
Exhibit E-1 - Form of Parent Guarantor's Consent
Exhibit E-2 - Form of Subsidiary Guarantors'Consent
Exhibit F-1 - Form of Opinion of Counsel for the
Loan Parties
Exhibit F-2 - Form of Opinion of General Counsel to
Crompton Corp. and its Subsidiaries
Exhibit F-3 - Form of Opinion of Counsel for the
Canadian Borrower
Exhibit G - Form of Designation Letter
Exhibit H - Form of Acceptance by Process Agent
Exhibit I - Form of Opinion of Counsel to a
Designated [Italian] Subsidiary
Exhibit J - Form of Italian Lender Joinder
Agreement
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as
of July 25, 1997 among CROMPTON & KNOWLES CORPORATION, a
Massachusetts corporation ("Crompton Corp."), CROMPTON & KNOWLES
COLORS INCORPORATED, a Delaware corporation ("Crompton Colors"),
DAVIS-STANDARD CORPORATION, a Delaware corporation ("Davis-Standard"),
INGREDIENT TECHNOLOGY CORPORATION, a Delaware
corporation ("ITC" and, together with Crompton Corp., Crompton
Colors and Davis-Standard, the "Crompton A Borrowers"), UNIROYAL
CHEMICAL COMPANY, INC., a New Jersey corporation ("Uniroyal" or
the "Uniroyal B-1 Borrower"), THE B-2 BORROWERS LISTED ON
SCHEDULE IV HERETO (together with each Designated Subsidiary of
Crompton Corp. that shall become a B-2 Borrower party to this
Agreement pursuant to Section 8.08, the "B-2 Borrowers"), THE B-3
BORROWERS LISTED ON SCHEDULE V HERETO (together with each
Designated Italian Subsidiary of Crompton Corp. that shall become
a B-3 Borrower party to this Agreement pursuant to Section
8.08, the "B-3 Borrowers"), UNIROYAL CHEMICAL LTD., a corporation
organized under the laws of Ontario, Canada (the "Canadian
Borrower"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the
Initial Lenders (the "Initial Lenders"), the Initial Issuing
Banks (the "Initial Issuing Banks") and the Swing Line Bank (as
hereinafter defined), CITICORP USA, INC. ("Citicorp"), as agent
(together with any successor appointed pursuant to Article
VII, the "Agent") for the Lender Parties (as hereinafter
defined), and THE CHASE MANHATTAN BANK, as Managing Agent.
PRELIMINARY STATEMENT. The Existing Lenders party to the
Existing Credit Agreement and the Initial Borrowers have agreed
to amend and restate the Existing Credit Agreement in order to
increase the Commitments of the Lender Parties, to allow such
Existing Lenders to assign a portion of their Commitments to the
Lender Parties hereunder, and to amend the covenant restricting
sales of assets. The Lender Parties have indicated their
willingness to agree to amend and restate the Existing Credit
Agreement and to lend such amounts on the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Advance" means a Working Capital
Advance, a Swing Line Advance or a Letter of Credit Advance.
"Affiliate" means, as to any
Person, any other Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person or
is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the
power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies
of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agent" has the meaning specified
in the recital of parties to this Agreement.
"Agent's Account" means (a) in the
case of Advances denominated in US Dollars (other than a Working
Capital B-3 Advance), the account of the Agent maintained by the
Agent with Citibank at its office at 399 Park Avenue, New York,
New York 10043, Account No. 3885-8061, Attention: Alexandra
Lozovsky, (b) in the case of Advances denominated in any Foreign
Currency (other than a Working Capital B-3 Advance or a Canadian
Borrower Advance), the account of the Agent designated in writing
from time to time by the Agent to Crompton Corp. and the Lender
Parties for such purpose, (c) in the case of any Working Capital
B-3 Advance, the account of the Agent in Milan, Italy designated
in writing from time to time by the Agent to Crompton Corp. and
the Lender Parties for such purpose and (d) in the case of any
Canadian Borrower Advance denominated in Canadian Dollars, the
account of the Agent in Toronto, Canada designated in writing
from time to time by the Agent to Crompton Corp., and the Lender
Parties for such purpose.
"Applicable Lending Office" means,
with respect to each Lender Party, such Lender Party's Domestic
Lending Office in the case of a Base Rate Advance, such Lender
Party's Eurocurrency Lending Office in the case of a Eurocurrency
Rate Advance, in the case of any Working Capital B-3 Advance,
such Lender Party's Eurocurrency Lending Office located in Italy,
in the case of any Canadian Borrower Advance, such Lender Party's
Canadian Domestic Lending Office and, in the case of a Drawing,
such Lender Party's BA Lending Office.
"Applicable Margin" means a
percentage per annum determined by reference to the Total
Debt/EBITDA Ratio as set forth below:
Total Debt/EBITDA Base Rate Advances/ Eurocurrency
Ratio Local Rate Advances Rate Advances
Level I
less than or equal
to 2.0:1.0 0.0% 0.375%
Level II
greater than 2.0:1.0,
but less than or
equal to 2.5:1.0 0.0% 0.500%
Level III
greater than 2.5:1.0,
but less than or
equal to 3.0:1.0 0.0% 0.625%
Level IV
greater than 3.0:1.0,
but less than or
equal to 3.5:1.0 0.0% 0.750%
Level V
greater than 3.5:1.0,
but less than or
equal to 4.0:1.0 0.0% 0.875%
Level VI
greater than 4.0:1.0 0.0% 1.000%
; provided, however, the Applicable Margin for each Working
Capital B-3 Advance shall equal the sum of (a) the applicable
percentage per annum determined by reference to the Total
Debt/EBITDA Ratio set forth above plus (b) 0.05%. The Applicable
Margin for each Advance shall be determined by reference to the
Total Debt/EBITDA Ratio in effect from time to time; provided,
however, that, at any date of determination of the Applicable
Margin, if the relevant Financial Statements shall not have been
delivered to the Agent and the Lender Parties by such date and
Crompton Corp. shall have delivered to the Agent a certificate
setting forth Crompton Corp.'s good faith estimate of the Total
Debt/EBITDA Ratio for the immediately preceding Rolling Period,
the Applicable Margin shall be determined by reference to such
good faith estimate of the Total Debt/EBITDA Ratio, provided
further that if, upon delivery by Crompton Corp. of such
Financial Statements, such Financial Statements indicate that
such estimate of the Total Debt/EBITDA Ratio was incorrect and,
as a result thereof, the Applicable Margin was too low at such
date of determination, such Applicable Margin shall be increased,
as appropriate, with retroactive effect to the beginning of the
Rolling Period during which such date of determination occurred,
and the applicable Borrower shall immediately pay to the Agent
for the account of the Lender Parties all additional interest due
by reason of such increased Applicable Margin.
"Applicable Percentage" means a
percentage per annum determined by reference to the Total
Debt/EBITDA Ratio as set forth below:
Trade Letter Standby Letter
Total Debt/ Commitment Of Of Credit Fees/
EBITDA Ratio Fees Credit Fees Drawing Fees
Level I
less than or equal
to 2.0:1.0 0.125% 0.125% 0.375%
Level II
greater than 2.0:1.0,
but less than or
equal to 2.5:1.0 0.150% 0.250% 0.500%
Level III
greater than 2.5:1.0,
but less than or
equal to 3.0:1.0 0.175% 0.375% 0.625%
Level IV
greater than 3.0:1.0,
but less than or
equal to 3.5:1.0 0.250% 0.500% 0.750%
Level V
greater than 3.5:1.0,
but less than or
equal to 4.0:1.0 0.250% 0.625% 0.875%
Level VI
greater than 4.0:1.0 0.375% 0.750% 1.000%
The Applicable Percentage shall be
determined by reference to the Total Debt/EBITDA Ratio in effect
from time to time; provided, however, that, at any date of
determination of the Applicable Percentage, if the relevant
Financial Statements shall not have been delivered to the Agent
and the Lender Parties by such date and Crompton Corp. shall have
delivered to the Agent a certificate setting forth Crompton
Corp.'s good faith estimate of the Total Debt/EBITDA Ratio for
the immediately preceding Rolling Period, the Applicable
Percentage shall be determined by reference to such good faith
estimate of the Total Debt/EBITDA Ratio, provided further that
if, upon delivery by Crompton Corp. of such Financial Statements,
such Financial Statements indicate that such estimate of the
Total Debt/EBITDA Ratio was incorrect and, as a result thereof,
the Applicable Percentage was too low at such date of
determination, such Applicable Percentage shall be increased, as
appropriate, with retroactive effect to the beginning of the
Rolling Period during which such date of determination occurred,
and the applicable Borrower shall immediately pay to the Agent
for the account of the Lender Parties all additional fees due by
reason of such increased Applicable Percentage.
"Appropriate Lender" means, at any
time, with respect to (a) any of the Working Capital Facilities,
a Lender that has a Commitment with respect to such Facility at
such time, (b) any of the Letter of Credit Facilities, (i) any
Issuing Bank that has a Commitment with respect to such Facility
at such time and (ii) if other Working Capital Lenders have made
Letter of Credit Advances pursuant to Section 2.03(c) that are
outstanding at such time, each such other Working Capital Lender
and (c) either of the Swing Line Facilities, (i) the Swing Line
Bank and (ii) if other Working Capital Lenders have made Swing
Line Advances pursuant to Section 2.02(b) that are outstanding at
such time, each such other Working Capital Lender.
"Assignment and Acceptance" means
an assignment and acceptance entered into by a Lender Party and
an Eligible Assignee, and accepted by the Agent, in accordance
with Section 8.07 and in substantially the form of Exhibit C
hereto.
"Available Amount" of any Letter of
Credit means, at any time, the maximum amount available to be
drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).
"Available Cash Flow" means, for
any Fiscal Year, an amount equal to the sum of (a) Operating Cash
Flow for the previous Fiscal Year, (b) the amount of Capital
Expenditures permitted to be made in the previous Fiscal Year
pursuant to Section 5.02(n) less the amount of Capital
Expenditures actually made during the previous Fiscal Year, (c)
the amount of dividends permitted to be paid by Crompton Corp. in
the previous Fiscal Year pursuant to Section 5.02(g) less the
amount of such dividends actually paid during the previous Fiscal
Year, (d) the aggregate amount of Net Cash Proceeds from the sale
or other disposition of assets pursuant to clause (iii) or (vi)
(to the extent not used permanently to prepay Debt or to make
Capital Expenditures) of Section 5.02(e) during the previous
Fiscal Year and (e) US$100,000,000.
"B-2 Borrowers" has the meaning
specified in the recital of parties to this Agreement.
"B-2 Facility Overage" means, as
determined on the first Business Day of each month, the lesser of
(a) US$10,000,000 minus the amount set forth in clause (b) of the
definition "B-3 Facility Overage" at such time and (b) the sum of
(i) the excess, if any, of the aggregate principal US Dollar
amount (or Equivalent in US Dollars, as applicable) of the
Working Capital B-2 Advances, the Letter of Credit Advances made
under the Letter of Credit B-2 Facility and the aggregate
Available Amount under all Letters of Credit outstanding under
the Letter of Credit B-2 Facility at such time over an amount
equal to 97% of the Working Capital B-2 Facility on such Business
Day and (ii) the aggregate principal US Dollar amount (or
Equivalent in US Dollars, as applicable) sufficient to cause the
aggregate amount on deposit in the relevant L/C Cash Collateral
Account to equal the amount by which the aggregate Available
Amount of all Letters of Credit then outstanding under the Letter
of Credit B-2 Facility exceeds the Letter of Credit B-2 Facility
on such Business Day.
"B-3 Borrowers" has the meaning
specified in the recital of parties to this Agreement.
"B-3 Facility Overage" means, as
determined on the first Business Day of each month, the lesser of
(a) US$10,000,000 minus the B-2 Facility Overage at such time and
(b) the excess, if any, of the aggregate principal US Dollar
amount (or Equivalent in US Dollars, as applicable) of the
Working Capital B-3 Advances at such time over an amount equal to
97% of the Working Capital B-3 Facility on such Business Day.
"BA Lending Office" means, with
respect to each Canadian Lender, the office of such Lender set
forth as its "BA Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it
became a Lender or such other office of such Lender in Canada as
such Lender may from time to time specify to the Canadian
Borrower and the Agent for such purpose.
"BA Rate" means, for all Bankers'
Acceptances comprising part of the same Drawing to be purchased
by a Canadian Lender, the average rate (calculated on an annual
basis of a year of 365 days and rounded up to the nearest
multiple of 1/4 of 1%, if such average is not such a multiple)
for Canadian Dollar Bankers' Acceptances having a comparable term
that appears on the Reuters Screen CDOR Page (or such other page
as is a replacement page for such bankers' acceptances) at 10:00
A.M. (Toronto time) or, if such rate is not available at such
time, the applicable discount rate in respect of such Bankers'
acceptances shall be the arithmetic average of the discount rates
(calculated on an annual basis of a year of 365 days) and rounded
up to the nearest multiple of 1/4 of 1%, if such average is not
such a multiple, quoted by each Canadian Reference Lender at 9:30
a.m. (Toronto time) on the date of such Drawing as the discount
rate at which such Canadian Reference Lender would purchase, on
such date, its own bankers' acceptances having an aggregate Face
Amount equal to and with a term to maturity the same as the
Bankers' Acceptances to be acquired by such Canadian Lender as
part of such Drawing. The BA Rate for each Bankers' Acceptance
comprising part of the same Drawing shall be determined by the
Agent on the basis of applicable rates furnished to and received
by the Agent from the Canadian Reference Lenders on the date of
the applicable Drawing, subject, however, to the provisions of
Section 2.08.
"Bank Hedge Agreement" means any
Hedge Agreement required or permitted under Article V that is
entered into by and between any Borrower and any Hedge Bank.
"Banker's Acceptance" has the
meaning specified in Section 2.01(f).
"Base Rate" means a fluctuating
interest rate per annum in effect from time to time, which rate
per annum shall at all times be equal to the highest of:
(a) the rate of interest
announced publicly by Citibank in New York, New York, from time
to time, as Citibank's base rate;
(b) the sum (adjusted to the
nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%) of (i)1/2 of 1% per annum, plus (ii) the
rate obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United
States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined
weekly on each Monday (or, if such day is not a Business Day, on
the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published
by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for
such rates received by Citibank from three New York certificate
of deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting
of or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment
rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) 1/2 of one percent per
annum above the Federal Funds Rate.
"Base Rate Advance" means an
Advance that bears interest as provided in Section 2.08(b)(i).
"Borrower's Account" means, with
respect to any Borrower in respect of US Dollars, Canadian
Dollars or any Foreign Currency, the account of such Borrower
maintained by Citibank set forth opposite such Borrower for US
Dollars, Canadian Dollars or the Foreign Currency, so designated,
as applicable, on Schedule VII and such other accounts maintained
on behalf of such Borrower as such Borrower with respect to any
additional Foreign Currencies may notify the Agent from time to
time.
"Borrower's Share" of any amount
means those fees, indemnities, expenses or other amounts arising
from or directly or indirectly relating to any B-2 Borrower, any
B-3 Borrower or the Canadian Borrower at any time.
"Borrowers" means, collectively,
each Initial Borrower, each Designated Subsidiary and each
Designated Italian Subsidiary that shall become a party to this
Agreement pursuant to Section 8.08.
"Borrowing" means a Working Capital
Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the
year on which banks are not required or authorized by law to
close in New York City and, if the applicable Business Day
relates to any Eurocurrency Rate Advances, on which dealings are
carried on in the London interbank market and in the country of
issue of the currency of such Eurocurrency Rate Advance.
"Canadian Base Rate" means a
fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the higher
of:
(a) the
average (rounded upward to the nearest whole multiple of 1/4 of
1% per annum, if such average is not such a multiple) of the
rates per annum which the principal office of each of the
Canadian Reference Lenders in Toronto, Ontario announces publicly
from time to time as its reference rate of interest for
commercial loans in US Dollars made by it to Canadian borrowers
in Canada; and
(b) 1/2
of 1% per annum above the Federal Funds Rate.
"Canadian Base Rate Advance" means
a Canadian Borrower Advance made in US Dollars that bears
interest as provided in Section 2.08(b)(iv).
"Canadian Borrower" has the meaning
specified in the recital of parties to this Agreement.
"Canadian Borrower Advance" has the
meaning specified in Section 2.01(e).
"Canadian Borrowing" means a
borrowing consisting of simultaneous Canadian Borrower Advances
of the same Type made by the Canadian Lenders.
"Canadian Borrower Note" means a
promissory note of the Canadian Borrower payable to the order of
any Canadian Lender, in substantially the form of Exhibit A-5
hereto, evidencing the aggregate indebtedness of the Canadian
Borrower to such Lender resulting from the Canadian Borrower
Advances made by or otherwise owing to such Lender.
"Canadian Business Day" means a day
of the year on which banks are not required or authorized by law
to close in Toronto, Ontario, Canada and New York, New York and,
if the applicable Business Day relates to any Eurocurrency Rate
Advances, on which dealings are carried on in the London
interbank market.
"Canadian Cash Collateral Account"
has the meaning specified in the Security Agreement.
"Canadian Commitment" means, with
respect to any Canadian Lender at any time, the US Dollar amount
set forth opposite such Lender's name on Schedule I hereto under
the caption "Canadian Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to
Section 8.07(d) as such Lender's "Canadian Commitment", as such
US Dollar amount may be reduced at or prior to such time pursuant
to Section 2.06.
"Canadian Dollar Advances" means
Canadian Borrower Advances denominated in Canadian Dollars.
"Canadian Dollars" and "CN$" each
means lawful money of Canada.
"Canadian Domestic Lending Office"
means, with respect to each Canadian Lender, the office of such
Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender or such other office of such
Lender as such Lender may from time to time specify to the
Canadian Borrower and the Agent.
"Canadian Eurocurrency Lending
Office" means, with respect to each Canadian Lender, the office
of such Lender specified as its "Eurocurrency Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender or such other
office of such Lender as such Lender may from time to time
specify to the Canadian Borrower and the Agent.
"Canadian Facility" means, at any
time, the aggregate amount of the Canadian Lenders' Canadian
Commitments at such time.
"Canadian Interbank Rate" means the
interest rate, expressed as a percentage per annum, which is
customarily used by the Agent when calculating interest due by it
or owing to it arising from or in connection with correction of
errors between it and other Canadian chartered banks.
"Canadian Lender" means any Lender
that (a) is a Canadian chartered bank lending and receiving
payment through Canadian offices and (b) has a Canadian
Commitment.
"Canadian Facility Overage" means,
as determined on the first Business Day of each month, the lesser
of (a) US$10,000,000 and (b) the sum of (i) the excess, if any,
of the aggregate principal US Dollar amount (or Equivalent in US
Dollars, as applicable) of the Canadian Borrower Advances and the
Face Amount of all Bankers' Acceptances outstanding under the
Canadian Facility at such time over an amount equal to 97% of the
Canadian Facility on such Business Day and (ii) the aggregate
principal US Dollar amount (or Equivalent in US Dollars, as
applicable) sufficient to cause the aggregate amount on deposit
in the relevant Canadian Cash Collateral Account to equal the
amount by which the aggregate Face Amount of all Bankers'
Acceptances then outstanding under the Canadian Facility exceeds
the Canadian Facility on such Business Day.
"Canadian Prime Rate" means a
fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the higher
of:
(a) the
average (rounded upward to the nearest whole multiple of 1/4 of
1% per annum, if such average is not such a multiple) of the
rates per annum which the principal office of each of the
Canadian Reference Lenders in Toronto, Ontario announces publicly
from time to time as its prime rate for determining rates of
interest on commercial loans in Canadian Dollars made by it in
Canada; and
(b) 3/4 of
1% per annum above the rate quoted for 30-day Canadian Dollar
bankers acceptances of Citibank Canada that appears on the
Reuters Screen CDOR Page (or any replacement page) as of 10:00
a.m. (Toronto, Ontario time) on the date of determination.
"Canadian Prime Rate Advance" means
a Canadian Borrower Advance made in Canadian Dollars that bears
interest as provided in Section 2.08(b)(iii).
"Canadian Reference Lenders" means
Citibank Canada, Canadian Imperial Bank of Commerce and The
Toronto-Dominion Bank; provided that, if any of the foregoing
shall cease to be a Canadian Lender, the term "Canadian Reference
Lenders" shall no longer include such Canadian Lender and shall
thereafter include such Canadian Lender as the Agent shall
designate as a replacement Canadian Reference Lender, which
designation shall be made with the consent of such replacement
Canadian Reference Lender and the Canadian Borrower, which
consent shall not be unreasonably withheld or delayed and
provided, further, that if any Canadian Lenders are banks set
forth in Schedule I of the Bank Act (Canada), at least one of the
Canadian Reference Lenders will be such a Schedule I bank.
"Capital Expenditures" means, for
any Person for any period and without duplication, the sum of (a)
all expenditures (including, without limitation, expenditures for
environmental remediation) made, directly or indirectly, by such
Person during such period for equipment, fixed or capital assets,
real property or improvements, or for replacements or substitu-tions
therefor or additions thereto, that have been or should be,
in accordance with GAAP, reflected as additions to property,
plant or equipment on a Consolidated balance sheet of such Person
plus (b) the aggregate principal amount of all Debt (including
Obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures but excluding
(x) expenditures made in connection with the replacement or
restoration of assets, to the extent such replacement or
restoration is financed out of insurance proceeds paid on account
of the loss of or damage to the assets so replaced or restored
and (y) interest capitalized during construction; provided,
however, that notwithstanding anything contained herein, Capital
Expenditures shall not include any Investments.
"Capitalized Leases" means all
leases that have been or should be, in accordance with GAAP,
recorded as capitalized leases.
"Cash Equivalents" means any of the
following, to the extent owned by any Borrower or any of its
Subsidiaries free and clear of all Liens and having a maturity of
not greater than 90 days from the date of acquisition thereof:
(a) readily marketable direct obligations of the Government of
the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial
bank that is a Lender Party or a member of the Federal Reserve
System, issues (or the parent of which issues) commercial paper
rated as described in clause (c), is organized under the laws of
the United States or any State thereof and has combined capital
and surplus of at least US$1 billion, (c) commercial paper in an
aggregate amount of no more than US$5,000,000 per issuer
outstanding at any time, issued by any corporation organized
under the laws of any State of the United States and rated at
least "Prime-1" (or the then equivalent grade) by Moody's or
"A-1" (or the then equivalent grade) by S&P or (d) in the case of
any Foreign Subsidiary, any equivalent, prudent, short-term
investment consistent with the foregoing.
"CERCLA" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended from time to time.
"CERCLIS" means the Comprehensive
Environmental Response, Compensation and Liability Information
System maintained by the U.S. Environmental Protection Agency.
"Citibank" means Citibank, N.A.
"Citibank Seoul" means Citibank,
N.A., Seoul Branch.
"Citicorp" has the meaning
specified in the recital of parties to this Agreement.
"Collateral" means all "Collateral"
referred to in the Collateral Documents and all other property
that is or is intended to be subject to any Lien in favor of the
Agent for the benefit of the Secured Parties.
"Collateral Documents" means the
Security Agreement, the Louisiana Undertaking, the Blocked
Account Letters (as defined in the Uniroyal Security Agreement)
and any other agreement that creates or purports to create a Lien
in favor of the Agent for the benefit of the Secured Parties.
"Collateral Release Date" means the
earliest of (a) the latest of (i) the Termination Date, (ii) the
payment in full of the Obligations of the Loan Parties under the
Loan Documents (other than any indemnities) and (iii) the
termination or expiration of all Bank Hedge Agreements, (b) the
date on which the Agent receives evidence satisfactory to it that
a Debt Rating of (i) BBB- or above from S&P and Ba1 or above from
Moody's or (ii) Baa3 or above from Moody's and BB+ or above from
S&P, in either case shall have been in effect continuously for
three months and is then in effect, provided that Crompton Corp.
shall not have been placed on "credit watch" with negative
implications (or any like designation by S&P or Moody's from time
to time) by either S&P or Moody's during such three-month period,
and (c) the date on which the Agent receives evidence
satisfactory to it that the Total Debt/EBITDA Ratio for the two
Rolling Periods then most recently ended shall be less than or
equal to 3.0:1.0 and the Interest Coverage Ratio for the two
Rolling Periods then most recently ended shall be greater than or
equal to 3.0:1.0, provided that in any event no Default shall
have occurred and shall be continuing on such date.
"Commitment" means a Working
Capital A Commitment, a Working Capital B-1 Commitment, a Working
Capital B-2 Commitment, a Working Capital B-3 Commitment, a
Canadian Commitment or a Letter of Credit Commitment.
"Confidential Information" means
information that any Borrower furnishes to the Agent or any
Lender Party in a writing designated as confidential but does not
include any such information that is or becomes generally
available to the public other than as a result of a breach by the
Agent or any Lender Party of its obligations hereunder or that is
or becomes available to the Agent or such Lender Party from a
source other than a Borrower that is not, to the best of the
Agent's or such Lender Party's knowledge, acting in violation of
a confidentiality agreement with any Borrower.
"Consents" means (a) the Consent to
this Second Amended and Restated Credit Agreement in
substantially the form of Exhibits D-1, D-2 and D-3 dated as of
the date hereof by the respective Pledgors under the Crompton
Security Agreement, the Uniroyal Security Agreement and the
Louisiana Undertaking, and (b) the Consent to this Second Amended
and Restated Credit Agreement in substantially the form of
Exhibit E-1 and E-2 dated as of the date hereof by the Parent
Guarantor (as defined in the Parent Guaranty) and each Subsidiary
Guarantor.
"Consolidated" refers to the
consolidation of accounts in accordance with GAAP.
"Conversion", "Convert" and
"Converted" each refer to a conversion of Advances of one Type
into Advances of the other Type pursuant to Section 2.10, 2.11 or
2.12.
"Crompton A Borrowers" has the
meaning specified in the recital of parties to this Agreement.
"Crompton Colors" has the meaning
specified in the recital of parties to this Agreement.
"Crompton Corp." has the meaning
specified in the recital of parties to this Agreement.
"Crompton Guarantors" means the
Subsidiaries of Crompton Corp. listed on Part I of Schedule II
hereto and each other Subsidiary of Crompton Corp. (other than,
in any event, Uniroyal Corp. and its Subsidiaries) that shall be
required to execute and deliver a guaranty pursuant to Section
5.01(k).
"Crompton Security Agreement" has
the meaning specified in Section 3.01(f)(i).
"Davis-Standard" has the meaning
specified in the recital of parties to this Agreement.
"Daylight Overdraft Bank" means
Citibank.
"Daylight Overdraft Documents"
means those documents and agreements entered into from time to
time by the Daylight Overdraft Bank and any Loan Party,
evidencing or relating to the Debt referred to in Section
5.02(b)(iii)(F).
"Debt" of any Person means, without
duplication, (a) all indebtedness of such Person for borrowed
money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables
not overdue by more than 60 days (unless the subject of a bona
fide dispute) incurred in the ordinary course of such Person's
business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under
Capitalized Leases, (f) all Obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or similar
facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect
of any capital stock of or other ownership or profit interest in
such Person or any other Person or any warrants, rights or
options to acquire such capital stock, valued, in the case of
redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, (i) all Debt of others referred to in clauses
(a) through (h) above or clause (j) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i)
to pay or purchase such Debt or to advance or supply funds for
the payment or purchase of such Debt, (ii) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt
against loss, (iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or
such services are rendered) or (iv) otherwise to assure a
creditor against loss, and (j) all Debt referred to in clauses
(a) through (i) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Debt Rating" means, as of any
date, the lowest rating that has been most recently announced by
either S&P or Moody's, as the case may be, for any class of non-credit
enhanced long-term senior unsecured debt issued by
Crompton Corp. or, if applicable, the rating assigned in writing
by either S&P or Moody's, as the case may be, as the "implied
rating" of Crompton Corp.'s non-credit enhanced long-term senior
unsecured Debt, provided that for purposes of the foregoing, if
S&P or Moody's shall change the basis on which ratings are
established, each reference to the Debt Rating announced by S&P
or Moody's, as the case may be, shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.
"Default" means any Event of
Default or any event that would constitute an Event of Default
but for the requirement that notice be given or time elapse or
both.
"Defaulted Advance" means, with
respect to any Lender Party at any time, the portion of any
Advance required to be made by such Lender Party to any Borrower
pursuant to Section 2.01 or 2.02 at or prior to such time which
has not been made by such Lender Party or the Agent for the
account of such Lender Party pursuant to Section 2.02(e) as of
such time. In the event that a portion of a Defaulted Advance
shall be deemed made pursuant to Section 2.18(a), the remaining
portion of such Defaulted Advance shall be considered a Defaulted
Advance originally required to be made pursuant to Section 2.01
on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with
respect to any Lender Party at any time, any amount required to
be paid by such Lender Party to the Agent or any other Lender
Party hereunder or under any other Loan Document at or prior to
such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender
Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to
purchase a portion of a Swing Line Advance made by the Swing Line
Bank, (b) any Issuing Bank pursuant to Section 2.03(c) to
purchase a portion of a Letter of Credit Advance made by such
Issuing Bank,(c) the Agent pursuant to Section 2.02(e) to
reimburse the Agent for the amount of any Advance made by the
Agent for the account of such Lender Party, (d) any other Lender
Party pursuant to Section 2.16 to purchase any participation in
Advances owing to such other Lender Party and (e) the Agent or
any Issuing Bank pursuant to Section 7.05 to reimburse the Agent
or such Issuing Bank for such Lender Party's ratable share of any
amount required to be paid by the Lender Parties to the Agent or
such Issuing Bank as provided therein. In the event that a
portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.18(b), the remaining portion of such Defaulted Amount
shall be considered a Defaulted Amount originally required to be
paid hereunder or under any other Loan Document on the same date
as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any
time, any Lender Party that, at such time, (a) owes a Defaulted
Advance or a Defaulted Amount or (b) shall take any action or be
the subject of any action or proceeding of a type described in
Section 6.01(f).
"Designated Italian Subsidiary"
means any wholly-owned Subsidiary of Crompton Corp. designated
for borrowing privileges as a B-3 Borrower under this Agreement
pursuant to Section 8.08.
"Designated Subsidiary" means any
wholly-owned Subsidiary of Crompton Corp. designated for
borrowing privileges as a B-2 Borrower under this Agreement
pursuant to Section 8.08.
"Designation Letter" means, with
respect to any Designated Subsidiary or Designated Italian
Subsidiary, a letter in the form of Exhibit G hereto signed by
such Designated Subsidiary or Designated Italian Subsidiary and
Crompton Corp.
"Disclosed Litigation" has the
meaning specified in Section 3.01(b).
"Domestic Lending Office" means,
with respect to any Lender Party, the office of such Lender Party
specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to
time specify to Crompton Corp. and the Agent.
"Domestic Subsidiary" of Crompton
Corp. means any Subsidiary of Crompton Corp. other than a Foreign
Subsidiary.
"Draft" means a blank bill of
exchange, within the meaning of the Bills of Exchange Act
(Canada), drawn by the Canadian Borrower on any Canadian Lender,
in substantially the form of Exhibit A-6, and which, except as
otherwise provided herein, has not been completed or accepted by
such Lender.
"Drawing" means the simultaneous
acceptance of Drafts and purchase of Bankers' Acceptances by the
Canadian Lenders, in accordance with Section 2.04(a).
"Drawing Fee" means, with respect
to each Bankers' Acceptance, an amount equal to (a) the
Applicable Percentage in effect on the date of the Drawing or
renewal, as the case may be, of such Bankers' Acceptance
multiplied by (b) the Face Amount of such Bankers' Acceptance,
calculated on the basis of the term to maturity of such Bankers'
Acceptance and a year of 365 days.
"Drawing Purchase Price" means,
with respect to each Bankers' Acceptance to be purchased and/or
accepted by any Canadian Lender at any time, the amount (adjusted
to the nearest whole cent or, if there is no nearest whole cent,
the next higher whole cent) obtained by dividing (i) the
aggregate Face Amount of such Bankers' Acceptance, by (ii) the
sum of (A) one and (B) the product of (1) the BA Rate in effect
at such time (expressed as a decimal fraction) multiplied by (2)
a fraction the numerator of which is the number of days in the
term to maturity of such Bankers' Acceptance and the denominator
of which is 365 days.
"EBITDA" means, for any period, net
income (or net loss) calculated before the cumulative effect of
accounting changes plus the sum of (a) interest expense, (b)
income tax expense, (c) extraordinary losses included in net
income, (d) depreciation expense, (e) amortization expense, (f)
all foreign currency losses less foreign currency gains (but only
to the extent such foreign currency gains do not exceed such
foreign currency losses), (g) non-recurring expenses incurred in
connection with the Merger in an amount not to exceed
US$70,000,000 in the aggregate and (h) non-recurring,
restructuring charges in an amount not to exceed US$30,000,000 in
any Fiscal Year or US$50,000,000 in the aggregate after the
Existing Credit Agreement Effective Date less extraordinary gains
included in net income, determined on a Consolidated basis in
accordance with GAAP for such period.
"Eligible Assignee" means (a) with
respect to any Facility (other than the Letter of Credit
Facilities), (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by the Agent and Crompton Corp.,
such approval not to be unreasonably withheld or delayed;
provided, however, any such Eligible Assignee under the Working
Capital B-3 Facility shall have entered into an Italian Lender
Joinder Agreement; and (b) with respect to the Letter of Credit
Facilities, any Person approved by the Agent and Crompton Corp.,
such approval not to be unreasonably withheld or delayed;
provided, however, that neither any Loan Party nor any Affiliate
of a Loan Party shall qualify as an Eligible Assignee under this
definition.
"Environmental Action" means any
action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any
federal, state, local or foreign statute, law, ordinance, rule,
regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage,
isposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any
permit, approval, identification number, license or other
authorization required under any Environmental Law.
"Equivalent" in (a) US Dollars of
any Foreign Currency on any date means the equivalent in US
Dollars of such Foreign Currency determined by using the quoted
spot rate for an equivalent amount at which Citibank's principal
office in London offers to exchange US Dollars for such Foreign
Currency in London prior to 11:00 A.M. (London time) on such date
as is required pursuant to the terms of this Agreement, (b) in
any Foreign Currency of US Dollars means the equivalent in such
Foreign Currency of US Dollars determined by using the quoted
spot rate for an equivalent amount at which Citibank's principal
office in London offers to exchange such Foreign Currency for US
Dollars in London prior to 11:00 A.M. (London time) on such date
as is required pursuant to the terms of this Agreement, (c) in US
Dollars of Canadian Dollars, on any date of determination, the
equivalent thereof determined by using the quoted spot rate at
which Citibank's principal office in Toronto, Ontario offers to
exchange US Dollars for Canadian Dollars in Toronto, Ontario at
11:00 a.m. (New York City time) on such date and (d) in Canadian
Dollars of US Dollars on any date of determination, the
equivalent thereof determined by using the quoted spot rate at
which Citibank's principal office in New York City, New York
offers to exchange Canadian Dollars for US Dollars in New York
City, New York at 11:00 a.m. (New York City time) on such date.
"ERISA" means the Employee
Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person
that for purposes of Title IV of ERISA is a member of the
controlled group of any Loan Party, or under common control with
any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a) (i)
the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless
the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of
such Section) are met with respect to a contributing sponsor, as
defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days; (b) the application for a
minimum funding waiver with respect to a Plan; (c) the provision
by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate
in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by any Loan Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f)
of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or (h)
the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event
or condition described in Section 4042 of ERISA that constitutes
grounds for the termination of, or the appointment of a trustee
to administer, such Plan.
"Eurocurrency Liabilities" has the
meaning specified in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Eurocurrency Lending Office"
means, with respect to any Lender Party, the office of such
Lender Party specified as its "Eurocurrency Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party (or, if no
such office is specified, its Domestic Lending Office), or such
other office of such Lender Party as such Lender Party may from
time to time specify to Crompton Corp. and the Agent.
"Eurocurrency Rate" means, for any
Interest Period for all Eurocurrency Rate Advances comprising
part of the same Borrowing, an interest rate per annum equal to
the rate per annum obtained by dividing (a) the rate per annum at
which deposits in US Dollars, Canadian Dollars or the applicable
Foreign Currency, as the case may be, are offered by the
principal office of Citibank in Milan, Italy, with respect to any
such Eurocurrency Rate Advance which is an Working Capital B-3
Advance, and London, England, with respect to all other
Eurocurrency Rate Advances, to prime banks in the primary
interbank eurocurrency market in which such eurocurrency deposits
are traded at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount substantially
equal to Citibank's Eurocurrency Rate Advance comprising part of
such Borrowing to be outstanding during such Interest Period (or,
if Citibank shall not have such a Eurocurrency Rate Advance,
US$1,000,000) and for a period equal to such Interest Period by
(b) a percentage equal to 100% minus the Eurocurrency Rate
Reserve Percentage (if applicable) for such Interest Period.
"Eurocurrency Rate Advance" means
an Advance that bears interest as provided in Section
2.08(b)(ii).
"Eurocurrency Rate Reserve
Percentage" for any Interest Period for all Eurocurrency Rate
Advances comprising part of the same Borrowing means the reserve
percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest rate on
Eurocurrency Rate Advances is determined) having a term equal to
such Interest Period.
"Events of Default" has the meaning
specified in Section 6.01.
"Existing Credit Agreement
Effective Date" means August 21, 1996.
"Existing Credit Agreement" means
the credit agreement dated as of August 21, 1996 among the
Crompton A Borrowers, Uniroyal, the Existing Lenders, Citicorp
Securities, Inc., as arranger, the Agent and the Managing Agent,
as amended and restated as of December 19, 1996 and as further
amended, supplemented or otherwise modified through the date
hereof.
"Existing Debt" means Debt of the
Borrowers and their respective Subsidiaries outstanding
immediately before giving effect to the Merger.
"Existing Italian Credit Agreement"
means the Credit Agreement dated as of March 16, 1995 among
Citibank, N.A., as arranger and agent, the lenders named therein
and Uniroyal Chimica S.p.A., as borrower.
"Existing Lenders" means the
lenders party to the Existing Credit Agreement.
"Existing Working Capital B-2
Lenders" means the "Working Capital B-2 Lenders" as defined in
the Existing Credit Agreement.
"Face Amount" means, with respect
to any Bankers' Acceptance, the amount payable to the holder of
such Bankers' Acceptance on its then existing Maturity Date.
"Facility" means any of any Working
Capital Facility, either Swing Line Facility or any Letter of
Credit Facility.
"Federal Funds Rate" means, for any
period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published
for such day (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 that is a
Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Statements" means, at
any time, the most recent financial statements furnished or
required to be furnished by Crompton Corp. to the Agent and the
Lender Parties pursuant to Section 5.03(b) or (c), as the case
may be.
"Fiscal Year" means a fiscal year
of Crompton Corp. and its Consolidated Subsidiaries ending on or
about December 31 in any calendar year.
"Foreign Currencies" means lawful
currency of the United Kingdom of Great Britain and Northern
Ireland, lawful currency of the Republic of France, the lawful
currency of the Federal Republic of Germany, the lawful currency
of Italy, the lawful currency of Japan, the lawful currency of
the Kingdom of Belgium, the lawful currency of the Swiss
Confederation, the lawful currency of the Netherlands and such
other freely transferable currencies as agreed upon by the
Required Lenders from time to time.
"Foreign Exchange Agreements" means
currency swap agreements, currency future or option contracts and
other similar agreements other than contracts or agreements under
which neither any Loan Party nor any of its Subsidiaries has any
obligation that may require payment in the future.
"Foreign Subsidiary" of Crompton
Corp. means (a) solely for purposes of Section 5.02(a), (b), (d),
(e) and (f), Uniroyal Chemical International Company, Gustafson
International Company and Uniroyal Chemical Company Limited and
(b) in all instances, any Subsidiary of Crompton Corp. (i) which
is not incorporated in the United States and (ii)(A)
substantially all of whose assets and properties are located, or
substantially all of whose business is carried on, outside of the
United States or (B) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clauses
(i) and (ii)(A) of this definition.
"GAAP" has the meaning specified in
Section 1.03.
"Guaranties" means the Parent
Guaranty, the Subsidiary Guaranty and any other guaranty
delivered pursuant to Section 5.01(k).
"Guarantors" means Crompton Corp.
and the Subsidiary Guarantors.
"Hazardous Materials" means (a)
petroleum or petroleum products, by-products or breakdown
products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other
chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant
under any Environmental Law.
"Hedge Agreements" means,
collectively, Interest Rate Swap Agreements, Foreign Exchange
Agreements and agreements designed to manage the total cost of
publicly traded Debt obligations of the Borrowers.
"Hedge Bank" means any Lender Party
or any of its Affiliates in its capacity as a party to a Bank
Hedge Agreement.
"Indemnified Party" has the meaning
specified in Section 8.04(b).
"Initial Borrowers" means the
Crompton A Borrowers, Uniroyal, those B-2 Borrowers listed on
Schedule IV hereto, those B-3 Borrowers listed on Schedule V
hereto and the Canadian Borrower.
"Initial Extension of Credit" means
the earlier to occur of the initial Borrowing or initial Drawing
by the Canadian Borrower hereunder.
"Initial Issuing Banks" has the
meaning specified in the recital of parties to this Agreement.
"Initial Lenders" has the meaning
specified in the recital of parties to this Agreement.
"Insufficiency" means, with respect
to any Plan, the amount, if any, of its unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, at
any date of determination, the ratio of Consolidated EBITDA to
interest payable on, and amortization of debt discount in respect
of, all Debt (including, without limitation, the interest
component of Capitalized Leases), in each case of Crompton Corp.
and its Subsidiaries for the immediately preceding Rolling
Period.
"Interest Period" means, for each
Eurocurrency Rate Advance comprising part of the same Borrowing,
the period commencing on the date of such Eurocurrency Rate
Advance or the date of the Conversion of any Base Rate Advance
into such Eurocurrency Rate Advance, and ending on the last day
of the period selected by the Borrower requesting such Borrowing
or Conversion pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day
of the period selected by such Borrower pursuant to the
provisions below. The duration of each such Interest Period
shall be one, two, three or six months, as such Borrower may,
upon notice received by the Agent not later than (i) 11:00 A.M.
(New York City time) in the case of Eurocurrency Rate Advances
under the Working Capital A Facility, the Working Capital B-1
Facility or the Canadian Facility and (ii) 11:00 A. M. (London
time) in the case of Eurocurrency Rate Advances under the Working
Capital B-2 Facility or the Working Capital B-3 Facility, in each
case on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that:
(a) such Borrower may not
select any Interest Period with respect to any Eurocurrency Rate
Advance under a Facility that ends after any principal repayment
installment date for such Facility unless, after giving effect to
such selection, the aggregate principal amount of Base Rate
Advances, Canadian Base Rate Advances and Canadian Prime Rate
Advances, as the case may be, and of Eurocurrency Rate Advances
having Interest Periods that end on or prior to such principal
repayment installment date for such Facility shall be at least
equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods
commencing on the same date for Eurocurrency Rate Advances
comprising part of the same Borrowing shall be of the same
duration;
(c) whenever the last day of
any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next
preceding Business Day; and
(d) whenever the first day of
any Interest Period occurs on a day of an initial calendar month
for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest
Period, such Interest Period shall end on the last Business Day
of such succeeding calendar month.
"Interest Rate Swap Agreements"
means interest rate swap, cap or collar agreements, interest rate
future or option contracts and other similar agreements other
than contracts or agreements under which neither any Loan Party
nor any of its Subsidiaries has any obligation that may require
payment in the future.
"Internal Revenue Code" means the
Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued thereunder.
"Inventory" has the meaning
specified in Section 1 of the Uniroyal Security Agreement.
"Investment" in any Person means
any loan or advance to such Person, any purchase or other
acquisition of all or substantially all of the assets of any
business of such Person or any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any arrangement pursuant to which the investor incurs
Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person.
"Issuing Banks" means (a) with
respect to the Letter of Credit A Facility, each Initial Issuing
Bank that has a Letter of Credit A Commitment set forth opposite
its name on Schedule I hereto and any other Working Capital A
Lender approved as an Issuing Bank by the Agent and, so long as
no Default shall have occurred and be continuing, by Crompton
Corp. (such approval not to be unreasonably withheld or delayed)
and each Eligible Assignee to which a Letter of Credit A
Commitment hereunder has been assigned pursuant to Section 8.07,
(b) with respect to the Letter of Credit B-1 Facility, each
Initial Issuing Bank that has a Letter of Credit B-1 Commitment
set forth opposite its name on Schedule I hereto and any other
Working Capital B-1 Lender approved as an Issuing Bank by the
Agent and, so long as no Default shall have occurred and be
continuing, by Crompton Corp. (such approval not to be
unreasonably withheld or delayed) and each Eligible Assignee to
which a Letter of Credit B-1 Commitment hereunder has been
assigned pursuant to Section 8.07 and (c) with respect to the
Letter of Credit B-2 Facility, Citibank, N.A., London and each
Eligible Assignee to which a Letter of Credit B-2 Commitment
hereunder has been assigned pursuant to Section 8.07 so long as,
in each case, each such Lender or Eligible Assignee expressly
agrees to perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to
be performed by it as an Issuing Bank and notifies the Agent of
its Applicable Lending Office and the amount of its Letter of
Credit Commitment (which information shall be recorded by the
Agent in the Register).
"Italian Lender Joinder Agreement"
means a joinder agreement entered into by a Working Capital B-3
Lender and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 8.07 and in substantially the form of
Exhibit J hereto.
"ITC" has the meaning specified in
the recital of parties to this Agreement.
"L/C Cash Collateral Account" has
the meaning specified in the Security Agreement.
"L/C Related Documents" has the
meaning specified in Section 2.05(h)(ii).
"Lender Party" means any Lender,
any Issuing Bank or the Swing Line Bank.
"Lenders" means the Initial Lenders
and each Person that shall become a Lender hereunder pursuant to
Section 8.07.
"Letter of Credit" has the meaning
specified in Section 2.01.
"Letter of Credit A Commitment"
means, with respect to any Issuing Bank at any time, the amount
set forth opposite such Issuing Bank's name on Schedule I hereto
under the caption "Letter of Credit A Commitment" or, if such
Issuing Bank has entered into one or more Assignments and
Acceptances, set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(d) as such
Issuing Bank's "Letter of Credit A Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.06.
"Letter of Credit A Facility"
means, at any time, an amount equal to the lesser of (a) the
aggregate amount of the Issuing Banks' Letter of Credit A
Commitments at such time and (b) US$50,000,000, as such amount
may be reduced at or prior to such time pursuant to Section 2.06.
"Letter of Credit Advance" means an
advance made by any Issuing Bank or any Appropriate Lender
pursuant to Section 2.03(c).
"Letter of Credit Agreement" has
the meaning specified in Section 2.03(a).
"Letter of Credit B-1 Commitment"
means, with respect to any Issuing Bank at any time, the amount
set forth opposite such Issuing Bank's name on Schedule I hereto
under the caption "Letter of Credit B-1 Commitment" or, if such
Issuing Bank has entered into one or more Assignments and
Acceptances, set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(d) as such
Issuing Bank's "Letter of Credit B-1 Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.06.
"Letter of Credit B-2 Commitment"
means, with respect to any Issuing Bank at any time, such amount,
if any, as may be agreed upon from time to time between an
Issuing Bank and a B-2 Borrower or, if such Issuing Bank has
entered into one or more Assignments and Acceptances with respect
to any such amount, the amount set forth for such Issuing Bank in
the Register maintained by the Agent pursuant to Section 8.07(d)
as such Issuing Bank's "Letter of Credit B-2 Commitment", as such
amount may be reduced at or prior to such time pursuant to
Section 2.06.
"Letter of Credit B-1 Facility"
means, at any time, an amount equal to the lesser of (a) the
aggregate amount of the Issuing Banks' Letter of Credit B-1
Commitments at such time and (b) US$20,000,000, as such amount
may be reduced at or prior to such time pursuant to Section 2.06.
"Letter of Credit B-2 Facility"
means, at any time, an amount equal to the lesser of (a) the
aggregate amount of the Issuing Banks' Letter of Credit B-2
Commitments at such time and (b) US$30,000,000, as such amount
may be reduced at or prior to such time pursuant to Section 2.06.
"Letter of Credit Commitment" means
a Letter of Credit A Commitment, a Letter of Credit B-1
Commitment or a Letter of Credit B-2 Commitment.
"Letter of Credit Facility" means
the Letter of Credit A Facility, the Letter of Credit B-1
Facility or the Letter of Credit B-2 Facility.
"Lien" means any lien, security
interest or other charge or encumbrance of any kind, or any other
type of preferential arrangement, including, without limitation,
the lien or retained security title of a conditional vendor and
any easement, right of way or other encumbrance on title to real
property.
"Loan Documents" means (a) for
purposes of this Agreement and the Notes and any amendment,
supplement or modification hereof or thereof and for all other
purposes other than for purposes of the Guaranties and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii)
the Guaranties, (iv) the Collateral Documents, (v) each Letter of
Credit Agreement and (vi) the Consents and (b) for purposes of
the Guaranties and the Collateral Documents, (i) this Agreement,
(ii) the Notes, (iii) the Guaranties, (iv) the Collateral
Documents, (v) each Letter of Credit Agreement, (vi) each Bank
Hedge Agreement, (vii) the Daylight Overdraft Documents and
(viii) the Consents, in each case as amended, supplemented or
otherwise modified from time to time.
"Loan Parties" means the Borrowers
and the Guarantors.
"Local Rate" means (a) with respect
to any Working Capital B-2 Advance denominated in any Foreign
Currency, the rate of interest from time to time publicly
announced by Citibank in the jurisdiction of issuance of such
Foreign Currency as its base rate (or its equivalent thereof) for
loans denominated in such Foreign Currency at the principal
lending office of Citibank in the jurisdiction of issuance of
such Foreign Currency, (b) with respect to any Working Capital B-3 Advance,
the rate of interest from time to time publicly
announced by the principal office of Citibank in Milan, Italy as
the base rate (or its equivalent thereof) for loans denominated
in such Foreign Currency at the principal lending office of
Citibank in the jurisdiction of issuance of such Foreign Currency
and (c) with respect to any Canadian Borrower Advance denominated
in Canadian Dollars, the Canadian Prime Rate.
"Local Rate Advance" shall mean
each Working Capital B-2 Advance, Working Capital B-3 Advance or
Canadian Borrower Advance hereunder at such time as it is made
and/or being maintained at a rate of interest based upon the
Local Rate for the relevant Foreign Currency or Canadian Dollars,
as the case may be.
"Louisiana Undertaking" has the
meaning specified in Section 3.01(f)(v).
"Margin Stock" has the meaning
specified in Regulation U. "Material Adverse Change" means any
material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of
(a) Crompton Corp. and its Subsidiaries, taken as a whole, (b)
Crompton Corp. and its Subsidiaries (other than Uniroyal Corp.
and its Subsidiaries), taken as a whole, or (c) Uniroyal and its
Subsidiaries, taken as a whole.
"Material Adverse Effect" means a
material adverse effect on (a) the business, condition (financial
or otherwise), operations, performance, properties or prospects
of (i) Crompton Corp. and its Subsidiaries, taken as a whole,
(ii) Crompton Corp. and its Subsidiaries (other than Uniroyal
Corp. and its Subsidiaries), taken as a whole, or (iii) Uniroyal
and its Subsidiaries, taken as a whole, (b) the rights and
remedies of the Agent or any Lender Party under any Loan Document
or Related Document or (c) the ability of any Loan Party to
perform its Obligations under any Loan Document or Related
Document to which it is or is to be a party.
"Material Subsidiary" means, at any
time, a Subsidiary of Crompton Corp. having at least
US$10,000,000 in assets on a Consolidated basis (determined as of
the last day of the most recent fiscal quarter of Crompton Corp.)
or at least US$20,000,000 in revenues, on a Consolidated basis,
for the 12-month period ending on the last day of the most recent
fiscal quarter of Crompton Corp.; provided, however, that any
Subsidiary formed or acquired after the last day of the most
recent fiscal quarter of Crompton Corp. that would have been a
Material Subsidiary if it had been formed or acquired on or prior
to the last day of such fiscal quarter shall be a Material
Subsidiary for purposes hereof from and after the date of its
formation or acquisition.
"Maturity Date" means, for each
Bankers' Acceptance comprising part of the same Drawing, the date
on which the Face Amount for such Bankers' Acceptance becomes due
and payable in accordance with the provisions set forth below,
which shall be a Business Day occurring one, two or three months
or, if available to all Canadian Lenders purchasing Bankers'
Acceptances in connection with the applicable Drawing, six months
after the date on which such Bankers' Acceptance is purchased
and/or accepted as part of any Drawing, as the Canadian Borrower
may select upon notice received by the Agent not later than 10:00
a.m. (New York City time) on a Canadian Business Day at least
three Canadian Business Days prior to the date on which such
Bankers' Acceptance is to be accepted and purchased (whether as a
new Drawing, by renewal or by Conversion); provided, however,
that:
(a) such
Borrower may not select any Maturity Date for any Bankers'
Acceptance that occurs after the then scheduled Termination Date;
(b)
the Maturity Date for all Bankers' Acceptances comprising part of
the same Drawing shall occur on the same date; and
(c)
whenever the Maturity Date for any Bankers' Acceptance would
otherwise occur on a day other than a Canadian Business Day, such
Maturity Date shall be extended to occur on the next succeeding
Canadian Business Day.
"Merger" means the merger
consummated on August 21, 1996 between Crompton Corp. and
Uniroyal Corp. through Tiger Merger Corp., a Delaware corporation
and a wholly owned Subsidiary of Crompton Corp., pursuant to the
Merger Agreement in which Uniroyal Corp. was the surviving
corporation.
"Merger Agreement" means the
Agreement and Plan of Merger dated as of April 30, 1996 (as
amended, supplemented or otherwise modified in accordance with
its terms, to the extent permitted in accordance with the Loan
Documents) among Crompton Corp., Tiger Merger Corp., a Delaware
corporation and wholly owned Subsidiary of Crompton Corp., and
Uniroyal Corp.
"Minor Subsidiaries" means those
Subsidiaries of Crompton Corp. listed on Schedule III hereto.
"Moody's" means Moody's Investors
Service, Inc.
"Multiemployer Plan" means a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which any Loan Party or any ERISA Affiliate is making or accruing
an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a
single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of any Loan Party or any
ERISA Affiliate and at least one Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such
plan has been or were to be terminated.
"Naugatuck" means Naugatuck
Treatment Company, a Connecticut corporation.
"Net Cash Proceeds" means, with
respect to any sale, lease, transfer or other disposition of any
asset or the sale or issuance of any Debt or capital stock or
other ownership or profit interest, any securities convertible
into or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights, options or other
securities to acquire capital stock or other ownership or profit
interest by any Person, the aggregate amount of cash received
from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf
of such Person in connection with such transaction after
deducting therefrom only (without duplication) (a) reasonable and
customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions
and (b) the amount of taxes payable in connection with or as a
result of such transaction, in each case to the extent, but only
to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of
any Loan Party and are properly attributable to such transaction
or to the asset that is the subject thereof; provided, however,
that in the case of taxes that are deductible under clause (b)
but for the fact that at the time of receipt of such cash, such
taxes have not been actually paid or are not then payable, such
Person may deduct an amount equal to the amount reserved in
accordance with GAAP for such Person's reasonable estimate of
such taxes, other than taxes for which such Person is
indemnified; provided further, however, that if the amount
deducted pursuant to clause (b) above is greater than the amount
actually so paid, the amount of such excess shall constitute Net
Cash Proceeds.
"Note" means a Working Capital A
Note, a Working Capital B-1 Note, a Working Capital B-2 Note, a
Working Capital B-3 Note or a Canadian Borrower Note.
"Notice of Borrowing" has the
meaning specified in Section 2.02(a).
"Notice of Issuance" has the
meaning specified in Section 2.03(a).
"Notice of Swing Line Borrowing"
has the meaning specified in Section 2.02(b).
"NPL" means the National Priorities
List under CERCLA.
"Obligation" means, with respect to
any Person, any payment, performance or other obligation of such
Person of any kind, including, without limitation, any liability
of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations
of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Loan
Party under any Loan Document and (b) the obligation of such Loan
Party to reimburse any amount in respect of any of the foregoing
that any Lender Party, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party.
"OECD" means the Organization for
Economic Cooperation and Development.
"Operating Cash Flow" means, for
any Fiscal Year, an amount equal to "cash flow from operations"
for such Fiscal Year as set forth on the statement of cash flows
furnished for such Fiscal Year pursuant to Section 5.03(c) less
scheduled principal amounts of Debt paid or to be paid (other
than in connection with the refinancing or replacement of any
Surviving Debt) by Crompton Corp. and its Subsidiaries during
such Fiscal Year.
"Other Taxes" has the meaning
specified in Section 2.15(b).
"Parent Guaranty" has the meaning
specified in Section 3.01(f)(iii).
"Payment Office" means with respect
to any Working Capital B-2 Advance, Working Capital B-3 Advance
or Canadian Borrower Advance, the office of Citibank set forth
opposite the caption "Working Capital B-2 Advances", "Working
Capital B-3 Advances" and "Canadian Borrower Advances",
respectively, on Schedule VII, or such other office as shall be
from time to time selected by the Agent, subject, so long as no
Default shall have occurred and be continuing, to the consent of
Crompton Corp., such consent not to be unreasonably withheld or
delayed, provided that each Payment Office designated for
Canadian Borrower Advances shall be located in Canada.
"PBGC" means the Pension Benefit
Guaranty Corporation or any successor agency or entity performing
substantially the same functions.
"Permitted Liens" has the meaning
specified in Section 5.02(a)(ii).
"Person" means an individual,
partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan
or a Multiple Employer Plan.
"Pledged Debt" has the meaning
specified in the Security Agreement.
"Pro Rata Share" of any amount
means (a) with respect to any Working Capital A Lender at any
time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Working Capital A
Commitment at such time and the denominator of which is the
Working Capital A Facility at such time, (b) with respect to any
Working Capital B-1 Lender at any time, the product of such
amount times a fraction the numerator of which is the amount of
such Lender's Working Capital B-1 Commitment at such time and the
denominator of which is the Working Capital B-1 Facility, (c)
with respect to any Working Capital B-2 Lender at any time, the
product of such amount times a fraction the numerator of which is
the amount of such Lender's Working Capital B-2 Commitment at
such time and the denominator of which is the Working Capital B-2
Facility, (d) with respect to any Working Capital B-3 Lender at
any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Working Capital
B-3 Commitment at such time and the denominator of which is the
Working Capital B-3 Facility and (e) with respect to any Canadian
Lender at any time, the product of such amount times a fraction
the numerator of which is the amount of such Lender's Canadian
Commitment at such time and the denominator of which is the
Canadian Facility.
"Process Agent" has the meaning
specified in Section 8.13(a).
"Receivables" has the meaning
specified in Section 1 of the Uniroyal Security Agreement.
"Receivables Securitization" has
the meaning specified in Section 5.02(e).
"Register" has the meaning
specified in Section 8.07(d).
"Regulation U" means Regulation U
of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Related Documents" means the
Merger Agreement, the Uniroyal Indentures, the Uniroyal Senior
Notes, the Uniroyal Corp. Senior Notes, the Uniroyal Corp. Senior
Subordinated Notes and the Uniroyal Corp. Subordinated Discount
Notes and the Tax Agreement.
"Required Lenders" means at any
time Lenders owed or holding at least 51% of the sum of the
aggregate Working Capital A Commitments, Working Capital B-1
Commitments, Working Capital B-2 Commitments, Working Capital B-3
Commitments and Canadian Commitments at such time, or, if the
Working Capital A Commitments, Working Capital B-1 Commitments,
Working Capital B-2 Commitments, Working Capital B-3 Commitments
and Canadian Commitments have been terminated, 51% of the sum of
the aggregate outstanding Working Capital A Advances, Working
Capital B-1 Advances, Working Capital B-2 Advances, Working
Capital B-3 Advances and Canadian Borrower Advances and Face
Amount of Bankers' Acceptances (in each case, based on the
Equivalent in US Dollars at such time) at such time; provided,
however, that if any Lender shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Required
Lenders at such time the aggregate amount of the Working Capital
A Commitment, Working Capital B-1 Commitment, Working Capital B-2
Commitment, Working Capital B-3 Commitment and Canadian
Commitment of such Lender at such time.
"Responsible Officer" means any
officer of any Loan Party or any of its Subsidiaries.
"Restatement Date" means any date
on or before August 5, 1997 on which the conditions set forth in
Article III applicable to the effectiveness of this Agreement
have been fulfilled or waived.
"Rolling Period" means, with
respect to any fiscal quarter of Crompton Corp. and its
Subsidiaries, such fiscal quarter and the three consecutive
immediately preceding fiscal quarters.
"S&P" means Standard & Poor's
Rating Group, a division of The McGraw-Hill Companies, Inc.
"Secured Parties" means the Agent,
the Lender Parties, the Hedge Banks and the Daylight Overdraft
Bank.
"Security Agreement" has the
meaning specified in Section 3.01(f)(ii).
"Seoul Guaranty" means the guaranty
made by Uniroyal in favor of Citibank Seoul, which has issued
bank guaranties of the obligations of Unikor Chemical Inc.
(Korea), a joint venture 50% owned by Uniroyal, to certain banks
organized and located in Korea.
"Seoul Guaranty Amount" means a
fluctuating dollar amount equal to the amount of Uniroyal's
obligations under the Seoul Guaranty, not to exceed US$2,000,000
or such other amount (not to exceed, in any event, US$5,000,000)
as agreed from time to time by Citibank, Uniroyal and the Agent.
"Single Employer Plan" means a
single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of any Loan Party or any
ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Solvent" and "Solvency" mean, with
respect to any Person on a particular date, that on such date (a)
the fair value of the property of such Person
is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b)
the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they
mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities
at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means
any Letter of Credit issued under any Letter of Credit Facility,
other than a Trade Letter of Credit.
"Subsidiary" of any Person means
any corporation, partnership, joint venture, limited liability
company, trust or estate of which (or in which) more than 50% of
(a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial
interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Subsidiary Guarantors" means the
Crompton Guarantors and the Uniroyal Guarantors.
"Subsidiary Guaranty" has the
meaning specified in Section 3.01(g)(iv).
"Surviving Debt" means the Debt
identified on Schedule 3.01(d).
"Swing Line A Advance" means an
advance made by (a) the Swing Line Bank pursuant to Section
2.01(g) or (b) any Working Capital A Lender pursuant to Section
2.02(b).
"Swing Line A Borrowing" means a
borrowing consisting of a Swing Line A Advance made by the Swing
Line Bank.
"Swing Line A Facility" has the
meaning specified in Section 2.01(g).
"Swing Line Advance" means a Swing
Line A Advance or a Swing Line B-1 Advance.
"Swing Line B-1 Advance" means an
advance made by (a) the Swing Line Bank pursuant to Section
2.01(h) or (b) any Working Capital B-1 Lender pursuant to Section
2.02(b).
"Swing Line B-1 Borrowing" means a
borrowing consisting of a Swing Line B-1 Advance made by the
Swing Line Bank.
"Swing Line B-1 Facility" has the
meaning specified in Section 2.01(h).
"Swing Line Bank" means Citicorp.
"Swing Line Borrowing" means a
Swing Line A Borrowing or a Swing Line B-1 Borrowing.
"Swing Line Facility" means the
Swing Line A Facility or the Swing Line B-1 Facility.
"Tax Agreement" means the Tax
Agreement to be entered into by Crompton Corp. and some or all of
its Subsidiaries.
"Taxes" has the meaning specified
in Section 2.15(a).
"Termination Date" means the
earlier of August 21, 2001 and the date of termination in whole
of the Working Capital A Commitments, the Working Capital B-1
Commitments, the Working Capital B-2 Commitments, the Working
Capital B-3 Commitments, the Canadian Commitments and the Letter
of Credit Commitments pursuant to Section 2.06 or 6.01.
"Total Debt" of any Person means
all Debt of such Person of the types referred to in clauses (a)
though (e) of the definition of "Debt".
"Total Debt/EBITDA Ratio" means, at
any date of determination, the ratio of Consolidated Total Debt
of Crompton Corp. and its Subsidiaries as at the end of the
immediately preceding Rolling Period to Consolidated EBITDA of
Crompton Corp. and its Subsidiaries for such immediately
preceding Rolling Period.
"Trade Letter of Credit" means any
Letter of Credit that is issued under either Letter of Credit
Facility for the benefit of a supplier of Inventory to any
Borrower or any of its Subsidiaries to effect payment for such
Inventory, the conditions to drawing under which include the
presentation to the Issuing Bank that issued such Letter of
Credit of negotiable bills of lading, invoices and related
documents.
"Type" refers to the distinction
between Advances bearing interest at the Base Rate and Advances
bearing interest at the Eurocurrency Rate and, with respect to
Canadian Borrower Advances, refers to the distinction among such
Advances bearing interest at the Canadian Base Rate, such
Advances bearing interest at the Canadian Prime Rate and such
Advances bearing interest at the Eurocurrency Rate.
"Uniroyal" has the meaning
specified in the recital of parties to this Agreement.
"Uniroyal B-1 Borrower" has the
meaning specified in the recital of parties to this Agreement.
"Uniroyal Corp." means Uniroyal
Chemical Corporation, a Delaware corporation.
"Uniroyal Corp. Senior Notes" means
the 10-1/2% Senior Notes due 2002 in an aggregate principal
amount of US$300,000,000, issued by Uniroyal Corp. pursuant to an
Indenture dated as of February 8, 1993 between Uniroyal Corp. and
State Street Bank and Trust Company, as Trustee, as amended,
supplemented or otherwise modified from time to time.
"Uniroyal Corp. Senior Subordinated
Notes" means the 11% Senior Subordinated Notes due 2003 in an
aggregate principal amount of US$325,000,000, issued by Uniroyal
Corp. pursuant to an Indenture dated as of February 8, 1993
between Uniroyal Corp. and United States Trust Company of New
York, as Trustee, as amended, supplemented or otherwise modified
from time to time.
"Uniroyal Corp. Subordinated
Discount Notes" means the 12% Subordinated Discount Notes due
2005 in an aggregate principal amount of US$229,952,000, issued
by Uniroyal Corp. pursuant to an Indenture dated as of February
8, 1993 between Uniroyal Corp. and Shawmut Bank Connecticut,
National Association, as Trustee, as amended, supplemented or
otherwise modified from time to time.
"Uniroyal Guarantors" means
Uniroyal Corp., the Subsidiaries of Uniroyal Corp. listed on Part
II of Schedule II hereto and each other Subsidiary of Uniroyal
Corp. that shall be required to execute and deliver a guaranty
pursuant to Section 5.01(k).
"Uniroyal Indentures" means the
Indentures pursuant to which the Uniroyal Corp. Senior Notes,
Uniroyal Corp. Senior Subordinated Notes, Uniroyal Corp.
Subordinated Discount Notes and Uniroyal Senior Notes were
issued, in each case as amended, supplemented or otherwise
modified or refinanced or refunded from time to time in
accordance with its terms, to the extent permitted in accordance
with the Loan Documents.
"Uniroyal Security Agreement" has
the meaning specified in Section 3.01(f)(ii).
"Uniroyal Senior Notes" means the
9% Senior Notes issued by Uniroyal pursuant to an Indenture dated
as of September 1, 1993 between Uniroyal and State Street Bank
and Trust Company, as Trustee, as amended, supplemented or
otherwise modified from time to time.
"Unused Working Capital Commitment"
means, with respect to any Working Capital Facility and any
Working Capital Lender at any time, (a) such Lender's Working
Capital Commitment under such Working Capital Facility at such
time minus (b) the sum (without duplication) of (i) the aggregate
principal amount in US Dollars of all Working Capital Advances,
Swing Line Advances and Letter of Credit Advances made under such
Working Capital Facility, by such Lender (in its capacity as a
Lender but not in its capacity as an Issuing Bank or a Swing Line
Bank) and outstanding at such time, plus (ii) such Lender's Pro
Rata Share of (A) the aggregate Available Amount of all Letters
of Credit outstanding under such Working Capital Facility at such
time, (B) the aggregate principal amount in US Dollars of all
Letter of Credit Advances made under such Working Capital
Facility by the Issuing Banks pursuant to Section 2.03(c) and
outstanding at such time, (C) the aggregate principal amount in
US Dollars of all Swing Line Advances made under such Working
Capital Facility by the Swing Line Bank pursuant to Section
2.01(g) or (h), as the case may be, and outstanding at such time,
(D) in the case of the Working Capital B-1 Facility, the amount
of the Working Capital B-1 Commitments then reserved pursuant to
Section 2.01(j), (E) in the case of the Working Capital A
Facility, the amount of the Working Capital A Commitments then
reserved pursuant to Sections 2.01(k) and 2.01(l) and (F) in the
case of the Canadian Facility, the aggregate Face Amount of all
Bankers' Acceptances purchased and/or accepted by such Lender and
outstanding at such time.
"US Dollars" and the "US$" sign
each means lawful money of the United States of America.
"Voting Stock" means capital stock
issued by a corporation, or equivalent interests in any other
Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the
right so to vote has been suspended by the happening of such a
contingency.
"Welfare Plan" means a welfare
plan, as defined in Section 3(1) of ERISA, that is maintained for
employees of any Loan Party or in respect of which any Loan Party
could have liability.
"Withdrawal Liability" has the
meaning specified in Part I of Subtitle E of Title IV of ERISA.
"Working Capital A Advance" has the
meaning specified in Section 2.01(a).
"Working Capital A Borrowing" means
a borrowing consisting of simultaneous Working Capital A Advances
of the same Type made by the Working Capital A Lenders.
"Working Capital A Commitment"
means, with respect to any Working Capital A Lender at any time,
the Dollar amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital A
Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(d) as
such Lender's "Working Capital A Commitment", as such Dollar
amount may be reduced at or prior to such time pursuant to
Section 2.06.
"Working Capital A Facility" means,
at any time, the aggregate amount of the Working Capital A
Lenders' Working Capital A Commitments at such time.
"Working Capital A Lender" means
any Lender that has a Working Capital A Commitment.
"Working Capital A Note" means a
promissory note of any Crompton A Borrower payable to the order
of any Working Capital A Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate
indebtedness of such Borrower to such Lender resulting from the
Working Capital A Advances made by such Lender.
"Working Capital Advance" means a
Working Capital A Advance, a Working Capital B-1 Advance, a
Working Capital B-2 Advance, a Working Capital B-3 Advance or a
Canadian Borrower Advance.
"Working Capital B-1 Advance" has
the meaning specified in Section 2.01(b).
"Working Capital B-1 Borrowing"
means a borrowing consisting of simultaneous Working Capital B-1
Advances of the same Type made by the Working Capital B-1
Lenders.
"Working Capital B-1 Commitment"
means, with respect to any Working Capital B-1 Lender at any
time, the Dollar amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital B-1
Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(d) as
such Lender's "Working Capital B-1 Commitment", as such Dollar
amount may be reduced at or prior to such time pursuant to
Section 2.06.
"Working Capital B-1 Facility"
means, at any time, the aggregate amount of the Working Capital
B-1 Lenders' Working Capital B-1 Commitments at such time.
"Working Capital B-1 Lender" means
any Lender that has a Working Capital B-1 Commitment.
"Working Capital B-1 Note" means a
promissory note of the Uniroyal B-1 Borrower payable to the order
of any Working Capital B-1 Lender, in substantially the form of
Exhibit A-2 hereto, evidencing the aggregate indebtedness of the
Uniroyal B-1 Borrower to such Lender resulting from the Working
Capital B-1 Advances made by such Lender.
"Working Capital B-2 Advance" has
the meaning specified in Section 2.01(c).
"Working Capital B-2 Borrowing"
means a borrowing consisting of simultaneous Working Capital B-2
Advances of the same Type made by the Working Capital B-2
Lenders.
"Working Capital B-2 Commitment"
means, with respect to any Working Capital B-2 Lender at any
time, the Dollar amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital B-2
Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(d) as
such Lender's "Working Capital B-2 Commitment", as such Dollar
amount may be reduced at or prior to such time pursuant to
Section 2.06.
"Working Capital B-2 Facility"
means, at any time, the aggregate amount of the Working Capital
B-2 Lenders' Working Capital B-2 Commitments at such time.
"Working Capital B-2 Lender" means
any Lender that has a Working Capital B-2 Commitment.
"Working Capital B-2 Note" means a
promissory note of any B-2 Borrower payable to the order of any
Working Capital B-2 Lender, in substantially the form of Exhibit
A-3 hereto, evidencing the aggregate indebtedness of such B-2
Borrower to such Lender resulting from the Working Capital B-2
Advances made by such Lender.
"Working Capital B-3 Advance" has
the meaning specified in Section 2.01(d).
"Working Capital B-3 Borrowing"
means a borrowing consisting of simultaneous Working Capital B-3
Advances of the same Type made by the Working Capital B-3
Lenders.
"Working Capital B-3 Commitment"
means, with respect to any Working Capital B-3 Lender at any
time, the Dollar amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital B-3
Commitment" or, if such Lender has entered into one or more.
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(d) as
such Lender's "Working Capital B-3 Commitment", as such Dollar
amount may be reduced at or prior to such time pursuant to
Section 2.06.
"Working Capital B-3 Facility"
means, at any time, the aggregate amount of the Working Capital
B-3 Lenders' Working Capital B-3 Commitments at such time.
"Working Capital B-3 Lender" means
any Lender that has a Working Capital B-3 Commitment.
"Working Capital B-3 Note" means a
promissory note of any B-3 Borrower payable to the order of any
Working Capital B-3 Lender, in substantially the form of Exhibit
A-3 hereto, evidencing the aggregate indebtedness of such B-3
Borrower to such Lender resulting from the Working Capital B-3
Advances made by such Lender.
"Working Capital Borrowing" means a
Working Capital A Borrowing, a Working Capital B-1 Borrowing, a
Working Capital B-2 Borrowing, a Working Capital B-3 Borrowing or
a Canadian Borrower Borrowing.
"Working Capital Commitment" means
a Working Capital A Commitment, a Working Capital B-1 Commitment,
a Working Capital B-2 Commitment, a Working Capital B-3
Commitment or a Canadian Commitment.
"Working Capital Facility" means
the Working Capital A Facility, the Working Capital B-1 Facility,
the Working Capital B-2 Facility, the Working Capital B-3
Facility or the Canadian Facility.
"Working Capital Lender" means a
Working Capital A Lender, a Working Capital B-1 Lender, a Working
Capital B-2 Lender, a Working Capital B-3 Lender or a Canadian
Lender.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods 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 mean "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(f), in the case of Crompton Corp. and
its Subsidiaries (other than Uniroyal Corp. and its
Subsidiaries), and Section 4.01(g), in the case of Uniroyal Corp.
and its Subsidiaries ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances.(a) The Working Capital A
Advances. Each Working Capital A Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances
(each a "Working Capital A Advance") to any Crompton A Borrower
from time to time on any Business Day during the period from the
date hereof until the Termination Date in an amount for each such
Advance not to exceed such Lender's Unused Working Capital
Commitment under the Working Capital A Facility at such time.
Each Working Capital A Borrowing shall be in an aggregate amount
of US$5,000,000 (or, if the Swing Line Bank shall, in its sole
discretion, decline to make a Swing Line A Advance on such
Business Day after a request therefor by such Crompton A Borrower
pursuant to Section 2.01(g), US$1,000,000) or an integral
multiple of US$1,000,000 in excess thereof and shall consist of
Working Capital A Advances made simultaneously by the Working
Capital A Lenders ratably according to their Working Capital A
Commitments. Each Working Capital A Advance shall be denominated
in US Dollars. Within the limits of each Working Capital A
Lender's Unused Working Capital Commitment under the Working
Capital A Facility in effect from time to time, the Crompton A
Borrowers may borrow under this Section 2.01(a), prepay pursuant
to Section 2.07(a) and reborrow under this Section 2.01(a).
(b) The Working Capital B-1 Advances. Each Working
Capital B-1 Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Working Capital
B-1 Advance") to the Uniroyal B-1 Borrower from time to time on
any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Advance not to exceed
such Lender's Unused Working Capital Commitment under the Working
Capital B-1 Facility at such time. Each Working Capital B-1
Borrowing shall be in an aggregate amount of US$5,000,000 (or, if
the Swing Line Bank shall, in its sole discretion, decline to
make a Swing Line B-1 Advance on such Business Day after a
request therefor by the Uniroyal B-1 Borrower pursuant to Section
2.01(h), US$1,000,000) or an integral multiple of US$1,000,000 in
excess thereof and shall consist of Working Capital B-1 Advances
made simultaneously by the Working Capital B-1 Lenders ratably
according to their Working Capital B-1 Commitments. Each Working
Capital B-1 Advance shall be denominated in US Dollars. Within
the limits of each Working Capital B-1 Lender's Unused Working
Capital Commitment under the Working Capital B-1 Facility in
effect from time to time, the Uniroyal B-1 Borrower may borrow
under this Section 2.01(b), prepay pursuant to Section 2.07(a)
and reborrow under this Section 2.01(b).
(c) The Working Capital B-2 Advances. Each Working
Capital B-2 Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Working Capital
B-2 Advance") to any B-2 Borrower from time to time on any
Business Day during the period from the date hereof until the
Termination Date in an amount (based in respect of any Working
Capital B-2 Advance denominated in a Foreign Currency on the
Equivalent in US Dollars on the Business Day such Advance is
made) for each such Advance not to exceed such Lender's Unused
Working Capital Commitment under the Working Capital B-2 Facility
at such time. Each Working Capital B-2 Borrowing shall be in an
aggregate amount of US$1,000,000 (or the Equivalent thereof in
any Foreign Currency) or an integral multiple of US$100,000 (or
the Equivalent thereof in any Foreign Currency) in excess thereof
and shall consist of Working Capital B-2 Advances made
simultaneously by the Working Capital B-2 Lenders ratably
according to their Working Capital B-2 Commitments. Within the
limits of each Working Capital B-2 Lender's Unused Working
Capital Commitment under the Working Capital B-2 Facility in
effect from time to time, any B-2 Borrower may borrow under this
Section 2.01(c), prepay pursuant to Section 2.07(a) and reborrow
under this Section 2.01(c).
(d) The Working Capital B-3 Advances. Each Working
Capital B-3 Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Working Capital
B-3 Advance") to any B-3 Borrower from time to time on any
Business Day during the period from the date hereof until the
Termination Date in an amount (based in respect of any Working
Capital B-3 Advance denominated in a Foreign Currency on the
Equivalent in US Dollars on the Business Day such Advance is
made) for each such Advance not to exceed such Lender's Unused
Working Capital Commitment under the Working Capital B-3 Facility
at such time. Each Working Capital B-3 Borrowing shall be in an
aggregate amount of US$1,000,000 (or the Equivalent thereof in
any Foreign Currency) or an integral multiple of US$100,000 (or
the Equivalent thereof in any Foreign Currency) in excess thereof
and shall consist of Working Capital B-3 Advances made
simultaneously by the Working Capital B-3 Lenders ratably
according to their Working Capital B-3 Commitments. Within the
limits of each Working Capital B-3 Lender's Unused Working
Capital Commitment under the Working Capital B-3 Facility in
effect from time to time, any B-3 Borrower may borrow under this
Section 2.01(d), prepay pursuant to Section 2.07(a) and reborrow
under this Section 2.01(d).
(e) Canadian Borrower Advances. Each Canadian Lender
severally agrees, on the terms and conditions hereinafter set
forth, to make advances (each a "Canadian Borrower Advance") in
either US Dollars or Canadian Dollars to the Canadian Borrower,
in each case, from time to time on any Business Day during the
period from the date hereof until the Termination Date in an
amount for each such Advance (based in respect of any Canadian
Borrower Advance denominated in Canadian Dollars, on the
Equivalent in US Dollars on the Business Day such Advance is
made) not to exceed such Lender's Unused Working Capital
Commitment under the Canadian Facility at such time. Each
Canadian Borrowing (other than a Canadian Borrowing the proceeds
of which will be used solely to repay a Borrowing of Canadian
Prime Rate Advances pursuant to Section 2.04(a) in connection
with any Drawing) under this Section 2.01(e) shall be in an
aggregate amount of US$5,000,000 (or the Equivalent thereof in
Canadian Dollars), or an integral multiple of US$1,000,000 (or
the Equivalent thereof in Canadian Dollars), in excess thereof
and shall consist of Canadian Borrower Advances made
simultaneously by the Canadian Lenders ratably according to their
Canadian Commitments. Within the limits of each Canadian
Lender's Unused Working Capital Commitment under the Canadian
Facility in effect from time to time, the Canadian Borrower may
borrow under this Section 2.01(e), prepay pursuant to Section
2.07(a) and reborrow under this Section 2.01(e).
(f) Drawings. Each Canadian Lender severally agrees,
on the terms and conditions hereinafter set forth, to accept
Drafts (each Draft so accepted, a "Bankers' Acceptance") for the
account of the Canadian Borrower, and to purchase such Bankers'
Acceptances from time to time on any Business Day during the
period from the date hereof until the Termination Date having a
Face Amount (determined in the Equivalent thereof in US Dollars)
for all such Bankers' Acceptances purchased by such Lender at the
time of such Drawing not to exceed such Lender's Unused Working
Capital Commitment under the Canadian Facility at such time.
Each Drawing shall be comprised solely of Canadian Dollars, shall
be in an aggregate Face Amount which, together with any Canadian
Prime Rate Advances made in connection with such Drawing, equals
CN$5,000,000 or an integral multiple of CN$1,000,000 in excess
thereof and shall consist of the creation and purchase of
Bankers' Acceptances at or about the same time by the Canadian
Lenders ratably in accordance with their respective Canadian
Commitments. Within the limits of each Canadian Lender's Unused
Working Capital Commitment under the Canadian Facility in effect
from time to time, amounts drawn by the Canadian Borrower under
this Section 2.01(f) and repaid or prepaid from time to time may
be redrawn by the Canadian Borrower under this Section 2.01(f).
(g) The Swing Line A Advances. Any Crompton A
Borrower may request the Swing Line Bank to make, and the Swing
Line Bank may, if in its sole discretion it elects to do so,
make, on the terms and conditions hereinafter set forth, Swing
Line A Advances to such Crompton A Borrower from time to time on
any Business Day during the period from the date hereof until the
Termination Date (i) in an aggregate amount not to exceed at any
time outstanding US$10,000,000 (the "Swing Line A Facility") and
(ii) in an amount for each such Swing Line A Borrowing not to
exceed the aggregate of the Unused Working Capital Commitments
under the Working Capital A Facility of the Working Capital A
Lenders at such time. No Swing Line A Advance shall be used for
the purpose of funding the payment of principal of any other
Swing Line A Advance. Each Swing Line A Borrowing shall be in an
amount of US$500,000 or an integral multiple of US$100,000 in
excess thereof and shall be made as a Base Rate Advance. Within
the limits of the Swing Line A Facility and within the limits
referred to in clause (ii) above, so long as the Swing Line Bank,
in its sole discretion, elects to make Swing Line A Advances, the
Crompton A Borrowers may borrow under this Section 2.01(g), repay
pursuant to Section 2.05(g) or prepay pursuant to Section 2.07(a)
and reborrow under this Section 2.01(g).
(h) The Swing Line B-1 Advances. The Uniroyal B-1
Borrower may request the Swing Line Bank to make, and the Swing
Line Bank may, if in its sole discretion it elects to do so,
make, on the terms and conditions hereinafter set forth, Swing
Line B-1 Advances to the Uniroyal B-1 Borrower from time to time
on any Business Day during the period from the date hereof until
the Termination Date (i) in an aggregate amount not to exceed at
any time outstanding US$10,000,000 (the "Swing Line B-1
Facility") and (ii) in an amount for each such Swing Line
Borrowing not to exceed the aggregate of the Unused Working
Capital Commitments under the Working Capital B-1 Facility of the
Working Capital B-1 Lenders at such time. No Swing Line B-1
Advance shall be used for the purpose of funding the payment of
principal of any other Swing Line B-1 Advance. Each Swing Line
B-1 Borrowing shall be in an amount of US$500,000 or an integral
multiple of US$100,000 in excess thereof and shall be made as a
Base Rate Advance. Within the limits of the Swing Line B-1
Facility and within the limits referred to in clause (ii) above,
so long as the Swing Line Bank, in its sole discretion, elects to
make Swing Line B-1 Advances, the Uniroyal B-1 Borrower may
borrow under this Section 2.01(h), repay pursuant to Section
2.05(g) or prepay pursuant to Section 2.07(a) and reborrow under
this Section 2.01(h).
(i) Letters of Credit. Each Issuing Bank severally
agrees, on the terms and conditions hereinafter set forth, to
issue letters of credit (the "Letters of Credit") for the account
of any Borrower under the Letter of Credit A Facility, Letter of
Credit B-1 Facility or Letter of Credit B-2 Facility, as the case
may be, from time to time on any Business Day during the period
from the date hereof until 30 days before the Termination Date
(i) in an aggregate Available Amount for all Letters of Credit
issued by such Issuing Bank not to exceed at any time such
Issuing Bank's Letter of Credit Commitment at such time under the
Facility which the applicable Notice of Issuance specifies as the
Facility under which such Letter of Credit is to be issued, (ii)
in an Available Amount for each such Letter of Credit to be
issued under the Letter of Credit A Facility not to exceed the
lesser of (x) the Letter of Credit A Facility at such time and
(y) the aggregate Unused Working Capital Commitments of the
Working Capital A Lenders under the Working Capital A Facility at
such time, (iii) in an Available Amount for each such Letter of
Credit to be issued under the Letter of Credit B-1 Facility not
to exceed the lesser of (x) the Letter of Credit B-1 Facility at
such time and (y) the aggregate Unused Working Capital
Commitments of the Working Capital B-1 Lenders under the Working
Capital B-1 Facility at such time and (iv) in an Available Amount
for each such Letter of Credit to be issued under the Letter of
Credit B-2 Facility not to exceed the lesser of (x) the Letter of
Credit B-2 Facility at such time and (y) the aggregate Unused
Working Capital Commitments of the Working Capital B-2 Lenders
under the Working Capital B-2 Facility at such time. Letters of
Credit issued under the Letter of Credit A Facility shall be
issued for the account of any Crompton A Borrower, Letters of
Credit issued under the Letter of Credit B-1 Facility shall be
issued for the account of the Uniroyal B-1 Borrower and Letters
of Credit issued under the Letter of Credit B-2 Facility shall be
issued for the account of any B-2 Borrower. No Letters of Credit
shall be issued under the Working Capital B-3 Facility or the
Canadian Facility. No Letter of Credit shall have an expiration
date (including all rights of the applicable Borrower or the
beneficiary to require renewal) later than the earlier of 30 days
before the Termination Date and (A) in the case of a Standby
Letter of Credit, one year after the date of issuance thereof and
(B) in the case of a Trade Letter of Credit, 90 days after the
date of issuance thereof. Within the limits of the Letter of
Credit A Facility, the Letter of Credit B-1 Facility or the
Letter of Credit B-2 Facility, as the case may be, and subject to
the limits referred to above, any Crompton A Borrower, the
Uniroyal B-1 Borrower, any B-2 Borrower, as the case may be, may
request the issuance of Letters of Credit under this Section
2.01(i), repay any Letter of Credit Advances resulting from
drawings thereunder pursuant to Section 2.03(c) and request the
issuance of additional Letters of Credit under this Section
2.01(i).
(j) Set Aside of Working Capital B-1 Commitments in
Respect of the Seoul Guaranty. Each Working Capital B-1 Lender's
Pro Rata Share of an aggregate amount of Working Capital B-1
Commitments equal to the Seoul Guaranty Amount shall be reserved
to ensure that sufficient funds may be made available to Uniroyal
for payment to Citibank Seoul of the Seoul Guaranty Amount as the
same becomes due and payable. The amount of Working Capital B-1
Commitments reserved under this Section 2.01(j) shall equal the
Seoul Guaranty Amount from time to time.
(k) Set Aside of Working Capital A Commitments in
Respect of B-2 Facility Overage. Each Working Capital A Lender's
Pro Rata Share of an aggregate amount of Working Capital A
Commitments equal to the B-2 Facility Overage shall be reserved
against the Working Capital A Commitment. The aggregate amount
of Working Capital A Commitments reserved under this Section
2.01(k) shall equal the B-2 Facility Overage from time to time.
(l) Set Aside of Working Capital A Commitments in
Respect of B-3 Facility Overage. Each Working Capital A Lender's
Pro Rata Share of an aggregate amount of Working Capital A
Commitments equal to the B-3 Facility Overage shall be reserved
against the Working Capital A Commitment. The aggregate amount
of Working Capital A Commitments reserved under this Section
2.01(l) shall equal the B-3 Facility Overage from time to time.
(m) Set Aside of Working Capital A Commitments in
Respect of Canadian Facility Overage. Each Working Capital A
Lender's Pro Rata Share of an aggregate amount of Working Capital
A Commitments equal to the Canadian Facility Overage shall be
reserved against the Working Capital A Commitment. The aggregate
amount of Working Capital A Commitments reserved under this
Section 2.01(m) shall equal the Canadian Facility Overage from
time to time.
SECTION 2.02. Making the Advances. (a) Except as
otherwise provided in Section 2.02(b) or 2.03, each Borrowing
shall be made on notice, given not later than (v) 11:00 A.M. (New
York City time) on the third Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of
Eurocurrency Rate Advances under the Working Capital A Facility
or the Working Capital B-1 Facility, (w) 11:00 A.M. (London time)
on the third Business Day prior to the date of the proposed
Borrowing in the case a Borrowing consisting of Eurocurrency Rate
Advances under the Working Capital B-2 Facility or the Working
Capital B-3 Facility, (x) 11:00 A.M. (New York City time) on the
third Canadian Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Eurocurrency
Rate Advances under the Canadian Facility, (y) 11:00 A.M. (New
York City time) on the first Canadian Business Day prior to the
date of the proposed Borrowing in the case of a Borrowing
consisting of Canadian Base Rate Advances or Canadian Prime Rate
Advances or (z) 11:00 A.M. (New York City time) on the first
Business Day prior to the date of the proposed Borrowing (or, if
the Swing Line Bank shall, in its sole discretion, decline to
make a Swing Line Advance on the date of the proposed Borrowing
after a request therefor by a Borrower pursuant to Section
2.01(g) or (h), the date of the proposed Borrowing) in the case
of a Borrowing consisting of Base Rate Advances, by any Borrower
to the Agent, which shall give to each Appropriate Lender prompt
notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing, or telex or telecopier, in
substantially the form of Exhibit B-1 hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of
Eurocurrency Rate Advances, initial Interest Period and currency
for each such Advance. Each Appropriate Lender shall, (x) before
11:00 A.M. (New York City time), in the case of a Borrowing under
the Working Capital A Facility, Working Capital B-1 Facility or
Canadian Facility and (y) before 11:00 (London time), in the case
of a Borrowing under the Working Capital B-2 Facility or Working
Capital B-3 Facility, in each case, on the date of such
Borrowing, make available for the account of its Applicable
Lending Office to the Agent at the applicable Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing
in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Appropriate
Lenders. If for any reason set forth in Section 2.13, any Lender
is unable to make, maintain or fund any Eurocurrency Rate
Advance, such Lender shall make available for the account of its
Applicable Lending Office to the Agent at the applicable Agent's
Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Appropriate
Lenders; provided, however, such Lender shall make such
Eurocurrency Rate Advance available in US Dollars or such other
currency as such Lender and the applicable Borrower may agree
upon. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the relevant
Borrower by crediting the relevant Borrower's Account or at the
applicable Payment Office, as the case may be.
(b) Each Swing Line Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the date
of the proposed Swing Line Borrowing, by any Borrower to the
Swing Line Bank and the Agent. Each such notice of a Swing Line
Borrowing (a "Notice of Swing Line Borrowing") shall be by
telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (i) date of such
Borrowing, (ii) amount of such Borrowing and (iii) maturity of
such Borrowing (which maturity shall be no later than the seventh
day after the requested date of such Borrowing). If, in its sole
discretion, it elects to make the requested Swing Line Advance,
the Swing Line Bank will make the amount thereof available to the
Agent at the Agent's Account, in same day funds. After the
Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will
make such funds available to the relevant Borrower by crediting
the relevant Borrower's Account. Upon written demand by the
Swing Line Bank with an outstanding Swing Line A Advance or Swing
Line B-1 Advance, as the case may be, with a copy of such demand
to the Agent, each other Working Capital A Lender or Working
Capital B-1 Lender, as the case may be, shall purchase from the
Swing Line Bank, and the Swing Line Bank shall sell and assign to
each such other Working Capital A Lender or Working Capital B-1
Lender, as the case may be, such other Lender's Pro Rata Share of
such outstanding Swing Line A Advance or Swing Line B-1 Advance,
as the case may be, as of the date of such demand, by making
available for the account of its Applicable Lending Office to the
Agent for the account of the Swing Line Bank, by deposit to the
Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Swing Line A
Advance or Swing Line B-1 Advance, as the case may be, to be
purchased by such Lender. Each Borrower hereby agrees to each
such sale and assignment. Each Working Capital A Lender agrees
to purchase its Pro Rata Share of an outstanding Swing Line A
Advance and each Working Capital B-1 Lender agrees to purchase
its Pro Rata Share of an outstanding Swing Line B-1 Advance on
(i) the Business Day on which demand therefor is made by the
Swing Line Bank, provided that notice of such demand is given not
later than 11:00 A.M. (New York City time) on such Business Day
or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such
assignment by the Swing Line Bank to any other Working Capital
Lender of a portion of a Swing Line Advance, the Swing Line Bank
represents and warrants to such other Lender that the Swing Line
Bank is the legal and beneficial owner of such interest being
assigned by it, but makes no other representation or warranty and
assumes no responsibility with respect to such Swing Line
Advance, the Loan Documents or any Loan Party. If and to the
extent that any Working Capital A Lender or Working Capital B-1
Lender, as the case may be, shall not have so made the amount of
such Swing Line A Advance or Swing Line B-1 Advance, as the case
may be, available to the Agent, such Lender agrees to pay to the
Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Swing Line
Bank until the date such amount is paid to the Agent, at the
Federal Funds Rate. If such Lender shall pay to the Agent such
amount for the account of the Swing Line Bank on any Business
Day, such amount so paid in respect of principal shall constitute
a Swing Line Advance made by such Lender on such Business Day for
purposes of this Agreement, and the outstanding principal amount
of the Swing Line Advance made by the Swing Line Bank shall be
reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrowers may not select Eurocurrency
Rate Advances for any Borrowing if the aggregate amount of such
Borrowing is less than (A) US$5,000,000 in the case of any
Working Capital A Advance or any Working Capital B-1 Advance and
(B) US$1,000,000 (or the Equivalent thereof in any Foreign
Currency or Canadian Dollars) in the case of any Working Capital
B-2 Advance, any Working Capital B-3 Advance or any Canadian
Borrower Advance, or if the obligation of the Appropriate Lenders
to make Eurocurrency Rate Advances shall then be suspended
pursuant to Section 2.12 or Section 2.13 and (ii) the Working
Capital Advances may not be outstanding as part of more than 12
separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower giving
such notice. In the case of any Borrowing that the related
Notice of Borrowing specifies is to be comprised of Eurocurrency
Rate Advances, the Borrower giving such notice shall indemnify
each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as
part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a
Facility under which such Lender has a Commitment that such
Lender will not make available to the Agent such Lender's ratable
portion of such Borrowing, the Agent may assume that such Lender
has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) or (b) of this
Section 2.02 and the Agent may, in reliance upon such assumption,
make available to the relevant Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Agent, such Lender and the relevant Borrower severally agree to
repay or pay to the Agent forthwith on demand such corresponding
amount and to pay interest thereon, for each day from the date
such amount is made available to such Borrower until the date
such amount is repaid or paid to the Agent, at (i) in the case of
the Borrowers, the interest rate applicable at such time under
Section 2.08 to Advances comprising such Borrowing and (ii) in
the case of such Lender, the higher of (A) the Federal Funds Rate
and (b) the cost of funds incurred by the Agent in respect of
such amount. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to
be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
(g) Uniroyal hereby irrevocably authorizes and
appoints Citibank as its attorney-in-fact to execute and deliver
a Notice of Borrowing in accordance with Section 2.02(a) or a
Notice of Swing Line Borrowing in accordance with Section
2.02(b), on behalf of and in the name of Uniroyal, for a Working
Capital B-1 Borrowing or Swing Line B-1 Borrowing, as the case
may be, in an aggregate amount not to exceed the Seoul Guaranty
Amount. Uniroyal hereby authorizes each of Citibank and Citibank
Seoul, in its discretion, to hold the proceeds of such Borrowing
as collateral for, and/or then or at any time thereafter to apply
such proceeds in whole or in part against the Obligations of
Uniroyal under the Seoul Guaranty. Each Working Capital B-1
Lender severally agrees, notwithstanding any other term or
condition of this Agreement (including, without limitation, any
non-fulfillment of any of the conditions specified in Article
III), to make an Advance to or for the account of Uniroyal for
the purposes specified in the proviso to the first sentence of
Section 2.17 hereof, on any Business Day during the period from
the date hereof until the Termination Date, in an aggregate
amount not to exceed such Lender's Pro Rata Share of the amount
of Working Capital B-1 Commitments then reserved pursuant to
Section 2.01(j); provided that, after giving effect to the
Advances made pursuant to this Section 2.02(g), the sum of the
aggregate principal amount of Working Capital B-1 Advances, Swing
Line B-1 Advances and Letter of Credit B-1 Advances then
outstanding plus the Available Amount of all Letters of Credit
issued under the Letter of Credit B-1 Facility and then
outstanding shall not exceed the aggregate Working Capital B-1
Commitments.
SECTION 2.03. Issuance of and Drawings and
Reimbursement Under Letters of Credit. (a) Request for
Issuance. Each Letter of Credit shall be issued upon notice,
given not later than (i) 11:00 A.M. (New York City time) in the
case of any proposed issuance under the Letter of Credit A
Facility or Letter of Credit B-1 Facility and (ii) 11:00 A. M.
(London time) in the case of any proposed issuance under the
Letter of Credit B-2 Facility, in each case on the second
Business Day prior to the date of the proposed issuance of such
Letter of Credit, by any Crompton A Borrower to any Issuing Bank
under the Letter of Credit A Facility, by the Uniroyal B-1
Borrower to any Issuing Bank under the Letter of Credit B-1
Facility or by any B-2 Borrower to any Issuing Bank under the
Letter of Credit B-2 Facility, which shall give to the Agent and
each Appropriate Lender prompt notice thereof by telex or
telecopier. No Letter of Credit shall be issued hereunder for
the account of any B-3 Borrower. Each such notice of issuance of
a Letter of Credit (a "Notice of Issuance") shall be by
telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount
and currency of such Letter of Credit, (C) expiration date of
such Letter of Credit, (D) name and address of the beneficiary of
such Letter of Credit, (E) Facility under which such Letter of
Credit is to be issued and (F) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter
of credit as such Issuing Bank may specify to the relevant
Borrower for use in connection with such requested Letter of
Credit (a "Letter of Credit Agreement"). If (x) the requested
form of such Letter of Credit is acceptable to such Issuing Bank
in its sole discretion and (y) it has not received notice of
objection to such issuance from Appropriate Lenders holding at
least 51% of the Working Capital A Commitments, Working Capital
B-1 Commitments or Working Capital B-2 Commitments, as the case
may be, such Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter
of Credit available to the Borrower requesting the issuance of
such Letter of Credit at its office referred to in Section 8.02
or as otherwise agreed with such Borrower in connection with such
issuance. In the event and to the extent that the provisions of
any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall
furnish (A) to the Agent on the first Business Day of each week a
written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the previous
week and drawings during such week under all Letters of Credit
issued by such Issuing Bank, (B) to each Appropriate Lender on
the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the preceding month and drawings during such
month under all Letters of Credit issued by such Issuing Bank and
(C) to the Agent and each Appropriate Lender on the first
Business Day of each calendar quarter a written report setting
forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit issued by
such Issuing Bank.
(c) Drawing and Reimbursement. The payment by any
Issuing Bank of a draft drawn under any Letter of Credit shall
constitute for all purposes of this Agreement the making by such
Issuing Bank of a Letter of Credit Advance, which shall be a Base
Rate Advance, in the amount of such draft. Upon payment by any
Issuing Bank of a draft drawn under any Letter of Credit, such
Issuing Bank shall give prompt notice thereof to the applicable
Borrower and the Agent. Upon written demand by any Issuing Bank
with an outstanding Letter of Credit Advance, with a copy of such
demand to the Agent, each Appropriate Lender shall purchase from
such Issuing Bank, and such Issuing Bank shall sell and assign to
each such Appropriate Lender, such Lender's Pro Rata Share of
such outstanding Letter of Credit Advance as of the date of such
purchase, by making available for the account of its Applicable
Lending Office to the Agent for the account of such Issuing Bank,
by deposit to the applicable Agent's Account, in same day funds,
an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such
Lender. Promptly after receipt thereof, the Agent shall transfer
such funds to such Issuing Bank. Each Borrower hereby agrees to
each such sale and assignment. Each Appropriate Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (i) the Business Day on which demand therefor is made
by the Issuing Bank which made such Advance, provided notice of
such demand is given not later than 11:00 A.M. (New York City
time) on such Business Day or (ii)the first Business Day next
succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by an Issuing Bank to any
Appropriate Lender of a portion of a Letter of Credit Advance,
such Issuing Bank represents and warrants to such Appropriate
Lender that such Issuing Bank is the legal and beneficial owner
of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes
no responsibility with respect to such Letter of Credit Advance,
the Loan Documents or any Loan Party. If and to the extent that
any Appropriate Lender shall not have so made the amount of such
Letter of Credit Advance available to the Agent, such Appropriate
Lender agrees to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of
demand by such Issuing Bank until the date such amount is paid to
the Agent, at the Federal Funds Rate for its account or the
account of such Issuing Bank, as applicable. If such Lender
shall pay to the Agent such amount for the account of such
Issuing Bank on any Business Day, such amount so paid in respect
of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Letter of Credit
Advance made by such Issuing Bank shall be reduced by such amount
on such Business Day.
(d) Failure to Make Letter of Credit Advances. The
failure of any Lender to make the Letter of Credit Advance to be
made by it on the date specified in Section 2.03(c) shall not
relieve any other Lender of its obligation hereunder to make its
Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such
date.
SECTION 2.04. Drawings of Bankers' Acceptances. (a)
Request for Drawing. Each Drawing shall be made on notice, given
not later than 12:00 noon (New York City time) on a Canadian
Business Day at least two Canadian Business Days prior to the
date of the proposed Drawing, by the Canadian Borrower to the
Agent, which shall give each Canadian Lender prompt notice
thereof by telex or telecopier. Each notice of a Drawing (a
"Notice of Drawing") shall be in writing (including by telex or
telecopier), in substantially the form of Exhibit B-2 hereto, and
shall be confirmed by telephone immediately by the Canadian
Borrower, specifying therein the requested (i) date of such
Drawing (which shall be a Business Day), (ii) aggregate Face
Amount of such Drawing and (iii) initial Maturity Date for each
Bankers' Acceptance comprising part of such Drawing; provided,
however, that, if the Agent determines in good faith (which
determination shall be conclusive and binding upon the Canadian
Borrower) that the Drafts to be accepted and purchased as part of
any Drawing cannot, due solely to the requested aggregate Face
Amount thereof, be accepted and/or purchased ratably by the
Canadian Lenders in accordance with Section 2.01(f), then the
aggregate Face Amount of such Drawing (or the Face Amount of
Bankers' Acceptances to be created by any Canadian Lender) shall
be reduced to such lesser amount as the Agent determines will
permit such Drafts comprising part of such Drawing to be so
accepted and purchased and, unless the Canadian Borrower shall
have given written notice to the contrary to the Agent, each
Canadian Lender shall fund the difference between such Lender's
ratable portion of the original aggregate Face Amount of such
Drawing and the Face Amount of the Bankers' Acceptances to be
created by such Lender after giving effect to such reduction in
the form of a Canadian Prime Rate Advance, which shall be deemed
for all purposes hereof to be a Canadian Borrower Advance made
pursuant to Section 2.01(f). The Agent agrees that it will, as
promptly as practicable, notify the Canadian Borrower of the
unavailability of Bankers' Acceptances and, if applicable, of the
date and the amount of each Canadian Prime Rate Advance to be
made or actually made in accordance with the immediately
preceding sentence. Each Draft in connection with any requested
Drawing (A) shall be in a minimum amount of CN$100,000 or an
integral multiple of CN$100,000 in excess thereof, and (B) shall
be dated the date of the proposed Drawing. Each Canadian Lender
shall, before 1:00 p.m. (Toronto time) on the date of each
Drawing, complete one or more Drafts in accordance with the
related Notice of Drawing, accept such Drafts and purchase the
Bankers' Acceptances created thereby for the Drawing Purchase
Price and shall, before 1:00 p.m. (Toronto time) on such date,
make available for the account of its Applicable Lending Office
to the Agent at its appropriate Agent's Account, in same day
funds, the Drawing Purchase Price payable by such Lender for such
Drawing less the Drawing Fee payable to such Lender with respect
thereto under Section 2.09(d). Upon the fulfillment of the
applicable conditions set forth in Article III, the Agent will
make the funds it has received from the Canadian Lenders
available to the Canadian Borrower by crediting the relevant
Borrower's Account or at the applicable Payment Office, as the
case may be.
(b) Limitations on Drawings. Anything in Section
2.04(a) to the contrary notwithstanding, the Canadian Borrower
may not select a Drawing if the obligation of the Canadian
Lenders to purchase and accept Bankers' Acceptances shall then be
suspended pursuant to Section 2.04(d) or 2.13.
(c) Binding Effect of Notices of Drawing. Each Notice
of Drawing shall be irrevocable and binding on the Canadian
Borrower. In the case of any proposed Drawing, the Canadian
Borrower shall indemnify each Canadian Lender against any loss,
cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in the Notice
of Drawing for such Drawing the applicable conditions set forth
in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Drawing Purchase Price
to be paid by such Lender as part of such Drawing when, as a
result of such failure, such Drawing is not made on such date.
(d) Circumstances Making Bankers' Acceptances
Unavailable. (i) If, with respect to any proposed Drawing, the
Agent determines in good faith that circumstances affecting the
money markets at the time any related Notice of Drawing is
delivered or is outstanding will result in no market for the
Bankers' Acceptances to be created in connection with such
Drawing or an insufficient demand for such Bankers' Acceptances
to allow the Lenders creating such Bankers' Acceptances to sell
or trade the Bankers' Acceptances to be created and purchased or
discounted by them hereunder in connection with such Drawing,
then, upon notice to the Canadian Borrower and the Canadian
Lenders thereof, (A) the Notice of Drawing with respect to such
proposed Drawing shall be cancelled and the Drawing requested
therein shall not be made and (B) the right of the Canadian
Borrower to request a Drawing shall be suspended until the Agent
shall notify such Borrower that the circumstances causing such
suspension no longer exist. In the case of any such cancellation
of a Notice of Drawing, unless the Canadian Borrower shall give
written notice to the contrary to the Agent, the cancellation of
any such Notice of Drawing shall be deemed to be the giving by
the Canadian Borrower of a Notice of Borrowing for Canadian
Borrower Advances consisting of Canadian Prime Rate Advances in
an aggregate principal amount equal to the aggregate Face Amount
of such proposed Drawing and the Canadian Lenders shall, subject
to the terms and conditions hereof applicable to the making of
Canadian Borrower Advances, make such Advances available to the
Canadian Borrower, if practicable, on the same Business Day, and
otherwise on the next Business Day. The Agent agrees that it
will, as promptly as practicable, notify the Canadian Borrower of
the unavailability of Bankers' Acceptances and, if applicable, of
the date and the amount of each Canadian Prime Rate Advance to be
made or actually made in accordance with the immediately
preceding sentence.
(ii) Upon the occurrence and
during the continuance of any Default, the obligation of the
Canadian Lenders to purchase and/or accept Bankers' Acceptances
shall be suspended.
(e) Assumptions of the Agent. Unless the Agent shall
have received notice from a Canadian Lender prior to the date of
any Drawing that such Lender will not make available to it such
Lender's ratable share of such Drawing in accordance with Section
2.04(a), the Agent may assume that such Lender has made such
ratable share available to it on the date of such Drawing in
accordance with Section 2.04(a) and the Agent may, in reliance
upon such assumption, make available to the Canadian Borrower on
such date a corresponding amount. If and to the extent that any
such Lender shall not have so made such ratable share available
to the Agent, such Lender and the Canadian Borrower severally
agree to repay or pay to the Agent forthwith on demand such
corresponding amount, together with interest thereon, for each
day from the date such amount is made available to such Borrower
until the date such amount is repaid or paid to the Agent, at (i)
in the case of the Canadian Borrower, a rate per annum equal to
the BA Rate used in calculating the Drawing Purchase Price with
respect to such Drawing, and (ii) in the case of such Lender, the
Canadian Interbank Rate. If such Lender shall pay to the Agent
such corresponding amount, such amount so paid shall constitute
such Lender's Bankers' Acceptance as part of such Drawing for all
purposes under this Agreement.
(f) Presigned Draft Forms. To enable the Canadian
Lenders to create Bankers' Acceptances in accordance with Section
2.01(f) and this Section 2.04, (i) the Canadian Borrower shall
supply each Canadian Lender, upon the Canadian Borrower's
execution of this Agreement, with such number of Drafts provided
to the Canadian Borrower by the Agent as the Agent may from time
to time reasonably request, duly endorsed and executed on behalf
of the Canadian Borrower by any one or more of its duly
authorized officers. Each Canadian Lender shall exercise such
care in the custody and safekeeping of any Drafts in its
possession from time to time as it would exercise in the custody
and safekeeping of similar property owned by it. The signatures
of officers of the Canadian Borrower on Drafts may be
mechanically reproduced in facsimile and Bankers' Acceptances
bearing such facsimile signatures shall be binding upon the
Canadian Borrower as if they had been manually signed by such
officers. Notwithstanding that any of the individuals whose
manual or facsimile signature appears on any Draft as one of such
officers may no longer hold office at the date of such draft or
at the date of its acceptance by a Lender hereunder or at any
time thereafter, any Draft or Bankers' Acceptance so signed shall
be valid and binding upon, and enforceable against, the Canadian
Borrower.
(g) Distribution of Bankers' Acceptances. Bankers'
Acceptances purchased by a Canadian Lender in accordance with the
terms of Section 2.01(f) and this Section 2.04 may, in such
Lender's sole discretion, be held by such Lender for its own
account until the applicable Maturity Date or sold, rediscounted
or otherwise disposed of by it at any time prior thereto in any
relevant market therefor.
(h) Failure to Fund in Respect of Drawings. The
failure of any Canadian Lender to fund the Drawing Purchase Price
to be funded by it as part of any Drawing shall not relieve any
other Canadian Lender of its obligation hereunder to fund its
Drawing Purchase Price on the date of such Drawing, but no
Canadian Lender shall be responsible for the failure of any other
Canadian Lender to fund the Drawing Purchase Price to be funded
by such other Canadian Lender on the date of any Drawing.
SECTION 2.05. Repayment of Advances. (a) Working
Capital A Advances. Each Crompton A Borrower shall repay to the
Agent for the ratable account of the Working Capital A Lenders on
the Termination Date the aggregate principal amount of the
Working Capital A Advances made to such Crompton A Borrower and
then outstanding.
(b) Working Capital B-1 Advances. The Uniroyal B-1
Borrower shall repay to the Agent for the ratable account of the
Working Capital B-1 Lenders on the Termination Date the aggregate
principal amount of the Working Capital B-1 Advances then
outstanding.
(c) Working Capital B-2 Advances. Each B-2 Borrower
shall repay to the Agent for the ratable account of the Working
Capital B-2 Lenders on the Termination Date the aggregate
principal amount of the Working Capital B-2 Advances made to such
B-2 Borrower and then outstanding, provided that such B-2
Borrower shall repay such amount in the currency in which such
Working Capital B-2 Advance was made.
(d) Working Capital B-3 Advances. Each B-3 Borrower
shall repay to the Agent for the ratable account of the Working
Capital B-3 Lenders on the Termination Date the aggregate
principal amount of the Working Capital B-3 Advances made to such
B-3 Borrower and then outstanding, provided that such B-3
Borrower shall repay such amount in the currency in which such
Working Capital B-3 Advance was made.
(e) Canadian Borrower Advances. The Canadian Borrower
shall repay to the Agent for the ratable account of the Canadian
Lenders on the Termination Date the aggregate principal amount of
the Canadian Borrower Advances then outstanding; provided that
the Canadian Borrower shall repay such amount in the currency in
which such Canadian Borrower Advance was made.
(f) Bankers' Acceptances. The Canadian Borrower
shall, subject to Sections 2.11(a) and 2.11(b), pay to the Agent
for the ratable account of the Canadian Lenders on the Maturity
Date of any Bankers' Acceptances an amount equal to the aggregate
Face Amount of all such Bankers' Acceptances maturing on such
date. Any payment by the Canadian Borrower of any Bankers'
Acceptances in accordance with this Section 2.05(f) shall, to the
extent of such payment, satisfy the obligations of the Canadian
Borrower under the Bankers' Acceptances to which it relates and,
in the case of a Bankers' Acceptance, the Lender that has
accepted such Bankers' Acceptance shall, to the extent of such
payment to such Lender, thereafter be solely responsible for the
payment thereof.
(g) Swing Line Advances. Each Borrower shall repay to
the Agent for the account of the Swing Line Bank and each other
Working Capital Lender that has made a Swing Line Advance to such
Borrower the outstanding principal amount of each Swing Line
Advance made by each of them and owing by such Borrower on the
earlier of the maturity date specified in the applicable Notice
of Swing Line Borrowing (which maturity shall be no later than
the seventh day after the requested date of such Borrowing) and
the Termination Date.
(h) Letter of Credit Advances. (i) Each Borrower
shall repay in like funds advanced to the Agent for the account
of each Issuing Bank and each other Working Capital Lender that
has made a Letter of Credit Advance to such Borrower on the
earlier of the second Business Day following the date on which
the related Letter of Credit is drawn and the Termination Date
the outstanding principal amount of each Letter of Credit Advance
made by each of them.
(ii) The Obligations of each Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement
or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of
Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or
enforceability of any Loan Document, any Letter of Credit
Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being,
collectively, the "L/C Related Documents");
(B) any change in the time, manner
or place of payment of, or in any other term of, all or any of
the Obligations of any Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(C) the existence of any claim,
set-off, defense or other right that any Borrower may have at any
time against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), any Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
(D) any statement or any other
document presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(E) payment by any Issuing Bank
under a Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such
Letter of Credit;
(F) any exchange, release or
non-perfection of any Collateral or other collateral, or any
release or amendment or waiver of or consent to departure from
any Guaranty or any other guarantee, for all or any of the
Obligations of any Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or
happening whatsoever, whether or not similar to any of the
foregoing, including, without limitation, any other circumstance
that might otherwise constitute a defense available to, or a
discharge of, any Borrower, any Guarantor or any other guarantor.
SECTION 2.06. Termination or Reduction of the
Commitments. (a) Optional. Crompton Corp. may, on its own behalf
and on behalf of the other Borrowers, upon at least two Business
Days' notice to the Agent, terminate in whole or reduce in part
the unused portion of any Letter of Credit Facility, any Swing
Line Facility or the Unused Working Capital Commitments under any
Working Capital Facility; provided, however, that each partial
reduction of a Facility (i) shall be in an aggregate amount of
US$10,000,000 or an integral multiple of US$5,000,000 in excess
thereof and (ii) shall be made ratably among the Appropriate
Lenders in accordance with their Commitments with respect to such
Facility.
(b) Mandatory. (i) The Letter of Credit A Facility,
Letter of Credit B-1 Facility or Letter of Credit B-2 Facility,
as the case may be, shall be permanently reduced from time to
time on the date of each reduction in the Working Capital A
Facility, Working Capital B-1 Facility or Working Capital B-2
Facility, as the case may be, by the amount, if any, by which the
amount of the Letter of Credit A Facility, Letter of Credit B-1
Facility or Letter of Credit B-2 Facility, as the case may be,
exceeds the Working Capital A Facility, Working Capital B-1
Facility or Working Capital B-2 Facility, as the case may be,
after giving effect to such reduction of such Working Capital
Facility.
(ii) The Swing Line A Facility or Swing Line B-1
Facility, as the case may be, shall be permanently reduced from
time to time on the date of each reduction in the Working Capital
A Facility or Working Capital B-1 Facility, as the case may be,
by the amount, if any, by which the amount of the Swing Line A
Facility or Swing Line B-1 Facility, as the case may be, exceeds
the Working Capital A Facility or Working Capital B-1 Facility,
as the case may be, after giving effect to such reduction of such
Working Capital Facility.
(iii) Upon the date of receipt by Crompton Corp. or
any of its Subsidiaries of the Net Cash Proceeds from the sale or
other disposition of assets pursuant to clause (xi) of Section
5.02(e), the Working Capital Facilities shall be automatically
and permanently reduced, on a pro rata basis, by the amount of
such Net Cash Proceeds to the extent required under such clause
(xi).
SECTION 2.07. Prepayments. (a) Optional. Each
Borrower may, upon at least one Business Day's notice in the case
of Base Rate Advances and three Business Days' notice in the case
of Eurocurrency Rate Advances, in each case to the Agent stating
the proposed date and aggregate principal amount of the
prepayment, and if such notice is given such Borrower shall,
prepay the outstanding aggregate principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in
part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid; provided,
however, that (x) each partial prepayment shall be (A) with
respect to any Working Capital A Advance or any Working Capital
B-1 Advance, in an aggregate principal amount of US$5,000,000 or
an integral multiple of US$1,000,000 in excess thereof or (B)
with respect to any Working Capital B-2 Advance or any Working
Capital B-3 Advance, in an aggregate principal amount of
US$1,000,000 (or the Dollar Equivalent in the Foreign Currency of
such Advance) or an integral multiple of US$100,000 (or the
Dollar Equivalent in the Foreign Currency of such Advance), in
each case in US Dollars or the applicable Foreign Currency of
such Advance, determined on the day such notice is given and (y)
if any prepayment of a Eurocurrency Rate Advance is made on a
date other than the last day of an Interest Period for such
Advance, such Borrower shall also pay any amounts owing pursuant
to Section 8.04(c).
(b) Mandatory. (i) The Crompton A Borrowers shall,
on each Business Day, prepay an aggregate principal amount of the
Working Capital A Advances comprising part of the same
Borrowings, the Letter of Credit A Advances and the Swing Line A
Advances equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Working Capital A Advances,
(y) the Letter of Credit A Advances and (z) the Swing Line A
Advances then outstanding plus the aggregate Available Amount of
all Letters of Credit then outstanding under the Working Capital
A Facility exceeds (B) the Working Capital A Facility on such
Business Day.
(ii) The Uniroyal B-1 Borrower shall, on each Business
Day, prepay an aggregate principal amount of the Working Capital
B-1 Advances comprising part of the same Borrowings, the Letter
of Credit B-1 Advances and the Swing Line B-1 Advances equal to
the amount by which (A) the sum of the aggregate principal amount
of (x) the Working Capital B-1 Advances, (y) the Letter of Credit
B-1 Advances and (z) the Swing Line B-1 Advances then outstanding
plus the aggregate Available Amount of all Letters of Credit then
outstanding under the Working Capital B-1 Facility exceeds (B)
the Working Capital B-1 Facility on such Business Day.
(iii) Notwithstanding anything herein to the contrary,
each B-2 Borrower shall, on the first Business Day of each month,
prepay such B-2 Borrower's Borrower's Share of any amount set
forth in clause (b) of the definition "B-2 Facility Overage" that
exceeds the lesser of (A) US$10,000,000 minus the B-3 Facility
Overage at such time and (B) the aggregate Unused Working Capital
Commitments of the Working Capital A Lenders at such time.
(iv) Notwithstanding anything herein to the contrary,
each B-3 Borrower shall, on the first Business Day of each month,
prepay such B-3 Borrower's Borrower's Share of any amount set
forth in clause (b) of the definition "B-3 Facility Overage" that
exceeds the lesser of (A) US$10,000,000 minus the B-2 Facility
Overage at such time and (B) the aggregate Unused Working Capital
Commitments of the Working Capital A Lenders at such time.
(v) The Canadian Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Canadian Borrower
Advances comprising part of the same Borrowings equal to the
amount by which (A) the sum of (x) the aggregate principal amount
of the Canadian Borrower Advances and (y) the aggregate Face
Amount of Bankers' Acceptances then outstanding exceeds (B) the
Canadian Facility on such Business Day.
(vi) Notwithstanding anything herein to the contrary,
the Canadian Borrower shall, on the first Business Day of each
month, prepay any amount set forth in clause (b) of the
definition "Canadian Facility Overage" that exceeds the lesser of
(A) US$10,000,000 and (B) the aggregate Unused Working Capital
Commitments of the Working Capital A Lenders at such time.
(vii) The Crompton A Borrowers shall, on each Business
Day, pay to the Agent for deposit in the relevant L/C Cash
Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount by which
the aggregate Available Amount of all Letters of Credit then
outstanding under the Working Capital A Facility exceeds the
Letter of Credit A Facility on such Business Day.
(viii) The Uniroyal B-1 Borrower shall, on each
Business Day, pay to the Agent for deposit in the relevant L/C
Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount
by which the aggregate Available Amount of all Letters of Credit
then outstanding under the Letter of Credit B-1 Facility exceeds
the Letter of Credit B-1 Facility on such Business Day.
(ix) The Canadian Borrower shall, on each Business
Day, pay to the Agent for deposit in the Canadian Cash Collateral
Account an amount sufficient to cause the aggregate amount on
deposit in such Account to equal the amount by which the
aggregate Face Amount of all Bankers' Acceptances then
outstanding under the Canadian Facility exceeds the Canadian
Facility on such Business Day.
(x) Prepayments of the Working Capital A Facility,
Working Capital B-1 Facility, Working Capital B-2 Facility,
Working Capital B-3 Facility or Canadian Facility made pursuant
to clause (i), (ii), (iii), (iv), (v) or (vi) above shall be
first applied to prepay Letter of Credit Advances then
outstanding under such Facility until such Advances are paid in
full, second applied to prepay Swing Line Advances then
outstanding under such Facility until such Advances are paid in
full, third applied to prepay Working Capital Advances then
outstanding under such Facility comprising part of the same
Borrowings until such Advances are paid in full and fourth
deposited in the relevant L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of
Credit then outstanding under such Facility or, in the case of
the Canadian Facility, deposited in the Canadian Cash Collateral
Account to cash collateralize 100% of the Face Amount of all
Bankers' Acceptances then outstanding.
(xi) All prepayments under this subsection (b) shall
be made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest. (a) Availability of Types of
Advances. Subject in each case to the provisions of Sections
2.10 and 2.13, Canadian Borrower Advances in US Dollars may be
Canadian Base Rate Advances or Eurocurrency Rate Advances only
and Canadian Borrower Advances in Canadian Dollars may be
Canadian Prime Rate Advances only.
(b) Scheduled Interest. Each Borrower shall pay
interest on the unpaid principal amount of each Advance made to
such Borrower and owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During
such periods as such Advance is a Base Rate Advance, a rate per
annum equal at all times to the sum of (A) the Base Rate in
effect from time to time plus (B) the Applicable Margin in effect
from time to time, payable in arrears quarterly on the first day
of each October, January, April and July during such periods and
on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurocurrency Rate Advances.
During such periods as such Advance is a Eurocurrency Rate
Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of (A) the Eurocurrency Rate
for such Interest Period for such Advance plus (B) the Applicable
Margin in effect from time to time, payable in US Dollars or the
applicable Foreign Currency, as the case may be, in arrears on
the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day
of such Interest Period and on the date such Eurocurrency Rate
Advance shall be Converted or paid in full.
(iii) Local Rate Advances. During
such periods as such Advance is a Local Rate Advance, a rate per
annum equal at all times to the sum of (A) the Local Rate in
effect from time to time plus (B) the Applicable Margin for Local
Rate Advances in effect from time to time, payable in arrears
quarterly on the first day of each October, January, April and
July during such periods and on the date such Local Rate Advance
shall be Converted or paid in full.
(iv) Canadian Base Rate Advances.
During such periods as such Advance is a Canadian Base Rate
Advance, a rate per annum equal at all times to the sum of (A)
the Canadian Base Rate in effect from time to
time plus (B) the Applicable Margin for Canadian Base Rate
Advances in effect from time to time, payable in arrears
quarterly on the first day of each October, January, April and
July during such periods and on the date such Canadian Base Rate
Advance shall be Converted or paid in full.
(c) Default Interest. Upon the occurrence and during
the continuance of an Event of Default, each Borrower shall pay
interest on (i) the unpaid principal amount of each Advance made
to such Borrower and owing to each Lender, payable in US Dollars
or the applicable Foreign Currency, as the case may be, in
arrears on the dates referred to in clause (b)(i) through (b)(iv)
above and on demand, at a rate per annum equal at all times to 2%
per annum above the rate per annum required to be paid on such
Advance pursuant to clause (b)(i) through (b)(iv) above and (ii)
to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such
amount shall be paid in full, payable in US Dollars or the
applicable Foreign Currency, as the case may be, in arrears on
the date such amount shall be paid in full and on demand, at a
rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the
Type of Advance on which such interest has accrued pursuant to
clause (b)(i) through (b)(iv) above, and, in all other cases, on
Base Rate Advances pursuant to clause (b)(i) above.
(d) Notice of Interest Rate. Promptly after receipt
of a Notice of Borrowing pursuant to Section 2.02(a), the Agent
shall give notice to the relevant Borrower and each Appropriate
Lender of the applicable interest rate determined by the Agent
for purposes of clause (a).
(e) Interest Rate Determination. (i) If the Reuters
Screen CDOR Page is not available for the timely determination of
the BA Rate, each Canadian Reference Lender agrees to furnish to
the Agent timely information for the purpose of determining the
BA Rate. If any one or more of such Canadian Reference Lenders
shall not furnish such timely information to the Agent for the
purpose of determining any such interest rate, the Agent shall
determine such interest rate on the basis of timely information
furnished by the remaining Canadian Reference Lenders.
(ii) If the Reuters Screen CDOR Page is not available
for the timely determination of the BA Rate, and fewer than two
Canadian Reference Lenders are able to furnish timely information
to the Agent for determining the BA Rate for any Bankers'
Acceptances,
(A) the Agent shall forthwith
notify the Canadian Borrower and the Canadian Lenders that the
interest rate cannot be determined for such Bankers' Acceptances,
and
(B) the obligation of the Canadian
Lenders to make, or to renew, Bankers' Acceptances shall be
suspended until the Agent shall notify the Canadian Borrower and
the Canadian Lenders that the circumstances causing such
suspension no longer exist.
(f) Interest Act (Canada). Whenever a rate of
interest hereunder is calculated on the basis of a year (the
"deemed year") which contains fewer days than the actual number
of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the
Interest Act (Canada) by multiplying such rate of interest by the
actual number of days in the calendar year of calculation and
dividing it by the number of days in the deemed year.
(g) Nominal Rates; No Deemed Reinvestment. The
principle of deemed reinvestment of interest shall not apply to
any interest calculation under this Agreement; all interest
payments to be made hereunder shall be paid without allowance or
deduction for reinvestment or otherwise, before and after
maturity, default and judgment. The rates of interest specified
in this Agreement are intended to be nominal rates and not
effective rates. Interest calculated hereunder shall be
calculated using the nominal rate method and not the effective
rate method of calculation.
(h) Interest Paid by the Canadian Borrower.
Notwithstanding any provision of this Agreement, in no event
shall the aggregate "interest" (as defined in Section 347 of the
Criminal Code (Canada)) payable by the Canadian Borrower under
this Agreement exceed the effective annual rate of interest on
the "credit advanced" (as defined in the Section) under this
Agreement lawfully permitted by that Section and, if any payment,
collection or demand pursuant to this Agreement in respect of
"interest" (as defined in that Section) is determined to be
contrary to the provisions of that Section, such payment,
collection or demand shall be deemed to have been made by mutual
mistake of the Canadian Borrower and the Canadian Lenders and the
amount of such payment or collection shall be refunded to the
Canadian Borrower. For the purposes of this Agreement, the
effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and
principles over the relevant term and, in the event of a dispute,
a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Canadian Lenders will be prima facie evidence of
such rate.
SECTION 2.09. Fees. (a) Commitment Fee. The
Borrowers jointly and severally agree to pay to the Agent for the
account of the Lenders a commitment fee, from August 15, 1996 in
the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender until the
Termination Date, payable in US Dollars in arrears quarterly on
the first Business Day of each January, April, July and October,
commencing October 1, 1996, and on the Termination Date, at a
rate per annum equal to the Applicable Percentage in effect from
time to time on the average daily Unused Working Capital
Commitments of such Lender (without giving effect to clauses
(b)(ii)(D) and (b)(ii)(E) of the definition of "Unused Working
Capital Commitment"); provided, however, that any commitment fee
accrued with respect to any of the Commitments of a Defaulting
Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by
the Borrowers so long as such Lender shall be a Defaulting Lender
except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrowers prior to such time;
provided further that no commitment fee shall accrue on any of
the Commitments of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender; and provided further that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.17, each B-2 Borrower, each B-3 Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such B-3 Borrower's or the Canadian Borrower's
Borrower's Share of such Commitment Fee.
(b) Letter of Credit Fees, Etc. (i) The Borrowers
jointly and severally agree to pay to the Agent for the account
of each Working Capital A Lender each Working Capital B-1 Lender
and each Working Capital B-2 Lender a commission, payable in US
Dollars quarterly in arrears on the first Business Day of each
January, April, July and October, commencing October 1, 1996, and
on the earliest to occur of the full drawing, expiration,
termination or cancellation of any Letter of Credit and on the
Termination Date, on such Lender's Pro Rata Share of the average
daily aggregate Available Amount during such quarter of all
Letters of Credit issued under the Working Capital A Facility,
Working Capital B-1 Facility and Working Capital B-2 Facility,
respectively, and outstanding from time to time at the rate per
annum equal to the Applicable Percentage in effect from time to
time; provided that, notwithstanding anything herein to the
contrary and pursuant to Section 8.17, each B-2 Borrower shall
only be responsible for such B-2 Borrower's Borrower's Share of
such Letter of Credit Fees.
(ii) Any Borrower giving a Notice of Issuance shall
pay to each Issuing Bank, for its own account, such commissions,
issuance fees, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of the
requested Letter of Credit as such Borrower and such Issuing Bank
shall agree.
(c) Agent's Fees. The Borrowers jointly and severally
agree to pay to the Agent for its own account such fees as may
from time to time be agreed between the Borrowers and the Agent;
provided that, notwithstanding anything herein to the contrary
and pursuant to Section 8.17, each B-2 Borrower, each B-3
Borrower and the Canadian Borrower shall only be responsible for
such B-2 Borrower's, such B-3 Borrower's or the Canadian
Borrower's Borrower's Share of such Agent's Fees.
(d) Drawing Fees. The Canadian Borrower shall, on the
date of each Drawing and on the date of each renewal of any
outstanding Bankers' Acceptances, pay to the Agent, in Canadian
Dollars, for the ratable account of the Canadian Lenders
accepting Drafts and purchasing Bankers' Acceptances, the Drawing
Fee with respect to such Bankers' Acceptances. The Canadian
Borrower irrevocably authorizes each such Lender to deduct the
Drawing Fee payable with respect to each Bankers' Acceptance of
such Lender from the Drawing Purchase Price payable by such
Lender in respect of such Bankers' Acceptance in accordance with
Section 2.04 and to apply such amount so withheld to the payment
of such Drawing Fee for the account of the Canadian Borrower and,
to the extent such Drawing Fee is so withheld and legally
permitted to be so applied, the Canadian Borrower's obligations
under the preceding sentence in respect of such Drawing Fee shall
be satisfied.
SECTION 2.10. Conversion of Advances. (a) Optional.
Any Borrower may on any Business Day, upon notice given to the
Agent not later than (i) 11:00 A.M. (New York City time) in the
case of Base Rate Advances or Eurocurrency Rate Advances under
the Working Capital A Facility, the Working Capital B-1 Facility
or the Canadian Facility and (ii) 11:00 A. M. (London time) in
the case of Eurocurrency Rate Advances under the Working Capital
B-2 Facility or the Working Capital B-3 Facility, on the third
Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.08 and 2.13, Convert all
or any portion of the Advances of one Type made to such Borrower
comprising the same Borrowing into Advances of the other Type;
provided, however, that any Conversion of Eurocurrency Rate
Advances into Base Rate Advances or Canadian Base Rate Advances,
as the case may be, shall be made only on the last day of an
Interest Period for such Eurocurrency Rate Advances, any
Conversion of Base Rate Advances or Canadian Base Rate Advances,
as the case may be, into Eurocurrency Rate Advances shall be in
an amount not less than the minimum amount specified in Section
2.02(c), no Conversion of any Advances shall result in more
separate Borrowings than permitted under Section 2.02(c) and each
Conversion of Advances comprising part of the same Borrowing
under any Facility shall be made ratably among the Appropriate
Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into
Eurocurrency Rate Advances, the duration of the initial Interest
Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower giving such notice.
(b) Mandatory. (i) On the date on which the
aggregate unpaid principal amount of Eurocurrency Rate Advances
comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than US$5,000,000, or
US$1,000,000 (or the Equivalent thereof) in the case of Working
Capital B-2 Advances, Working Capital B-3 Advances and Canadian
Borrower Advances, such Advances shall automatically (A) if such
Eurocurrency Rate Advances are denominated in US Dollars, be
Converted into Base Rate Advances and (B) if such Eurocurrency
Rate Advances are denominated in any Foreign Currency, be
Converted into Local Rate Advances.
(ii) If any Borrower shall fail to select the duration
of any Interest Period for any Eurocurrency Rate Advances made to
such Borrower in accordance with the provisions contained in the
definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify such Borrower and the Appropriate Lenders,
whereupon each such Eurocurrency Rate Advance will automatically,
on the last day of the then existing Interest Period therefor,
(A) if such Eurocurrency Rate Advances are denominated in US
Dollars, be Converted into Base Rate Advances and (B) if such
Eurocurrency Rate Advances are denominated in any Foreign
Currency, be Converted into a Local Rate Advance.
(iii) Upon the occurrence and during the continuance
of any Event of Default, (x) each Eurocurrency Rate Advance will
automatically, on the last day of the then existing Interest
Period therefor, (A) if such Eurocurrency Rate Advances are
denominated in US Dollars, be Converted into Base Rate Advances
and (B) if such Eurocurrency Rate Advances are denominated in any
Foreign Currency, be redenominated into an Equivalent amount of
US Dollars and be Converted into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into,
Eurocurrency Rate Advances and the obligation of the Canadian
Lenders to create or renew Bankers' Acceptances shall be
suspended.
SECTION 2.11. Renewal and Conversion of Bankers'
Acceptances. (a) Optional Renewal. The Canadian Borrower may on
any Business Day, upon notice given to the Agent not later than
12:00 noon (New York City time) on a Business Day at least two
Canadian Business Days prior to the date of the proposed renewal
and subject to the provisions of Section 2.13, renew all or any
portion of the Bankers' Acceptances comprising part of the same
Drawing; provided, however, that:
(i) any renewal of Bankers'
Acceptances shall be made only on the then existing Maturity Date
for such Bankers' Acceptances;
(ii) each renewal of Bankers'
Acceptances comprising part of the same Drawing shall be made
ratably among the Lenders holding such Bankers' Acceptances in
accordance with the respective amount of such Bankers'
Acceptances so held; and
(iii) no renewal of any Bankers'
Acceptance may be made at any time that a Default has occurred
and is continuing.
Each such notice of renewal shall, within the restrictions set
forth above, specify (A) the date of such renewal (which shall be
the then existing Maturity Date of such Bankers' Acceptances and
shall be a Canadian Business Day), (B) the Bankers' Acceptances
to be renewed, (C) if less than all of the Bankers' Acceptances
comprising part of any Drawing are to be renewed, the aggregate
Face Amount for such renewal and (D) the term to maturity of the
renewed Bankers' Acceptances (which shall comply with the
definition of "Maturity Date" in Section 1.01); provided,
however, that, if the Agent determines in good faith (which
determination shall be conclusive and binding upon the Canadian
Borrower) that the Bankers' Acceptances cannot, due solely to the
requested aggregate Face Amount thereof, be renewed ratably by
the Canadian Lenders, the aggregate Face Amount of such renewal
(or the Face Amount of Bankers' Acceptances to be created by any
Canadian Lender) shall be reduced to such lesser amount as the
Agent determines will permit such renewal to be so made and each
Canadian Lender shall fund the difference between such Lender's
ratable portion of the original aggregate Face Amount of such
renewal and the Face Amount of the Bankers' Acceptances to be
created by such Lender after giving effect to such reduction in
the form of a Canadian Prime Rate Advance, which shall be deemed
for all purposes hereof to be a Canadian Borrower Advance made
pursuant to Section 2.01(e)(ii). Each notice of renewal under
this Section 2.11 shall be irrevocable and binding on the
Canadian Borrower. Upon any renewal of Bankers' Acceptances
comprising part of any Drawing in accordance with this Section
2.11(a), the Lenders holding the Bankers' Acceptances to be
renewed shall exchange such maturing Bankers' Acceptances for new
Bankers' Acceptances containing the terms set forth in the
applicable notice of renewal, and the Drawing Purchase Price
payable for each such renewal shall be applied, together with
other funds, if necessary, available to the Canadian Borrower, to
reimburse the Bankers' Acceptances otherwise maturing on such
date in accordance with Section 2.05(f). The Canadian Borrower
hereby irrevocably authorizes and directs each Canadian Lender to
apply the proceeds of each renewed Bankers' Acceptance owing to
it to the reimbursement, in accordance with this Section 2.11(a),
of the Bankers' Acceptances owing to such Lender and maturing on
such date.
(b) Optional Conversion. The Canadian Borrower may on
any Business Day, upon notice given to the Agent not later than
12:00 noon (New York City time) on a Business Day at least two
Canadian Business Days prior to the date of the proposed
Conversion and subject to the provisions of Section 2.13, Convert
all or any portion of the Bankers' Acceptances comprising part of
the same Drawing to a Canadian Borrower Borrowing comprised of
Canadian Prime Rate Advances; provided, however, that:
(i) any Conversion of Bankers'
Acceptances shall be made only on the then existing Maturity Date
for such Bankers' Acceptances;
(ii) each Conversion of Bankers'
Acceptances comprising part of the same Drawing shall be made
ratably among the Lenders holding such Bankers' Acceptances in
accordance with the respective amounts of such Bankers'
Acceptances so held; and
(iii) no Conversion may be made if
(A) the amount of the Advance to be made by any Canadian Lender
in connection with such Conversion would exceed such Lender's
Unused Working Capital Commitment under the Canadian Facility in
effect at the time of such Conversion, or (B) after giving effect
to such Conversion, the sum of the aggregate principal amount of
outstanding Canadian Borrower Advances plus the aggregate Face
Amount of Bankers' Acceptances then outstanding would exceed the
Canadian Facility.
Each such notice of Conversion shall, within the restrictions set
forth above, specify (A) the date of such Conversion (which shall
be the then existing Maturity Date of such Bankers' Acceptances
and shall be a Business Day), (B) the Bankers' Acceptances to be
Converted and (C) if less than all of the Bankers' Acceptances
comprising part of any Drawing are to be Converted, the aggregate
Face Amount of such Conversion. Each notice of Conversion under
this Section 2.11 shall be irrevocable and binding on the
Canadian Borrower. Upon any Conversion of Bankers' Acceptances
comprising part of the same Drawing in accordance with this
Section 2.11(b), the obligation of the Canadian Borrower to
reimburse the Lenders under Section 2.14 in respect of the
Bankers' Acceptances otherwise maturing on such date shall, to
the extent of such conversion, be Converted to an obligation to
reimburse the Lenders making the Canadian Borrower Advances made
in respect of such maturing Bankers' Acceptances on such date
ratably in accordance with the amount of the Advances held by
such Lender at the time of reimbursement. The Canadian Borrower
hereby irrevocably authorizes and directs each Canadian Lender to
apply the net proceeds of each Canadian Prime Rate Advance made
by such Lender pursuant to this Section 2.11(b) to the
reimbursement of the Bankers' Acceptances owing to such Lender
and maturing on such date.
(c) Mandatory Conversion. If any Default shall have
occurred and be continuing or if the Canadian Borrower shall fail
(i) to deliver a properly completed notice of renewal under
Section 2.11(b) or a properly completed notice of Conversion
under Section 2.11(b) indicating its intention to renew or to
Convert any maturing Bankers' Acceptances or (ii) to reimburse
the Canadian Lenders for any Bankers' Acceptances comprising part
of the same Drawing pursuant to Section 2.05, the Agent will
forthwith so notify the Canadian Borrower and the Canadian
Lenders, whereupon each such Bankers' Acceptance will
automatically, on the then existing Maturity Date of such
Bankers' Acceptances, Convert into a Canadian Prime Rate Advance.
SECTION 2.12. Increased Costs, Etc. (a) If, due to
either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law),
there shall be:
(A) any increase in the cost to
any Lender Party of agreeing to make or of making, funding or
maintaining Eurocurrency Rate Advances or of agreeing to issue or
of issuing or maintaining Letters of Credit or of agreeing to
make or of making or maintaining Letter of Credit Advances;
(B) any increase in the cost to
any Lender Party of agreeing to perform or of performing its
obligations under this Agreement under or in respect of Bankers'
Acceptances; or
(C) any reduction in any amount
payable to, or any increase in any payment required to be made
by, or any forgiveness or reduction of effective return to, any
Lender Party under this Agreement under or in respect of any
Bankers' Acceptances
(excluding for purposes of this Section 2.12 any such increased
costs resulting from (i) Taxes or Other Taxes (as to which
Section 2.15 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its
Applicable Lending Office or any political subdivision thereof),
then the Borrowers jointly and severally agree to pay from time
to time, upon demand by such Lender Party (with a copy of such
demand to the Agent), to the Agent for the account of such Lender
Party additional amounts sufficient to compensate such Lender
Party for such increased cost; provided, however, that, before
making any such demand, each Lender Party agrees to use
reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid
the need for, or reduce the amount of, such increased cost and
would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party. A certificate as
to the amount of such increased cost, submitted to the Borrowers
by such Lender Party, shall be conclusive and binding for all
purposes, absent manifest error; provided further that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.17, each B-2 Borrower, each B-3 Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such B-3 Borrower's or the Canadian Borrower's
Borrower's Share of such additional amounts.
(b) If any Lender Party determines that either (i)
the enactment of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any law or
regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or
expected to be maintained by such Lender Party or any corporation
controlling such Lender Party and that the amount of such capital
is increased by or based upon the existence of such Lender
Party's commitment to lend, to accept, purchase and/or discount
Bankers' Acceptances or to issue Letters of Credit hereunder and
other commitments of such type or the purchase and/or acceptance
and maintenance of Bankers' Acceptances or the issuance or
maintenance of the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party (with a copy
of such demand to the Agent), the Borrowers jointly and severally
agree to pay to the Agent for the account of such Lender Party,
from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party in the light
of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to
the existence of such Lender Party's commitment to lend, to
accept, purchase and/or discount Bankers' Acceptances or to issue
Letters of Credit hereunder or to the purchase and/or acceptance
and maintenance of Bankers' Acceptances or the issuance or
maintenance of any Letters of Credit; provided, however, that,
before making any such demand, each Lender Party agrees to use
reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid
the need for, or reduce the amount of, such additional amounts
payable under this subsection (b) and would not, in the
reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to such
amounts submitted to the Borrowers by such Lender Party shall be
conclusive and binding for all purposes, absent manifest error;
provided further that, notwithstanding anything herein to the
contrary and pursuant to Section 8.17, each B-2 Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's or the Canadian Borrower's Borrower's Share of such
additional amounts.
(c) If, with respect to any Eurocurrency Rate Advances
made or to be made under any Facility, Appropriate Lenders
holding at least 51% of the Commitments under such Facility
notify the Agent that the Eurocurrency Rate for any Interest
Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurocurrency
Rate Advances for such Interest Period, the Agent shall forthwith
so notify the Borrowers and the Appropriate Lenders, whereupon
(i) each such Eurocurrency Rate Advance under such Facility will
automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert
Advances into, Eurocurrency Rate Advances shall be suspended
until the Agent shall notify the Borrowers that the Required
Lenders have determined that the circumstances causing such
suspension no longer exist.
[(d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful,
or any central bank or other governmental authority shall assert
that it is unlawful, for any Lender or its Eurocurrency Lending
Office to perform its obligations hereunder to make Eurocurrency
Rate Advances or to continue to fund or maintain Eurocurrency
Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrowers through the Agent, (i)
each Eurocurrency Rate Advance under each Facility under which
such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation
of such Lender to make, or to Convert Advances into, Eurocurrency
Rate Advances shall be suspended until the Agent shall notify the
Borrowers that such Lender has determined that the circumstances
causing such suspension no longer exist.] [Duplicates 2.13(a)]
SECTION 2.13. Illegality. (a) If, after the date of
this Agreement, the adoption of any applicable law, rule or
regulation, 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 Party (or its Eurocurrency Lending Office) with any
request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency shall make
it unlawful or impossible for any Lender Party (or its
Eurocurrency Lending Office) to make, maintain or fund its
Eurocurrency Rate Advances in US Dollars or any Foreign Currency
hereunder such Lender Party shall so notify the Agent and
Crompton Corp., whereupon until such Lender Party notifies the
Agent and Crompton Corp. that the circumstances giving rise to
such suspension no longer exist, the obligation of such Lender
Party to make such Eurocurrency Rate Advances shall be suspended.
Before giving any notice to the Agent and Crompton Corp pursuant
to this Section, such Lender Party shall designate a different
Eurocurrency Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
If such Lender Party shall determine that it may not lawfully
continue to maintain and fund any of its outstanding Eurocurrency
Rate Advances to maturity and shall so specify in such notice,
each such Eurocurrency Rate Advance made by such Lender Party
will automatically, upon such demand, (a) if such Eurocurrency
Rate Advance is denominated in US Dollars, be converted into a
Base Rate Loan and (b) if such Eurocurrency Advance is
denominated in any Foreign Currency, be redenominated into an
Equivalent amount of US Dollars and converted into a Local Rate
Advance.
(b) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in the
interpretation of any law or regulation (including, without
limitation, any change in acceptance limits imposed on any
Lender) shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any
Lender or any of their respective BA Lending Offices to perform
its obligations hereunder to complete and accept Drafts, to
purchase Bankers' Acceptances or to continue to fund or maintain
Bankers' Acceptances hereunder, then, upon notice thereof and
demand therefor by such Lender to the Canadian Borrower through
the Agent (i) an amount equal to the aggregate Face Amount of all
Bankers' Acceptances outstanding at such time shall, upon such
demand (which shall only be made if deemed necessary by the
applicable Lender to comply with applicable law), be deposited by
the Canadian Borrower into the Canadian Cash Collateral Account
until the Maturity Date of each such Bankers' Acceptance, (ii)
upon the Maturity Date of any Bankers' Acceptance in respect of
which any such deposit has been made, the Agent shall be, and
hereby is, authorized (without notice to or any further action by
any Borrower) to apply, or to direct the Agent to apply, such
amount (or the applicable portion thereof) to the reimbursement
of such Bankers' Acceptance and (iii) the obligation of the
Canadian Lenders to complete and accept Drafts and/or to purchase
Bankers' Acceptances shall be suspended until the Agent shall
notify the Canadian Borrower that such Lender has determined that
the circumstances causing such suspension no longer exist.
SECTION 2.14. Payments and Computations. (a) Each
Borrower (other than any B-2 Borrower or any B-3 Borrower) shall
make each payment hereunder and under the Notes, irrespective of
any right of counterclaim or set-off (except as otherwise
provided in Section 2.18), not later than 11:00 A.M. (New York
City time) on the day when due in US Dollars to the Agent at the
applicable Agent's Account in same day funds. Each B-2 Borrower
and B-3 Borrower shall make each payment hereunder and under the
Notes, irrespective of any right of counterclaim or set-off
(except as otherwise provided in Section 2.18), not later than
11:00 A.M. (London time) on the day when due in like funds as
advanced to the Agent in same day funds by deposit of such funds
to the applicable Agent's Account maintained at such Payment
Office. The Agent will promptly thereafter cause like funds to
be distributed (i) if such payment by such Borrower is in respect
of principal, interest, commitment fees or any other Obligation
then payable hereunder and under the Notes to more than one
Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with
the amounts of such respective Obligations then payable to such
Lender Parties and (ii) if such payment by such Borrower is in
respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment
and Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the Agent shall
make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender Party assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) If the Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for
which the Loan Documents do not specify the Advances or the
Facility to which, or the manner in which, such funds are to be
applied, the Agent may, but shall not be obligated to, elect to
distribute such funds to each Lender Party ratably in accordance
with such Lender Party's proportionate share of the principal
amount of all outstanding Advances, the Face Amount of all
outstanding Bankers' Acceptances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment of
such of the outstanding Advances or other Obligations owed to
such Lender Party, and for application to such principal
installments, as the Agent shall direct.
(c) Each Borrower hereby authorizes each Lender Party,
if and to the extent payment owed to such Lender Party is not
made when due hereunder or, in the case of a Lender, under the
Note held by such Lender, to charge from time to time against any
or all of such Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest based on the Base
Rate, the Local Rate and the Canadian Base Rate shall be made by
the Agent on the basis of a year of 365 or 366 days, as the case
may be, all computations of interest based on the Eurocurrency
Rate (other than such Eurocurrency Rate on any Advances
denominated in the lawful currency of the United Kingdom of Great
Britain and Northern Ireland) or the Federal Funds Rate and of
fees and Letter of Credit commissions shall be made by the Agent
on the basis of a year of 360 days, and all computations of
interest based on the BA Rate and the Eurocurrency Rate on any
Advances denominated in the lawful currency of the United Kingdom
of Great Britain and Northern Ireland shall be made by the Agent
on the basis of a year of 365 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Agent of an
interest rate, fee or commission hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes
or in respect of Bankers' Acceptances shall be stated to be due
on a day other than a Business Day or a Canadian Business Day, as
the case may be, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of
Eurocurrency Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Agent shall have received notice from a
Borrower prior to the date on which any payment is due to any
Lender Party hereunder that such Borrower will not make such
payment in full, the Agent may assume that such Borrower has made
such payment in full to the Agent on such date and the Agent may,
in reliance upon such assumption, cause to be distributed to each
such Lender Party on such due date an amount equal to the amount
then due such Lender Party. If and to the extent any Borrower
shall not have so made such payment in full to the Agent, each
such Lender Party shall repay to the Agent forthwith on demand
such amount distributed to such Lender Party together with
interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party
repays such amount to the Agent, at the higher of (A) the Federal
Funds Rate and (b) the cost of funds incurred by the Agent in
respect of such amount.
SECTION 2.15. Taxes. (a) Any and all payments by any
Borrower hereunder or under the Notes or in respect of any
Bankers' Acceptance shall be made, in accordance with Section
2.14, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, (i) in the case of each Lender Party and the Agent,
respectively, taxes that are imposed on its overall net income or
the overall net income of its branch (and franchise taxes imposed
in lieu thereof) by the state or foreign jurisdiction under the
laws of which such Lender Party or the Agent, respectively, is
organized or any political subdivision thereof, (ii) in the case
of each Lender Party, taxes that are imposed on its overall net
income (and franchise taxes imposed in lieu thereof) by the state
or foreign jurisdiction in which the principal office or such
Lender Party's Applicable Lending Office is located or any
political subdivision thereof and (iii) in the case of the Agent,
taxes that are imposed on its overall net income (and franchise
taxes imposed in lieu thereof) by the jurisdiction in which the
office through which the Agent performs its activities hereunder
is located but not excluding any such taxes required to be
withheld by a Working Capital B-3 Lender or Borrower with respect
to any payments due to a Lender Party or the Agent from such
Working Capital B-3 Lender or Borrower pursuant to this Agreement
(all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments
hereunder or under any of the Notes or in respect of a Bankers'
Acceptance being hereinafter referred to as "Taxes"). If any
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum paid or payable hereunder or under any Note or
in respect of any Bankers' Acceptance to any Lender Party or the
Agent, or, if the Agent shall be required by law to deduct any
Taxes from or in respect of any sum paid or payable hereunder or
under any Note or in respect of any Bankers' Acceptance to any
Lender Party, (i) the sum payable by such Borrower shall be
increased by such Borrower as may be necessary so that, after
making all required deductions (including deductions, whether by
such Borrower or the Agent, applicable to additional sums payable
under this Section 2.15) such Lender Party and the Agent each
receive an amount equal to the sum they each would have received
had no such deductions been made (for example, and without
limitation, if the sum paid or payable hereunder from or in
respect of which a Borrower or the Agent shall be required to
deduct any Taxes is interest, the interest payable by such
Borrower shall be increased by such Borrower as may be necessary
so that, after making all required deductions (including
deductions applicable to additional interest), such Lender Party
and the Agent each receive interest equal to the interest they
each would have received had no such deduction been made), (ii)
such Borrower (or, as the case may be and as required by
applicable law, the Agent) shall make such deductions and (iii)
such Borrower (or, as the case may be and as required by
applicable law or the Agent) shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder to such Borrower or under the Notes or in
respect of any Bankers' Acceptance or from the execution,
delivery or registration of, performance under, or otherwise with
respect to, this Agreement, any of the Notes or any Bankers'
Acceptance (hereinafter referred to as "Other Taxes").
(c) Each Borrower shall indemnify each Lender Party
and the Agent for and hold harmless against the full amount of
Taxes or Other Taxes (as well as, without limitation, any taxes
imposed by any jurisdiction on amounts payable under this Section
2.15) imposed on or paid by such Lender Party or the Agent (as
the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such
Lender Party or the Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, each Borrower shall furnish to the Agent at its address
referred to in Section 8.02, the original or a certified copy of
a receipt evidencing payment thereof. In the case of any payment
hereunder or under any of the Notes or in respect of any Bankers'
Acceptance by or on behalf of any Borrower through an account or
branch outside the United States, the United Kingdom, the
Republic of France, the Kingdom of The Netherlands, the Federal
Republic of Germany, Italy, Belgium and Canada or by or on behalf
of any Borrower by a payor that is not a United States person or
a corporation organized under the laws of the United Kingdom, the
Republic of France, the Kingdom of The Netherlands, the Federal
Republic of Germany, Italy, Belgium or Canada, if such Borrower
determines that no Taxes are payable in respect thereof, such
Borrower shall furnish, or shall cause such payor to furnish, to
the Agent, at such address, an opinion of counsel reasonably
acceptable to the Agent stating that such payment is exempt from
Taxes. For purposes of this subsection (d), the terms "United
States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party, on or prior to the date of its
execution and delivery of this Agreement in the case of each
Initial Lender and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each
other Lender Party, and from time to time thereafter as requested
in writing by any Borrower (but only so long as such Lender Party
remains lawfully able to do so), shall provide such Borrower and
the Agent with any form or certificate that is required by any
taxing authority including, if applicable, two original Internal
Revenue Service forms 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service or (in
the case of a Lender Party that is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the
Internal Revenue Code with respect to payments of "portfolio
interest") two accurate and complete signed original Forms W-8 or
any successor form prescribed by the Internal Revenue Service
(and, if such Lender Party delivers Forms W-8, two signed
certificates certifying that such Lender Party is not (i) a
"bank" for purposes of Section 881(c) of the Internal Revenue
Code, (ii) is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower, (iii) is not a controlled foreign corporation related
to the Borrower (within the meaning of Section 864(d)(4) of the
Internal Revenue Code) and (iv) is not a conduit entity
participating in a conduit financing arrangement (as defined in
Treasury Regulation Section 1.881-3), as appropriate, or any
successor or other form prescribed by the Internal Revenue
Service, certifying (if it is the case) that such Lender Party is
exempt from or entitled to a reduced rate of Home Jurisdiction
Withholding Taxes (as defined below) on payments pursuant to this
Agreement, the Notes or in respect of any Bankers' Acceptances
(or, in the case of a Lender Party that initially becomes a party
to this Agreement pursuant to an assignment under Section 8.07,
exempt from or entitled to a reduced rate of Home Jurisdiction
Withholding Taxes on payments made pursuant to this Agreement,
the Notes or in respect of any Bankers' Acceptances that is no
greater than the rate to which the assigning Lender Party was
subject (assuming such assigning Lender Party provided such forms
or certificates as may be required by this subsection (e)));
provided, however, that such Lender Party shall have been advised
in writing by each Borrower (including at the time any renewal
form is due) of the form or certificate applicable to it,
determined by reference to the jurisdiction of organization and
Applicable Lending Office of such Lender Party set forth on
Schedule I hereto, in the case of each Initial Lender, or to the
jurisdiction of organization and Applicable Lending Office of
such Lender Party set forth in the Assignment and Acceptance
pursuant to which it became a Lender Party, in the case of each
other Lender Party, or such other branch or office of any Lender
Party designated by such Lender Party from time to time. If any
form or document referred to in this subsection (e) requires the
disclosure of information not substantially similar to the
information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service form 1001
or 4224 or United Kingdom Inland Revenue Form FD13, and which a
Lender Party reasonably considers to be confidential, such Lender
Party shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential
information. If the accurate and complete forms provided by a
Lender Party at the time such Lender Party first becomes a party
to this Agreement indicate a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party
provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender Party becomes a party
to this Agreement, the Lender Party assignor was entitled to
payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other
amounts otherwise includible in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee
on such date.
"Home Jurisdiction Withholding Taxes" means (a) in the
case of Crompton Corp., Crompton Colors, Davis-Standard, ITC and
Uniroyal, withholding taxes imposed by the United States, (b) in
the case of any Borrower incorporated under the laws of the
United Kingdom of Great Britain and Northern Ireland, withholding
taxes imposed by the United Kingdom of Great Britain and Northern
Ireland or who is a tax resident in the United Kingdom of Great
Britain and Northern Ireland because of central management and
control being located in the United Kingdom of Great Britain and
Northern Ireland, (c) in the case of any Borrower incorporated
under the laws of Republic of France, withholding taxes imposed
by the Republic of France, (d) in the case of any Borrower
incorporated under the laws of the Kingdom of The Netherlands,
withholding taxes imposed by the Kingdom of The Netherlands, (e)
in the case of any Borrower incorporated under the laws of the
Federal Republic of Germany, withholding taxes imposed by the
Federal Republic of Germany, (f) in the case of any Borrower
incorporated under the laws of Italy, but solely with respect to
the B-3 Lenders, withholding taxes imposed by Italy, (g) in the
case of C & K Services SA (a Belgian coordination center)
withholding taxes imposed by Belgium and (h) in the case of the
Canadian Borrower, withholding taxes imposed by Canada.
(f) For any period with respect to which a Lender
Party has failed, within 30 days of such Lender Party's receipt
of written request therefor from any Borrower, to provide such
Borrower with the appropriate form or certificate described in
Section 2.15(e) (other than if such failure is due to a change in
law (including, without limitation, any change in regulation or
change in the interpretation of any statute or regulation or
other rule of law) occurring subsequent to the date on which a
form originally was required to be provided, such Lender Party
shall not be entitled to indemnification under Section 2.15(a) or
(c) with respect to Taxes imposed by the United States, the
United Kingdom, the Republic of France, the Kingdom of The
Netherlands, the Federal Republic of Germany, Italy, Belgium or
Canada, as applicable, by reason of such failure); provided,
however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form or certificate required
hereunder, each Borrower shall take such steps as such Lender
Party shall reasonably request, and at such Lender Party's
expense, to assist such Lender Party to recover such Taxes.
(g) Each Lender Party shall promptly upon the request
of the Agent take all action (including without limitation the
completion of forms and the provision of information to the
appropriate taxing authorities or to the Agent), of the kind
prescribed in regulations promulgated under Section 118H of the
U.K. Income and Corporation Taxes Act of 1988 (and any statements
published by the Inland Revenue relating thereto and having
general application) and consistent with such Lender Party's
legal and regulatory restrictions, reasonably requested by the
Agent, and the Agent shall upon reasonable request from any
Borrower make such request of each Lender Party and shall itself
(consistent with the Agent's legal and regulatory restrictions),
to the extent appropriate and reasonable, take similar action, to
secure the benefit of any exemption from, or relief with respect
to, Taxes or Other Taxes imposed by the United Kingdom under
Section 118H of the U.K. Income and Corporation Taxes Act of 1988
in relation to any amounts payable under this Agreement or any of
the Notes.
(h) Any Lender Party or the Agent (as the case may be)
claiming any additional amounts payable pursuant to this Section
2.15 agrees to use reasonable efforts (consistent with such
Lender Party's or the Agent's (as the case may be) internal
policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office or the office of
the Agent (as the case may be) if the making of such a change
would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in
the sole judgment of such Lender Party or in the reasonable
judgment of the Agent (as the case may be), be otherwise
disadvantageous to such Lender Party or the Agent (as the case
may be). Each Borrower shall promptly upon request by any Lender
Party or the Agent take all actions (including, without
limitation, the completion of forms and the provision of
information to the appropriate taxing authorities) reasonably
requested by such Lender Party or the Agent to secure the benefit
of any exemption from, or relief with respect to, Taxes or Other
Taxes in relation to any amounts payable under this Agreement.
(i) If the Agent or any Lender Party, in its sole
opinion, determines that it has finally and irrevocably received
or been granted a refund in respect of any Taxes or Other Taxes
as to which indemnification has been paid by Crompton Corp.
pursuant to Section 2.15(a) or (c), it shall promptly remit such
refund (including any interest) to Crompton Corp., net of all
out-of-pocket expenses of the Agent or such Lender Party;
provided, however, that Crompton Corp., upon the request of the
Agent or such Lender Party, agrees promptly to return such refund
(plus any interest) to such party in the event such party is
required to repay such refund to the relevant taxing authority.
The Agent or such Lender Party shall provide Crompton Corp. with
a copy of any notice or assessment from the relevant taxing
authority (deleting any confidential information contained
therein) requiring repayment of such refund. Nothing contained
herein shall impose an obligation on the Agent or any Lender
Party to apply for any refund or to disclose to any party any
information regarding their proprietary information regarding tax
affairs and computations.
SECTION 2.16. Sharing of Payments, Etc. If any Lender
Party shall obtain at any time any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) (a) on account of Obligations due and payable to such
Lender Party hereunder and under the Notes and under any Bankers'
Acceptances at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
Obligations due and payable to such Lender Party at such time to
(ii) the aggregate amount of the Obligations due and payable to
all Lender Parties hereunder and under the Notes and under any
Bankers' Acceptances at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and
under the Notes and under any Bankers' Acceptances at such time
obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender
Party hereunder and under the Notes and under any Bankers'
Acceptances at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
Obligations owing to such Lender Party at such time to (ii) the
aggregate amount of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes and
under any Bankers' Acceptances at such time) of payments on
account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes and under any
Bankers' Acceptances at such time obtained by all of the Lender
Parties at such time, such Lender Party shall forthwith purchase
from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be,
as shall be necessary to cause such purchasing Lender Party to
share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such
other Lender Party shall repay to the purchasing Lender Party the
purchase price to the extent of such Lender Party's ratable share
(according to the proportion of (i) the purchase price paid to
such Lender Party to (ii) the aggregate purchase price paid to
all Lender Parties) of such recovery together with an amount
equal to such Lender Party's ratable share (according to the
proportion of (i) the amount of such other Lender Party's
required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total
amount so recovered. Each Borrower agrees that any Lender Party
so purchasing a participation from another Lender Party pursuant
to this Section 2.16 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off)
with respect to such participation as fully as if such
Lender Party were the direct creditor of such Borrower in the
amount of such participation.
SECTION 2.17. Use of Proceeds. The proceeds of the
Advances and issuances of Letters of Credit under the Working
Capital Facilities shall be available (and each Borrower agrees
that it shall use such proceeds and Letters of Credit) solely to
pay transaction fees and expenses incurred in connection with
this Agreement, redeem or repurchase certain public Existing Debt
of Uniroyal Corp. and Uniroyal, and for other general corporate
purposes, including, without limitation, to finance permitted
acquisitions and Capital Expenditures and provide working capital
for the Borrowers and their respective Subsidiaries; provided
that Advances made pursuant to Section 2.02(g) shall be used by
Uniroyal solely for the purpose of satisfying its obligations
under the Seoul Guaranty.
SECTION 2.18. Defaulting Lenders. (a) In the event
that, at any one time, (i) any Lender Party shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance
to any Borrower and (iii) such Borrower shall be required to make
any payment hereunder or under any other Loan Document to or for
the account of such Defaulting Lender, then such Borrower may, so
long as no Default shall occur or be continuing at such time and
to the fullest extent permitted by applicable law, set off and
otherwise apply the Obligation of such Borrower to make such
payment to or for the account of such Defaulting Lender against
the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, such Borrower shall so
set off and otherwise apply its Obligation to make any such
payment against the obligation of such Defaulting Lender to make
any such Defaulted Advance on or prior to such date, the amount
so set off and otherwise applied by such Borrower shall
constitute for all purposes of this Agreement and the other Loan
Documents an Advance by such Defaulting Lender made on the date
under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01.
Such Advance shall be a Base Rate Advance, a Canadian Base Rate
Advance or a Local Rate Advance, as the case may be, and shall be
considered, for all purposes of this Agreement, to comprise part
of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section
2.01, even if the other Advances comprising such Borrowing shall
be Eurocurrency Rate Advances on the date such Advance is deemed
to be made pursuant to this subsection (a). Each Borrower shall
notify the Agent at any time such Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in
such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender
and (B) the amount set off and otherwise applied in respect of
such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by any
Borrower to or for the account of such Defaulting Lender which is
paid by such Borrower, after giving effect to the amount set off
and otherwise applied by such Borrower pursuant to this
subsection (a), shall be applied by the Agent as specified in
subsection (b) or (c) of this Section 2.18.
(b) In the event that, at any one time, (i) any Lender
Party shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Amount to the Agent or any of the other
Lender Parties and (iii) any Borrower shall make any payment
hereunder or under any other Loan Document to the Agent for the
account of such Defaulting Lender, then the Agent may, on its
behalf or on behalf of such other Lender Parties and to the
fullest extent permitted by applicable law, apply at such time
the amount so paid by such Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to
the extent required to pay such Defaulted Amount. In the event
that the Agent shall so apply any such amount to the payment of
any such Defaulted Amount on any date, the amount so applied by
the Agent shall constitute for all purposes of this Agreement and
the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the
Agent shall be retained by the Agent or distributed by the Agent
to such other Lender Parties, ratably in accordance with the
respective portions of such Defaulted Amounts payable at such
time to the Agent and such other Lender Parties and, if the
amount of such payment made by any Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to
the Agent and the other Lender Parties, in the following order of
priority:
(i) first, to the Agent for any
Defaulted Amount then owing to the Agent; and
(ii) second, to any other Lender
Parties for any Defaulted Amounts then owing to such other Lender
Parties, ratably in accordance with such respective Defaulted
Amounts then owing to such other Lender Parties.
Any portion of such amount paid by any Borrower for the account
of such Defaulting Lender remaining, after giving effect to the
amount applied by the Agent pursuant to this subsection (b),
shall be applied by the Agent as specified in subsection (c) of
this Section 2.18.
(c) In the event that, at any one time, (i) any Lender
Party shall be a Defaulting Lender, (ii) such Defaulting Lender
shall not owe a Defaulted Advance or a Defaulted Amount and (iii)
any Borrower, the Agent or any other Lender Party shall be
required to pay or distribute any amount hereunder or under any
other Loan Document to or for the account of such Defaulting
Lender, then such Borrower or such other Lender Party shall pay
such amount to the Agent to be held by the Agent, to the fullest
extent permitted by applicable law, in escrow or the Agent shall,
to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Agent in
escrow under this subsection (c) shall be deposited by the Agent
in an account with Citibank, in the name and under the control of
the Agent, but subject to the provisions of this subsection (c).
The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such
account from time to time, shall be Citibank's standard terms
applicable to escrow accounts maintained with it. Any interest
credited to such account from time to time shall be held by the
Agent in escrow under, and applied by the Agent from time to time
in accordance with the provisions of, this subsection (c). The
Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent
necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to
the Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay
all such Advances and amounts required to be made or paid at such
time, in the following order of priority:
(i) first, to the Agent for any
amount then due and payable by such Defaulting Lender to the
Agent hereunder;
(ii) second, to any other Lender
Parties for any amount then due and payable by such Defaulting
Lender to such other Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to such Borrower for
any Advance then required to be made by such Defaulting Lender
pursuant to a Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender
shall, at any time, cease to be a Defaulting Lender, any funds
held by the Agent in escrow at such time with respect to such
Lender Party shall be distributed by the Agent to such Lender
Party and applied by such Lender Party to the Obligations owing
to such Lender Party at such time under this Agreement and the
other Loan Documents ratably in accordance with the respective
amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting
Lender under this Section 2.18 are in addition to other rights
and remedies that the Borrowers may have against such Defaulting
Lender with respect to any Defaulted Advance and that the Agent
or any Lender Party may have against such Defaulting Lender with
respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of
Amendment and Restatement. The amendment and restatement of the
Existing Credit Agreement pursuant hereto shall become effective
on and as of the Restatement Date, which shall occur on such date
on or prior to August 5, 1997, on which each of the following
conditions precedent shall have been satisfied:
(a) The Required Lenders (as
defined in the Existing Credit Agreement) and all Canadian
Lenders shall have consented to this Second Amended and Restated
Credit Agreement.
(b) There shall exist no action,
suit, investigation, litigation or proceeding affecting any Loan
Party or any of its Subsidiaries pending or threatened before any
court, governmental agency or arbitrator that (i) would be
reasonably likely to have a Material Adverse Effect other than
the matters described on Schedule 3.01(f) (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note, any other Loan
Document, any Related Document or the consummation of the
transactions contemplated hereby, and there shall have been no
material adverse change in the status, or financial effect on any
Loan Party or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 3.01(f).
(c) All stock of the Borrowers
(other than Crompton Corp.) and the Borrowers' Subsidiaries, to
the extent owned by the Borrowers and their Subsidiaries, shall
be owned by the Borrowers or one or more of the Borrowers'
Subsidiaries, in each case free and clear of any lien, charge or
encumbrance other than in favor of the Lender Parties or other
than liens to be released pursuant to Section 5.01(l).
(d) All governmental and third
party consents and approvals (including, without limitation, any
consents or approvals required under the documents relating to
the Uniroyal Corp. Senior Notes and the Uniroyal Corp. Senior
Subordinated Notes) necessary in connection with Loan Documents
and the transactions contemplated thereby shall have been
obtained (without the imposition of any conditions that are not
reasonably acceptable to the Lender Parties) and shall remain in
effect other than such governmental or third party consents and
approvals the failure to obtain which shall not (x) be materially
adverse to any of the Borrowers, in each case together with its
respective Subsidiaries, taken as a whole, (y) affect the
enforceability, validity or binding effect of any of the Loan
Documents required to be executed and delivered prior to or on
the Restatement Date or (z) expose the Agent or the Lender
Parties to personal liability; all applicable waiting periods
shall have expired without any action being taken by any
competent authority; and no law or regulation shall be applicable
in the judgment of the Lender Parties that restrains, prevents or
imposes materially adverse conditions upon the Loan Documents or
the transactions contemplated thereby.
(e) The Borrowers shall have paid
all accrued fees and expenses of the Agent and the Lender Parties
(including the accrued fees and expenses of counsel to the Agent
and local counsel to the Lender Parties).
(f) The Agent shall have received
on or before the Restatement Date the following, each dated such
day (unless otherwise specified), in form and substance
satisfactory to the Agent (unless otherwise specified) and in
sufficient copies for each Lender Party:
(i) A
consent in substantially the form of Exhibit D-1, by the Pledgors
(as defined in the Crompton Security Agreement) in favor of the
Agent under the security agreement dated August 21, 1996 made by
the Pledgors named therein in favor of the Agent (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Crompton Security Agreement"),
duly executed by each Pledgor thereunder, consenting to the
amendment and restatement contemplated by this Agreement.
(ii) A
consent in substantially the form of Exhibit D-2, by the Pledgors
(as defined in the Uniroyal Security Agreement) in favor of the
Agent under the security agreement dated August 21, 1996 made by
the Pledgors named therein in favor of the Agent (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Uniroyal Security Agreement" and,
together with the Crompton Security Agreement and each security
agreement delivered pursuant to Section 5.01(k), in each case as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Security Agreement"), duly
executed by each Pledgor thereunder, consenting to the amendment
and restatement contemplated by this Agreement.
(iii) A
consent in substantially the form of Exhibit E-1, by Crompton
Corp. in favor of the Secured Parties under the guaranty dated
August 21, 1996 made by Crompton Corp. in favor of the Secured
Parties (as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "Parent Guaranty"),
duly executed by Crompton Corp., consenting to the amendment and
restatement contemplated by this Agreement.
(iv) A
consent in substantially the form of Exhibit E-2, by the
Subsidiary Guarantors in favor of the Secured Parties under the
subsidiary guaranty dated August 21, 1996 made by the Subsidiary
Guarantors in favor of the Secured Parties (together with each
other guaranty delivered pursuant to Section 5.01(k), in each
case as amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Subsidiary Guaranty"),
duly executed by each Subsidiary Guarantor, consenting to the
amendment and restatement contemplated by this Agreement.
(v) A
consent in substantially the form of Exhibit D-3, by Uniroyal and
each Uniroyal Guarantor under the supplement to the Uniroyal
Security Agreement in respect of Collateral located in the State
of Louisiana dated as of August 21, 1996 made by Uniroyal and the
Uniroyal Guarantors in favor of the Secured Parties (as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Louisiana Undertaking"), duly
executed by Uniroyal and the Uniroyal Guarantors, consenting to
the amendment and restatement contemplated by this Agreement.
(vi) A
favorable opinion of Shearman & Sterling, counsel for the Agent,
in form and substance satisfactory to the Agent.
SECTION 3.02. Conditions Precedent to Initial
Extension of Credit. The obligation of each Canadian Lender to
make a Canadian Borrower Advance on the occasion of the Initial
Extension of Credit hereunder is subject to satisfaction of the
following conditions precedent before or concurrent with the
Initial Extension of Credit:
(a) The Lender Parties shall be
satisfied with the corporate and legal structure and
capitalization of the Canadian Borrower and each of its
Subsidiaries, including the terms and conditions of the charter,
bylaws (or analogous organizational documents) and each class of
capital stock of the Canadian Borrower and each such Subsidiary
and of each agreement or instrument relating to such structure or
capitalization.
(b) The Agent shall have
received on or before the Initial Extension of Credit the
following, each dated on or before such date (unless otherwise
specified), in form and substance satisfactory to the Agent
(unless otherwise specified) and (except for the Canadian
Borrower Notes) in sufficient copies for each Lender Party:
(i) The Canadian Borrower
Notes payable to the order of the Canadian Lenders.
(ii)
Certified copies of the resolutions (or analogous authorizations)
of the Board of Directors (or other authorized legal
representatives) of the Canadian Borrower approving this
Agreement, the Canadian Borrower Notes, each other Loan Document
and each Related Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to this Agreement, the Canadian Borrower Notes,
each other Loan Document and each Related Document.
(iii) To
the extent applicable in such jurisdiction, a copy of a
certificate of the applicable regulatory authority of the
jurisdiction of its incorporation, dated on or before the date of
the Initial Extension of Credit, listing the charter of the
Canadian Borrower and each amendment thereto on file in his
office and certifying that (A) such amendments are the only
amendments to the Canadian Borrower's charter on file in his
office, (B) the Canadian Borrower has paid all franchise taxes to
the date of such certificate and (C) the Canadian Borrower is
duly incorporated and in good standing under the laws of the
jurisdiction of its incorporation.
(iv) A
certificate of the Canadian Borrower, signed on behalf of the
Canadian Borrower by its President or a Vice President and its
Secretary or any Assistant Secretary or an authorized legal
representative of the Canadian Borrower, dated on or before the
date of the Initial Extension of Credit (the statements made in
which certificate shall be true on and as of such date),
certifying as to (A) the absence of any amendments to the charter
of the Canadian Borrower since the date of the certificate
referred to in Section 3.02(b)(iii), (B) a true and correct copy
of the bylaws (or analogous organizational documents) of the
Canadian Borrower as in effect on such date, (C) to the extent
applicable in such jurisdiction, the due incorporation and good
standing of the Canadian Borrower organized under the laws of the
jurisdiction of its incorporation, and the absence of any
proceeding for the dissolution or liquidation of the Canadian
Borrower, (D) the truth of the representations and warranties
made by the Canadian Borrower contained in the Loan Documents as
though made on and as of such date and (E) the absence of any
event occurring and continuing, or resulting from the Initial
Extension of Credit, that constitutes a Default.
(v) A
certificate of the Secretary or an Assistant Secretary or an
authorized legal representative of the Canadian Borrower
certifying the names and true signatures of the officers of the
Canadian Borrower authorized to sign this Agreement, the Canadian
Borrower Notes, each other Loan Document and each Related
Document to which it is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(vi) A
favorable opinion of Wachtell, Lipton, Rosen & Katz, special
counsel for the Canadian Borrower, in substantially the form of
Exhibit F-1 hereto and as to such other matters as any Lender
Party through the Agent may reasonably request.
(vii) A
favorable opinion of John T. Ferguson, II, Esq., General Counsel
and Corporate Secretary of Crompton Corp. and its Subsidiaries,
in substantially the form of Exhibit F-2 hereto and as to such
other matters as any Lender Party through the Agent may
reasonably request.
(viii) A
favorable opinion of Weir & Foulds, special counsel for the
Canadian Borrower, in substantially the form of Exhibit F-3
hereto and as to such other matters as any Lender Party through
the Agent may reasonably request.
SECTION 3.03. Initial Extension of Credit to Each
Designated Subsidiary and Each Designated Italian Subsidiary.
The obligation of each Lender Party to make an Initial Extension
of Credit to (a) each Designated Subsidiary following any
designation of such Designated Subsidiary as a B-2 Borrower
hereunder pursuant to Section 8.08 and (b) each Designated
Italian Subsidiary following any designation of such Designated
Italian Subsidiary as a B-3 Borrower hereunder pursuant to
Section 8.08 is, in each case, subject to the Agent's receipt on
or before the date of such Initial Extension of Credit of each of
the following with respect to such Designated Subsidiary or
Designated Italian Subsidiary, as the case may be, in form and
substance satisfactory to the Agent and dated such date, and in
sufficient copies for each Lender Party:
(i) In the case of such B-2
Borrower, the Working Capital B-2 Notes payable to the order of
the Lenders and in the case of such B-3 Borrower, the Working
Capital B-3 Notes payable to the order of the Lenders.
(ii) Certified copies of the
resolutions (or analogous authorizations) of the Board of
Directors (or other authorized legal representatives) of such B-2
Borrower or B-3 Borrower approving this Agreement, the Working
Capital B-2 Notes or Working Capital B-3 Notes, as the case may
be, each other Loan Document and each Related Document to which
it is or is to be a party, and of all documents evidencing other
necessary corporate action and governmental and other third party
approvals and consents, if any, with respect to this Agreement,
the Notes, each other Loan Document and each Related Document.
(iii) To the extent applicable in
such jurisdiction, a copy of a certificate of the applicable
regulatory authority of the jurisdiction of its incorporation,
dated reasonably near the date of the Initial Extension of Credit
to such B-2 Borrower or B-3 Borrower, as the case may be, listing
the charter of such B-2 Borrower or B-3 Borrower and each
amendment thereto on file in his office and certifying that (A)
such amendments are the only amendments to such B-2 Borrower's or
B-3 Borrower's charter on file in his office, (B) each such B-2
Borrower or B-3 Borrower has paid all franchise taxes to the date
of such certificate and (C) each such B-2 Borrower or B-3
Borrower is duly incorporated and in good standing under the laws
of the jurisdiction of its incorporation.
(iv) A certificate of such B-2
Borrower or B-3 Borrower, signed on behalf of such B-2 Borrower
or B-3 Borrower, as the case may be, by its President or a Vice
President and its Secretary or any Assistant Secretary or an
authorized legal representative of such B-2 Borrower or B-3
Borrower, dated the date of the Initial Extension of Credit to
such B-2 Borrower or B-3 Borrower, relating to such B-2 Borrower
or B-3 Borrower (the statements made in which certificate shall
be true on and as of such date), certifying as to (A) the absence
of any amendments to the charter of such B-2 Borrower or B-3
Borrower, as the case may be, since the date of the certificate
referred to in Section 3.03(b)(iii), (B)a true and correct copy
of the bylaws (or analogous organizational documents) of such B-2
Borrower or B-3 Borrower as in effect on such date, (C)to the
extent applicable in such jurisdiction, the due incorporation and
good standing of such B-2 Borrower or B-3 Borrower organized
under the laws of the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or liquidation of
such B-2 Borrower or B-3 Borrower, (D) the truth of the
representations and warranties made by such B-2 Borrower or B-3
Borrower contained in the Loan Documents as though made on and as
of such date and (E) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit to
such B-2 Borrower or B-3 Borrower, that constitutes a Default.
(v) A certificate of the Secretary
or an Assistant Secretary or an authorized legal representative
of such B-2 Borrower or B-3 Borrower, as the case may be,
certifying the names and true signatures of the officers of such
B-2 Borrower or B-3 Borrower authorized to sign this Agreement,
the Working Capital B-2 Notes or Working Capital B-3 Notes, as
the case may be, each other Loan Document and each Related
Document to which they are or are to be a parties and the other
documents to be delivered hereunder and thereunder.
(vi) The Designation Letter of
such Designated Subsidiary or Designated Italian Subsidiary, as
the case may be, substantially in the form of Exhibit G hereto.
(vii) Evidence of the Process
Agent's acceptance of its appointment pursuant to Section 8.13(a)
as the agent of such B-2 Borrower or B-3 Borrower, substantially
in the form of Exhibit H hereto.
(viii) A favorable opinion of
counsel (which may be in-house counsel) to such Designated
Subsidiary or Designated Italian Subsidiary, dated the date of
such Initial Extension of Credit to such B-2 Borrower or B-3
Borrower, substantially in the form of Exhibit I hereto or in
form and substance reasonably acceptable to the Agent.
(ix) Such other approvals,
opinions or documents as any Lender Party, through the Agent, may
reasonably request.
SECTION 3.04. Conditions Precedent to Each Borrowing,
Drawing and Issuance. The right of the Borrowers to request and
the obligation of each Appropriate Lender to make an Advance or
to purchase, accept or renew a Bankers' Acceptance (other than a
Letter of Credit Advance made by an Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and a Swing Line
Advance made by a Working Capital Lender pursuant to Section
2.02(b)) on the occasion of each Borrowing (including the Initial
Extension of Credit), and the right of the Borrowers to request
and the obligation of each Issuing Bank to issue a Letter of
Credit (including the initial issuance) and the right of the
Borrowers to request a Swing Line Borrowing, shall be subject to
the further conditions precedent that on the date of such
Borrowing, Drawing or issuance (a) the following statements shall
be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Drawing, Notice of Swing Line Borrowing or
Notice of Issuance and the acceptance by the relevant Borrower of
the proceeds of such Borrowing, Drawing or Letter of Credit shall
constitute a representation and warranty by such Borrower that
both on the date of such notice and on the date of such
Borrowing, Drawing or issuance, such statements are true):
(i) the representations and
warranties contained in each Loan Document are correct on and as
of such date, before and after giving effect to such Borrowing,
Drawing or issuance and to the application of the proceeds
therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to
a specific date other than the date of such Borrowing, Drawing or
issuance, in which case as of such specific date; and
(ii) no event has occurred and is
continuing, or would result from such Borrowing, Drawing or
issuance or from the application of the proceeds therefrom, that
constitutes a Default;
and (b) the Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the Agent
may reasonably request.
SECTION 3.05. Determinations Under Sections 3.01, 3.02
and 3.03. For purposes of determining compliance with the
conditions specified in Sections 3.01, 3.02 and 3.03, each Lender
Party shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender Parties unless an officer of the Agent
responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party prior
to the Initial Extension of Credit specifying its objection
thereto and, if such Initial Extension of Credit consists of a
Borrowing or a Drawing, such Lender Party shall not have made
available to the Agent such Lender Party's ratable portion of
such Borrowing or Drawing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows;
provided, however, each B-2 Borrower, each B-3 Borrower and the
Canadian Borrower represents and warrants solely with respect to
itself:
(a) To the extent applicable under
the laws of the jurisdiction of incorporation of each Loan Party,
each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure
to so qualify or be licensed would not have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock
of the Borrowers has been validly issued and is fully paid and
non-assessable.
(b) Set forth on Schedule 4.01(b)
hereto is a complete and accurate list as of the Existing Credit
Agreement Effective Date of all Subsidiaries of each Loan Party,
showing as of the Existing Credit Agreement Effective Date (as to
each such Subsidiary) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and
the number outstanding, on the Existing Credit Agreement
Effective Date and the percentage of the outstanding shares of
each such class owned (directly or indirectly) by such Loan Party
and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at
the Existing Credit Agreement Effective Date. All of the
outstanding capital stock of all of such Subsidiaries to the
extent owned by the Borrowers and their Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by
such Loan Party or one or more of its Subsidiaries free and clear
of all Liens, except those created under the Loan Documents.
Each such Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure
to so qualify or be licensed would not have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and
performance by each Loan Party of this Agreement, the Notes, each
other Loan Document and each Related Document to which it is or
is to be a party, and the other transactions contemplated hereby,
are within such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any
law, rule, regulation (including, without limitation, Regulation
X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or
award, (iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, indenture,
mortgage, deed of trust or other instrument or material contract
or material lease binding on or affecting any Loan Party, any of
its Subsidiaries or any of their properties or (iv) except for
the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to
any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach
of any such loan agreement, indenture, mortgage, deed of trust or
other instrument or material contract or material lease, the
violation or breach of which would have a Material Adverse
Effect.
(d) No authorization or approval
or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of this
Agreement, the Notes, any other Loan Document or any Related
Document to which it is or is to be a party, or for the
transactions contemplated hereby, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by the Agent or any Lender
Party of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents,
except for the authorizations, approvals, actions, notices and
filings listed on Schedule 4.01(d), all of which have been duly
obtained, taken, given or made and are in full force and effect.
(e) This Agreement has been, and
each of the Notes, each other Loan Document and each Related
Document when delivered hereunder will have been, duly executed
and delivered by each Loan Party party thereto. This Agreement
is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal,
valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms.
(f) The Consolidated balance sheet
of Crompton Corp. and its Subsidiaries as at December 30, 1995,
and the related Consolidated statement of income and Consolidated
statement of cash flows of Crompton Corp. and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of KPMG
Peat Marwick LLP, independent public accountants, and the
Consolidated balance sheet of Crompton Corp. and its Subsidiaries
as at March 30, 1996, and the related Consolidated statement of
income and Consolidated statement of cash flows of Crompton Corp.
and its Subsidiaries for the three months then ended, duly
certified by the chief financial officer of Crompton Corp.,
copies of which have been furnished to each Lender Party, fairly
present, subject, in the case of said balance sheet as at March
30, 1996, and said statements of income and cash flows for the
three months then ended, to year-end audit adjustments, the
Consolidated financial condition of Crompton Corp. and its
Subsidiaries as at such dates and the Consolidated results of
operations of Crompton Corp. and its Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since
December 30, 1995, there has been no Material Adverse Change.
(g) The Consolidated balance sheet
of Uniroyal Corp. and its Subsidiaries as at October 1, 1995, and
the related Consolidated statement of income and Consolidated
statement of cash flows of Uniroyal Corp. and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
Deloitte & Touche LLP, independent public accountants, and the
Consolidated balance sheet of Uniroyal Corp. and its Subsidiaries
as at March 31, 1996, and the related Consolidated statement of
income and Consolidated statement of cash flows of Uniroyal Corp.
and its Subsidiaries for the six months then ended, duly
certified by the chief financial officer of Uniroyal Corp.,
copies of which have been furnished to each Lender Party, fairly
present, subject, in the case of said balance sheet as at March
31, 1996, and said statements of income and cash flows for the
six months then ended, to year-end audit adjustments, the
Consolidated financial condition of Uniroyal Corp. and its
Subsidiaries as at such date and the Consolidated results of
operations of Uniroyal Corp. and its Subsidiaries for the period
ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since
October 1, 1995, there has been no Material Adverse Change.
(h) The Consolidated pro forma
balance sheet of Crompton Corp. and its Subsidiaries and the
related Consolidated pro forma statements of income and cash
flows of Crompton Corp. and its Subsidiaries, in each case
contained in the Proxy Statement dated July 23, 1996, copies of
which have been furnished to each Lender Party, fairly present
the Consolidated pro forma financial condition of Crompton Corp.
and its Subsidiaries as at such date and the Consolidated pro
forma results of operations of Crompton Corp. and its
Subsidiaries for the period ended on such date, in each case
giving effect to the Merger and the other transactions
contemplated hereby.
(i) The Consolidated and
consolidating forecasted balance sheets, income statements and
cash flows statements of Crompton Corp. and its Subsidiaries
delivered to the Lender Parties pursuant to Section 5.03 were
prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and
represented, at the time of delivery, Crompton Corp.'s good faith
estimate of its future financial performance.
(j) No information, exhibit or
report furnished by any Loan Party to the Agent or any Lender
Party in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(k) There is no action, suit,
investigation, litigation or proceeding affecting any Loan Party
or any of its Subsidiaries, including any Environmental Action,
pending or threatened before any court, governmental agency or
arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect (other than the Disclosed Litigation) or (ii)
purports to affect the legality, validity or enforceability of
this Agreement, any Note, any other Loan Document or any Related
Document or the consummation of the transactions contemplated
hereby, and there has been no material adverse change in the
status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(f).
(l) No proceeds of any Advance,
any Drawing or drawings under any Letter of Credit will be used
to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
(m) No Borrower is engaged in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock, and no proceeds of any Advance, any
Drawing or drawings under any Letter of Credit will be used to
purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.
(n)(i) Except as disclosed in Part
I of Schedule 4.01(o) hereto, the operations and properties of
each Loan Party and each of its Subsidiaries comply in all
material respects with all applicable Environmental Laws and
Environmental Permits, all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved
without material ongoing obligations or costs, and no
circumstances exist that would be reasonably likely to (i) form
the basis of an Environmental Action against any Loan Party or
any of its Subsidiaries or any of their properties that could
have a Material Adverse Effect or (ii) cause any such property to
be subject to any material restrictions on ownership, occupancy,
use or transferability under any Environmental Law in effect on
the date hereof.
(ii) Except as disclosed in Part
II of Schedule 4.01(o) hereto or as would not, individually or in
the aggregate, result in a Material Adverse Effect, none of the
properties currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or, to the best
knowledge of any Loan Party, proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list or
is adjacent to any such property; there are no and never have
been any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by any Loan
Party or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by any Loan
Party or any of its Subsidiaries; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries; and
Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries.
(iii) Except as disclosed in Part
III of Schedule 4.01(o) hereto, neither any Loan Party nor any of
its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries have been disposed of in a
manner not reasonably expected to result in material liability to
any Loan Party or any of its Subsidiaries.
(o) Neither any Loan Party nor any
of its Subsidiaries is an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any
Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by any Borrower,
nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission
thereunder.
(p) Each Loan Party is,
individually and together with its Subsidiaries, Solvent.
(q) Set forth on Schedule 4.01(t)
hereto is a complete and accurate list of all Existing Debt
(other than Surviving Debt), showing as of the Existing Credit
Agreement Effective Date the principal amount outstanding
thereunder.
(s) Set forth on Schedule 3.01(d)
hereto is a complete and accurate list as of the Existing Credit
Agreement Effective Date of all Surviving Debt, showing as of the
Existing Credit Agreement Effective Date the principal amount
outstanding thereunder.
(t) Set forth on Schedule 4.01(w)
hereto is a complete and accurate list of all Material
Subsidiaries existing as of the Existing Credit Agreement
Effective Date.
SECTION 4.02. Additional Representations and
Warranties of the Crompton A Borrowers and Uniroyal B-1 Borrower.
Each Crompton A Borrower and the Uniroyal B-1 Borrower represents
and warrants as follows:
(a) The Collateral Documents
create a valid and perfected first priority interest in the
Collateral (other than as to matters of perfection and priority
of the security interest in the Pledged Accounts (as defined in
the Uniroyal Security Agreement) and the Other Accounts (as
defined in the Uniroyal Security Agreement)), securing the
payment of the Secured Obligations (as defined in the Collateral
Documents), and all filings and other actions necessary or
desirable to perfect and protect such security interest have been
duly taken. The Loan Parties are the legal and beneficial owners
of the Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the Loan
Documents.
(b) The aggregate revenues of the
Minor Subsidiaries (other than Crompton and Knowles I.P.R.
Corporation), on a Consolidated basis, do not exceed US$250,000
for the twelve-month period ending on the last day of the most
recent fiscal quarter of Crompton Corp., and the aggregate book
value of the assets of the Minor Subsidiaries (other than
Crompton and Knowles I.P.R. Corporation), on a Consolidated
basis, as at the end of the most recent fiscal quarter of
Crompton Corp. does not exceed US$250,000.
(c) (i) No ERISA Event has
occurred or is reasonably expected to occur with respect to any
Plan that has had or is reasonably expected to have a Material
Adverse Effect.
(ii) Schedule B (Actuarial
Information) to the most recent annual report (Form 5500 Series)
for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is complete
and accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material
adverse change in such funding status.
(iii) Neither any Loan Party nor
any ERISA Affiliate has incurred or is reasonably expected to
incur any Withdrawal Liability to any Multiemployer Plan that has
had or is reasonably expected to have a Material Adverse Effect.
(d) Neither any Loan Party nor any
ERISA Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA which, in
either event, has had or is reasonably expected to have a
Material Adverse Effect.
(e) Crompton and Knowles I.P.R.
Corporation does not conduct any business or engage in any
activity and has no material assets other than an intercompany
receivable in an amount that does not exceed US$33,000,000.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, each Borrower will:
(a) Compliance with Laws, Etc.
Comply, and cause each of its Subsidiaries to comply, in all
material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970,
except, in any case, where the failure so to comply, either
individually or in the aggregate, could not be reasonably
expected to have a Material Adverse Effect and would not be
reasonably likely to subject any Loan Party or any of its
Subsidiaries to any criminal penalties or any Lender Party to any
civil or criminal penalties.
(b) Payment of Taxes, Etc. Pay
and discharge, and cause each of its Subsidiaries to pay and
discharge, before the same shall become delinquent, (i) all
federal income and other material taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither
any Borrower nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, charge or claim (x) that
is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained or (y) in
respect of which the Lien resulting therefrom, if any, attaches
to its property and becomes enforceable against its other
creditors, to the extent that the aggregate amount of all such
taxes, assessments, charges or claims does not exceed
US$3,000,000.
(c) Maintenance of Insurance.
Maintain (or have maintained on its behalf or maintain on behalf
of each of its Subsidiaries), and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which
such Borrower or such Subsidiary operates; it being understood
and agreed that Crompton Corp. and its Subsidiaries may self-insure
to the extent consistent with prudent business practice.
(d) Preservation of Corporate
Existence, Etc. Preserve and maintain, and cause each of its
Subsidiaries (other than any Minor Subsidiary) to preserve and
maintain, its existence, legal structure, legal name, rights
(charter and statutory), permits, licenses, approvals, privileges
and franchises; provided, however, that such Borrower and its
Subsidiaries may consummate the Merger and any other merger or
consolidation permitted under Section 5.02(d); provided further
that neither any Borrower nor any of its Subsidiaries shall be
required to preserve any legal structure, legal name, right,
permit, license, approval, privilege or franchise if such
Borrower or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of
such Borrower or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect
to such Borrower, such Subsidiary or the Lender Parties or, with
respect to permits, licenses, approvals, privileges and
franchises, that the loss thereof could not be reasonably
expected to have a Material Adverse Effect; provided still
further that, prior to the Collateral Release Date, if any
Borrower or any of its Subsidiaries shall determine not to
preserve any legal structure or legal name (to the extent
permitted under the immediately preceding proviso), the Borrowers
and their Subsidiaries shall take such action (within such time
as may be required under the Collateral Documents or under the
Uniform Commercial Code (as defined in the Security Agreement))
as the Agent may deem necessary or desirable to perfect and
protect the Liens created under the Collateral Documents.
(e) Visitation Rights. At any
reasonable time and from time to time, during regular business
hours and upon reasonable prior notice, permit the Agent or any
of the Lender Parties or any agents or representatives thereof,
to examine and make copies of and abstracts from the records
(other than (i) records subject to attorney-client privilege or
confidentiality agreements and (ii) records relating to trade
secrets) and books of account of, and visit the properties of,
any Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of any Borrower and any of its
Subsidiaries with any of their respective officers or directors
and with their independent certified public accountants and
authorize and direct such accountants to disclose to the Agent or
any of the Lender Parties any and all financial statements and
other information of any kind that they may have with respect to
any Borrower and any of its Subsidiaries.
(f) Keeping of Books. Keep,
and cause each of its Subsidiaries to keep, proper books of
record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of
such Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to
time.
(g) Maintenance of Properties,
Etc. Maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, except where the
failure to do so, either individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect.
(h) Compliance with Terms of
Leaseholds. Make all payments and otherwise perform all
obligations in respect of all leases of real property to which
such Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Agent of any default by any
party with respect to such leases and cooperate with the Agent in
all respects to cure any such default, and cause each of its
Subsidiaries to do so, except, in any case, where the failure to
do so, either individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect.
(i) Performance of Related
Documents. Perform and observe all of the terms and provisions
of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take
all such action to such end as may be from time to time requested
by the Agent and, upon request of the Agent, make to each other
party to each such Related Document such demands and requests for
information and reports or for action as such Borrower is
entitled to make under such Related Document, and cause each of
its Subsidiaries to do so, except, in any case, where the failure
to do so, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect.
(j) Transactions with
Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates other than wholly owned
Subsidiaries (except the Minor Subsidiaries) of Crompton Corp. on
terms which have been determined by the applicable Borrower's
board of directors or such Subsidiary's board of directors, board
of trustees or managing partners, as the case may be, to be at
least as favorable to the Borrowers as would be obtainable on an
arm's length basis at the time of such transaction for a
comparable transaction with a Person who is not an Affiliate;
provided, however, the foregoing restriction shall not apply to
(i) the execution by Crompton Corp. and certain of its
Subsidiaries of, and payments by Crompton Corp. and any of its
Subsidiaries pursuant to, the Tax Agreement, (ii) the payment of
reasonable and customary fees to members of the board of
directors of Crompton Corp. or any of its Subsidiaries who are
not employees of Crompton Corp. or any of its Subsidiaries, (iii)
loans and advances to officers, directors and employees of
Crompton Corp. or any of its Subsidiaries for travel,
entertainment, moving and other relocation expenses made in the
ordinary course of business to the extent otherwise permitted
hereunder, (iv) subject to the provisions of this Agreement, any
transaction between or among Crompton Corp. and any of its wholly
owned Subsidiaries or between Uniroyal and Premier Chemical
Company, Ltd. (so long as Premier Chemical Company, Ltd. remains
at least 80% owned, directly or indirectly, by Crompton Corp.),
(v) payment by Crompton Corp. and its Subsidiaries of ordinary
and customary compensation to their respective employees in the
ordinary course of business, (vi) any dividends or other
distributions permitted by Section 5.02(g), (vii) transactions
with Monochem, Inc. and Rubicon Inc. on terms that are customary
in the ordinary course of business of Uniroyal and its
Subsidiaries as currently practiced, (viii) a Receivables
Securitization and (ix) transactions in addition to those
permitted by the foregoing clauses of this subsection (j) which
in the aggregate involve amounts not in excess of US$500,000 per
year.
(k) Covenant to Guarantee
Obligations and Give Security. (i) At such time as any new
direct or indirect Material Subsidiaries of any Loan Party are
formed or acquired by such Loan Party or at such time as any
Minor Subsidiary shall have revenues which exceed US$250,000 for
the twelve-month period ending on the last day of the most recent
fiscal quarter of Crompton Corp. or the aggregate book value of
the assets of such Minor Subsidiary, as at the end of the most
recent fiscal quarter of Crompton Corp. exceeds US$250,000, in
each case to the extent not prohibited by the terms of the
Uniroyal Indentures then in effect and at the expense of the
Borrowers, within 30 days after such formation or acquisition,
cause each such Material Subsidiary (other than any Foreign
Subsidiary) or each such Minor Subsidiary, as the case may be,
and cause each direct and indirect parent (other than the
Borrowers and any Foreign Subsidiary) of such Material Subsidiary
or each such Minor Subsidiary, as the case may be, (if it has not
already done so), to duly execute and deliver to the Agent a
guaranty, in form and substance satisfactory to the Agent,
guaranteeing the other Loan Parties' Obligations under the Loan
Documents;
(ii) At any time prior to the
Collateral Release Date, at such time as any new direct or
indirect Material Subsidiaries of any Loan Party are formed or
acquired by such Loan Party or at such time as any Minor
Subsidiary shall have revenues which exceed US$250,000 for the
twelve-month period ending on the last day of the most recent
fiscal quarter of Crompton Corp. or the aggregate book value of
the assets of such Minor Subsidiary, as at the end of the most
recent fiscal quarter of Crompton Corp. exceeds US$250,000, in
each case to the extent not prohibited by the terms of the
Uniroyal Indentures then in effect and at the expense of the
Borrowers, within 30 days after such formation or acquisition,
duly execute and deliver, and cause each such Material Subsidiary
(other than any Foreign Subsidiary) or each such Minor
Subsidiary, as the case may be, and each direct and indirect
parent of such Material Subsidiary or each such Minor Subsidiary,
as the case may be, (other than any Foreign Subsidiary except to
the extent provided in the proviso below), if it has not already
done so, to duly execute and deliver, to the Agent, in the case
of Crompton Corp. or any of its Subsidiaries (other than Uniroyal
Corp. and its Subsidiaries), pledge agreements (pledging the
capital stock of its Subsidiaries, except to the extent provided
in the proviso below) and, in the case of any direct or indirect
Subsidiary of Uniroyal Corp., security agreements (granting a
security interest in Inventory and Receivables), as specified by
and in form and substance satisfactory to the Agent, securing
payment of all the Obligations of such Borrower, such Subsidiary
or such parent, as the case may be, under the Loan Documents and
constituting Liens on all such properties; provided that with
respect to the pledge of the capital stock of any Foreign
Subsidiary, such pledge shall cover not more than 66% of the
outstanding capital stock of such Foreign Subsidiary if it is
directly owned by a Loan Party and not cover any of the
outstanding capital stock of such Foreign Subsidiary if it is
directly or indirectly owned by another Foreign Subsidiary;
(iii) At any time prior to the
Collateral Release Date, upon the request of the Agent following
the occurrence and during the continuance of an Event of Default,
in each case to the extent not prohibited by the terms of the
Uniroyal Indentures then in effect and at the expense of the
Borrowers:
(A) within 30 days after
such request, duly execute and deliver, and cause each of its
Subsidiaries (other than any Foreign Subsidiary) and each direct
and indirect parent of such Subsidiary (if it has not already
done so) (other than any Foreign Subsidiary except to the extent
required in the proviso below) to duly execute and deliver, to
the Agent mortgages, pledges, assignments and other security
agreements, as specified by and in form and substance
satisfactory to the Agent, securing payment of all the
Obligations of such Borrower, such Subsidiary or such parent, as
the case may be, under the Loan Documents and constituting Liens
on all such properties; provided that with respect to the pledge
of the capital stock of any Foreign Subsidiary, such pledge shall
cover not more than 66% of the outstanding capital stock of such
Foreign Subsidiary if it is directly owned by a Loan Party and
not cover any of the outstanding capital stock of such Foreign
Subsidiary if it is directly or indirectly owned by another
Foreign Subsidiary; and
(B) within 30 days after
such request, take, and cause such Subsidiary (other than any
Foreign Subsidiary) or such parent (other than any Foreign
Subsidiary) to take, whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices and
the endorsement of notices on title documents) may be necessary
or advisable in the opinion of the Agent to vest in the Agent (or
in any representative of the Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments and security agreements delivered
pursuant to this Section 5.01(k), enforceable against all third
parties in accordance with their terms;
(iv) Within 60 days after such
formation, acquisition or request, deliver to the Agent, upon the
request of the Agent in its sole discretion, a signed copy of a
favorable opinion, addressed to the Agent and the other Secured
Parties, of counsel for the Loan Parties acceptable to the Agent
as to the guaranties, mortgages, pledges, assignments and
security agreements referred to in clauses (i), (ii) and (iii)
above being the legal, valid and binding obligations of each Loan
Party party thereto enforceable in accordance with their terms
and as to such other matters as the Agent may reasonably request;
and
(v) At any time and from time
to time, promptly execute and deliver any and all further
instruments and documents and take all such other action as the
Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of, the
guaranties, mortgages, pledges, assignments and security
agreements referred to in clauses (i), (ii) and (iii) above.
SECTION 5.02. Negative Covenants.
So long as any Advance shall remain unpaid, any Letter of Credit
or Bankers' Acceptance shall be outstanding or any Lender Party
shall have any Commitment hereunder, no Borrower will, at any
time:
(a) Liens, Etc. Create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of
its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names any Borrower or any of its Subsidiaries as
debtor, or sign or suffer to exist, or permit any of its
Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding,
however, from the operation of the foregoing restrictions the
following:
(i) Liens created under
the Loan Documents;
(ii) with respect to any
Person, all of the following (collectively, the "Permitted
Liens"):
(A) pledges or deposits by such Person under
workers' compensation laws, unemployment insurance laws or
similar legislation or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Debt) or
leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of
cash or United States Government bonds to secure surety or appeal
bonds to which such Person is a party, or deposits as security
for contested taxes or for charges relating thereto (including,
without limitation, interest, penalties and certain other similar
charges) or import duties or for the payment of rent;
(B) (x) liens imposed by
law, such as carriers', warehousemen's and mechanics' liens or
(y) other liens arising out of judgments or
awards against such Person with respect to which such Person
shall then be prosecuting an appeal or other proceedings for
review or otherwise arising out of judicial proceedings to the
extent such liens do not constitute an Event of Default;
(C) liens for taxes, assessments or
governmental charges or levies to the extent not required to be
paid by Section 5.01(b); and
(D) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of others
for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental
to the conduct of the business of such Person or to the ownership
of its properties which were not incurred in connection with Debt
or other extensions of credit and which do not in the aggregate
materially adversely affect the value of said properties or
materially impair their use in the operation of the business of
such Person.
(iii) Liens existing on
the Existing Credit Agreement Effective Date and described on
Schedule 5.02(a) hereto;
(iv) purchase money Liens
upon or in real property or personal property (other than
Inventory of Uniroyal Corp. and its Subsidiaries) acquired or
held by any Borrower or any of its Subsidiaries in the ordinary
course of business to secure the purchase price of such property
or to secure Debt incurred solely for the purpose of financing
the acquisition, construction or improvement of any such property
to be subject to such Liens, or Liens existing on any such
property at the time of acquisition (other than any such Liens
created in contemplation of such acquisition that do not secure
the purchase price); provided, however, that no such Lien shall
extend to or cover any property other than the property being
acquired, constructed or improved, and no such extension, renewal
or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the aggregate principal
amount of the Debt secured by Liens permitted by this clause (iv)
shall not exceed the amount permitted under Section
5.02(b)(iii)(B) at any time outstanding and that any such Debt
shall not otherwise be prohibited by the terms of the Loan
Documents;
(v) Liens arising in
connection with Capitalized Leases permitted under Section
5.02(b)(iii)(C); provided that no such Lien shall extend to or
cover any Collateral or assets other than the assets subject to
such Capitalized Leases;
(vi) Liens on property of
a Person existing at the time such Person is merged into or
consolidated with any Borrower or any Subsidiary of such Borrower
or becomes a Subsidiary of such Borrower; provided that such
Liens were not created in contemplation of such merger,
consolidation or investment and do not extend to any assets other
than those of the Person merged into or consolidated with such
Borrower or such Subsidiary or acquired by such Borrower or such
Subsidiary;
(vii) Liens arising in
connection with any lease permitted under Section 5.02(c),
provided that no such Lien shall extend to or cover any assets
other than the assets subject to such lease;
(viii) Liens securing Debt
incurred by Foreign Subsidiaries pursuant to Section
5.02(b)(iii)(G) and (H);
(ix) Liens on accounts
receivable (and in property securing or otherwise supporting such
accounts receivable together with proceeds thereof) of Crompton
Corp. and its Subsidiaries (other than Uniroyal Corp. and its
Subsidiaries) in connection with a Receivables Securitization;
(x) Liens securing
Obligations of Crompton Corp. or any of its Subsidiaries in an
aggregate amount not to exceed US$5,000,000 at any time
outstanding;
(xi) filings for
information purposes only under the Uniform Commercial Code, as
amended, of any state in connection with a lease of property
(other than Capitalized Leases);
(xii) Liens to secure any
extension, renewal or replacement (or successive extensions,
renewals or replacements) as a whole, or in part, of any Debt
secured by any Lien referred to in the foregoing clauses (iii)
through (vii), provided that (i) such extended, renewed or
replacement Lien shall be limited to all or part of the same type
of property that secured the Lien extended, renewed or replaced
(plus improvements on such property) and (ii) the Debt secured by
such Lien at such time is not increased to an amount in excess of
the original principal amount of the Debt secured by such Lien;
and
(xiii) Liens on the assets
of any B-2 Borrower or B-3 Borrower or cash collateral to secure
any obligation set forth in Section 2(b)(iv).
(b) Debt. Create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Debt other than:
(i) in the case of the
Borrowers,
(A) Debt of Uniroyal
in respect of the Seoul Guaranty, provided that the U.S. dollar
equivalent of the amount of such Debt shall not exceed
US$5,000,000,
(B) Debt in respect
of Interest Rate Swap Agreements designed to hedge against
fluctuations in interest rates incurred in the ordinary course of
business and consistent with prudent business practice in an
aggregate notional amount not to exceed US$400,000,000 at any
time outstanding,
(C) Debt in respect
of Foreign Exchange Agreements designed to hedge against
fluctuations in foreign exchange rates incurred in the ordinary
course of business and consistent with prudent business practice
in an aggregate notional amount not to exceed US$100,000,000 at
any time outstanding, and
(D) Debt owed to
Crompton Corp. or to a wholly owned Subsidiary of Crompton Corp,
provided that, solely with respect to any Crompton A Borrower,
Uniroyal, any Guarantor and Uniroyal Chemical Ltd., such Debt (x)
shall, to the extent not prohibited by the terms of the Uniroyal
Indentures then in effect, constitute Pledged Debt (as defined in
the Security Agreement) other than any such Debt owing to any
Minor Subsidiary and (y) shall, to the extent not prohibited by
the terms of the Uniroyal Indentures then in effect, be evidenced
by promissory notes in form and substance satisfactory to the
Agent and such promissory notes shall be pledged as security for
the Obligations under the Loan Documents of the holder thereof
and delivered to the Agent pursuant to the terms of the Security
Agreement,
(ii) in the case of any of
such Borrower's Subsidiaries (other than any Minor Subsidiary),
Debt owed to any Borrower or to a wholly owned Subsidiary of any
Borrower, provided that, solely with respect to any Crompton A
Borrower, Uniroyal, any Guarantor and Uniroyal Chemical Ltd.,
such Debt (A) shall, to the extent not prohibited by the terms of
the Uniroyal Indentures then in effect, constitute Pledged Debt
(as defined in the Security Agreement) other than any such Debt
owing to any Minor Subsidiary and (B) shall, to the extent not
prohibited by the terms of the Uniroyal Indentures then in
effect, be evidenced by promissory notes in form and substance
satisfactory to the Agent and such promissory notes shall be
pledged as security for the Obligations under the Loan Documents
of the holder thereof and delivered to the Agent pursuant to the
terms of the Security Agreement,
(iii) in the case of the
Borrowers and their respective Subsidiaries (other than any Minor
Subsidiary except as provided below),
(A) Debt under the
Loan Documents,
(B) Debt secured by
Liens permitted by Section 5.02(a)(iv) not to exceed in the
aggregate, together with Debt referred to in clause (C) below,
US$100,000,000 at any time outstanding,
(C) (i) Capitalized
Leases not to exceed in the aggregate, together with Debt
referred to in clause (B) above, US$100,000,000 at any time
outstanding and (ii) in the case of Capitalized Leases to which
any Subsidiary of any Borrower is a party, Debt of such Borrower
of the type described in clause (i) of the definition of "Debt"
guaranteeing the Obligations of such Subsidiary under such
Capitalized Leases,
(D) the Surviving
Debt listed on Part I of Schedule 3.01(d) hereto, and any Debt
extending the maturity of, or refunding or refinancing, in whole
or in part, any Surviving Debt, provided that the terms of any
such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents;
provided further that the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if
any), and other material terms taken as a whole, of any such
extending, refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in connection
therewith, are no less favorable in any material respect to the
Loan Parties or the Lender Parties than the terms of any
agreement or instrument governing the Surviving Debt being
extended, refunded or refinanced and the interest rate applicable
to any such extending, refunding or refinancing Debt does not
exceed the then market interest rate for companies having a
credit standing similar to that of Crompton Corp. at such time,
provided still further that the principal amount of such
Surviving Debt shall not be increased above the principal amount
thereof outstanding immediately prior to such extension,
refunding or refinancing plus the amount of any redemption
premium stipulated in the indenture relating to such Surviving
Debt or other reasonable premium paid in connection with any
redemption of, or tender offer or exchange offer for, or open
market purchase of, such Surviving Debt, and the direct and
contingent obligors therefor shall not be changed, as a result of
or in connection with such extension, refunding or refinancing,
provided still further that any Debt refinancing the Surviving
Debt with respect to the Receivables Securitization listed on
Part I of Schedule 3.01(d) may be incurred up to 6 months after
the termination of such Receivables Securitization,
(E) Debt of any
Person that becomes a Subsidiary of any Borrower after the
Existing Credit Agreement Effective Date in accordance with the
terms of Section 5.02(f) which Debt is existing at the time such
Person becomes a Subsidiary of such Borrower (other than Debt
incurred solely in contemplation of such Person becoming a
Subsidiary of such Borrower),
(F) Debt owing to the
Daylight Overdraft Bank in respect of any daylight overdraft
facility or in connection with any automated clearing house
transfers of funds in an aggregate amount outstanding at any time
not to exceed US$10,000,000 in the case of the Crompton A
Borrowers and US$10,000,000 in the case of Uniroyal,
(G) (i) Debt of
any Foreign Subsidiary including any B-2 Borrower, any B-3
Borrower or any of their respective Subsidiaries incurred for
business purposes, provided that the aggregate Debt described in
this clause (G) for all such Persons at any one time outstanding
shall not exceed the sum of (A) 60% of the book value of
Inventory of Foreign Subsidiaries plus (B) 90% of the book value
of Receivables of Foreign Subsidiaries plus (C) US$100,000,000
and (ii) Debt of any Borrower of the type described in clause (i)
of the definition of "Debt" guaranteeing up to 40% of the
Obligations of Foreign Subsidiaries outstanding under clause (i)
above,
(H) Debt of Foreign
Subsidiaries relating to sales of accounts receivable pursuant to
Section 5.02(e)(v),
(I) Debt, if any, of
Crompton Corp. and its Subsidiaries (other than Uniroyal Corp.
and its Subsidiaries and the Minor Subsidiaries), incurred in
connection with a Receivables Securitization,
(J) short term,
unsecured Debt in an aggregate amount not to exceed US$75,000,000
at any time outstanding, provided, however, that the aggregate
amount of Debt issued or incurred pursuant to this clause (J) and
clause (K) shall not exceed in the aggregate US$125,000,000 at
any time outstanding,
(K) other Debt in an
aggregate amount not to exceed US$75,000,000 at any time
outstanding, provided, however, that the aggregate amount of Debt
issued or incurred pursuant to clause (J) and this clause (K)
shall not exceed in the aggregate US$125,000,000 at any time
outstanding,
(L) endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business,
(M) unsecured Debt of
Naugatuck in an aggregate amount not to exceed US$1,000,000 at
any time outstanding,
(N) intercompany Debt
owing to Crompton & Knowles I.P.R. Corporation in an amount not
to exceed US$33,000,000 at any time outstanding, and
(O) guaranties of
Debt set forth in Section 5.02(b)(iv), and
(iv) in the case of the B-2
Borrowers and B-3 Borrowers, Debt in an amount not to exceed
US$30,000,000 in respect of letters of credit; provided, that the
sum of (A) the aggregate amount of such Debt outstanding at any
time and (B) the aggregate amount of the Letter of Credit B-2
Commitments in effect at any time shall not exceed US$30,000,000.
(c) Lease Obligations. Create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any obligations as
lessee for the rental or hire of real or personal property of any
kind under leases or agreements to lease (including Capitalized
Leases) having an original term of one year or more that would
cause the direct and contingent liabilities of Crompton Corp. and
its Subsidiaries, on a Consolidated basis, in respect of all such
obligations to exceed US$50,000,000 payable in any period of 12
consecutive months; provided, however, that no Minor Subsidiary
(other than Naugatuck) shall create, incur, assume or suffer to
exist any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease
(including Capitalized Leases).
(d) Mergers, Etc. Merge into or
consolidate with any Person or permit any Person to merge into
it, or permit any of its Subsidiaries to do so, except that (i)
the Borrowers and their Subsidiaries may consummate the Merger,
(ii) Uniroyal Corp. may merge into or consolidate with Crompton
Corp., (iii) any Foreign Subsidiary may merge into or consolidate
with any other Foreign Subsidiary; (iv) any Foreign Subsidiary
may merge into or consolidate with any Domestic Subsidiary,
provided that such Domestic Subsidiary shall survive such merger,
(v) any Domestic Subsidiary of Crompton Corp. (other than the
Borrowers and Uniroyal Corp. and its Subsidiaries) may merge into
or consolidate with any other Domestic Subsidiary of Crompton
Corp. (other than the Borrowers and Uniroyal Corp. and its
Subsidiaries) so long as if any Loan Party is party to such
merger or consolidation, such Loan Party shall survive such
merger or consolidation, (vi) any Domestic Subsidiary of Uniroyal
Corp. may merge into or consolidate with any other Domestic
Subsidiary of Uniroyal Corp. so long as if any Loan Party is
party to such merger or consolidation, such Loan Party shall
survive such merger or consolidation, (vii) after the Collateral
Release Date, any Subsidiary of Crompton Corp. (other than the
other Borrowers) may merge into or consolidate with any Borrower
or any other Subsidiary of Crompton Corp. so long as if any
Borrower is party to such merger or consolidation, such Borrower
shall survive such merger or consolidation, (viii) in connection
with any acquisition permitted under Section 5.02(f), any
Subsidiary of Crompton Corp. may merge into or consolidate with
any other Person or permit any other Person to merge into or
consolidate with it; provided that the Person surviving such
merger shall be a wholly owned Subsidiary of Crompton Corp. and
(ix) in connection with any sale or other disposition permitted
under Section 5.02(e) (other than clause (ii) thereof), any
Subsidiary of Crompton Corp. may merge into or consolidate with
any other Person or permit any other Person to merge into or
consolidate with it; provided, however, that in each case,
immediately after giving effect thereto, no event shall occur and
be continuing that constitutes a Default and, in the case of any
such merger to which Crompton Corp. is a party, Crompton Corp. is
the surviving corporation.
(e) Sales, Etc. of Assets. Sell, lease,
transfer or otherwise dispose of, or permit any of its
Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease
or otherwise acquire any assets other than Inventory to be sold
in the ordinary course of its business, except:
(i) sales of Inventory in the ordinary course of its
business,
(ii) in a transaction authorized
by Section 5.02(d) (other than clause (ix) thereof),
(iii) sales of assets and for
fair value in an aggregate amount not to exceed US$50,000,000 in
any Fiscal Year,
(iv) the sale or other
disposition of damaged, worn out or obsolete property that is no
longer necessary for the proper conduct of the business of
Crompton Corp. and its Subsidiaries in the ordinary course of
business,
(v) sales of accounts receivable
of Foreign Subsidiaries on a basis which is non-recourse to
Crompton Corp. and its Subsidiaries (other than any Minor
Subsidiary) (which accounts receivable, to the extent sold to
Persons other than Crompton Corp. and its Subsidiaries, shall at
no time exceed 25% of the aggregate accounts receivable of
Crompton Corp. and its Consolidated Subsidiaries),
(vi) sales of assets after the
Existing Credit Agreement Effective Date having an aggregate fair
market value of not more than the greater of (A) US$100,000,000
and (B) an amount equal to 5% of Consolidated sales of Crompton
Corp. and its Subsidiaries since the Existing Credit Agreement
Effective Date, provided that the Net Cash Proceeds of such asset
sales are applied to purchase substantially similar assets
(whether by means of an acquisition of stock or assets or
otherwise) constituting Investments permitted under Section
5.02(f) or Capital Expenditures permitted under Section 5.02(n)
or to prepay permanently Debt of Crompton Corp. or any of its
Subsidiaries,
(vii) sales of accounts
receivable of Crompton Corp. and its Subsidiaries (other than
Uniroyal Corp. and its Subsidiaries and the Minor Subsidiaries)
in connection with agreements for limited recourse or non-recourse
sales by Crompton Corp. or any of its Subsidiaries
(other than Uniroyal Corp. and its Subsidiaries and the Minor
Subsidiaries) for cash, provided that (A) any such agreement is
of a type and on terms customary for comparable transactions in
the good faith judgment of the Board of Directors of Crompton
Corp., (B) such agreement does not create any interest in any
asset other than accounts receivable (and property securing or
otherwise supporting accounts receivable) and proceeds of the
foregoing and (C) the Net Cash Proceeds thereof in excess of
US$25,000,000 shall be applied to the permanent reduction of the
Facilities in accordance with Section 2.06(b)(iii) (a
"Receivables Securitization"),
(viii) the sale of assets listed
in a letter dated the Existing Credit Agreement Effective Date
from Crompton Corp. addressed and delivered to the Lender Parties
on or prior to the Existing Credit Agreement Effective Date,
(ix) the transfer of assets among
Loan Parties to the extent permitted under Section 5.02(f)(vii),
and
(x) sales of accounts receivable
of Crompton Corp. and its Subsidiaries (other than Uniroyal Corp.
and its Subsidiaries and the Minor Subsidiaries) to any Loan
Party or any of its Subsidiaries, provided that such sales of
accounts receivable shall be made in accordance with Section
5.01(j).
(f) Investments in Other Persons. Make
or hold, or permit any of its Subsidiaries to make or hold, any
Investment in any Person other than:
(i) equity Investments by the
Borrowers and their Subsidiaries in their Subsidiaries
outstanding on the Existing Credit Agreement Effective Date and
additional equity investments in wholly owned Subsidiaries (other
than any Minor Subsidiary), which Subsidiaries were in existence
on the Existing Credit Agreement Effective Date;
(ii) loans and advances to
employees in the ordinary course of the business of the Borrowers
and their Subsidiaries (other than any Minor Subsidiary) as
presently conducted in an aggregate principal amount not to
exceed US$5,000,000 at any time outstanding;
(iii) Investments by the
Borrowers and their Subsidiaries in Cash Equivalents;
(iv) Investments by the Borrowers
in Hedge Agreements permitted under Sections 5.02(b)(i)(B) and
(C);
(v) Investments consisting of
intercompany Debt permitted under Section 5.02(b)(i)(D) or (ii);
(vi) Investments existing on the
Existing Credit Agreement Effective Date and described on Part I
of Schedule 5.02(f) hereto;
(vii) Investments consisting of the
contribution of assets of (A) any Loan Party to any other Loan
Party in an aggregate amount not to exceed US$50,000,000 in any
Fiscal Year or US$100,000,000 in the aggregate after the Existing
Credit Agreement Effective Date, (B) any Domestic Subsidiary to
any Foreign Subsidiary in an aggregate amount not to exceed
US$25,000,000 in any Fiscal Year or US$50,000,000 in the
aggregate after the Existing Credit Agreement Effective Date, (C)
any Foreign Subsidiary to any other Foreign Subsidiary, (D) any
Foreign Subsidiary to any Domestic Subsidiary (other than any
Minor Subsidiary) and (E) Uniroyal to Uniroyal Chemical Leasing
Company, Inc. in an amount not to exceed US$100,000,000 in the
aggregate after the Existing Credit Agreement Effective Date;
(viii) Investments by Crompton Corp.
and its Subsidiaries in (A) the joint ventures listed on Part II
of Schedule 5.02(f) and other joint ventures and non-wholly owned
Subsidiaries in an aggregate amount invested (including, without
limitation, assumption of debt, noncompetition arrangements,
"earn-outs" and other deferred payment arrangements) not to
exceed US$50,000,000 and (B) Monochem, Inc. and Rubicon, Inc.;
provided that with respect to Investments made under this clause
(viii): (1) immediately before and after giving effect thereto,
no Default shall have occurred and be continuing or would result
therefrom; (2) any business acquired or invested in pursuant to
this clause (viii) shall be in the same general line of business
or substantially related lines of business as the business of
Crompton Corp. or such Subsidiary; and (3) immediately after
giving effect to the acquisition of a company or business
pursuant to this clause (viii), Crompton Corp. shall be in pro
forma compliance with the covenants contained in Section 5.04,
calculated based on the relevant Financial Statements, as though
such acquisition had occurred at the beginning of the 12-month
period covered thereby, as evidenced by a certificate of the
chief financial officer or treasurer of Crompton Corp. furnished
to the Lender Parties, demonstrating such compliance;
(ix) other Investments (other than
Investments in Minor Subsidiaries) in an aggregate amount
invested not to exceed the sum of (A) an amount equal to the
aggregate Net Cash Proceeds of any equity issued by Crompton
Corp. after the Existing Credit Agreement Effective Date and (B)
in any Fiscal Year, an amount equal to Available Cash Flow for
such Fiscal Year; provided that with respect to Investments made
under this clause (ix): (1) any newly acquired or created
Subsidiary of any Borrower or any of its Subsidiaries shall be a
wholly owned Subsidiary thereof; (2) immediately before and after
giving effect thereto, no Default shall have occurred and be
continuing or would result therefrom; (3) any business acquired
or invested in pursuant to this clause (ix) shall be in the same
general line of business or substantially related lines of
business as the business of such Borrower or any of its
Subsidiaries; and (4) immediately after giving effect to the
acquisition of a company or business pursuant to this clause
(ix), Crompton Corp. shall be in pro forma compliance with the
covenants contained in Section 5.04, calculated based on the
relevant Financial Statements, as though such acquisition had
occurred at the beginning of the 12-month period covered thereby,
as evidenced by a certificate of the chief financial officer or
treasurer of Crompton Corp. furnished to the Lender Parties,
demonstrating such compliance; and
(x) additional equity Investments
in Naugatuck and intercompany Debt incurred by Naugatuck not to
exceed US$5,000,000 in the aggregate from the Existing Credit
Agreement Effective Date.
(g) Dividends, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire
for value any of its capital stock or any warrants, rights or
options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make
any distribution of assets, capital stock, warrants, rights,
options, obligations or securities to its stockholders as such or
issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of any Borrower or any
warrants, rights or options to acquire such capital stock or to
issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, except that, so long as no
Default shall have occurred and be continuing at the time of any
action described in clauses (i) and (ii) below or would result
therefrom, (i) Crompton Corp. may (A) declare and pay dividends
and distributions payable only in common stock of Crompton Corp.,
(B) issue and sell shares of its capital stock, (C) purchase,
redeem, retire, defease or otherwise acquire shares of its
capital stock with the proceeds received from the issue of new
shares of its capital stock with equal or inferior voting powers,
designations, preferences and rights and (D) declare and pay cash
dividends to its stockholders and purchase, redeem, retire or
otherwise acquire shares of its own outstanding capital stock for
cash in an amount not to exceed in the Fiscal Year ending on or
about December 31, 1996, US$15,000,000, and in any Fiscal Year
thereafter the greater of (I) US$15,000,000 and (II) 50% of
Consolidated net income of Crompton Corp. and its Subsidiaries
for the immediately preceding Fiscal Year computed in accordance
with GAAP, and (ii) any Subsidiary of Crompton Corp. may (A)
declare and pay cash dividends to any Borrower (including,
without limitation, the declaration and payment of cash dividends
by Uniroyal to Uniroyal Corp.) and (B) declare and pay cash
dividends to any other wholly owned Subsidiary of any Borrower of
which it is a Subsidiary.
(h) Change in Nature of Business. Make,
or permit any of its Subsidiaries to make, any material change in
the nature of its business as carried on at the Existing Credit
Agreement Effective Date.
(i) Charter Amendments. Amend, or permit
any of its Subsidiaries to amend, its certificate of
incorporation or bylaws in any material respect.
(j) Accounting Changes. Make or permit,
or permit any of its Subsidiaries to make or permit, any change
in (i) accounting policies or reporting practices, except as
required or permitted by generally accepted accounting principles
or (ii) Fiscal Year, except in each case, as necessary to make
such Fiscal Year the same with respect to Uniroyal Corp. and
Crompton Corp.
(k) Amendment, Etc. of Related Documents.
Cancel or terminate any Related Document or consent to or accept
any cancellation or termination thereof, amend, modify or change
in any manner any term or condition of any Related Document or
give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any
Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related
Document or take any other action in connection with any Related
Document, in each case that would impair in any material respect
the value of the interest or rights of any Borrower thereunder or
that would impair the rights or interests of the Agent or any
Lender Party, or permit any of its Subsidiaries to do any of the
foregoing.
(l) Negative Pledge. Enter into or
suffer to exist, or permit any of its Subsidiaries to enter into
or suffer to exist, any agreement prohibiting or conditioning the
creation or assumption of any Lien upon any of its property or
assets other than (i) in favor of the Secured Parties, (ii) in
connection with any Surviving Debt, any Debt extending the
maturity of, or refunding or refinancing, in whole or in part,
any Surviving Debt in accordance with Section 5.02(b)(iii)(D) (to
the extent the agreement or instrument evidencing such Surviving
Debt contained such a provision or agreement) and any Debt
outstanding on the date such Subsidiary first becomes a
Subsidiary (so long as such agreement was not entered into solely
in contemplation of such Subsidiary becoming a Subsidiary) or
(iii) in connection with any lease permitted under Section
5.02(c) solely to the extent that such lease prohibits a Lien on
the lease or the property subject to such lease.
(m) Partnerships, Etc. Become a general
partner in any general or limited partnership or joint venture,
or permit any of its Subsidiaries to do so, other than any
Subsidiary the sole assets of which consist of its interest in
such partnership or joint venture.
(n) Capital Expenditures. Make, or
permit any of its Subsidiaries to make, any Capital Expenditures
that would cause the aggregate of all such Capital Expenditures
made by Crompton Corp. and its Subsidiaries in any period set
forth below to exceed the amount set forth below for such period.
Fiscal Year Ending On or About Amount
December 31, 1996 US$100,000,000
December 31, 1997 US$100,000,000
December 31, 1998 US$110,000,000
December 31, 1999 US$110,000,000
December 31, 2000 US$110,000,000
December 31, 2001
and thereafter US$110,000,000
plus, for each Fiscal Year set forth above, an amount
equal to (i) the excess, if any, of the amount set opposite the
immediately preceding Fiscal Year over the aggregate amount of
such Capital Expenditures actually made during such Fiscal Year
(other than pursuant to clause (ii) below), provided that any
Capital Expenditures made in any Fiscal Year shall be applied
first against any amount permitted to be carried over from the
immediately preceding Fiscal Year and (ii) the amount of any Net
Cash Proceeds received with respect to the sale, lease, transfer
or other disposition of assets pursuant to Section 5.02(e)(vi),
solely to the extent such Net Cash Proceeds are not used to make
Investments permitted under Section 5.02(f) or to prepay
permanently Debt of Crompton Corp. or any of its Subsidiaries,
provided that such amount of Net Cash Proceeds shall not be
carried over to any subsequent Fiscal Year pursuant to clause (i)
above.
(o) Minor Subsidiaries. Permit any Minor
Subsidiary (other than Naugatuck Treatment Company) to enter into
or conduct any business or engage in any activity (including,
without limitation, any action or transaction that is required or
restricted with respect to any Borrower and its Subsidiaries
under Section 5.01 and this Section 5.02).
SECTION 5.03. Reporting Requirements. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, Crompton Corp. will furnish to the
Agent and the Lender Parties:
(a) Default Notice. As soon as possible
and in any event within five days after any Responsible Officer
of any Borrower becomes aware of the occurrence of each Default
or any event, development or occurrence reasonably likely to have
a Material Adverse Effect continuing on the date of such
statement, a statement of the chief financial officer, treasurer
or chief accounting officer of such Borrower setting forth
details of such Default and the action that such Borrower has
taken and proposes to take with respect thereto.
(b) Quarterly Financials. As soon as
available and in any event within 50 days after the end of each
of the first three quarters of each Fiscal Year, Consolidated
and, to the extent otherwise available, consolidating balance
sheets of Crompton Corp. and its Subsidiaries and Consolidated
balance sheets of Uniroyal Corp. and its Subsidiaries, in each
case, as of the end of such quarter and Consolidated and, to the
extent otherwise available, consolidating statements of income
and a Consolidated statement of cash flows of Crompton Corp. and
its Subsidiaries and Consolidated statements of income and of
cash flows of Uniroyal Corp. and its Subsidiaries, in each case,
for the period commencing at the end of the previous fiscal
quarter and ending with the end of such fiscal quarter and
Consolidated and, to the extent otherwise available,
consolidating statements of income and a Consolidated statement
of cash flows of Crompton Corp. and its Subsidiaries and
Consolidated statements of income and of cash flows of Uniroyal
Corp. and its Subsidiaries, in each case, for the period
commencing at the end of the previous Fiscal Year and ending with
the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
period of the preceding Fiscal Year, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the
chief financial officer or treasurer of such Borrower as having
been prepared in accordance with GAAP, together with (i) a
certificate of said officer stating that no Default has occurred
and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action
that such Borrower has taken and proposes to take with respect
thereto and (ii) a schedule in form satisfactory to the Agent of
the computations used by Crompton Corp. in determining compliance
with the covenants contained in Sections 5.04(a) and (b),
provided that in the event of any change in GAAP used in the
preparation of such financial statements, Crompton Corp. shall
also provide, if necessary for the determination of compliance
with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP.
(c) Annual Financials. As soon as
available and in any event within 95 days after the end of each
Fiscal Year, a copy of the annual report for such year for
Crompton Corp. and its Subsidiaries, including therein a
Consolidated balance sheet of Crompton Corp. and its Subsidiaries
as of the end of such Fiscal Year and a Consolidated statement of
income and a Consolidated statement of cash flows of Crompton
Corp. and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of
KPMG Peat Marwick LLP or other independent public accountants of
recognized standing acceptable to the Required Lenders, and a
Consolidated and, to the extent otherwise available,
consolidating balance sheets of Crompton Corp. and Uniroyal Corp.
and their respective Subsidiaries as of the end of such Fiscal
Year and Consolidated and, to the extent otherwise available,
consolidating statements of income and a Consolidated statement
of cash flows of Crompton Corp. and Uniroyal Corp. and their
respective Subsidiaries for such Fiscal Year, all in reasonable
detail and duly certified by the chief financial officer or
treasurer of such Borrower as having been prepared in accordance
with GAAP, together with (i) a certificate of such accounting
firm to the Lender Parties stating that in the course of the
regular audit of the business of Crompton Corp. and its
Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that a Default has
occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a
statement as to the nature thereof, (ii) a schedule in form
satisfactory to the Agent of the computations used by such
accountants in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Sections 5.04(a) and
(b), provided that in the event of any change in GAAP used in the
preparation of such financial statements, Crompton Corp. shall
also provide, if necessary for the determination of compliance
with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP and (iii) a certificate of the chief
financial officer or treasurer of each Borrower stating that no
Default has occurred and is continuing or, if a default has
occurred and is continuing, a statement as to the nature thereof
and the action that such Borrower has taken and proposes to take
with respect thereto.
(d) Annual Forecasts. As soon as
available and in any event no later than June 30 in each year,
forecasts prepared by management of Crompton Corp. and Uniroyal
Corp., in form satisfactory to the Agent, of balance sheets,
income statements and cash flow statements for Crompton Corp. and
its Subsidiaries, Uniroyal Corp. and its Subsidiaries and
Crompton Corp. and its Subsidiaries (other than Uniroyal Corp.
and its Subsidiaries) on an annual basis for the then current
Fiscal Year and for each Fiscal Year thereafter until the
Termination Date.
(e) Annual Budget. As soon as available
and in any event within 45 days after the end of each Fiscal
Year, an annual budget for Crompton Corp. and its Subsidiaries,
Uniroyal Corp. and its Subsidiaries and Crompton Corp. and its
Subsidiaries (other than Uniroyal Corp. and its Subsidiaries),
prepared by management of Crompton Corp. and Uniroyal Corp.
consisting of balance sheets, income statements and cash flow
statements on a quarterly basis for the Fiscal Year following
such Fiscal Year then ended in form and substance satisfactory to
the Agent.
(f) ERISA Events and ERISA Reports. (i)
Promptly and in any event within 15 days after any Loan Party or
any ERISA Affiliate knows or has reason to know that any ERISA
Event has occurred, a statement of the chief financial officer or
treasurer of Crompton Corp. describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (ii) promptly
and in any event within two days after the date any records,
documents or other information must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, a copy of
such records, documents and information.
(g) Plan Terminations. Promptly and in
any event within three Business Days after receipt thereof by any
Loan Party or any ERISA Affiliate, copies of each notice from the
PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan.
(h) Plan Annual Reports. Promptly and in
any event within 30 days after the filing thereof with the
Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect
to each Plan.
(i) Multiemployer Plan Notices. Promptly
and in any event within five Business Days after receipt thereof
by any Loan Party or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (i) the
imposition of Withdrawal Liability by any such Multiemployer
Plan, (ii) the reorganization or termination, within the meaning
of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such
Loan Party or any ERISA Affiliate in connection with any event
described in clause (i) or (ii).
(j) Litigation. Promptly after the
commencement thereof, notice of all actions, suits,
investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or
any of its Subsidiaries of the type described in Section 4.02(k),
and promptly after the occurrence thereof, notice of any adverse
change in the status or the financial effect on any Loan Party or
any of its Subsidiaries of the Disclosed Litigation from that
described on Schedule 3.01(f).
(k) Securities Reports. Promptly after
the sending or filing thereof, copies of all proxy statements,
financial statements and reports that any Loan Party or any of
its Subsidiaries sends to its outside stockholders, and copies of
all regular, periodic and special reports, and all registration
statements, that any Loan Party or any of its Subsidiaries files
with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or with any national
securities exchange.
(l) Creditor Reports. Promptly after the
furnishing thereof, copies of any statement or report furnished
to any other holder of the securities of any Loan Party or of any
of its Subsidiaries pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be
furnished to the Lender Parties pursuant to any other clause of
this Section 5.03.
(m) Agreement Notices. Promptly upon
receipt thereof, copies of all notices of any default or breach
and all other material requests and other documents received by
any Loan Party or any of its Subsidiaries under or pursuant to
any Related Document or indenture, loan or credit or similar
agreement and, from time to time upon request by the Agent, such
information and reports regarding the Related Documents as the
Agent may reasonably request.
(n) Revenue Agent Reports. Within 10
days after receipt, copies of all Revenue Agent Reports (Internal
Revenue Service Form 886), or other written proposals of the
Internal Revenue Service, that propose, determine or otherwise
set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which Crompton Corp.
is a member aggregating US$3,000,000 or more.
(o) Environmental Conditions. Promptly
after the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by any Loan
Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could reasonably be expected to have a
Material Adverse Effect.
(p) Other Information. Such other
information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects of
any Loan Party or any of its Subsidiaries as any Lender Party
(through the Agent) may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit or Bankers'
Acceptance shall be outstanding or any Lender Party shall have
any Commitment hereunder, Crompton Corp. will:
(a) Leverage Ratio. Maintain at the end
of each fiscal quarter of Crompton Corp. a Total Debt/EBITDA
Ratio of not more than the amount set forth below for each
Rolling Period set forth below:
Rolling Period Ending On or About Ratio
December 31, 1996 4.00:1.0
March 31, 1997 4.00:1.0
June 30, 1997 4.00:1.0
September 30, 1997 3.75:1.0
December 31, 1997 3.75:1.0
March 31, 1998 3.75:1.0
June 30, 1998 3.50:1.0
September 30, 1998 3.50:1.0
December 31, 1998 3.50:1.0
March 31, 1999 3.25:1.0
June 30, 1999 3.00:1.0
September 30, 1999 3.00:1.0
December 31, 1999 3.00:1.0
March 31, 2000 3.00:1.0
June 30, 2000 3.00:1.0
September 30, 2000 3.00:1.0
December 31, 2000 3.00:1.0
March 31, 2001 3.00:1.0
June 30, 2001
and thereafter 3.00:1.0
(b) Interest Coverage Ratio. Maintain at
the end of each fiscal quarter of Crompton Corp. an Interest
Coverage Ratio of not less than the amount set forth below for
each Rolling Period set forth below:
Rolling Period Ending On or About Ratio
December 31, 1996 2.50:1.0
March 31, 1997 2.50:1.0
June 30, 1997 2.50:1.0
September 30, 1997 2.75:1.0
December 31, 1997 2.75:1.0
March 31, 1998 2.75:1.0
June 30, 1998 2.75:1.0
September 30, 1998 2.75:1.0
December 31, 1998 3.00:1.0
March 31, 1999 3.00:1.0
June 30, 1999 3.00:1.0
September 30, 1999 3.25:1.0
December 31, 1999 3.25:1.0
March 31, 2000 3.50:1.0
June 30, 2000 3.50:1.0
September 30, 2000 3.50:1.0
December 31, 2000 3.50:1.0
March 31, 2001 3.50:1.0
June 30, 2001
and thereafter 3.50:1.0
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) (i) any Borrower shall fail to pay
any principal of any Advance or any portion of any Bankers'
Acceptance when the same shall become due and payable or (ii) any
Borrower shall fail to pay any interest on any Advance, or any
Loan Party shall fail to make any other payment under any Loan
Document, in each case under this clause (ii) within five days
after the same becomes due and payable; or
(b) any representation or warranty made
by any Loan Party (including, without limitation, any Designated
Subsidiary and any Designated Italian Subsidiary) or any of its
officers under or in connection with any Loan Document, or by any
Designated Subsidiary or any Designated Italian Subsidiary in the
Designation Letter pursuant to which such Designated Subsidiary
or Designated Italian Subsidiary became a Borrower hereunder,
shall prove to have been incorrect in any material respect when
made; or
(c) any Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section
2.17, 5.01(d), (e), (k) or (l), 5.02, 5.03(a) or 5.04; or
(d) any Loan Party shall fail to perform
or observe any other term, covenant or agreement contained in any
Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 15 days after the earlier of
the date on which (A) a Responsible Officer becomes aware of such
failure or (B) written notice thereof shall have been given to
Crompton Corp. by the Agent or any Lender Party; or
(e) any Loan Party or any of its
Subsidiaries shall fail to pay any principal of, premium or
interest on or any other amount payable in respect of any Debt
that is outstanding in a principal or notional amount of at least
US$10,000,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof
to cause, such Debt to mature; or any such Debt shall be declared
to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its
Material 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 or
against any Loan Party or any of its Material Subsidiaries
seeking to adjudicate it a 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 for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in
good faith, either such proceeding shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in
such proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party
or any of its Material Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this
subsection (f); or
(g) any judgment or order for the
payment of money in excess of US$10,000,000 shall be rendered
against any Loan Party or any of its Material Subsidiaries and
either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be
any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; provided, however,
that any such judgment or order shall not be an Event of Default
under this Section 6.01(g) if and to the extent that the amount
of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer
covering payment thereof so long as such insurer, which shall be
rated at least "A" by A.M. Best Company, has been notified of,
and has not disputed the claim made for payment of, the amount of
such judgment or order; or
(h) any non-monetary judgment or order
shall be rendered against any Loan Party or any of its Material
Subsidiaries that is reasonably likely to have a Material Adverse
Effect, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document
after delivery thereof pursuant to Section 3.01 or 5.01(k) shall
for any reason cease to be valid and binding on or enforceable
against any Loan Party party to it, or any such Loan Party shall
so state in writing; or
(j) any Collateral Document after
delivery thereof pursuant to Section 3.01 or 5.01(k) shall for
any reason (other than pursuant to the terms thereof or as a
result of action taken or failure to take action by the Agent or
any Lender Party) cease to create a valid and perfected first
priority lien on and security interest in the Collateral
purported to be covered thereby; or
(k) (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly
or indirectly, of Voting Stock of Crompton Corp. (or other
securities convertible into such Voting Stock) representing 20%
or more of the combined voting power of all Voting Stock of
Crompton Corp.; or (ii) during any period of up to 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24-month period were
directors of Crompton Corp. shall cease for any reason to
constitute a majority of the board of directors of Crompton Corp.
(except to the extent that individuals who at the beginning of
such 24-month period were replaced by individuals (x) elected by
66-2/3% of the remaining members of the board of directors of
Crompton Corp. or (y) nominated for election by a majority of the
remaining members of the board of directors of Crompton Corp. and
thereafter elected as directors by the shareholders of Crompton
Corp.); or (iii) Crompton Corp. shall at any time for any reason
cease to be the record and beneficial owner of 100% of the
capital stock of the other Borrowers; or
(l) (i) any ERISA Event shall have
occurred with respect to a Plan; (ii) the sum (determined as of
the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then
exist exceeds US$10,000,000; and (iii) such ERISA Events
(considered in the aggregate) are reasonably likely to result in
obligations on the part of the Loan Parties to make payments in
the aggregate in excess of US$10,000,000 in any given calendar
year; or
(m) any Loan Party or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts
required to be paid to Multiemployer Plans by the Loan Parties
and the ERISA Affiliates as Withdrawal Liability (determined as
of the date of such notification), requires payments exceeding
US$10,000,000 in any given calendar year; or
(n) any Loan Party or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of
such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount
exceeding US$10,000,000;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to
the Borrowers, declare the Commitment of each Lender Party and
the obligation of each Appropriate Lender to make Advances (other
than Letter of Credit Advances by an Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and Swing Line
Advances by a Working Capital Lender pursuant to Section
2.02(b)), of each Canadian Lender to accept and/or purchase
Bankers' Acceptances and of each Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers,
declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest
and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by each
Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan
Party or any of its Subsidiaries under the Federal Bankruptcy
Code, (x) the Commitment of each Lender Party and the obligation
of each Lender to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Working Capital Lender pursuant
to Section 2.03(c) and Swing Line Advances by a Working Capital
Lender pursuant to Section 2.02(b)) and of each Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y)
the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Borrower.
SECTION 6.02. Actions in Respect of the Letters of
Credit and Bankers' Acceptances upon Default. If any Event of
Default shall have occurred and be continuing, the Agent shall at
the request, or may with the consent, of the Required Lenders,
irrespective of whether it is taking any of the actions described
in Section 6.01 or otherwise, (a) make demand upon the Borrowers
to, and forthwith upon such demand the Borrowers jointly and
severally agree to, pay to the Agent on behalf of the Lender
Parties in same day funds at the Agent's office designated in
such demand, for deposit in the relevant L/C Cash Collateral
Account, an amount equal to the aggregate Available Amount of all
Letters of Credit then outstanding; provided that,
notwithstanding anything herein to the contrary and pursuant to
Section 8.17, each B-2 Borrower, each B-3 Borrower and the
Canadian Borrower shall only be responsible for such B-2
Borrower's, such B-3 Borrower's or the Canadian Borrower's
Borrower's Share of such amount and (b) make demand upon the
Canadian Borrower to, and forthwith upon such demand, such
Borrower will, pay to the Agent on behalf of the Canadian Lenders
in same day funds at the Agent's office designated in such
demand, for deposit in the Canadian Cash Collateral Account, an
amount equal to the aggregate Face Amount of all Bankers'
Acceptances then outstanding. If at any time the Agent
determines that any funds held in such L/C Cash Collateral
Account or Canadian Cash Collateral Account are subject to any
right or claim of any Person other than the Agent and the Lender
Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit or the
aggregate Face Amount of all outstanding Bankers' Acceptances,
the Borrowers jointly and severally agree to, forthwith upon
demand by the Agent, (x) pay to the Agent, as additional funds to
be deposited and held in such L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount
over (b)the total amount of funds, if any, then held in such L/C
Cash Collateral Account that the Agent determines to be free and
clear of any such right and claim; provided that, notwithstanding
anything herein to the contrary and pursuant to Section 8.17,
each B-2 Borrower, each B-3 Borrower and the Canadian Borrower
shall only be responsible for such B-2 Borrower's, such B-3
Borrower's or the Canadian Borrower's Borrower's Share of such
amount and (y) pay to the Agent, as additional funds to be
deposited and held in the Canadian Cash Collateral Account, an
amount equal to the excess of (i) such aggregate Face Amount of
all outstanding Bankers' Acceptances over (ii) the total amount
of funds, if any, then held in the Canadian Cash Collateral
Account that the Agent determines to be free and clear of any
such right and claim; provided that, notwithstanding anything
herein to the contrary and pursuant to Section 8.17, each B-2
Borrower, each B-3 Borrower and the Canadian Borrower shall only
be responsible for such B-2 Borrower's, such B-3 Borrower's or
the Canadian Borrower's Borrower's Share of such amount.
SECTION 6.03. Actions in Respect of Working Capital B-1
Commitments Reserved Pursuant to Section 2.01(j). If, at any
time and from time to time, any Working Capital B-1 Commitments
are reserved pursuant to Section 2.01(j) and either (i) an Event
of Default shall have occurred and be continuing or (ii) the
Termination Date shall have occurred, then, upon the occurrence
of any of the events described in clause (i) or (ii) above,
Citibank may, whether in addition to the taking by the Agent of
any of the actions described in Section 6.01 or 6.02 or
otherwise, make demand upon Uniroyal to, and forthwith upon such
demand Uniroyal will, pay to Citibank in same day funds at
Citibank's office designated in such demand, for deposit in a
special cash collateral account to be maintained in the name of
Citibank Seoul and under the sole dominion and control of
Citibank at such place as shall be designated by Citibank, an
amount equal to the Seoul Guaranty Amount on the date of such
demand.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender
Party (in its capacities as a Lender, a Swing Line Bank (if
applicable), an Issuing Bank (if applicable) and, on behalf of
itself and its Affiliates, a potential Hedge Bank) hereby
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that the
Agent shall not be required to take any action that exposes the
Agent to personal liability or that is contrary to this Agreement
or applicable law. The Agent agrees to give to each Lender Party
prompt notice of each notice given to it by any Borrower pursuant
to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the
Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent:
(a) may treat the payee of any Note as the holder thereof until
the Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (b) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and
other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender
Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall
not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party or
to inspect the property (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender Party for
the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f)
shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy or
telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Citicorp and Affiliates. With respect
to its Commitments, the Advances made by it and the Notes issued
to it, Citicorp shall have the same rights and powers under the
Loan Documents as any other Lender Party and may exercise the
same as though it were not the Agent; and the term "Lender Party"
or "Lender Parties" shall, unless otherwise expressly indicated,
include Citicorp in its individual capacity. Citicorp and its
affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who
may do business with or own securities of any Loan Party or any
such Subsidiary, all as if Citicorp were not the Agent and
without any duty to account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each
Lender Party acknowledges that it has, independently and without
reliance upon the Agent or any other Lender Party and based on
the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Agent or any other
Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party
severally agrees to indemnify the Agent (to the extent not
promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or
arising out of the Loan Documents or any action taken or omitted
by the Agent under the Loan Documents; provided, however, that no
Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to
reimburse the Agent promptly upon demand for its ratable share of
any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrowers under Section 8.04,
to the extent that the Agent is not promptly reimbursed for such
costs and expenses by the Borrowers. For purposes of this
Section 7.05(a), the Lender Parties' respective ratable shares of
any amount shall be determined, at any time, according to their
respective Working Capital Commitments at such time. In the
event that any Defaulted Advance shall be owing by any Defaulting
Lender at any time, such Lender Party's Commitment with respect
to the Facility under which such Defaulted Advance was required
to have been made shall be considered to be unused for purposes
of this Section 7.05(a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse
the Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lender Party to the Agent as
provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse the Agent for its ratable share
of such amount, but no Lender Party shall be responsible for the
failure of any other Lender Party to reimburse the Agent for such
other Lender Party's ratable share of such amount.
(b) Each Lender Party severally agrees to indemnify
each Issuing Bank (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted
against such Issuing Bank in any way relating to or arising out
of the Loan Documents or any action taken or omitted by such
Issuing Bank under the Loan Documents; provided, however, that no
Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such
Issuing Bank's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to
reimburse such Issuing Bank promptly upon demand for its ratable
share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrowers under
Section 8.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrowers.
For purposes of this Section 7.05(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at
any time, according to their respective Working Capital
Commitments at such time. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall
be considered to be unused for purposes of this Section 7.05(b)
to the extent of the amount of such Defaulted Advance. The
failure of any Lender Party to reimburse such Issuing Bank
promptly upon demand for its ratable share of any amount required
to be paid by the Lender Parties to such Issuing Bank as provided
herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse such Issuing Bank for its ratable share of
such amount, but no Lender Party shall be responsible for the
failure of any other Lender Party to reimburse such Issuing Bank
for such other Lender Party's ratable share of such amount.
(c) Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05
shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan
Documents.
SECTION 7.06. Successor Agents. The Agent may resign
as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrowers and may be
removed as to all of the Facilities at any time with or without
cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a
successor Agent as to such of the Facilities as to which the
Agent has resigned or been removed, subject, so long as no
Default shall have occurred and be continuing, to the consent of
Crompton Corp., such consent not to be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lender
Parties, appoint a successor Agent, subject, so long as no
Default shall have occurred and be continuing, to the consent of
Crompton Corp., such consent not to be unreasonably withheld or
delayed, which shall be a commercial bank organized under the
laws of the United States or of any State thereof and having a
combined capital and surplus of at least US$250,000,000. Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent as to all of the Facilities and upon the
execution and filing or recording of such financing statements,
or amendments thereto, and such other instruments or notices, as
may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted
or purported to be granted by the Collateral Documents, such
successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent as to
less than all of the Facilities and upon the execution and filing
or recording of such financing statements, or amendments thereto,
and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be
granted by the Collateral Documents, such successor Agent shall
succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent as to
such Facilities, other than with respect to funds transfers and
other similar aspects of the administration of Borrowings under
such Facilities, issuances of Letters of Credit (notwithstanding
any resignation as Agent with respect to the Letter of Credit
Facility) and payments by the Borrowers in respect of such
Facilities, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement as to such
Facilities, other than as aforesaid. After any retiring Agent's
resignation or removal hereunder as Agent as to all of the
Facilities, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent as to any Facilities under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement or the Notes or any other Loan
Document, nor consent to any departure by any Borrower therefrom,
shall in any event be effective unless the same shall be in
writing and signed (or, in the case of the Collateral Documents,
consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (a)
no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders, do any of the following at any
time: (i) waive any of the conditions specified in Section
3.01, in the case of an Initial Extension of Credit to the
Canadian Borrower, Section 3.02 or, in the case of the Initial
Extension of Credit to any Designated Subsidiary or Designated
Italian Subsidiary, Section 3.03, (ii) change the number of
Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the
aggregate Available Amount of outstanding Letters of Credit that,
in each case, shall be required for the Lenders or any of them to
take any action hereunder, (iii) reduce or limit the obligations
of any Guarantor under Section 1 of the Guaranty to which it is a
party or otherwise limit such Guarantor's liability with respect
to the Obligations owing to the Agent and the Lender Parties,
(iv) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all
or substantially all of the Collateral in any transaction or
series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan
Documents and other than Debt owing to any other Person, provided
that, in the case of any Lien on all or substantially all of the
Collateral to secure Debt owing to any other Person, (A) such
Lien shall be subordinated to the Liens created under the Loan
Documents on terms acceptable to the Required Lenders and (B) the
Required Lenders shall otherwise permit the creation, incurrence,
assumption or existence of such Lien and, to the extent not
otherwise permitted under Section 5.02(b), of such Debt, (v)
amend this Section 8.01 or (vi) limit the liability of any Loan
Party under any of the Loan Documents and (b) no amendment,
waiver or consent shall, unless in writing and signed by the
Required Lenders and each Lender that has a Commitment under any
Working Capital Facility if affected by such amendment, waiver or
consent, (i) increase the Commitments of such Lender or subject
such Lender to any additional obligations, (ii) reduce the
principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment or prepayment of
principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender or
(iv) change the order of application of any prepayment set forth
in Section 2.07 in any manner that materially affects such
Lender; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or
each Issuing Bank, as the case may be, in addition to the Lenders
required above to take such action, affect the rights or
obligations of the Swing Line Bank or of the Issuing Banks, as
the case may be, under this Agreement; and provided further that
no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent under
this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy or telex communication) and
mailed, telegraphed, telecopied, telexed or delivered, if to the
Borrowers, addressed both c/o Crompton Corp. at its address at
One Station Place, Metro Center, Stamford, CT 06902, Attention:
Chief Financial Officer and c/o Uniroyal
Corp. at its address at World Headquarters, Benson Road,
Middlebury, CT 06749, Attention: Chief Financial Officer; if to
any Initial Lender or any Initial Issuing Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender Party, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it
became a Lender Party; and if to the Agent, at its address at 399
Park Avenue, New York, New York 10043, Attention: Carolyn
Sheridan; or, as to the Borrowers or the Agent, at such other
address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice
to the Borrowers and the Agent. All such notices and
communications shall (a) when mailed, be effective three Business
Days after the same is deposited in the mails, (b) when mailed
for next day delivery by a reputable freight company or reputable
overnight courier service, be effective one Business Day
thereafter, and (c) when sent by telegraph, telecopier or telex,
be effective when the same is confirmed by telephone, telecopier
confirmation or return telecopy or telex answerback,
respectively, except that notices and communications to the Agent
pursuant to Article II, III or VII shall not be effective until
received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof. Delivery of a notice from
any Borrower pursuant to Section 5.03(a) shall be deemed, solely
with respect to such Section, notice from all Borrowers.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender Party or the Agent to exercise, and no delay
in exercising, any right hereunder or under any Note shall
operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrowers
jointly and severally agree to pay on demand (i) all costs and
expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment
of the Loan Documents (including, without limitation, (A) all due
diligence, collateral review, syndication, transportation,
computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Agent with
respect thereto, with respect to advising the Agent as to its
rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising
out of any Default or any events or circumstances that may give
rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto) and (ii)
all costs and expenses of the Agent and the Lender Parties in
connection with the enforcement of the Loan Documents, whether in
any action, suit or litigation, any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally
(including, without limitation, the reasonable fees and expenses
of counsel for the Agent and each Lender Party with respect
thereto); provided that, notwithstanding anything herein to the
contrary and pursuant to Section 8.17, each B-2 Borrower, each B-3
Borrower and the Canadian Borrower shall only be responsible
for such B-2 Borrower's, such B-3 Borrower's or the Canadian
Borrower's Borrower's Share of such costs and expenses.
(b) The Borrowers jointly and severally agree to
indemnify and hold harmless the Agent, each Lender Party and each
of their Affiliates and their officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with
(i) the Facilities, the actual or proposed use of the proceeds of
the Advances or the Letters of Credit, the Loan Documents or any
of the transactions contemplated thereby, including, without
limitation, any acquisition or proposed acquisition (including,
without limitation, the Merger and any of the other transactions
contemplated hereby) by Crompton Corp. or any of its Subsidiaries
or Affiliates of all or any portion of the stock or substantially
all the assets of Uniroyal Corp. or any of its Subsidiaries or
(ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any
of its Subsidiaries, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful
misconduct; provided that, notwithstanding anything herein to the
contrary and pursuant to Section 8.17, each B-2 Borrower, each B-3
Borrower and the Canadian Borrower shall only be responsible
for such B-2 Borrower's, such B-3 Borrower's or the Canadian
Borrower's Borrower's Share of such amount. In the case of any
investigation, litigation or other proceeding to which the
indemnity in this Section 8.04(b) applies, such indemnity shall
be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby are consummated. The
Borrowers also jointly and severally agree not to assert any
claim against the Agent, any Lender Party or any of their
Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions
contemplated thereby.
(c) If any payment of principal of, or Conversion
of, any Eurocurrency Rate Advance is made by any Borrower to or
for the account of a Lender Party other than on the last day of
the Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.10(b)(i) or 2.12(a),
acceleration of the maturity of the Notes pursuant to Section
6.01 or for any other reason, or by an Eligible Assignee to a
Lender Party other than on the last day of the Interest Period
for such Advance upon an assignment of rights and obligations
under this Agreement pursuant to Section 8.07 as a result of a
demand by Crompton Corp. pursuant to Section 8.07(a), such
Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Agent), pay to the Agent for the account of
such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any
costs, expenses or other amounts payable by it under any Loan
Document, including, without limitation, fees and expenses of
counsel and indemnities, such amount may be paid on behalf of
such Loan Party by the Agent or any Lender Party, in its sole
discretion, and will result in an increase in the amount owing by
such Loan Party to the Agent or such Lender Party.
(e) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan
Document, the agreements and obligations of the Borrowers
contained in Sections 2.12 and 2.15 and this Section 8.04 shall
survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan
Documents.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default and
(b) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Agent to declare the
Notes due and payable pursuant to the provisions of Section 6.01,
each Lender Party and each of its respective Affiliates is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and otherwise apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Lender Party or such Affiliate to or for the credit or
the account of any Borrower against any and all of the
Obligations of such Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender
Party, irrespective of whether such Lender Party shall have made
any demand under this Agreement or such Note or Notes and
although such obligations may be unmatured. Each Lender Party
agrees promptly to notify any Borrower after any such set-off and
application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and
application. The rights of each Lender Party and its respective
Affiliates under this Section 8.05 are in addition to other
rights and remedies (including, without limitation, other rights
of set-off) that such Lender Party and its respective Affiliates
may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by each
Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender and each Initial Issuing Bank
that such Initial Lender and such Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the
benefit of each Borrower, the Agent and each Lender Party and
their respective successors and assigns, except that no Borrower
shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender
Parties.
SECTION 8.07. Assignments and Participations. (a)
Each Lender may (and, so long as no Default shall have occurred
and be continuing, if demanded by Crompton Corp. (following a
demand by such Lender pursuant to Section 2.12 or 2.15 or if such
Lender shall be a Defaulting Lender) assign to one or more
Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to
it and the Note or Notes held by it); provided, however, that (i)
each such assignment shall be of a uniform, and not a varying,
percentage of all rights and obligations under and in respect of
all of the Facilities, (ii) except in the case of an assignment
to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of
the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than US$20,000,000 or, if the aggregate amount of the
Commitment of such assigning Lender is less than US$20,000,000,
all of such Lender's Commitment, (iii) each such assignment shall
be to an Eligible Assignee, (iv) each such assignment made as a
result of a demand by Crompton Corp. pursuant to this Section
8.07(a) shall be arranged by Crompton Corp. after consultation
with the Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender under this
Agreement and the other Loan Documents or an assignment of a
portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together
cover all of the rights and obligations of the assigning Lender
under this Agreement and the other Loan Documents, (v) no Lender
shall be obligated to make any such assignment as a result of a
demand by Crompton Corp. pursuant to this Section 8.07(a) unless
and until such Lender shall have received one or more payments
from either the applicable Borrowers or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of
payment of such principal amount and all other amounts payable to
such Lender under this Agreement, (vi) no such assignments shall
be permitted without the consent of the Agent until the Agent
shall have notified the Lender Parties that syndication of the
Commitments hereunder has been completed, and (vii) the parties
to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of US$3,500;
provided further that for the purposes of making Working Capital
B-2 Advances, any Working Capital B-2 Lender may assign its
rights and obligations under the Working Capital B-2 Facility to
any Affiliate of such Working Capital B-2 Lender.
(b) Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or
Issuing Bank assignor thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's or Issuing Bank's
rights and obligations under this Agreement, such Lender or
Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Lender Party assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or any other Loan Document
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any
other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (ii) such assigning Lender Party
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Borrower or any
other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender Party or any other
Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are delegated
to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender or Issuing Bank,
as the case may be.
(d) The Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and
Acceptance and Italian Lender Joinder Agreement delivered to and
accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under each
Facility of, and principal amount of the Advances owing under
each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party
hereunder for all purposes of this Agreement. The Register shall
be available for inspection by any Borrower or any Lender Party
at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and
Acceptance and, in the case of an assignment of any Working
Capital B-3 Commitment, an Italian Lender Joinder Agreement, in
each case executed by an assigning Lender Party and an assignee,
together with any Note or Notes subject to such assignment, the
Agent shall, if each such Assignment and Acceptance and Italian
Lender Joinder Agreement (if applicable) has been completed and
is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance and such Italian Lender Joinder
Agreement (if applicable), (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrowers. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, each
Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder under such Facility, a new Note
to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A-1, A-2,
A-3, A-4 or A-5 hereto, as the case may be.
(f) Each Issuing Bank may assign to one or more
Eligible Assignees all or a portion of its rights and obligations
under the undrawn portion of its Letter of Credit Commitment at
any time; provided, however, that (i) except in the case of an
assignment to a Person that immediately prior to such assignment
was an Issuing Bank or an assignment of all of an Issuing Bank's
rights and obligations under this Agreement, the amount of the
Letter of Credit Commitment of the assigning Issuing Bank being
assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than US$10,000,000 and
shall be in an integral multiple of US$1,000,000 in excess
thereof, (ii) each such assignment shall be to an Eligible
Assignee and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together
with a processing and recordation fee of US$3,500.
(g) Each Lender Party may sell participations to
one or more Persons (other than any Loan Party or any of its
Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that
(i) such Lender Party's obligations under this Agreement
(including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible
to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the
Borrowers, the Agent and the other Lender Parties shall continue
to deal solely and directly with such Lender Party in connection
with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation
shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure
by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to
such participation, or release all or substantially all of the
Collateral.
(h) Any Lender Party may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant, any
information relating to the Borrowers furnished to such Lender
Party by or on behalf of the Borrowers; provided, however, that,
prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it
from such Lender Party.
(i) Notwithstanding any other provision set forth
in this Agreement, any Lender Party may at any time create a
security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to
it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 8.08. Designated Subsidiaries and Designated
Italian Subsidiaries. Crompton Corp. may at any time, and from
time to time, by delivery to the Agent of a Designation Letter
duly executed by Crompton Corp. and the respective Subsidiary and
substantially in the form of Exhibit G hereto, designate such
Subsidiary as a "Designated Subsidiary" or a "Designated Italian
Subsidiary" for purposes of this Agreement and such Subsidiary
shall thereupon become a "Designated Subsidiary" or a "Designated
Italian Subsidiary", respectively, for purposes of this Agreement
and, as such, shall have all of the rights and obligations of a
Borrower hereunder; provided, however, that no such Subsidiary
incorporated under the laws of any United States jurisdiction may
be appointed a "Designated Subsidiary" or a "Designated Italian
Subsidiary". The Agent shall promptly notify each Lender of each
such designation by Crompton Corp. and the identity of the
respective Subsidiary.
SECTION 8.09. Execution in 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 taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 8.10. No Liability of the Issuing Banks. Each
Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to
its use of such Letter of Credit. Neither any Issuing Bank nor
any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against
presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d)
any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit, except that the relevant
Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to such Borrower, to the extent of
any direct, but not consequential, damages suffered by such
Borrower that such Borrower proves were caused by (i) such
Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) such
Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of
the Letter of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary.
SECTION 8.11. Release of Collateral. As soon as
practicable after the Collateral Release Date, the Agent shall,
at the expense of the Borrowers, execute and deliver to Crompton
Corp. such documents as Crompton Corp. shall reasonably request
to evidence the release of the Collateral from the liens and
security interest created under the Collateral Documents.
SECTION 8.12. Confidentiality. Neither the Agent nor
any Lender Party shall disclose any Confidential Information to
any Person without the consent of Crompton Corp., other than (a)
to the Agent's or such Lender Party's Affiliates and their
officers, directors, partners, employees, agents and advisors and
to actual or prospective Eligible Assignees and participants, and
then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process, provided that, other than
with respect to Confidential Information otherwise permitted to
be disclosed pursuant to clause (d) below, the Agent or such
Lender Party shall, unless prohibited by applicable law or
regulation or court order, give notice to Crompton Corp. of any
such requirement to disclose such Confidential Information, and,
if practicable, such notice shall be given prior to such
disclosure, provided, however, that the failure to give such
notice shall not prohibit such disclosure, (c) to any rating
agency when required by it, provided that, prior to any such
disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the
Borrowers received by it from such Lender Party and (d) as
requested or required by any state, federal or foreign authority
or examiner or the National Association of Insurance
Commissioners or any state or federal authority regulating such
Lender Party.
SECTION 8.13. Jurisdiction, Etc. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of
any New York State court or federal court of the United States of
America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to
which it is a party, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such
federal court. Each Initial Borrower hereby agrees that service
of process in any such action or proceeding brought in any such
New York State court or in such federal court may be made upon CT
Corporation System at its offices at 1633 Broadway, New York, New
York 10019 (the "Process Agent") and each Designated Subsidiary
and Designated Italian Subsidiary hereby irrevocably appoints the
Process Agent its authorized agent to accept such service of
process, and agrees that the failure of the Process Agent to give
any notice of any such service shall not impair or affect the
validity of such service or of any judgment rendered in any
action or proceeding based thereon. Each Borrower hereby further
irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties
hereto by registered or certified mail, postage prepaid, to such
Borrower at its address specified pursuant to Section 8.02. Each
of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action
or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party in any New York State or
federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 8.14. Judgment. (a) If for the purposes of
obtaining judgment in any court it is necessary to convert a sum
due hereunder or under the Notes in US Dollars into another
currency, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures the
Agent could purchase US Dollars with such other currency at
Citibank's principal office in London at 11:00 A.M. (London time)
on the Business Day preceding that on which final judgment is
given.
(b) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder or under
the Notes in a Foreign Currency into US Dollars, the parties
agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance
with normal banking procedures the Agent could purchase such
Foreign Currency with US Dollars at Citibank's principal office
in London at 11:00 A.M. (London time) on the Business Day
preceding that on which final judgment is given.
(c) The obligation of any Borrower in respect of
any sum due from it to any Lender Party or the Agent hereunder or
under a Note held by such Lender Party shall, notwithstanding any
judgment in a currency other than US Dollars, be discharged only
to the extent that on the Business Day following receipt by such
Lender Party or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency, such Lender Party
or the Agent (as the case may be) may in accordance with normal
banking procedures purchase US Dollars with such other currency;
if the US Dollars so purchased are less than such sum due to such
Lender Party or the Agent (as the case may be) in US Dollars,
such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender Party
or the Agent (as the case may be) against such loss, and if the
US Dollars so purchased exceed such sum due to any Lender Party
or the Agent (as the case may be) in US Dollars, such Lender
Party or the Agent (as the case may be) agrees to remit to such
Borrower such excess.
SECTION 8.15. Power of Attorney. Each Subsidiary of
Crompton Corp. may from time to time authorize and appoint
Crompton Corp. as its attorney-in-fact to execute and deliver (a)
any amendment, waiver or consent in accordance with Section 8.01
on behalf of and in the name of such Subsidiary and (b) any
notice or other communication hereunder, on behalf of and in the
name of such Subsidiary. Such authorization shall become
effective as of the date on which such Subsidiary delivers to the
Agent a power of attorney enforceable under applicable law and
any additional information to the Agent as necessary to make such
power of attorney the legal, valid and binding obligation of such
Subsidiary.
SECTION 8.16. Governing Law. This Agreement, each
Designation Letter and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 8.17. Limitation on B-2 Borrower Obligations,
B-3 Borrower Obligations and Canadian Borrower Obligations.
Notwithstanding anything herein to the contrary, to the extent a
B-2 Borrower, a B-3 Borrower or the Canadian Borrower is
purported to owe any amounts hereunder, such B-2 Borrower, such
B-3 Borrower or the Canadian Borrower, as the case may be, shall
only owe such amount solely with respect to its own Obligations.
In addition, if any of the undertakings or obligations of any B-2
Borrower, any B-3 Borrower or the Canadian Borrower under this
Agreement, the Loan Documents or any contract, document or
instrument entered into in connection therewith or relating
thereto would otherwise be or become unenforceable in full or in
part as a result of, or because of any mandatorily applicable
provisions of the law of the jurisdiction under which such B-2
Borrower, such B-3 Borrower or the Canadian Borrower is
incorporated, then such undertakings and obligations of such B-2
Borrower, such B-3 Borrower or the Canadian Borrower shall be
deemed to be limited to the extent necessary to make them valid,
legal and enforceable under such law. For the avoidance of
doubt, if any of the obligations of any B-2 Borrower, any B-3
Borrower or the Canadian Borrower to make payments would
otherwise be or become invalid, illegal or unenforceable because
of the provisions contained in provisions of applicable statutory
law aimed at preserving such B-2 Borrower's, such B-3 Borrower's
or the Canadian Borrower's share capital, such B-2 Borrower, such
B-3 Borrower or the Canadian Borrower, respectively, shall be
obligated to make payments only to the extent it would be legal
for such payments to be made under such provision.
SECTION 8.18. Waiver of Jury Trial. Each of the
Borrowers, the Agent and the Lender Parties irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the actions of the Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
CROMPTON & KNOWLES
CORPORATION
By /s/ Frank A. Manganella
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By /s/ Frank A. Manganella
Title:
DAVIS-STANDARD CORPORATION
By /s/ Frank A. Manganella
Title:
INGREDIENT TECHNOLOGY
CORPORATION
By /s/ Frank A. Manganella
Title:
UNIROYAL CHEMICAL COMPANY,
INC.
By /s/ Frank A. Manganella
Title:
C & K SERVICES SA
By /s/ Frank A. Manganella
Title:
DAVIS-STANDARD (DEUTSCHLAND)
GMBH
By /s/ Frank A. Manganella
Title:
DAVIS STANDARD (FRANCE) SARL
By /s/ Frank A. Manganella
Title:
ER-WE-PA DAVIS-STANDARD GMBH
By /s/ Frank A. Manganella
Title:
UNIROYAL CHEMICAL B.V.
By /s/ John T. Ferguson II
Title:
UNIROYAL CHEMICAL LTD.
By /s/ Frank A. Manganella
Title:
UNIROYAL CHIMICA S.P.A.
By /s/ Frank A. Manganella
Title:
CITICORP USA, INC., as Agent
By /s/ Robin F. Lenna
Title:
THE CHASE MANHATTAN BANK,
as Managing Agent
By /s/ Robert T. Sacks
Title: Managing Director
Working Capital A Lenders
Working Capital B-1 Lenders
CITICORP USA, INC.
By /s/ Robin F. Lenna
Title:
THE CHASE MANHATTAN BANK
By /s/ Robert T. Sacks
Title: Managing Director
ABN AMRO BANK N.V., NEW YORK
BRANCH
By /s/ George M. Dugan
Title: Vice President
By /s/ David W. Stack
Title: Vice President
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By /s/ Karen Purelis
Title: VP
By /s/ Charles Dougherty
Title: VP
BANK OF AMERICA ILLINOIS
By /s/ Donald J. Chin
Title: Managing Director
THE BANK OF NEW YORK
By /s/ David Judge
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ JoAnn Keller
Title: Senior Vice President
BHF - BANK AKTIENGESELLSCHAFT
By /s/ Linda Pace
Title: VP
By /s/ Hans-Juergen Scholz
Title: APV
CIBC INC.
By /s/ John Burke
Title: Director
CORESTATES BANK, N.A.
By /s/ Brian M. Haley
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Rod Hurst
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Steven Francis
Title: Vice President
FLEET NATIONAL BANK
By /s/ Robert Lord
Title: Vice President
SOCIETE GENERALE NEW YORK BRANCH
By /s/ Allan Zinser
Title: Vice President
TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge A. Garcia
Title: Vice President
Working Capital B-2 Lenders
CITIBANK, N.A.
By /s/ Mary W. Corkran
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ Robert T. Sacks
Title: Managing Director
ABN AMRO BANK N.V., NEW YORK
BRANCH
By /s/ George M. Dugan
Title: Vice President
By /s/ David W. Stack
Title: Vice President
BANK OF AMERICA ILLINOIS
By /s/ Donald J. Chin
Title: Managing Director
THE BANK OF NEW YORK
By /s/ David Judge
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ JoAnn Keller
Title: Senior Vice President
BHF - BANK AKTIENGESELLSCHAFT
By /s/ Linda Pace
Title: VP
By /s/ Hans-Juergen Scholz
Title: AVP
CIBC WOOD GUNDY PLC
By /s/ John Burke
Title: Director
CORESTATES BANK, N.A.
By /s/ Brian M. Haley
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Rod Hurst
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Steven Francis
Title: Vice President
FLEET NATIONAL BANK
By /s/ Robert Lord
Title: Vice President
TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge A. Garcia
Title: Vice President
<PAGE>
Working Capital B-3 Lenders
CITIBANK, N.A.,
MILAN BRANCH
By /s/ Nicoletta Zappatini
Title: Vice President
BANCA COMMERCIALE ITALIANA,
LATINA BRANCH
By /s/ Karen Purelis
Title: VP
By /s/ Charles Dougherty
Title: VP
BANK OF AMERICA NT&SA,
MILAN BRANCH
By /s/ Luca Sala
Title: VP
CHASE MANHATTAN BANK,
MILAN BRANCH
By /s/ Guido Pescione
Title: MD
SOCIETE GENERALE
MILAN BRANCH
By /s/ Luca Brasi
Title: General Manager
Canadian Lenders
CITIBANK CANADA
By /s/ Eric Schmacher
Title: Vice President
BANK OF AMERICA CANADA
By /s/ David King
Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ Doug Zinkiewich
Title: Director
CHASE MANHATTAN BANK OF CANADA
By /s/ Arun Bery & Christine Chan
Title: VP & VP
CREDIT LYONNAIS CANADA
By /s/ Caroline Stade & Blake Colvin
Title: VP, Corp Banking & V.P.
SOCIETE GENERALE (CANADA)
By /s/ Michael Klopchic & Eric Dhoste
Title:
TORONTO DOMINION
By /s/ David Pankhurst
Title: Manager
Initial Issuing Banks
CITIBANK, N.A.
By /s/ Mary W. Corkran
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ JoAnn Keller
Title: Senior Vice President
CITIBANK, N.A., LONDON BRANCH
By /s/ Robin F. Lenna
Title:
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Working Working Working Working Canadian Letter
Lender/ Capital Capital Capital Capital Commit. of Credit
Initial A B-1 B-2 B-3 Commitment
Issuing Commit. Commit. Commit. Commit. (Facility)
Bank
Citicorp USA, Inc.
$30,000,000 $15,000,000 N/A N/A N/A N/A
Citibank N.A.
N/A N/A $4,500,000 N/A N/A $25,000,000(A)
$10,000,000(B-1)
Citibank, N.A., Milan Branch
N/A N/A N/A $6,750,000 N/A N/A
Citibank Canada
N/A N/A N/A N/A $11,250,000 N/A
The Chase Manhattan Bank
$25,000,000 $12,500,000 $3,750,000 N/A N/A, N/A
The Chase Manhattan Bank, Milan Branch
N/A N/A N/A $8,750,000 N/A N/A
The Chase Manhattan Bank of Canada
N/A N/A N/A N/A $11,250,000 N/A
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Working Working Working Working Canadian Letter
Lender/ Capital Capital Capital Capital Commit. of Credit
Initial A B-1 B-2 B-3 Commitment
Issuing Commit. Commit. Commit. Commit. (Facility)
Bank
ABN AMRO Bank N.V., New York Branch
$20,000,000 $10,000,000 $6,750,000 N/A N/A N/A
Banca Commerciale Italiana, New York Branch
$12,500,000 $6,250,000 N/A N/A N/A N/A
Banca Commerciale Italiana, Latina Branch
N/A N/A N/A $6,250,000 N/A N/A
Bank of America NT&SA
$20,000,000 $10,000,000 N/A N/A N/A N/A
Bank of America NT&SA, London Branch
N/A N/A $3,000,000 N/A N/A N/A
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Working Working Working Working Canadian Letter
Lender/ Capital Capital Capital Capital Commit. of Credit
Initial A B-1 B-2 B-3 Commitment
Issuing Commit. Commit. Commit. Commit. (Facility)
Bank
Bank of America NT&SA, Milan Branch
N/A N/A N/A $7,000,000 N/A N/A
Bank of America Canada
N/A N/A N/A N/A $5,000,000 N/A
Bank of Boston Connecticut
$20,000,000 $10,000,000 $3,000,000 N/A N/A $25,000,000(A)
$10,000,000(B-1)
The Bank of New York
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
BHF-Bank Aktiengesellschaft
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
CIBC Inc.
$20,000,000 $10,000,000 N/A N/A N/A N/A
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Working Working Working Working Canadian Letter
Lender/ Capital Capital Capital Capital Commit. of Credit
Initial A B-1 B-2 B-3 Commitment
Issuing Commit. Commit. Commit. Commit. (Facility)
Bank
CIBC Wood Gundy Plc
N/A N/A $3,000,000 N/A N/A N/A
Canadian Imperial Bank of Commerce
N/A N/A N/A N/A $15,000,000 N/A
CoreStates Bank, N.A.
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
Credit Lyonnais, New York Branch
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
Credit Lyonnais Canada
N/A N/A N/A N/A $5,000,000 N/A
First Union National Bank
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
Fleet National Bank
$20,000,000 $10,000,000 $3,000,000 N/A N/A N/A
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Working Working Working Working Canadian Letter
Lender/ Capital Capital Capital Capital Commit. of Credit
Initial A B-1 B-2 B-3 Commitment
Issuing Commit. Commit. Commit. Commit. (Facility)
Bank
Societe Generale, New York Branch
$12,500,000 $6,250,000 N/A N/A N/A N/A
Societe Generale, Milan Branch
N/A N/A N/A $6,250,000 N/A N/A
Societe Generale (Canada)
N/A N/A N/A N/A $7,500,000 N/A
Toronto Dominion (New York), Inc.
$20,000,000 $10,000,000 N/A N/A N/A N/A
The Toronto-Dominion Bank
N/A N/A $3,000,000 N/A $15,000,000 N/A
Total Commitments:
$300,000,000 $150,000,000 $45,000,000 $35,000,000 $70,000,000
$50,000,000(A)
$20,000,000(B-1)
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name Domestic Canadian Eurocur. Eurocur. Eurocur. Eurocur.
of Lending/ Domestic Lending Lending Lending Lending
Initial Issuing Lending Office Office Office Office
Lender/ Office Office For For For For
Initial Working Working Working Canadian
Issuing Capital Capital Capital Borrower
Bank A & B-1 B-2 B-3 Advances
Advances Advances Advances
Citicorp USA, Inc.
399 Park Ave N/A 399 Park Ave N/A N/A N/A
NY, NY 10043 NY, NY 10043
Attn R. Lenna Attn R. Lenna
TEL212-559-3974 TEL212-559-3974
FAX212-793-1290 FAX212-793-1290
Citibank N.A.
399 Park Avenue
NY, NY 10043
Attn R. Lenna
TEL212-559-3974
FAX212-793-1290 N/A P.O. Box 12068 N/A N/A
Counting House
53 Pooley Street
London SE12GA
Atn K.Purchase/
David Williams
TEL44-171-500-9675
FAX44-171-500-9701
Citibank, N.A., Milan Branch
N/A N/A N/A N/A Foro Bounaparte 16 N/A
20121 Milan, Italy
Atn N. Zappatini
TEL39-2-86474-583
FAX39-2-86474-200
Citibank Canada
N/A 123 Front St W N/A N/A N/A 123 Front St W
10th Fl. 10th Fl.
Toronto, Ontario Toronto, Ontario
Canada M5J 2M3 Canada M5J 2M3
The Chase Manhattan Bank
270 Park Avenue N/A 270 Park Avenue 1 Chaseside N/A N/A
NY, NY 10017 NY, NY 10017 Bournemouth, Dorset
Atn R.Sacks Atn R. Sacks BH77DB
TEL212-270-4118 TEL212-270-4118 Atn European Loans
FAX212-270-7939 FAX212-270-7939 TEL0120-234-2020
FAX0120-234-3706
The Chase Manhattan Bank, Milan Branch
N/A N/A N/A N/A Via Catena, No. 4 N/A
20121 Milan, Italy
Attn: Luca Preziose
TEL: 39-2-8895-2007
FAX: 39-2-8895-2567
The Chase Manhattan Bank of Canada
N/A 1 1st Canadian Pl N/A N/A N/A 1 1st Canadian Pl
100 King St W 100 King St W
Suite 6900 PO Box 106 Suite 6900 PO Box 106
Toronto, Ontario Toronto, Ontario
Canada M5X1A4 Canada M5X1A4
ABN AMRO Bank N.V., New York Branch
500 Park Ave N/A 500 Park Ave 500 Park Ave N/A N/A
NY, NY 10022 NY, NY 10022 NY, NY 10022
Atn: M. Jeter Atn: M. Jeter Atn M. Jeter
TEL212-446-4224 TEL212-446-4224 TEL212-446-4224
FAX212-832-7468 FAX212-832-7468 FAX212-832-7468
Banca Commerciale Italiana, New York Branch
1 William St N/A 1 William St N/A N/A N/A
NY, NY 10004 NY, NY 10004
Atn:B. Carlson Atn:B. Carlson
TEL212-607-3886 TEL212607-3886
FAX212-809-2124 FAX212809-2124
Banca Commerciale Italiana, Latina Branch
N/A N/A N/A N/A Via Cerveteri, 2 N/A
04100 Latina, Italy
Atn S. Barmucci
TEL:39-7-73-486-034
FAX:39-7-73-694-109
w/ copy to B. Carlson
1 William St
NY, NY 10004
Bank of America NT&SA
200 W Jackson Blvd N/A 200 W Jackson Blvd N/A N/A N/A
Chicago, IL 60697 Chicago, IL 60697
Atn: R. DiMatteo Atn: R.DiMatteo
TEL312-828-1988 TEL312-828-1988
FAX312-974-9626 FAX312-974-9626
Bank of America NT&SA, London Branch
N/A N/A N/A 1 Alie Street N/A N/A
London E1 8DE England
Attn: Keith Thomas
TEL: 44-171-634-4436
FAX: 44-171-634-4707
Bank of America NT&SA, Milan Branch
N/A N/A N/A N/A Corso Matteotti, 10 N/A
20121 Milan, Italy
Attn: Louis Moncada
TEL: 39-2-760-69-341
FAX: 39-2-760-69-210
Bank of America Canada
N/A 200 Front St W, N/A N/A N/A 200 Front St W,
Suite 2700 Suite 2700
Toronto, Ontario Toronto, Ontario
Canada M5V 8L2 Canada M5V 8L2
Bank of Boston Connecticut
1 Landmark Sq N/A 1 Landmark Sq 1 Landmark Square N/A N/A
20th Floor 20th Floor 20th Floor
Stamford, CT 06901 Stamford, CT 06901 Stamford, CT 06901
Atn: JoAnn Keller Atn: JoAnn Keller Atn: JoAnn Keller
TEL:(203) 973-1941 TEL:(203) 973-1941 TEL:(203) 973-1941
FAX:(203) 967-8169 FAX:(203) 967-8169 FAX:(203) 967-8169
The Bank of New York
1 Wall Street N/A 1 Wall Street 1 Wall Street N/A N/A
22nd Floor 22nd Floor 22nd Floor
NY, NY 10286 NY, NY 10286 NY, NY 10286
Atn:David Judge Atn:David Judge NY, NY 10286
TEL:212635-6861 TEL:212635-6861 TEL:212635-6861
FAX:212635-6999 FAX:212635-6999 FAX:212635-6999
BHF-Bank Aktiengesellschaft
590 Madison Ave N/A 590 Madison Ave 590 Madison Ave N/A N/A
NY, NY 10022 NY, NY 10022 NY, NY 10022
Atn: L. Pace Atn: L. Pace Atn: L. Pace
TEL212-756-5915 TEL212-756-5915 TEL212-756-5915
FAX212-756-5536 FAX212-756-5536 FAX212-756-5536
CIBC Inc.
2727 Paces Ferry Rd N/A 2727 Paces Ferry Road N/A N/A N/A
Suite 1200 Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339
Attn:Sheila Hogan Attn: Sheila Hogan
TEL:(770) 319-4820 TEL:(770) 319-4820
FAX:(770) 319-4950 FAX:(770) 319-4950
CIBC Wood Gundy Plc
N/A N/A N/A CIBC, Cottons Centre N/A N/A
Cottons Lane
SE1 2QL London, England
Attn: Andy Rose
TEL:44-171-234-6151
FAX:44-171-234-6433
Canadian Imperial Bank of Commerce
N/A Commerce Court W, N/A N/A N/A Commerce Court W,
7th Floor 7th Floor
Toronto, Ontario Toronto, Ontario
Canada M5L 1A2 Canada M5L 1A2
CoreStates Bank, N.A.
1345 Chestnut St N/A 1345 Chestnut St 24 Monument St N/A N/A
PO Box 7618 PO Box 7618 London EC3R 8AJ
Phil., PA 19101 Phil., PA 19101 England
Attn: B. Haley Attn: B. Haley Atn: R. Hunter
TEL:(215) 973-2372 TEL:(215) 973-2372 TEL:44-171-962-2821
FAX:(215) 973-7820 FAX:(215) 973-7820 FAX:44-171-962-2877
Credit Lyonnais, NY Branch
1301 Ave. N/A 1301 Ave. 1301 Ave. N/A N/A
of Americas of Americas of Americas
NY, NY 10019 NY, NY 10019 NY, NY 10019
Attn:T. Randolph Attn:T. Randolph Attn:T. Randolph
TEL:(212)261-7344 TEL:(212)261-7344 TEL:(212)261-7344
FAX:(212)459-3179 FAX:(212)459-3179 FAX:(212)459-3179
Credit Lyonnais Canada
N/A 1 Financial Pl N/A N/A N/A 1 Financial Pl
1 Adelaide St E, 1 Adelaide St E,
Suite 2505 Suite 2505
Toronto, Ontario Toronto, Ontario
Canada M5C 2V9 Canada M5C 2V9
First Union National Bank
550 Broad St, 550 Broad St, 550 Broad St, N/A N/A
NJ1535 NJ1535 NJ1535
Newark, NJ 07102 Newark, NJ 07102 Newark, NJ 07102
Attn: Mary Tenore Attn: Mary Tenore Attn:Mary Tenore
TEL:(201)565-3607 TEL:(201)565-3607 TEL:(201)565-3607
FAX:(201)565-3978 FAX:(201)565-3978 FAX:(201)565-3978
Fleet National Bank
1 Landmark Sq 1 Landmark Sq 1 Landmark Sq N/A N/A
12th Floor 12th Floor 12th Floor
Stamford, CT 06904 Stamford, CT 06904 Stamford, CT 06904
Attn: G. Rockwood Attn:G. Rockwood Attn:G. Rockwood
TEL:(203)358-6146 TEL:(203)358-6146 TEL:(203)358-6146
FAX:(203)358-6111 FAX:(203)358-6111 FAX:(203)358-6111
Societe Generale, New York Branch
1221 Ave. of N/A 1221 Ave. of N/A N/A N/A
Americas Americas
NY, NY 10020 NY, NY 10020
Attn:M. O'Donnell Attn:M. O'Donnell
TEL:(212) 278-6853 TEL:(212) 278-6853
FAX:(212) 278-7490 FAX:(212) 278-7490
Societe Generale, New York Branch
N/A N/A N/A N/A Sedi di Milano N/A
Foro Bounparte, 66
20121 Milan, Italy
Attn: Mauro Lucchesi
TEL: 39-2-854-9320
FAX: 39-2-854-9245
with a copy to: Alan Zinser
1301 Ave. of the Americas
New York, NY 10020
Societe Generale (Canada)
N/A 100 Yonge Street N/A N/A N/A 100 Yonge Street
Suite 1002 Suite 1002
Toronto, Ontario Toronto, Ontario
Canada M5C 2W1 Canada M5C 2W1
Toronto Dominion (New York), Inc.
909 Fannin, Suite 1700 N/A 909 Fannin, Suite 1700 N/A N/A N/A
Houston, TX 77010 Houston, TX 77010
Attn: Jorge Garcia Attn: Jorge Garcia
TEL: (713) 653-8242 TEL: (713) 653-8242
FAX: (713) 951-9921 FAX: (713) 951-9921
The Toronto-Dominion Bank
N/A P.O. Box 1 N/A Triton Court N/A P.O. Box 1
Toronto Dominion 14/18 Finsbury Sq Toronto Dominion
Center London EC2A-1DB Center
55 King Street England 55 King Street
Toronto, Ontario Attn:D. Payne Toronto,
Canada M5K 1A2 TEL:011-44-171-920-0272 Ontario
FAX:011-44-171-638-2551 Canada
M5K 1A2
SCHEDULE II
PART I:
CROMPTON GUARANTORS
CK Holding Corporation
CNK Disposition Corp.
Crompton & Knowles Colors Incorporated
Crompton & Knowles Overseas Corporation
Davis-Standard Corporation
Ingredient Technology Corporation
Kem Manufacturing Corporation
PART II:
UNIROYAL GUARANTORS
Gustafson, Inc.
Gustafson International Company
Lokar Enterprises, Inc.
Trace Chemicals, Inc.
Uniroyal Chemical Brazil Holding, Inc.
Uniroyal Chemical Company, Inc.
Uniroyal Chemical Corporation
Uniroyal Chemical Export Limited
Uniroyal Chemical International Company
Uniroyal Chemical Leasing Company, Inc.
SCHEDULE III
MINOR SUBSIDIARIES
American Flouride Corporation
CNK Specialities Holding B.V.
Crompton & Knowles Acceptance Corporation
Crompton & Knowles Chemical Realty
Killion Extruders, Inc.
KEM International Corporation
Superior Chemical Corporation
CNK One B.V.
CNK Two B.V.
CNK S.R.L.
CNK Italiana S.R.L.
Crompton & Knowles I.P.R. Corporation
Interbel Trading, Inc.
Uniroyal Chemical Asia, Ltd.
Naugatuck Treatment Co.
SCHEDULE IV
TO THE AMENDED AND RESTATED CREDIT AGREEMENT
B-2 BORROWERS
Borrower Country of Incorporation
C & K Services SA Belgium
Davis-Standard (Deutschland) GmbH Germany
Davis Standard (France) SARL France
ER-WE-PA Davis-Standard GmbH Germany
Uniroyal Chemical B.V. Netherlands
Uniroyal Chemical Ltd. United Kingdom
SCHEDULE V
TO THE AMENDED AND RESTATED
CREDIT AGREEMENT
B-3 BORROWERS
Borrower Country of Incorporation
Uniroyal Chimica S.p.A. Italy
SCHEDULE VI
TO THE AMENDED AND RESTATED
CREDIT AGREEMENT
WORKING CAPITAL B-3 LENDERS
Citibank, N.A., Milan Branch
The Chase Manhattan Bank, Milan Branch
Bank of America NT & SA, Milan Branch
Banca Commerciale Italiana, Latina Branch
Societe Generale Milan Branch
SCHEDULE VII
TO THE AMENDED AND RESTATED
CREDIT AGREEMENT
BORROWERS' ACCOUNTS
Borrower Currency Account No.
Crompton & Knowles U.S. Dollars 4070-6411
Corporation 399 Park Avenue
New York, NY 10043
Crompton & Knowles U.S. Dollars 4070-6438
Colors Incorporated 399 Park Avenue
New York, NY 10043
Davis-Standard U.S. Dollars 4070-6462
Corporation 399 Park Avenue
New York, NY 10043
Ingredient Technology U.S. Dollars 4070-6446
Corporation 399 Park Avenue
New York, NY 10043
Uniroyal Chemical U.S. Dollars 4049-8376
Company, Inc. 399 Park Avenue
New York, NY 10043
Uniroyal
Chimica S.P.A. Italian Lira 10789/04
c/o MONTE DEI PASCHI
DI SIENA, Latina
Branch
Uniroyal Italian Lira 0/114349/011
Chimica S.P.A. c/o CITIBANK MILAN
Uniroyal Chemical Ltd. Canadian Dollars
PAYMENT OFFICES
Working Capital B-2 Facility: Citibank, N.A., London Branch
P.O. Box 12068
Counting House
53 Pooley Street
London SE12GA
Attention: Ken Purchase/David
Williams
Working Capital B-3 Facility: Citibank, N.A., Milan Branch
Foro Bounaparte 16
20121 Milan, Italy
Attention: Nicoletta Zappatini
Canadian Facility Citibank Canada
123 Front Street West
10th Floor
Toronto, Ontario
Canada M5J 2M3
Attention: David Wingfelder
SCHEDULE 3.01(d)
SURVIVING DEBT
( $ OOO'S ) *
TOTAL
I. LOAN FACILITIES DESCRIPTION LINE(S)
CROMPTON & KNOWLES CORPORATION
INDUSTRIAL REVENUE BONDS (**) INDUSTRIAL REVENUE BONDS 4,000
BANK OF NEW YORK UNSECURED SHORT-TERM DEBT 10,000
NEW ENGLAND LIFE INS. CO. LIFE INSURANCE POLICY LOANS 6,986
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK UNSECURED SHORT-TERM DEBT 5,000
CROMPTON & KNOWLES EUROPE S.A.
CREDIT LYONNAIS NOTES PAYABLE & OVERDRAFT 19,084
BANK BRUSSELS LAMBERT NOTES PAYABLE & OVERDRAFT 2,544
GENERALE DE BANQUE NOTES PAYABLE & OVERDRAFT 954
ER-WA-PA DAVIS STANDARD GmbH
COMMERZBANK NOTES PAYABLE & OVERDRAFT 4,902
WESTDEUTSCHE LANDESBANK NOTES PAYABLE & OVERDRAFT 4,902
UNIROYAL CHEMICAL COMPANY, INC. (USA)
VARIOUS BONDHOLDERS (**) 9% SR. SECURED NOTES 252,800
CREDIT SUISSE (**) A/R SECURED LOAN FACILITY 15,000
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCO DI NAPOLI OVERDRAFT & CURRENCY
LOANS EXPORT 2,610
MONTE DEI PASCHI DI SIENA " 4,890
BANCA COMMERCIALE ITALIANA " 3,260
BANCA DI ROMA " 3,260
CREDITO ROMAGNOLO " 1,304
ISTITUTO BANCARIO S. PAOLO DI TORINO " 4,623
BANCA NAZIONALE DEL LAVORO " 3,384
BANCA ITALO ROMENA " 1,630
CREDITO ITALIANO " 196
BANCA NAZIONALE DEL LAVORO (**) LONG-TERM DEBT 835
BANCA NAZIONALE DEL LAVORO (**) " 1,089
BANCA NAZIONALE DEL LAVORO (**) " 730
BANCA NAZIONALE DEL LAVORO (**) " 126
BANCA NAZIONALE DEL LAVORO (**) " 3,651
CITIBANK (**) " 47,100
CITIBANK - STANDBY " 12,560
UNIROYAL CHEMICAL, LIMITED (U.K.)
NATIONAL WESTMINSTER OVERDRAFT FACILITY 775
UNIROYAL CHEMICAL, LTD. (CANADA)
ROYAL BANK OF CANADA (**) REVOLVER 11,100
PREMIER CHEMICAL COMPANY, LTD. (TAIWAN)
ROYAL BANK OF CANADA MULTI-PURPOSE 2,000
HONG KONG BANK " 545
UNIROYAL CHEMICAL PTY. LTD. (AUSTRALIA)
NATIONAL AUSTRALIA BANK OVERDRAFT 789
HANNAFORD SEEDMASTER SERVICES
PTY. LTD (AUSTRALIA)
WESTPAC OVERDRAFT 1,066
WESTPAC (**) EQUIPMENT FINANCE 395
WESTPAC REMITTANCE L/C 8
WESTPAC BANKERS' UNDERTAKING 8
WESTPAC FORWARD EXCHANGE CONTRACT(S) 494
WESTPAC TAPE NEGOTIATION AUTHORITY 40
UNIROYAL CHEMICAL COMPANY, LTD. (BAHAMAS)
BANKERS TRUST CO. (**) OPIC GUARANTEED LOAN 10,800
UNIROYAL QUIMICA S.A. (BRAZIL)
ITAU SHORT-TERM DEBT 200
UNIROYAL CHEMICAL EXPORT, LTD.
CREDIT SUISSE (**) A/R SECURED LOAN FACILITY 15,000
(CO-BORROWER WITH UCCI)
(1) included in Uniroyal Chemical Co., Inc. amount
UNIROYAL CHEMICAL B.V.
ABN-AMRO UNSECURED OVERDRAFT FACILITY 1,500
II. LETTERS OF CREDIT AMOUNT OF L/C
CROMPTON & KNOWLES CORPORATION
PENNSYLVANIA DEPT. OF EPA 6,000
FIRST UNION BANK, AS TRUSTEE 4,123
NEW JERSEY DEPT. OF EPA 3,558
PENNSYLVANIA DEPT. OF EPA 3,772
ENVIRONMENTAL PROTECTION AGENCY 196
CONTINENTAL CASUALTY COMPANY 3,471
INSURANCE CO. OF NORTH AMERICA 130
INSURANCE CO. OF NORTH AMERICA 100
HARTFORD INSURANCE COMPANY 20
BANCO NATIONAL DE MEXICO S.A. 35
CHINA NATIONAL OVERSEAS TRADING 358
INDIAN ALUMINUM COMPANY, LTD 471
WIHURI OY WIPAK 455
HUBEI JIANGYU PLASTICS INDUSTRY DEV. CO., LTD. 228
SUN A ENTERPRISE CO., LTD 280
PKL - VARPACKUNGSSYTEME GmbH 4,438
THE PAPER PRODUCTS, LTD 20
DAELIM ENGINEERING CO., LTD 9
BARCLAY'S BANK, LTD 27
AT & T NETWORK SYSTEMS IRELAND LTD 311
J.K. INDUSTRIES, LTD. 18
KLERK'S PLASTICS RECYCLING N.V. 111
BANK HAPOALIM B.M. 27
DALIAN VASTONE COMMUNICATION CABLE CORP. 37
GIZA CABLE TELEPHONE CO. 32
ANZ GRINDLAYS BANK PLC 37
DALIAN TIENCHENG PACKING MATERIAL 208
RATHI DYE CHEM PVT. LTD 409
DIVIYA CHEMICALS LTD 211
UNIROYAL CHEMICAL COMPANY, INC. (USA) AMOUNT OF L/C
NATIONAL UNION FIRE INS. 2,411
NATIONAL UNION FIRE INS. 964
PREMIER/BAYOU SORREL TRUST 229
NUCLEAR REGULATORY COMMISSION 150
BANKERS TRUST/O.P.I.C. 676
KREDIETBANK/CHEMICAL FORWARDERS 150
KREDIETBANK/CHEMICAL FORWARDERS 175
FREGATA S.A. (CUSTOMS OFFICE) 100
L. MARQUEZ 10
PREMIER CHEMICAL COMPANY LTD. (TAIWAN)
ROYAL BANK OF CANADA USANCE 381
UNIROYAL QUIMICA, S.A. (BRAZIL)
BANCO ITAU S/A 61
BANCO DE BOSTON 46
III LETTERS OF GUARANTY AMOUNT OF GUARANTY
CROMPTON & KNOWLES CORPORATION
CHASE MANHATTAN BANK UNSECURED S-T SUB LOANS 5,000
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK L/C'S ISSUED FOR CROMPTON & KNOW 10,891
UNIROYAL CHEMICAL COMPANY, INC. (USA)
OVERSEAS PRIVATE INVESTMENT CORP. BAHAMAS LOAN 10,800
ICI (RUBICON/RCRA) LA. EPA OBLIGATIONS 2,780
CITIBANK UNIKOR LOCAL LINES OF CREDIT 1,800
SIAM COMMERCIAL BANK THAILAND J.V. - OVERDRAFT
& SHORT-TERM LOAN 490
SIAM COMMERCIAL BANK THAILAND J.V. - OVERDRAFT 98
SIAM COMMERCIAL BANK THAILAND J.V. - SHORT-TERM LOAN 588
SIAM COMMERCIAL BANK THAILAND J.V. - L/C & TRUST
RECEIPT 392
SIAM COMMERCIAL BANK THAILAND J.V. - OFFSHORE LOAN 2,940
SIAM COMMERCIAL BANK THAILAND J.V. - LEGAL GUARANTY 98
CREDIT SUISSE (**) EUROPEAN RECEIVABLES 15,000
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCA NAZIONALE DEL LAVORO METAN GAS USAGE 59
BANCA NAZIONALE DEL LAVORO CUSTOM DUTY VAT - ANTWERP 46
ISTITUTO BANCARIO S. PAOLO DI TORINO
CUSTOM DUTY VAT - ROME 98
ISTITUTO BANCARIO S. PAOLO DI TORINO
CUSTOM DUTY VAT - APRILIA 196
ISTITUTO BANCARIO S. PAOLO DI TORINO
WASTE DISPOSAL (LOCAL GOVERNMENT 130
ISTITUTO BANCARIO S. PAOLO DI TORINO
GOVERNMENT RAILWAYS 6
BANCO DI NAPOLI TELEX EXPENSES COVERAGE IN FAVOR OF 2
POST & TELECOMMUNICATIONS IND.
UNIROYAL CHEMICAL, LTD. (U.K.)
MINISTRY OF AGRICULTURE - EGYPT 4
PISCO ESTABLISHMENT 137
PISCO ESTABLISHMENT 43
PISCO ESTABLISHMENT 35
H.M. CUSTOMS & EXCISE 465
* MOST FOREIGN SUBSIDIARY LINES ARE IN LOCAL CURRENCY, AND FOR
PURPOSES OF THIS EXHIBIT HAVE BEEN CONVERTED TO U.S. $ AT
THE EXCHANGE RATES IN EFFECT ON 6/30/96.
* * SECURED DEBTS
SCHEDULE 3.01(f)
DISCLOSED LITIGATION
None, except as disclosed in the (i) Annual Report on
Form 10K of Crompton & Knowles Corporation for the fiscal year
ended December 30, 1995, and the Quarterly Reports on Form 10Q
of such company for the quarters ended March 30, 1996 and
June 29, 1996, (ii) Annual Report on Form 10K of Uniroyal
Chemical Corporation and Uniroyal Chemical Company, Inc. for
the fiscal year ended October 1, 1995, and the Quarterly
Reports on Form 10Q of the same companies for the quarters
ended December 31, 1995, March 31, 1996, and June 30, 1996,
(iii) the report of Beveridge and Diamond, P.C. dated March 9,
1995, (iv) any report issued pursuant to Section 3.01(k)(xv) of
this Credit Agreement and (v) Schedule 4.01(o) to this Credit
Agreement.
SCHEDULE 3.02(b)(viii)
TO THE AMENDED AND RESTATED
CREDIT AGREEMENT
FOREIGN LOCAL COUNSEL
ITALY
GIANNI, ORIGONI & PARTNERS
BELGIUM
FRESHFIELDS
GERMANY
FRESHFIELDS
FRANCE
FRESHFIELDS
THE NETHERLANDS
LOEFF CLAEYS VERBEKE
SCOTLAND
DUNDAS & WILSON
Schedule 4.01(b)
Percentage
of
Securities
Shares of Owned by
Number of Issued and its
Shares/Class Outstanding Immediate
Name/Place of Incorporation Authorized Capital Stock Parent
Uniroyal Chemical Corporation/ 205,000,000 24,308,403 0%
Delaware shares of
Common Stock
50,000,000 shares of Preferred (a) 12,000 12,000 0%
Stock authorized shares of
B Preferred
Stock
(b) 29,721 29,721 0%
shares of
Series A
Cumulative
Redeemable
Preferred
Stock
(c) 2,050,000 0 0%
shares of
Series C Junior
Participating
Preferred Stock
Purchase Rights - 718,216
Warrants - 111,930
Options - 1,821,798
**********************************
Domestic Subsidiaries
Uniroyal Chemical Company, 2,500 shares of 100 shares of 100%
Inc./New Jersey (A) Common Stock Common Stock
Uniroyal Chemical Leasing 1,000 shares of 100 shares of 100%
Company, Inc./Delaware (B) Common Stock Common Stock
Nagatuck Treatment 100 shares of 100 shares of 100%
Company/Connecticut (B) Common Stock Common Stock
Interbel Trading, Inc./ 50 shares of 50 shares of 100%
Florida (B) Common Stock Common Stock
Gustafson, Inc./ 150,000 shares 116,310 shares 100%
Minnesota (B) of Common of Common Stock
Stock
Uniroyal Chemical Brazil 1,000 shares of 100 shares of 100%
Holding, Inc./Delaware (B) Common Stock Common Stock
1,000 shares of -0- 0%
Preferred Stock
Uniroyal Chemical Int'l 1,000 shares of 150 shares of 100%
Company/Texas (C) Common Stock Common Stock
1,000 shares of -0- 0%
Preferred Stock
Gustafson Int'l 100 shares of 100 shares of 100%
Company/Texas (B) Common Stock Common Stock
Uniroyal Chemical Asia, 3,000 shares of 100 shares of 100%
Ltd./Delaware (B) Common Stock Common Stock
Lokar Enterprises, Inc./ 3,000 shares of 100 shares of 100%
Delaware (A) Common Stock Common Stock
Trace Chemicals, Inc./ 1,000 shares of 80 shares of 100%
Nevada (B) Common Stock Common Stock
Uniroyal Chemical Export 1,000 shares of 100 shares of 100%
Limited/Delaware (B) Common Stock Common Stock
Foreign Subsidiaries
Novaquim Holdings S.A. de 50,000 shares of 50,000 shares of 100%
C.V./Mexico Series B Capital Series B Capital
Stock Stock
Novaquim S.A. de C.V./ 5,150,750 shares 5,150,750 shares 100%
Mexico (D) of Series B of Series B
Capital Stock Capital Stock
683,255,080 683,255,080 100%
shares of Sub- shares of Sub-
Series B Capital Series B Capital
Stock Stock
Unicorb Limited/England
(B) 636,945 shares 636,945 shares 100%
of Common Stock of Common Stock
Uniroyal Quimica
S.A.C.I./ 3,000 shares of 3,000 shares of 100%
Argentina (B) Common Stock Common Stock
Uniroyal Chemical
Investments 1,000,000 shares 1,000,000 shares 100%
Ltd./ Canada (B) of Common Stock of Commmon Stock
Uniroyal Chemical Ltd./4,000,000 shares 440,000 shares 100%
Canada (E) of Common Stock of Common Stock
Uniroyal Chemical
Participacones 2,700,996,670 2,700,996,670 100%
Ltda./Brazil (F) Quotas Quotas
Uniroyal Quimica
S.A./Brazil (G) 2,798,781,305 2,798,781,305 100%
shares of shares of Common
Common Stock Stock
Premier Chemical
Co. Ltd./ 3,970,740 shares 3,970,740 shares 80%
Taiwan (B) of Common of Common Stock
Stock
Uniroyal Chemical
Holdings 250,000 shares 50,000 shares of 100%
B.V./Netherlands of Common Stock Common Stock
(H)
Uniroyal Chimica
S.p.A./ 10,000 shares of 10,000 shares of 100%
Italy (I) Common Stock Common Stock
Uniroyal Chemical
B.V./The 500 shares of 500 shares of 100%
Netherlands (J) Common Stock Common Stock
Uniroyal Chemical
Technology 2,000 shares of 400 shares of 100%
B.V./The of Capital Stock of Capital Stock
Netherlands (B)
Uniroyal Chemical
(Proprietary) 25,000 shares of 25,000 shares of 100%
Limited/South Common Stock Common Stock
Africa (B)
Uniroyal Chemical
S.A.R.L./ 20 Quota Units 20 Quota Units 100%
Switzerland (B)
Uniroyal Chemical
S.A./ 10,000 shares of 10,000 shares of 100%
Spain (B) Common Stock Common Stock
Uniroyal Chemical
Pty. Ltd./ 1,000,000 shares 500,000 shares 100%
Australia (B) of Common Stock of Common Stock
Hannaford
Seedmaster
Services 10,000 shares of 10,000 shares of 100%
Services Common Stock Common Stock
(Australia)
Pty. Ltd./
Australia (K)
Industrias
Gustafson S.A. 50 shares of 50 shares of 100%
de C.V./ Mexico Common Stock Common Stock
(L)
Uniroyal
Chemical Int'l Unlimited no. of 1,000 shares of 100%
Sales Corp./ Common Shares Common Stock
Barbados (M)
Uniroyal
Chemical Ltd./ 5,000,000 shares 1,697,372 shares 100%
Scotland (B) of Common Stock of Common Stock
Uniroyal Chemical 100,000 shares 4,000 shares of 100%
Company Limited/ of Capital Stock Capital Stock
Bahamas/Delaware
(B)
Hancock Tire Co.
Limited/ 400 shares of 3 shares of 100%
Canada (F) Common Stock Common Stock
15 shares of -0- 0%
Preferred Stock
Domestic Affiliates
Monochem, Inc./ 500 shares of 500 shares of 100%(*)
Louisiana (B) Class A Common Class A Common
Stock Stock
500 shares of 500 shares of 0%
Class B Common Class B Common
Stock Stock
1,500,000 shares 501,020 shares of 33.1%
of Class C Common Class C Common Stock
Stock
Rubicon Inc./
Louisiana (B) 5,000,000 shares 400,000 shares of 100%(*)
of Class A Class A Common
Common Stock Stock
5,000,000 shares 400,000 shares of 0%
of Class B Common Class B Common
Stock Stock
NPC Services,
Inc./ 100 shares of 100 shares of 12.75%
Louisiana (B) Common Stock Common Stock
Foreign Affiliates
TOA UNI Chemical 490,000 Group 490,000 Group 100%(*)
Manf. Ltd./ A Shares A Shares
Thailand (B)
510,000 Group 510,000 Group 0%
B Shares B Shares
TOA UNI Chemicals
Ltd./ 14,700 Group 14,700 Group 100%(*)
Thailand (B) A Shares A Shares
15,300 Group 15,300 Group 0%
B Shares B Shares
Orchem (Prop)
Ltd./ 1,050,000 shares 1,050,000 shares 0%
S. Africa (B) of Class A Common of Class A Common
Stock Stock
450,000 shares 450,000 shares 100%(*)
of Class B Common of Class B Common
Stock Stock
Herdillia
Unimers Ltd./ 35,000,000 33,000,000 Equity 10.0%
India (F) Equity Shares Shares
Unikor Chem.
Inc./ 408,000 shares 408,000 shares 50%
Korea (B) of Common Stock of Common Stock
(A) Owned by Uniroyal Chemical Corporation
(B) Owned by Uniroyal Chemical Company, Inc.
(C) 66-2/3% owned by Uniroyal Chemical Company, Inc. and 33-1/3%
owned by Uniroyal Chemical Brazil Holding Inc.
(D) Owned by Nobaquim Holding, S.A. de C.V.
(E) Owned by Uniroyal Chemical International Company
(F) Owned by Uniroyal Chemical Ltd.
(G) Owned by Uniroyal Chemical Participacoes Ltda.
(H) Owned by Gustafson International Company
(I) Owned by Uniroyal Chemical Holdings B.V.
(J) Owned by Uniroyal Chimica S.p.A.
(K) Owned by Uniroyal Chemical Pty. Ltd.
(L) Owned by Gustafson, Inc.
(M) Owned by Uniroyal Chemical Export Limited
(*) Uniroyal Chemical Company, Inc. holds the following combined
voting
power of the entities indicated:
Monochem, Inc. - 50%
Rubicon Inc. - 50%
TOA UNI Chemical Manufacturing Ltd. - 48.9%
TOA UNI Chemicals Ltd. - 49%
Orchem (Proprietary) Ltd. - 30%
8/08/96
Subsidiaries
Place of % Owned
Name Organization Authorized Issued Owner By Owner
CK Holding DE 1,000 750 Crompton &
Corporation Knowles Corp 100%
CNK Disposition
Corp. FL Crompton & 100%
Knowles Corp
CNK Specialities Netherlands KEM Manufact. 100%
Holding B.V. Corp.
Crompton & Knowles
Overseas Corporation DE 2,000 100 Crompton & 100%
Knowles Corp.
Crompton & Knowles
Canada Limited Canada Unlimited 104.4 Crompton & 69.6
Knowles Corp
45.6 Crompton &
Knowles Overseas
Corp. 30.4
Crompton & Knowles Chemical Realty Pennsylvania
Crompton & Knowles
Europe S.A. Belgium 60,000 59,999 Crompton &
Knowles Overseas
Corporation 99.98
1 Crompton &
Knowles Corp. .02
Crompton & Knowles
(France) S.A. France 1,021,470 1,021,464 Crompton &
Knowles Europe S.A.99%
1 V. Calarco Less
than 1%
1 C. Marsden Less
than 1%
1 G.Fickenscher Less
than 1%
1 E. Mortier Less
than 1%
1 A. Caste (in process
to be
changed to P. Boury)Less
than 1%
1 J. Ferguson Less
than 1%
Crompton & Knowles
(Hong Kong) Ltd. Hong Kong 1 1 Crompton &
Knowles Europe
S.A. 100%
Crompton & Knowles Korea 20,000 10,000 Crompton &
(Korea) Ltd. Knowles
Europe S.A.100%
Davis-Standard
Corporation Delaware 1,000 500 CK Holding Corp.
100%
Davis-Standard
(Deutschland) GmbH Germany Davis-Standard Corp.
Davis-Standard
(France) SARL France 7,326 2,400 Crompton & Knowles
Corporation 32.76
4,926 Grandma Food
Products Ltd. 67.24
Crompton & Knowles Colors
Incorporated
Delaware 1,000 500 CK Holding Corp. 100%
ER-WE-PA Davis-
Standard GmbH Germany 10,000,000 9,999,999 Davis-Standard
(Deutschland) 99%
1 ER-We-PA D-S
Beteiligungs
GmbH Less than 1%
Ingredient Technology
Corporation Delaware 1,000 10 CK Holding Corp. 100%
Grandma Food Products,
Ltd. Quebec, Unlimited 251 Ingredient Technology 100%
Canada Common Corporation
Unlimited 1,000 100%
Preferred "A"
Killion Extruders,
Inc. New
Jersey 14,997,240 3,006,700 Davis-Standard Corp.100%
Common
1,400 1,050 100%
Preferred "A"
1,360 1,360 100%
Preferred "B"
KEM International
Corporation Delaware 2,000 250 KEM Manufacturing
Corporation 100%
KEM Manufacturing
Corporation Georgia Crompton & Knowles
Corporation 100%
Orlex Chemicals Corporation New Jersey 100%
Crompton & Knowles
I.P.R. Delaware 3,000 250 Crompton & Knowles Corp.100%
Corporation
Crompton & Knowles
Acceptance
Corporation MA 7,500 100 Crompton & Knowles
Corp. 100%
C&K Services S.A. Brussels, 149,000 149,000 Crompton & Knowles
Belgium Europe
S.A.99%+
1 Crompton & Knowles Corp
Less than 1%
Crompton & Knowles
(Nederland) B.V. Tilburg, 100 100 Crompton & Knowles
Netherlands Europe S.A. 100%
Crompton & Knowles
(Deutschland)
GmbH Dusseldorf, 50 50 Crompton & Knowles
Germany Europe S.A. 100%
Crompton & Knowles
(U.K.) Ltd. Manchester, 800,000 799,999 Crompton & Knowles
U.K. Europe S.A. 99%
1 Crompton & Knowles
(Nederland)B.V.
Less than 1%
Crompton & Knowles
(Italia) SRL Milan, 20,000 14,000 Crompton & Knowles
Italy Europe S.A. 70%
6,000 Crompton & Knowles
(Nederland) B.V. 30%
Crompton & Knowles
(Portugal) LDA Lisbon, 5,000,000 3,500,000 Crompton & Knowles
Portugal Europe S.A. 70%
1,500,000 Crompton & Knowles
(Nederland) B.V. 30%
Crompton & Knowles
(Espana) SL Barcelone, 2,300,000 2,188,000 Crompton & Knowles
Spain Europe S.A. 95%
112,000 Crompton & Knowles
(Nederland) B.V.5%
Crompton & Knowles
(Luxembourg) S.A. Luxembourg 1,250 1,250 Crompton & Knowles
Europe S.A. 100%
C&K Services
(Luxembourg) S.A. Luxembourg 1,250 125 Crompton & Knowles
Europe S.A. 100%
Ifatex Chemische
Produkte GmbH Dusseldorf, 4 4 Crompton & Knowles
Germany (Deutschland GmbH)100%
Crompton & Knowles LaMadeline 20 20 Overseas Corp. 100%
International) SARL France
Crompton & Knowles
International Inc. Virgin Islands
Superior Chemical Corporation
CNK One B.V.
CNK Two B.V.
CNK S.R.L.
Italiana S.R.L.
SCHEDULE 4.01(d)
AUTHORIZATIONS, APPROVALS, ACTIONS,
NOTICES AND FILINGS
1. Authorization of the Merger and the transactions contem-
plated by the Merger Agreement by stockholders of Crompton
& Knowles Corporation.
2. Authorization for inclusion of the shares of Crompton &
Knowles Corporation common stock to be issued in the
Merger and the transactions contemplated by the Merger
Agreement on the NYSE, subject to official notice of issu-
ance.
3. Actions required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
4. Registrations or other actions required under federal and
state securities laws as are contemplated by the Merger
Agreement.
5. Authorization of the Merger and the transactions contem-
plated by the Merger Agreement by stockholders of Uniroyal
Chemical Corporation.
6. As may be required under the following instruments:
a. $125 Million Revolving Credit Facility of Crompton &
Knowles Corporation
b. Indenture, dated as of February 8, 1993, among
Uniroyal Chemical Corporation and State Street Bank
and Trust Company, as Trustee, relating to the 10 %
Senior Notes due 2002.
c. Indenture, dated as of February 8, 1993, among
Uniroyal Chemical Corporation and United States Trust
Company of New York, as Trustee, relating to the 11%
Senior Subordinated Notes due 2003.
d. Indenture, dated as of February 8, 1993, among
Uniroyal Chemical Corporation and The Shawmut Bank
Connecticut, N.A., as Trustee, relating to the 12%
Subordinated Discount Notes due 2005.
e. Indenture, dated as of September 1, 1993, among
Uniroyal Chemical Company, Inc. and State Street Bank
and Trust Company, as Trustee, relating to the 9%
Senior Notes due 2000.
f. Amended and Restated $150 Million Credit Agreement,
dated as of December 21, 1995, among Uniroyal
Chemical Company, Inc., as borrower, various lenders
and Citibank USA, Inc., as Agent (and related
documents).
g. Warrant Agreement, dated as of October 30, 1989,
between Uniroyal Chemical Corporation and Avery, Inc.
h. Loan Agreement, dated as of March 16, 1995, among
Uniroyal Chimica S.p.A., Citibank N.A., as Agent, and
the Banks party thereto.
i. Finance Agreement, dated as of May 15, 1992, between
Uniroyal Chemical Company Limited, Borrower, and
Overseas Private Investment Corporation, Loan
Guarantor (and related documents).
7. Receipt of legal opinions, accountant letters, officers'
certificates and "affiliate" letters as prescribed by the
Merger Agreement.
8. Execution of employment agreements with certain officers
of Uniroyal Chemical Corporation as prescribed by the
Merger Agreement.
9. Filing of Uniform Commercial Code financing statements as
contemplated by the Uniroyal Security Agreement, to be
filed on or about the Effective Date.
10. Delivery of the instruments evidencing the Pledged Debt as
contemplated by the Security Agreement.
11. Delivery of the certificates evidencing the Pledged Shares
as contemplated by the Crompton Security Agreement.
12. Delivery of the Blocked Account Letters as contemplated by
the Uniroyal Security Agreement.
Schedule 4.01(o)
Disclosure Schedules
1. Schedule 4.01(o) - Part I
(a) See the environmental report of Beveridge & Diamond
dated March 9, 1995 ("B & D Report") and the public filings
of Uniroyal Chemical Corporation including but not limited
to its Annual Report on Form 10-K for the fiscal year ended
October 1, 1995, its Quarterly Reports on Form 10-Q for the
periods ended December 31, 1995, March 31, 1996 and June 30,
1996 and its Prospectus used in connection with its initial
public offering of Common Stock dated March 16, 1995
(collectively, its "Public Filings").
(b) Uniroyal Chemical Company's Painesville, Lake County,
Ohio Plant (the "Painesville Plant") manufactures nitrile
rubber. The Painesville Plant pretreats and discharges its
process wastewater to the Lake County sewer system for
treatment at Lake County's Greater Mentor Wastewater
Treatment Plant ("GMWTP"). In June 1993, Lake County
submitted to Ohio EPA a proposed Local Limit aimed at
regulating the amount of substances, which absorb at 230
nanometers, that are discharged in wastewater to the GMWTP.
Ohio EPA approved the Local Limit in March 1994.
One of the principal ingredients in the Painesville
Plant's nitrile rubber manufacturing process, which is known
as Tamol, absorbs at 230 nanometers. As a result, the
Painesville Plant appealed Ohio EPA's approval of the Local
Limit to the Ohio Environmental Board of Review (the "EBR").
The EBR plans to hold an evidentiary hearing on the
Painesville Plant's appeal in December 1996. If the EBR's
decision is adverse to the Painesville Plant, it may appeal
the decision to the Ohio courts.
If the Painesville Plant loses its appeal and the Local
Limit becomes final, the Plant would be required to
modify its nitrile rubber recipes to remove or reduce the
amount of Tamol used and/or install some form of additional
pretreatment.
(c) Crompton Corp. has been designated along with others
as a potentially responsible party under CERCLA or
comparable state statutes, at the Industrial Solvent &
Chemical Company solvent reprocessing facility in York
County, Pennsylvania, and the Spectron waste site in Elkton
Maryland. CNK Disposition Corp. has been designated along
with others as a potentially responsible party under CERCLA
or comparable state statutes, at the Taylor Road Landfill
and the Bay Drums drum recycling sites located in
Hillsborough County, Florida.
(d) In CPS Chemical Co., Inc. v. Evor Phillips Leasing
Co., Inc., et al., (C.A. 94-4107, D.C.N.J.), the plaintiffs
allege that hazardous substances migrated from the Evor
Phillips Site to the adjoining property of CPS Chemical
Company, Inc. ("CPS Site"), contaminating the CPS Site and
the groundwater beneath it. The plaintiffs were required by
a 1988 consent order to perform remediation in connection
with contamination at the CPS Site.
In Adhesives Research v. American Inks & Coatings,(C.A.
1:CV-95-1975, M.D. Pa.), the plaintiffs seek to recover
cleanup and other response costs and to obtain contribution
from Crompton Corp. and the other defendants in connection
with the Industrial Solvent & Chemical Company solvents
reprocessing facility located in York County, Pennsylvania.
(e) KEM Manufacturing Corporation ("KEM"), a wholly-owned
subsidiary of Crompton Corp. acquired in 1976, was named
along with others, a potentially responsible party under the
New Jersey Spill Compensation and Control Act by the New
Jersey Department of Environmental Protection and Energy
with respect to the Evor Phillips waste disposal site
located in central New Jersey ("Evor Phillips Site"). It
appears that KEM held title to the site between 1970 and
1974, prior to the acquisition of KEM by Crompton Corp., but
that KEM did not own or operate and facility at the site.
On September.28, 1995, KEM was released by the State of New
Jersey as a potentially responsible party with respect to
the Evor Phillips Site upon payment to the state of
$175,000.
2. Schedule 4.01(o) - Part II
(a) With respect to Uniroyal Chemical Corporation and its
Subsidiaries, none, except as disclosed or reflected in the
B & D Report and the Public Filings including the reserves
for environmental contingencies reflected in the financial
statements contained in the Public Filings.
(b) Crompton Corp. has been designated along with others
as a potentially responsible party under CERCLA or
comparable state statutes, at the Industrial Solvent &
Chemical Company solvent reprocessing facility in York
County, Pennsylvania, and the Spectron waste site in Elkton
Maryland. CNK Disposition Corp. has been designated along
with others as a potentially responsible party under CERCLA
or comparable state statutes, at the Taylor Road Landfill
and the Bay Drums drum recycling sites located in
Hillsborough County, Florida.
(c) In CPS Chemical Co., Inc. v. Evor Phillips Leasing
Co., Inc., et al., (C.A. 94-4107, D.C.N.J.), the plaintiffs
allege that hazardous substances migrated from the Evor
Phillips Site to the adjoining property of CPS Chemical
Company, Inc. ("CPS Site"), contaminating the CPS Site and
the groundwater beneath it. The plaintiffs were required by
a 1988 consent order to perform remediation in connection
with contamination at the CPS Site.
In Adhesives Research v. American Inks & Coatings, (C.A.
1:CV-95-1975, M.D. Pa.), the plaintiffs seek to recover
cleanup and other response costs and to obtain contribution
from Crompton Corp. and the other defendants in connection
with the Industrial Solvent & Chemical Company solvents
reprocessing facility located in York County, Pennsylvania.
(d) KEM Manufacturing Corporation ("KEM"), a wholly-owned
subsidiary of Crompton Corp. acquired in 1976, was named
along with others, a potentially responsible party under the
New Jersey Spill Compensation and Control Act by the New
Jersey Department of Environmental Protection and Energy
with respect to the Evor Phillips waste disposal site
located in central New Jersey ("Evor Phillips Site"). It
appears that KEM held title to the site between 1970 and
1974, prior to the acquisition of KEM by Crompton Corp., but
that KEM did not own or operate any facility at the site.
On September.28, 1995, KEM was released by the State of New
Jersey as a potentially responsible party with respect to
the Evor Phillips Site upon payment to the state of
$175,000.
3. Schedule 4.01(o) - Part III
(a) The matters described or referred to in Schedule 4.01(o) -
Part II are hereby incorporated by reference.
(b) Uniroyal Chemical Company has received a notice from
the State of Ohio regarding the Painesville Plant alleging
water and soil contamination of the facility and inviting
Uniroyal Chemical Company to negotiate a Consent Order
governing performance of on-site studies. Uniroyal Chemical
Company intends to attempt to negotiate such an Order which
would also encompass the adjoining property owned by Dartron
Corporation which at one time was owned and operated by
Uniroyal Chemical Company. The Dartron property has been
thus far included by Ohio as part of the much larger Diamond
Shamrock site study area rather than as part of the
Painesville Plant study area.
(c) Crompton Colors is conducting remediation at its
Nutley, New Jersey dyes manufacturing plant under the New
Jersey Industrial Site Recovery Act ("ISRA") in connection
with its purchase of the facility in 1990 from Atlantic
Industries, Inc. CNK Disposition Corporation is conducting
remediation at its former manufacturing facility in Tampa,
Florida pursuant to a consent order with the State of
Florida. KEM Manufacturing Corporation is conducting
remediation at its former warehouse and formulation site in
East Brunswick, New Jersey under ISRA.
(d) Crompton Corp. has been designated along with others
as a potentially responsible party under CERCLA or
comparable state statutes, at the Industrial Solvent &
Chemical Company solvent reprocessing facility in York
County, Pennsylvania, and the Spectron waste site in Elkton
Maryland. CNK Disposition Corp. has been designated along
with others as a potentially responsible party under CERCLA
or comparable state statutes, at the Taylor Road Landfill
and the Bay Drums drum recycling sites located in
Hillsborough County, Florida.
SCHEDULE 4.01(t)
EXISTING DEBT
( @ 6/30/96 )
( $ OOO'S ) *
OUTSTANDING UNUSED
I. LOAN TOTAL BORROW- COMMITT-
FACILITIES DESCRIPTION LINE(S) INGS MENTS
CROMPTON & KNOWLES CORPORATION
BANKERS TRUST REVOLVING CREDIT AGREE. 125,000 75,000 50,000
CO
FLEET BANK UNSECURED SHORT-TERM DEBT 27,200 27,200 0
FIRST UNION UNSECURED SHORT-TERM DEBT 20,000 20,000 0
BANK
BANK OF NY UNSECURED SHORT-TERM DEBT 9,300 9,300 0
CHASE MANHATTAN UNSECURED SHORT-TERM DEBT 15,000 15,000 0
BANK
INDUSTRIAL REV. BONDS INDUST. REV. BONDS 4,000 4,000 0
BANK OF NY UNSECURED SHORT-TERM DEBT 10,000 0 10,000
NEW ENG. LIFE INS. LIFE INS. POLICY LOAN 6,986 6,986 0
CROMPTON & KNOWLES COLORS, INC., DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANH. BANK UNSECURED SHORT-TERM DEBT 5,000 0 5,000
CROMPTON & KNOWLES EUROPE S.A.
CREDIT LYONNAIS NOTES PAYABLE & OVERDRAFT 19,084 3,858 15,226
BANK BRUSSELS LAMBERT NOTES PAY.&OVERDRAFT 2,544 0 2,544
GENERALE DE BANQUE NOTES PAY. & OVERDRAFT 954 0 954
ER-WA-PA DAVIS STANDARD GmbH
COMMERZBANK NOTES PAYABLE & OVERDRAFT 4,902 0 4,902
WESTDEUTSCHE LANDESBANK NOTES PAY & OVERDRAFT4,902 0 4,902
UNIROYAL CHEMICAL COMPANY, INC. (USA)
VARIOUS BONDHOLDERS 9% SR. SECURED NTS 252,800 252,800 0
CREDIT SUISSE A/R SECURED LOAN FACILITY 15,000 5,306 9,694
CITIBANK, N.A. REVOLVER 150,000 31,419 100,216
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCO DI NAPOLI OVERDRAFT & CURRENCY 2,610 670 1,940
LOANS EXPORT
MONTE DEI PASCHI DI SIENA " 4,890 1,599 3,291
BANCA COMMERCIALE ITALIANA " 3,260 0 3,260
BANCA DI ROMA " 3,260 471 2,789
CREDITO ROMAGNOLO " 1,304 0 1,304
ISTITUIO BANCARIO
S. PAOLO DI TORINO " 4,623 256 4,367
BANCA NAZIONALE DEL LAVORO " 3,384 924 2,460
BANCA ITALO ROMENA " 1,630 0 1,630
CREDITO ITALIANO " 196 0 196
BANCA NAZIONALE DEL LAVORO LONG-TERM DEBT 835 85 0
BANCA NAZIONALE DEL LAVORO " 1,089 239 0
BANCA NAZIONALE DEL LAVORO " 730 561 0
BANCA NAZIONALE DEL LAVORO " 126 126 0
BANCA NAZIONALE DEL LAVORO " 3,651 1,956 0
CITIBANK " 47,100 29,666 0
CITIBANK - STANDBY " 12,560 5,216 7,344
UNIROYAL CHEMICAL, LIMITED (U.K.)
NATIONAL WESTMINSTER OVERDRAFT FACILITY 775 500 275
UNIROYAL CHEMICAL, LTD. (CANADA)
ROYAL BANK OF CANADA REVOLVER 11,100 0 11,100
PREMIER CHEMICAL COMPANY, LTD. (TAIWAN)
ROYAL BANK OF CANADA MULTI-PURPOSE 2,000 543 1,457
HONG KONG BANK " 545 0 545
UNIROYAL CHEMICAL PTY. LTD. (AUSTRALIA)
NATIONAL AUSTRALIA BANK OVERDRAFT 789 0 789
HANNAFORD SEEDMASTER SERVICES PTY. LTD (AUSTRALIA)
WESTPAC OVERDRAFT 1,066 0 1,066
" " EQUIPMENT FINANCE 395 0 395
" " REMITTANCE L/C 8 0 8
" " BANKERS' UNDERTAKING 8 0 8
" " FORWARD EXCHANGE CONTRACT 494 42 452
" " TAPE NEGOTIATION AUTHORITY 40 0 40
UNIROYAL CHEMICAL COMPANY, LTD. (BAHAMAS)
BANKERS TRUST CO. OPIC GUARANTEED LOAN 10,800 1,906 0
UNIROYAL QUIMICA S.A. (BRAZIL)
ITAU SHORT-TERM DEBT 200 0 200
UNIROYAL CHEMICAL EXPORT, LTD.
CREDIT SUISSE A/R SECURED LOAN FACILITY 15,000 0 (1) 15,000
(CO-BORROWER WITH UCCI)
(1) included in Uniroyal Chemical Co., Inc. amount
UNIROYAL CHEMICAL B.V.
ABN-AMRO UNSECURED OVERDRAFT FACIL 1,500 0 1,500
II. LETTERS OF CREDIT AMOUNT OF L/C
CROMPTON & KNOWLES CORPORATION
PENNSYLVANIA DEPT. OF EPA 6,000
FIRST UNION BANK, AS TRUSTEE 4,123
NEW JERSEY DEPT. OF EPA 3,558
PENNSYLVANIA DEPT. OF EPA 3,772
ENVIRONMENTAL PROTECTION AGENCY 196
CONTINENTAL CASUALTY COMPANY 3,471
INSURANCE CO. OF NORTH AMERICA 130
INSURANCE CO. OF NORTH AMERICA 100
HARTFORD INSURANCE COMPANY 20
BANCO NATIONAL DE MEXICO S.A. 35
CHINA NATIONAL OVERSEAS TRADING 358
INDIAN ALUMINUM COMPANY, LTD 471
WIHURI OY WIPAK 455
HUBEI JIANGYU PLASTICS INDUSTRY DEV. CO., LTD. 228
SUN A ENTERPRISE CO., LTD 280
PKL - VARPACKUNGSSYTEME GmbH 4,438
THE PAPER PRODUCTS, LTD 20
DAELIM ENGINEERING CO., LTD 9
BARCLAY'S BANK, LTD 27
AT & T NETWORK SYSTEMS IRELAND LTD 311
J.K. INDUSTRIES, LTD. 18
KLERK'S PLASTICS RECYCLING N.V. 111
BANK HAPOALIM B.M. 27
DALIAN VASTONE COMMUNICATION CABLE CORP. 37
GIZA CABLE TELEPHONE CO. 32
ANZ GRINDLAYS BANK PLC 37
DALIAN TIENCHENG PACKING MATERIAL 208
RATHI DYE CHEM PVT. LTD 409
DIVIYA CHEMICALS LTD 211
UNIROYAL CHEMICAL COMPANY, INC. (USA) AMOUNT OF L/C
NATIONAL UNION FIRE INS. 2,411
NATIONAL UNION FIRE INS. 964
PREMIER/BAYOU SORREL TRUST 229
NUCLEAR REGULATORY COMMISSION 150
BANKERS TRUST/O.P.I.C. 676
KREDIETBANK/CHEMICAL FORWARDERS 150
KREDIETBANK/CHEMICAL FORWARDERS 175
FREGATA S.A. (CUSTOMS OFFICE) 100
L. MARQUEZ 10
PREMIER CHEMICAL COMPANY LTD. (TAIWAN)
ROYAL BANK OF CANADA USANCE 381
UNIROYAL QUIMICA, S.A. (BRAZIL)
BANCO ITAU S/A 61
BANCO DE BOSTON 46
III LETTERS OF GUARANTY AMOUNT OF GUARANTY
CROMPTON & KNOWLES CORPORATION
CHASE MANHATTAN BANK UNSECURED S-T SUB LOANS 5,000
<PAGE>
CROMPTON & KNOWLES COLORS, INC., DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK L/C'S ISSUED FOR C&K CORP. 10,891
UNIROYAL CHEMICAL COMPANY, INC. (USA)
OVERSEAS PRIVATE INVESTMENT BAHAMAS LOAN 10,800
ICI (RUBICON/RCRA) LA. EPA OBLIGATIONS 2,780
CITIBANK UNIKOR LOCAL LINES OF CREDIT 1,800
SIAM COMMERCIAL BANK THAILAND J.V.-OVERDRAFT
& SHORT-TERM LOAN 490
SIAM COMMERCIAL BANK THAILAND J.V.-OVERDRAFT 98
SIAM COMMERCIAL BANK THAILAND J.V.-
SHORT-TERM LOAN 588
SIAM COMMERCIAL BANK THAILAND J.V. - L/C &
TRUST RECEIPT 392
SIAM COMMERCIAL BANK THAILAND J.V. - OFFSHORE
LOAN 2,940
SIAM COMMERCIAL BANK THAILAND J.V.-LEGAL GUARANTY 98
CREDIT SUISSE EUROPEAN RECEIVABLES 15,000
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCA NAZIONALE DEL LAVORO METAN GAS USAGE 59
BANCA NAZIONALE DEL LAVORO CUSTOM DUTY VAT-ANTWERP 46
ISTITUTO BANCARIO S. PAOLO DI TORINO
CUSTOM DUTY VAT - ROME 98
" CUSTOM DUTY VAT - APRILIA 196
" WASTE DISPOSAL (LOCAL GOVERNMENT) 130
" GOVERNMENT RAILWAYS 6
BANCO DI NAPOLI TELEX EXPENSES COVERAGE IN FAVOR 2
POST & TELECOMMUNICATIONS IND.
UNIROYAL CHEMICAL, LTD. (U.K.)
MINISTRY OF AGRICULTURE - EGYPT 4
PISCO ESTABLISHMENT 137
PISCO ESTABLISHMENT 43
PISCO ESTABLISHMENT 35
H.M. CUSTOMS & EXCISE 465
* MOST FOREIGN SUBSIDIARY LINES ARE IN LOCAL CURRENCY, AND
FOR PURPOSES OF THIS EXHIBIT HAVE BEEN CONVERTED TO U.S. $
AT THE EXCHANGE RATES IN EFFECT ON 6/30/96.
SCHEDULE 4.01(w)
MATERIAL SUBSIDIARIES
CK Holding Corporation
Crompton & Knowles Overseas Corporation
Crompton & Knowles Europe S.A.
Crompton & Knowles (France) S.A.
Davis-Standard Corporation
Davis-Standard (Deutschland) GmbH
Davis-Standard (France) SARL
Crompton & Knowles Colors Incorporated
ER-WE-PA Davis-Standard GmbH
Ingredient Technology Corporation
Grandma Food Products, Ltd.
KEM Manufacturing Corporation
C&K Services S.A.
C&K Services (Luxembourg) S.A.
Uniroyal Chemical Corporation
Uniroyal Chemical Company, Inc.
Premier Chemical Company Ltd.
Uniroyal Chemical Export Limited
Uniroyal Chemical Leasing Company, Inc.
Uniroyal Chemical Limited
Novaquim Holdings S.A. de C.V.
Novaquim S.A. de C.V.
Gustafson International Company
Uniroyal Chemical Holdings B.V.
Uniroyal Chimica S.p.A.
Uniroyal Chemical B.V.
Gustafson, Inc.
Uniroyal Chemical International Company
Uniroyal Chemical LTD/LTEE
Uniroyal Chemical Participacoes Ltda.
Uniroyal Quimica S.A.
Uniroyal Chemical Brazil Holding, Inc.
Uniroyal Chemical Pty. Ltd.
Uniroyal Chemical Company Limited
Uniroyal Chemical Investments Ltd.
Trace Chemicals Inc.
Schedule 5.02(a)
Debtor: Crompton & Knowles Colors Incorporated
Index Filing Filing
Jurisdiction Date Date Number Secured Party
Collateral
NC - Sec. of State 9/27/95 1267402 Bankers Leasing
Specified Assoc., Inc.
Assets
Debtor: Crompton & Knowles Corporation
CT - Sec. of State 4/9/96 5/19/93 1011971 Datronic Equip.
Specified Income Fund
Equipment XVII, L.P.
CT - Sec. of State 4/9/96 5/24/93 1013330 Caterpillar Fin.
Specified Services Corp.
Equipment
CT - Sec. of State 4/9/96 8/26/93 1025926 Caterpillar Fin.
Specified Services Corp.-
Equipment Amendment
CT - Sec. of State 4/9/96 1/18/94 1042994 Citicorp Dealer
Specified Fin.
Equipment
CT - Sec. of State 4/9/96 3/14/94 1049268 Caterpillar Fin.
Specified Services Corp.
Equipment
CT - Sec. of State 4/9/96 6/22/94 1062559 Caterpillar Fin.
Specified Services Corp.
Equipment
CT - Sec. of State 4/9/96 8/10/94 1068586 Caterpillar Fin.
Specified Services Corp.
Equipment
CT - Sec. of State 4/9/96 2/23/95 1607933 Toyota Motor
Specified Credit Corp.
Equipment
CT - Sec. of State 4/9/96 6/5/95 1627933 Assignment from
Specified Toyota Motor
Equipment Credit Corp. to
Citicorp Dealer
Finance
CT - Sec. of State 4/9/96 9/27/95 1646673 Caterpillar Fin.
Specified Services
Equipment
NC - Mecklenburg County 8/9/96 7/10/90 346-323 Cyclone Roofing
Mechanic Company
Lien Claim $15,962.00
NC - Mecklenburg County 8/9/96 10/5/95 013981 McRae Graphics,
Specified Inc.
Equipment
Debtor: Gustafson, Inc.
IL - Sec of State 7/19/96 6/24/88 2443312 First
Specified Illinois
Assets Bk. of Evanston,N.A.
IL - Sec of State 7/19/96 5/10/93 3119568 First
Specified Illinois Bank
Assets of Evanston,
N.A.- Continuation
IL - Sec of State 7/19/96 5/23/94 3260710 Tri-Cities Sales
Specified Co., Inc.
Assets
MN - Hennepin County 6/7/96 12/23/87 87-23337 Larue, Nancy A.
Judgement et al.
$1,308.00
Texas - Sec. of State 7/16/96 9/18/91 91-181848 The Baker Co.
Specified
Equipment
Texas - Sec. of State 7/16/96 11/2/94 94-214318 The Baker Co.
Specified
Equipment
WI - Sec. of State 7/15/96 11/14/90 1164353 The First Nat'l
Specified Bank of Park
Assets Falls
WI - Sec. of State 7/15/96 9/26/95 1536213 The First Nat'l
Specified Bank of Park
Assets Falls -
Continuation
WI - Sec. of State 7/15/96 7/8/91 1215851 U.S. Small Bus.
Specified Administration
Assets
WI - Sec. of State 7/15/96 5/17/96 1587438 U.S. Small Bus.
Specified Administration
Assets Continuation
WI - Sec. of State 7/15/96 8/8/91 1221927 City of Park
Specified Falls
Equipment
WI - Sec. of State 7/15/96 4/15/94 1422601 Advance Accept.
Specified Corporation
Equipment
Debtor: Ingredient Technology Corporation
New Jersey - Bergen County 8/7/96 8/29/95 003881 CMO
Specified Enterprises,
Equipment Inc.
Debtor: Uniroyal Chemical Company, Inc.
CT - Sec. of State 4/9/96 8/29/91 936838 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 10/28/91 943524 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 11/26/91 947114 The Manifest
Specified Group
Equipment
CT - Sec. of State 4/9/96 12/27/91 950397 Graphics
Specified Leasing Corp.
Equipment
CT - Sec. of State 4/9/96 1/6/92 951382 Graphics
Specified Leasing Corp.-
Equipment Amends Collateral
Description
CT - Sec. of State 4/9/96 1/6/92 951383 Execulease
Specified Cred.
Equipment Corporation
CT - Sec. of State 4/9/96 1/21/92 952965 Graphics
Specified Leasing Corp.
Equipment
CT - Sec. of State 4/9/96 1/21/92 952966 American Lease
Specified Funding Corp.
Equipment
CT - Sec. of State 4/9/96 1/21/92 952967 Amer. Network
Specified Leasing Corp.
Equipment
CT - Sec. of State 4/9/96 1/2/92 950884 Citicorp
Specified Leasing,
Equipment Inc.
CT - Sec. of State 4/9/96 1/2/92 950885 Citicorp
Specified Leasing,
Equipment Inc.
CT - Sec. of State 4/9/96 1/8/92 951554 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 6/2/92 968252 Citicorp
Specified Leasing,
Equipment Inc.
CT - Sec. of State 4/9/96 6/22/92 970769 Graphics
Specified Leasing Corp.
Equipment
CT - Sec. of State 4/9/96 10/2/92 982921 Dana Comm'l
Specified Credit Corp.
Equipment
CT - Sec. of State 4/9/96 7/31/92 975992 IBM Credit
Specified Corporation
Equipment
CT - Sec. of State 4/9/96 3/26/93 1003101 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 12/30/93 1040909 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 3/30/94 1051458 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 4/14/94 1053429 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 4/25/94 1054813 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 5/2/94 1055817 Sanwa Leasing
Specified Corp.
Equipment
CT - Sec. of State 4/9/96 6/3/94 1060126 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 6/27/94 1063035 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 8/24/94 1070311 Pepsi Cola
Specified
Equipment
CT - Sec. of State 4/9/96 3/8/95 1608471 Citicorp
Specified Leasing, Inc.
Equipment
CT - Sec. of State 4/9/96 4/26/96 1691461 Sanwa Leasing
N/A Corp.
NC - Gaston County 7/30/96 7/23/90 90-1818 Citibank N.A.
Specified
Assets
NC - Gaston County 7/30/96 2/11/91 90-1818 Citibank N.A.-
Specified Amendment
Assets
NC - Gaston County 7/30/96 5/24/95 95-936 Citibank N.A.-
Specified Continuation
Assets
Ohio - Sec. of State 7/15/96 11/15/93 AK59118 Clarklift of
Specified Cleveland Inc.
Equipment
Ohio - Lake County 7/17/96 11/16/93 93173308 Clarklift of
Specified Cleveland Inc.
Equipment
PA - Crawford County 7/24/96 7/23/90 71055 Citibank N.A.
Specified Vol36
Assets
PA - Crawford County 7/24/96 2/7/91 71056 Citibank N.A.-
Specified Vol36 Amendment
Assets
PA - Crawford County 7/24/96 5/24/95 71055 Citibank N.A.-
Specified Vol36 Continuation
Assets
Debtor: Uniroyal Chemical Co. Accumulation Plan
NY - Sec. of State 7/24/96 5/14/91 099755 Internal Federal
Revenue
Service Tax Lien
$2,471.19
Liens securing Debt identified on Schedule 5.02(a) by the
designation (**).
SCHEDULE 5.02(f)
INVESTMENTS
(@ 6/30/96)
UNIROYAL CHEMICAL COMPANY, INC.
INVESTEE AMOUNT ($000'S)
RUBICON 21,181
MONOCHEM 3,762
NAUGATUCK TREATMENT CO. 2
RAPID, INC. 14
ORCHEM 498
HERDILLIA 1,374
TOA UNI, TLD. 69
TOA UNI MFG. 1,910
UNIKOR 805
TOTAL 29,615
Schedule 5.02(f)
Crompton & Knowles Corporation
Investments
(as of JUNE 29, 1996)
Investee Amount
Ingretec S.A. De C.V. Mexico 228,000
EXHIBIT A-1
FORM OF WORKING CAPITAL A NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [CROMPTON &
KNOWLES CORPORATION] [CROMPTON & KNOWLES COLORS INCORPORATED]
[DAVIS-STANDARD CORPORATION] [INGREDIENT TECHNOLOGY CORPORATION],
a [Massachusetts] [Delaware] corporation (the "Borrower"), HEREBY
PROMISES TO PAY to the order of ___________________ (the
"Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the aggregate
principal amount of the Working Capital A Advances (as defined
below) owing to the Lender by the Borrower pursuant to the Credit
Agreement dated as of August 21, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement";
terms defined therein being used herein as therein defined) among
the Borrower, [Crompton & Knowles Corporation, a Massachusetts
corporation,] [Crompton & Knowles Colors Incorporated, a Delaware
corporation,] [Davis-Standard Corporation, a Delaware
corporation,] [Ingredient Technology Corporation, a Delaware
corporation,] Uniroyal Chemical Company, Inc., a New Jersey
corporation, the Lender and certain other lender parties party
thereto, Citicorp Securities, Inc., as Arranger, Citicorp USA,
Inc., as Agent for the Lender and such other lender parties, and
The Chase Manhattan Bank, as Managing Agent, on the Termination
Date.
The Borrower promises to pay interest on the
unpaid principal amount of each Working Capital A Advance from
the date of such Working Capital A Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful
money of the United States of America to Citicorp USA, Inc., as
Agent, at 399 Park Avenue, New York, New York 10043 in same day
funds. Each Working Capital A Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred
to in, and is entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of advances (the "Working Capital A Advances") by the
Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting
from each such Working Capital A Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein
specified. The Obligations of the Borrower under this Promissory
Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the
Loan Documents.
[CROMPTON & KNOWLES CORPORATION]
[CROMPTON & KNOWLES COLORS
INCORPORATED][DAVIS-STANDARD
CORPORATION][INGREDIENT TECHNOLOGY
CORPORATION]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Working Principal Paid Principal Notation
Capital A or Prepaid Balance Made By
Advance
EXHIBIT A-2
FORM OF WORKING CAPITAL B-1 NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, UNIROYAL
CHEMICAL COMPANY, INC., a New Jersey corporation (the
"Borrower"), HEREBY PROMISES TO PAY to the order of ____________
(the "Lender") for the account of its Applicable Lending Office
(as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Working Capital B-1 Advances
(as defined below) owing to the Lender by the Borrower pursuant
to the Credit Agreement dated as of August 21, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein
defined) among the Borrower, Crompton & Knowles Corporation, a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, the Lender and certain other lender parties
party thereto, Citicorp Securities, Inc., as Arranger, Citicorp
USA, Inc., as Agent for the Lender and such other lender parties,
and The Chase Manhattan Bank, as Managing Agent, on the
Termination Date.
The Borrower promises to pay interest on the
unpaid principal amount of each Working Capital B-1 Advance from
the date of such Working Capital B-1 Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful
money of the United States of America to Citicorp USA, Inc., as
Agent, at 399 Park Avenue, New York, New York 10043 in same day
funds. Each Working Capital B-1 Advance owing to the Lender by
the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred
to in, and is entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of advances (the "Working Capital B-1 Advances") by the
Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting
from each such Working Capital B-1 Advance being evidenced by
this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions
therein specified. The Obligations of the Borrower under this Promissory
Note, and the Obligations of the other Loan
Parties under the Loan Documents, are secured by the Collateral
as provided in the Loan Documents.
UNIROYAL CHEMICAL COMPANY, INC.
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Working Principal Paid Principal Notation
Capital A or Prepaid Balance Made By
Advance
EXHIBIT A-3
FORM OF WORKING CAPITAL B-2 NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [NAME OF B-2
BORROWER] ("Borrower"), HEREBY PROMISES TO PAY to the order of
______________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Working
Capital B-2 Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Second Amended and Restated Credit
Agreement dated as of July 25, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement", the terms defined therein being
used herein as therein defined) among Crompton & Knowles
Corporation ("Crompton Corp."), a Massachusetts corporation,
Crompton & Knowles Colors Incorporated, a Delaware corporation,
Davis-Standard Corporation, a Delaware corporation, Ingredient
Technology Corporation, a Delaware corporation, Uniroyal Chemical
Company, Inc., a New Jersey corporation, the B-2 Borrowers named
therein, the B-3 Borrowers named therein and Uniroyal Chemical
Ltd., a corporation organized under the laws of Ontario, Canada
(collectively, the "Borrowers"), certain Lender Parties party
thereto, Citicorp USA, Inc., as Agent for the Lender Parties, and
The Chase Manhattan Bank, as Managing Agent, on the dates and in
the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the
unpaid principal amount of each Working Capital B-2 Advance from
the date of such Working Capital B-2 Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each of
the Working Capital B-2 Advances (i) in Dollars are payable in
lawful money of the United States of America to Citicorp USA, as
Agent, at its account maintained at 399 Park Avenue, New York,
New York, 10043, in same day funds and (ii) in any Foreign
Currency are payable in such currency at the applicable Payment
Office in same day funds. Each Working Capital B-2 Advance owing
to the Lender by the Borrower pursuant to the Credit Agreement,
and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the Notes referred
to in, and is entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of Working Capital B-2 Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed
at any time outstanding the Dollar amount first above mentioned
or the Equivalent thereof in one or more Foreign Currencies, the
indebtedness of the Borrower resulting from each such Working
Capital B-2 Advance being evidenced by this Promissory Note, (ii)
contains provisions for determining the Dollar Equivalent of
Working Capital B-2 Advances denominated in Foreign Currencies
and (iii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The
Obligations of the Borrower under this Promissory Note, and the
Obligations of the other Loan Parties under the Loan Documents,
are secured by the Collateral as provided in the Loan Documents.
The Borrower hereby waives presentment, demand,
protest and notice of any kind. No failure to exercise, and no
delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
This promissory note shall be governed by, and
construed in accordance with the laws of the State of New York.
[NAME OF B-2 BORROWER]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Working Principal Paid Principal Notation
Capital A or Prepaid Balance Made By
Advance
EXHIBIT A-4
FORM OF WORKING CAPITAL B-3 NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, [NAME OF B-3
BORROWER] ("Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Working
Capital B-3 Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Second Amended and Restated Credit
Agreement dated as of July 25, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement", the terms defined therein being
used herein as therein defined) among Crompton & Knowles
Corporation ("Crompton Corp."), a Massachusetts corporation,
Crompton & Knowles Colors Incorporated, a Delaware corporation,
Davis-Standard Corporation, a Delaware corporation, Ingredient
Technology Corporation, a Delaware corporation, Uniroyal Chemical
Company, Inc., a New Jersey corporation, the B-2 Borrowers named
therein, the B-3 Borrowers named therein and Uniroyal Chemical
Ltd., a corporation organized under the laws of Ontario, Canada
(collectively, the "Borrowers"), certain Lender Parties party
thereto, Citicorp USA, Inc., as Agent for the Lender Parties, and
The Chase Manhattan Bank, as Managing Agent, on the dates and in
the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the
unpaid principal amount of each Working Capital B-3 Advance from
the date of such Working Capital B-3 Advance until such principal
amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each of
the Working Capital B-3 Advances are payable in like funds
advanced at the applicable Payment Office, in same day funds.
Each Working Capital B-3 Advance owing to the Lender by the
Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred
to in, and is entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of Working Capital B-3 Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed
at any time outstanding the Dollar amount first above mentioned
or the Equivalent thereof in one or more Foreign Currencies, the
indebtedness of the Borrower resulting from each such Working
Capital B-3 Advance being evidenced by this Promissory Note, (ii)
contains provisions for determining the Dollar Equivalent of
Working Capital B-3 Advances denominated in Foreign Currencies
and (iii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The
Obligations of the Borrower under this Promissory Note, and the
Obligations of the other Loan Parties under the Loan Documents,
are secured by the Collateral as provided in the Loan Documents.
The Borrower hereby waives presentment, demand,
protest and notice of any kind. No failure to exercise, and no
delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
This promissory note shall be governed by, and
construed in accordance with the laws of the State of New York.
[NAME OF B-3 BORROWER]
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Working Principal Paid Principal Notation
Capital A or Prepaid Balance Made By
Advance
EXHIBIT A-5
FORM OF CANADIAN BORROWER NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, UNIROYAL
CHEMICAL LTD. ("The Canadian Borrower"), HEREBY PROMISES TO PAY
to the order of _________________________ (the "Lender") for the
account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below) the aggregate principal
amount of the Canadian Borrower Advances (as defined below) owing
to the Lender by the Canadian Borrower pursuant to the Credit
Agreement dated as of July 25, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement", the terms defined therein being
used herein as therein defined) among Crompton & Knowles
Corporation, a Massachusetts corporation, Crompton & Knowles
Colors Incorporated, a Delaware corporation, Davis-Standard
Corporation, a Delaware corporation, Ingredient Technology
Corporation, a Delaware corporation, Uniroyal Chemical Company,
Inc., a New Jersey corporation, the B-2 Borrowers named therein,
the B-3 Borrowers named therein and the Canadian Borrower,
certain Lender Parties party thereto, Citicorp USA, Inc., as
Agent for the Lender Parties, and The Chase Manhattan Bank, as
Managing Agent, on the dates and in the amounts specified in the
Credit Agreement.
The Canadian Borrower promises to pay interest on
the unpaid principal amount of each Canadian Borrower Advance
from the date of such Canadian Borrower Advance until such
principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest in respect of each of
the Canadian Borrower Advances are payable in like funds advanced
at the applicable Payment Office, in same day funds. Each
Canadian Borrower Advance owing to the Lender by the Canadian
Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred
to in, and is entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of the "Canadian Borrower Advances" by the Lender to the
Canadian Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the US Dollar amount first above
mentioned or the Equivalent thereof in Canadian Dollars, the
indebtedness of the Canadian Borrower resulting from each such
Canadian Borrower Advance being evidenced by this Promissory
Note, (ii) contains provisions for determining the US Dollar
Equivalent of Canadian Borrower Advances denominated in Canadian
Dollars and (iii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Obligations of the Canadian Borrower under this Promissory
Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the
Loan Documents.
The Canadian Borrower hereby waives presentment,
demand, protest and notice of any kind. No failure to exercise,
and no delay in exercising, any rights hereunder on the part of
the holder hereof shall operate as a waiver of such rights.
This promissory note shall be governed by, and
construed in accordance with the laws of the State of New York.
UNIROYAL CHEMICAL LTD.
By
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Working Principal Paid Principal Notation
Capital A or Prepaid Balance Made By
Advance
EXHIBIT A-6
FORM OF DRAFT
BANKERS' ACCEPTANCE
DUE_______________ No. BA___
Toronto, Canada
_____________, 19__
ON ___________________________, (WITHOUT GRACE), FOR VALUE
RECEIVED PAY TO THE ORDER OF THE UNDERSIGNED DRAWER THE SUM OF
$ ______________DOLLARS
TO: [NAME OF BANK]
UNIROYAL CHEMICAL LTD.
Per:
Authorized Signing Officer
EXHIBIT B-1
FORM OF NOTICE OF BORROWING
Citicorp USA, Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue [Date]
New York, NY 10022
Attention: Robin Lenna
[for Working Capital B-2 Borrowings]
[Citibank, N.A., London Branch
P.O. Box 12068
Counting House
53 Pooley Street
London SE12GA
Attention: Ken Purchase/David Williams]
[for Working Capital B-3 Borrowings]
[Citibank, N.A., Milan Branch
Foro Bounaparte 16
20121 Milan, Italy
Attention: Nicoletta Zappatini]
[for Canadian Borrowings]
[Citibank Canada
123 Front Street West
10th Floor
Toronto, Ontario
Canada M5J 2M3
Attention: David Wingfelder]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to
the Second Amended and Restated Credit Agreement, dated as of
July 25, 1997 among Crompton & Knowles Corporation, a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the B-3
Borrowers named therein, Uniroyal Chemical Ltd., a corporation
organized under the laws of Ontario, Canada, certain Lender
Parties party thereto, Citicorp USA, Inc., as Agent for the
Lender Parties, and The Chase Manhattan Bank, as Managing Agent.,
and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such
Borrowing (the "Proposed Borrowing") as required by
Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________.
(ii) Facility under which the Proposed Borrowing
is requested is the _________ Facility1.
(iii) The Type of Advances comprising the Proposed
Borrowing is [Base Rate Advances] [Eurocurrency Rate Advances].
(iv) The aggregate amount of the Proposed
Borrowing is [$_______________] [for a Proposed Borrowing in a
Foreign Currency, list currency and amount of Borrowing].
[(v) The initial Interest Period for each
Eurocurrency Rate Advance made as part of the Proposed Borrowing
is _____ month[s].]
[(vi) The Proposed Borrowing is comprised of
Working Capital [B-2][B-3] Advances.]
The undersigned hereby certifies that the
following statements are true on the date hereof, and will be
true on the date of the proposed Borrowing:
(A) the representations and warranties contained
in each Loan Document are correct on and as of the date of the
Proposed Borrowing, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to
a specific date other than the date of the Proposed Borrowing, in
which case, as of such specific date; and
(B) no event has occurred and is continuing, or
would result from such Proposed Borrowing or from the application
of the proceeds therefrom, that constitutes a Default.
_________________
* For Working Capital A advances and Working Capital B-1
Advances only.
Very truly yours,
[NAME OF BORROWER]
By
Title:
EXHIBIT B-2
FORM OF NOTICE OF DRAWING
Citicorp USA, Inc.
Agent under the Credit Agreement
referred to below
Attention: ________________________
Ladies and Gentlemen:
The undersigned, UNIROYAL CHEMICAL LTD., a
corporation organized under the laws of Ontario, Canada, refers
to the Credit Agreement dated as of July 25, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein unless otherwise defined herein
being used herein as therein defined) among the undersigned,
Crompton & Knowles Corporation, a Massachusetts corporation,
Crompton & Knowles Colors Incorporated, a Delaware corporation,
Davis-Standard Corporation, a Delaware corporation, Ingredient
Technology Corporation, a Delaware corporation, Uniroyal Chemical
Company, Inc., a New Jersey corporation, the B-2 Borrowers named
therein, the B-3 Borrowers named therein and the undersigned, the
Lender Parties parties thereto, Citicorp USA, Inc., as agent for
the Lender Parties, and the Chase Manhattan Bank, as Managing
Agent, and hereby gives you notice, irrevocably, pursuant to
Section 2.04 of the Credit Agreement that the undersigned hereby
requests a Drawing under the Credit Agreement and, in that
connection, sets forth below the information relating to such
Drawing (the "Proposed Drawing") as required by Section 2.04(a)
of the Credit Agreement:
(i) The Business Day of the Proposed
Drawing is ___________, ____.
(ii) The aggregate Face Amount of the Proposed
Drawing is CN$__________.
(iii) The initial Maturity Date for each Banker's
Acceptance comprising part of the Proposed Drawing is
[one][[two][three][six] months.
The undersigned hereby certifies that the
following statements are true on the date hereof and will be true
on the date of the Proposed Drawing:
(A) the representations and warranties contained
in each Loan Document are complete and correct on and as of the
date of the Proposed Drawing, before and after giving effect to
such Proposed Drawing and to the application of the proceeds
therefrom, as though made on and as of such date other than any
such representations and warranties that, by their terms, refer
to a specific date other than the date of the Proposed Drawing,
in which case, as of such specific date; and
(B) no event has occurred and is continuing, or
would result from the Proposed Drawing or from the application of
the proceeds therefrom, that constitutes a Default.
Very truly yours,
UNIROYAL CHEMICAL LTD.,
By____________________
Name:
Title
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and
Restated Credit Agreement dated as of July 25, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among Crompton & Knowles Corporation, a Massachusetts
corporation ("Crompton Corp."), Crompton & Knowles Colors
Incorporated, a Delaware corporation ("Crompton Colors"), Davis-Standard
Corporation, a Delaware corporation ("Davis-Standard"),
Ingredient Technology Corporation, a Delaware corporation
("ITC"), Uniroyal Chemical Company, Inc., a New Jersey
corporation, the B-2 Borrowers named therein, the B-3 Borrowers
named therein and Uniroyal Chemical Ltd., a corporation organized
under the laws of Ontario, Canada (collectively, the
"Borrowers"), the Lender Parties (as defined in the Credit
Agreement), Citicorp Securities, Inc., as Arranger, Citicorp USA,
Inc., as agent for the Lender Parties (the "Agent"), and The
Chase Manhattan Bank, as Managing Agent. Terms defined in the
Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on
Schedule 1 hereto agree as follows:
1. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes
from the Assignor, an interest in and to the Assignor's rights
and obligations under the Credit Agreement as of the date hereof
equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit
Agreement Facility or Facilities specified on Schedule 1 hereto.
After giving effect to such sale and assignment, the Assignee's
Commitments and the amount of the Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and
warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of,
or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with,
the Loan Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note or Notes held by the Assignor and
requests that the Agent exchange such Note or Notes for a new
Note or Notes payable to the order of the Assignee in an amount
equal to the Commitments assumed by the Assignee pursuant hereto
or new Notes payable to the order of the Assignee in an amount
equal to the Commitments assumed by the Assignee pursuant hereto
and the Assignor in an amount equal to the Commitments retained
by the Assignor under the Credit Agreement, respectively, as
specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has
received a copy of the Credit Agreement, together with copies of
the financial statements referred to in Section 4.01 thereof and
such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor
or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations
that by the terms of the Credit Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be;
and (vi) attaches any U.S. Internal Revenue Service forms
required under Section 2.13 of the Credit Agreement.
4. Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for
acceptance and recording by the Agent. The effective date for
this Assignment and Acceptance (the "Effective Date") shall be
the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by
the Agent, as of the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a
Lender Party thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance and recording by
the Agent, from and after the Effective Date, the Agent shall
make all payments under the Credit Agreement and the Notes in
respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment
fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be
governed by, and construed in accordance with, the laws of the
State of New York.
8. This Assignment and Acceptance 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 taken together
shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and
Acceptance by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee
have caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
As to the _____Facility in respect of which an interest is being
assigned:
Percentage interest assigned: __________%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Advances assigned:
$__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date (if other than date of acceptance by Agent):
2 ________ __, ____
[NAME OF ASSIGNOR], as Assignor
By
Title:
Dated: _________ __, ____
[NAME OF ASSIGNEE], as Assignee
By
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_________________
2 This date should be no earlier than five Business Days after
the delivery of this Assignment and Acceptance to the Agent.
Accepted 3[and Approved] this ____
day of ___________, ____
[NAME OF AGENT]
By
Title:
2[Approved this ____ day
of _____________, ____
CROMPTON & KNOWLES CORPORATION
By
Title: ]
___________________
3 Required if the Assignee is an Eligible Assignee solely by
reason of clause (a)(iii) or (b) of the definition of Eligible
Assignee.
EXHIBIT D-1
FORM OF CONSENT
Dated as of July 25, 1997
The undersigned, (a) each a Pledgor under the Crompton
Security Agreement and designated on the signature pages hereof
as a "Crompton Pledgor" or (b) each a Pledgor under the Uniroyal
Security Agreement and the Louisiana Undertaking and designated
on the signature pages hereof as a "Uniroyal Pledgor", in each
case in favor of the Agent, for its benefit and the benefit of
the Lender Parties party to the Existing Credit Agreement as
amended and restated by the Second Amended and Restated Credit
Agreement dated as of July 25, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Second Amended and Restated Credit Agreement"; terms
not otherwise defined herein shall have the meaning herein as
therein ascribed to them) among Crompton & Knowles Corporation, a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the B-3
Borrowers named therein and Uniroyal Chemical Ltd., a corporation
organized under the laws of Ontario, Canada, certain Lender
Parties party thereto, Citicorp USA, Inc., as Agent for the
Lender Parties, and The Chase Manhattan Bank, as Managing Agent,
hereby consent to such Second Amended and Restated Credit
Agreement and hereby confirm and agree that notwithstanding the
effectiveness of such Second Amended and Restated Credit
Agreement, each of the Crompton Security Agreement, the Uniroyal
Security Agreement and the Louisiana Undertaking to which they
are a party shall continue to be in full force and effect and is
hereby ratified and confirmed in all respects, except that, on
and after the effectiveness of such Second Amended and Restated
Credit Agreement, each reference in the Crompton Security
Agreement, the Uniroyal Security Agreement and the Louisiana
Undertaking to the "Credit Agreement", "thereunder", "thereof" or
words of like import shall mean and be a reference to the Second
Amended and Restated Credit Agreement.
CROMPTON PLEDGORS
CK HOLDING CORPORATION
By_________________________
Title:
CNK DISPOSITION CORP.
By_________________________
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By_________________________
Title:
CROMPTON & KNOWLES
CORPORATION
By_________________________
Title:
CROMPTON & KNOWLES OVERSEAS
CORPORATION
By_________________________
Title:
DAVIS-STANDARD CORPORATION
By_________________________
Title:
INGREDIENT TECHNOLOGY CORPORATION
By_________________________
Title:
KEM MANUFACTURING CORPORATION
By_________________________
Title:
UNIROYAL PLEDGORS
GUSTAFSON, INC.
By_________________________
Title:
GUSTAFSON INTERNATIONAL COMPANY
By_________________________
Title:
LOKAR ENTERPRISES, INC.
By_________________________
Title:
TRACE CHEMICALS, INC.
By_________________________
Title:
UNIROYAL CHEMICAL BRAZIL HOLDING, INC.
By_________________________
Title:
UNIROYAL CHEMICAL COMPANY,
INC.
By_________________________
Title:
UNIROYAL CHEMICAL CORPORATION
By_________________________
Title:
UNIROYAL CHEMICAL EXPORT
LIMITED
By_________________________
Title:
UNIROYAL CHEMICAL INTERNATIONAL
COMPANY
By_________________________
Title:
UNIROYAL CHEMICAL LEASING
COMPANY, INC.
By_________________________
Title:
EXHIBIT D-2
[SEE EXHIBIT D-1]
EXHIBIT D-3
[SEE EXHIBIT D-1]
EXHIBIT E-1
FORM OF CONSENT
Dated as of July 25, 1997
The undersigned, (a) Crompton & Knowles Corporation,
("Crompton Corp."), the Parent Guarantor under the Parent
Guaranty and (b) each of the Guarantors under the Subsidiary
Guaranty and designated on the signature pages hereof as a
"Subsidiary Guarantor", in each case in favor of the Agent, for
its benefit and the benefit of the Lender Parties party to the
Existing Credit Agreement as amended and restated by the Second
Amended and Restated Credit Agreement dated as of July 25, 1997
(as amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Second Amended and Restated
Credit Agreement"; terms not otherwise defined herein shall have
the meaning herein as therein ascribed to them) among Crompton
Corp., Crompton & Knowles Colors Incorporated, a Delaware
corporation, Davis-Standard Corporation, a Delaware corporation,
Ingredient Technology Corporation, a Delaware corporation,
Uniroyal Chemical Company, Inc., a New Jersey corporation, B-2
Borrowers named therein, the B-3 Borrowers named therein and
Uniroyal Chemical Ltd., a corporation organized under the laws of
Ontario, Canada, the Lender Parties party thereto, Citicorp USA,
Inc., as Agent for the Lender Parties, and The Chase Manhattan
Bank, as Managing Agent, hereby consent to such Second Amended
and Restated Credit Agreement and hereby confirm and agree that
notwithstanding the effectiveness of such Second Amended and
Restated Credit Agreement, each of the Parent Guaranty and the
Subsidiary Guaranty shall continue to be in full force and effect
and is hereby ratified and confirmed in all respects, except
that, on and after the effectiveness of such Second Amended and
Restated Credit Agreement, each reference in the Parent Guaranty
and the Subsidiary Guaranty to the "Credit Agreement",
"thereunder", "thereof" or words of like import shall mean and be
a reference to the Second Amended and Restated Credit Agreement.
CROMPTON & KNOWLES
CORPORATION
By_________________________
Title:
SUBSIDIARY GUARANTORS
CK HOLDING CORPORATION
By_________________________
Title:
CNK DISPOSITION CORP.
By_________________________
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By_________________________
Title:
CROMPTON & KNOWLES OVERSEAS
CORPORATION
By_________________________
Title:
DAVIS-STANDARD CORPORATION
By_________________________
Title:
INGREDIENT TECHNOLOGY CORPORATION
By_________________________
Title:
GUSTAFSON, INC.
By_________________________
Title:
GUSTAFSON INTERNATIONAL COMPANY
By_________________________
Title:
KEM MANUFACTURING CORPORATION
By_________________________
Title:
LOKAR ENTERPRISES, INC.
By_________________________
Title:
TRACE CHEMICALS, INC.
By_________________________
Title:
UNIROYAL CHEMICAL BRAZIL HOLDING, INC.
By_________________________
Title:
UNIROYAL CHEMICAL COMPANY, INC.
By_________________________
Title:
UNIROYAL CHEMICAL CORPORATION
By_________________________
Title:
UNIROYAL CHEMICAL EXPORT LIMITED
By_________________________
Title:
UNIROYAL CHEMICAL INTERNATIONAL
COMPANY
By_________________________
Title:
UNIROYAL CHEMICAL LEASING
COMPANY, INC.
By_________________________
Title:
EXHIBIT E-2
[SEE EXHIBIT E-1]
EXHIBIT F-1
July 31, 1997
To the Initial Lenders party to the
Credit Agreement referred to below
and to Citicorp USA, Inc.,
as Agent for the Lender Parties
and The Chase Manhattan Bank,
as Managing Agent
Re: Crompton & Knowles Corporation
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
3.02(b)(vi) of the Second Amended and Restated Credit Agreement
dated as of July 25, 1997 (the "Credit Agreement") among Crompton
& Knowles Corporation, Crompton & Knowles Colors Incorporated,
Davis-Standard Corporation, Ingredient Technology Corporation,
Uniroyal Chemical Company, Inc., the B-2 Borrowers named therein,
the B-3 Borrowers named therein and Uniroyal Chemical Ltd.
(collectively, the "Borrowers"), the Lender Parties party
thereto, Citicorp USA, Inc., as Agent and The Chase Manhattan
Bank, as Managing Agent. Terms defined in the Credit Agreement
and in the Security Agreement referred to therein are used herein
as therein defined.
We have acted as special counsel to the Borrowers and
the other Loan Parties in the State of New York in connection
with the preparation, execution and delivery of the Credit
Agreement, the Notes, the other Loan Documents and the initial
Borrowing made under the Credit Agreement.
The opinions set forth in this letter are based upon
our review of counterparts of each of the Loan Documents, exe-
cuted by each of the parties thereto, and the other documents
furnished by the Borrower and the other Loan Parties pursuant to
Article III of the Credit Agreement.
The Loan Parties set forth on Schedule I are referred
to herein as the "Delaware Loan Parties".
We have also examined the originals, or copies certi-
fied to our satisfaction, of the documents listed in a certifi-
cate of the respective chief financial officers of Crompton &
Knowles Corporation and Uniroyal Chemical Company, Inc., dated
August 21, 1996 (the "Certificate"), certifying that the docu-
ments listed therein are all of the public indentures that affect
or purport to affect the obligations of such Loan Party or any of
its Subsidiaries under any Loan Document or any Related Document
or the right of such Loan Party or any of its Subsidiaries to
borrow money, to guarantee the obligations of other Persons, to
create Liens on its property or to consummate transactions such
as the transactions contemplated by the Loan Documents.
In addition, we have examined the originals, or copies
certified to our satisfaction, of such other corporate records of
the Loan Parties, certificates of public officials and of
officers of the Loan Parties and agreements, instruments and
other documents as we have deemed necessary as a basis for the
opinions expressed below. As to questions of fact material to
such opinions, we have, when relevant facts were not inde-
pendently established by us, relied upon certificates of the Loan
Parties or of their respective officers or of public officials
and on the representations and warranties of the Loan Parties as
to factual matters contained in any of the Loan Documents.
In our examination of the documents referred to above,
we have assumed (i)(A) the valid authorization, execution and
delivery of each of the documents referred to above by all
parties thereto (other than the Delaware Loan Parties) ("Subject
Parties"), (B) each Subject Party (in the case of parties which
are not natural persons) has been duly organized and is validly
existing and in good standing in its jurisdiction of
organization, (C) each Subject Party has the legal capacity,
power and authority to perform its obligations thereunder and (D)
such documents to which each Subject Party (other than the Loan
Parties) is a party constitute the legal, valid and binding
obligation of such party, enforceable against it in accordance
with their respective terms, (ii) the authenticity of all such
documents submitted to us as originals and (iii) the conformity
to originals of all such documents submitted to us as copies.
We are members of the Bar of the State of New York, and
we have not considered, and we express no opinion as to, the laws
of any jurisdiction other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and the laws
of the United States of America, in each case as in effect on the
date hereof (the "Relevant Laws").
Based upon the foregoing and upon such investigation as
we have deemed necessary, and subject to the qualifications set
forth in this letter, it is our opinion that:
1. Each Delaware Loan Party has all necessary cor-
porate power and authority to execute and deliver, and to perform
its obligations under, each of the Loan Documents to which it is
a party and to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted.
2. The execution, delivery and performance by each
Delaware Loan Party of each Loan Document to which it is a party,
and the consummation of the transactions contemplated by the Loan
Documents (to the extent a Delaware Loan Party is contemplated to
be a party to such transaction), are within such Delaware Loan
Party's corporate powers, have been duly authorized by all
necessary corporate action of such Delaware Loan Party and will
not violate or conflict with any provision of the certificate of
incorporation or bylaws of such Delaware Loan Party.
3. The execution, delivery and performance by each
Loan Party of the Loan Documents to which it is a party and the
transactions contemplated thereby will not (i) violate or con-
flict with any provision of the Delaware General Corporation Law
(in the case of the Delaware Loan Parties only), or any United
States federal or State of New York statute, rule or regulation
or any writ, injunction, decree, order or judgment under the
Relevant Laws known to us to be applicable to any Loan Party or
any of such Loan Party's properties that could reasonably be
expected (individually or in the aggregate) to materially impair
or prevent the performance of such Loan Party's obligations under
the Loan Documents to which such Loan Party is a party, (ii)
conflict with or result in the breach of, or constitute a default
under, any agreement or instrument listed in the Certificate or
(iii) except for the Liens created by the Collateral Documents,
result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any
of its Subsidiaries under any agreement or instrument listed in
the Certificate.
4. The Credit Agreement and each other Loan Document
to be delivered pursuant to the Credit Agreement on or prior to
the date hereof has been duly executed and delivered by each
Delaware Loan Party party thereto.
5. Each Loan Document constitutes the legal, valid
and binding obligations of each Loan Party party thereto, in each
case enforceable against such Loan Party in accordance with its
respective terms, except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and by equitable principles
of general applicability (regardless of whether enforcement is
sought in a proceeding in equity or at law).
6. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body under the Relevant Laws, or any third party that
is party to any of the agreements and instruments listed in the
Certificate, is required for (a) the due execution, delivery,
recordation, filing or performance by any Loan Party of the Loan
Documents to which it is a party, or for the consummation of the
transactions contemplated by the Loan Documents, or (b) the
exercise by the Agent or any Lender Party of its rights under the
Loan Documents or the remedies in respect of the Collateral
pursuant to the Security Agreement, except for (i) in the case of
clause (a) above, the authorizations, approvals, actions, notices
and filings listed on Schedule II hereto, all of which have been
duly obtained, taken, given or made and are in full force and
effect, and except for those authorizations, approvals, actions,
notices and filings the failure to obtain, take, give or make
which, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect and (ii) in
the case of the Security Collateral (as defined in the Security
Agreement), as may be required in connection with any disposition
of any portion of the Security Collateral by laws affecting the
offering and sale of securities generally. All applicable
waiting periods under the Relevant Laws in connection with the
transactions contemplated by the Credit Agreement have expired
without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions
upon the rights of the Loan Parties or their Subsidiaries freely
to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
7. All taxes and governmental fees and charges, the
payment of which is required in connection with the execution,
delivery and recording of the Loan Documents, have been paid.
8. Neither any Loan Party nor any of its Subsidiaries
is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act
of 1940, as amended.
The opinions expressed herein are subject to the fol-
lowing qualifications and comments:
(a) We express no opinion as to the effect of the
law of any jurisdiction other than the State of New York wherein
any Lender may be located or wherein enforcement of the Credit
Agreement or the Notes may be sought that limits the rates of
interest legally chargeable or collectible.
(b) We express no opinion as to the applicability of
Section 548 of the Bankruptcy Code or Article 10 of the New York
Debtor and Creditor Law relating to fraudulent transfers to any
obligations of any Subsidiary Guarantor under any of the Loan
Documents.
(c) The provisions of the Loan Documents that permit
any party thereto to take action or make determinations, or to
benefit from indemnities and similar undertakings of any party to
the Loan Documents, may be subject to a requirement that such
action be taken or such determinations be made, and any action or
inaction by such party that may give rise to a request for
payment under such an undertaking be taken or not taken, on a
reasonable basis and in good faith.
(d) We express no opinion as to (i) whether a fed-
eral or state court outside New York would give effect to the
choice of New York law provided for in the Loan Documents, (ii)
provisions of the Loan Documents that relate to the subject
matter jurisdiction of the federal or state courts of New York to
adjudicate any controversy related to any of the Loan Documents
or the transactions contemplated thereby, (iii) the waiver of
inconvenient forum set forth in any of the Loan Documents, or
(iv) the waiver of jury trial found in any of the Loan Documents.
(e) Our opinions above as to compliance with laws
are based upon a review of those statutes, rules and regulations
which, in our experience, are normally applicable to transactions
of the type contemplated by the Loan Documents and statutes,
rules and regulations applicable to corporations conducting
businesses similar to those conducted by the Loan Parties.
(f) We express no opinion as to the creation, valid-
ity, perfection or priority of any security interest or lien
purported to be created by any of the Loan Documents.
(g) Certain remedial and exculpatory provisions of
the Security Agreement may be unenforceable in whole or in part
under the laws of the State of New York, but in our opinion the
inclusion of such provisions does not affect the validity of the
pledges and the granting of liens or security interests effected
thereby and, in our opinion, the Security Agreement and the laws
of the State of New York contain adequate remedial provisions for
the practical realization of the rights and benefits purported to
be afforded thereby.
A copy of this letter may be delivered by you to any
Eligible Assignee in accordance with the provisions of the Credit
Agreement, and such Eligible Assignee may rely on the opinions
expressed above as if this opinion letter were addressed and
delivered to such Eligible Assignee on the date hereof.
Very truly yours,
RDF:bar
Att.
SCHEDULE I
DELAWARE LOAN PARTIES
Davis-Standard Corporation
Crompton & Knowles Colors Incorporated
Ingredient Technology Corporation
SCHEDULE II
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
Schedule 4.01(d) to the Credit
Agreement is hereby incorporated
by reference.
EXHIBIT F-2
July 25, 1997
To the Initial Lenders party to the Credit
Agreement referred to below and to
Citicorp USA, Inc., as Agent for the Lender Parties
and The Chase Manhattan Bank, as Managing Agent
CROMPTON & KNOWLES CORPORATION
and
UNIROYAL CHEMICAL CORPORATION
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section
3.02(b)(vii) of the Second Amended and Restated Credit Agreement
dated as of the date hereof (the "Credit Agreement") among
Crompton & Knowles Corporation, a Massachusetts corporation
("Crompton"), Crompton & Knowles Colors Incorporated, a Delaware
corporation ("Crompton Colors"), Davis-Standard Corporation, a
Delaware corporation ("Davis-Standard"), Ingredient Technology
Corporation, a Delaware corporation ("ITC", and together with
Crompton, Crompton Colors and Davis-Standard, the "Crompton
Borrowers"), Uniroyal Chemical Company, Inc. ("Uniroyal"), the B-2
Borrowers named therein, the B-3 Borrowers named therein and
Uniroyal Chemical Ltd., the Lender Parties party thereto,
Citicorp USA, Inc., as Agent (the "Agent") and The Chase
Manhattan Bank, as Managing Agent. Terms defined in the Credit
Agreement and in the Crompton Security Agreement referred to
therein, unless otherwise defined herein, are used herein as
therein defined.
I am the General Counsel of Crompton and have acted as
counsel to the Loan Parties in connection with (a) the Credit
Agreement, (b) the Crompton Security Agreement dated as of August
21, 1996 (the "Crompton Security Agreement"), made by the
Pledgers party thereto to the Agent; (c) the Uniroyal Security
Agreement, dated as of August 21, 1996 (the "Uniroyal Security
Agreement") made by the Pledgers party thereto to the Agent; (d)
the Subsidiary Guaranty, dated as of August 21, 1996 (the
"Subsidiary Guaranty") made by the Guarantors party thereto in
favor of the Secured Parties, (e) the Parent Guaranty, dated as
of August 21, 1996 (the "Parent Guaranty"), made by Crompton in
favor of the Secured Parties and; (f) each of the consents
executed by the Loan Parties in connection with the Credit
Agreement (the "Consents," and together with the Credit
Agreement, the Crompton Security Agreement, the Uniroyal Security
Agreement, the Subsidiary Guaranty, and the Parent Guaranty, the
"Agreements") and (g) certain other instruments and documents
related to the Agreements.
In connection with this opinion, I have examined (i) the
Agreements and (ii) the certificates of incorporation and by-laws
of Crompton and Uniroyal. I have also examined such records of
the Loan Parties and such other documents, certificates and
records as I have deemed necessary or appropriate as a basis for
the opinions set forth herein.
In my examination of the documents referred to above, I have
assumed (i) the due execution and delivery, pursuant to due
authorization, of each of the documents referred to above by all
parties thereto other than the Loan Parties, (ii) the
authenticity of all documents submitted to me as originals and
(iii) the conformity to originals of all documents submitted to
me as copies.
I am qualified to practice law in the Commonwealth of
Pennsylvania and in rendering the opinions expressed herein I
express no opinion as to the laws of any jurisdiction other than
the laws of the Commonwealth of Pennsylvania.
Based upon the foregoing and upon such investigation as I
have deemed necessary in my capacity as General Counsel, I am of
the opinion that:
1. None of the execution, delivery or performance by each of
the Loan Parties of the Agreements to which it is a party, nor
the consummation of the transactions contemplated thereby will
violate, or be in conflict with, or constitute a default under,
or permit the termination of, any agreement or instrument to
which such Loan Party is a party or by which such Loan Party (or
its properties) is bound which, individually or in the aggregate,
would have a material adverse effect on Crompton and its
Subsidiaries, taken as a whole.
2. To the best of my knowledge, except as disclosed in the
Credit Agreement or the Schedules thereto, there is no action,
proceeding or investigation pending or threatened against any of
the Loan Parties that (i) could reasonably be expected to result
in any material adverse effect on the business, operations or
financial condition of Crompton and its Subsidiaries taken as a
whole or (ii) purports to affect the legality, validity or
enforceability of any Loan Document to which any Loan Party is a
party or any of the transactions contemplated by the Credit
Agreement.
3. Each of Crompton and Uniroyal (a) is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and (b) has all
requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
4. The execution, delivery and performance by Crompton and
Uniroyal of each Loan Document to which it is a party, and the
consummation of the other transactions contemplated by the Credit
Agreement are within each such party's corporate powers, have
been duly authorized by all necessary corporate action, and do
not contravene each such party's charter or by-laws.
5. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for (a) the due execution, delivery,
recordation, filing or performance by Crompton or Uniroyal of any
Loan Document to which it is a party, or for the consummation of
the other transactions contemplated thereby or (b) the grant by
Crompton or Uniroyal of the Liens granted by it pursuant to the
Collateral Documents.
6. Each Loan Document to which any of Crompton or Uniroyal is
a party has been duly executed and delivered by such party.
This opinion is limited to the matters stated herein, and no
opinion is implied or may be inferred beyond the matters
expressly stated. This opinion is being furnished only to you
and is solely for your benefit and is not to be used, circulated,
quoted, relied upon or otherwise referred to by any other person
or for any other purpose without my prior written consent,
provided, a copy of this letter may be delivered by you to any
Eligible Assignee in accordance with the provisions of the Credit
Agreement, and such Eligible Assignee may rely on the opinions
expressed above as if this opinion letter were addressed and
delivered to such Eligible Assignee on the date hereof.
Very truly yours,
JTF/mds
EXHIBIT F-3
July 31, 1997
To each of the Lenders parties
to the Credit Agreement referred to below,
to Citicorp USA, Inc., as Agent and to
The Chase Manhattan Bank, as
Managing Agent
Uniroyal Chemical Ltd.
Ladies/Gentlemen:
This opinion is furnished to you at the direction of our
client, Uniroyal Chemical Ltd., pursuant to the request of
Crompton & Knowles Corporation ("Crompton Corp."), pursuant to
Section 3.02 of the Second Amended and Restated Credit Agreement
dated as of July 25, 1997 among Crompton Corp., a Massachusetts
corporation, Crompton & Knowles Colors Incorporated, a Delaware
corporation, Davis-Standard Corporation, a Delaware corporation,
Ingredient Technology Corporation, a Delaware corporation,
Uniroyal Chemical Company, Inc., a New Jersey corporation, the B-2
Borrowers named therein, the B-3 Borrowers named therein and
Uniroyal Chemical Ltd., a corporation continued under the laws of
Ontario, Canada, certain Lender Parties party thereto, Citicorp
USA, Inc., as Agent for the Lender Parties, and The Chase
Manhattan Bank, as Managing Agent (such Credit Agreement as it
may hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement").
Any capitalized term herein which is not defined herein but
which is defined in the Credit Agreement shall have the meaning
ascribed to it in the Credit Agreement.
We have acted as counsel for Uniroyal Chemical Ltd. (the
"Canadian Borrower") in connection with the preparation,
execution and delivery of the Credit Agreement and the Canadian
Borrower Notes.
In that connection we have examined originals or copies,
certified or otherwise identified to our satisfaction, of all of
the following, copies of which are either presently in your
possession or are being delivered to you with this letter:
(1) the Credit Agreement;
(2) the Canadian Borrower Notes;
(3) the Certificate of Articles of Continuance, effective
April 10, 1991, of the Canadian Borrower and all
amendments thereto (the "Charter");
(4) the by-laws (or analogous authorizations) of the
Canadian Borrower and all amendments thereto (the "By-
laws");
(5) a Certificate of Status issued by the Ministry of
Consumer and Commercial Relations dated July 31, 1997;
and
(6) an Officers' Certificate of the Chief Financial Officer
and Secretary of the Canadian Borrower dated July 31,
1997.
In addition, we have examined the originals, or copies certified
to our satisfaction, of such other corporate records of the
Canadian Borrower, certificates of public officials and of
officers of the Canadian Borrower, and agreements, instruments
and documents, as we have deemed necessary as a basis for the
opinions hereinafter expressed. As to questions of fact material
to such opinions, we have, when relevant facts were not
independently established by us, relied upon certificates of the
Canadian Borrower or its officers or of public officials
(including telex and telephone confirmations of such
certificates), and in such instances we have made no independent
inquiry with respect to such factual matters. The accuracy and
currency of our searches of the records and certificates of
public officials are subject to the accuracy and currency of the
indices and filing systems maintained by such public officials.
In our examination of the documents referred to above, we
have assumed (i) the due execution and delivery, pursuant to due
authorization, of each of the documents referred to above by all
parties thereto other than the Canadian Borrower and that all
such documents are legal, valid, binding obligations of all
parties thereto other than the Canadian Borrower, enforceable
against all parties thereto other than the Canadian Borrower in
accordance with their terms, (ii) the authenticity of all
documents submitted to us as originals and (iii) the conformity
to originals of all documents submitted to us as copies.
We are qualified to practice law in the Province of Ontario
and we do not purport to be experts on (or to provide opinions
on) any laws other than the laws of the Province of Ontario and
the federal laws of Canada applicable therein (the "Applicable
Laws").
Our opinions are subject to and may be limited by:
(a) bankruptcy, insolvency, winding-up reorganization,
arrangement, moratorium and other similar laws relating to or
affecting creditors' rights generally, including, without
limitation, laws pertaining to fraudulent preferences, fraudulent
conveyances or corporate governance statutes pertaining to
actions causing or made prior to insolvency; and
(b) general principles of equity and the discretion
exercisable by courts of competent jurisdiction in respect of the
availability of specific remedies, including, without limitation,
specific performance and injunctive relief, whether in
proceedings in law or equity, and the equitable or statutory
powers of courts of competent jurisdiction, including, without
limitation, the power to stay proceedings before them, to stay
the execution of judgments and to grant relief against
forfeiture.
Based upon and subject to the foregoing and the other
limitations or qualifications set out herein and also based upon
such investigation as we have deemed necessary, we are of the
following opinion:
1. The Canadian Borrower (a) is a corporation duly organized and
validly existing under the laws of Ontario, Canada and (b) has
all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now
conducted.
2. The execution, delivery and performance by the Canadian
Borrower of the Credit Agreement and Canadian Borrower Notes and
the consummation of the other transactions contemplated by the
Credit Agreement to be consummated by the Canadian Borrower are
within the Canadian Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and (a) do not
contravene the Canadian Borrower's charter or by-laws and (b) do
not violate any Applicable Law.
3. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery,
recordation, filing or performance by the Canadian Borrower of
the Credit Agreement or the Canadian Borrower Notes, or for the
consummation by the Canadian Borrower of the other transactions
contemplated to be consummated by the Canadian Borrower thereby.
4. The Credit Agreement and Canadian Borrower Notes have been
duly executed by the Canadian Borrower.
5. Under Ontario Law, parties may contractually submit to the
jurisdiction of a particular court and such clauses containing
such a contractual submission to jurisdiction are sufficient to
enable foreign courts to exercise jurisdiction under conflict of
laws principles with respect to in personam actions, provided
that such submissions are not contrary to public policy as
understood under the laws of the Province of Ontario. We express
no opinion on the effect of any clause to the extent that it
purports to confer exclusive jurisdiction with respect to any
agreements on the courts set out therein; we would, however, note
that the intent of the parties is a factor a court in Ontario
will consider in making a determination as to the place of trial.
We note that Section 8.13 of the Credit Agreement does not
purport to confer exclusive jurisdiction on New York State courts
or federal courts of the United States of America sitting in New
York City, and appelate courts from any thereof, and is, rather,
a submission to the non-exclusive jurisdiction of such courts.
6. The choice of New York law as the governing law of the Credit
Agreement and Canadian Borrower Notes will be upheld as a valid
choice of law by the courts of the Province of Ontario provided
that such choice of law is bona fide (in the sense that it was
not made with a view to avoiding the consequences of the law of
any other jurisdiction) and provided that such choice of law is
not contrary to public policy, as that term is understood under
the laws of the Province of Ontario.
7. The laws of the Province of Ontario permit an action to be
brought in a court of competent jurisdiction in Ontario on any
final and conclusive judgment in personam of a foreign
jurisdiction, which is not impeachable as void or voidable under
the internal laws of such foreign jurisdiction, for a sum certain
if (i) the court rendering such judgment had jurisdiction over
the judgment debtor, as recognized by the courts of the Province
of Ontario; (ii) such judgment was not obtained by fraud or in a
manner contrary to natural justice and the enforcement thereof
would not be inconsistent with public policy, as such term is
understood under the laws of the Province of Ontario; (iii) the
enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriatory or
penal laws; (iv) no new admissible evidence relevant to the
action is discovered prior to the rendering of judgment by the
courts of the Province of Ontario; and (v) there has been
compliance with the Limitations Act (Ontario), which provides
that an action to enforce a foreign judgment must be commenced
within six years of the date of the foreign judgment.
8. All taxes, tariffs, royalties, assessments and governmental
charges and fees imposed by Canada or any political subdivision
or taxing authority thereof or therein, the payment of which is
required in connection with the execution, delivery, or recording
of the Credit Agreement and Canadian Borrower Notes have been
paid. It is not necessary that the Credit Agreement or Canadian
Borrower Notes be filed or recorded with any federal
governmental, administrative or other authority or court in
Canada or any provincial governmental, administrative or other
authority or court in Ontario or any other third Person or that
any stamp, documentary, registration, issue or similar duty or
tax be paid on or in respect of the Credit Agreement or Canadian
Borrower Notes. We express no opinion as to any tax, levy,
import duty, deduction, charge or withholding (or as to laws or
regulations, or compliance with laws or regulations, pertaining
to such matters) imposed by Canada or any political subdivision
or taxing authority thereof or therein in connection with the
performance of, enforcement of, or payments under the Credit
Agreement or Canadian Borrower Notes.
9. In the event that the Credit Agreement and Canadian Borrower
Notes are sought to be enforced in the Province of Ontario in
accordance with the laws applicable thereto as chosen by the
parties, namely the laws of New York, the courts of competent
jurisdiction of the Province of Ontario would, subject to the
paragraph of this opinion relative to the validity of the choice
of law provision, recognize the choice of law and apply the laws
of New York, upon appropriate evidence as to such laws being
adduced, provided that none of the provisions of the Credit
Agreement and Canadian Borrower Notes or of the laws of New York
are contrary to public policy, as such term is understood under
the laws of the Province of Ontario. A court in the Province of
Ontario may, however, reserve to itself an inherent power to
decline to hear such an action if it is contrary to public
policy, as such term is understood under the laws of the Province
of Ontario, for it to do so, or if it is not the proper forum to
hear such action, or if concurrent proceedings are being brought
elsewhere.
10. There are no restrictions under the laws of Ontario on the
service of process in Ontario in connection with civil
proceedings before the courts of New York.
A copy of this letter may be delivered by you to any
Eligible Assignee which becomes a Lender in accordance with the
provisions of the Credit Agreement, and such Eligible Assignee
may rely on the opinions expressed above as if this opinion
letter were addressed and delivered to such Eligible Assignee on
the date hereof. Save and except as provided in the immediately
preceding sentence, this opinion may not be assigned to any other
party and may not be relied on by any parties other than the
addressees and any Eligible Assignees which become Lenders or for
any other purpose. This opinion is not to be quoted from or
referred to in any public document filed with any governmental
agency.
Delivery of an executed copy of this opinion letter by
telecopier shall be effective as delivery of a manually executed
copy of this opinion letter.
Yours very truly,
Weir & Foulds
EXHIBIT G
FORM OF DESIGNATION LETTER
[DATE]
To each of the Lenders
parties to the Credit Agreement
(as defined below), to Citicorp USA, Inc.
as Agent for such Lenders and to
The Chase Manhattan Bank, as
Managing Agent
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit
Agreement dated as of July 25, 1997 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "Credit Agreement") among Crompton & Knowles
Corporation ("Crompton Corp."), a Massachusetts corporation,
Crompton & Knowles Colors Incorporated, a Delaware corporation,
Davis-Standard Corporation, a Delaware corporation, Ingredient
Technology Corporation, a Delaware corporation, Uniroyal Chemical
Company, Inc., a New Jersey corporation, the B-2 Borrowers named
therein, the B-3 Borrowers named therein and Uniroyal Chemical
Ltd., a corporation organized under the laws of Ontario, Canada
(collectively, the "Borrowers"), certain Lender Parties party
thereto, Citicorp USA, Inc., as Agent for the Lender Parties, and
The Chase Manhattan Bank, as Managing Agent. Terms used herein
and defined in the Credit Agreement shall have the respective
meanings ascribed to such terms in the Credit Agreement.
Please be advised that Crompton Corp hereby designates its
undersigned Subsidiary, ____________ ("Designated [Italian]
Subsidiary"), as a "Designated [Italian] Subsidiary" under and
for all purposes of the Credit Agreement.
The Designated [Italian] Subsidiary, in consideration of
each Lender's agreement to extend credit to it under and on the
terms and conditions set forth in the Credit Agreement, does
hereby assume each of the obligations imposed upon a ["Designated
Subsidiary" and a "B-2 Borrower" ]["Designated Italian
Subsidiary" and a "B-3 Borrower"] under the Credit Agreement and
agrees to be bound by the terms and conditions of the Credit
Agreement. In furtherance of the foregoing, the Designated
[Italian] Subsidiary hereby represents and warrants, solely with
respect to itself, to each Lender Party as follows:
(a) The Designated [Italian] Subsidiary, to the extent
applicable under the laws of the jurisdiction of incorporation,
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation,
(ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to
so qualify or be licensed except where the failure to so qualify
or be licensed would not have a Material Adverse Effect and
(iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted. All of the outstanding capital stock of the Borrowers
has been validly issued and is fully paid and non-assessable.
(b) Set forth on Schedule I hereto is a complete and
accurate list as of the date hereof of all Subsidiaries of the
Designated [Italian] Subsidiary, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital
stock authorized, and the number outstanding, on the date hereof
and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by such Designated [Italian]
Subsidiary and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock
of all of such Subsidiaries to the extent owned by the Designated
[Italian] Subsidiary and its Subsidiaries has been validly
issued, is fully paid and non-assessable and is owned by such
Designated [Italian] Subsidiary or one or more of its
Subsidiaries free and clear of all Liens, except those created
under the Loan Documents. Each such Subsidiary (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (ii) is
duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed
would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without
limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted.
(c) The execution, delivery and performance by the
Designated [Italian] Subsidiary of this Agreement, the Notes,
each other Loan Document and each Related Document to which it is
or is to be a party, and the other transactions contemplated
hereby, are within such Designated [Italian] Subsidiary's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Designated
[Italian] Subsidiary's charter or bylaws, (ii) violate any law,
rule, regulation (including, without limitation, Regulation X of
the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a
default under, any loan agreement, indenture, mortgage, deed of
trust or other instrument or material contract or material lease
binding on or affecting the Designated [Italian] Subsidiary, any
of its Subsidiaries or any of their properties or (iv) except for
the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to
any of the properties of the Designated [Italian] Subsidiary or
any of its Subsidiaries. The Designated [Italian] Subsidiary or
any of its Subsidiaries is not in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such loan agreement,
indenture, mortgage, deed of trust or other instrument or
material contract or material lease, the violation or breach of
which would have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by
the Designated [Italian] Subsidiary of this Agreement, the Notes,
any other Loan Document or any Related Document to which it is or
is to be a party, or for the transactions contemplated hereby,
(ii) the grant by the Designated [Italian] Subsidiary of the
Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by the
Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for
the authorizations, approvals, actions, notices and filings
listed on Schedule 4.01(d), all of which have been duly obtained,
taken, given or made and are in full force and effect.
(e) This Agreement has been, and each of the Notes, each
other Loan Document and each Related Document when delivered
hereunder will have been, duly executed and delivered by the
Designated [Italian] Subsidiary party thereto. This Agreement
is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal,
valid and binding obligation of the Designated [Italian]
Subsidiary party thereto, enforceable against such Designated
[Italian] Subsidiary in accordance with its terms.
(f) There is no action, suit, investigation, litigation or
proceeding affecting the Designated [Italian] Subsidiary or any
of its Subsidiaries, including any Environmental Action, pending
or threatened before any court, governmental agency or arbitrator
that (i) would be reasonably likely to have a Material Adverse
Effect (other than the Disclosed Litigation) or (ii) purports to
affect the legality, validity or enforceability of this
Agreement, any Note, any other Loan Document or any Related
Document or the consummation of the transactions contemplated
hereby, and there has been no material adverse change in the
status, or financial effect on the Designated [Italian]
Subsidiary or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 3.01(f).
(g) (i) Except as disclosed in Part I of Schedule 4.01(o)
to the Credit Agreement, the operations and properties of the
Designated [Italian] Subsidiary and each of its Subsidiaries
comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance
with such Environmental Laws and Environmental Permits
has been resolved without material ongoing obligations or costs,
and no circumstances exist that would be reasonably likely to
(i) form the basis of an Environmental Action against the
Designated [Italian] Subsidiary or any of its Subsidiaries or any
of their properties that could have a Material Adverse Effect or
(ii) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability
under any Environmental Law in effect on the date hereof.
(ii) Except as disclosed in Part II of Schedule 4.01(o) to
the Credit Agreement or as would not, individually or in the
aggregate, result in a Material Adverse Effect, none of the
properties currently or formerly owned or operated by the
Designated [Italian] Subsidiary or any of its Subsidiaries is
listed or, to the best knowledge of the Designated [Italian]
Subsidiary, proposed for listing on the NPL or on the CERCLIS or
any analogous foreign, state or local list or is adjacent to any
such property; there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by the Designated [Italian]
Subsidiary or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by the
Designated [Italian] Subsidiary or any of its Subsidiaries; there
is no asbestos or asbestos-containing material on any property
currently owned or operated by the Designated [Italian]
Subsidiary or any of its Subsidiaries; and Hazardous Materials
have not been released, discharged or disposed of on any property
currently or formerly owned or operated by the Designated
[Italian] Subsidiary or any of its Subsidiaries.
(iii) Except as disclosed in Part III of Schedule 4.01(o)
to the Credit Agreement, neither the Designated [Italian]
Subsidiary nor any of its Subsidiaries is undertaking, and has
not completed, either individually or together with other
potentially responsible parties, any investigation or assessment
or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials
at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law; and all Hazardous
Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned
or operated by the Designated [Italian] Subsidiary or any of its
Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to the Designated
[Italian] Subsidiary or any of its Subsidiaries.
(h) The Designated [Italian] Subsidiary is, individually
and together with its Subsidiaries, Solvent.
(i) The Designated [Italian] Subsidiary is incorporated
under the laws of a jurisdiction other than the United States of
America.
THIS DESIGNATION LETTER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
This Designation Letter 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 taken together shall constitute
one and the same agreement. Delivery of an executed counterpart
of this Designation Letter by telecopier shall be effective as
delivery of a manually executed counterpart of this Designation
Letter.
Very truly yours,
CROMPTON & KNOWLES CORPORATION
By _________________________
Name:
Title:
DESIGNATED [ITALIAN] SUBSIDIARY]
By__________________________
Name:
Title:
EXHIBIT H
FORM OF ACCEPTANCE BY PROCESS AGENT
[Letterhead of Process Agent]
[Date]
To each of the Lenders parties
to the Credit Agreement
(as defined below), to
Citicorp USA, Inc., as Agent for
said Lenders and The Chase
Manhattan Bank, as Managing Agent
[Name of Designated [Italian] Subsidiary]
Ladies and Gentlemen:
Reference is made to (i) that certain Second Amended and
Restated Credit Agreement dated as of July 25, 1997 among
Crompton & Knowles Corporation ("Crompton Corp."), a
Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the B-3
Borrowers named therein and Uniroyal Chemical Ltd., a corporation
organized under the laws of Ontario, Canada (collectively, the
"Borrowers"), certain Lender Parties party thereto, Citicorp USA,
Inc., as Agent for the Lender Parties, and The Chase Manhattan
Bank, as Managing Agent (such Credit Agreement as it may
hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement"; the terms defined
therein being used herein as therein defined), and (ii) to the
Designation Letter, dated _________, pursuant to which __________
(the "Designated [Italian] Subsidiary") has become a [B-2
Borrower][B-3 Borrower].
Pursuant to Section 8.08 of the Credit Agreement to
which the Designated [Italian] Subsidiary has become subject
pursuant to its Designation Letter, the Designated [Italian]
Subsidiary has appointed _______________ (with an office on the
date hereof at _______________, Attention: __________) as
Process Agent to receive on behalf of the Designated [Italian]
Subsidiary and its property service of copies of the summons and
complaint and any other process which may be served in any action
or proceeding in any New York State or Federal court sitting in
New York City arising out of or relating to the Credit Agreement.
The undersigned hereby accepts such appointment as
Process Agent and agrees with each of you that (i) the
undersigned will maintain an office in ________________ through
the Termination Date and will give the Agent prompt notice of any
change of address of the undersigned, (ii) the undersigned will
perform its duties as Process Agent to receive on behalf of the
Designated [Italian] Subsidiary and its property service of
copies of the summons and complaint and any other process which
may be served in any action or proceeding in any New York State
or Federal court sitting in New York City arising out of or
relating to the Credit Agreement and (iii) the undersigned will
forward forthwith to the Designated [Italian] Subsidiary at its
address at ________________ or, if different, its then current
address, copies of any summons, complaint and other process which
the undersigned receives in connection with its appointment as
Process Agent.
This acceptance and agreement shall be binding upon the
undersigned and all successors of the undersigned.
Very truly yours,
[NAME OF PROCESS AGENT]
By_______________________
EXHIBIT I
FORM OF OPINION OF COUNSEL
TO A DESIGNATED [ITALIAN] SUBSIDIARY
[Effective Date]
To each of the Lenders parties
to the Credit Agreement referred to below,
to Citicorp USA, Inc., as Agent and to
The Chase Manhattan Bank, as
Managing Agent
[Name of Designated [Italian] Subsidiary]
Ladies/Gentlemen:
This opinion is furnished to you at the direction of our
client, Crompton & Knowles Corporation ("Crompton Corp."),
pursuant to Section 3.03 of the Second Amended and Restated
Credit Agreement dated as of July 25, 1997 among Crompton Corp.,
a Massachusetts corporation, Crompton & Knowles Colors
Incorporated, a Delaware corporation, Davis-Standard Corporation,
a Delaware corporation, Ingredient Technology Corporation, a
Delaware corporation, Uniroyal Chemical Company, Inc., a New
Jersey corporation, the B-2 Borrowers named therein, the B-3
Borrowers named therein and Uniroyal Chemical Ltd., a corporation
organized under the laws of Ontario, Canada (collectively, the
"Borrowers"), certain Lender Parties party thereto, Citicorp USA,
Inc., as Agent for the Lender Parties, and The Chase Manhattan
Bank, as Managing Agent (such Credit Agreement as it may
hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein as therein defined.
We have acted as counsel for __________ (the "Designated
[Italian] Subsidiary") in connection with the preparation,
execution and delivery of the Designation Letter executed by the
Designated [Italian] Subsidiary.
In that connection we have examined:
(1) the Designation Letter executed by the
Designated [Italian] Subsidiary;
(2) the Credit Agreement;
(3) the documents furnished by the Designated
[Italian] Subsidiary pursuant to Article III of the Credit
Agreement;
(4) the Certificate of Incorporation (or analogous
authorizations) of the Designated [Italian] Subsidiary and all
amendments thereto (the "Charter"); and
(5) the by-laws (or analogous authorizations) of the
Designated [Italian] Subsidiary and all amendments thereto (the
"By-laws").
We have also examined the originals, or copies certified to our
satisfaction, of the documents listed in a certificate of the
chief financial officer of the Designated [Italian] Subsidiary,
dated the date hereof (the "Certificate"), certifying that the
documents listed in such certificate are all of the indentures,
loan or credit agreements, leases, mortgages, security
agreements, bonds, notes and other agreements or instruments, and
all of the orders, writs, judgments, awards, injunctions and
decrees, which affect or purport to affect the Designated
[Italian] Subsidiary's right to borrow money or the Designated
[Italian] Subsidiary's obligations under the Credit Agreement,
its Designation Letter or its Working Capital [B-2][B-3] Notes.
In addition, we have examined the originals, or copies certified
to our satisfaction, of such other corporate records of the
Designated [Italian] Subsidiary, certificates of public officials
and of officers of the Designated [Italian] Subsidiary, and
agreements, instruments and documents, as we have deemed
necessary as a basis for the opinions hereinafter expressed. As
to questions of fact material to such opinions, we have, when
relevant facts were not independently established by us, relied
upon certificates of the Designated [Italian] Subsidiary or its
officers or of public officials (including telex and telephone
confirmations of such certificates), and in such instances we
have made no independent inquiry with respect to such factual
matters.
In our examination of the documents referred to
above, we have assumed (i) the due execution and delivery,
pursuant to due authorization, of each of the documents referred
to above by all parties thereto other than the Designated
[Italian] Subsidiary, (ii) the authenticity of all documents
submitted to us as originals and (iii) the conformity to
originals of all documents submitted to us as copies.
We are qualified to practice law in [name of country]
and we do not purport to be experts on any laws other than the
laws of [name of country].
Based upon the foregoing and upon such investigation as
we have deemed necessary, we are of the following opinion:
1. The Designated [Italian] Subsidiary (a) is a
corporation duly organized, validly existing and in good standing
under the laws of [name of country] and (b) has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
2. The execution, delivery and performance by the
Designated [Italian] Subsidiary of each Loan Document and each
Related Document to which it is a party, and the consummation of
the other transactions contemplated by the Credit Agreement are
within the Designated [Italian] Subsidiary's corporate powers,
have been duly authorized by all necessary corporate action, and
do not contravene the Designated [Italian] Subsidiary's charter
or bylaws.
3. No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery,
recordation, filing or performance by the Designated [Italian]
Subsidiary of any Loan Document or any Related Document to which
it is a party, or for the consummation of the other transactions
contemplated thereby.
4. Each Loan Document and each Related Document to which
the Designated [Italian] Subsidiary is a party has been duly
executed and delivered by the Designated [Italian] Subsidiary.
5. The appointment of Crompton Corp. as the Designated
[Italian] Subsidiary's attorney-in-fact pursuant to Section 8.15
of the Credit Agreement constitutes the legal, valid and binding
obligation of the Designated [Italian] Subsidiary under [name of
country]'s law, enforceable against such B-2 Borrower in
accordance with its terms.
6. To the best of my knowledge, there are no pending or
overtly threatened actions or proceedings against the Designated
[Italian] Subsidiary or any of its subsidiaries before any court,
governmental agency or arbitrator which are likely to materially
adversely affect (i) the financial condition or operations of the
Designated [Italian] Subsidiary or any of its Subsidiaries or
(ii) the ability of the Designated [Italian] Subsidiary to
perform its obligations under the Loan Documents or Related
Documents to which it is a party, or which purport to affect the
legality, validity, binding effect or enforceability of such Loan
Documents or Related Documents.
7. The submission to the jurisdiction of the New York
State and Federal courts sitting in New York City (and any
appellate court from any thereof) contained in Section 8.13 of
the Credit Agreement and contained in the other Loan Documents to
which the Designated [Italian] Subsidiary is a party are
irrevocably binding on the Designated [Italian] Subsidiary.
8. In any action or proceeding arising out of or
relating to the Credit Agreement or any other Loan Document to
which the Designated [Italian] Subsidiary is a party in any court
sitting in [name of country], such court would recognize and give
effect to the provisions of Section 8.16 of the Credit Agreement
and such identical provisions contained in such other Loan
Documents wherein the Designated [Italian] Subsidiary agrees that
the Credit Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, U.S.A.
Without limiting the generality of the foregoing, a court sitting
in the [name of country] would apply the usury law of the State
of New York, and would not apply the usury law of [name of
country], to the Credit Agreement and such Loan Documents.
However, if a court were to hold that the Credit Agreement or
such Loan Documents are governed by, and are to be construed in
accordance with, the laws of [name of country], the Credit
Agreement and such Loan Documents would be, under the laws of the
[name of country], the legal, valid and binding obligations of
the Designated [Italian] Subsidiary enforceable against the
Designated [Italian] Subsidiary in accordance with their terms,
subject, however, to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and (ii) the effect of general
principles of equity.
A copy of this letter may be delivered by you to
any Eligible Assignee in accordance with the provisions of the
Credit Agreement, and such Eligible Assignee may rely on the
opinions expressed above as if this opinion letter were addressed
and delivered to such Eligible Assignee on the date hereof.
Delivery of an executed copy of this opinion letter by
telecopier shall be effective as delivery of a manually executed
copy of this opinion letter.
Very truly yours,
EXHIBIT J
FORM OF ITALIAN
LENDER JOINDER AGREEMENT
ITALIAN LENDER JOINDER AGREEMENT, dated as of _______, ___,
19__, made by the Working Capital B-3 Lender named below (the
"Working Capital B-3 Lender") and the Eligible Assignee named
below (the "Eligible Assignee") pursuant to the Second Amended
and Restated Credit Agreement dated as of July 25, 1997 (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Credit Agreement") among Crompton
& Knowles Corporation, a Massachusetts corporation, Crompton &
Knowles Colors Incorporated, a Delaware corporation, Davis-Standard
Corporation, a Delaware corporation, Ingredient
Technology Corporation, a Delaware corporation, Uniroyal Chemical
Company, Inc., a New Jersey corporation, the B-2 Borrowers named
therein, the B-3 Borrowers named therein and Uniroyal Chemical
Ltd., a corporation organized under the laws of Ontario, Canada
(collectively, the "Borrowers"), certain Lender Parties party
thereto, Citicorp USA, Inc., as Agent for the Lender Parties, and
The Chase Manhattan Bank, as Managing Agent. Terms used herein
and defined in the Credit Agreement shall have the respective
meanings ascribed to such terms in the Credit Agreement.
For good and valid consideration, the sufficiency of which
hereby is acknowledged, the undersigned Eligible Assignee hereby
agrees (for the benefit of the Lender Parties and the Loan
Parties) that it shall serve as a "Working Capital B-3 Lender"
under the Credit Agreement upon the terms and subject to the
conditions set forth therein.
The undersigned hereby:
(a)represents and warrants that it is legally authorized to enter
into this Italian Lender Joinder Agreement and is an Eligible
Assignee under the Credit Agreement;
(b)represents and warrants that it is located in Italy;
(c)confirms that is has received and reviewed a copy of the
Credit Agreement and the other Loan Documents relevant to it; and
(d)agrees that it will (i) be bound by the provisions of the
Credit Agreement and each other Loan Document, in each case,
applicable to it as a Working Capital B-3 Lender and (ii) perform
all obligations which are required to be performed by it as a
Working Capital B-3 Lender pursuant to the Credit Agreement and
each other Loan Document.
From and after Effective Date set forth on Schedule I hereto
the undersigned shall (a) be a "Working Capital B-3 Lender" with
respect to the Currency set forth on Schedule I hereto for all
purposes under the Loan Documents and (b) have the rights and
obligations of a Working Capital B-3 Lender thereunder and under
the other Loan Documents and (c) be bound by the provisions of
the Loan Documents.
THIS ITALIAN LENDER JOINDER AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have caused this Italian
Lender Joinder Agreement to be executed by a duly authorized
officer as of the date set forth above.
[NAME OF WORKING CAPITAL B-3 LENDER]
By:
Title:
[NAME OF ELIGIBLE ASSIGNEE]
By:
Title:
ACKNOWLEDGED AND AGREED:
CITICORP USA, INC. as Agent
By:
Title:
SCHEDULE I
TO EXHIBIT J
DATE OF ITALIAN LENDER JOINDER AGREEMENT:
NAME OF DESIGNATED WORKING CAPITAL B-3 LENDER:
JURISDICTION:
AMOUNT OF OUTSTANDING WORKING CAPITAL B-3 ADVANCES
ASSIGNED: _____________[Foreign
Currency][US$]
NAME OF DESIGNATED [ITALIAN] SUBSIDIARY:
EFFECTIVE DATE OF ITALIAN LENDER JOINDER AGREEMENT:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Form 10-Q for the period ended June 28, 1997 and is qualified in its
entirety by reference to such finanical statements.
</LEGEND>
<CIK> 0000858905
<NAME> UNIROYAL CHEMICAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-END> JUN-28-1997
<CASH> 21,415
<SECURITIES> 0
<RECEIVABLES> 176,437
<ALLOWANCES> 5,108
<INVENTORY> 197,028
<CURRENT-ASSETS> 448,477
<PP&E> 604,142
<DEPRECIATION> 280,151
<TOTAL-ASSETS> 1,121,957
<CURRENT-LIABILITIES> 224,115
<BONDS> 881,840
0
0
<COMMON> 0
<OTHER-SE> (300,786)
<TOTAL-LIABILITY-AND-EQUITY> 1,121,957
<SALES> 631,696
<TOTAL-REVENUES> 631,696
<CGS> 382,727
<TOTAL-COSTS> 518,140
<OTHER-EXPENSES> 707
<LOSS-PROVISION> 957
<INTEREST-EXPENSE> 49,336
<INCOME-PRETAX> 63,513
<INCOME-TAX> 24,135
<INCOME-CONTINUING> 39,378
<DISCONTINUED> 0
<EXTRAORDINARY> 1,227
<CHANGES> 0
<NET-INCOME> 38,151
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Form 10-Q for the period ended June 28, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000862612
<NAME> UNIROYAL CHEMICAL COMPANY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-END> JUN-28-1997
<CASH> 21,415
<SECURITIES> 0
<RECEIVABLES> 176,437
<ALLOWANCES> 5,108
<INVENTORY> 197,028
<CURRENT-ASSETS> 448,477
<PP&E> 604,142
<DEPRECIATION> 280,151
<TOTAL-ASSETS> 1,121,957
<CURRENT-LIABILITIES> 224,115
<BONDS> 881,840
0
0
<COMMON> 1
<OTHER-SE> (300,787)
<TOTAL-LIABILITY-AND-EQUITY> 1,121,957
<SALES> 631,696
<TOTAL-REVENUES> 631,696
<CGS> 382,727
<TOTAL-COSTS> 518,140
<OTHER-EXPENSES> 707
<LOSS-PROVISION> 957
<INTEREST-EXPENSE> 49,336
<INCOME-PRETAX> 63,513
<INCOME-TAX> 24,135
<INCOME-CONTINUING> 39,378
<DISCONTINUED> 0
<EXTRAORDINARY> 1,227
<CHANGES> 0
<NET-INCOME> 38,151
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
