SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QT
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from September 29, 1996 to December 28,
1996
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 February 14, 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
UNIROYAL CHEMICAL COMPANY, INC.
FORM 10-QT
FOR THE TRANSITION PERIOD ENDED DECEMBER 28, 1996
PART I - FINANCIAL INFORMATION PAGE
Item 1 -- Financial Statements (unaudited):
Consolidated Statements of Operations for the
Quarters Ended December 28, 1996 and
December 31, 1995 2
Consolidated Balance Sheets - December 28, 1996
and December 31, 1995
Uniroyal Chemical Corporation 3
Uniroyal Chemical Company, Inc. 4
Consolidated Statements of Cash Flows for the
Quarters Ended December 28, 1996 and
December 31, 1995 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2 -- Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7
PART II - OTHER INFORMATION
Item 6 -- Exhibits and Reports on Form 8-K 8
Signatures 9
*Exhibit 10 -- $530,000,000 Amended and
Restated Credit Agreement Dated as
of December 19, 1996 Among Uniroyal
Chemical Company, Inc., et al., as
Borrowers and Various Banks as Lenders
*Exhibit 27 -- Financial Data Schedule
* A copy of these Exhibits are annexed to this report on Form
10-QT provided to the Securities and Exchange Commission.
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
UNIROYAL CHEMICAL CORPORATION Unaudited
UNIROYAL CHEMICAL COMPANY, INC.
Consolidated Statements Of Operations
Quarters ended December 28, 1996 and December 31, 1995
(In thousands of dollars)
Quarters Ended
----------------------
Dec. 28, Dec. 31,
1996 1995
---------- ----------
Net sales $242,338 $231,480
Cost of products sold 154,031 156,015
Selling, general and administrative 40,214 37,696
Depreciation and amortization 15,485 16,657
Research and development 9,160 8,862
---------- ----------
Operating profit 23,448 12,250
Interest expense 24,814 26,342
Other income, net (41) (143)
---------- ----------
Loss before income taxes (1,325) (13,949)
Benefit for income taxes (531) (5,581)
---------- ----------
Net loss ($794) ($8,368)
========== ==========
See notes to unaudited consolidated financial statements
<PAGE>
UNIROYAL CHEMICAL CORPORATION Unaudited
Consolidated Balance Sheets
December 28, 1996 and December 31, 1995
(In thousands of dollars)
Dec. 28, Dec. 31,
1996 1995
------------ ------------
ASSETS
Current Assets
Cash $21,015 $16,043
Accounts receivable 137,238 140,086
Inventories 202,762 192,780
Other current assets 60,848 48,275
------------ ------------
Total current assets 421,863 397,184
Non-Current Assets
Property, plant and equipment 367,962 390,833
Costs in excess of acquired net
assets 128,155 132,611
Other intangible assets 91,782 104,613
Other assets 123,545 136,055
------------ ------------
$1,133,307 $1,161,296
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Current installments of long-term
debt $731 $11,461
Notes payable 8,595 48,570
Accounts payable and accrued
expenses 210,191 195,742
------------ ------------
Total current liabilities 219,517 255,773
Non-Current Liabilities
Long-term debt 925,982 911,608
Postretirement healthcare
liability 174,025 176,991
Other liabilities 150,615 126,273
Stockholders' Equity (Deficit)
Preferred stock - 4,172
Common stock - 254
Additional paid-in capital 172,822 176,956
Accumulated deficit (480,407) (455,828)
Cumulative translation adjustment (25,534) (20,425)
Pension liability adjustment (3,713) (3,617)
Treasury stock at cost - (10,861)
------------ ------------
Total stockholders' deficit (336,832) (309,349)
------------ ------------
$1,133,307 $1,161,296
============ ============
See notes to unaudited consolidated financial statements
UNIROYAL CHEMICAL COMPANY, INC. Unaudited
Consolidated Balance Sheets
December 28, 1996 and December 31, 1995
(In thousands of dollars)
Dec. 28, Dec. 31,
1996 1995
------------ ------------
ASSETS
Current Assets
Cash $21,015 $16,043
Accounts receivable 137,238 140,086
Inventories 202,762 192,780
Other current assets 60,848 48,275
------------ ------------
Total current assets 421,863 397,184
Non-Current Assets
Property, plant and equipment 367,962 390,833
Costs in excess of acquired net
assets 128,155 132,611
Other intangible assets 91,782 104,613
Other assets 123,545 136,055
------------ ------------
$1,133,307 $1,161,296
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Current installments of long-term
debt $731 $11,461
Notes payable 8,595 48,570
Accounts payable and accrued
expenses 210,191 195,742
------------ ------------
Total current liabilities 219,517 255,773
Non-Current Liabilities
Long-term debt 925,982 911,608
Postretirement healthcare
liability 174,025 176,991
Other liabilities 150,615 126,273
Stockholders' Equity (Deficit)
Common stock 1 1
Additional paid-in capital 174,504 176,956
Accumulated deficit (482,090) (462,264)
Cumulative translation adjustment (25,534) (20,425)
Pension liability adjustment (3,713) (3,617)
------------ ------------
Total stockholders' deficit (336,832) (309,349)
------------ ------------
$1,133,307 $1,161,296
============ =============
See notes to unaudited consolidated financial statements
UNIROYAL CHEMICAL CORPORATION Unaudited
UNIROYAL CHEMICAL COMPANY, INC.
Consolidated Statements of Cash Flows
For the Quarters Ended December 28, 1996 and December 31, 1995
(In thousands of dollars)
Quarters Ended
---------------------------
Dec. 28, Dec. 31,
1996 1995
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($794) ($8,368)
Adjustments to reconcile net loss
to net cash provided by operations:
Depreciation and amortization 15,485 16,657
Non-cash interest 3,567 3,752
Deferred income taxes 2,114 (7,422)
Changes in assets and liabilities,
net (28,397) (25,141)
Other (79) (78)
------------ ------------
Net cash used by operations (8,104) (20,600)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (7,437) (8,299)
Other investing activities 11 275
------------ ------------
Net cash used by investing
activities (7,426) (8,024)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term
borrowings 22,237 996
Increase (decrease) in notes
payable (403) 15,208
Other financing activities 141 (1,160)
------------ ------------
Net cash provided by financing
activities 21,975 15,044
CASH
Effect of exchange rates on cash (1,045) 104
------------ ------------
Change in cash 5,400 (13,476)
Cash at beginning of period 15,615 29,519
------------ ------------
Cash at end of period $21,015 $16,043
============ ============
See notes to unaudited consolidated financial statements
UNIROYAL CHEMICAL CORPORATION
UNIROYAL CHEMICAL COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
Transition Period Ended December 28, 1996
1. Presentation of Consolidated Financial Statements
Uniroyal Chemical Corporation ("UCC") 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
substantially all of the operations (primarily interest expense),
assets and liabilities of UCC.
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.
By unanimous written consent of the respective Board of
Directors of UCC and Uniroyal Chemical dated September 27, 1996,
the directors determined that the fiscal year of UCC and Uniroyal
Chemical, which commenced September 29, 1996, shall end on
December 28, 1996, and that thereafter, the fiscal year of each
of UCC and Uniroyal Chemical shall commence on the Sunday
following the last Saturday in December of each year and end on
the last Saturday of the next following December. The fiscal
years for UCC and Uniroyal Chemical will now coincide with the
fiscal year of Crompton & Knowles Corporation, the parent of UCC.
Accordingly, the unaudited consolidated financial statements are
presented for the transition period from September 29, 1996 to
December 28, 1996.
Certain amounts in the accompanying consolidated financial
statements have been reclassified to conform with the current
year presentation.
Accumulated depreciation at December 28, 1996
and December 31, 1995 was $262.4 and $222.8 million,
respectively.
Accumulated amortization (in thousands) of costs in excess of
acquired net assets was $26,534 and $22,360 and accumulated
amortization (in thousands) of other intangible assets was
$106,655 and $91,536 at December 28, 1996 and December 31, 1995,
respectively.
Cash payments for the quarters ended December 28, 1996 and
December 31, 1995 include interest payments of $28.7 and $27.7
million and income tax payments of $7.7 and $8.8 million,
respectively.
2. Inventories
A summary of inventory components is as follows (in
thousands):
Dec. 28, Dec. 31,
1996 1995
------------ ------------
Finished goods $148,552 $141,677
Work in process 9,296 9,308
Raw materials and
supplies 44,914 41,795
------------ ------------
$202,762 $192,780
============ ============
3. Contingencies
The Companies are involved in claims, litigation,
administrative proceedings and investigations of various types in
several 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 (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. The total amount accrued for environmental
remediation activities at December 28, 1996 was $94.9 million.
It is reasonably possible that Uniroyal Chemical's estimates for
environmental remediation liabilities may subsequently change
should additional sites be identified, further remediation
measures be required or undertaken, 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 its consolidated financial position.
While Uniroyal Chemical believes it is unlikely, the resolution
of these environmental matters could have a material adverse
effect on its consolidated results of operations in any given
year if a significant number of these matters are resolved
unfavorably.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operation
The response to this item has been limited to an analysis of
the results of operations for the quarter ended December 28, 1996
as compared with the quarter ended December 31, 1995 as
Registrants meet the conditions set forth in General Instruction
(H)(1)(a) and (b) of Form 10-Q.
Operating Results - Quarters Ended December 28, 1996 and December
31, 1995
Net Sales
Net sales for the quarter ended December 28, 1996 increased by
5% to $242.3 million from $231.5 million for the quarter ended
December 31, 1995. The majority of the increase was due to
higher unit volume.
Chemicals and Polymers sales rose 3% to $119.5 million for the
quarter ended December 28, 1996. Rubber chemicals pricing
remained steady for this period while unit volume increased.
EPDM unit volume was unchanged but lower pricing reduced total
sales. Nitrile rubber posted a solid sales gain, primarily
resulting from stronger Latin American sales.
Crop Protection sales of $48.8 million for the quarter ended
December 28, 1996 were slightly higher than the corresponding
period last year, with higher seed treatment sales offsetting
lower insecticide sales in the Asia/Pacific region. Sales in
this business are typically at a seasonal low during this period.
Specialties sales of $74.0 million increased 10% versus the
prior quarter of last year primarily due to strong demand for
lubricant additives and continued international growth of
urethane prepolymers.
Operating Profit
As a percentage of net sales, gross margins improved to 36.4%
from 32.6% for the quarter ended December 28, 1996 primarily as a
result of lower raw material and manufacturing costs.
Consolidated operating profit increased 91% to $23.4 million in
1996 from $12.3 million in 1995 as a result of higher unit volume
and lower costs, including raw material, manufacturing and
overhead.
Other
Selling, general and administrative expenses of $40.2 million
increased 7% versus the quarter ending December 31, 1995
primarily due to increased advertising and selling expenses.
Depreciation and amortization of $15.5 million decreased 7%
versus the quarter ended December 31, 1995 primarily as a result
of certain assets becoming fully amortized or depreciated.
Research and development costs of $9.2 million increased 3% from
the quarter ended December 31, 1995 but remained constant as a
percentage of sales.
Interest expense for the quarter ended December 28, 1996 of
$24.8 million decreased 6% from the quarter ended December 31,
1995 primarily due to lower levels of indebtedness. Other
income, net of $41 thousand decreased slightly versus the prior
year. The effective tax benefit rate of 40% for the quarter
ended December 28, 1996 was unchanged from the comparable 1995
period.
PART II - OTHER INFORMATION
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits
10. $530,000,000 Amended and Restated Credit Agreement
Dated as of December 19, 1996 Among Uniroyal Chemical Company,
Inc., et al., as Borrowers and Various Banks as Lenders
27. Financial data schedule
(b) Reports on Form 8-K
During the transition period ended December 28, 1996, the
registrants did not file any reports on Form 8-K, except as to a
report on Form 8-K dated September 27, 1996 and filed on
September 30, 1996, which has been previously reported.
SIGNATURE
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: February 21, 1997 By /s/ Charles J. Marsden
----------------- ---------------------
Vice President and
Chief Financial Officer
(Principal Financial
Officer)
EXECUTION COPY
$530,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 19, 1996
Among
CROMPTON & KNOWLES CORPORATION,
CROMPTON & KNOWLES COLORS INCORPORATED,
DAVIS-STANDARD CORPORATION,
INGREDIENT TECHNOLOGY CORPORATION,
UNIROYAL CHEMICAL COMPANY, INC.,
THE B-2 BORROWERS NAMED HEREIN,
AND
THE B-3 BORROWERS NAMED HEREIN
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 . . . . . . . . . . . . . . 2
1.02. Computation of Time Periods . . . . . . . . . . . 35
1.03. Accounting Terms . . . . . . . . . . . . . . . . 35
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances. . . . . . . . . . . . . . . . . . . 36
2.02. Making the Advances . . . . . . . . . . . . . . . 40
2.03. Issuance of and Drawings and Reimbursement
Under Letters of Credit . . . . . . . . . . . . . 43
2.04. Repayment of Advances . . . . . . . . . . . . . . 45
2.05. Termination or Reduction of the Commitments . . . 47
2.06. Prepayments . . . . . . . . . . . . . . . . . . . 48
2.07. Interest. . . . . . . . . . . . . . . . . . . . . 50
2.08. Fees. . . . . . . . . . . . . . . . . . . . . . . 50
2.09. Conversion of Advances. . . . . . . . . . . . . . 52
2.10. Increased Costs, Etc. . . . . . . . . . . . . . . 53
2.11. Illegality. . . . . . . . . . . . . . . . . . . . 54
2.12. Payments and Computations . . . . . . . . . . . . 55
2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . 57
2.14. Sharing of Payments, Etc. . . . . . . . . . . . . 61
2.15. Use of Proceeds . . . . . . . . . . . . . . . . . 62
2.16. Defaulting Lenders. . . . . . . . . . . . . . . . 62
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to . . . . . . . . . . . . . 64
3.02. Conditions Precedent to Initial Extension of
Credit to each B-2 Borrower and each B-3
Borrower. . . . . . . . . . . . . . . . . . . . . 67
3.04. Conditions Precedent to Each Borrowing and
Issuance. . . . . . . . . . . . . . . . . . . . . 71
3.05. Determinations Under Sections 3.01. . . . . . . . 72
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrowers. . 72
ARTICLE V
COVENANTS OF THE BORROWERS
5.01. Affirmative Covenants. . . . . . . . . . . . . . . 78
5.02. Negative Covenants . . . . . . . . . . . . . . . . 83
5.03. Reporting Requirements . . . . . . . . . . . . . . 96
5.04. Financial Covenants . . . . . . . . . . . . . . .100
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . 102
6.02. Actions in Respect of the Letters of Credit
upon Default. . . . . . . . . . . . . . . . . . . 105
6.03. Actions in Respect of Working Capital B-1
Commitments Reserved Pursuant to Section 2.01(i). 106
ARTICLE VII
THE AGENT
7.01. Authorization and Action. . . . . . . . . . . . . 106
7.02. Agent's Reliance, Etc. . . . . . . . . . . . . . 107
7.03. Citicorp and Affiliates . . . . . . . . . . . . . 107
7.04. Lender Party Credit Decision. . . . . . . . . . . 108
7.05. Indemnification . . . . . . . . . . . . . . . . . 108
7.06. Successor Agents. . . . . . . . . . . . . . . . . 109
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.. . . . . . . . . . . . . . . . . 110
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . 111
8.03. No Waiver; Remedies.. . . . . . . . . . . . . . . 112
8.04. Costs and Expenses. . . . . . . . . . . . . . . . 112
8.05. Right of Set-off. . . . . . . . . . . . . . . . . 114
8.06. Binding Effect. . . . . . . . . . . . . . . . . . 114
8.07. Assignments and Participations. . . . . . . . . . 114
8.09. Execution in Counterparts . . . . . . . . . . . . 118
8.10. No Liability of the Issuing Banks . . . . . . . . 118
8.11. Release of Collateral . . . . . . . . . . . . . . 119
8.12. Confidentiality . . . . . . . . . . . . . . . . . 119
8.13. Jurisdiction, Etc.. . . . . . . . . . . . . . . . 119
8.14. Judgment. . . . . . . . . . . . . . . . . . . . . 120
8.15. Power of Attorney . . . . . . . . . . . . . . . . 121
8.16. Governing Law . . . . . . . . . . . . . . . . . . 121
8.17. Waiver of Jury Trial. . . . . . . . . . . . . . . 122
8.18. Limitation on B-2 Borrower Obligations and B-3
Borrower Obligations. . . . . . . . . . . . . . . 122
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 B - Form of Notice of Borrowing
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 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 Assignment Agreement
Exhibit K - Form of Italian Lender Joinder Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of
December 19, 1996 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"), 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 STATEMENTS:
(1) 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 allow such
Existing Lenders to assign a portion of their Commitments to the
Lender Parties hereunder, and to modify their Commitments in
order to provide funds for general corporate purposes, including,
without limitation, to finance permitted acquisitions and Capital
Expenditures and to provide working capital for the Borrowers and
their respective Subsidiaries. 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.
(2) Simultaneously with the execution hereof, the
Existing Working Capital B-2 Lenders have entered into an
Assignment and Agreement in the form of Exhibit J attached hereto
dated as of the date hereof (the "Assignment Agreement"), with
the Working Capital B-2 Lenders and Working Capital B-3 Lenders
hereunder pursuant to which such Existing Working Capital B-2
Lenders have agreed to sell and assign to the Working Capital B-2
Lenders and the Working Capital B-3 Lenders, and the Working
Capital B-2 Lenders and Working Capital B-3 Lenders have agreed
to purchase and assume, as of the Restatement Date, all of such
Existing Working Capital B-2 Lenders' rights and obligations
under the Existing Credit Agreement on the terms set forth in the
Assignment Agreement. After giving effect to such sale and
assignment as of the Restatement Date, the Commitments of and the
amount of Advances owing to each of the Working Capital B-2
Lenders and Working Capital B-3 Lenders will be as set forth on
Schedule I.
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 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),
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 and (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.
"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 and, in the case of any Working Capital B-3
Advance, such Lender Party's Eurocurrency Lending Office
located in Italy.
"Applicable Margin" means (a) from the date hereof
until December 31, 1996, 0.0% per annum for Base Rate
Advances and 0.875% per annum for Eurocurrency Rate Advances
and (b) thereafter, a percentage per annum determined by
reference to the Total Debt/EBITDA Ratio as set forth below:
Total Debt/EBITDA Ratio Base Rate Advances Eurocurrency
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) from the date hereof
until December 31, 1996, 0.25% per annum for commitment
fees, 0.625% per annum for Trade Letter of Credit fees and
0.875% per annum for Standby Letter of Credit fees and (b)
thereafter, a percentage per annum determined by reference
to the Total Debt/EBITDA Ratio as set forth below:
Total Debt/EBITDA Commitment Trade Letter Standby Letter
Ratio Fees of Credit Fees Of Credit Fees
Level I
less than or equal
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 Agreement" has the meaning specified in the
Preliminary Statements.
"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)
$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)
$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
Dollar amount (or Equivalent in 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 Dollar amount (or Equivalent in 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)
$10,000,000 minus the B-2 Facility Overage at such time and
(b) the excess, if any, of the aggregate principal Dollar
amount (or Equivalent in 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.
"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.
"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 2.07(a)(i).
"Borrower's Account" means, with respect to any
Borrower in respect of Dollars or any Foreign Currency, the
account of such Borrower maintained by Citibank set forth
opposite such Borrower for 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 or B-3
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.
"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 substitutions 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 $1 billion, (c) commercial paper in an aggregate
amount of no more than $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 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 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 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 2.09, 2.10 or 2.11.
"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(g)(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 2.16(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 2.14 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 2.16(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(c).
"Dollars" and the "$" sign each means lawful money of
the United States of America.
"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.
"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 $70,000,000 in the aggregate and (h) non-recurring
restructuring charges in an amount not to exceed $30,000,000
in any Fiscal Year or $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, disposal, 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 Dollars of any Foreign Currency on any
date means the equivalent in 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 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, and the
"Equivalent" in any Foreign Currency of Dollars means the
equivalent in such Foreign Currency of 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 Dollars in London prior to 11:00
A.M. (London time) on such date as is required pursuant to
the terms of this Agreement.
"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 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, $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 2.07(a)(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,
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.
"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
and those B-3 Borrowers listed on Schedule V hereto.
"Initial Extension of Credit" means, (a) with respect
to each B-2 Borrower, the earlier to occur of the initial
Borrowing by such B-2 Borrower and the initial issuance of a
Letter of Credit to such B-2 Borrower hereunder, and (b)
with respect to each B-3 Borrower, the initial Borrowing by
such B-3 Borrower.
"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 or the Working Capital B-1 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 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 M 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 2.04(f)(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 2.05.
"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) $50,000,000, as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"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 2.05.
"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 2.05.
"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) $20,000,000, as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"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) $30,000,000, as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"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 and (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.
"Local Rate Advance" shall mean each Working Capital
B-2 Advance or each Working Capital B-3 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.
"Louisiana Undertaking" has the meaning specified in
Section 3.01(g)(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 $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
$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.
"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 or a Working
Capital B-3 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 2.13(b).
"Payment Office" means with respect to any Working
Capital B-2 Advance or Working Capital B-3 Advance, the
office of Citibank set forth opposite the caption "Working
Capital B-2 Advances" and "Working Capital B-3 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.
"Parent Guaranty" has the meaning specified in
Section 3.01(g)(iii).
"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 and (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.
"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 and Working Capital B-3
Commitments at such time, or, if the Working Capital A
Commitments, Working Capital B-1 Commitments, Working
Capital B-2 Commitments and Working Capital B-3 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 and Working Capital
B-3 Advances (in each case, based on the Equivalent in
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 and Working Capital B-3
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 December
19, 1996 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.
"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(g)(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 $2,000,000 or such other
amount (not to exceed, in any event, $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(f) 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(f).
"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(g) 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.
<PAGE>
"Swing Line B-1 Facility" has the meaning specified in
Section 2.01(g).
"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 2.13(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 and the Letter of Credit Commitments pursuant to
Section 2.05 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.
"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
$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 $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 $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(g)(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 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 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 Dollars of all Swing Line Advances made under such
Working Capital Facility by the Swing Line Bank pursuant to
Section 2.01(f) or (g), 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(i) and (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(j) and 2.01(k).
"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(b).
"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 2.05.
"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 or Working Capital B-3 Advance.
"Working Capital B-1 Advance" has the meaning specified
in Section 2.01(c).
"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 2.05.
"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(d).
"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 2.05.
"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(e).
"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 2.05.
"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 or a Working Capital B-3 Borrowing.
"Working Capital Commitment" means a Working Capital A
Commitment, a Working Capital B-1 Commitment, a Working
Capital B-2 Commitment or a Working Capital B-3 Commitment.
"Working Capital Facility" means a Working Capital A
Facility, a Working Capital B-1 Facility, a Working Capital
B-2 Facility or a Working Capital B-3 Facility.
"Working Capital Lender" means a Working Capital A
Lender, a Working Capital B-1 Lender, a Working Capital B-2
Lender or a Working Capital B-3 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) Purchase of
Assignments. Each Working Capital B-2 Lender and each Working
Capital B-3 Lender severally agrees, on the terms and conditions
hereinafter set forth, to purchase and assume on the Restatement
Date an undivided interest in the rights and obligations of the
Existing Working Capital B-2 Lenders under the Existing Credit
Agreement in an amount up to such Working Capital B-2 Lender's
Working Capital B-2 Commitment hereunder and such Working Capital
B-3 Lender's Working Capital B-3 Commitment hereunder, such
purchase to be effected by assigning each Existing Working
Capital B-2 Lender's "Working Capital B-2 Commitment" under the
Existing Credit Agreement to the Working Capital B-2 Lenders and
Working Capital B-3 Lenders hereunder. Such purchase shall be
made on such notice, and otherwise on such terms, as are provided
under this Agreement as though such purchase were a Borrowing
hereunder. In furtherance of the foregoing, each Working Capital
B-2 Lender and Working Capital B-3 Lender hereby authorizes and
directs the Agent to accept the Assignment Agreement on behalf of
the Working Capital B-2 Lenders and Working Capital B-3 Lenders.
(b) 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 $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(f),
$1,000,000) or an integral multiple of $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 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(b),
prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(b).
(c) 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 $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(g), $1,000,000) or an integral multiple of $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 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(c), prepay pursuant to Section 2.06(a)
and reborrow under this Section 2.01(c).
(d) 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 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 $1,000,000 (or the Equivalent thereof in any
Foreign Currency) or an integral multiple of $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(d),
prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(d).
(e) 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 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 $1,000,000 (or the Equivalent thereof in any
Foreign Currency) or an integral multiple of $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(e),
prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(e).
(f) 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 $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 $500,000 or an integral multiple of $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(f), repay
pursuant to Section 2.04(e) or prepay pursuant to Section 2.06(a)
and reborrow under this Section 2.01(f).
(g) 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 $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 $500,000 or an integral multiple of $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(g),
repay pursuant to Section 2.04(e) or prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(g).
(h) 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. 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(h), 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(h).
(i) 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(i) shall equal the
Seoul Guaranty Amount from time to time.
(j) 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(j) shall equal the B-2 Facility Overage from time to time.
(k) 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(k) shall equal the B-3 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 (x) 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, (y) 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, 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(f) or (g), 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 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 or Working
Capital B-1 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 2.11, 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 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) $5,000,000 in the case of any Working
Capital A Advance or any Working Capital B-1 Advance and (B)
$1,000,000 (or the Equivalent thereof in any Foreign Currency) in
the case of any Working Capital B-2 Advance or any Working
Capital B-3 Advance, or if the obligation of the Appropriate
Lenders to make Eurocurrency Rate Advances shall then be
suspended pursuant to Section 2.10 or Section 2.11 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 2.07 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 2.15 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(i); 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. 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) 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.
(f) 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 2.05. 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 $10,000,000 or an integral multiple of $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 (vii) 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
(vii).
SECTION 2.06. 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 $5,000,000 or an
integral multiple of $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 $1,000,000 (or
the Dollar Equivalent in the Foreign Currency of such Advance) or
an integral multiple of $100,000 (or the Dollar Equivalent in
the Foreign Currency of such Advance), in each case in 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
B1 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) $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) $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 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.
(vi) 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.
(vii) Prepayments of the Working Capital A Facility,
Working Capital B-1 Facility, Working Capital B-2 Facility or
Working Capital B-3 Facility made pursuant to clause (i), (ii),
(iii) or (iv) 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.
(vii) 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 2.07. Interest. (a) 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
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.
(b) 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 Dollars or
the applicable Foreign Currency, as the case may be, in arrears
on the dates referred to in clause (a)(i) or (a)(ii) 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 (a)(i) or (a)(ii) 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 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 (a)(i) or (a)(ii)
above, and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above.
(c) 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)(i) or (ii).
SECTION 2.08. 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 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 8.18, each B-2 Borrower and B-3 Borrower shall only be
responsible for such B-2 Borrower's or B-3 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
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 8.18, 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 8.18, each B-2 Borrower and B-3
Borrower shall only be responsible for such B-2 Borrower's or B-3
Borrower's Borrower's Share of such Agent's Fees.
SECTION 2.09. 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 or the Working Capital B-1
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 2.07 and 2.10, 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 shall be made only on the last day of an
Interest Period for such Eurocurrency Rate Advances, any
Conversion of Base Rate Advances 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 $5,000,000, or $1,000,000
(or the Dollar Equivalent thereof) in the case of Working Capital
B-2 Advances and Working Capital B-3 Advances, such Advances
shall automatically (A) if such Eurocurrency Rate Advances are
denominated in 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
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 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
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 shall be suspended.
SECTION 2.10. 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 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 (excluding for
purposes of this Section 2.10 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.13 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 8.18, each B-2 Borrower and
B-3 Borrower shall only be responsible for such B-2 Borrower's or
B-3 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 or to issue Letters of Credit
hereunder and other commitments of such type 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 or to
issue Letters of Credit hereunder or to 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 8.18, each B-2 Borrower shall
only be responsible for such B-2 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.
SECTION 2.11. Illegality. 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 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 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 Dollars and converted into a Base Rate Advance.
SECTION 2.12. 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 2.16), not later than 11:00 A.M. (New York
City time) on the day when due in 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 2.16), 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 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 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 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
shall be stated to be due on a day other than a Business Day,
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 2.13. Taxes. (a) Any and all payments by any
Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.12, 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 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 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 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 2.13)
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
from the execution, delivery or registration of, performance
under, or otherwise with respect to, this Agreement or any of the
Notes (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 2.13) 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 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 and Belgium
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 or the Kingdom of The
Netherlands, the Federal Republic of Germany, Italy or Belgium,
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 or the Notes (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 or the Notes 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 and (g) in
the case of C & K Services SA (a Belgian coordination center)
withholding taxes imposed by Belgium.
(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 2.13(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 2.13(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 or Belgium,
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
2.13 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 2.13(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 2.14. 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 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
at such time) of payments on account of the Obligations due and
payable to all Lender Parties hereunder and under the Notes 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 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 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 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 2.14 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 2.15. 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 2.16. 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 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 2.16.
(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 2.16.
(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 2.16 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 December 19, 1996, on which each of the following
conditions precedent shall have been satisfied:
(a) The Assignment Agreement shall be in full force
and effect and shall not have been terminated and, pursuant
thereto, the Commitments and Advances (as defined in the
Existing Credit Agreement) of each Existing Working Capital
B-2 Lender shall have been sold and assigned to the Working
Capital B-2 Lenders and Working Capital B-3 Lenders
hereunder on the terms and in the amounts set forth in the
Assignment Agreement.
(b) All Existing Lenders shall have consented to this
Amended and Restated Credit Agreement.
(c) 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).
(d) 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).
(e) 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.
(f) 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).
(g) 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 to each B-2 Borrower and each B-3 Borrower.
The obligation of each Working Capital B-2 Lender and each
Working Capital B-3 Lender to make a Working Capital B-2 Advance
and a Working Capital B-3 Advance, respectively, or of the
Issuing Bank to issue a Letter of Credit under the Working
Capital B-2 Facility, in each case on the occasion of the Initial
Extension of Credit to each B-2 Borrower and B-3 Borrower
hereunder is subject to satisfaction of the following conditions
precedent with respect to such B-2 Borrower or B-3 Borrower
before or concurrent with the Initial Extension of Credit to such
B-2 Borrower or B-3 Borrower:
(a) The Lender Parties shall be satisfied with the
corporate and legal structure and capitalization of such B-2
Borrower or B-3 Borrower and each of its respective Subsidiaries,
including the terms and conditions of the charter, bylaws (or
analogous organizational documents) and each class of capital
stock of each such B-2 Borrower or B-3 Borrower and each such
respective 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 to such B-2 Borrower or B-3 Borrower,
as the case may be, the following with respect to such B-2
Borrower or B-3 Borrower, 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
Notes) 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 on or before
the date of the Initial Extension of Credit, 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 on or before 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 3.02(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) A favorable opinion of Wachtell, Lipton, Rosen &
Katz, special counsel for the B-2 Borrowers and B-3
Borrowers, 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 foreign local counsel to
such B-2 Borrower or B-3 Borrower, as the case may be, as
listed on Schedule 3.02(b)(viii) in the jurisdictions listed
on Schedule 3.02(b)(viii) in form and substance satisfactory
to the Agent 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
and Issuance. The right of the Borrowers to request and the
obligation of each Appropriate Lender to make an Advance (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 to any B-2 Borrower or B-3 Borrower),
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 or issuance (a) the
following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Swing Line Borrowing or
Notice of Issuance and the acceptance by the relevant Borrower of
the proceeds of such Borrowing or of such 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
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 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 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 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 to each B-2 Borrower and B-3
Borrower specifying its objection thereto and, if such Initial
Extension of Credit consists of a Borrowing, such Lender Party
shall not have made available to the Agent such Lender Party's
ratable portion of such Borrowing.
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 and B-3 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 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 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 $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 $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 $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 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 $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.
<PAGE>
(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 $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 $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 $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 $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
$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;
<PAGE>
(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.
(l) Conditions Subsequent. Deliver to the Agent, in
form and substance satisfactory to the Agent and in
sufficient copies for each Lender Party, as soon as possible
and in any event within 120 days after the Initial Extension
of Credit (or such later date as may be agreed by Crompton
Corp. and the Agent) evidence that Uniroyal Chimica S.p.A.
has completed all necessary actions required of it to cause
the release of all liens created under the Existing Italian
Credit Agreement.
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit 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;
<PAGE>
(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
government 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 $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 5.02(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
U.S.$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 $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 $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, $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, $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 $10,000,000
in the case of the Crompton A Borrowers and
$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) $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 $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 $125,000,000 at any
time outstanding,
(K) other Debt in an aggregate amount not
to exceed $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
$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 $1,000,000 at any
time outstanding,
(N) intercompany Debt owing to Crompton &
Knowles I.P.R. Corporation in an amount not to
exceed $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 $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 $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
$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 $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 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)
$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 $25,000,000
shall be applied to the permanent reduction of the
Facilities in accordance with Section 2.05(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, and
(ix) the transfer of assets among Loan Parties
to the extent permitted under Section 5.02(f)(vii).
(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 $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 $50,000,000 in any
Fiscal Year or $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 $25,000,000 in any
Fiscal Year or $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 $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
$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 $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, $15,000,000, and in
any Fiscal Year thereafter the greater of (I) $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 $100,000,000
December 31, 1997 $100,000,000
December 31, 1998 $110,000,000
December 31, 1999 $110,000,000
December 31, 2000 $110,000,000
December 31, 2001
and thereafter $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 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 30 days after the end of each Fiscal
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 Fiscal Year following such Fiscal Year
then ended and for each Fiscal Year thereafter until the
Termination Date.
(e) Annual Budget. As soon as available and in any
event within 30 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(c), 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 $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 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 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 2.15,
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
$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 $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 $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 $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 $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
$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))
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 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, 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 8.18, each B-2 Borrower and
B-3 Borrower shall only be responsible for such B-2 Borrower's or
B-3 Borrower's Borrower's Share of such amount. If at any time
the Agent determines that any funds held in such L/C 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, the Borrowers jointly and
severally agree to, forthwith upon demand by the Agent, 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 8.18, each B-2 Borrower and each
B-3 Borrower shall only be responsible for such B-2 Borrower's or
such B-3 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(i). If, at
any time and from time to time, any Working Capital B-1
Commitments are reserved pursuant to Section 2.01(i) 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 $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 any B-2 Borrower
or B-3 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 2.06 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: Robert Kosian; 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 8.18, each B-2 Borrower and B-3
Borrower shall only be responsible for such B-2 Borrower's or B-3
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 8.18, each B-2 Borrower and B-3 Borrower shall
only be responsible for such B-2 Borrower's or B-3
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 2.09(b)(i) or
2.10(d), 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 2.10 and 2.13 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 2.10 or 2.13 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 $20,000,000 or, if the aggregate amount of the
Commitment of such assigning Lender is less than 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 $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 or A-4
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 $10,000,000
and shall be in an integral multiple of $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 $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 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 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 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 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
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 Dollars with such other currency; if the
Dollars so purchased are less than such sum due to such
Lender Party or the Agent (as the case may be) in 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 Dollars so purchased exceed such sum due to any
Lender Party or the Agent (as the case may be) in 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. 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.
SECTION 8.18. Limitation on B-2 Borrower Obligations
and B-3 Borrower Obligations. Notwithstanding anything herein to
the contrary, to the extent a B-2 Borrower or a B-3 Borrower is
purported to owe any amounts hereunder, such B-2 Borrower or B-3
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 or any B-3
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 or B-3 Borrower is
incorporated, then such undertakings and obligations of such B-2
Borrower or B-3 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 or B-3 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 or B-3 Borrower's
share capital, such B-2 Borrower or B-3 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.
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/ Charles J. Marsden
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By /s/ Charles J. Marsden
Title:
DAVIS-STANDARD CORPORATION
By /s/ Charles J. Marsden
Title:
INGREDIENT TECHNOLOGY
CORPORATION
By /s/ Charles J. Marsden
Title:
UNIROYAL CHEMICAL COMPANY,
INC.
By /s/ Charles J. Marsden
Title:
C & K SERVICES SA
By /s/ Charles J. Marsden
Title:
DAVIS-STANDARD (DEUTSCHLAND)
GMBH
By /s/ Charles J. Marsden
Title:
DAVIS STANDARD (FRANCE) SARL
By /s/ Charles J. Marsden
Title:
ER-WE-PA DAVIS-STANDARD GMBH
By /s/ Charles J. Marsden
Title:
UNIROYAL CHEMICAL B.V.
By /s/ Frank Manganella
Title:
UNIROYAL CHEMICAL LTD.
By /s/ Frank Manganella
Title:
UNIROYAL CHIMICA S.P.A.
By /s/ Frank Manganella
Title:
CITICORP USA, INC., as Agent
By /s/ Robert Kosian
Title: Attorney-In-Fact
THE CHASE MANHATTAN BANK,
as Managing Agent
By /s/ Robert Sacks
Title: Vice President
Working Capital A Lenders
Working Capital B-1 Lenders
CITICORP USA, INC.
By /s/ Robert Kosian
Title: Attorney-In-Fact
THE CHASE MANHATTAN BANK
By /s/ Robert Sacks
Title: Vice President
ABN AMRO BANK N.V., NEW YORK
BRANCH
By /s/ George Dugan
Title: Vice President
By /s/ Darin Cohen
Title: C.B.O.
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By /s/ Charles Dougherty
Title: C. Dougherty, VP
By /s/ B. Carlson
Title: B. Carlson, AVP
BANK OF AMERICA ILLINOIS
By /s/ Wendy L. Loring
Title: Vice President
THE BANK OF NEW YORK
By /s/ David P. Judge
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ Joann Keller
Title: Senior Vice President
BHF - BANK AKTIENGESELLSCHAFT
By /s/ John Sykes
Title: AVP
By /s/ Evon Contos
Title: VP
CIBC INC.
By /s/ Judy Domkowski
Title: Director, CIBC Wood Gundy
Security Corp., As Agent
CORESTATES BANK, N.A.
By /s/ Brian M. Haley
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary Collier
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Lance M. Zarenva
Title:
FLEET NATIONAL BANK
By /s/ Robert C. Rubino
Title: V.P.
SOCIETE GENERALE NEW YORK BRANCH
By /s/ Allen Zinser
Title: Assistant Vice President
TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge Garcia
Title: Vice President
Working Capital B-2 Lenders
CITIBANK, N.A.
By /s/ Robin F. Lenna
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ Robert Sacks
Title: Vice President
ABN AMRO BANK N.V., NEW YORK
BRANCH
By /s/ George M. Dugan
Title: Vice President
By /s/ Darin Cohen
Title: C.B.O.
BANK OF AMERICA ILLINOIS
By /s/ Wendy L. Loring
Title: Vice President
THE BANK OF NEW YORK
By /s/ David P. Judge
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ Joann Keller
Title: Senior Vice President
<PAGE>
BHF - BANK AKTIENGESELLSCHAFT
By /s/ John Sykes
Title: AVP
By /s/ Evon Contos
Title: VP
CIBC WOOD GUNDY PLC
By /s/ Judy Domkowski
Title: Power of Attorney
CORESTATES BANK, N.A.
By /s/ Brian M. Haley
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary Collier
Title: Vice President
FIRST UNION NATIONAL BANK
By /s/ Lance M. Zarenva
Title:
FLEET NATIONAL BANK
By /s/ Robert C. Rubino
Title: V.P.
TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge A. Garcia
Title: Mgr. Cr. Admin.
Working Capital B-3 Lenders
CITIBANK, N.A.,
MILAN BRANCH
By /s/ Nicoletta Zappatini
Title: Vice President
BANCA COMMERCIALE ITALIANA,
LATINA BRANCH
By /s/ Charles Dougherty As Power
Of Attorney
Title:C. Dougherty, VP
By /s/ B. Carlson, As Power of
Attorney
Title: B. Carlson, AVP
BANK OF AMERICA NT & SA,
MILAN BRANCH
By /s/ Luca Sala
Title:
CHASE MANHATTAN BANK,
MILAN BRANCH
By /s/ Luca Preziose
Title: Associate
SOCIETE GENERALE
MILAN BRANCH
By /s/ Guido Rosa
Title:
Initial Issuing Banks
CITIBANK, N.A.
By /s/ Robin F. Lenna
Title: Vice President
BANK OF BOSTON CONNECTICUT
By /s/ Joann Keller
Title: Senior Vice President
CITIBANK, N.A., LONDON BRANCH
By /s/ William W. Conklin
Title: Vice President
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of
Initial Letter
Lender/ Working Working Working Working of Credit
Initial Capital A Capital B-1 Capital B-2 Capital B-3 Commitment
Issuing Commitment Commitment Commitment Commitment Facility)
Bank
Citicorp $30,000,000 $15,000,000 N/A N/A N/A
USA, Inc.
Citibank,
N.A. N/A N/A $4,500,000 N/A $25,000,000(A)
$10,000,000(B-1)
Citibank,
N.A.
Milan N/A N/A N/A $6,750,000 N/A
Branch
The Chase $25,000,000 $12,500,000 $3,750,000 N/A N/A
Manhattan
Bank
The Chase N/A N/A N/A $8,750,000 N/A
Manhattan
Bank, Milan
Branch
Name of
Initial Letter
Lender/ Working Working Working Working of Credit
Initial Capital A Capital B-1 Capital B-2 Capital B-3 Commitment
Issuing Commitment Commitment Commitment Commitment Facility)
Bank
ABN AMRO $20,000,000 $10,000,000 $6,750,000 N/A N/A
Bank N.V.,
New York
Branch
Banca $12,500,000 $6,250,000 N/A N/A N/A
Commerciale
Italiana
New York
Branch
Banca N/A N/A N/A $6,250,000 N/A
Commerciale
Italiana
Latina
Branch
Bank of $20,000,000 $10,000,000 N/A N/A N/A
America
Illinois
Bank of N/A N/A $3,000,000 N/A N/A
America
NT&SA
London
Branch
Name of
Initial Letter
Lender/ Working Working Working Working of Credit
Initial Capital A Capital B-1 Capital B-2 Capital B-3 Commitment
Issuing Commitment Commitment Commitment Commitment Facility)
Bank
Bank of N/A N/A N/A $7,000,000 N/A
America
NT&SA
Milan
Branch
Bank of $20,000,000 $10,000,000 $3,000,000 N/A $25,000,000 (A)
Boston $10,000,000 (B-1)
Connecticut
The Bank $20,000,000 $10,000,000 $3,000,000 N/A N/A
of
New York
BHF-Bank $20,000,000 $10,000,000 $3,000,000 N/A N/A
Aktiengesellschaft
CIBC Inc.$20,000,000 $10,000,000 N/A N/A N/A
Name of
Initial Letter
Lender/ Working Working Working Working of Credit
Initial Capital A Capital B-1 Capital B-2 Capital B-3 Commitment
Issuing Commitment Commitment Commitment Commitment Facility)
Bank
CIBC N/A N/A $3,000,000 N/A N/A
Wood Gundy
Plc
CoreStates $20,000,000 $10,000,000 $3,000,000 N/A N/A
Bank, N.A.
Credit $20,000,000 $10,000,000 $3,000,000 N/A N/A
Lyonnais
New York
Branch
First Union $20,000,000 $10,000,000 $3,000,000 N/A N/A
National Bank
Fleet $20,000,000 $10,000,000 $3,000,000 N/A N/A
National
Bank
Name of
Initial Letter
Lender/ Working Working Working Working of Credit
Initial Capital A Capital B-1 Capital B-2 Capital B-3 Commitment
Issuing Commitment Commitment Commitment Commitment Facility)
Bank
Societe $12,500,000 $6,250,000 N/A N/A N/A
Generale
New York
Branch
Societe N/A N/A N/A $6,250,000 N/A
Generale
Milan
Branch
Toronto $20,000,000 $10,000,000 N/A N/A N/A
Dominion
(New York), Inc.
The Toronto- N/A N/A $3,000,000 N/A N/A
Dominion Bank
__________ ____________ ___________ ____________ _____________
Total
Commitments:
$300,000,000 $150,000,000 $45,000,000 $35,000,000 $50,000,000(A)
$20,000,000(B-1)
Eurocurrency Eurocurrency Eurocurrency
Lending Lending Lending Office
Domestic Office Office for Working
Lending/ for Working for Working Capital
Issuing Capital A and Capital B-2 B-3
Office B-1 Advances Advances Advances
399 Park Avenue 399 Park Avenue N/A N/A
New York, NY 10043 New York, NY 10043
Attn: Robin Lenna Attn: Robin Lenna
TEL: (212) 559-3974 TEL: (212) 559-3974
FAX: (212) 793-1290 FAX: (212) 793-1290
399 Park Avenue N/A P.O. Box 12068 N/A
New York, NY 10043 Counting House
Attn: Robin Lenna 53 Pooley Street
TEL: (212) 559-3974 London SE12GA
FAX: (212) 793-1290 Attn: Ken Purchase/
David Williams
TEL: 44-171-500-9675
FAX: 44-171-500-9701
N/A N/A N/A Foro Bounaparte 16
20121 Milan, Italy
Attn:NicolettaZappatini
TEL: 39-2-86474-583
FAX: 39-2-86474-200
270 Park Avenue 270 Park Avenue 1 Chaseside N/A
New York, NY 10017 New York, NY 10017 Bournemouth, Dorset
Attn:Robert T. Sacks Attn:Robert T. Sacks BH77DB
TEL:(212)552-2331 TEL:(212)552-2331 Attn:European Loans
FAX:(212)552-7175 FAX:(212)552-7175 TEL: 0120-234-2020
FAX: 0120-234-3706
N/A N/A N/A Via Catena, No. 4
20121 Milan, Italy
Attn:Luca Preziose
TEL:39-2-8895-2007
FAX:39-2-8895-2567
Eurocurrency Eurocurrency Eurocurrency
Lending Lending Lending Office
Domestic Office Office for Working
Lending/ for Working for Working Capital
Issuing Capital A and Capital B-2 B-3
Office B-1 Advances Advances Advances
500 Park Avenue 500 Park Avenue 500 Park Avenue N/A
New York, NY 10022 New York, NY 10022 New York, NY 10022
Attn:Melissa Jeter Attn:Melissa Jeter Attn:Melissa Jeter
TEL:(212)446-4224 TEL:(212)446-4224 TEL:(212) 446-4224
FAX:(212)832-7468 FAX:(212)832-7468 FAX:(212) 832-7468
One William St One William St N/A N/A
New York, NY 10004 New York, NY 10004
Attn:Brian Carlson Attn:Brian Carlson
TEL:(212)607-3886 TEL:(212)607-3886
FAX:(212)809-2124 FAX:(212) 809-2124
N/A N/A N/A Via Cerveteri, 2
04100 Latina, Italy
Attn:Sandro Barmucci
TEL:39-7-73-486-034
FAX:39-7-73-694-109
with a copy to:
Brian Carlson
One William Street
New York, NY 10004
200 W. Jackson Blvd 200 W. Jackson Blvd N/A N/A
Chicago, IL 60697 Chicago, IL 60697
Attn:Richard DiMatteo Attn:Richard DiMatteo
TEL:(312) 828-1988 TEL:(312) 828-1988
FAX:(312) 974-9626 FAX:(312) 974-9626
N/A N/A 1 Alie Street N/A
London E1 8DE England
Attn: Keith Thomas
TEL: 44-171-634-4436
FAX: 44-171-634-4707
Eurocurrency Eurocurrency Eurocurrency
Lending Lending Lending Office
Domestic Office Office for Working
Lending/ for Working for Working Capital
Issuing Capital A and Capital B-2 B-3
Office B-1 Advances Advances Advances
N/A N/A N/A Corso Matteotti, 10
20121 Milan, Italy
Attn:Louis Moncada
TEL:39-2-760-69-341
FAX:39-2-760-69-210
1 Landmark Sq. 1 Landmark Sq. 1 Landmark Sq. N/A
20th Floor 20th Floor 20th Floor
Stamford, CT 06901 Stamford, CT 06901 Stamford, CT 06901
Attn:JoAnn Keller Attn:JoAnn Keller Attn: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
1 Wall Street 1 Wall Street 1 Wall Street N/A
22nd Floor 22nd Floor 22nd Floor
New York, NY 10286 New York, NY 10286 New York, NY 10286
Attn: David Judge Attn: David Judge Attn: David Judge
TEL:(212) 635-6861 TEL:(212) 635-6861 TEL:(212) 635-6861
FAX:(212) 635-6999 FAX:(212) 635-6999 FAX:(212) 635-6999
590 Madison Avenue 590 Madison Avenue 590 Madison Avenue N/A
New York, NY 10022 New York, NY 10022 New York, NY 10022
Attn: Linda Pace Attn: Linda Pace Attn: Linda Pace
TEL:(212)756-5915 TEL:(212)756-5915 TEL:(212)756-5915
FAX:(212)756-5536 FAX:(212)756-5536 FAX:(212) 756-5536
2727 Paces Ferry Rd 2727 Paces Ferry Rd 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
Eurocurrency Eurocurrency Eurocurrency
Lending Lending Lending Office
Domestic Office Office for Working
Lending/ for Working for Working Capital
Issuing Capital A and Capital B-2 B-3
Office B-1 Advances Advances Advances
N/A N/A CIBC, Cottons Centre N/A
Cottons Lane
SE1 2QL London, England
Attn: Andy Rose
TEL: 44-171-234-6151
FAX: 44-171-234-6433
1345 Chestnut St 1345 Chestnut St 24 Monument Street N/A
P.O. Box 7618 P.O. Box 7618 London EC3R 8AJ
Phil., PA 19101 Phil., PA 19101 England
Atn:Brian M. HaleyAtn:Brian M. Haley Attn: Ruth 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
1301 Ave. of the 1301 Ave. of the 1301 Ave. of the N/A
Americas Americas Americas
New York, NY 10019 New York, NY 10019 New York, NY 10019
Attn: Tom Randolph Attn: Tom Randolph Attn: Tom Randolph
TEL:(212) 261-7344 TEL:(212) 261-7344 TEL:(212) 261-7431
FAX:(212) 459-3179 FAX:(212) 459-3179 FAX:(212) 459-3179
550 Broad St, 550 Broad St, 550 Broad Street, 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
One Landmark Sq. One Landmark Sq. One Landmark Sq. N/A
12th Floor 12th Floor 12th Floor
Stamford, CT 06904 Stamford, CT 06904 Stamford, CT 06904
Atn:Ginny Rockwood Atn:Ginny Rockwood Atn:Ginny Rockwood
TEL:(203)358-6146 TEL:(203)358-6146 TEL:(203)358-6146
FAX:(203)358-6111 FAX:(203)358-6111 FAX:(203) 358-61111
Eurocurrency Eurocurrency Eurocurrency
Lending Lending Lending Office
Domestic Office Office for Working
Lending/ for Working for Working Capital
Issuing Capital A and Capital B-2 B-3
Office B-1 Advances Advances Advances
221 Ave. of 1221 Ave. of N/A N/A
the Americas the Americas
NY, NY 10020 NY, NY 10020
Atn:Maggie Attn:Maggie
O'Donnell O'Donnell
TEL:(212)278-6853 TEL:(212)278-6853
FAX:(212)278-7490 FAX:(212) 278-7490
N/A N/A N/A Sedi di Milano
Foro Bounaparte, 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
NY, NY 10020
909 Fannin, 909 Fannin, N/A N/A
Suite 1700 Suite 1700
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
N/A N/A N/A Triton Court N/A
14/18 Finsbury Sq
London EC2A-1DB England
Attn:Denise Payne
TEL:011-44-171-920-0272
FAX:011-44-171-638-2551
SCHEDULE II
DELAWARE LOAN PARTIES
CK Holding Corporation
Crompton & Knowles Overseas Corporation
Davis-Standard Corporation
Crompton & Knowles Colors Incorporated
Ingredient Technology Corporation
Uniroyal Chemical Corporation
Uniroyal Chemical Brazil Holding, Inc.
Lokar Enterprises, Inc.
Uniroyal Chemical Export Limited
SCHEDULE III
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
Schedule 4.01(d) to the Credit
Agreement is hereby incorporated
by reference.
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
(TO BE SUPPLEMENTED)
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, Itlay
Attention: Nicoletta Zappatini
SCHEDULE 3.01(d)
SURVIVING DEBT
( $ OOO'S ) *
OUT- UN-
STAND- USED
ING COM-
TOTAL BORROW- MIT-
I. LOAN FACILITIES DESCRIPTION LINE(S) INGS MENTS
CROMPTON & KNOWLES CORPORATION
INDUSTRIAL REV. BONDS INDUSTRIAL REVENUE BONDS 4,000 4,000 0
BANK OF NEW YORK UNSECURED SHORT-TERM DEBT 10,000 0 10,000
NEW ENGLAND LIFE INS.CO. LIFE INSURANCE POLICY LOAN 6,986 6,986 0
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN 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 PAYABLE & OVERDRAFT 2,544 0 2,544
GENERALE DE BANQUE NOTES PAYABLE & OVERDRAFT 954 0 954
ER-WA-PA DAVIS STANDARD GmbH
COMMERZBANK NOTES PAYABLE & OVERDRAFT 4,902 0 4,902
WESTDEUTSCHE LANDESBANK NOTES PAYABLE & OVERDRAFT 4,902 0 4,902
UNIROYAL CHEMICAL COMPANY, INC. (USA)
VARIOUS BONDHOLDERS 9% SR. SECURED NOTES 252,800 252,800 0
CREDIT SUISSE A/R SECURED LOAN FACILITY 15,000 5,306 9,694
UNIROYAL CHIMICA S.p.A. (ITALY)
BANCO DI NAPOLI OVERDRAFT & CURRENCY LOANS 2,610 670 1,940
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 AUTHORIT 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 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
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK L/C'S ISSUED FOR CROMPTON & KNOWLES 10,891
UNIROYAL CHEMICAL COMPANY, INC. (USA)
OVERSEAS PRIVATE INVESTMENT CBAHAMAS 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 GOVERNMEN 130
" GOVERNMENT RAILWAYS 6
BANCO DI NAPOLI TELEX EXPENSES COVERAGE IN FAVO 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 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)
Shares of Percentage of
Number of Issued and Securities
Shares/Class Outstanding Owned by its
Name/Place of Incorporation Authorized Capital Stock Immediate 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 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 & Knowles
(Korea) Ltd. 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.
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 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.
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) Compton 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 ) *
OUT- UN-
STAND- USED
ING COM-
TOTAL BORROW- MIT-
I. LOAN FACILITIES DESCRIPTION LINE(S) INGS MENTS
CROMPTON & KNOWLES CORPORATION
BANKERS TRUST COMPANY REVOLVING CREDIT AGREE. 125,000 75,000 50,000
FLEET BANK UNSECURED SHORT-TERM DEBT 27,200 27,200 0
FIRST UNION BANK UNSECURED SHORT-TERM DEBT 20,000 20,000 0
BANK OF NEW YORK UNSECURED SHORT-TERM DEBT 9,300 9,300 0
CHASE MANHATTAN BANK UNSECURED SHORT-TERM DEBT 15,000 15,000 0
INDUSTRIAL REV. BONDS INDUSTRIAL REVENUE BONDS 4,000 4,000 0
BANK OF NEW YORK UNSECURED SHORT-TERM DEBT 10,000 0 10,000
NEW ENGLAND LIFE INS. LIFE INSURANCE POLICY LOAN 6,986 6,986 0
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN 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 PAYABLE & OVERDRAFT 2,544 0 2,544
GENERALE DE BANQUE NOTES PAYABLE & OVERDRAFT 954 0 954
ER-WA-PA DAVIS STANDARD GmbH
COMMERZBANK NOTES PAYABLE & OVERDRAFT 4,902 0 4,902
WESTDEUTSCHE
LANDESBANNOTES PAYABLE & OVERDRAFT 4,902 0 4,902
UNIROYAL CHEMICAL COMPANY, INC. (USA)
VARIOUS BONDHOLDERS 9% SR. SECURED NOTES 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 BANOVERDRAFT 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 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
CROMPTON & KNOWLES COLORS, INC.,
DAVIS STANDARD CORP. &
INGREDIENT TECHNOLOGY CORP.
CHASE MANHATTAN BANK L/C'S ISSUED FOR CROMPTON & KNOWKES 10,891
UNIROYAL CHEMICAL COMPANY, INC. (USA)
OVERSEAS PRIVATE INVESTMENTBAHAMAS 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 8/9/96 7/10/90 346-323 Cyclone Roofing Mechanic
County Company Lien Claim
$15,962.00
NC - Mecklenburg 8/9/96 10/5/95 013981 McRae Graphics, Specified
County 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 8/7/96 8/29/95 003881 CMO Specified
County 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 Cred.Specified
Corporation Equipment
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 Specified
Corp. N/A Equipment
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
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
EXHIBIT A-1
FORM OF WORKING CAPITAL A PROMISSORY 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
Working Amount of Unpaid Notation
Capital A Principal Paid Principal Made By
Advance or Prepaid Balance
EXHIBIT A-2
FORM OF WORKING CAPITAL B-1 PROMISSORY 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
Working Amount of Unpaid Notation
Capital A Principal Paid Principal Made By
Advance or Prepaid Balance
EXHIBIT A-3
FORM OF WORKING CAPITAL B-2 PROMISSORY 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-2 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 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 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-2 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-2 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-2 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
Working Amount of Unpaid Notation
Capital A Principal Paid Principal Made By
Advance or Prepaid Balance
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 Credit Agreement dated as of
December 19, 1996 (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 and the B-3
Borrowers named therein (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
Amount of Amount of
Advance in Principal Unpaid
Type of Foreign Interest Paid or Principal Notation
Date Advance Currency Rate Prepaid Balance Made By
EXHIBIT B
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: Robert Kosian
[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]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the
Amended and Restated Credit Agreement, dated as of December 19,
1996 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 and the B-3 Borrowers named therein,
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.
Very truly yours,
[NAME OF BORROWER]
By
Title:
______________________
* For Working Capital A Advances and Working Capital B-1
Advances only.
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit
Agreement dated as of December 19, 1996 (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 and the B-3
Borrowers named therein (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):
1________ __, ____
[NAME OF ASSIGNOR], as Assignor
By
Title:
Dated: _________ __, ____
[NAME OF ASSIGNEE], as Assignee
By
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_______________
1 This date be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent.
Accepted 2[and Approved] this ____
day of ___________, ____
[NAME OF AGENT]
By
Title:
2[Approved this ____ day
of _____________, ____
CROMPTON & KNOWLES CORPORATION
By
Title: ]
___________________
2 Required if the Assignee is an Eligible Assignee soley by
reason of clause (a)(iii) or (b) of the definition of
Eligible Assignee.
EXHIBIT D-1
FORM OF CONSENT
Dated as of December __, 1996
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 Amended and Restated Credit Agreement
dated as of December __, 1996 (as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "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 and the B-3
Borrowers named therein, 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
Amended and Restated Credit Agreement and hereby confirm and
agree that notwithstanding the effectiveness of such 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
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 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-1
FORM OF CROMPTON SECURITY AGREEMENT
CROMPTON SECURITY AGREEMENT
Dated August 21, 1996
from
THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF
as Pledgors
to
CITICORP USA, INC.
as Agent
TABLE OF CONTENTS
Section Page
1. Grant of Security 2
2. Security for Obligations 3
3. Pledgors Remain Liable 4
4. Delivery of Security Collateral and Account Collateral 4
5. Maintaining the L/C Cash Collateral Accounts 4
6. Investing of Amounts in the L/C Cash Collateral Accounts 5
7. Release of Amounts 5
8. Representations and Warranties 6
9. Further Assurances 7
10. Voting Rights; Dividends; Etc. 8
11. Transfers and Other Liens; Additional Shares 9
12. Agent Appointed Attorney-in-Fact 10
13. Agent May Perform 10
14. The Agent's Duties 10
15. Remedies 11
16. Registration Rights 12
17. Indemnity and Expenses 13
18. Amendments; Waivers; Etc. 13
19. Addresses for Notices 14
20. Continuing Security Interest; Assignments 14
21. Release and Termination 15
22. Security Interest Absolute 15
23. Execution in Counterparts 15
24. Governing Law; Terms 16
Schedule I - Initial Pledged Shares and Initial Pledged Debt
Schedule II - Trade Names
Schedule III - Chief Executive Offices of Pledgors
Exhibit A - Form of Crompton Security Agreement Supplement
CROMPTON SECURITY AGREEMENT
CROMPTON SECURITY AGREEMENT dated August 21, 1996 made by
the Persons listed on the signature pages hereof and the
Additional Pledgors (as defined in Section 18(b)) (such Persons
so listed and the Additional Pledgors being, collectively, the
"Pledgors") to CITICORP USA, INC. ("Citicorp"), as agent (in such
capacity, the "Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
PRELIMINARY STATEMENTS.
(1) Crompton & Knowles Corporation ("Crompton Corp."),
Crompton & Knowles Colors Incorporated ("Crompton Colors"),
Davis-Standard Corporation ("Davis-Standard") and Ingredient
Technology Corporation ("ITC" and, together with Crompton Corp.,
Crompton Colors and Davis-Standard, the "Crompton Borrowers")
have entered into a Credit Agreement dated as of August 21, 1996
(said Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit
Agreement"; capitalized terms used herein and not otherwise
defined herein are used herein as therein defined) with Uniroyal
Chemical Company, Inc., the lender parties party thereto (the
"Lender Parties"), Citicorp Securities, Inc., as Arranger,
Citicorp USA, Inc., as Agent and The Chase Manhattan Bank, as
Managing Agent.
(2) Each Pledgor is the owner of the shares of stock set
forth opposite such Pledgor's name in Part I of Schedule I hereto
and issued by the corporations indicated therein and of the
indebtedness set forth opposite such Pledgor's name in Part II of
Schedule I hereto and issued by the obligors indicated therein.
(3) Each of the Crompton Borrowers have opened a
non-interest bearing (but subject to investment pursuant to
Section 6) cash collateral account (each, an "L/C Cash Collateral
Account") with Citibank at its office at 399 Park Avenue, New
York, New York 10043, which account is, in the case of Crompton
Colors, Account No. 4070-5777 in the case of Crompton Corp.,
Account No. 4070-5785, in the case of Davis-Standard, Account No.
4070-5769, and in the case of ITC, Account No. 4070-5793, each
such L/C Cash Collateral Account being in the name of such
Crompton Borrower but under the sole control and dominion of the
Agent and subject to the terms of this Agreement.
(4) Each Pledgor will derive substantial direct and indirect
benefit from the transactions contemplated by the Credit
Agreement.
(5) It is a condition precedent to the making of Advances
and the issuance of Letters of Credit by the Lender Parties under
the Credit Agreement and the entry by the Hedge Banks into Bank
Hedge Agreements with the Borrowers from time to time that each
Pledgor shall have granted the assignment and security interest
and made the pledge and assignment contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lender Parties to make Advances and to issue
Letters of Credit under the Credit Agreement and to induce the
Hedge Banks to enter into Bank Hedge Agreements with the
Borrowers from time to time, each Pledgor hereby agrees with the
Agent for the ratable benefit of the Secured Parties as follows:
SECTION 1. Grant of Security. Each Pledgor hereby assigns
and pledges to the Agent for the ratable benefit of the Secured
Parties, and hereby grants to the Agent for the ratable benefit
of the Secured Parties a security interest in, the following, in
each case, as to each type of property described below, whether
now owned or hereafter acquired by such Pledgor, wherever located
and whether now or hereafter existing (collectively, the
"Collateral"):
(a) All of the following (the "Security Collateral"):
(i) the shares of stock set forth opposite such
Pledgor's name in Part I of Schedule I hereto and issued by the
corporations indicated therein (collectively referred to herein
as the "Initial Pledged Shares", and together with the shares
referred to in clause (iii) below, the "Pledged Shares"),
together with the certificates representing such Initial Pledged
Shares and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Initial
Pledged Shares;
(ii) the indebtedness (whether or not evidenced by
instruments) set forth opposite such Pledgor's name in Part II of
Schedule I hereto and issued by the obligors indicated therein
(collectively referred to herein as the "Initial Pledged Debt",
and together with the indebtedness referred to in clause (iv)
below, the "Pledged Debt") and the instruments (if any)
evidencing such Initial Pledged Debt, all security therefor and
all interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such Initial Pledged Debt;
(iii) all additional shares of stock of any issuer of
any Initial Pledged Shares or of any other Loan Party or any
Subsidiary of any Loan Party or of any other Person from time to
time acquired by such Pledgor in any manner, and all additional
shares of stock of each other Subsidiary of such Pledgor to the
extent required pursuant to Section 5.01(k) of the Credit
Agreement, together with the certificates representing such
additional shares and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
shares; and
(iv) all additional indebtedness from time to time owed
to such Pledgor by any obligor of the Initial Pledged Debt
(whether or not evidenced by instruments) and the instruments
evidencing such indebtedness (if any), and all additional
indebtedness owed to such Pledgor by any other obligor to the
extent required pursuant to Section 5.01(k) of the Credit
Agreement, all security therefor and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such indebtedness;
provided, however, that the Pledged Shares shall not include
more than 66 2/3% of the issued and outstanding shares of stock
of any Foreign Subsidiary;
(b) All of such Pledgor's right, title and interest in and
to the following (collectively, the "Account Collateral"):
(i) each L/C Cash Collateral Account, all funds held
therein and all certificates and instruments, if any, from time
to time representing or evidencing such L/C Cash Collateral
Account;
(ii) all Collateral Investments (as hereinafter defined)
from time to time and all certificates and instruments, if any,
from time to time representing or evidencing the Collateral
Investments;
(iii) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Agent for or
on behalf of such Pledgor in substitution for or in addition to
any or all of the then existing Account Collateral; and
(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral; and
(c) All proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property
of the types described in clauses (a) and (b) of this Section 1)
and, to the extent not otherwise included, all (i) payments under
insurance (whether or not the Agent is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by reason of loss
or damage to or otherwise with respect to any of the foregoing
Collateral, and (ii) cash.
SECTION 2. Security for Obligations. This Agreement
secures, in the case of each Pledgor, the payment of all
Obligations of such Pledgor now or hereafter existing under the
Loan Documents, whether direct or indirect, absolute or
contingent, including any extensions, modifications,
substitutions, amendments and renewals thereof, whether for
principal (including reimbursement for amounts drawn under
Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or
otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement
secures, as to each Pledgor, the payment of all amounts that
constitute part of the Secured Obligations of such Pledgor and
that would be owed by such Pledgor to the Secured Parties under
the Loan Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Pledgor.
SECTION 3. Pledgors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Pledgor shall remain liable
under the contracts and agreements included in the Collateral to
the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release any Pledgor from any of
its duties or obligations under the contracts and agreements
included in the Collateral, and (c) no Secured Party shall have
any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement or any
other Loan Document, nor shall any Secured Party be obligated to
perform any of the obligations or duties of any Pledgor
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. Delivery of Security Collateral and Account
Collateral. All certificates or instruments representing or
evidencing any Security Collateral or Account Collateral shall be
delivered to and held by or on behalf of the Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably
satisfactory to the Agent. If any Event of Default shall have
occurred and be continuing, the Agent shall have the right to
transfer to or to register in the name of the Agent or any of its
nominees any or all of the Security Collateral and Account
Collateral, subject only to the revocable rights specified in
Section 10(a). In addition, the Agent shall have the right at
any time to exchange certificates or instruments representing or
evidencing the Security Collateral or Account Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 5. Maintaining the L/C Cash Collateral Accounts.
So long as any Advance shall remain unpaid, any Letter of Credit
or Bank Hedge Agreement shall be outstanding or any Lender Party
shall have any Commitment under the Credit Agreement:
(a) The Crompton Borrowers will maintain the L/C Cash
Collateral Accounts with Citibank.
(b) It shall be a term and condition of each the L/C Cash
Collateral Accounts, notwithstanding any term or condition to the
contrary in any other agreement relating to such L/C Cash
Collateral Account, as the case may be, and except as otherwise
provided by the provisions of Section 7 and Section 15, that no
amount (including interest on Collateral Investments) shall be
paid or released to or for the account of, or withdrawn by or for
the account of, any Crompton Borrower or any other Person from
the L/C Cash Collateral Accounts, as the case may be.
The L/C Cash Collateral Accounts shall be subject to such
applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other
appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 6. Investing of Amounts in the L/C Cash Collateral
Accounts. If requested by any Crompton Borrower and until the
Crompton Borrower in any way amends such request, the Agent will
direct Citibank to, subject to the provisions of Sections 7 and
15, from time to time (a) invest amounts on deposit in such
Crompton Borrower's L/C Cash Collateral Account in such Cash
Equivalents in the name of the Agent or as to which all action
required by Section 9 shall have been taken as such Crompton
Borrower may select and the Agent may approve and (b) invest
interest paid on the Cash Equivalents referred to in clause (a)
above, and reinvest other proceeds of any such Cash Equivalents
that may mature or be sold, in each case in such Cash Equivalents
in the name of the Agent or as to which all action required by
Section 9 shall have been taken as such Crompton Borrower may
select and the Agent may approve (the Cash Equivalents referred
to in clauses (a) and (b) above being collectively "Collateral
Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be
deposited and held in such L/C Cash Collateral Account, as the
case may be.
SECTION 7. Release of Amounts. So long as no Event of
Default shall have occurred and be continuing, the Agent will
direct Citibank to pay and release to each Crompton Borrower or
at its order or, at the request of such Crompton Borrower, apply
to the Obligations of such Crompton Borrower under the Loan
Documents, such amounts on deposit in its L/C Cash Collateral
Accounts at the times and in the amounts specified in the Credit
Agreement, or, if such times or amounts are not specified in the
Credit Agreement, such amount on deposit shall be released at
such Crompton Borrower's direction.
SECTION 8. Representations and Warranties. Each Pledgor
represents and warrants as follows:
(a) Such Pledgor is the legal and beneficial owner of the
Collateral of such Pledgor free and clear of any Lien, claim,
option or rights of others, except for the liens and security
interests created under this Agreement or permitted under the
Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of such
Collateral (including, without limitation, general intangibles
relating to the Collateral) or listing such Pledgor or any of its
Subsidiaries or any trade names of such Pledgor or any of its
Subsidiaries as debtor is on file in any recording office, except
such as may have been filed in favor of the Agent relating to
this Agreement or such as may have been filed in connection with
other Liens permitted under the Credit Agreement.
(b) The Pledged Shares owned by such Pledgor have been duly
authorized and validly issued and are fully paid and non-assessable.
The Pledged Debt held by such Pledgor has been duly
authorized, authenticated or issued and delivered, is the legal,
valid and binding obligation of the issuers thereof, is evidenced
by one or more promissory notes (except as otherwise provided in
Section 5.02(b)(i)(D) and Section 5.02(b)(ii) of the Credit
Agreement) (which notes have been delivered to the Agent) and is
not in default.
(c) The Initial Pledged Shares owned by such Pledgor
constitute the percentage of the issued and outstanding shares of
stock of the issuers thereof indicated on Schedule I hereto. The
Initial Pledged Debt constitutes all of the outstanding
indebtedness owed to such Pledgor by the issuers thereof.
(d) The principal place of business and the chief executive
office of such Pledgor are located at the address specified
opposite the name of such Pledgor on Schedule III.
(e) This Agreement, the pledge of the Security Collateral
pursuant hereto and the pledge and assignment of the Account
Collateral pursuant hereto create in favor of the Agent for the
benefit of the Secured Parties a valid and perfected first
priority security interest in the Collateral of such Pledgor,
securing the payment of the Secured Obligations of such Pledgor,
and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken.
(f) Such Pledgor has no trade names except as set forth on
Schedule II hereto; such trade names were adopted in good faith;
and, to the best of such Pledgor's knowledge, there exist no
adverse claims against such trade names as of the Effective Date.
(g) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other third party is
required (i) for the grant by such Pledgor of the assignment and
security interest granted hereunder, for the pledge by such
Pledgor of any Security Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by such
Pledgor, (ii) for the perfection or maintenance of the pledge,
assignment and security interest created hereunder (including the
first priority nature of such pledge, assignment and security
interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing
statements shall have been duly filed within 60 days after the
Initial Extension of Credit (or such later date as may be agreed
by the Borrowers and the Agent), or (iii) for the exercise by the
Agent of its voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant
to this Agreement, except as may be required in connection with
the disposition of any portion of the Security Collateral by laws
affecting the offering and sale of securities generally.
(h) There are no conditions precedent to the effectiveness
of this Agreement that have not been satisfied or waived.
SECTION 9. Further Assurances. (a) Each Pledgor agrees
that from time to time, at the expense of such Pledgor, such
Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary
or desirable, or that the Agent may request, in order to perfect
and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to
exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of
the foregoing, each Pledgor will: (i) if any Collateral shall be
evidenced by a promissory note or other instrument, deliver and
pledge to the Agent for the benefit of the Secured Parties
hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Agent, (ii) deliver and
pledge to the Agent for the benefit of the Secured Parties
hereunder certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank and
evidence that all other action that the Agent may deem necessary
or desirable in order to perfect and protect the liens and
security interests created under this Agreement has been taken
and (iii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Agent may
reasonably request, in order to perfect and preserve the pledge,
assignment and security interests granted or purported to be
granted hereunder.
(b) Each Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without
the signature of such Pledgor where permitted by law, provided
that the Agent shall give reasonably prompt notice of any such
filing to such Pledgor. A photocopy or other reproduction of
this Agreement or any financing statement covering the Collateral
or any part thereof shall be sufficient as a financing statement
where permitted by law.
(c) Each Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable
detail.
(d) Each Pledgor shall keep its chief place of business and
chief executive office and the office where it keeps its records
concerning the Collateral, at the location therefor specified
opposite the name of such Pledgor on the signature pages hereof
or, upon 20 days' prior written notice to the Agent, at such
other locations in a jurisdiction where all actions required by
this Section 9 shall have been taken with respect to the
Collateral. Each Pledgor will hold and preserve such records and
will permit representatives of the Agent at any reasonable time
and from time to time during regular business hours and upon
reasonable prior notice to inspect and make abstracts from such
records.
SECTION 10. Voting Rights; Dividends; Etc. (a) So long as
no Default under Section 6.01(a) or (f) of the Credit Agreement
or Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security
Collateral of such Pledgor or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the other
Loan Documents; provided, however, that no Pledgor shall exercise
or refrain from exercising any such right if, in the Agent's
judgment, such action would have a material adverse effect on the
value of the Security Collateral or any part thereof.
(ii) Each Pledgor shall be entitled to receive and retain
any and all dividends and interest paid in respect of the
Security Collateral of such Pledgor if and to the extent that the
payment thereof is not otherwise prohibited by the terms of the
Loan Documents; provided, however, that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or
in exchange for, any Security Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Security Collateral in connection with
a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-surplus,
and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for,
any Security Collateral,
shall be, and shall be forthwith delivered to the Agent to
hold as, Security Collateral and shall, if received by any
Pledgor, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of such Pledgor and
be forthwith delivered to the Agent as Security Collateral in the
same form as so received (with any necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each Pledgor all such proxies and
other instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments that it
is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the occurrence and during the continuance of any
Default under Section 6.01(a) or (f) of the Credit Agreement or
any Event of Default:
(i) All rights of each Pledgor (A) to exercise or refrain
from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section
10(a)(i) shall, upon notice to such Pledgor by the Agent, cease,
and (B) to receive the dividends and interest payments that it
would otherwise be authorized to receive and retain pursuant to
Section 10(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as
Security Collateral such dividends and interest payments.
(ii) All dividends and interest payments that are received
by any Pledgor contrary to the provisions of paragraph (i) of
this Section 10(b) shall be received in trust for the benefit of
the Agent, shall be segregated from other funds of such Pledgor
and shall be forthwith paid over to the Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
SECTION 11. Transfers and Other Liens; Additional Shares.
(a) Each Pledgor agrees that it shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant
any option with respect to, any of the Collateral of such Pledgor
(other than sales, assignments, options and other dispositions
permitted under the terms of the Credit Agreement) or (ii) create
or suffer to exist any Lien upon or with respect to any of the
Collateral of such Pledgor, except for the Liens created under
the Collateral Documents and any other Liens permitted under the
Credit Agreement.
(b) Each Pledgor agrees that it shall (i) cause each issuer
of the Pledged Shares owned by such Pledgor not to issue any
stock or other securities in addition to or in substitution for
the Pledged Shares issued by such issuer, except to such Pledgor,
and (ii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional shares
of stock or other securities of each issuer of any Pledged
Shares.
SECTION 12. Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints the Agent such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise, from time to time
after the occurrence and during the continuance of an Event of
Default in the Agent's discretion, to take any action and to
execute any instrument that the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above,
and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned
Agreement or the rights of the Agent with respect to any of the
Collateral.
SECTION 13. Agent May Perform. If any Pledgor fails to
perform any agreement contained herein, the Agent may, but
without any obligation to do so and without further notice,
itself perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be
payable by such Pledgor under Section 17. The Agent agrees to
notify the Crompton Borrowers of any such performance; provided,
however, that the failure to give such notice shall not affect
the Agent's right to perform or the validity of such performance.
SECTION 14. The Agent's Duties. The powers conferred on
the Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Security Collateral, whether or not the Agent or
any other Secured Party has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights
pertaining to any Collateral. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own
property.
SECTION 15. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party upon default under the Uniform Commercial Code in
effect in the State of New York at such time (the "Uniform
Commercial Code"), whether or not the Uniform Commercial Code
applies to the affected Collateral, and also may without notice
except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
of the Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Agent may deem
commercially reasonable. Each Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days'
notice to such Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) Any cash held by the Agent as Collateral and all cash
proceeds received by the Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the
Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Agent
pursuant to Section 17) in whole or in part by the Agent for the
ratable benefit of the Secured Parties against, all or any part
of the Secured Obligations in such order as the Agent shall
elect. In determining the amount of any such cash to be applied
against the Secured Obligations owing to the Hedge Banks other
than Secured Obligations theretofore accrued and unpaid, the
Agent shall be fully protected in relying on the Agreement Values
of the Bank Hedge Agreements. "Agreement Value" means, for any
Bank Hedge Agreement on any date of determination, the amount, if
any, that would be payable to the Hedge Bank in respect of
"agreement value" as though such Bank Hedge Agreement were
terminated on such date, calculated as provided in the
International Swap Dealers Association Inc. Code of Standard
Wording, Assumptions and Provisions for Swaps, 1992 Edition; each
determination of Agreement Value shall be made by the Agent in
good faith and in reliance on any information, including
information provided by such Hedge Bank, that it believes
accurate, but without any obligation to verify such information.
Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all the Secured Obligations
shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgors in respect of the Collateral.
(d) All payments received by any Pledgor in respect of the
Collateral shall be received in trust for the benefit of the
Agent and the other Secured Parties, shall be segregated from
other funds of such Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary
indorsement).
(e) The Agent may, without notice to any Crompton Borrower
except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the
Secured Obligations against such Crompton Borrower's L/C Cash
Collateral Account or any part thereof.
SECTION 16. Registration Rights. If the Agent shall
determine to exercise its right to sell all or any of the
Security Collateral pursuant to Section 15, each Pledgor agrees
that, upon request of the Agent, such Pledgor will, at its own
expense:
(a) execute and deliver, and cause each issuer of the
Security Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of the Agent,
advisable to register such Security Collateral under the
provisions of the Securities Act of 1933 (as amended from time to
time, the "Securities Act"), to cause the registration statement
relating thereto to become effective and to remain effective for
such period as prospectuses are required by law to be furnished
and to make all amendments and supplements thereto and to the
related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Security Collateral
under the state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Security
Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information and
projections as may be necessary or, in the opinion of the Agent,
advisable to enable the Agent to effect the sale of such Security
Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Security Collateral or
any part thereof valid and binding and in compliance with
applicable law.
The Agent is authorized, in connection with any sale of the
Security Collateral pursuant to Section 15, to deliver or
otherwise disclose to any prospective purchaser of the Security
Collateral (i) any registration statement or prospectus, and all
supplements and amendments thereto, prepared pursuant to clause
(a) above, (ii) any information and projections provided to it
pursuant to clause (d) above and (iii) any other information in
its possession relating to the Security Collateral.
SECTION 17. Indemnity and Expenses. (a) Each Pledgor
agrees to defend, protect, indemnify and hold harmless each
Secured Party from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement),
except claims, losses or liabilities resulting from the Agent's
or any such other Secured Party's gross negligence or willful
misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Pledgor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, that the Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral of such Pledgor, (iii)
the exercise or enforcement of any of the rights of the Agent or
any other Secured Party against such Pledgor, or (iv) the failure
by such Pledgor to perform or observe any of the provisions
hereof.
(c) 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 Pledgors contained in this
Section 17 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under any of
the other Loan Documents.
SECTION 18. Amendments; Waivers; Etc. (a) No amendment
or waiver of any provision of this Agreement, and no consent to
any departure by any Pledgor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no
delay in exercising, any right hereunder 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.
(b) Upon the execution and delivery by any Person of a
security agreement supplement in substantially the form of
Exhibit A hereto (each a "Crompton Security Agreement
Supplement"), (i) such Person shall be referred to as an
"Additional Pledgor" and shall be and become a Pledgor and each
reference in this Agreement to "Pledgor" shall also mean and be a
reference to such Additional Pledgor, and (ii) the annexes
attached to each Crompton Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I
and II hereto, and the Collateral Agent may attach such annexes
as supplements to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as
supplemented by such Crompton Security Agreement Supplement.
SECTION 19. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic or telex communication) and,
if to any Pledgor, mailed, telecopied, telegraphed, telexed or
delivered to it, addressed to it c/o Crompton Corp. at its
address at One Station Place, Metro Center, Stamford, CT 06902,
Attention: Chief Financial Officer, and if to the Agent, mailed,
telecopied, telegraphed, telexed or delivered to it, addressed to
it at the address of the Agent specified in the Credit Agreement,
or as to any party at such other address as shall be designated
by such party in a written notice to each other party complying
as to delivery with the terms of this Section 19. All such
notices and other 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.
SECTION 20. Continuing Security Interest; Assignments.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until
the Collateral Release Date, (b) be binding upon each Pledgor,
its successors and assigns and (c) inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause
(c), any Lender Party may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held
by it) to any other Person and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to
such Lender Party herein or otherwise, in each case as provided
in Section 8.07 of the Credit Agreement. No Pledgor shall have
the right to assign its rights hereunder or any interest herein
without the prior written consent of the Secured Parties.
SECTION 21. Release and Termination. (a) Upon any sale,
lease, transfer or other disposition of any item of Collateral of
any Pledgor, in accordance with the terms of the Loan Documents,
the Agent will, at such Pledgor's expense, execute and deliver to
such Pledgor such documents as such Pledgor shall reasonably
request to evidence the release of such item of Collateral from
the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release no
Event of Default shall have occurred and be continuing and (ii)
Crompton Corp. shall have delivered to the Agent, at least ten
Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral and
the terms of the sale, lease, transfer or other disposition in
reasonable detail, including the price thereof and any expenses
in connection therewith, together with a form of release for
execution by the Agent and a certification by Crompton Corp. to
the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Agent may request.
(b) Upon the Collateral Release Date, the pledge, assignment
and security interest granted hereby shall terminate and all
rights to the Collateral shall revert to the respective Pledgor.
Upon any such termination or release, the Agent will, at such
Pledgor's expense, execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence
such termination.
SECTION 22. Security Interest Absolute. The Obligations of
each Pledgor hereunder are independent of the Obligations of any
other Loan Party under the Loan Documents, and a separate action
or actions may be brought or prosecuted against each Pledgor
whether action is brought against any other Loan Party or whether
any other Loan Party is joined in any such action or actions.
All rights of the Collateral Agent and security interests
hereunder, and all obligations of each Pledgor hereunder, shall
be absolute and unconditional, irrespective of, and each Pledgor
hereby irrevocably waives any defenses it may now or hereafter
have in any way relating to, any or all of the circumstances
described in the Guaranties or any other circumstance that might
constitute a discharge available to, or a discharge of, any
Borrower or any Guarantor.
This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any
of the Secured Obligations is rescinded or must otherwise be
returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
SECTION 23. Execution in Counterparts. This Agreement may
be executed in any number of 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 24. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York, except to the extent that the validity or
perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed
by the laws of a jurisdiction other than the State of New York.
Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 8 or Article 9 of the Uniform Commercial Code are
used herein as therein defined.
IN WITNESS WHEREOF, each Pledgor has caused this Agreement
to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
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:
SCHEDULE I
TO THE CROMPTON SECURITY AGREEMENT
INITIAL PLEDGED SHARES AND INITIAL PLEDGED DEBT
PART I
Initial Pledged Shares
Name of Pledgor Name of Issuer Number of Shares
Crompton & Knowles
Corporation CK Holding Corporation 750
Crompton & Knowles Crompton & Knowles Overseas
Corporation Corporation 100
Crompton & Knowles KEM Manufacturing 5,000
Corporation Corporation (formerly known
as CNK Corporation)
CK Holding Davis-Standard Corporation 500
Corporation
CK Holding Crompton & Knowles Colors 500
Corporation Incorporated (formerly known
as Dyes & Chemicals Corporation)
PART II
Initial Pledged Debt
Debt of the Crompton Borrowers and the Crompton Guarantors
evidenced by the intercompany promissory note dated August 21,
1996 made by CK Holding Corporation, CNK Disposition Corp.,
Crompton & Knowles Colors Incorporated, Crompton & Knowles
Corporation, Crompton & Knowles Overseas Corporation, Davis-Standard
Corporation, Ingredient Technology Corporation, Kem
Manufacturing Corporation, 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. and Uniroyal Chemical Ltd.
SCHEDULE II
TO THE CROMPTON SECURITY AGREEMENT
TRADE NAMES
John Brown
John Brown Plastics Machinery
Trafalgar House
Egan
Bone Markham
Bone Cravens
Bone Brothers
Western Polymer
Johnson Plastics Machine
Magna Graphics
DATM
Spartan
Titan
Flex lip
CMR-1000
CMR-2000
CMR-3000
CRM-Plus
Flexistrictor
Powerflight
SCHEDULE III
TO THE CROMPTON SECURITY AGREEMENT
CHIEF EXECUTIVE OFFICES OF PLEDGORS
CK Holding Corporation
One Station Place - Metro Center
Stamford, CT 06902
Fed Tax ID #: 06-1413342
Crompton & Knowles Overseas Corporation
One Station Place - Metro Center
Stamford, CT 06902
Fed Tax ID #: 04-2463110
Davis-Standard Corporation
One Extrusion Drive
Pawcatuck, CT 06379
Fed Tax ID #: 06-1413340
Crompton & Knowles Colors Incorporated
3001 N. Graham Street
Charlotte, NC 28206
Fed Tax ID #: 06-1413341
Ingredient Technology Corporation
1595 MacArthur Blvd.
Mahwah, NJ 07430
Fed Tax ID #: 13-4923610
Kem Manufacturing Corporation
One Station Place - Metro Center
Stamford, CT 06902
Fed Tax ID #: 58-0620603
Crompton & Knowles Corporation
One Station Place - Metro Center
Stamford, CT 06902
Fed Tax ID #: 04-1218720
CNK Disposition Corp.
5414 North 56th Street
Tampa, FL 33610
Fed Tax ID #: 59-0614068
EXHIBIT A
TO THE CROMPTON SECURITY AGREEMENT
FORM OF CROMPTON SECURITY AGREEMENT SUPPLEMENT
Citicorp USA, Inc., as Agent
under the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: Robert Kosian
Crompton Security Agreement dated as of
August 21, 1996 made by the
Pledgors party thereto to Citicorp USA, Inc., as Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Crompton Security
Agreement (such Crompton Security Agreement, as in effect on the
date hereof and as it may hereafter be amended, modified or
otherwise supplemented from time to time, being the "Crompton
Security Agreement"). The terms defined in the Crompton Security
Agreement (or in the Credit Agreement referred to therein) and
not otherwise defined herein are used herein as therein defined.
The undersigned hereby agrees, as of the date first above
written, to become a Pledgor under the Crompton Security
Agreement as if it were an original party thereto and agrees that
each reference in the Crompton Security Agreement to "Pledgor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Agent for
the ratable benefit of the Secured Parties, and hereby grants to
the Agent for the ratable benefit of the Secured Parties as
security for the Secured Obligations a lien on and security
interest in, all of the right, title and interest of the
undersigned, whether now owned or hereafter acquired, in and to
the Collateral owned by the undersigned, including, but not
limited to, the property listed on Annex I hereto. Schedules I
and II to the Crompton Security Agreement are hereby supplemented
by Annexes I and II hereto, respectively. The undersigned hereby
certifies that such Annexes have been prepared by the undersigned
in substantially the form of Schedules I and II to the Crompton
Security Agreement and are accurate and complete as of the date
hereof.
The undersigned hereby makes each representation and
warranty set forth in Section 8 of the Crompton Security
Agreement (as supplemented by the attached Annexes) to the same
extent as each other Pledgor and hereby agrees to be bound as a
Pledgor by all of the terms and provisions of the Crompton
Security Agreement to the same extent as each other Pledgor.
This Crompton Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
Very truly yours,
[NAME OF ADDITIONAL
PLEDGOR]
By
Title:
Address of Chief Executive
Office and for Notices:
[Address]
EXHIBIT D-2
[SEE EXHIBIT D-1]
EXHIBIT D-2
FORM OF UNIROYAL SECURITY AGREEMENT
UNIROYAL SECURITY AGREEMENT
Dated August 21, 1996
From
THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF
as Pledgors
to
CITICORP USA, INC.,
as Agent
TABLE OF CONTENTS
Section Page
1. Grant of Security 2
2. Security for Obligations 4
3. Pledgors Remain Liable 4
4. Delivery of Security Collateral and Account Collateral 5
5. Maintaining the Collection Account, the Cash
Concentration Account and the L/C Cash Collateral Account 5
6. As to Account Collateral 6
7. Investing of Amounts in the Cash Concentration Account
and the L/C Cash Collateral Account 7
8. Release of Amounts 7
9. Representations and Warranties 7
10. Further Assurances 9
11. As to Inventory 10
12. Insurance 10
13. Place of Perfection; Records; Collection of Receivables 11
14. Transfers and Other Liens 12
15. Agent Appointed Attorney-in-Fact 12
16. Agent May Perform 12
17. The Agent's Duties 13
18. Remedies 13
19. Indemnity and Expenses 14
20. Amendments; Waivers; Etc 15
21. Addresses for Notices 15
22. Continuing Security Interest; Assignments 16
23. Release and Termination 16
24. Security Interest Absolute 17
25. Execution in Counterparts 17
26. Governing Law; Terms 18
Schedule I - Trade Names
Schedule II - Locations of Inventory
Schedule III - Pledged Debt
Schedule IV - Chief Executive Offices of Pledgors
Exhibit A - Form of Uniroyal Security
AgreementSupplement
UNIROYAL SECURITY AGREEMENT
UNIROYAL SECURITY AGREEMENT dated August 21, 1996 made
by the Persons listed on the signature pages hereof and the
Additional Pledgors (as defined in Section 20(b)) (such Persons
so listed and the Additional Pledgors being, collectively, the
"Pledgors") to CITICORP USA, INC. as agent (in such capacity, the
"Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
PRELIMINARY STATEMENTS.
(1) Uniroyal Chemical Company, Inc. (the "Uniroyal
Borrower") has entered into a Credit Agreement dated as of August
21, 1996 (said Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used herein and not
otherwise defined herein are used herein as therein defined) with
Crompton & Knowles Corporation, Crompton & Knowles Colors
Incorporated, Davis-Standard Corporation, Ingredient Technology
Corporation, the lender parties party thereto (the "Lender
Parties"), Citicorp Securities, Inc., as Arranger, Citicorp USA,
Inc., as Agent and The Chase Manhattan Bank, as Managing Agent.
(2) The Uniroyal Borrower maintains a non-interest
bearing cash collection account (the "Collection Account") with
Citibank, N.A. ("Citibank") at its office at 399 Park Avenue, New
York, New York 10043, Account No. 4055-5094, in the name of the
Uniroyal Borrower but under the sole control and dominion of the
Agent and subject to the terms of this Agreement.
(3) The Uniroyal Borrower maintains a non-interest
bearing cash concentration account (the "Cash Concentration
Account") with Citibank at its office at 399 Park Avenue, New
York, New York 10043, Account No. 4049-8376, in the name of the
Uniroyal Borrower and subject to the terms of this Agreement.
(4) The Uniroyal Borrower has opened a non-interest
(but subject to investment pursuant to Section 6) cash collateral
account (an "L/C Cash Collateral Account") with Citibank at its
office at 399 Park Avenue, New York, New York 10043, Account No.
4070-5742, in the name of the Uniroyal Borrower and subject to
the terms of this Agreement.
(5) Each Pledgor will derive substantial direct and
indirect benefit from the transactions contemplated by the Credit
Agreement.
(6) It is a condition precedent to the making of
Advances and the issuance of Letters of Credit by the Lender
Parties under the Credit Agreement and the entry by the Hedge
Banks into Bank Hedge Agreements with the Borrowers from time to
time that each Pledgor shall have granted the assignment and
security interest and made the pledge and assignment contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lender Parties to make Advances and to issue
Letters of Credit under the Credit Agreement and to induce the
Hedge Banks to enter into Bank Hedge Agreements with the
Borrowers from time to time, each Pledgor hereby agrees with the
Agent for the ratable benefit of the Secured Parties as follows:
SECTION 1. Grant of Security. Each Pledgor hereby
assigns and pledges to the Agent for the ratable benefit of the
Secured Parties, and hereby grants to the Agent for the ratable
benefit of the Secured Parties a security interest in, the
following, in each case, as to each type of property described
below, whether now owned or hereafter acquired by such Pledgor,
wherever located and whether now or hereafter existing
(collectively, the "Collateral"):
(a) all of such Pledgor's right, title and
interest, whether now owned or hereafter acquired, in and to all
inventory in all of its forms, wherever located, now or hereafter
existing (including, but not limited to, (i) all herbicides,
agricides, insecticides, foliar nutrients, plant growth
regulants, fungicides, seed treatment chemicals and equipment,
chemicals and polymers and specialty chemicals and raw materials
and work in process therefor, finished goods thereof and
materials used or consumed in the manufacture or production
thereof, (ii) inventory in which such Pledgor has an interest in
mass or a joint or other interest or right of any kind
(including, without limitation, goods in which such Pledgor has
an interest or right as consignee) and (iii) inventory that is
returned to or repossessed by such Pledgor), and all accessions
thereto and products thereof and documents therefor (any and all
such inventory, accessions, products and documents being the
"Inventory");
(b) all of such Pledgor's (i) right, title and
interest, whether now owned or hereafter acquired, in and to all
accounts, contract rights, chattel paper, instruments, deposit
accounts, general intangibles and other obligations of any kind,
now or hereafter existing, but only to the extent the foregoing
arise out of or in connection with, and constitute a right of
payment of money or other property for, the sale or lease of
goods or the rendering of services other than intercompany
royalty payments, licensing fees, technology transfer payments
and other similar intercompany payments (to the extent not
referred to in clause (c) below, the "Receivables") and (ii)
rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise
relating to the Receivables (the "Related Contracts");
(c) all of such Pledgor's right, title and interest
in and to the following (collectively, the "Account Collateral
"):
(i) the Cash Concentration Account, all funds
held therein and all certificates and instruments, if any, from
time to time representing or evidencing the Cash Concentration
Account;
(ii) the Collection Account, all funds held
therein and all certificates and instruments, if any, from time
to time representing or evidencing the Collection Account;
(iii) the L/C Cash Collateral Account, all
funds held therein and all certificates and instruments, if any,
from time to time representing or evidencing such L/C Cash
Collateral Account;
(iv) all Pledged Accounts (as hereinafter
defined), all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing
the Pledged Accounts;
(v) all Other Accounts (as hereinafter
defined), all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing
such accounts;
(vi) all notes, certificates of deposit,
deposit accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Agent for or
on behalf of such Pledgor in substitution for or in addition to
any or all of the then existing Account Collateral; and
(vii) all interest, dividends, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of the then existing Account Collateral; and
(d) All of the following (the "Security Collateral
"):
(i) the indebtedness (whether or not evidenced
by instruments) set forth opposite such Pledgor's name on
Schedule III hereto and issued by the obligors indicated therein
(collectively referred to herein as the "Initial Pledged Debt
", and together with the indebtedness referred to in clause (ii)
below, the "Pledged Debt") and the instruments (if any)
evidencing such Initial Pledged Debt, all security therefor and
all interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such Initial Pledged Debt; and
(ii) all additional indebtedness from time to
time owed to such Pledgor by any obligor of the Initial Pledged
Debt (whether or not evidenced by instruments) and the
instruments evidencing such indebtedness (if any), and all
additional indebtedness owed to such Pledgor by any other obligor
to the extent required pursuant to Section 5.01(k) of the Credit
Agreement, all security therefor and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such indebtedness;
(e) all proceeds of any and all of the foregoing
Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a), (b),
(c) and (d) of this Section 1) and, to the extent not otherwise
included, all (i) payments under insurance (whether or not the
Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise
with respect to any of the foregoing Collateral, and (ii)cash.
SECTION 2. Security for Obligations. This Agreement
secures, in the case of each Pledgor, the payment of all
Obligations of such Pledgor now or hereafter existing under the
Loan Documents, which shall not exceed, so long as any Uniroyal
Indenture remains in effect, the maximum amount of Debt permitted
to be incurred by such Pledgor under such Uniroyal Indenture,
whether direct or indirect, absolute or contingent, including any
extensions, modifications, substitutions, amendments and renewals
thereof, whether for principal (including reimbursement for
amounts drawn under Letters of Credit), interest, premiums,
penalties, fees, indemnifications, contract causes of action,
costs, expenses or otherwise (all such Obligations being the
"Secured Obligations"). Without limiting the generality of the
foregoing, this Agreement secures, as to each Pledgor, the
payment of all amounts that constitute part of the Secured
Obligations of such Pledgor and that would be owed by such
Pledgor to the Secured Parties under the Loan Documents but for
the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding
involving such Pledgor.
SECTION 3. Pledgors Remain Liable. Anything herein to
the contrary notwithstanding, (a) each Pledgor shall remain
liable under the contracts and agreements included in the
Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of
any of its rights hereunder shall not release any Pledgor from
any of its duties or obligations under the contracts and
agreements included in the Collateral and (c) no Secured Party
shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement
or any other Loan Document, nor shall any Secured Party be
obligated to perform any of the obligations or duties of any
Pledgor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
SECTION 4. Delivery of Security Collateral and Account
Collateral. All certificates or instruments representing or
evidencing any Security Collateral or Account Collateral have
been or shall be delivered to and held by or on behalf of the
Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Agent. If any Event of Default
shall have occurred and be continuing, the Agent shall have the
right to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Security Collateral and
Account Collateral. In addition, the Agent shall have the right
at any time to exchange certificates or instruments representing
or evidencing Account Collateral for certificates or instruments
of smaller or larger denominations.
SECTION 5. Maintaining the Collection Account, the
Cash Concentration Account and the L/C Cash Collateral Account
. So long as any Advance shall remain unpaid, any Letter of
Credit or Bank Hedge Agreement shall be outstanding or any Lender
Party shall have any Commitment under the Credit Agreement:
(a) The Pledgor will maintain the Collection
Account and the Cash Concentration Account with Citibank.
(b) It shall be a term and condition of the
Collection Account and the L/C Cash Collateral Account,
notwithstanding any term or condition to the contrary in any
other agreement relating to such Collection Account or such L/C
Cash Collateral Account, as the case may be, and except as
otherwise provided by the provisions of Section 8 and Section 18,
that no amount (including interest on Collateral Investments)
shall be paid or released to or for the account of, or withdrawn
by or for the account of, the Pledgor or any other Person from
such Collection Account or L/C Cash Collateral Account, as the
case may be.
The Collection Account, the Cash Concentration Account and the
L/C Cash Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors
of the Federal Reserve System and of any other appropriate
banking or governmental authority, as may now or hereafter be in
effect.
SECTION 6. As to Account Collateral. So long as any
Advance shall remain unpaid, any Letter of Credit shall be
outstanding, any Bank Hedge Agreement shall be in effect or any
Lender Party shall have any Commitment under the Credit
Agreement:
(a) Each Pledgor shall comply with its current cash
management policies and practices, and shall not make any
material change to such policies and practices which could
adversely affect the interests of the Secured Parties without the
prior written consent of the Agent.
(b) Each Pledgor shall instruct each Person
obligated at any time to make any payment to such Pledgor for any
reason (an "Obligor") to make such payment to a Pledged Account
(as defined in Section 9(d)) or to the Collection Account and
shall pay to the Agent for deposit in the Collection Account, at
the end of each Business Day, all proceeds of Collateral.
(c) Each Pledgor shall not make any deposit in any
deposit account other than a deposit in the Cash Concentration
Account or an Other Account (as defined in Section 9(d)) or an
Excepted Account (as defined in Section 9(d)) in accordance with
its then current cash management policies and practices in
accordance with Section 6(a), provided that in the case of
deposits in the Excepted Accounts, no amount deposited therein
shall constitute proceeds of Collateral, other than amounts
transferred directly from the Cash Concentration Account.
(d) Upon the occurrence and during the continuance
of an Event of Default, at the Agent's request, within 15
Business Days of such request (or such later time as the Agent
and Crompton Corp. shall agree), (i) each Pledgor shall give
written notice to the Agent of (A) the name and address of each
bank with which each Pledged Account or Other Account is
maintained by such Pledgor, (B) the account number of each such
Pledged Account or Other Account and (C) the full name under
which such Pledged Account or Other Account is maintained, (ii)
each Pledgor shall enter into letter agreements (the "Pledged
Account Letters") in form and substance satisfactory to the Agent
among such Pledgor, the Agent and each bank with which such
Pledgor maintains a Pledged Account or, at the option of such
Pledgor, shall close such account, (iii) each Pledgor shall enter
into letter agreements (the "Other Account Letters", and together
with the Pledged Account Letters, the "Blocked Account Letters
") in form and substance satisfactory to the Agent among such
Pledgor, the Agent and each bank with which such Pledgor
maintains an Other Account or, at the option of such Pledgor,
shall close such account, (iv) upon any termination of any
Pledged Account Letter or other agreement with respect to the
maintenance of a Pledged Account, such Pledgor shall promptly
notify all Obligors that were making payments to such Pledged
Account to make all future payments to another Pledged Account or
to the Collection Account, and (v) each Pledgor agrees to close
any or all Pledged Accounts and terminate any or all Pledged
Account Letters at the request of the Agent upon five Business
Days' notice thereof.
SECTION 7. Investing of Amounts in the Cash
Concentration Account and the L/C Cash Collateral Account. If
requested by the Uniroyal Borrower and until the Uniroyal
Borrower in any way amends such request, the Agent will direct
Citibank to, subject to the provisions of Section 8 and Section
18, from time to time (a) invest amounts on deposit in the Cash
Concentration Account and the L/C Cash Collateral Account in such
Cash Equivalents in the name of the Agent or as to which all
action required by Section 10 shall have been taken as the
Uniroyal Borrower may select and the Agent may approve and (b)
invest interest paid on the Cash Equivalents referred to in
clause (a) above, and reinvest other proceeds of any such Cash
Equivalents that may mature or be sold, in each case in such Cash
Equivalents in the name of the Agent or as to which all action
required by Section 10 shall have been taken as such Uniroyal
Borrower may select and the Agent may approve (the Cash
Equivalents referred to in clauses (a) and (b) above being
collectively "Collateral Investments"). Interest and proceeds
that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the Cash
Concentration Account or the L/C Cash Collateral Account, as the
case may be.
SECTION 8. Release of Amounts. So long as no Event
of Default shall have occurred and be continuing, the Agent will
direct Citibank to pay and release to the Uniroyal Borrower or at
its order or, at the request of the Uniroyal Borrower, apply to
the Obligations of the Uniroyal Borrower under the Loan
Documents, such amounts on deposit in the Collection Account, the
Cash Concentration Account and the L/C Cash Collateral Account at
the times and in the amounts specified in the Credit Agreement,
or, if such times or amounts are not specified in the Credit
Agreement, such amounts on deposit shall be released at the
Uniroyal Borrower's direction.
SECTION 9. Representations and Warranties. Each
Pledgor represents and warrants as follows:
(a) As of the Effective Date, all of the Inventory
is located at the places specified in Schedule II hereto. The
chief place of business and chief executive office of such
Pledgor and the office where such Pledgor keeps its records
concerning the Receivables and all originals of all chattel paper
that evidence Receivables, are located at the address specified
opposite the name of such Pledgor on Schedule IV. None of the
Receivables is evidenced by a promissory note or other instrument
which has not been pledged to the Agent for the ratable benefit
of the Secured Parties and delivered to the Agent pursuant to the
terms of this Agreement.
(b) Such Pledgor is the legal and beneficial owner
of the Collateral of such Pledgor free and clear of any Lien,
claim, option or rights of others except for the liens and
security interests created under this Agreement or permitted
under the Credit Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of
such Collateral (including, without limitation, general
intangibles relating to the Collateral) or listing such Pledgor
or any of its Subsidiaries or any trade names of such Pledgor or
any of its Subsidiaries as debtor is on file in any recording
office, except such as may have been filed in favor of the Agent
relating to this Agreement or such as may have been filed in
connection with other Liens permitted under the Credit Agreement.
(c) Such Pledgor has exclusive possession and
control of the Inventory, except the Inventory locations marked
by an asterisk in Schedule II.
(d) Such Pledgor has no lockbox accounts, deposit
accounts, disbursement accounts or other accounts other than (i)
the deposit accounts into which an Obligor deposits proceeds
received in respect of Inventory Receivables or Related Contracts
owing to such Pledgor (each a "Pledged Account"), (ii) the other
accounts into which such Pledgor deposits proceeds received in
respect of Inventory Receivables or Related Contracts owing to
such Pledgor (each an "Other Account") and (iii) such other
accounts into which no proceeds of Collateral are deposited (each
an "Excepted Account").
(e) The Initial Pledged Debt constitutes all of the
outstanding indebtedness owed to such Pledgor by the issuers
thereof.
(f) The principal place of business and chief
executive office of such Pledgor are located at the address
specified opposite the name of such Pledgor on Schedule IV.
(g) Such Pledgor has no trade names except as set
forth on Schedule I hereto; such trade names were adopted in good
faith; and, to the best of such Pledgor's knowledge, there exist
no adverse claims against such trade names as of the Effective
Date.
(h) This Agreement and the pledge of the Collateral
pursuant hereto create in favor of the Agent for the benefit of
the Secured Parties a valid and perfected first priority security
interest in the Collateral (other than as to matters of
perfection and priority of the security interest in the Pledged
Accounts and the Other Accounts) of such Pledgor, securing the
payment of the Secured Obligations of such Pledgor, and all
filings and other actions necessary or desirable to perfect and
protect such security interest have been duly taken. Such
Pledgor has not granted any security interest in the Collateral
to any other Person.
(i) No consent of any other Person and no
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or
other third party is required (i) for the grant by such Pledgor
of the assignment and security interest granted hereunder, for
the pledge by such Pledgor of the Collateral pursuant hereto or
for the execution, delivery or performance of this Agreement by
such Pledgor, (ii) for the perfection or maintenance of the
pledge, assignment and security interest created hereunder
(including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and
continuation statements under the Uniform Commercial Code, which
financing statements shall have been duly filed within 60 days
after the Initial Extension of Credit (or such later date as may
be agreed by the Borrowers and the Agent), or (iii) for the
exercise by the Agent of its rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant
to this Agreement.
(j) The Inventory that has been produced by such
Pledgor has been produced in compliance with all requirements of
the Fair Labor Standards Act.
(k) There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or
waived.
SECTION 10. Further Assurances. (a) Each Pledgor
agrees that from time to time, at the expense of such Pledgor,
such Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may
be necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect any pledge, assignment
or security interest granted or purported to be granted hereby or
to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, each Pledgor will: (i)
at the request of the Agent, mark conspicuously each document
included in the Inventory of such Pledgor and each chattel paper
included in the Receivables of such Pledgor with a legend, in
form and substance satisfactory to the Agent, indicating that
such document or chattel paper is subject to the security
interest granted hereby; (ii) if any Collateral shall be
evidenced by a promissory note or other instrument or chattel
paper, at the request of the Agent, deliver and pledge to the
Agent hereunder such note or instrument or chattel paper duly
endorsed and accompanied by duly executed instruments of transfer
or assignment, all in form and substance satisfactory to the
Agent; and (iii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Agent may
reasonably request, in order to perfect and preserve the pledge,
assignment and security interests granted or purported to be
granted hereunder.
(b) Each Pledgor hereby authorizes the Agent to
file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral
without the signature of such Pledgor where permitted by law,
provided that the Agent shall give reasonably prompt notice of
any such filing to such Pledgor. A photocopy or other
reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law.
(c) Each Pledgor will furnish to the Agent from
time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in
reasonable detail.
SECTION 11. As to Inventory. (a) Each Pledgor shall
keep the Inventory (other than Inventory sold in the ordinary
course of business) at any of the places therefor specified in
Section 9(a) or, upon 20 days' prior written notice to the
Agent, at such other places in a jurisdiction where all action
required by Section 10 shall have been taken with respect to the
Inventory.
(b) Each Pledgor shall pay promptly when due all
property and other taxes, assessments and governmental charges or
levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Inventory, except to the
extent not required pursuant to Section 5.01(b) of the Credit
Agreement. In producing the Inventory, each Pledgor shall comply
with all requirements of the Fair Labor Standards Act.
SECTION 12. Insurance. (a) Each Pledgor shall, at
its own expense, maintain insurance with respect to the Inventory
in such amounts, against such risks, in such form and with such
insurers, as shall be satisfactory to the Agent from time to
time. Each policy for property damage insurance with respect to
Inventory shall provide for all losses (except for losses of less
than $250,000 per occurrence) to be paid directly to the Agent.
Each such policy shall in addition (i) name the Agent as loss
payee, (ii) provide that there shall be no recourse against the
Agent for payment of premiums or other amounts with respect
thereto and (iii) provide that at least 10 days' prior written
notice of cancellation or of lapse shall be given to the Agent by
the insurer. Each Pledgor shall, if so requested by the Agent
upon an Event of Default, deliver to the Agent duplicate policies
of such insurance and, as often as the Agent may reasonably
request, a report of a reputable insurance broker with respect to
such insurance. Further, each Pledgor shall, at the request of
the Agent, duly execute and deliver instruments of assignment of
such insurance policies to comply with the requirements of
Section 10 and use its best efforts to cause the insurers to
acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance
maintained by the Uniroyal Borrower pursuant to this Section 12
may be paid directly to the Person who shall have incurred
liability covered by such insurance. In case of any loss
involving damage to Inventory when subsection (c) of this
Section 12 is not applicable, the Uniroyal Borrower shall make or
cause to be made the necessary repairs to such Inventory or
replacements of any Inventory, and any proceeds of insurance
maintained by the Uniroyal Borrower pursuant to this Section 12
shall be paid to the Uniroyal Borrower as reimbursement for the
costs of such repairs or replacements.
(c) Upon the occurrence and during the continuance
of any Event of Default or the actual or constructive total loss
(in excess of $250,000 per occurrence) of any Inventory, all
insurance payments in respect of such Inventory shall be paid to
and applied by the Agent as specified in Section 18(b).
SECTION 13. Place of Perfection; Records; Collection
of Receivables. (a) Each Pledgor shall keep its chief place of
business and chief executive office and the office where it keeps
its records concerning the Collateral, and all originals of all
chattel paper that evidence Receivables, at the location therefor
specified in Section 9(a) or, upon 20 days' prior written notice
to the Agent, at such other locations in a jurisdiction where all
actions required by Section 10 shall have been taken with respect
to the Collateral. Each Pledgor will hold and preserve such
records and chattel paper and will permit representatives of the
Agent at any reasonable time and from time to time during regular
business hours and upon reasonable prior notice to inspect and
make abstracts from such records and chattel paper.
(b) Except as otherwise provided in this subsection
(b), each Pledgor shall continue to collect in the ordinary
course of its business in a manner consistent with past
practices, at its own expense, all amounts due or to become due
to such Pledgor under the Receivables. The Agent shall have the
right at any time, upon the occurrence and during the continuance
of an Event of Default and upon written notice to the Pledgor of
its intention to do so, to notify the Obligors under any
Receivables of the assignment of such Receivables to the Agent
and to direct such Obligors to make payment of all amounts due or
to become due to such Pledgor thereunder directly to the Agent
and, upon such notification and at the expense of such Pledgor,
to enforce collection of any such Receivables, and to adjust,
settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Pledgor might have done.
After receipt by such Pledgor of the notice from the Agent
referred to in the preceding sentence and so long as such Event
of Default is continuing, (i) all amounts and proceeds (including
instruments) received by such Pledgor in respect of the
Receivables shall be received in trust for the benefit of the
Agent hereunder, shall be segregated from other funds of such
Pledgor and shall be forthwith paid over to the Agent in the same
form as so received (with any necessary endorsement) to be
deposited in the Collection Account and either (A) released to
the Uniroyal Borrower on the terms set forth in Section 8 so long
as no Event of Default shall have occurred and be continuing or
(B) if an Event of Default shall have occurred and be continuing,
applied as provided by Section 18(b) and (ii) such Pledgor shall
not adjust, settle or compromise the amount or payment of any
Receivable, release wholly or partly any Obligor thereof, or
allow any credit or discount thereon.
SECTION 14. Transfers and Other Liens. Each Pledgor
agrees that it shall not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral of such Pledgor (other than
sales, assignments, options and other dispositions permitted
under the terms of the Credit Agreement) or (ii) create or suffer
to exist any Lien upon or with respect to any of the Collateral
of such Pledgor, except for the Liens created under the
Collateral Documents and any other Liens permitted under the
Credit Agreement.
SECTION 15. Agent Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints the Agent such Pledgor's
attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of
an Event of Default in the Agent's discretion, to take any action
and to execute any instrument that the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a) to obtain and adjust insurance required to be
paid to the Agent pursuant to Section 12,
(b) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Collateral,
(c) to receive, indorse and collect any drafts or
other instruments, documents and chattel paper, in connection
with clause (a) or (b) above, and
(d) to file any claims or take any action or
institute any proceedings that the Agent may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce compliance with the rights of the Agent with
respect to any of the Collateral.
SECTION 16. Agent May Perform. If any Pledgor fails
to perform any agreement contained herein, the Agent may, but
without any obligation to do so and without further notice,
itself perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be
payable by such Pledgor under Section 19(b). The Agent agrees to
notify the Uniroyal Borrower of any such performance; provided,
however, that the failure to give such notice shall not affect
the Agent's right to perform or the validity of such performance.
SECTION 17. The Agent's Duties. The powers conferred
on the Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent or any other
Secured Party has or is deemed to have knowledge of such matters,
or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment
substantially equal to that which the Agent accords its own
property.
SECTION 18. Remedies. If any Event of Default shall
have occurred and be continuing:
(a) The Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the Uniform Commercial Code
in effect in the State of New York at such time (the "Uniform
Commercial Code") (whether or not the Uniform Commercial Code
applies to the affected Collateral) and also may (i) require any
Pledgor to, and each Pledgor hereby agrees that it will at its
expense and upon request of the Agent forthwith, assemble all or
part of the Collateral pledged by it (other than the Receivables
and the Account Collateral) as directed by the Agent and make it
available to the Agent at a place and time to be designated by
the Agent that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private
sale, at any of the Agent's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Agent may deem commercially reasonable. Each Pledgor agrees
that, to the extent notice of sale shall be required by law, at
least ten days' notice to such Pledgor of the time and place of
any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall
not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Agent may adjourn any
public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by the Agent as Collateral and
all cash proceeds received by the Agent in respect of any sale
of, collection from, or other realization upon all or any part of
the Collateral may in the discretion of the Agent, be held by the
Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Agent
pursuant to Section 19) in whole or in part by the Agent for the
ratable benefit of the Secured Parties, against all or any part
of the Secured Obligations in such order as the Agent shall
elect. In determining the amount of any such cash to be applied
against the Secured Obligations owing to the Hedge Banks other
than Secured Obligations theretofore accrued and unpaid, the
Agent shall be fully protected in relying on the Agreement Values
of the Bank Hedge Agreements. "Agreement Value" means, for any
Bank Hedge Agreement on any date of determination, the amount, if
any, that would be payable to the Hedge Bank in respect of
"agreement value" as though such Bank Hedge Agreement were
terminated on such date, calculated as provided in the
International Swap Dealers Association Inc. Code of Standard
Wording, Assumptions and Provisions for Swaps, 1992 Edition; each
determination of Agreement Value shall be made by the Agent in
good faith and in reliance on any information, including
information provided by such Hedge Bank, that it believes
accurate, but without any obligation to verify such information.
Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all the Secured Obligations
shall be paid over to the Pledgors or to whomsoever may be
lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and
remedies of the Pledgors in respect of the Collateral.
(d) All payments received by each Pledgor in
respect of the Collateral shall be received in trust for the
benefit of the Agent, shall be segregated from other funds of
such Pledgor and shall be forthwith paid over to the Agent in the
same form as so received (with any necessary endorsement).
(e) The Agent may, without notice to the Uniroyal
Borrower except as required by law and at any time or from time
to time, charge, set-off and otherwise apply all or any part of
the Secured Obligations against the Uniroyal Borrower's
Collection Account, the Cash Concentration Account and the L/C
Cash Collateral Account or any part thereof.
SECTION 19. Indemnity and Expenses. (a) Each
Pledgor agrees to defend, protect, indemnify and hold harmless
each Secured Party from and against any and all claims, losses
and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement),
except claims, losses or liabilities resulting from the Agent's
or such other Secured Party's gross negligence or willful
misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Pledgor will upon demand, pay to the Agent
the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, that the Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral of such Pledgor, (iii)
the exercise or enforcement of any of the rights of the Agent or
any other Secured Party against such Pledgor, or (iv) the failure
by such Pledgor to perform or observe any of the provisions
hereof.
(c) 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 Pledgors
contained in this Section 19 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and
under any of the other Loan Documents.
SECTION 20. Amendments; Waivers; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which given. No failure on the part of the Agent to exercise,
and no delay in exercising, any right hereunder 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.
(b) Upon the execution and delivery by any Person
of a security agreement supplement in substantially the form of
Exhibit A hereto (each a "Uniroyal Security Agreement Supplement
"), (i) such Person shall be referred to as an "Additional
Pledgor " and shall be and become a Pledgor and each
reference in this Agreement to "Pledgor " shall also mean and
be a reference to such Additional Pledgor, and (ii) the annexes
attached to each Uniroyal Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules
I, II and III hereto, and the Collateral Agent may attach such
annexes as supplements to such Schedules; and each reference to
such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant hereto.
SECTION 21. Addresses for Notices. All notices and
other communications provided for hereunder shall be in writing
(including telecopier, telegraphic or telex communication) and,
if to any Pledgor, mailed, telecopied, telegraphed, telexed or
delivered to it, addressed to it c/o Uniroyal Corp. at its
address at World Headquarters, Benson Road, Middlebury, CT
06749, Attention: Chief Financial Officer, and if to the Agent,
mailed, telecopied, telegraphed, telexed or delivered to it,
addressed to it at the address of the Agent specified in the
Credit Agreement, or as to any party, at such other address as
shall be designated by such party in a written notice to each
other party complying as to delivery with the terms of this
Section. All such notices and other 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.
SECTION 22. Continuing Security Interest; Assignments.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until
the Collateral Release Date, (b) be binding upon each Pledgor,
its successors and assigns and (c) inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause
(c), any Lender Party may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to
such Lender Party herein or otherwise, in each case as provided
in Section 8.07 of the Credit Agreement. No Pledgor shall have
the right to assign its rights hereunder or any interest herein
without the prior written consent of the Secured Parties.
SECTION 23. Release and Termination. (a) Upon any
sale, lease, transfer or other disposition of any item of
Collateral of any Pledgor, in accordance with the terms of the
Loan Documents, the Agent will, at such Pledgor's expense,
execute and deliver to such Pledgor such documents as such
Pledgor shall reasonably request to evidence the release of such
item of Collateral from the assignment and security interest
granted hereby; provided, however, that (i) at the time of such
request and such release no Event of Default shall have occurred
and be continuing and (ii) the Uniroyal Borrower shall have
delivered to the Agent, at least ten Business Days prior to the
date of the proposed release, a written request for release
describing the item of Collateral and the terms of the sale,
lease, transfer or other disposition in reasonable detail,
including the price thereof and any expenses in connection
therewith, together with a form of release for execution by the
Agent and a certification by the Uniroyal Borrower to the effect
that the transaction is in compliance with the Loan Documents and
as to such other matters as the Agent may request.
(b) Upon the Collateral Release Date, the pledge,
assignment and security interest granted hereby shall terminate
and all rights to the Collateral shall revert to the respective
Pledgor. Upon any such termination or release, the Agent will,
at such Pledgor's expense, execute and deliver to such Pledgor
such documents as such Pledgor shall reasonably request to
evidence such termination.
SECTION 24. Security Interest Absolute. The
Obligations of each Pledgor hereunder are independent of the
Obligations of any other Loan Party under the Loan Documents, and
a separate action or actions may be brought or prosecuted against
each Pledgor whether action is brought against any other Loan
Party or whether any other Loan Party is joined in any such
action or actions. All rights of the Collateral Agent and
security interests hereunder, and all obligations of each Pledgor
hereunder, shall be absolute and unconditional, irrespective of,
and each Pledgor hereby irrevocably waives any defenses it may
now or hereafter have in any way relating to, any or all of the
circumstances described in the Guaranties or any other
circumstance that might constitute a discharge available to, or a
discharge of, any Borrower or any Guarantor.
This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any
of the Secured Obligations is rescinded or must otherwise be
returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
SECTION 25. Execution in Counterparts. This Agreement
may be executed in any number of 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.
<PAGE>
SECTION 26. Governing Law; Terms. This Agreement shall
be governed by and construed in accordance with the laws of the
State of New York, except to the extent that the validity or
perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed
by the laws of a jurisdiction other than the State of New York.
Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 9 of the Uniform Commercial Code are used herein
as therein defined.
IN WITNESS WHEREOF, each Pledgor has caused this
Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
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:
SCHEDULE I
TO THE UNIROYAL SECURITY AGREEMENT
TRADE NAMES
Uniroyal Chemical Company, Inc. only sells as Uniroyal Chemical
Company, Inc.
SCHEDULE II
TO THE UNIROYAL SECURITY AGREEMENT
LOCATIONS OF INVENTORY
SCHEDULE III
TO THE UNIROYAL SECURITY AGREEMENT
PLEDGED DEBT
Debt of the Uniroyal Borrower and the Uniroyal
Guarantors evidenced by the intercompany promissory note dated
August 21, 1996 made by CK Holding Corporation, CNK Disposition
Corp., Crompton & Knowles Colors Incorporated, Crompton & Knowles
Corporation, Crompton & Knowles Overseas Corporation, Davis-Standard
Corporation, Ingredient Technology Corporation, Kem
Manufacturing Corporation, 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. and Uniroyal Chemical Ltd.
SCHEDULE IV
TO THE UNIROYAL SECURITY AGREEMENT
CHIEF EXECUTIVE OFFICES OF PLEDGORS
Uniroyal Chemical Corporation Lokar Enterprises, Inc.
c/o Uniroyal Chemical Company, Inc. c/o Uniroyal Chemical
Company, Inc.
Benson Road Benson Road
Middlebury, CT 06749 Middlebury, CT 06749
Fed. Tax ID #: 06-1258925
Gustafson International Company Uniroyal Chemical Company,
Inc.
c/o Gustafson, Inc. Benson Road
1400 Preston Road Middlebury, CT 06749
Suite 400 Fed. Tax ID #: 06-1148490
Plano, TX 75093
Fed. Tax ID #: 75-2295890 Gustafson, Inc.
1400 Preston Road, Suite 400
Uniroyal Chemical Brazil Holding, Plano, TX 75093
Inc. Fed. Tax ID #: 41-0795292
c/o Uniroyal Chemical Company, Inc.
Benson Road
Middlebury, CT 06749 Trace Chemicals, Inc.
06-1237209 839 Brinkman Drive
Fed. Tax ID #: 06-1237209 Pekin, IL 61554
Fed. Tax ID #: 37-1032576
Uniroyal Chemical Export Limited
c/o Uniroyal Chemical Company, Inc.
Benson Road
Middlebury, CT 06749
Fed. Tax ID #: 06-1431523
Uniroyal Chemical International Company
c/o Gustafson, Inc.
1400 Preston Road
Suite 400
Plano, TX 75093
Fed. Tax ID #: 75-2270460
Uniroyal Chemical Leasing Company, Inc.
c/o Uniroyal Chemical Company, Inc.
Benson Road
Middlebury, CT 06749<PAGE>
EXHIBIT A TO THE UNIROYAL SECURITY AGREEMENT
FORM OF UNIROYAL SECURITY AGREEMENT SUPPLEMENT
Citicorp USA, Inc., as Agent
under the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: Robert Kosian
Uniroyal Security Agreement dated as of August 21, 1996
made by Uniroyal Chemical Company, Inc. and the other
Pledgors to Citicorp USA, Inc., as Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Uniroyal Security
Agreement (such Uniroyal Security Agreement, as in effect on the
date hereof and as it may hereafter be amended, modified or
otherwise supplemented from time to time, being the "Uniroyal
Security Agreement"). The terms defined in the Uniroyal Security
Agreement (or in the Credit Agreement referred to therein) and
not otherwise defined herein are used herein as therein defined.
The undersigned hereby agrees, as of the date first above
written, to become a Pledgor under the Uniroyal Security
Agreement as if it were an original party thereto and agrees that
each reference in the Uniroyal Security Agreement to "Pledgor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Agent for
the ratable benefit of the Secured Parties, and hereby grants to
the Agent for the ratable benefit of the Secured Parties as
security for the Secured Obligations a lien on and security
interest in, all of the right, title and interest of the
undersigned, whether now owned or hereafter acquired, in and to
the Collateral owned by the undersigned, including, but not
limited to, the property listed on Annex I hereto. Schedules I,
II and III to the Uniroyal Security Agreement are hereby
supplemented by Annexes I, II and III hereto, respectively. The
undersigned hereby certifies that such Annexes have been prepared
by the undersigned in substantially the form of Schedules I, II
and III to the Uniroyal Security Agreement and are accurate and
complete as of the date hereof.
The undersigned hereby makes each representation and
warranty set forth in Section 9 of the Uniroyal Security
Agreement (as supplemented by the attached Annexes) to the same
extent as each other Pledgor and hereby agrees to be bound as a
Pledgor by all of the terms and provisions of the Uniroyal
Security Agreement to the same extent as each other Pledgor.
This Uniroyal Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
Very truly yours,
[NAME OF ADDITIONAL PLEDGOR]
By
Title:
Address of Chief Executive
Office and for Notices:
[Address]
EXHIBIT D-3
[SEE EXHIBIT D-1]
EXHIBIT D-3
FORM OF LOUISIANA UNDERTAKING
LOUISIANA UNDERTAKING
Dated as of August 21, 1996
To the Lender Parties party to the
Credit Agreement referred
to below and to Citicorp USA, Inc.,
as Agent for such Lender Parties
Ladies and Gentlemen:
We refer to the Uniroyal Security Agreement dated as of
August 21, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Security Agreement"), made and executed
by the Pledgors party thereto in favor of Citicorp, USA, Inc., as
Agent (in such capacity, the "Agent") for the Secured Parties
referred to in the Credit Agreement dated as of August 21, 1996
(as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among Uniroyal Chemical Company,
Inc. ("Uniroyal"), Crompton & Knowles Corporation, Crompton &
Knowles Colors Incorporated, Davis-Standard Corporation,
Ingredient Technology Corporation, the Lender Parties party
thereto, Citicorp Securities, Inc., as Arranger, Citicorp USA,
Inc., as Agent and The Chase Manhattan Bank, as Managing Agent.
Unless otherwise defined herein, the terms defined in the Credit
Agreement or the Security Agreement shall be used herein as
therein defined.
Each Pledgor hereby agrees, with respect to any and all
Collateral located in the State of Louisiana (the "Louisiana
Collateral") that the Security Agreement is hereby supplemented,
effective as of the date first above written, as follows:
(a) In the event the Louisiana Collateral or any part
thereof is seized as an incident to an action for the recognition
or enforcement of the security interest granted under the
Security Agreement by executory process, ordinary process,
sequestration, writ of fieri facias, or otherwise, each Pledgor
hereby agrees that any court issuing any such order shall, if
petitioned for by the Agent, direct the sheriff or the United
States Marshal, as applicable, to appoint as a keeper of the
Louisiana Collateral, the Agent, or any agent designated by the
Agent, or any person named by the Agent at the time such seizure
is effected. This designation is made pursuant to LSA-R.S.
9:5136 through 5140.2, inclusive, as the same may be amended from
time to time, and the Agent shall be entitled to all the rights
and benefits afforded thereunder including reasonable
compensation.
(b) The Agent may exercise in respect of the Louisiana
Collateral, in addition to all other rights and remedies provided
for herein or in the Security Agreement or otherwise available to
it, all of the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in the State
of Louisiana at such time, whether or not the Uniform Commercial
Code of the State of Louisiana applies to the affected Louisiana
Collateral.
(c) Each Pledgor hereby confesses judgment in the amount
of the Secured Obligations for purposes of executory process in
favor of the Agent or of any future holder, bona fide purchaser,
or assignee of the Secured Obligations of such Pledgor under the
Security Agreement, and it shall be lawful for the Agent, without
making demand and without notice or putting into default, the
same being hereby expressly waived, to cause all and singular the
Louisiana Collateral to be seized and sold under executory or
ordinary process by any court of competent jurisdiction or to
proceed with enforcement of its security interests in any other
manner provided by law, to be sold with or without appraisement,
to the highest bidder for cash or on such other terms as the
plaintiff in such proceedings may direct. To the extent
otherwise applicable at all, each Pledgor hereby expressly waives
all of the following: (i) the benefit of appraisement, as
provided in Articles 2332, 2336, 2723, and 2724 of the Louisiana
Code of Civil Procedure (the "Louisiana Code"), and all other
laws conferring the same; (ii) the demand and three (3) days
delay accorded by Articles 2639 and 2721 of the Louisiana Code,
(iii) the notice of seizure required by Article 2293 of the
Louisiana Code, and conferring the same; (iv) the three (3) days
delay provided by Articles 2331 and 2722 of the Louisiana Code,
and the other provisions of Articles 2331, 2722, and 2723 of the
Louisiana Code, and (v) all other Articles of the Louisiana Code
not specifically mentioned above, in each case, as amended from
time to time; and each Pledgor expressly agrees to the immediate
seizure of the Louisiana Collateral in the event of suit thereon.
This Undertaking shall not operate as a waiver of any
right, power or remedy of the Agent under the Security Agreement
nor constitute a waiver of any provision of the Credit Agreement
or any other Loan Document.
Without duplication of any amount payable under Section 8.04
of the Credit Agreement, Uniroyal agrees: (a) to indemnify the
Agent from and against any and all claims, losses and liabilities
growing out of or resulting from this Undertaking (including,
without limitation, enforcement of this Undertaking), except
claims, losses or liabilities resulting from the Agent's gross
negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction; and (b) upon
demand, to pay to the Agent the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that the Agent may incur
in connection with (i) the administration of this Undertaking,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the
Louisiana Collateral, (iii) the exercise or enforcement of any of
the rights of the Agent or the Lender Parties hereunder or (iv)
the failure by any Pledgor to perform or observe any of the
provisions hereof.
This Undertaking 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 Undertaking by telecopier shall be
effective as delivery of a manually executed counterpart of this
Undertaking.
This Undertaking shall be governed by, and construed in
accordance with, the laws of the State of Louisiana.
Very truly yours,
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:
WITNESSES:
___________________________
___________________________
Acknowledged this 21st
day of August, 1996
CITICORP USA, INC.
as Agent for the Secured Parties
By__________________
Title:
EXHIBIT E-1
FORM OF CONSENT
Dated as of December __, 1996
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 Amended
and Restated Credit Agreement dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "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 and the B-3 Borrowers named therein, 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 Amended and Restated Credit Agreement and hereby
confirm and agree that notwithstanding the effectiveness of such
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
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 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-1
FORM OF PARENT GUARANTY
PARENT GUARANTY
Dated August 21, 1996
From
CROMPTON & KNOWLES CORPORATION
as Guarantor
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
T A B L E O F C O N T E N T S
Section Page
1.Guaranty 1
2.Guaranty Absolute 2
3.Waivers and Acknowledgments 3
4.Subrogation 4
5.Payments Free and Clear of Taxes, Etc. 4
6.Representations and Warranties 7
7.Amendments, Etc. 8
8.Notices, Etc. 8
9.No Waiver; Remedies 8
10.Right of Set-off 8
11.Indemnification 9
12.Continuing Guaranty; Assignments under the Credit
Agreement 9
13.Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. 9
PARENT GUARANTY
PARENT GUARANTY dated August 21, 1996 made by CROMPTON & KNOWLES
CORPORATION, a Massachusetts corporation (the "Guarantor"), in
favor of the Secured Parties (as defined in the Credit Agreement
referred to below).
PRELIMINARY STATEMENT. The Guarantor has entered into a Credit
Agreement dated as of August 21, 1996 (said Agreement, as it may
hereafter be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"; terms used herein and not
otherwise defined are used herein as therein defined) with
Crompton & Knowles Colors Incorporated ("Crompton Colors"),
Davis-Standard Corporation ("Davis-Standard"), Ingredient
Technology Corporation ("ITC" and, together with the Guarantor,
Crompton Colors and Davis-Standard, the "Crompton Borrowers") and
Uniroyal Chemical Company, Inc. (together with the Crompton
Borrowers, the "Borrowers") the lender parties party thereto (the
"Lender Parties"), Citicorp Securities, Inc., as Arranger,
Citicorp USA, Inc., as Agent and The Chase Manhattan Bank, as
Managing Agent. The Guarantor may receive a portion of the
proceeds of the Advances under the Credit Agreement and will
derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement. It is a
condition precedent to the making of Advances and the issuance of
Letters of Credit by the Lender Parties under the Credit
Agreement and the entry by the Hedge Banks into Bank Hedge
Agreements with the Borrowers from time to time that the
Guarantor, as direct or indirect owner of 100% of the outstanding
shares of stock of each Borrower, shall have executed and
delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters
of Credit under the Credit Agreement and the Hedge Banks to enter
into Bank Hedge Agreements with the Borrowers from time to time,
the Guarantor hereby agrees as follows:
Section 1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees the punctual payment
when due, whether at stated maturity, by acceleration or
otherwise, of all Obligations of each other Loan Party now or
hereafter existing under the Loan Documents, whether for
principal (including reimbursement for amounts drawn under
Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or
otherwise (such Obligations being the "Guaranteed Obligations"),
and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agent or any other
Secured Party in enforcing any rights under this Guaranty and the
other Loan Documents. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be
owed by any other Loan Party to the Agent or any other Secured
Party under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such
Loan Party.
Section 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with
the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the
Agent or any other Secured Party with respect thereto. The
Obligations of the Guarantor under this Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any
other Loan Party under the Loan Documents, and a separate action
or actions may be brought and prosecuted against the Guarantor to
enforce this Guaranty, irrespective of whether any action is
brought against any Borrower or any other Loan Party or whether
such Borrower or any other Loan Party is joined in any such
action or actions. The liability of the Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and the Guarantor hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any
or all of the following:
(a)any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b)any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or
any other Obligations of any other Loan Party under the Loan
Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Borrower or any of its
Subsidiaries or otherwise;
(c)any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations;
(d)any manner of application of Collateral, or proceeds thereof,
to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other Obligations of any other Loan
Party under the Loan Documents or any other assets of any Loan
Party or any of its Subsidiaries;
(e)any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its
Subsidiaries;
(f)any failure of any Secured Party to disclose to any Borrower
or the Guarantor any information relating to the financial
condition, operations, properties or prospects of any other Loan
Party now or in the future known to any Secured Party (the
Guarantor waiving any duty on the part of the Secured Parties to
disclose such information);
(g)the failure of any other person to execute any other guaranty
or agreement or the release or reduction of liability of any
guarantor or other surety with respect to the Guaranteed
Obligations; or
(h)any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Agent or any other Secured Party that might
otherwise constitute a defense available to, or a discharge of,
each Borrower, the Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned
by any Secured Party or any other Person upon the insolvency,
bankruptcy or reorganization of any Borrower or any other Loan
Party or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) The Guarantor
hereby waives promptness, diligence, notice of acceptance,
presentment, demand for performance, protest, notice of
nonperformance, default, acceleration, protest or dishonor and
any other notice with respect to any of the Guaranteed
Obligations and this Guaranty or the rights of the Secured
Parties under this Guaranty and any requirement that the Agent or
any other Secured Party protect, secure, perfect or insure any
Lien or any property subject thereto or exhaust any right or take
any action against any Loan Party or any other Person or any
Collateral.
(b)The Guarantor hereby waives any right to revoke this Guaranty,
and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) The Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth
in Section 2 and this Section 3 are knowingly made in
contemplation of such benefits.
Section 4. Subrogation. The Guarantor will not exercise any
rights that it may now or hereafter acquire against any Borrower
or any other insider guarantor that arise from the existence,
payment, performance or enforcement of the Guarantor's
Obligations under this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of any Secured
Party against any Borrower or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including,
without limitation, the right to take or receive from any
Borrower or any other insider guarantor, directly or indirectly,
in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right,
unless and until all of the Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash,
all Bank Hedge Agreements shall have expired or terminated and
the Commitments shall have expired or terminated. If any amount
shall be paid to the Guarantor in violation of the preceding
sentence at any time prior to the later of the payment in full in
cash of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the later of (i) the Termination Date and
(ii) the expiration or termination of all Bank Hedge Agreements,
such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Agent to be credited
and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Loan Documents, or to be held as
Collateral for any Guaranteed Obligations or other amounts
payable under this Guaranty thereafter arising. If (i) the
Guarantor shall make payment to the Agent or any other Secured
Party of all or any part of the Guaranteed Obligations, (ii) all
of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall be paid in full in cash and (iii) the
Termination Date shall have occurred and all Bank Hedge
Agreements shall have expired or terminated, the Agent and the
other Secured Parties will, at the Guarantor's request and
expense, execute and deliver to the Guarantor appropriate
documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to
the Guarantor of an interest in the Guaranteed Obligations
resulting from such payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in
accordance with Section 2.11 of the Credit Agreement, free and
clear of and without deduction for any and all present or future
Taxes. If the Guarantor shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to the
Agent or any other Secured Party, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section) the Agent or such other Secured Party
(as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the
Guarantor shall make such deductions and (iii) the Guarantor
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b)In addition, the Guarantor agrees to pay any present or future
Other Taxes.
(c)The Guarantor agrees to indemnify the Agent and each other
Secured Party for and hold them harmless against the full amount
of Taxes and Other Taxes, and for the full amount of taxes of any
kind imposed by any jurisdiction on amounts payable under this
Section 5, imposed on or paid by the Agent or such other Secured
Party (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be
made within 30 days from the date the Agent or such other Secured
Party (as the case may be) makes written demand therefor.
(d)Within 30 days after the date of any payment of Taxes by or on
behalf of the Guarantor, the Guarantor will furnish to the Agent,
at its address referred to in the Credit Agreement, the original
or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder by or on behalf of the Guarantor
through an account or branch outside the United States or by or
on behalf of the Guarantor by a payor that is not a United States
person, if the Guarantor determines that no Taxes are payable in
respect thereof, the Guarantor shall furnish, or shall cause such
payor to furnish, to the Agent, at such address, an opinion of
counsel acceptable to the Agent stating that such payment is
exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e)Upon the reasonable request in writing of the Guarantor, each
Secured Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution
and delivery of the Credit Agreement in the case of each Initial
Lender or Initial Issuing Bank, as the case may be, and on the
date of the Assignment and Acceptance or other agreement pursuant
to which it becomes a Secured Party in the case of each other
Secured Party, and from time to time thereafter upon the
reasonable request in writing by the Guarantor (but only so long
thereafter as such Secured Party remains lawfully able to do so),
provide the Agent and the Guarantor with Internal Revenue Service
Forms 1001 or 4224 or (in the case of a Secured 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 (and, if such Secured Party
delivers Forms W-8, two signed certificates certifying that such
Secured Party (i) is not 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 that such Secured Party is
exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to the Credit Agreement. If
the accurate and complete forms provided by a Secured Party at
the time such Secured Party first becomes a party to the Credit
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 Secured
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 Secured Party assignee becomes
a party to the Credit Agreement, the Secured 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 includable in Taxes) United States
withholding tax, if any, applicable with respect to the Secured
Party assignee on such date.
(f)For any period with respect to which a Secured Party has
failed to provide the Guarantor following the Guarantor's request
therefor pursuant to subsection (e) above with the appropriate
form described in subsection (e) above (other than if such
failure is due to a change in law occurring after the date on
which a form originally was required to be provided or if such
form otherwise is not required under subsection (e) above), such
Secured Party shall not be entitled to indemnification under
subsection (a) or (c) with respect to Taxes imposed by the United
States by reason of such failure; provided, however, that should
a Secured Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Guarantor shall take such
steps, at such Lender Party's sole expense, as such Secured Party
shall reasonably request to assist such Secured Party to recover
such Taxes.
(g)Any Secured Party claiming any additional amounts payable
pursuant to this Section 5 agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office 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 reasonable
judgment of such Secured Party, be otherwise disadvantageous to
such Secured Party.
(h)If any Secured 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 5(a) or (b),
it shall promptly remit such refund (including any interest) to
Crompton Corp., net of all out-of-pocket expenses of such Secured
Party; provided, however, that Crompton Corp., upon the request
of such Secured 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.
Such Secured 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 any Secured Party to apply for any
refund.
(i)Without prejudice to the survival of any other agreement of
the Guarantor hereunder or under any other Loan Document, the
agreements and obligations of the Guarantor contained in this
Section 5 and in Section 11 shall survive the payment in full of
the Guaranteed Obligations and all other amounts payable under
this Guaranty.
Section 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a)The Guarantor (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 Guarantor has been validly issued and is fully paid and
non-assessable.
(b)The execution, delivery and performance by the Guarantor of
this Guaranty and each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation
of the Merger and the other transactions contemplated hereby, are
within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(i) contravene the Guarantor'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 Guarantor, 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 Guarantor or any of its
Subsidiaries. Neither the Guarantor nor any of its Subsidiaries
is in violation of any the law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach
of any the contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of
which would have a Material Adverse Effect.
(c)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 Guarantor of
this Guaranty, any other Loan Document or any Related Document to
which it is or is to be a party, or for the consummation of the
Merger or the other transactions contemplated hereby, (ii) the
grant by the Guarantor 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) to the Credit
Agreement, all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting
periods in connection with the Merger and the other transactions
contemplated hereby and 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 Merger or the rights of the Guarantor or its
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.
(d)This Guaranty has been, and each other Loan Document and each
Related Document to which the Guarantor will be a party when
delivered pursuant to the Credit Agreement will have been, duly
executed and delivered by the Guarantor. This Guaranty is, and
each other Loan Document and each Related Document to which it
will be a party when delivered pursuant to the Credit Agreement
will be, the legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with
its terms.
(e)There is no action, suit, investigation, litigation or
proceeding affecting the Guarantor 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 the Merger, this
Guaranty, any other Loan Document or any Related Document or the
consummation of the transactions contemplated by the Loan
Documents, and there has been no material adverse change in the
status, or financial effect on the Guarantor or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(f) of the Credit Agreement.
(f)There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(g)The Guarantor has, independently and without reliance upon the
Agent or any other Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty, and the
Guarantor has established adequate means of obtaining from any
other Loan Parties on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely
familiar with, the financial condition, operations, properties
and prospects of such other Loan Parties.
Section 7. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the
Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Agent and 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 no amendment, waiver or consent
shall, unless in writing and signed by all of the Secured Parties
(other than any Lender Party that is, at such time, a Defaulting
Lender), (a) reduce or limit the liability of the Guarantor
hereunder or release the Guarantor, (b) postpone any date fixed
for payment hereunder or (c) change the number of Secured Parties
required to take any action hereunder.
Section 8. 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 to it, if to the
Guarantor, addressed to it at One Station Place, Metro Center,
Stamford, CT 06902, Attention: Chief Financial Officer, if to
the Agent or any Lender Party, at its address specified in the
Credit Agreement, if to any Hedge Bank, at its address specified
in the Bank Hedge Agreement to which it is a party, or as to any
party at such other address as shall be designated by such party
in a written notice to each other party. All such notices and
other 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.
Section 9. No Waiver; Remedies. No failure on the part of the
Agent or any other Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder 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 10. 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 of the Credit Agreement to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of
said 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
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 the Guarantor against any and all of
the Obligations of the Guarantor now or hereafter existing under
this Guaranty, whether or not such Lender Party shall have made
any demand under this Guaranty and although such Obligations may
be unmatured. Each Lender Party agrees promptly to notify the
Guarantor 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 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 11. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Secured Parties
under this Guaranty, the Guarantor shall, to the fullest extent
permitted by law, indemnify, defend and save and hold harmless
each Secured Party from and against, and shall pay on demand, any
and all losses, liabilities, damages, costs, expenses and charges
(including the fees and disbursements of such Secured Party's
legal counsel) suffered or incurred by such Secured Party as a
result of any failure of any Guaranteed Obligations to be the
legal, valid and binding obligations of any Loan Party
enforceable against such Loan Party in accordance with their
terms, except to the extent such loss, liability, damages, cost,
expense or charge is found in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such
Secured Party's gross negligence or willful misconduct.
Section 12. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the later of the
payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty and the later of (i)
the Termination Date and (ii) the expiration or termination of
all Bank Hedge Agreements, (b) be binding upon the Guarantor, its
successors and assigns and (c) inure to the benefit of and be
enforceable by the Agent and the other Secured Parties and their
successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Secured Party may
assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Advances
owing to it and the Note or Notes held by it) to any other
Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as and to the extent provided
in Section 8.07 of the Credit Agreement. The Guarantor shall not
have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Secured Parties.
Section 13. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b)The Guarantor 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 Guaranty or any of the other Loan Documents to
which it is or is to be a party, or for recognition or
enforcement of any judgment, and the Guarantor 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. The Guarantor 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 Guaranty shall affect
any right that any party may otherwise have to bring any action
or proceeding relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c)The Guarantor 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 Guaranty or any of the other Loan Documents to
which it is or is to be a party in any New York State or federal
court. The Guarantor 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.
(d)The Guarantor hereby 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 transactions contemplated thereby or the
actions of the Agent or any other Secured Party in the
negotiation, administration, performance or enforcement thereof.
(e)Delivery of an executed counterpart of a signature page to
this Guaranty by telecopier shall be effective as delivery of a
manually executed counterpart of this Guaranty.
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
CROMPTON & KNOWLES CORPORATION
By
Title:
EXHIBIT E-2
[SEE EXHIBIT E-1]
EXHIBIT E-2
FORM OF SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY
Dated August 21, 1996
From
THE GUARANTORS NAMED HEREIN
as Guarantors
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
T A B L E O F C O N T E N T S
Section Page
1. Guaranty; Limitation of Liability 1
2. Guaranty Absolute 3
3. Waivers and Acknowledgments 4
4. Subrogation 5
5. Payments Free and Clear of Taxes, Etc 6
6. Representations and Warranties 8
7. Covenants 10
8. Amendments, Etc. 11
9. Notices, Etc. 11
10. No Waiver; Remedies 11
11. Right of Set-off 11
12. Indemnification 12
13. Continuing Guaranty; Assignments under the
Credit Agreement 12
14. Execution in Counterparts 13
15. Governing Law; Jurisdiction; Waiver of Jury
Trial, Etc. 13
SCHEDULE I-Uniroyal Guarantors and Crompton Guarantors
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated August 21, 1996 made by the Persons
listed on the signature pages hereof (each, a "Guarantor", and
collectively the "Guarantors"), in favor of the Secured Parties
(as defined in the Credit Agreement referred to below).
PRELIMINARY STATEMENT. Crompton & Knowles Corporation ("Crompton
Corp."), Crompton & Knowles Colors Incorporated ("Crompton
Colors"), Davis-Standard Corporation ("Davis-Standard") and
Ingredient Technology Corporation ("ITC" and, together with
Crompton Corp., Crompton Colors and Davis-Standard, the "Crompton
Borrowers") and Uniroyal Chemical Company, Inc. (together with
the Crompton Borrowers, the "Borrowers") have entered into a
Credit Agreement dated as of August 21, 1996 (said Agreement, as
it may hereafter be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"; terms used herein and
not otherwise defined are used herein as therein defined) with
the lender parties party thereto (the "Lender Parties"), Citicorp
Securities, Inc., as Arranger, Citicorp USA, Inc., as Agent and
The Chase Manhattan Bank, as Managing Agent. Each Guarantor may
receive a portion of the proceeds of the Advances under the
Credit Agreement and will derive substantial direct and indirect
benefit from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Advances
and the issuance of Letters of Credit by the Lender Parties under
the Credit Agreement and the entry by the Hedge Banks into Bank
Hedge Agreements with the Borrowers from time to time that each
Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters
of Credit under the Credit Agreement and the Hedge Banks to enter
into Bank Hedge Agreements with the Borrowers from time to time,
each Guarantor, jointly and severally with each other Guarantor,
hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Each
Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of
each other Loan Party now or hereafter existing under the Loan
Documents, whether for principal (including reimbursement for
amounts drawn under Letters of Credit), interest, premiums,
penalties, fees, indemnifications, contract causes of action,
costs, expenses or otherwise (such Obligations being the
"Guaranteed Obligations"), and agrees to pay any and all expenses
(including reasonable counsel fees and expenses) incurred by the
Agent or any other Secured Party in enforcing any rights under
this Guaranty and the other Loan Documents. Without limiting the
generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any Loan Party to the Agent or
any other Secured Party under the Loan Documents but for the fact
that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving
such Loan Party.
(b)(i)Uniroyal Guarantors. Each Guarantor listed on Part A of
Schedule I hereto (each, a "Uniroyal Guarantor" and collectively,
the "Uniroyal Guarantors"), and by its acceptance of this
Guaranty, the Agent and each other Secured Party, hereby confirms
that it is the intention of all such parties that this Guaranty
not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state
law to the extent applicable to this Guaranty. To effectuate the
foregoing intention, the Agent, the other Secured Parties and the
Guarantors hereby irrevocably agree that the Obligations of each
Uniroyal Guarantor under this Guaranty shall not exceed the
lesser of (A) so long as any Uniroyal Indenture remains in
effect, the maximum amount of Debt permitted to be incurred under
such Uniroyal Indenture and (B) the maximum amount as will, after
giving effect to such maximum amount (including, without
limitation, the net benefit realized by the Uniroyal Guarantors
from the proceeds of the Advances made from time to time by the
Borrowers to the Uniroyal Guarantors or any Subsidiary of any
Uniroyal Guarantor) and all other contingent and fixed
liabilities of such Uniroyal Guarantor that are relevant under
such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the Obligations of
such other Guarantor under this Guaranty, result in the
Obligations of such Uniroyal Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance. For purposes
hereof, "Bankruptcy Law" means Title 11, U.S. Code, or any
similar Federal or state law for the relief of debtors.
(ii)Crompton Guarantors. The liability of each Guarantor listed
on Part B of Schedule I hereto (each a "Crompton Guarantor")
under this Guaranty with respect to the Obligations of each other
Loan Party (other than any Loan Party that is a Subsidiary of
such Crompton Guarantor) guaranteed hereunder shall not exceed
the maximum amount as will, after giving effect to such maximum
amount (including, without limitation, the net benefit realized
by the Crompton Guarantors from the proceeds of the Advances made
from time to time by the Borrowers to the Crompton Guarantors or
any Subsidiary of any Crompton Guarantor) and all other
contingent and fixed liabilities of such Crompton Guarantor that
are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments
made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under this Guaranty, result
in the Obligations of such Crompton Guarantor under this Guaranty
not constituting a fraudulent transfer or conveyance.
(iii)Each Guarantor agrees that in the event any payment shall be
required to be made to the Secured Parties under this Guaranty or
the Parent Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts
to each other Guarantor and Crompton Corp. and each other
guarantor so as to maximize the aggregate amount paid to the
Secured Parties under the Loan Documents.
Section 2. Guaranty Absolute. Each Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the
Agent or any other Secured Party with respect thereto. The
Obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any
other Loan Party under the Loan Documents, and a separate action
or actions may be brought and prosecuted against each Guarantor
to enforce this Guaranty, irrespective of whether any action is
brought against any Borrower or any other Loan Party or whether
such Borrower or any other Loan Party is joined in any such
action or actions. The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any
or all of the following:
(a)any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b)any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or
any other Obligations of any other Loan Party under the Loan
Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Borrower or any of its
Subsidiaries or otherwise;
(c)any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations;
(d)any manner of application of Collateral, or proceeds thereof,
to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other Obligations of any other Loan
Party under the Loan Documents or any other assets of any Loan
Party or any of its Subsidiaries;
(e)any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its
Subsidiaries;
(f)any failure of any Secured Party to disclose to any Borrower
or any Guarantor any information relating to the financial
condition, operations, properties or prospects of any other Loan
Party now or in the future known to any Secured Party (each
Guarantor waiving any duty on the part of the Secured Parties to
disclose such information);
(g)the failure of any other person to execute any guaranty or
agreement or the release or reduction of liability of any
guarantor or other surety with respect to the Guaranteed
Obligations; or
(h)any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Agent or any other Secured Party that might
otherwise constitute a defense available to, or a discharge of,
any Borrower, any Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned
by any Secured Party or any other Person upon the insolvency,
bankruptcy or reorganization of any Borrower or any other Loan
Party or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) Each Guarantor
hereby waives promptness, diligence, notice of acceptance,
presentment, demand for performance, protest, notice of
nonperformance, default, acceleration, protest or dishonor and
any other notice with respect to any of the Guaranteed
Obligations and this Guaranty or the rights of the Secured
Parties under this Guaranty and any requirement that the Agent or
any other Secured Party protect, secure, perfect or insure any
Lien or any property subject thereto or exhaust any right or take
any action against any Loan Party or any other Person or any
Collateral.
(b)Each Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth
in Section 2 and this Section 3 are knowingly made in
contemplation of such benefits.
Section 4. Subrogation. No Guarantor will exercise any rights
that it may now or hereafter acquire against any Borrower or any
other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor's Obligations under
this Guaranty or any other Loan Document, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in
any claim or remedy of any Secured Party against each Borrower or
any other insider guarantor or any Collateral, whether or not
such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right
to take or receive from each Borrower or any other insider
guarantor, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account
of such claim, remedy or right, unless and until all of the
Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, all Bank Hedge Agreements
shall have expired or terminated and the Commitments shall have
expired or terminated. If any amount shall be paid to any
Guarantor in violation of the preceding sentence at any time
prior to the later of the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this
Guaranty and the later of (i) the Termination Date and (ii) the
expiration or termination of all Bank Hedge Agreements, such
amount shall be held in trust for the benefit of the Agent and
the other Secured Parties and shall forthwith be paid to the
Agent to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty
thereafter arising. If (i) any Guarantor shall make payment to
the Agent or any other Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations
and all other amounts payable under this Guaranty shall be paid
in full in cash and (iii) the Termination Date shall have
occurred and all Bank Hedge Agreements shall have expired or
terminated, the Agent and the other Secured Parties will, at any
Guarantor's request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by any Guarantor hereunder shall be made, in
accordance with Section 2.11 of the Credit Agreement, free and
clear of and without deduction for any and all present or future
Taxes. If any Guarantor shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to the
Agent or any other Secured Party, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section) the Agent or such other Secured Party
(as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such
Guarantor shall make such deductions and (iii) such Guarantor
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b)In addition, each Guarantor agrees to pay any present or
future Other Taxes.
(c)The Guarantors jointly and severally agree to indemnify the
Agent and each other Secured Party for and hold them harmless
against the full amount of Taxes and Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 5, imposed on or paid by the
Agent or such other Secured Party (as the case may be) and any
liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date the
Agent or such other Secured Party (as the case may be) makes
written demand therefor.
(d)Within 30 days after the date of any payment of Taxes by or on
behalf of any Guarantor, such Guarantor will furnish to the
Agent, at its address referred to in the Credit Agreement, the
original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder by or on behalf of
any Guarantor through an account or branch outside the United
States or by or on behalf of such Guarantor by a payor that is
not a United States person, if such Guarantor determines that no
Taxes are payable in respect thereof, such Guarantor shall
furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent
stating that such payment is exempt from Taxes. For purposes of
this subsection (d) and subsection (e), the terms "United States"
and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e)Upon the reasonable request in writing of any Guarantor, each
Secured Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution
and delivery of the Credit Agreement in the case of each Initial
Lender or Initial Issuing Bank, as the case may be, and on the
date of the Assignment and Acceptance or other agreement pursuant
to which it becomes a Secured Party in the case of each other
Secured Party, and from time to time thereafter upon the
reasonable request in writing by any Guarantor (but only so long
thereafter as such Secured Party remains lawfully able to do so),
provide the Agent and such Guarantor with Internal Revenue
Service forms 1001 or 4224 or (in the case of a Secured 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 (and, if such Secured Party
delivers Forms W-8, two signed certificates certifying that such
Secured Party (i) is not 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 that such Secured Party is
exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to the Credit Agreement. If
the accurate and complete forms provided by a Secured Party at
the time such Secured Party first becomes a party to the Credit
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 Secured
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 Secured Party assignee becomes
a party to the Credit Agreement, the Secured 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 includable in Taxes) United States
withholding tax, if any, applicable with respect to the Secured
Party assignee on such date.
(f)For any period with respect to which a Secured Party has
failed to provide any Guarantor following such Guarantor's
request therefor pursuant to subsection (e) above with the
appropriate form described in subsection (e) above (other than if
such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such
form otherwise is not required under subsection (e) above), such
Secured Party shall not be entitled to indemnification under
subsection (a) or (c) with respect to Taxes imposed by the United
States by reason of such failure; provided, however, that should
a Secured Party become subject to Taxes because of its failure to
deliver a form required hereunder, such Guarantor shall take such
steps, at such Lender Party's sole expense, as such Secured Party
shall reasonably request to assist such Secured Party to recover
such Taxes.
(g)Any Secured Party claiming any additional amounts payable
pursuant to this Section 5 agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office 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 reasonable
judgment of such Secured Party, be otherwise disadvantageous to
such Secured Party.
(h)If any Secured 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 5(a) or (b),
it shall promptly remit such refund (including any interest) to
Crompton Corp., net of all out-of-pocket expenses of such Secured
Party; provided, however, that Crompton Corp., upon the request
of such Secured 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.
Such Secured 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 any Secured Party to apply for any
refund.
(i)Without prejudice to the survival of any other agreement of
any Guarantor hereunder or under any other Loan Document, the
agreements and obligations of each Guarantor contained in this
Section 5 and in Section 12 shall survive the payment in full of
the Guaranteed Obligations and all other amounts payable under
this Guaranty.
Section 6. Representations and Warranties. Each Guarantor
hereby represents and warrants as follows:
(a)Such Guarantor (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 such Guarantor has been validly issued and is fully paid and
non-assessable.
(b)The execution, delivery and performance by such Guarantor of
this Guaranty and each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation
of the Merger and the other transactions contemplated hereby, are
within such Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(i) contravene such Guarantor'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 such Guarantor, 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 such Guarantor or any of its
Subsidiaries. Neither such Guarantor nor 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 contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach of
which would have a Material Adverse Effect.
(c)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 such Guarantor of
this Guaranty, any other Loan Document or any Related Document to
which it is or is to be a party, or for the consummation of the
Merger or the other transactions contemplated hereby, (ii) the
grant by such Guarantor 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) to the Credit
Agreement, all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting
periods in connection with the Merger and the other transactions
contemplated hereby and 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 Merger or the rights of such Guarantor or its
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.
(d)This Guaranty has been, and each other Loan Document and each
Related Document to which such Guarantor will be a party when
delivered pursuant to the Credit Agreement will have been, duly
executed and delivered by such Guarantor. This Guaranty is, and
each other Loan Document and each Related Document to which it
will be a party when delivered pursuant to the Credit Agreement
will be, the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with
its terms.
(e)There is no action, suit, investigation, litigation or
proceeding affecting such Guarantor 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 the Merger, this
Guaranty, any other Loan Document or any Related Document or the
consummation of the transactions contemplated by the Loan
Documents, and there has been no material adverse change in the
status, or financial effect on such Guarantor or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(f) of the Credit Agreement.
(f)There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(g)Such Guarantor has, independently and without reliance upon
the Agent or any other Secured Party and based on such documents
and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty, and such
Guarantor has established adequate means of obtaining from any
other Loan Parties on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely
familiar with, the financial condition, operations, properties
and prospects of such other Loan Parties.
Section 7. Covenants. Each Guarantor covenants and agrees that,
so long as any part of the Guaranteed Obligations shall remain
unpaid, any Letter of Credit shall be outstanding, any Lender
Party shall have any Commitment or any Hedge Bank shall have any
obligation under any Bank Hedge Agreement, such Guarantor will,
unless the Required Lenders shall otherwise consent in writing,
perform or observe, and cause its Subsidiaries to perform or
observe, all of the terms, covenants and agreements that the Loan
Documents state that the Borrowers are to cause such Guarantor or
such Subsidiaries to perform or observe.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Agent and 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 no amendment, waiver or consent
shall, unless in writing and signed by all of the Secured Parties
(other than any Lender Party that is, at such time, a Defaulting
Lender), (a) reduce or limit the liability of such Guarantor
hereunder or release such Guarantor, (b) postpone any date fixed
for payment hereunder or (c) change the number of Secured Parties
required to take any action hereunder.
Section 9. 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 to it, if to any
Guarantor, 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 the Agent or any Lender
Party, at its address specified in the Credit Agreement, if to
any Hedge Bank, at its address specified in the Bank Hedge
Agreement to which it is a party, or as to any party at such
other address as shall be designated by such party in a written
notice to each other party. All such notices and other
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. Delivery of a notice to any Guarantor at the above
addresses shall be deemed notice to all Guarantors.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any other Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder 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 11. 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 of the Credit Agreement to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of
said 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
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 Guarantor against any and all of
the Obligations of such Guarantor now or hereafter existing under
this Guaranty, whether or not such Lender Party shall have made
any demand under this Guaranty and although such Obligations may
be unmatured. Each Lender Party agrees promptly to notify such
Guarantor 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 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 12. Indemnification. Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties
under this Guaranty, each Guarantor shall, to the fullest extent
permitted by law, indemnify, defend and save and hold harmless
each Secured Party from and against, and shall pay on demand, any
and all losses, liabilities, damages, costs, expenses and charges
(including the fees and disbursements of such Secured Party's
legal counsel) suffered or incurred by such Secured Party as a
result of any failure of any Guaranteed Obligations to be the
legal, valid and binding obligations of any Loan Party
enforceable against such Loan Party in accordance with their
terms, except to the extent such loss, liability, damages, cost,
expense or charge is found in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such
Secured Party's gross negligence or willful misconduct.
Section 13. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the later of the
payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty and the later of (i)
the Termination Date and (ii) the expiration or termination of
all Bank Hedge Agreements, (b) be binding upon each Guarantor,
its successors and assigns and (c) inure to the benefit of and be
enforceable by the Agent and the other Secured Parties and their
successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Secured Party may
assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Advances
owing to it and the Note or Notes held by it) to any other
Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as and to the extent provided
in Section 8.07 of the Credit Agreement. No Guarantor shall have
the right to assign its rights hereunder or any interest herein
without the prior written consent of the Secured Parties.
Section 14. Execution in Counterparts. This Agreement may be
executed in any number of 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 15. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b)Each Guarantor 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 Guaranty or any of the other Loan Documents to
which it is or is to be a party, or for recognition or
enforcement of any judgment, and each Guarantor 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 Guarantor 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 Guaranty
shall affect any right that any party may otherwise have to bring
any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the
courts of any jurisdiction.
(c)Each Guarantor 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 Guaranty or any of the other Loan Documents to
which it is or is to be a party in any New York State or federal
court. Each Guarantor 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.
(d)Each Guarantor hereby 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 transactions contemplated thereby or the
actions of the Agent or any other Secured Party in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
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:
<PAGE>
SCHEDULE I TO THE GUARANTY
PART A:
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.
PART B:
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
EXHIBIT F-1
December 19, 1996
To the Initial Lenders party to the
Credit Agreement referred to below
and to Citicorp Securities, Inc.,
as Arranger, 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 Amended and Restated Credit Agreement dated as
of December 19, 1996 (the "Credit Agreement") among Crompton &
Knowles Corporation, Crompton & Knowles Colors Incorporated,
Davis-Standard Corporation, Ingredient Technology Corporation and
Uniroyal Chemical Company, Inc., the B-2 Borrowers named therein
and the B-3 Borrowers named therein (collectively, the
"Borrowers"), the Lender Parties party thereto, Citicorp
Securities, Inc., as Arranger, 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 documents set forth on Schedule I are referred to
herein as the "Financing Statements". The Loan Parties set forth
on Schedule II 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 is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware.
2. Each Delaware Loan Party has all necessary corporate
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.
3. 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.
4. 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.
5. 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.
6. 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).
7. 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, (b) the grant by
any Loan Party of the Liens granted by it pursuant to the
Security Agreement, (c) the perfection or maintenance of the
Liens created by the Security Agreement, or (d) 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 III 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, (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, and (iii) the matters
referred to in paragraph 8 below. 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.
8. Each Security Agreement creates a valid security
interest in the Collateral referred to therein securing payment
of the Secured Obligations to the extent Article 9 of the Uniform
Commercial Code as in effect in State of New York (the "UCC") is
applicable thereto and as to which a security interest may be
perfected by filing a financing statement under the UCC. The
Agent's having possession of the certificates representing the
Pledged Shares and the instruments representing the Pledged Debt
previously delivered to the Agent is sufficient to maintain
perfection of such security interest in such Security Collateral.
Our opinion in this paragraph 8 is subject to the
following qualifications:
(i) in the case of instruments (as such term is de-
fined in Article 9 of the UCC) not constituting part of chattel
paper (as such term is defined in Article 9 of the UCC), the
security interest of the Agent therein cannot be perfected by the
filing of the Financing Statements but will be perfected if
possession thereof is obtained in accordance with the provisions
of Article 9 of the UCC;
(ii) in the case of the issuance or other distribu-
tion in respect of the Pledged Shares or Pledged Debt of
additional instruments (as such term is defined in Article 9 of
the UCC), the security interest of the Agent therein will be
perfected only if possession thereof is obtained in accordance
with the provisions of Article 9 of the UCC;
(iii) in the case of the issuance or other
distribution in respect of the Pledged Shares or Pledged Debt of
additional securities (as such term is defined in Article 8 of
the UCC), the security interest of the Agent therein will be
perfected only if possession thereof is obtained in accordance
with the provisions of the Security Agreement or the transfer
thereof otherwise occurs in a manner provided for in Section 8-313(1)
of the UCC;
(iv) in the case of proceeds, continuation of
perfection of the Agent's security interest therein is limited to
the extent set forth in Section 9-306 of the UCC;
(v) in the case of all Collateral in which the
security interest of the Agent has been perfected by the filing
of Financing Statements, Article 9 of the UCC requires the filing
of continuation statements within the period of six months prior
to the expiration of five years from the date of the original
filings in order to maintain the effectiveness of the filings
referred to in this paragraph; and
(vi) in the case of property that becomes
Collateral after the date hereof, Section 552 of the Federal
Bankruptcy Code limits the extent to which property acquired by a
debtor after the commencement of a case under the Federal
Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the
commencement of such case.
We call to your attention that the perfection of the
above security interests will be terminated as to any Collateral
acquired by a Loan Party more than four months after such Loan
Party so changes its name, identity or corporate structure as to
make the Financing Statements seriously misleading, unless new
appropriate financing statements indicating the new name,
identity or corporate structure of such Loan Party are properly
filed before the expiration of such four months.
9. Except as set forth on Schedule IV hereto, 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 or the execution, delivery or filing of the
Financing Statements in the State of New York have been paid.
10. 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 set forth above are subject to the following qual-
ifications:
(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) Our opinions set forth in paragraph 8 above are
subject to the further qualifications that we express no opinion
as to:
(i) any Loan Party's rights in or title to any Col-
lateral; and
(ii) the validity or perfection of the security in-
terests referred to in paragraph 8 above as they relate to any
interest in or claim in or under any policy of insurance, except
a claim to proceeds payable by reason of loss or damage under
insurance policies maintained by the Loan Parties with respect to
Inventory as required by and in compliance with Section 12 of the
Uniroyal Security Agreement.
The opinions expressed herein are subject to the fol-
lowing additional qualifications and comments:
(a) 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.
(b) 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.
(c) We express no opinion as to (i) whether a
federal 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.
(d) 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.
(e) Except as expressly set forth in paragraph
8 above, we express no opinion as to the creation, validity,
perfection or priority of any security interest or lien purported
to be created by any of the Loan Documents.
(f) 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 ad dressed and
delivered to such Eligible Assignee on the date hereof.
Very truly yours,
RDF:bar
Att.
SCHEDULE I
FINANCING STATEMENTS
Financing Statements under the Uniform Commercial Code, naming
the Loan Parties listed below as debtors and the Agent as secured
party, which Financing Statements are to be filed in the filing
offices listed below:
Loan Parties Filing Office
Uniroyal Chemical Company, Inc. Secretary of State, NY
Dutchess County, NY
Kings County, NY
Nassau County, NY
Ontario County, NY
Schenectady County, NY
Ulster County, NY
Wayne County, NY
Gustafson, Inc. Secretary of State, NY
Cayuga County, NY
SCHEDULE II
DELAWARE LOAN PARTIES
Davis-Standard Corporation
Crompton & Knowles Colors Incorporated
Ingredient Technology Corporation
SCHEDULE III
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
Schedule 4.01(d) to the Credit
Agreement is hereby incorporated
by reference.
SCHEDULE IV
UNPAID TAXES AND GOVERNMENTAL FEES AND CHARGES
None
EXHIBIT F-2
December 19, 1996
To the Initial Lenders party to the Credit
Agreement referred to below and to
Citicorp Securities, Inc., as Arranger,
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 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") and Uniroyal Chemical Company, Inc. ("Uniroyal"), the
B-2 Borrowers named therein and the B-3 Borrowers named therein,
the Lender Parties party thereto, Citicorp Securities, Inc., as
Arranger, 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 (together with the Credit Agreement, the Crompton
Security Agreement, the Uniroyal Security Agreement and the
Subsidiary Guaranty, the "Agreement" made by Crompton in favor of
the Secured Parties and (f) 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 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 Amended and Restated Credit
Agreement dated as of December 19, 1996 (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 and the B-3 Borrowers named therein (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 juridiction of
incoporation, (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 Amended and
Restated Credit Agreement dated as of December 19, 1996 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 and the B-3
Borrowers named therein (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 Amended and Restated Credit
Agreement dated as of December 19, 1996 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 and the B-3
Borrowers named therein (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
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT
Reference is made to the Credit Agreement dated as of
August 21, 1996 (as amended or 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 ("Uniroyal "), and, together with the Crompton
Borrowers, the "Borrowers "), the banks, financial institutions
and other institutional lenders listed on the signature pages
hereof as the Initial Lenders, the Initial Issuing Banks and the
Swing Line Bank, CITICORP SECURITIES, INC., as Arranger, CITICORP
USA, INC. ("Citicorp "), as agent (the "Agent ") for the Lender
Parties, and THE CHASE MANHATTAN BANK ("Chase "), as Managing
Agent. Terms not otherwise defined herein are used herein as
defined in the Credit Agreement.
Each of the undersigned Assignors, Crompton Corp,
Crompton Colors, Davis Standard, ITC and Uniroyal have caused
this Assignment Agreement to be executed in New York as of
December 19, 1996 by their officers thereunto duly authorized and
agree as follows:
1. Each of the Working Capital B-2 Lenders listed
on the signature pages hereof under the caption "Assignors" (each
an "Assignor " and, collectively, the "Assignors ") hereby for
value and consideration received sells and assigns to the Working
Capital B-2 Lenders and the Working Capital B-3 Lenders listed on
the signature pages hereof under the caption "Assignees" (each an
"Assignee " and, collectively, the "Assignees ") party to the
Amended and Restated Credit Agreement dated as of December 19,
1996 (the "Restated Credit Agreement ") among CROMPTON CORP.,
CROMPTON COLORS, DAVIS-STANDARD, ITC, UNIROYAL, the B-2 BORROWERS
named therein and the B-3 BORROWERS named therein
(collectively, the "Borrowers "), the Initial Lenders, the
Initial Issuing Banks and the Swing Line Bank, CITICORP, as agent
for the Lender Parties, and CHASE, as Managing Agent, all of such
Assignor's interest in and rights and obligations under the
Working Capital B-2 Facility under the Credit Agreement as of the
Effective Date (as defined below) (each an "Assignment " and,
collectively, the "Assignments "). The Agent, on behalf of each
Assignee, accepts the Assignments in accordance with the terms
set forth in the Restated Credit Agreement
2. This Assignment Agreement shall become effective
as of the date (the "Effective Date ") and time specified in a
notice delivered by the Borrowers to the Agent in accordance with
the Restated Credit Agreement no later than the day prior to the
proposed Effective Date; the Agent shall give each Assignor
prompt notice of the delivery of such notice by the Borrowers.
No such notice shall specify an Effective Date later than
December 19, 1996. In consideration of the Assignments
contemplated hereby, each Assignor shall receive an amount (each,
an "Assignment Payment " and, collectively, the "Assignment
Payments ") in same day funds equal to the sum of the aggregate
principal amount of all Advances owing to such Assignor on such
date, plus accrued and unpaid commitment fees and interest
thereon to such date at the rates specified pursuant to the
Credit Agreement, such payment to be made as soon as practicable
following the initial borrowing under the Restated Credit
Agreement (the "Effective Time "), but in no event later than
12:00 noon on the day immediately following the Effective Time
(the "Payment Deadline "). Each Assignee shall pay an amount
equal to its ratable share, determined as set forth in the
Restated Credit Agreement, of the aggregate of the Assignment
Payments. If the aggregate amount of the Assignment Payments has
not been delivered to the Agent on or prior to the Payment
Deadline or if the Restatement Date (as defined in the Restated
Credit Agreement) does not occur, then (i) each Assignment shall
automatically be revoked without further action by any party and
each Assignor shall have the same interest in and rights and
obligations under the Credit Agreement as existed immediately
prior to the Effective Date, (ii) each Assignor shall return to
the Agent all Assignment Payments received by such Assignor, and
the Agent shall return all such payments, together with all other
Assignment Payments received by the Agent and not paid to the
Assignors, to the Assignees and (iii) this Assignment Agreement
shall be of no further force and effect and each of the parties
hereto shall be released from its obligations and forfeit its
rights hereunder (except under this sentence). In the event that
any Assignor's Assignment Payment is not made by 12:00 noon on
the Effective Date, such Assignor shall receive an additional
day's interest and commitment fee for each day until the day on
which such payment is made prior to 2:00 p.m., unless this
Assignment Agreement shall have been revoked in accordance with
the preceding sentence.
3. Each Assignor (i) represents and warrants that
it is the legal and beneficial owner of the interests being sold
and assigned by it hereunder and that such interests are 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 Credit Agreement or the Restated Credit
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or the
Restated Credit Agreement 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 the Borrowers or the performance or
observance by the Borrowers of any of their respective
obligations under the Credit Agreement or the Restated Credit
Agreement or any other instrument or document furnished pursuant
thereto.
4. By accepting this Assignment Agreement below,
the Agent confirms on behalf of each Assignee that such Assignee
has received such financial statements and such other documents
and information as such Assignee has deemed appropriate to make
its own credit analysis and decision to enter into the Restated
Credit Agreement and agrees that such Assignee will,
independently and without reliance upon any Assignor and based on
such documents and information as such Assignee shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Restated
Credit Agreement.
5. The Borrowers hereby acknowledge that this
Assignment Agreement varies from the form of Assignment and
Acceptance prescribed by the Credit Agreement and waives any
objection to such variations. Subject to the payment of all
amounts specified under paragraph 2 above, each Assignor waives
any and all rights to assert that the borrowings and other
transactions contemplated by the Restated Credit Agreement
constitute a Default under the Credit Agreement.
6. The Borrowers hereby acknowledge that the
Assignors, by performance of this Assignment Agreement, may incur
costs associated with a repayment on a day other than the last
day of an Interest Period. The Borrower hereby agrees to pay
directly to each Assignor, on demand, an amount equal to such
costs in accordance with Section 8.04(c) of the Credit Agreement.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
8. This Assignment 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 this Assignment Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this
Assignment Agreement.
IN WITNESS WHEREOF, the Assignors, Crompton Corp,
Crompton Colors, Davis Standard, ITC and Uniroyal have caused
this Assignment Agreement to be executed by their officers
thereunto duly authorized.
CROMPTON & KNOWLES
CORPORATION
By
Title:
CROMPTON & KNOWLES COLORS
INCORPORATED
By
Title:
DAVIS-STANDARD CORPORATION
By
Title:
INGREDIENT TECHNOLOGY
CORPORATION
By
Title:
UNIROYAL CHEMICAL COMPANY,
INC.
By
Title:
CITICORP SECURITIES, INC.,
as Arranger
By
Title:
CITICORP USA, INC., as Agent
By
Title:
THE CHASE MANHATTAN BANK,
as Managing Agent
By
Title:
Assignors
CITICORP USA, INC.
By
Title:
THE CHASE MANHATTAN BANK
By
Title:
ABN AMRO BANK, N.V., NEW YORK
BRANCH
By
Title:
By
Title:
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By
Title:
By
Title:
BANK OF AMERICA ILLINOIS
By
Title:
THE BANK OF NEW YORK
By
Title:
BANK OF BOSTON CONNECTICUT
By
Title:
BHF - BANK AKTIENGESELLSCHAFT
By
Title:
By
Title:
CIBC, INC.
By
Title:
CORESTATES BANK, N.A.
By
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
By
Title:
FIRST UNION NATIONAL BANK
By
Title:
FLEET NATIONAL BANK
By
Title:
SOCIETE GENERALE
By
Title:
TORONTO DOMINION (NEW YORK),
INC.
By
Title:
Assignees
Working Capital B-2 Lenders
CITIBANK, N.A.
By
Title:
THE CHASE MANHATTAN BANK
By
Title:
ABN AMRO BANK N.V., NEW YORK
BRANCH
By
Title:
By
Title:
BANK OF AMERICA ILLINOIS
By
Title:
THE BANK OF NEW YORK
By
Title:
BANK OF BOSTON CONNECTICUT
By
Title:
BHF - BANK AKTIENGESELLSCHAFT
By
Title:
By
Title:
CIBC WOOD GUNDY PLC
By
Title:
CORESTATES BANK, N.A.
By
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
By
Title:
FIRST UNION NATIONAL BANK
By
Title:
FLEET NATIONAL BANK
By
Title:
TORONTO DOMINION (NEW YORK),
INC.
By
Title:
Working Capital B-3 Lenders
CITIBANK, N.A.,
MILAN BRANCH
By
Title:
BANCA COMMERCIALE ITALIANA,
LATINA BRANCH
By
Title:
By
Title:
BANK OF AMERICA NT & SA,
MILAN BRANCH
By
Title:
THE CHASE MANHATTAN BANK,
MILAN BRANCH
By
Title:
SOCIETE GENERALE
MILAN BRANCH
By
Title:
ACKNOWLEDGED AND AGREED:
C & K SERVICES SA
By
Title:
DAVIS-STANDARD (DEUTSCHLAND)
GMBH
By
Title:
DAVIS STANDARD (FRANCE) SARL
By
Title:
ER-WE-PA DAVIS-STANDARD GMBH
By
Title:
UNIROYAL CHEMICAL B.V.
By
Title:
UNIROYAL CHEMICAL LTD.
By
Title:
UNIROYAL CHIMICA S.P.A.
By
Title:
EXHIBIT K
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 Amended and
Restated Credit Agreement dated as of December 19, 1996 (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 and the B-3 Borrowers named therein (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 K
DATE OF ITALIAN LENDER JOINDER AGREEMENT:
NAME OF DESIGNATED WORKING CAPITAL B-3 LENDER:
JURISDICTION:
AMOUNT OF OUTSTANDING WORKKING 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-QT FOR THE PERIOD ENDED DECEMBER 28, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000858905
<NAME> UNIROYAL CHEMICAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> DEC-28-1996
<CASH> 21,015
<SECURITIES> 0
<RECEIVABLES> 140,979
<ALLOWANCES> 3,741
<INVENTORY> 202,762
<CURRENT-ASSETS> 421,863
<PP&E> 630,389
<DEPRECIATION> 262,427
<TOTAL-ASSETS> 1,133,307
<CURRENT-LIABILITIES> 219,517
<BONDS> 925,982
0
0
<COMMON> 0
<OTHER-SE> (336,832)
<TOTAL-LIABILITY-AND-EQUITY> 1,133,307
<SALES> 242,338
<TOTAL-REVENUES> 242,338
<CGS> 154,031
<TOTAL-COSTS> 218,890
<OTHER-EXPENSES> (41)
<LOSS-PROVISION> 420
<INTEREST-EXPENSE> 24,814
<INCOME-PRETAX> (1,325)
<INCOME-TAX> (531)
<INCOME-CONTINUING> (794)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (794)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-QT FOR THE PERIOD ENDED DECEMBER 28, 1996 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> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> DEC-28-1996
<CASH> 21,015
<SECURITIES> 0
<RECEIVABLES> 140,979
<ALLOWANCES> 3,741
<INVENTORY> 202,762
<CURRENT-ASSETS> 421,863
<PP&E> 630,389
<DEPRECIATION> 262,427
<TOTAL-ASSETS> 1,133,307
<CURRENT-LIABILITIES> 219,517
<BONDS> 925,982
0
0
<COMMON> 1
<OTHER-SE> (336,833)
<TOTAL-LIABILITY-AND-EQUITY> 1,133,307
<SALES> 242,338
<TOTAL-REVENUES> 242,338
<CGS> 154,031
<TOTAL-COSTS> 218,890
<OTHER-EXPENSES> (41)
<LOSS-PROVISION> 420
<INTEREST-EXPENSE> 24,814
<INCOME-PRETAX> (1,325)
<INCOME-TAX> (531)
<INCOME-CONTINUING> (794)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (794)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
