EXHIBIT 10.2
KRONOS INTERNATIONAL, INC.
SECOND AMENDED AND RESTATED LOAN AGREEMENT
Dated as of January 31, 1997
DM 418,249,878
HYPOBANK INTERNATIONAL S.A.
as Agent
and the
BANKS NAMED HEREIN
1
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS......................................................................4
ARTICLE 2. THE FACILITY....................................................................38
2.01 .............................................................................38
2.02 .............................................................................40
2.03 .............................................................................40
2.04 .............................................................................40
2.05 .............................................................................42
2.06 .............................................................................42
ARTICLE 3. PURPOSE OF THE LOAN.............................................................45
ARTICLE 4. CONDITIONS PRECEDENT AND NOTICE OF BORROWING....................................45
4.01 .............................................................................45
4.02 .............................................................................49
4.03 .............................................................................50
4.04 .............................................................................50
ARTICLE 5. INTEREST PERIODS................................................................50
5.01 .............................................................................50
5.02 .............................................................................50
5.03 .............................................................................50
5.04 .............................................................................51
ARTICLE 6. INTEREST........................................................................51
6.01 .............................................................................51
6.02 .............................................................................51
6.03 .............................................................................51
6.04 .............................................................................51
6.05 .............................................................................51
ARTICLE 7. SUBSTITUTE BASIS................................................................52
7.01 .............................................................................52
7.02 .............................................................................52
7.03 .............................................................................53
7.04 .............................................................................54
ARTICLE 8. PREPAYMENT......................................................................54
8.01 .............................................................................54
8.02 .............................................................................58
ii
8.03 .............................................................................59
ARTICLE 9. REPAYMENT.......................................................................59
ARTICLE 10. EVIDENCE OF DEBT...............................................................60
10.01 .............................................................................60
10.02 .............................................................................60
10.03 .............................................................................61
ARTICLE 11. PAYMENTS.......................................................................61
11.01 .............................................................................61
11.02 .............................................................................62
11.03 .............................................................................63
11.04 .............................................................................63
11.05 .............................................................................63
11.06 .............................................................................64
11.07 .............................................................................64
11.08 .............................................................................64
11.09 .............................................................................65
ARTICLE 12. DEFAULT INTEREST AND INDEMNITY.................................................65
12.01 .............................................................................65
12.02 .............................................................................66
12.03 .............................................................................66
12.04 .............................................................................67
ARTICLE 13. SET-OFF AND REDISTRIBUTION OF PAYMENTS.........................................67
13.01 .............................................................................67
13.02 .............................................................................68
13.03 .............................................................................68
13.04 .............................................................................68
13.05 .............................................................................68
ARTICLE 14. CHANGE OF CIRCUMSTANCES; ILLEGALITY;
RESERVE REQUIREMENTS.....................................................69
14.01 Change of Circumstances......................................................69
14.02 Illegality...................................................................70
14.03 Reserve Requirements.........................................................71
ARTICLE 15. REPRESENTATIONS AND WARRANTIES.................................................72
15.01 Corporate Existence of Borrower and Subsidiaries.............................72
15.02 Power and Authority of Borrower..............................................72
15.03 Power and Authority of Pledgors and Guarantors...............................72
iii
15.04 Rank of Indebtedness.........................................................73
15.05 No Conditions to Performance and Enforceability..............................73
15.06 No Filings; No Stamp Taxes...................................................73
15.07 Legal, Valid and Enforceable Obligations.....................................74
15.08 Bankruptcy...................................................................74
15.09 No Defaults; No Litigation...................................................74
15.10 Environmental Compliance.....................................................75
15.11 Financial Statements.........................................................76
15.12 No Material Adverse Change...................................................76
15.13 Accurate Information.........................................................76
15.14 No Violation, Defaults or Liens..............................................76
15.15 ERISA........................................................................77
15.16 Non-U.S. Employee Plans......................................................79
15.17 Investment Company...........................................................79
15.18 Subsidiaries.................................................................79
15.19 Margin Stock.................................................................80
15.20 Taxes........................................................................81
15.21 Intellectual Property Rights.................................................81
15.22 Key Contracts................................................................82
15.23 Affiliate Transactions.......................................................82
15.24 NL Debt Offering; Mirror Notes; Subordinated Loans; Consideration
for Prepayments............................................................83
15.25 Taxes relating to Mirror Notes...............................................83
15.26 Ownership of Material Assets.................................................83
15.27 Optional Prepayments.........................................................84
15.28 Certain Adjusted Restricted Payments.........................................84
ARTICLE 16. UNDERTAKINGS AND COVENANTS.....................................................84
16.01 Delivery of Financial Statements, etc........................................84
16.02 Operating Permits............................................................86
16.03 Environmental Compliance.....................................................86
16.04 Compliance with Applicable Law...............................................86
16.05 Books and Records............................................................87
16.06 Environmental Reports........................................................87
16.07 Intellectual Property Rights.................................................87
16.08 Liens........................................................................88
16.09 Dispositions.................................................................88
16.10 Merger; Consolidation........................................................89
16.11 Employee Matters.............................................................90
16.12 Interest Rate Protection Agreements..........................................92
16.13 Indebtedness to Subsidiaries.................................................92
16.14 Maintenance of Separate Corporate Identities.................................92
16.15 Affiliate Transactions.......................................................92
iv
16.16 Transactions with Subsidiaries...............................................93
16.17 Notice of Default; Change of Law.............................................94
16.18 Limitation of Indebtedness...................................................94
16.19 Subsidiary Indebtedness......................................................94
16.20 Restricted Payments..........................................................94
16.21 Maximum Funded Debt Ratio; Maximum Indebtedness..............................95
16.22 Minimum Consolidated Equity..................................................96
16.23 Current Assets to Current Liabilities Ratio..................................96
16.24 Interest Coverage Ratio......................................................96
16.25 Minimum EBITDA...............................................................97
16.26 Registered Office in Germany.................................................97
16.27 Service Contract of Kronos Titan.............................................97
16.28 Restriction on Dividends from Subsidiaries...................................97
16.29 Investments..................................................................98
16.30 Limitation on Restricted Payments............................................98
16.31 Maintenance of Property; Insurance...........................................99
16.32 Continuation of Business.....................................................99
16.33 Taxes........................................................................99
16.34 Additional Guaranties, Pledged Subsidiaries..................................99
16.35 Pledged Stock...............................................................100
16.36 Principal Shareholder Waiver................................................101
16.37 Maximum Capital Expenditures................................................101
16.38 Mirror Notes; Subordinated Loans............................................102
16.39 Notification of Indenture Defaults..........................................102
16.40 Bank Accounts...............................................................102
ARTICLE 17. COLLATERAL....................................................................103
17.01 ............................................................................103
17.02 ............................................................................104
17.03 ............................................................................104
17.04 ............................................................................105
17.05 ............................................................................106
ARTICLE 18. EVENTS OF DEFAULT.............................................................107
18.01 ............................................................................107
18.02 ............................................................................107
18.03 ............................................................................107
18.04 ............................................................................107
18.05 ............................................................................107
18.06 ............................................................................107
18.07 ............................................................................108
18.08 ............................................................................108
18.09 ............................................................................108
v
18.10 ............................................................................108
18.11 ............................................................................108
18.12 ............................................................................108
18.13 ............................................................................109
18.14 ............................................................................109
18.15 ............................................................................109
18.16 ............................................................................109
18.17 ............................................................................109
ARTICLE 19. FEES..........................................................................110
19.01 ............................................................................110
19.02 ............................................................................111
19.03 ............................................................................111
19.04 ............................................................................111
ARTICLE 20. EXPENSES AND DUTIES...........................................................111
20.01 ............................................................................111
20.02 ............................................................................111
20.03 ............................................................................112
20.04 ............................................................................112
ARTICLE 21. THE AGENT AND THE BANKS.......................................................112
21.01 ............................................................................112
21.02 ............................................................................112
21.03 ............................................................................113
21.04 ............................................................................113
21.05 ............................................................................114
21.06 ............................................................................114
21.08 ............................................................................115
21.09 ............................................................................115
21.10 ............................................................................116
21.11 ............................................................................116
ARTICLE 22. NO WAIVER.....................................................................116
ARTICLE 23. PARTIAL INVALIDITY; CHANGE IN ACCOUNTING PRINCIPLES...........................117
23.01 ............................................................................117
23.02 ............................................................................117
ARTICLE 24. ASSIGNMENTS, PARTICIPATION....................................................117
24.01 ............................................................................117
24.02 ............................................................................118
24.03 ............................................................................119
vi
24.04 ............................................................................120
24.05 ............................................................................120
24.06 ............................................................................120
24.07 ............................................................................121
ARTICLE 25. LANGUAGE......................................................................121
ARTICLE 26. NOTICES.......................................................................121
ARTICLE 27. LIMITATION ON SPECIAL DAMAGES.................................................121
ARTICLE 28. APPLICABLE LAW; JURISDICTION; SERVICE OF PROCESS..............................122
ARTICLE 29. COUNTERPARTS..................................................................122
ARTICLE 30. FURTHER ASSURANCES............................................................122
ARTICLE 31. CONSTRUCTION..................................................................123
ARTICLE 32. ENTIRE AGREEMENT..............................................................123
ARTICLE 33. SURVIVAL OF WARRANTIES AND AGREEMENTS.........................................123
ARTICLE 34. NO THIRD PARTY BENEFICIARIES..................................................123
ARTICLE 35. NO NOVATION...................................................................124
ARTICLE 36. MISCELLANEOUS.................................................................124
36.01 ............................................................................124
36.02 ............................................................................124
36.03 ............................................................................124
36.04 ............................................................................125
vii
SCHEDULES
Schedule 1 List of Banks
Schedule 2 Indebtedness
Schedule 3 Liens
Schedule 4 Certain Legal Matters
Schedule 5 Litigation
Schedule 6 ERISA and Non-U.S. Employee Plans
A Erisa Disclosure
B Termination
C Plan Description
D Withdrawal
E Claims
F Non-U.S. Employee Plans
Schedule 7 Subsidiaries
Schedule 8 License Agreements and Intellectual Property Rights
A Exceptions to Ownership of Intellectual Property Rights
B Affiliate License Agreements
C Third Party License Agreements
D Other Agreements
E Patents
F Trademarks
G Infringements Claims
Schedule 9 Affiliate Transactions
Schedule 10 Insurance
Schedule 11 Tax Information
Schedule 12 Certain Loan Agreements
Schedule 13 Certain Material Assets
viii
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Mirror Notes
Exhibit C Subordinated Loan Documents
Exhibit D Forms of Amendments and/or Reaffirmations of Pledge Agreements
Exhibit E Forms of Amendments and/or Reaffirmations of Guaranties
Exhibit F Form of Second Amended and Restated Technology and Trademark
Undertaking
Exhibit G Form of Amendment and/or Reaffirmation of Subordination and
Contribution Agreement
Exhibit H Form of Second Amended and Restated Liquidity Undertaking
Exhibit I Form of Acknowledgment of Limitation of Special Damages
Exhibit J Form of NL Guaranty
Exhibit K Form of Canadian Security Documents
Exhibit L Form of Nordenham Mortgage
Exhibit M Forms of Cash Pledge Agreements of the Borrower
Exhibit N Forms of Cash Pledge Agreements of the Canadian Subsidiaries
Exhibit O Form of Solvency Certificate
Exhibit P Form of Notice of Borrowing
Exhibit Q Form of Certificate of Chief Financial Officer of Borrower as
to Annual Financial Statements
Exhibit R Form of Certificate of Chief Financial Officer of Borrower as
to Quarterly Financial Statements
Exhibit S Form of Confidentiality Agreement
ix
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of January 31,
1997, is executed and delivered by and among KRONOS INTERNATIONAL, INC., a
Delaware corporation (the "BORROWER"), KRONOS TITAN - GMBH, a German corporation
("KRONOS TITAN") (for the limited purposes specified herein), the BANKS (as
hereinafter defined), HYPOBANK INTERNATIONAL S.A., as Agent for the Banks.
The Borrower has a registered office in Leverkusen, Germany, and is an
indirect wholly-owned subsidiary of NL Industries, Inc., a New Jersey
corporation ("NL INDUSTRIES"). As of May 30, 1990, and prior to January 1, 1992,
the Borrower was a wholly-owned subsidiary of Kronos (US), Inc., a Delaware
corporation formerly and then known as Kronos, Inc. ("KRONOS (US)"). Effective
as of January 1, 1992, Kronos (US) assigned the Stock of the Borrower to Kronos,
Inc., a Delaware corporation formerly (prior to such assignment) known as Kronos
(USA), Inc. ("KRONOS") and a subsidiary of Kronos (US), whereupon the Borrower
became (and is now) a wholly-owned subsidiary of Kronos.
The Borrower, the Banks (or their predecessors in interest), the Agent
and Banque Paribas, Co-Agent for the Banks (the "CO-AGENT") were parties to that
certain Loan Agreement dated as of May 30, 1990, as amended by that certain (a)
First Amendment Agreement (herein so called) dated as of December 31, 1990, (b)
Second Amendment Agreement (herein so called) dated as of March 22, 1991, and
(c) Third Amendment Agreement (herein so called) dated as of June 15, 1992 (as
amended thereby, the "ORIGINAL AGREEMENT"). Pursuant to the Original Agreement,
the Borrower requested that the Banks (and/or their predecessors in interest)
make, and the Banks (and/or their predecessors in interest) made, advances to
the Borrower in Deutsche Mark in the aggregate principal amount of DM
1,600,000,000 on the terms and subject to the conditions and for the purposes
set forth in the Original Agreement.
Pursuant to the First Amendment Agreement, certain financial covenants
in the Original Agreement were amended for the year 1990.
Pursuant to the Second Amendment Agreement, INTER ALIA, certain
financial covenants in the Original Agreement were amended, the repayment
schedule for the Loan was amended and the NL/Kronos Guaranty and the Investment
Account Agreement (as defined in the Original Agreement) were executed.
Pursuant to the Third Amendment Agreement, INTER ALIA, certain financial
covenants in the Original Agreement were amended, the repayment schedule for the
Loan was amended, certain U.S. Dollar denominated tranches of the Loan were
permitted, the Borrower was given the right to reborrow certain prepayments of
the final repayment installment of the Loan and a Liquidity Undertaking was
executed by NL Industries and Kronos (US).
Effective as of January 1, 1992, the Borrower became a wholly-owned
subsidiary of Kronos as explained in the second paragraph of the preamble of
this Agreement.
1
During February 1993, the Borrower notified the Agent and the Co-Agent
of certain proposed transactions involving its Subsidiaries, certain of which
transactions were required to be approved by the requisite Banks. As a result,
the First Approval Agreement was executed and the transactions described in the
First Approval Agreement have been consummated (except for the transactions
referred to in Step 10 of Schedule 1 to the First Approval Agreement, which
transactions have not been, and need not be, consummated).
The Borrower, the Banks, the Agent and the Co-Agent are parties to that
certain Amended and Restated Loan Agreement dated as of October 15, 1993 (the
"FIRST RESTATED AGREEMENT"), which amends and restates the Original Agreement.
Pursuant to or in connection with the First Restated Agreement, (a) the Agent
and the Banks (or their predecessors in interest) were requested by NL
Industries, Kronos (US) and Kronos to approve, and did approve, certain
transactions pursuant to which NL Industries assigned, contributed or otherwise
transferred the Stock of Kronos (US) to Kronos and Kronos (US) assigned or
otherwise transferred the Stock of Kronos to NL Industries, (b) a substantial
prepayment of the Loan was made from proceeds of a public debt offering made by
NL Industries and the maturity of the principal amount of the Loan that remained
outstanding after giving effect to such prepayment was extended, and (c) the
Original Agreement was amended in certain other respects.
During 1994, the Borrower notified the Agent of (a) the Borrower's
receipt of the Tentative Tax Refund (as hereinafter defined) relating to German
income taxes for the calendar year 1990 and (b) the Borrower's position that the
Tentative Tax Refund did not constitute the Tax Refund for purposes of the First
Restated Agreement. In addition, in consideration of the Agent, the Co-Agent and
the Banks not challenging that position and in accordance with the terms and
provisions of the Tentative Tax Refund Letter (as hereinafter defined), the
Borrower agreed to apply the amount of the Tentative Tax Refund as an optional
prepayment of the Revolving Portion and, notwithstanding Section 2.04 of the
First Restated Agreement, further agreed to not borrow all or any portion of the
Tentative Tax Refund Availability Amount (as hereinafter defined) except for the
purpose of (i) prior to the Final Determination Date (as defined in the
Tentative Tax Refund Letter), repaying amounts constituting the Tentative Tax
Refund which the Borrower became obligated to repay to the German tax
authorities in respect of German tax assessments or liabilities of the Borrower
and certain of its Consolidated Subsidiaries for calendar years 1989 and 1990 or
(ii) at the Borrower's election, treating the amount so borrowed as a portion of
the Tax Refund and prepaying the Loan pursuant to SECTION 8.01(D) of the First
Restated Agreement. During 1994, the Borrower paid DM 175,000,000 to the Agent
for application against the Revolving Portion in accordance with the Tentative
Tax Refund Letter.
On October 31, 1994, the Borrower drew down DM 50,000,000 of the
Revolving Portion from the Banks under the Tentative Tax Refund Availability
Amount and applied such amount (which constituted part of the Tax Refund) as a
prepayment of the Term Portion in accordance with SECTION 8.01(D) of the First
Restated Agreement.
2
During 1996, the Borrower notified the Agent of certain proposed
transactions involving its Subsidiaries, certain of which transactions were
required to be approved by the requisite Banks. As a result, the Second Approval
Agreement (as hereinafter defined) was executed and the transactions described
in the Second Approval Agreement have been or are in the process of being
consummated.
On October 22, 1996, the Borrower drew down DM 49,361,653 of the
Revolving Portion from the Banks under the Tentative Tax Refund Availability
Amount to pay German income taxes in accordance with the Tentative Tax Refund
Letter. On January 22, 1997, the Borrower repaid DM 1,649,238 of such amount
drawn on October 22, 1996, which DM 1,649,238 amount was applied to the
Revolving Portion and thereby increased the Tentative Tax Refund Availability
Amount by DM 1,649,238.
Immediately prior to the Second Restatement Date, (a) the outstanding
principal amount of the Term Portion was DM 395,537,463 and (b) the outstanding
principal amount of the Revolving Portion was DM 142,784,415. In addition,
immediately prior to the Second Restatement Date, the undrawn portion of the
Revolving Portion was DM 107,215,585, DM 77,287,585 of which constituted the
Tentative Tax Refund Availability Amount, the reborrowing of which was
restricted in accordance with the terms and provisions of the Tentative Tax
Refund Letter.
Notwithstanding that the Final Determination Date may not have occurred,
the Borrower, in consideration of the agreements of the Banks set forth in this
Agreement, is willing and desires to treat the amount of DM 77,287,585 as a
portion of the Tax Refund as of the Second Restatement Date subject to the terms
and conditions of this Agreement. Accordingly, in accordance with SECTION
8.01(D) of the First Restated Agreement and this Agreement, the Borrower shall,
on the Second Restatement Date, make a DM 77,287,585 prepayment of the Term
Portion, all of which shall be applied, on a pro rata basis as provided in
SECTION 8.01(D), to reduce the remaining Repayment Installments of the Term
Portion, with the proceeds of a drawdown of the Revolving Portion (in accordance
with the Tentative Tax Refund Letter) in the amount of DM 57,287,585 and with DM
20,000,000 of the proceeds of the NL Subordinated Loan referred to in the
immediately succeeding paragraph.
The Borrower, the Agent and the Banks have discussed, and desire to
provide for, (a) a DM 150,000,000 prepayment of the Term Portion of the Loan to
be made on the Second Restatement Date from a subordinated loan in the principal
amount of DM 260,000,000 to be made by NL Industries to the Borrower and (b)
certain other amendments to the First Restated Agreement. DM 20,000,000 of such
prepayment will be (as stated in the immediately preceding paragraph) applied,
on a pro rata basis, to reduce the remaining Repayment Installments of the Term
Portion as a mandatory prepayment of part of the Tax Refund in accordance with
SECTION 8.01(D) of the First Restated Agreement and this Agreement and the
remaining DM 130,000,000 of such prepayment will be applied as a mandatory
prepayment of the Term Portion in accordance with SECTION 8.01(H) of this
Agreement and will be applied to the outstanding Repayment
3
Installments of the Term Portion in the direct order of the maturities of such
installments. In order to accomplish the foregoing and to address additional
matters relating thereto, the Borrower, the Banks and the Agent now desire to
amend and restate the First Restated Agreement as provided in this Agreement.
NOW, THEREFORE, in consideration of the Original Agreement, the First
Restated Agreement, this Agreement and the mutual covenants and agreements
contained therein and herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
First Restated Agreement is hereby amended and restated in its entirety, and the
parties hereto hereby agree, as follows:
ARTICLE 1. DEFINITIONS
In this Agreement, unless the context otherwise requires:
"Adjusted Restricted Payments" means, without
duplication (a) the aggregate of all
Restricted Payments, plus (b) the
aggregate of all Deemed Restricted
Payments.
"Affiliate" means any individual, corporation,
partnership, joint venture, trust,
unincorporated organization or
association, mutual company, joint
stock company, estate, trust or
other organization, whether or not a
legal entity, which directly or
indirectly is in Control of, is
Controlled by, or is under common
Control with respect to, any Person.
"Affiliate License Agreements" means as set forth in SECTION 15.21.
"Agent" means Hypobank International S.A.,
its corporate successors or any
successor agent appointed pursuant
to ARTICLE 21.
"Agreement" means this Second Amended and
Restated Loan Agreement, including
all of the Schedules and the
Exhibits hereto, as amended or
supplemented from time to time.
"Assignment and Acceptance" means an assignment
and acceptance of a Bank's rights
and obligations with respect to a
Loan (or a Commitment relating
thereto) or a portion thereof in the
form attached hereto as EXHIBIT A.
4
"Assignment of Dividends" means an assignment of
dividends from Societe Industrielle
du Titane S.A. in the form delivered
in connection with the Original
Agreement, the First Restated
Agreement or this Agreement, as
amended or supplemented from time to
time.
"Bank" and "Banks" means any bank or
financial institution or all banks
or financial institutions as listed
on the signature pages of this
Agreement and on SCHEDULE 1 and any
bank(s) or financial institution(s)
which become(s) a Bank or Banks in
accordance with ARTICLE 24 of this
Agreement.
"Base Deutsche Mark Amount" means (a) with
respect to any advance of the Loan
originally borrowed in U.S. Dollars,
the amount of Deutsche Mark
specified in the Notice of Borrowing
of which the U.S. Dollar amount
advanced is the Equivalent Amount on
the Drawdown Date of such advance,
and (b) with respect to any advance
of the Loan or portion thereof to be
redenominated from Deutsche Mark to
U.S. Dollars, the amount of Deutsche
Mark specified in the Borrower's
request for redenomination pursuant
to SECTION 2.05 of which the U.S.
Dollar amount to be redenominated is
the Equivalent Amount as of the date
of redenomination.
"Borrower" means as set forth in the first
paragraph of the preamble of this
Agreement.
"Business Day" means a day on which banks are
required to be open for business in
London, Luxembourg, New York and
Munich.
"Canadian Dollars or Can. $" means lawful currency of Canada.
"Canadian Security Documents" mean a Deed of
Collateral Hypothec executed by
Kronos Canada, Inc. pursuant to
which a Lien affecting the real and
personal property of Kronos Canada
Inc. (including the plant located at
Varennes, Quebec, Canada, and bank
accounts but excluding stock of
Kronos World Services S.A./N.V. and
certain immaterial assets) is
created in favor of the
5
Agent, a Deed of Hypothec executed
by 2927527 Canada Inc. pursuant to
which a Lien affecting the personal
property of 2927527 Canada Inc.
(including bank accounts but
excluding certain immaterial assets)
is created in favor of the Agent, a
Deed of Hypothec executed by 2969157
Canada Inc. pursuant to which a Lien
affecting the personal property of
2969157 Canada Inc. (including the
Kronos Canada Note and bank accounts
but excluding certain immaterial
assets) is created in favor of the
Agent and other agreements,
documents and instruments relating
to the foregoing.
"Capital Expenditures" means any expenditure
by the Borrower or any Consolidated
Subsidiary for or with respect to an
asset which has a useful life of
more than one year, which
expenditure is properly classified,
in the consolidated financial
statements of the Borrower and in
accordance with German GAAP, as an
addition to equipment, real property
or improvements or similar types of
tangible fixed assets.
"Capital Leases" means rental obligations as
lessee under leases recorded as
capital leases in accordance with
German GAAP.
"Cash Pledge Agreements" means such
collateral assignments, security
agreements, pledge agreements and/or
similar agreements, in form and
substance reasonably satisfactory to
the Agent, pursuant to which Liens
are granted in favor of the Agent
affecting the cash balances of the
Borrower and its Canadian
Subsidiaries.
"Co-Agent" means Banque Paribas in its capacity
as Co-Agent for the Banks under the
Original Agreement and the First
Restated Agreement.
"Code" means the United States Internal
Revenue Code of 1986, as amended and
in effect from time to time.
6
"Collateral" means the Pledge Agreements, the
Canadian Security Documents, the
Nordenham Mortgage, the Cash Pledge
Agreements, the Guaranties and other
documents delivered or to be
delivered pursuant to SECTIONS
16.34, 17.01, 17.02, 17.03 and 17.04
of this Agreement, the Liens and
guaranties created thereby and any
and all property, real, personal,
tangible or intangible, which
secures the Borrower's obligations
under this Agreement.
"Commitment" or "Commitments" means, in relation
to each Bank, the several
obligations of such Bank, and in
relation to all Banks, the aggregate
obligations of such Banks, sub ject
to the terms of this Agreement, to
make available its portion of the
Loans (including, without
limitation, the Revolving Portion)
to be made under this Agreement up
to the aggregate principal amount
specified in SCHEDULE 1, to the
extent not reduced or canceled under
this Agreement, and includes,
without limitation, the "Revolving
Commitment" or "Revolving
Commitments", respectively.
"Company" or "Companies" means, individually,
any of the Borrower or any Major
Subsidiary and, collectively, the
Borrower and all Major Subsidiaries.
"Consolidated Equity" means, as of the date of
determination for the Borrower and
its Subsidiaries on a consolidated
basis in conformity with German
GAAP, (a) consolidated stockholder's
equity determined in accordance with
German GAAP, (b) plus any deductions
made for currency translation
adjustments and minus any additions
made for currency translation
adjustments, (c) plus an amount
equal to the outstanding principal
of and accrued and unpaid interest
on the Subordinated Debt, if any,
described in CLAUSES (A), (B) and
(C) of the definition of the term
"Subordinated Debt" in this
Agreement, (d) minus any increase,
or plus any decrease, in Net Income
resulting from the foreign currency
translation amount arising from the
translation of the Mirror Notes from
U.S. Dollars to Deutsche Mark since
the issuance of the Mirror Notes,
(e) minus the
7
Restricted Capital Amount, plus (f)
any deductions made for adjustments
to goodwill if and to the extent
that such adjustments have reduced
Net Income.
"Consolidated Subsidiary" means any Subsidiary the
accounts of which would be
consolidated with those of the
Borrower in its consolidated
financial statements.
"Contaminant" means any waste, pollutant,
hazardous substance, toxic
substance, hazardous waste or
material, special or toxic waste,
petroleum or petroleum derived
substance or waste, or any
constituent of any such substance or
waste, including, without
limitation, any such substance
defined in or pursuant to any
Environmental Law.
"Control" or "Controlled" means, with respect
to any Person, the power, directly
or indirectly:
(a) to vote more than fifty
percent (50%) of the voting
securities issued by such
Person for the election of
the board of directors (or
members of an equivalent
governing body) of such
Person; or
(b) otherwise to direct or cause
the direction of management
and policies of such Person.
"Controlled Group" means all members of a
controlled group of corporations and
all trades or businesses (whether or
not incorporated) under common
control which, together with the
Borrower, are treated as a single
employer under Section 414(b),
414(c), 414(m) or 414(o) of the
Code.
"Current Assets" means, for the Borrower and
its Subsidiaries on a consolidated
basis in conformity with German
GAAP, consolidated assets, excluding
intangibles and tangible fixed
assets, realizable within one year
of the date of determination.
"Current Liabilities" means, for the Borrower
and its Subsidiaries on a
consolidated basis in conformity
with German
8
GAAP, consolidated accruals and
liabilities due within one year of
the date of determination, excluding
Current Maturities.
"Current Maturities" means those portions of
Funded Debt due within one year of
the date of determination.
"Deemed Restricted Payments" means, without
duplication, any payments or other
transfers of value (irrespective of
the form of such payments or other
transfers) directly or indirectly
made by the Borrower or any of its
Subsidiaries to Kronos, NL
Industries, Kronos (US) or any other
Affiliate of the Borrower (other
than the Borrower or a Subsidiary of
the Borrower) for less than full and
fair consideration to the Borrower
or its Subsidiary (as applicable)
and, in any event, shall include,
without limitation, (a) all license
fees, royalties or other payments
for the use of technology or other
Intellectual Property Rights paid or
payable to such Affiliates, (b) all
amounts paid or payable to such
Affiliates constituting cost sharing
(excluding insurance expenses except
to the extent that such expenses
exceed the amount therefor that
would be paid or payable in a
comparable arm's length transaction
with a non-Affiliate), personnel
costs and other overhead, (c)
transfers of value resulting from
the sale or transfer of product or
other assets by the Borrower or any
of its Subsidiaries to such
Affiliates for consideration that is
less than the consideration (net of
reasonable transaction costs
incurred in the ordinary course of
business) that is obtained by such
Affiliates in connection with the
resale or subsequent transfer of
such product or other assets, (d)
transfers of value resulting from
the sale or transfer of product or
other assets by such Affiliates to
the Borrower or any of its
Subsidiaries for consideration that
is more than the cost of such
product or other assets to such
Affiliates (provided, however, that
such sales or other transfers by
such Affiliates of product in the
ordinary course of business shall be
excluded from this CLAUSE (D) except
to the extent that the consideration
received therefor is more than would
be paid or payable in a comparable
arm's
9
length transaction with a
non-Affiliate), and (e) payments in
the form of service charges to
compensate such Affiliates for
purchases of titanium ore and other
product or assets.
"Default" means an Event of Default or any
event, act or occurrence which, with
the giving of notice or passage of
time or both, unless cured or
waived, would become an Event of
Default.
"Deutsche Mark" or "DM" means the lawful
currency of Germany.
"Deutsche Mark Amount" means (a) in the case
of any amount denominated in
Deutsche Mark, the amount of
Deutsche Mark from time to time
outstanding, and (b) in the case of
any amount denominated or to be
denominated in U.S. Dollars, the
amount of Deutsche Mark which is
equivalent to a given amount of U.S.
Dollars as of the Relevant Date,
determined by using the Spot Rate on
the date two Business Days prior to
the Relevant Date (unless another
date is specified in this
Agreement).
"Disposition" means, with respect to any asset, to
sell, assign, lease, exchange,
transfer or otherwise dispose of
such asset.
"Drawdown Date" means (a) with respect to each
advance of the Loan prior to any
reborrowing pursuant to SECTION
2.04, the date set forth in the
Notice of Borrowing relating to such
advance (which date was a Business
Day on or before June 19, 1990), and
(b) with respect to any reborrowing
under the Revolving Portion pursuant
to SECTION 2.04, the date set forth
in the Notice of Borrowing relating
to such reborrowing, which date
shall be a Business Day on or before
August 15, 2000.
"Earnings Available for Fixed Charges" means,
for the preceding four fiscal
quarters and for the Borrower and
its Subsidiaries on a consolidated
basis in conformity with German
GAAP, Net Income plus Income Taxes
plus depreciation, depletion and
amortization plus Interest Expense
plus
10
rentals payable under leases (other
than Capital Leases) having an
initial non-cancelable lease term in
excess of one year plus, to the
extent included in determining Net
Income, the decrease resulting from
the foreign currency translation
amount arising from the translation
of the Mirror Notes from U.S.
Dollars to Deutsche Mark or minus,
to the extent included in
determining Net Income, the increase
resulting from the foreign currency
translation amount arising from the
translation of the Mirror Notes from
U.S. Dollars to Deutsche Mark.
"EBITDA" means, with respect to any fiscal
period, for the Borrower and its
Subsidiaries on a consolidated basis
in conformity with German GAAP or,
with respect to the third sentence
of SECTION 8.01(C) only, NL
Industries and its subsidiaries on a
consolidated basis in conformity
with generally accepted accounting
principles in the United States of
America, the sum of (a) net income,
excluding extraordinary gains and
losses, plus (b) interest expense
(including imputed interest expense
in respect of obligations under
capital leases, if any), income
taxes, depreciation, amortization
and other non-cash expenses to the
extent that any of such expenses are
deducted in determining net income,
minus (c) non-cash income to the
extent that such income is included
in determining net income.
"Employee Plan" means an employee benefit plan
within the meaning of Section 3(3)
of ERISA.
"Environmental Claim" means any written notice by
any state, federal, territorial,
provincial, local or other court or
govern mental authority, entity or
instrumentality alleging potential
liability for damage to the
environment, or by any Person
alleging potential liability for
personal injury (including sickness,
disease or death) or property damage
or damage of any other kind
resulting from or based upon:
(a) the presence or release
(including, without
limitation, sudden or
non-sudden, accidental
11
or non-accidental, leaks or
spills) of any Contaminant
at, in or from property,
whether or not owned by the
Borrower and/or any of its
Subsidiaries; or
(b) circumstances forming the
basis of any violation, or
alleged violation, of any
Environmental Law.
"Environmental Law" means any law, rule or
regulation pertaining to land use,
air, soil, surface water, ground
water (including the protection,
cleanup, removal, remediation or
damage thereof), public or employee
health or safety or any other
environmental matter, including,
without limitation, any of the above
promulgated by the EU, together with
any other non-U.S. or domestic laws
(federal, state, territorial,
provincial or local) relating to
emissions, discharges, releases or
threatened releases of any
Contaminant into ambient air, land,
surface water, groundwater, personal
property or structures, or otherwise
relating to the manufacture,
processing, distribution, use,
treatment, storage, disposal,
transportation, discharges or
handling of any Contaminant.
"Equivalent Amount" means the amount of U.S.
Dollars which is equivalent to a
given amount of Deutsche Mark as of
the Relevant Date, determined by
using the Spot Rate on the date two
Business Days prior to the Relevant
Date.
"ERISA" means the United States Employee
Retirement Income Security Act of
1974, as amended and in effect from
time to time.
"EU" means the European Union.
"Eurocurrency Liabilities" means as that term is
defined in Regulation D.
"Eurocurrency Rate Reserve Percentage" means the
reserve percentage applicable for
any Bank during any Interest Period
under regulations issued from time
to time by the Federal Reserve for
determining the maximum reserve
requirement
12
(including, without limitation, any
emergency, supplemental or other
marginal reserve requirement) for
such Bank with respect to
liabilities or assets consisting of
or including Eurocurrency
Liabilities having a term equal to
such Interest Period.
"Event of Default" means as set forth in ARTICLE 18.
"Excess Adjusted Restricted Payments" means,
without duplication, for the
applicable calendar year (or portion
thereof which has occurred as of any
date of determination), the amount
(if any) by which the aggregate
amount of Adjusted Restricted
Payments exceeds (a) DM 47,000,000
(Deutsche Mark Forty-Seven Million)
during calendar year 1996, (b) DM
39,000,000 (Deutsche Mark
Thirty-Nine Million) during calendar
year 1997, (c) DM 44,000,000
(Deutsche Mark Forty- Four Million)
during calendar year 1998, and (d)
DM 47,000,000 (Deutsche Mark
Forty-Seven Million) for any
calendar year thereafter; provided,
however, that if, within 30 (thirty)
days after the payment or other
making of any such excess amount,
the entire amount thereof is
contributed by NL Industries or any
of its subsidiaries (other than the
Borrower and its Subsidiaries) to
the Borrower (or a Subsidiary of the
Borrower as the Agent may approve,
which approval shall not be
unreasonably withheld) as a cash
equity capital contribution or as
Subordinated Debt (other than
Subordinated Debt referred to in
CLAUSE (A) of the definition of the
term "Subordinated Debt") made or
advanced, respectively, to the
Borrower or such Subsidiary, then
such excess amount previously paid
or otherwise made and thereafter so
contributed or advanced to the
Borrower (or its Subsidiary, as
applicable) shall not be deemed to
constitute an Excess Adjusted
Restricted Payment hereunder.
"Excess Cash Flow" means (a) Free Cash Flow
minus (b) Capital Expenditures for
the preceding four fiscal quarters
less any Indebtedness or
Subordinated Debt specifically
incurred to finance any such Capital
Expenditures during such fiscal
quarters minus
13
(c) the sum of (i) Fixed Charges and
(ii) repayments of Funded Debt,
exclusive of repayments of Funded
Debt from proceeds of the Tax
Refund, in the preceding four fiscal
quarters.
"Excess EBITDA" means, for the Borrower and
its Subsidiaries on a consolidated
basis and with respect to any fiscal
year, the positive remainder (if
any) of (a) (i) EBITDA for such
fiscal year, minus (ii) Income Taxes
paid in cash (exclusive of taxes
paid arising from assessments
received as a result of tax audits),
Capital Expenditures and Interest
Expense, other than non-cash
Interest Expense, for such fiscal
year, minus (b) the amount set forth
in the table below for such fiscal
year:
FISCAL YEAR ENDED AMOUNT
1997 Negative DM 90,000,000
1998 Negative DM 7,500,000
1999 DM 60,000,000
"Excess Term Prepayment" means DM 2,000,000
(Deutsche Mark Two Million), which
amount is the positive remainder of
(a) the amount of the First
Prepayment applied to the Term
Portion in accordance with SECTION
2.01(A) (expressed in Deutsche Mark)
minus (b) DM 400,000,000 (Deutsche
Mark Four Hundred Million).
"Excluded Taxes" means as set forth in SECTION 11.01.
"Federal Reserve" means the Board of
Governors of the Federal Reserve
System.
"Financial Covenants" means as set forth in SECTION 23.02.
"First Amendment Agreement" means as set
forth in the third paragraph of the
preamble of this Agreement.
"First Approval Agreement" means the
Approval Agreement dated as of April
6, 1993, among the Borrower, the
requisite Banks who are signatories
thereto, the Agent and the Co-Agent.
14
"First Prepayment" means the prepayment of
the Loan in the First Prepayment
Amount as referred to in SECTION
2.01(A).
"First Prepayment Amount" means DM
552,000,000 (Deutsche Mark Five
Hundred Fifty-Two Million), i.e.,
the amount, determined as of the
First Prepayment Date and expressed
in Deutsche Mark, equal to the
remainder of (a) the gross proceeds
of the NL Debt Offering minus (b)
the NL Debt Offering Expenses.
"First Prepayment Date" means October 21,
1993, the date upon which the First
Prepayment was received by the
Agent.
"First Restated Agreement" Means as set
forth in the ninth paragraph of the
preamble of this Agreement.
"First Restatement Date" means October 15,
1993, the date of the First Restated
Agreement.
"Fixed Charges" means, for the preceding
four fiscal quarters and for the
Borrower and its Subsidiaries on a
consolidated basis in conformity
with German GAAP, Interest Expense
(excluding Interest Expense on
Subordinated Debt payable in kind in
the form of Subordinated Debt and
excluding non-cash Interest Expense
on the Mirror Notes) plus rentals
payable under leases (other than
Capital Leases) having an initial
non-cancelable lease term in excess
of one year.
"Free Cash Flow" means, for the preceding
four fiscal quarters and for the
Borrower and its Subsidiaries on a
consolidated basis in conformity
with German GAAP, (a) Earnings
Available for Fixed Charges minus
(b) taxes paid in cash during such
fiscal quarters, plus (c) tax
refunds, exclusive of the Tax
Refund, received in cash during such
fiscal quarters, plus or minus, as
the case may be (d) any non-cash
additions or subtractions included
in the determination of Net Income
to the extent not already taken into
account in the definition of
Earnings Available for Fixed
Charges.
15
"Funded Debt" means, as of the date of any
calculation, (a) all Indebtedness of
the Borrower and its Subsidiaries to
the extent such Indebtedness has an
initial stated or final maturity of,
or by its terms is renewable or
extendable by the Borrower or its
Subsidiaries to, a date or a period
ending more than one year after the
date of any such calculation, (b)
plus Indebtedness of the Borrower
and its Subsidiaries comprised of or
liabilities in respect of unfunded
vested benefits under Non-U.S.
Employee Plans to the extent such
liabilities exceed DM 150,000,000
(Deutsche Mark One Hundred Fifty
Million), (c) minus unsecured
working capital Indebtedness of the
Borrower and its Subsidiaries
(including the aggregate face amount
of all funded and unfunded standby
and documentary letters of credit),
but only to the extent such
unsecured working capital
Indebtedness is Permitted
Indebtedness, (d) minus the increase
in Indebtedness resulting from the
foreign currency translation amount
arising from the translation of the
Mirror Notes from U.S. Dollars to
Deutsche Mark or plus the decrease
in Indebtedness resulting from the
foreign currency translation amount
arising from the translation of the
Mirror Notes from U.S. Dollars to
Deutsche Mark, and (e) plus (without
duplication) the Restricted Capital
Amount.
"Funded Debt Ratio" means, for the Borrower
and its Subsidiaries on a
consolidated basis, Funded Debt
divided by the sum of (a)
Consolidated Equity plus (b)
Subordinated Debt.
"German GAAP" means generally accepted
accounting principles for the
preparation of group accounts
pursuant to the provisions of the
relevant laws of Germany.
"Gross Proceeds" means, with respect to the
Disposition of Stock or any other
asset, cash or non-cash proceeds
actually received, directly or
indirectly by, or for the account
of, the Borrower or any Subsidiary.
"Guarantor" means NL Industries, Kronos Canada,
Inc., 2927527 Canada Inc., 2969157
Canada Inc. or any
16
Subsidiary, whether existing on the
Second Restatement Date or at any
time hereafter, which becomes a
Guarantor pursuant to SECTION 16.34.
"Guaranty" or "Guaranties" means a guaranty or
the guaranties executed or to be
executed by the Guarantors in
accordance with the Original
Agreement, the First Restated
Agreement or this Agreement
(including, without limitation,
SECTION 16.34 and ARTICLE 17), as
amended or supplemented from time to
time.
"Income Taxes" means, for the Borrower and
its Subsidiaries on a consolidated
basis, expense for income taxes in
accordance with German GAAP.
"Indebtedness" means, for any Person without
duplication, and excluding all
Subordinated Debt referred to in
CLAUSES (B), (C) and (D) of the
definition of the term "Subordinated
Debt":
(a) debt consisting of borrowed
money, including obligations
evidenced by bonds,
debentures, notes or similar
instruments, or the deferred
purchase price of property or
services (other than trade
payables incurred and payable
in the ordinary course of
business and on customary
terms);
(b) rental obligations under
Capital Leases;
(c) obligations under direct or
indirect guaranties in
respect of obligations
(contingent or otherwise) to
purchase or otherwise
acquire, or otherwise to
assure a creditor against
loss (such as, without
limitation, obligations under
an agreement to pay for
property or services
irrespective of whether or
not such property is
delivered or such services
are rendered), in respect of,
debt or obligations of others
of the kinds referred to in
CLAUSES (A) or (B) above;
17
(d) obligations (contingent or
otherwise) under letters of
credit (funded or unfunded)
not arising out of the import
of goods;
(e) liabilities in respect of
unfunded vested benefits
under (i) plans covered by
Title IV of ERISA and (ii)
any laws governing Non-U.S.
Employee Plans to the extent
such liabilities exceed DM
150,000,000 (Deutsche Mark
One Hundred Fifty Million);
and
(f) all obligations secured by
any Lien, other than Liens
described in CLAUSES (D), (E)
and (F) of the definition of
the term "Permitted Liens" in
this Agreement, to which any
property or asset owned by
the Borrower and/or its
Subsidiaries is subject,
whether or not the
obligations secured thereby
shall have been assumed by
the Borrower or its
Subsidiaries.
"Indentures" means that certain (a) Indenture
dated as of October 20, 1993,
between NL Industries and Chemical
Bank, as trustee, to be executed by
the parties thereto relating to the
senior secured notes due 2003 to be
issued by NL Industries and (b)
Indenture dated as of October 20,
1993, between NL Industries and
State Street Bank and Trust Company,
as trustee, to be executed by the
parties thereto relating to the
senior secured discount notes due
2005 to be issued by NL Industries.
"Intellectual Property Rights" shall mean all
material patents and patent
applications, technical information,
know-how and processes necessary for
or used in the current manufacturing
operations and all material trade
names, trademarks, trademark
registrations and applications used
in the marketing and sales
operations of the Borrower and its
Subsidiaries as of the Second
Restatement Date.
"Interbank Rate" means the rate per annum
determined by the Agent on the
Interest Determination Date to be
the
18
arithmetic mean (rounded upwards, if
necessary, to the nearest four
decimal places) of the rates
notified to the Agent by the
Reference Banks to be those at which
each Reference Bank, in accordance
with its normal practice, is able to
obtain deposits in Deutsche Mark,
with respect to that portion of the
Loan denominated in Deutsche Mark,
or deposits in U.S. Dollars, with
respect to that portion of the Loan
denominated in U.S. Dollars (or
other substitute currency agreed to
in accordance with the provisions of
ARTICLE 7) at or about 11:00 a.m.
London time in the London interbank
Euro-currency market for delivery on
the first day of the Interest Period
for the number of days comprised
therein, provided that, if a
Reference Bank shall fail to notify
the Agent of its rate, the Interbank
Rate shall be determined on the
basis of the quotation(s) of the
remaining Reference Bank(s).
"Interest Coverage Ratio" means, for the
preceding four fiscal quarters and
for the Borrower and its
Subsidiaries on a consolidated
basis, (a) the sum of (i) EBITDA,
plus (ii) the sum of (A) the amount,
if any, of contributions to the
equity of the Borrower in the form
of cash (as distinguished from the
conversion of debt to equity) made
by NL Industries or Kronos during
such period, plus (B) the amount, if
any, of loans made by NL Industries
or Kronos as Subordinated Debt
during such period, minus (iii) the
sum of (A) the increase in the
Restricted Capital Amount during
such period, plus (B) the aggregate
amount of Restricted Payments made
during such period pursuant to
SECTION 16.20(B), divided by (b)
Interest Expense (exclusive of
non-cash Interest Expense);
provided, however, that the amounts
referred to in clause (ii) preceding
that shall be counted for purposes
of the definition of "Interest
Coverage Ratio" shall be made during
no more than two separate fiscal
years of the Borrower during the
term of this Agreement and any such
amounts contributed or made during
any fiscal year shall be wholly
excluded for purposes of determining
the "Interest Coverage Ratio" during
any other fiscal year.
19
"Interest Determination Date" means, with
respect to any Interest Period, the
Business Day which is 2 (two)
Business Days prior to the first day
of such Interest Period.
"Interest Expense" means interest expense of
the Borrower and its Subsidiaries on
a consolidated basis in conformity
with German GAAP, and shall include
imputed interest expense in respect
of obligations under Capital Leases,
if any.
"Interest Payment Date" means the last day of
any Interest Period.
"Interest Period" means each of the successive
periods, determined in accordance
with this Agreement, into which the
period for which the Loan is
outstanding is divided and for which
a rate of interest is to be
established under this Agreement.
"Interest Rate Protection Agreement" means any
agreement evidencing an arrangement
designed to protect the Borrower
against fluctuations in interest
rates.
"Investment" means any investment of cash or cash
equivalents in any Person, whether
by means of share purchase, loan,
capital contribution or otherwise.
"Kroner" means the lawful currency of Norway.
"Kronos" means as set forth in the second
paragraph of the preamble of this
Agreement.
"Kronos Canada Note" means that certain
Amended Promissory Note dated
December 20, 1996, in the original
principal amount of Cdn. $89,000,000
made by Kronos Canada, Inc. payable
to the order of 2969157 Canada Inc.,
which promissory note amends and
replaces that certain Subordinated
Promissory Note dated May 28, 1993,
in the original principal amount of
Cdn. $123,000,000 made by Kronos
Canada, Inc. payable to the order of
Kronos S.A./N.V. and subsequently
assigned to 2969157 Canada Inc.
20
"Kronos Subordinated Loan" means the
unsecured and subordinated loan in
the principal amount of DM
25,000,000 (Deutsche Mark
Twenty-Five Million) made by Kronos
to the Borrower on December 31,
1996, pursuant to the Kronos
Subordinated Note and the
Subordination
Agreement.
"Kronos Subordinated Note" means that
certain Zero Coupon Subordinated
Promissory Note dated December 31,
1996, in the original principal
amount of DM 25,000,000 (Deutsche
Mark Twenty-Five Million) made by
the Borrower payable to the order of
Kronos which evidences the Kronos
Subordinated Loan.
"Kronos Titan" means Kronos Titan - GmbH, a
German corporation and an indirect
wholly-owned Subsidiary of the
Borrower.
"Kronos Titan Revolving Portion means as set
forth in SECTION 2.04(C).
"Kronos (US)" means as set forth in the
second paragraph of the preamble of
this Agreement.
"Kronos(US)/Kronos Flip" means the
transactions pursuant to which NL
Industries has assigned, contributed
or otherwise transferred the Stock
of Kronos (US) to Kronos and Kronos
(US) assigned or otherwise
transferred the Stock of Kronos to
NL Industries.
"Lending Office" means, as to each Bank, the
office(s) or branch(es) located at
the address(es) set forth on the
signature page(s) below or such
other office(s) or branch(es) of
such Bank as it may from time to
time designate pursuant to this
Agreement.
"Leverkusen Lease" means the lease agreement
(Erbbaurechtsvertrag zum Grundstueck
Gemarkung Wiesdorf, Flur 18,
Parzelle 108/2 mit Ergaenzungsabrede
zum Erbbaurechtsvertrag und
Errechnung des Erbbauzinses) between
Titangesellschaft GmbH and I.G.
Farbenindustrie Aktiengesellschaft
i.L. dated June 21, 1952, as amended
by Supplementary Agreement dated
June 21, 1952.
21
"Lien" means, with respect to the Borrower
or any Subsidiary (in each case,
whether the same is consensual or
nonconsensual or arises by
contractual obligation, operation of
law, legal process or otherwise,
existing on the Second Restatement
Date or at any time thereafter): any
mortgage, deed of trust, lien,
pledge, attachment, levy, charge or
other security interest or
encumbrance of any kind in respect
of any property now or hereafter
owned by the Borrower or any
Subsidiary, personal, real or
otherwise, or upon the proceeds,
income or profits therefrom. For
this purpose, the Borrower or any
Subsidiary shall be deemed to own,
subject to a Lien, any asset that it
has acquired or hereafter holds
subject to the interest of a vendor
or lessor under any conditional
sales agreement, Capital Lease,
reservation of title or other title
retention agreement relating to such
asset.
"Liquidity Undertaking" means the Second
Amended and Restated Liquidity
Undertaking dated as of the Second
Restatement Date among NL
Industries, Kronos, the Borrower and
the Agent.
"Liquidity Undertaking Credit" means, as of the
date of determination, an amount
equal to the aggregate amount, if
any, of the credits against the
"Maximum Required Investment
Amount", as such term is defined in
the Liquidity Undertaking,
designated by the Borrower by its
giving of written notice to the
Agent, at any time or from time to
time, provided, however, that the
Liquidity Undertaking Credit (a)
shall be zero prior to January 1,
2000, may not exceed DM 50,000,000
(Deutsche Mark Fifty Million) at any
time prior to July 1, 2000 and may
not exceed DM 75,000,000 (Deutsche
Mark Seventy-Five Million) at any
time after July 30, 2000, (b) shall
not, at any time, exceed the
aggregate amount of Restricted
Payments then permitted to be made
by the Borrower pursuant to Section
16.20(a) in the absence of any
Liquidity Undertaking Credit and (c)
once designated, may not thereafter
be reduced.
22
"Loan" or "Loans" means, with respect to
each Bank, at any time, the total of
all monies advanced by or owing to
each such Bank under the Original
Agreement, the First Restated
Agreement or this Agreement and
outstanding at any time, or the
aggregate of all monies so advanced
by or owing to all Banks and
outstanding at any time.
"Loan Documents" means the Original
Agreement, the First Restated
Agreement, this Agreement, the
Guaranties, the Pledge Agreements,
the Canadian Security Documents, the
Nordenham Mortgage, the Cash Pledge
Agreements, the Assignment of
Dividends, the Subordination
Agreement, the Technology
Undertaking, the Special Purpose
Account Agreement, the Liquidity
Undertaking, the First Approval
Agreement, the Second Approval
Agreement, the documents executed
pursuant to or specified or referred
to in CLAUSES (I)(A) through (I) of
SECTION 4.01(A) of the First
Restated Agreement, CLAUSES (I)(A)
through (N) of SECTION 4.01(B) and
SECTIONS 16.40, 17.01 (other than
17.01(J)), 17.02, 17.03, and 17.04,
any and all amendments to or
restatements of the foregoing Loan
Documents and any and all other
documents, instruments and
certificates executed and delivered
or to be executed and delivered by
the Borrower or any Affiliate
pursuant to the terms of this
Agreement or any amendment to this
Agreement (including, without
limitation, the documents,
instruments and certificates in the
forms attached as Exhibits to the
Original Agreement, the First
Restated Agreement or this
Agreement).
"Majority Banks" means, at any time when no
Loans are outstanding, the Banks
whose aggregate Commitments at any
time exceed 50% (fifty percent) of
the total aggregate Commitments of
all Banks and, at any time when
Loans are outstanding, the Banks
holding more than 50% (fifty
percent) of the aggregate unpaid
principal amount of the Loans.
23
"Majority Banks (662/3%)" means, at any time
when no Loans are outstanding, the
Banks whose aggregate Commitments at
any time exceed 66 2/3% (sixty-six
and two-thirds percent) of the total
aggregate Commitments of all Banks
and, at any time when Loans are
outstanding, the Banks holding more
than 66 2/3% (sixty-six and two
thirds percent) of the aggregate
unpaid principal amount of the
Loans.
"Major Subsidiaries" means the following
Subsidiaries (unless amended with
the consent of the Majority Banks):
(a) NL Industries (Deutschland)
GmbH;
(b) Kronos Titan - GmbH;
(c) Societe Industrielle du
Titane, S.A.;
(d) Kronos Europe S.A./N.V.;
(e) Kronos World Services
S.A./N.V.;
(f) Kronos Norge A/S;
(g) Kronos Titan A/S;
(h) Titania A/S;
(i) Kronos Limited;
(j) Kronos Canada, Inc.;
(k) 2969157 Canada Inc.;
and other Subsidiaries, whether
existing on the Second Restatement
Date or at any time thereafter, with
Total Assets for any such
Subsidiary, determined at the date
of presentation of its respective
quarterly unaudited or annual
audited financial statements, in
excess of DM 35,000,000 (Deutsche
Mark Thirty-Five Million).
24
"Margin" means, with respect to that portion
of the Loan that is denominated in
Deutsche Mark, 2.75% (two and
three-quarters of one percent) per
annum and, with respect to that
portion of the Loan that is
denominated in U.S. Dollars, 2.875%
(two and seven-eighths of one
percent) per annum.
"Material Adverse Effect" means a material adverse effect on:
(a) the financial condition,
business, operations or
properties of any specified
Person or a specified group
of Persons, taken as a whole;
or
(b) the ability of the Borrower
to meet its payment,
Collateral or Lien
obligations under this
Agreement or any other Loan
Document.
"Mirror Notes" means that certain (a)
Second-Tier Senior Mirror Note dated
as of October 20, 1993, in the
original principal amount of
$250,000,000 executed by the
Borrower payable to the order of
Kronos and (b) Second-Tier Discount
Mirror Note dated as of October 20,
1993, in the original principal
amount of $187,500,000 executed by
the Borrower payable to the order of
Kronos, in the forms attached hereto
as EXHIBIT B.
"Multiemployer Plan" means a multiemployer plan as
such term is defined in Section
4001(a)(3) of ERISA.
"Net Income" means net income of the
Borrower and its Subsidiaries on a
consolidated basis in conformity
with German GAAP.
"Net Proceeds" means, with respect to the
Disposition of Stock or any other
asset by any Person, Gross Proceeds
of such Disposition less (i) all
reasonable fees and expenses
actually incurred pursuant to an
arm's length agreement or
arrangement, including, without
limitation, customary brokerage
commissions, charges or fees, and
(ii) all taxes, excluding income
taxes.
25
"NL Debt Offering" means the offering of the NL Notes.
"NL Debt Offering Expenses" means the
reasonable fees and expenses
incurred relating to the NL Debt
Offering.
"NL Guaranty" means the Guaranty dated
as of the Second Restatement Date
executed by NL Industries to and in
favor of the Agent, as amended or
supplemented from time to time.
"NL Industries" means as set forth in
the second paragraph of the preamble
of this Agreement.
"NL/Kronos Guaranty" means the Guaranty dated
as of March 22, 1991, executed by NL
Industries and Kronos (US) (then
known as Kronos, Inc.) to and in
favor of the Agent.
"NL Notes" means the senior secured
notes due 2003 and the senior
secured discount notes due 2005
issued by NL Industries pursuant to
the Indentures.
"NL Subordinated Loan" means the
unsecured and subordinated loan in
the principal amount of DM
260,000,000 (Deutsche Mark Two
Hundred Sixty Million) made by NL
Industries to the Borrower on or
before the Second Restatement Date
pursuant to the NL Subordinated Note
and the Subordination Agreement.
"NL Subordinated Note" means that
certain Zero Coupon Subordinated
Promissory Note dated January 31,
1997, in the original principal
amount of DM 260,000,000 (Deutsche
Mark Two Hundred Sixty Million) made
by the Borrower payable to the order
of NL Industries which evidences the
NL Subordinated Loan.
"NL Undertaking" means the Amended and
Restated Undertaking of NL
Industries, Inc. dated as of First
Restatement Date among NL
Industries, the Agent and the Banks,
as amended or supplemented from time
to time.
"Non-U.S. Employee Plans" means all employee
pension benefit and welfare benefit
plans of the Borrower or any of its
26
Subsidiaries including, without
limitation, severance pay, plans,
policies, agreements or programs,
governed by laws other than the laws
of the United States applicable to
or covering current or former
employees or directors of the
Borrower or any Subsidiaries.
"Nordenham Mortgage" means Land Charges
executed by Kronos Titan pursuant to
which Liens affecting the real
properties (and plant) of Kronos
Titan located in Nordenham, Germany
are created in favor of the Agent
and other agreements, documents and
instruments relating thereto.
"Notice of Borrowing" means as set forth in
SECTION 4.02(C).
"Operating Subsidiaries" means as set forth in
SECTION 16.09(F).
"Original Agreement" means as set forth in the
third paragraph of the preamble of
this Agreement.
"Original Currency" means as set forth in SECTION 12.03.
"Other Currency" means as set forth in SECTION 12.03.
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor
thereto.
"Pension Benefit Plan" means an employee
pension benefit plan within the
meaning of Section 3(2) of ERISA.
"Permitted Indebtedness" means, with respect to
the Borrower and any Subsidiary:
(a) Indebtedness described on
SCHEDULE 2 attached hereto
(other than working capital
indebtedness of the Borrower
and any Subsidiary set forth
in CLAUSE (D) below and other
than Subordinated Debt);
(b) trade payables incurred and
payable in the ordinary
course of business and on
customary terms and rental
obligations under Capital
27
Leases relating solely to
personal property acquired by
the Borrower or any
Subsidiary in the ordinary
course of business;
(c) Indebtedness arising or
existing pursuant to this
Agreement;
(d) unsecured (except as provided
in this CLAUSE (D) below)
working capital Indebtedness
of the Borrower and its
Subsidiaries maturing in all
cases no more than 3 (three)
years from the date incurred
or issued, including, without
limitation, the aggregate
face amounts (funded or
unfunded) of all standby and
documentary letters of
credit; provided, however,
that such unsecured working
capital Indebtedness shall
not exceed in the aggregate
DM 80,000,000 (Deutsche Mark
Eighty Million) at any time
outstanding; and provided,
further, however, that any
such working capital
Indebtedness incurred by
Kronos Canada, Inc. shall not
exceed Cdn. $10,000,000 in
aggregate principal amount at
any time outstanding and may
be secured by the Lien
referred to in CLAUSE (H) of
the definition of the term
"Permitted Liens";
(e) any refinancing of the
Indebtedness in the foregoing
CLAUSES (A) through (D),
provided, however, that, with
respect to Indebtedness
described in CLAUSE (A) such
refinancing shall not: (i)
(A) include an increase in
Indebted ness, (B) include
any decrease, reduction or
shortening of the then
remaining term over which
such Indebtedness is
amortized, (C) include any
increase in the amount or
frequency of principal
payments of such
Indebtedness, and (ii) result
in a Default under this
Agreement, unless otherwise
approved in writing by the
Majority Banks in their
reasonable discretion;
28
(f) Indebtedness between or among
any of the Borrower and/or
its Subsidiaries;
(g) Indebtedness of the Borrower
evidenced by the Mirror
Notes; and
(h) Subordinated Debt as defined
in CLAUSE (A) of the
definition of the term
"Subordinated Debt."
"Permitted Liens" means:
(a) Liens existing on the Second
Restatement Date and set
forth in SCHEDULE 3;
(b) Liens existing on property at
the time of its acquisition
(other than any such Lien
created in contemplation of
or connection with such
acquisition);
(c) extensions, renewals and
replacements of Liens
referred to in CLAUSES (A)
and (B) above, provided that
any such extension, renewal
or replacement is limited to
the property or assets
covered by the Lien extended,
renewed or replaced and does
not secure any Indebtedness
in addition to that
originally secured, in the
case of Liens referred to in
CLAUSE (A) above, as of May
30, 1990 and, in the case of
Liens referred to in CLAUSE
(B) above, at the time when
such Liens are or were
originally created or
incurred;
(d) Liens imposed by law, such as
carriers', warehousemen's,
materialmen's, landlords',
and mechanics' Liens; zoning
restrictions; easements;
survey exceptions;
reservations; rights-of-way;
restrictions on use; and
other similar Liens that were
not incurred in con nection
with the borrowing of monies
or obtaining credit and that:
29
(i) do not in the
aggregate materially
detract from the
value, or materially
impair the use, of the
property or assets to
which such Liens
attach; or
(ii) are being contested in
good faith by
appropriate
proceedings, which
proceedings have the
effect of preventing
the forfeiture or sale
of the property or
assets subject to such
Lien;
(e) Liens securing taxes not yet
due or being contested in
good faith by appropriate
proceedings, which
proceedings have the effect
of preventing the forfeiture
or sale of the property or
assets subject to such Liens
and where adequate reserves
are established and
maintained if required in
accordance with German GAAP;
provided, however, that none
of the Liens referred to in
this CLAUSE (E) may, at any
time, attach or relate to any
property or assets of any
Subsidiary of the Borrower
except to the extent that the
taxes secured thereby are
attributable to and owed by
such Subsidiary or are owed
to the taxing authorities of
the country in which such
Subsidiary is organized;
(f) Liens arising in connection
with workman's compensation
laws or similar legislation
or progress payments under
government con tracts,
deposits to secure public or
statutory obligations of the
Borrower or any of its
Subsidiaries, or deposits as
security for contested import
duties;
(g) obligations under conditional
sale agreements, Capital
Leases or reservation of
title or other title
retention agreements relating
solely to personal property
acquired by the Borrower or
any Subsidiary in the
ordinary course of business;
30
(h) Liens affecting the property
of Kronos Canada, Inc.
securing working capital
Indebtedness not to exceed
Cdn. $10,000,000 in aggregate
principal amount at any time
outstanding;
(i) other Liens if approved by
the Majority Banks, in their
sole discretion; and
(j) Liens in favor of the Agent
and the Banks under the Loan
Documents.
"Person" means an individual, a corporation,
a partnership, joint venture, or a
trust, unincorporated organization
or association or mutual company,
joint stock company, estate, trust
or other organization, whether or
not a legal entity, including a
government or political subdivision
or an agency or instrumentality
thereof.
"Pledge Agreement"
or "Pledge Agreements" means the pledge agreement or pledge
agreements executed or to be
executed by NL Industries and the
Pledgors in accordance with the
Original Agreement, the First
Approval Agreement, the First
Restated Agreement, the Second
Approval Agreement or this Agreement
(including, without limitation,
SECTION 16.34 and ARTICLE 17), as
amended or supplemented from time to
time.
"Pledged Subsidiary"
or "Pledged Subsidiaries" means,
individually or collectively, each
of the following Subsidiaries of the
Borrower (unless amended with the
consent of the Majority Banks):
(a) NL Industries (Deutschland)
GmbH;
(b) Kronos Chemie GmbH;
(c) Societe Industrielle du
Titane, S.A.;
(d) Kronos Europe S.A./N.V.;
31
(e) Kronos Norge A/S;
(f) Kronos Limited;
(g) Kronos Canada, Inc.;
(h) 2927527 Canada Inc.;
(i) 2969157 Canada Inc.;
and any Subsidiaries, whether
existing on the Second Restatement
Date or at any time thereafter,
which become Pledged Subsidiaries
pursuant to SECTION
16.34.
"Pledgors" means the Borrower and those
Subsidiaries which have delivered or
will deliver a pledge of the Stock
of any of the Pledged Subsidiaries
pursuant to SECTION 16.34 and
ARTICLE 17.
"Primary Syndication Completion Date" means
the Primary Syndication Completion
Date as such term is defined in the
Original Agreement.
"Principal Shareholder" means, with respect to
the Borrower, any Person who owns
directly more than 50% (fifty
percent) of the voting Stock of the
Borrower (whether such Stock is held
in the name of such Person or is
held in the name of another Person
for the benefit of such Person), or
if no Person owns such percentage of
voting Stock, that Person who
directly owns an amount of the
Borrower's voting Stock which
exceeds the amount of such Stock
owned directly by any other
stockholder (whether such Stock is
held in the name of such Person or
is held in the name of another
Person for the benefit of such
Person).
"Reference Banks" means the principal London or
Luxembourg office of:
(a) Hypobank International S.A.;
(b) Bankers Trust Company; and
32
(c) Arab Banking Corporation;
provided that, if the Commitment of
any Reference Bank is terminated
pursuant to this Agreement or any
Reference Bank ceases to be a Bank
or ceases to act as a Reference
Bank, the Agent, with the consent of
the Borrower, which consent shall
not be unreasonably withheld or
delayed, shall select another Bank
to serve as a Reference Bank
hereunder.
"Regulation D" means Regulation D of the Federal
Reserve.
"Relevant Date" means, with respect to any
amounts denominated or to be
denominated in U.S. Dollars, a
Drawdown Date or the date of any
redenomination or payment pursuant
to this Agreement in U.S. Dollars or
the date of any other calculation
with respect to U.S. Dollars, as
applicable.
"Repayment Date" means each of the days for
repayment of the Loan or any portion
thereof referred to in ARTICLE 9,
provided that if any such day is not
a Business Day, the relevant
Repayment Date shall be the next
succeeding Business Day.
"Repayment Installment" means each installment
for repayment or amount of repayment
of the Loan or any portion thereof
required pursuant to or described in
ARTICLE 9.
"Restricted Capital Amount" means, as of the
date of determination, the aggregate
amount of Restricted Payments
permitted to be paid by the Borrower
on or after the date of
determination as Restricted Payments
pursuant to SECTION
16.20(B).
"Restricted Payments" means:
(a) with respect to any Stock
issued by any Person,
(i) the retirement,
redemption, purchase
or other acquisition
for value
33
(directly or
indirectly) of any
such Stock (except
Stock acquired upon
conversion into other
shares of such Stock);
and
(ii) the declaration or
payment of any
dividend or other
distribution,
including any
distribution of
assets, properties,
cash, rights,
obligations or
securities, but other
than dividends or
distributions payable
solely in shares of
such Stock, on or with
respect to any such
Stock;
(b) payments of principal or
interest on or with respect
to any Subordinated Debt;
(c) Investments by the Borrower
or any Subsidiary in an
Affiliate, other than the
Borrower or any Subsidiary,
consisting of investments in
the capital stock of such
Affiliate or loans to such
Affiliate (exclusive of trade
payables and contractual
obligations not for borrowed
money incurred by such
Affiliate in the ordinary
course of business); and
(d) for purposes of SECTION
16.20(A) only, the Liquidity
Undertaking Credit.
"Revolving Commitment"
or "Revolving Commitments" means, in relation to
each Bank, the several obligations
of such Bank, and in relation to all
Banks, the aggregate obligations of
such Banks, subject to the terms of
this Agreement, to make available
its portion of the Revolving Portion
to be made under this Agreement up
to the aggregate principal amount
specified in SCHEDULE 1, to the
extent not reduced or canceled under
this Agreement.
"Revolving Portion" means that portion of the
principal of the Loan in the maximum
amount of (a) DM 230,000,000
(Deutsche
34
Mark Two Hundred Thirty Million) for
the period from the Second
Restatement Date through March 14,
2000 or (b) DM 105,000,000 (Deutsche
Mark One Hundred Five Million) for
the period from March 15, 2000
through September 14, 2000, which
portion includes the Kronos Titan
Revolving Portion and may be, from
time to time, prepaid pursuant to
SECTION 8.02 and reborrowed pursuant
to SECTION 2.04; provided, however,
that each of the amounts set forth
in CLAUSES (A) and (B) preceding
shall be automatically reduced by an
aggregate amount equal to 300%
(three hundred percent) of the
cumulative total of the Excess
Adjusted Restricted Payments which
have been, as of any date but
subject to the 30 (thirty) day cure
period specified in the definition
of "Excess Adjusted Restricted
Payments", paid or made or have
otherwise arisen or existed on or
after January 1, 1996, which
reduction in the Revolving Portion
shall occur automatically upon
expiration of the 30 (thirty) day
cure period applicable to the
payment, making, arising or other
existence of each such Excess
Adjusted Restricted Payment.
"Revolving Portion Availability" means, at any
time, the principal amount of the
Revolving Portion that has been
prepaid pursuant to SECTION 2.04 and
is not then outstanding.
"Second Amendment Agreement" means as set
forth in the third paragraph of the
preamble of this Agreement.
"Second Approval Agreement" means the
Approval Agreement dated as of June
21, 1996, among the Borrower, the
requisite Banks who are signatories
thereto, the Agent and the Co-Agent.
"Second Prepayment" means the prepayment of
the Loan in the Second Prepayment
Amount pursuant to SECTION 2.01(B).
"Second Prepayment Amount" means DM
150,000,000 (Deutsche Mark One
Hundred Fifty Million).
"Second Restatement Date" means January 31,
1997, the date of this Agreement (as
unamended).
35
"Service Contract" means the agreement
between Bayer AG, Leverkusen and
Kronos Titan - GmbH, Leverkusen,
dated June 21, 1952, as amended on
September 9, 1971 and as
supplemented on December 29, 1983,
and as supplemented on June 30,
1995.
"Special Purpose Account" has the meaning set
forth in the Special Purpose Account
Agreement.
"Special Purpose Account Agreement" means the
Amended and Restated Special Purpose
Account Agreement dated as of the
First Restatement Date among NL
Industries, Kronos, the Borrower and
the Agent, as amended or
supplemented from time to time.
"Spot Rate" means, with respect to any
day, the rate determined on such
date on the basis of the offered
rates, as reflected on the
appropriate BHFX display of the
Reuter Monitor Money Rates Service
at or about 1:00 p.m. Frankfurt time
(a) with respect to the
determination of the Deutsche Mark
Amount, to purchase Deutsche Mark
with U.S. Dollars and (b) with
respect to the determination of the
Equivalent Amount, to purchase U.S.
Dollars with Deutsche Mark, provided
that, if at least two such offered
rates appear on such display, the
rate shall be the arithmetic mean of
such offered rates and, if no such
offered rates are so displayed, the
Spot Rate shall be determined by the
Agent on the basis of the arithmetic
mean of such offered rates notified
to the Agent by the Reference Banks
in accordance with their normal
practice.
"Stock" means, with respect to any Person,
any capital stock or other equity
rights, bonds, notes or other
instruments convertible into capital
stock or other equity interests, and
options, warrants or other rights to
acquire capital stock or other
equity interests.
"Subordinated Debt" means the following
Indebtedness (exclusive of the
Indebtedness of the Borrower to
Kronos evidenced by the Mirror
Notes):
36
(a) Indebtedness (if any) owed by
the Borrower to Kronos and/or
NL Industries in respect of
loans to the Borrower from
Kronos and/or NL Industries
made after the First
Prepayment Date if and to the
extent that (i) the proceeds
of such loans are deposited
by Kronos and/or NL
Industries into the Special
Purpose Account (or, if so
agreed by the Agent, into
another special, restricted
account of the Borrower
maintained at, and acceptable
to, the Agent from which the
Borrower may not make
withdrawals or otherwise
direct distributions except
with respect to any interest
to accrue thereon), and (ii)
such proceeds are applied to
the Loans in accordance with
the Special Purpose Account
Agreement;
(b) Indebtedness (if any) owed by
the Borrower to Kronos and/or
NL Industries in respect of
loans to the Borrower from
Kronos and/or NL Industries
made after the First
Prepayment Date obtained for
general corporate purposes or
made to comply with the
obligations of Kronos and/or
NL Industries under the
Liquidity Undertaking, which
Indebtedness is not otherwise
permitted under the
definition of "Permitted
Indebtedness" or described in
CLAUSE (A) of this definition
of "Subordinated Debt";
(c) the Kronos Subordinated Loan
and the NL Subordinated Loan;
and
(d) other Indebtedness approved
by the Majority Banks as
Subordinated Debt.
"Subordinated Loan Documents" means the
Subordination Agreement, the NL
Subordinated Note and the Kronos
Subordinated Note, true, correct and
complete photocopies of which (other
than the Subordination Agreement)
are attached hereto as EXHIBIT C.
37
"Subordination Agreement" means the Amended and
Restated Subordination and
Contribution Agreement dated as of
the First Restatement Date among NL
Industries, Kronos, the Borrower and
the Agent, as amended or
supplemented from time to time.
"Subsidiary" means any Person Controlled directly
or indirectly by the Borrower.
"Tax Refund" means the German income
taxes to be refunded to the
Borrower, if any, pursuant to its
1990 German federal corporate income
tax returns for calendar year 1990
claiming refunds aggregating more
than DM 150,000,000 of German income
taxes previously paid by the
Borrower and certain Consolidated
Subsidiaries for calendar years
1988, 1989 and 1990.
"Taxes" shall have the meaning set forth in
SECTION 11.01.
"Technology Undertaking" means the Amended and
Restated Technology and Trademark
Undertaking dated as of the First
Restatement Date among Kronos,
Kronos (US) and the Agent, as
amended or supplemented from time to
time.
"Temporary Cash Investment" means any
Investment in (i) direct obligations
of, or obligations guaranteed by,
the governments of Belgium, Canada,
Germany, France, Norway, the United
Kingdom or the United States or any
agency of any of the foregoing, (ii)
commercial paper (including, without
limitation, Eurocommercial paper)
rated in the highest grade by an
internationally recognized credit
rating agency, (iii) time deposits
(including, without limitation,
Euro-deposits and certificates of
deposit), with prime commercial
banks of international standing, and
(iv) bonds issued by corporations
and financial institutions with
obligations rated at least "AA" by
an internationally recognized credit
rating agency; provided, however, in
each case, that such Investment
matures within one year from the
date of
38
acquisition thereof by the Borrower
or its Subsidiary.
"Tentative Tax Refund" means as set forth in
the Tentative Tax Refund Letter.
"Tentative Tax Refund
Availability Amount" means as set forth in the
Tentative Tax Refund Letter.
"Tentative Tax Refund Letter" means that
certain letter dated May 27, 1994,
from the Borrower to the Agent.
"Term Portion" means that portion of the
principal of the Loan other than the
Revolving Portion.
"Third Amendment Agreement" means as set
forth in the third paragraph of the
preamble of this Agreement.
"Third Party License Agreements" shall have
the meaning set forth in SECTION
15.21.
"Total Assets" means total assets of the
Borrower and its Subsidiaries on a
consolidated basis in conformity
with German GAAP.
"Underwriting Agreement" means the Underwriting
Agreement dated as of October 13,
1993, between NL Industries and
Salomon Brothers Inc. executed by
the parties thereto in connection
with the underwriting of the NL
Notes.
"U.S. Dollars or U.S. $" means lawful
currency of the United States of
America.
When used in this Agreement:
(a) A reference to a law, rule or regulation includes any amendment,
supplement or modification to such law, rule or regulation and
any successor to such law, rule or regulation;
(b) A reference to an agreement, instrument or document shall include
such agreement, instrument or document as the same may be
amended, modified, supplemented or restated from time to time in
accordance with its terms and as permitted by this
39
Agreement or has been amended, modified, supplemented or restated
in accordance with its terms;
(c) All article and section headings in this Agreement are for ease
of reference only and shall be disregarded in the construction of
this Agreement; and
(d) A reference to a Person shall, unless otherwise provided, include
its successors.
ARTICLE 2. THE FACILITY
2.01 (a) The Banks (or their predecessors in interest) previously
granted, through their respective Lending Offices, to the
Borrower, upon the terms and subject to the conditions of the
Original Agreement (as and to the extent amended by this
Agreement), the Loan in the maximum aggregate principal amount of
DM 1,600,000,000 (Deutsche Mark One Billion Six Hundred Million),
of which DM 1,100,000,000 (Deutsche Mark One Billion One Hundred
Million) was outstanding as of the First Restatement Date (prior
to giving effect to the First Prepayment). On the First
Prepayment Date and in accordance with SECTION 2.01 of the First
Restated Agreement, but immediately prior to the making of the
First Prepayment, the Loan was deemed to be divided into two
portions, the Term Portion in the outstanding principal amount of
DM 850,000,000 (Deutsche Mark Eight Hundred Fifty Million) and
the Revolving Portion in the outstanding principal amount of DM
250,000,000 (Deutsche Mark Two Hundred Fifty Million). On the
First Prepayment Date and in accordance with SECTION 2.01 of the
First Restated Agreement, and promptly upon the consummation of
the NL Debt Offering, NL Industries or Kronos wire transferred to
the Agent (to the Agent's account specified in SECTION 11.04)
immediately available funds in the amount equal to the First
Prepayment Amount. The Borrower agreed that it had absolutely no
control over such funds used to make the First Prepayment and
that its estate was not, in any way, diminished as a result of
such transfer of funds or the First Prepayment. Immediately upon
the Agent's receipt of the First Prepayment, the First Prepayment
was applied in accordance with SECTION 2.1 of the First Restated
Agreement as a prepayment of the principal of the Loan, as
follows:
(i) first, DM 400,000,000 (Deutsche Mark Four Hundred Million)
of the First Prepayment Amount was applied to the Term
Portion;
(ii) second, DM 150,000,000 (Deutsche Mark One Hundred Fifty
Million) of the First Prepayment Amount was applied to the
Revolving Portion as a prepayment of the Loans pursuant to
SECTION 8.02; and
(iii) third, an amount equal to DM 2,000,000 (Deutsche Mark Two
Million) of the First Prepayment Amount was applied to the
Term Portion.
40
After giving effect to such application of the First Prepayment
and other prepayments made in accordance with the First Restated
Agreement, the outstanding principal balance of the Term Portion
was, immediately prior to the Second Restatement Date, DM
395,537,463 (Deutsche Mark Three Hundred Ninety-Five Million Five
Hundred Thirty-Seven Thousand Four Hundred Sixty-Three).
(b) The Banks shall continue to maintain the Loan in accordance with
and subject to the terms and provisions of this Agreement. On or
before the Second Restatement Date, NL Industries shall wire
transfer to the Agent's account with respect to payments in
Deutsche Mark specified in SECTION 11.04, in immediately
available funds, proceeds of the NL Subordinated Loan in the
amount equal to the Second Prepayment Amount. The Borrower agrees
that it shall have absolutely no control over such funds used to
make the Second Prepayment and that its estate shall not be, in
any way, diminished as a result of such transfer of funds or the
Second Prepayment. Immediately upon the Agent's receipt of the
Second Prepayment, the Second Prepayment shall be promptly and
automatically applied by the Agent as a prepayment of the
principal of the Term Portion of the Loan as follows: first, DM
20,000,000 (Deutsche Mark Twenty Million) of the Second
Prepayment Amount shall be applied as a mandatory prepayment of a
portion of the amount equal to the Tax Refund in accordance with
SECTION 8.01(D) and, second, DM 130,000,000 (Deutsche Mark One
Hundred Thirty Million) of the Second Prepayment Amount shall be
applied as a mandatory prepayment pursuant to SECTION 8.01(H).
Also concurrently herewith, the Borrower shall cause NL
Industries to wire transfer to the Borrower's account number
5803610284 maintained at Bayerische Hypotheken-und Wechselbank
AG, Munich, in immediately available funds, the remainder of the
proceeds of the NL Subordinated Loan in the amount of DM
110,000,000 (Deutsche Mark One Hundred Ten Million), which
proceeds shall be available for general corporate purposes of the
Borrower without any restriction on use of proceeds imposed by
any Affiliate of the Borrower. The proceeds of the Kronos
Subordinated Loan in the amount of DM 25,000,000 (Deutsche Mark
Twenty-Five Million) also shall be available for working capital
purposes of the Borrower without any restriction on use of
proceeds imposed by any Affiliate of the Borrower.
2.02 Upon the terms and subject to the conditions of this Agreement, the
Revolving Portion shall be made available to the Borrower severally by
each Bank in the amount of such Bank's Revolving Commitment under this
Agreement.
2.03 The failure of any Bank to perform its obligations under this Agreement
shall not affect the obligations of the Borrower toward the Agent or any
other Bank or the obligations of any other Bank toward the Borrower, nor
shall the Agent or any other Bank be liable for the failure of such Bank
to perform its obligation under this Agreement.
41
2.04 (a) The Revolving Portion may be, from time to time, prepaid in
whole or in part at the option of the Borrower pursuant to
SECTION 8.02 and thereafter the amounts so prepaid may be
reborrowed pursuant to, and in compliance with all terms and
conditions of, SECTION 2.04 and the other provisions of this
Agreement. Notwithstanding anything to the contrary contained in
SECTION 2.04 or elsewhere in this Agreement, the amount of the
Loan that may be reborrowed by the Borrower pursuant to SECTION
2.04 at any time shall not exceed the Revolving Portion
Availability at such time. The Borrower may not reborrow any
amounts prepaid pursuant to SECTION 8.01 or any other provision
of this Agreement (other than SECTION 8.02, to the extent
permitted in the immediately preceding sentences). The Borrower
and the Banks hereby acknowledge and agree that, as of the Second
Restatement Date and after giving effect to the prepayment in an
amount equal to the Tax Refund as referred to in SECTION 8.01(D),
the Revolving Portion Availability is DM 29,928,000 (Deutsche
Mark Twenty-Nine Million Nine Hundred Twenty-Eight Thousand)
(i.e., the remainder of DM 230,000,000, the maximum principal
amount of the Revolving Portion as of the Second Restatement
Date, minus DM 200,072,000, the outstanding principal amount of
the Revolving Portion as of the Second Restatement Date).
(b) Upon the terms and subject to the conditions set forth in this
SECTION 2.04 and elsewhere in this Agreement (including, without
limitation, the Borrower's satisfaction of all conditions
precedent to such reborrowing), and upon request of the Borrower
made pursuant to a Notice of Borrowing delivered to the Agent in
compliance with SECTION 4.02(C), each Bank agrees, severally and
not jointly, to make advances of the Revolving Portion (including
the Kronos Titan Revolving Portion) to or for the account of the
Borrower from the First Prepayment Date to August 15, 2000, by
making such amounts available to the Agent on the respective
Drawdown Dates therefor pursuant to SECTION 11.06; provided,
however, that (i) the principal amount of each advance of the
Revolving Portion made by each Bank pursuant to this SECTION 2.04
at any time may not exceed such Bank's pro rata share (based upon
its Revolving Commitment as a percentage of the aggregate
Revolving Commitments of all Banks) of the Revolving Portion
Availability at such time and the aggregate principal amount of
all advances of the Revolving Portion made by each Bank pursuant
to this SECTION 2.04 and outstanding from time to time may not
exceed such Bank's pro rata share (based upon its Revolving
Commitment as a percentage of the aggregate Revolving Commitments
of all Banks) of the Revolving Portion and (ii) the aggregate
principal amount of all advances of the Revolving Portion made by
all Banks pursuant to this SECTION 2.04 at any time may not
exceed the Revolving Portion Availability at such time and the
aggregate principal amount of all advances of the Revolving
Portion made by all Banks pursuant to this SECTION 2.04 and
outstanding from time to time may not exceed the aggregate
Revolving Commitments of all Banks. Unless the Agent
42
determines that any applicable condition precedent to any such
reborrowing has not been satisfied, the Agent shall make the
funds so received from the Banks available to the Borrower
pursuant to SECTION 11.05; provided, however, that such funds
consisting of drawdowns under the Kronos Titan Revolving Portion
requested by Kronos Titan (together with the Borrower) shall be
made available directly to Kronos Titan in accordance with
SECTION 2.04(C). Each advance of the Revolving Portion made
pursuant to this SECTION 2.04 shall be made as a part of a
borrowing consisting of advances made by the Banks in accordance
with their respective pro rata shares thereof; provided, however,
that the failure of any Bank to advance its pro rata share of any
such advance shall not in itself relieve any other Bank of its
obligation under this SECTION 2.04 (it being agreed, however,
that no Bank shall be responsible for the failure of any other
Bank to do so). Prior to August 15, 2000, the Borrower may repay
and reborrow under this SECTION 2.04 and the Banks shall make
advances in accordance with the terms of this Agreement. The
Banks shall not be obligated to make any advances of the
Revolving Portion under this SECTION 2.04 subsequent to the
August 15, 2000.
(c) It is acknowledged and agreed by the parties hereto that Kronos
Titan may utilize certain proceeds of drawdowns under the
Revolving Portion. Accordingly, as of the Second Restatement
Date, an amount of the Revolving Portion not to exceed DM
20,000,000 (Deutsche Mark Twenty Million) shall be designated as
the "Kronos Titan Revolving Portion". The Kronos Titan Revolving
Portion is, and shall be deemed to be for all purposes of this
Agreement, a part of the Revolving Portion and is available to be
drawn down by the Borrower in accordance with this Agreement. The
Borrower and Kronos Titan agree that, notwithstanding anything to
the contrary contained in this SECTION 2.04, the Borrower shall
use its best efforts to ensure that the proceeds of all drawdowns
under the Revolving Portion that are to be utilized by Kronos
Titan, unless the Kronos Titan Revolving Portion is then fully
drawn, shall be requested by Kronos Titan (together with the
Borrower) to be advanced by the Agent directly to Kronos Titan.
Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, each of the Borrower and
Kronos Titan hereby jointly and severally agrees to repay the
principal of the Kronos Titan Revolving Portion, to pay all
interest accrued on such principal that is outstanding from time
to time and to pay all fees accrued with respect to the Kronos
Titan Revolving Portion from time to time, all in accordance with
the terms and provisions of this Agreement; provided, however,
that Kronos Titan so agrees only if and to the extent that such
indebtedness, liabilities and obligations relate to advances
under the Kronos Titan Revolving Portion advanced directly to
Kronos Titan. Furthermore, the Borrower acknowledges and agrees
that advances of the Kronos Titan Revolving Portion to Kronos
Titan shall directly benefit the Borrower to the same extent as
if such advances had been made directly to the Borrower, and that
the indebtedness, liabilities and obligations of the Borrower
with respect to the Kronos Titan Revolving Portion shall be
identical to
43
the Borrower's indebtedness, liabilities and obligations with
respect to the portion of the Revolving Portion that is not the
Kronos Titan Revolving Portion.
2.05 The Borrower may, in connection with and concurrently with any Notice of
Borrowing with respect to any reborrowing of the Revolving Portion
pursuant to SECTION 2.04 and in connection with and concurrently with
any selection of a new Interest Period pursuant to SECTION 5.02, deliver
to the Agent a written request that such reborrowing or such portion of
the Loan subject to such new Interest Period, as the case may be, be
denominated or redenominated (as the case may be) in U.S. Dollars (as
opposed to Deutsche Mark), provided, however, that the aggregate
principal amount of the Loan at any time outstanding that is denominated
in U.S. Dollars may not, without the prior written consent of the Banks
that hold at least 80% (eighty percent) of the aggregate unpaid
principal amount of the Loans, immediately upon giving effect to any
such reborrowing or any such Interest Period, exceed the Base Deutsche
Mark Amount of DM 350,000,000 (Deutsche Mark Three Hundred Fifty
Million). Each such written request for a U.S. Dollar denominated
tranche shall specify the Base Deutsche Mark Amount of such tranche. If
such a written request for a U.S. Dollar denominated tranche is not
received by the Agent at least five (5) Business Days prior to the
proposed Drawdown Date, with respect to a Notice of Borrowing, or no
later than 10:00 a.m., Luxembourg time, on the fourth (4th) Business Day
prior to the beginning of the relevant Interest Period, with respect to
the selection of a new Interest Period, then the tranche shall be
denominated in Deutsche Mark, provided, however, that if the
corresponding tranche for the Interest Period then ending is denominated
in U.S. Dollars, then the tranche for the next succeeding Interest
Period shall also be denominated in U.S. Dollars unless the Borrower
notifies the Agent, pursuant to SECTION 5.02, that such tranche shall be
redenominated in Deutsche Mark for the next succeeding Interest Period.
Any agreement or obligation of the Banks to provide any portion of the
Loan in Deutsche Mark or U.S. Dollars pursuant to this Agreement shall
in all cases be subject to the condition that no circumstance described
in SECTION 7.01 shall have occurred (as determined in good faith by the
Agent) in the London interbank Euro-currency market or otherwise after
request therefor by the Borrower and before the relevant Drawdown Date
or the first day of the relevant Interest Period, as the case may be. If
the Agent has determined that such a change has occurred, then it shall
forthwith give notice thereof to the Borrower and each Bank and the
procedures set forth in ARTICLE 7 shall be applicable.
2.06 (a) If the Borrower requests (pursuant to SECTION 2.05) that any
reborrowing of the Revolving Portion (pursuant to SECTION 2.04)
be denominated in U.S. Dollars, the Banks shall, subject to
compliance by the Borrower with SECTION 2.05 and the other terms
and conditions of this Agreement, make their advances of the
reborrowing in U.S. Dollars in an aggregate amount equal to the
Equivalent Amount of the Base Deutsche Mark Amount of the
advances to be funded in U.S.
Dollars.
44
(b) In the event of any advance of the Loan being redenominated in
whole or in part in U.S. Dollars for the next succeeding Interest
Period and such advance having been denominated in Deutsche Mark
during the Interest Period then ending, each Bank will make an
amount equal to the Equivalent Amount in U.S. Dollars of the Base
Deutsche Mark Amount of its advance (or the relevant portion
thereof) to be denominated in U.S. Dollars during the next
succeeding Interest Period available to the Agent on the first
day of such next succeeding Interest Period. The Agent shall,
subject to the provisions of SECTION 2.06(F), make each such
amount of U.S. Dollars available to the Borrower on such date and
in like currency and funds as received by the Agent from the
Banks in the manner provided in SECTION 11.06, and the Borrower
on the last day of the Interest Period then ending shall repay
the amount of such advance (or the relevant portion thereof)
outstanding in Deutsche Mark during the Interest Period then
ending (with accrued interest thereon in Deutsche Mark).
(c) In the event that (i) any advance of the Loan denominated in U.S.
Dollars is to continue to be denominated in U.S. Dollars for the
next succeeding Interest Period, and (ii) as of the last day of
the Interest Period then ending, the aggregate Deutsche Mark
Amount of all outstanding advances of the Loan then denominated
in U.S. Dollars is more than one hundred and five percent (105%)
of the aggregate Base Deutsche Mark Amount of all outstanding
advances of the Loan then denominated in U.S. Dollars, then the
Borrower shall repay to the Agent, on the last day of such
Interest Period then ending, an amount of U.S. Dollars as will
result in (after giving effect to such repayment) the aggregate
Deutsche Mark Amount of all outstanding advances of the Loan then
denominated in U.S. Dollars, as of the last day of the Interest
Period then ending, being equal to one hundred percent (100%) of
the aggregate Base Deutsche Mark Amount of all outstanding
advances of the Loan then denominated in U.S. Dollars. The amount
to be repaid by the Borrower pursuant to this SECTION 2.06(C)
shall be in addition to any Repayment Installment or other amount
due and payable by the Borrower on the last day of such Interest
Period then ending. In the event that (A) any advance of the Loan
denominated in U.S. Dollars is to continue to be denominated in
U.S. Dollars for the next succeeding Interest Period, (B) as of
the last day of the Interest Period then ending, the aggregate
Deutsche Mark Amount of all outstanding advances of the Loan then
denominated in U.S. Dollars is less than ninety-five percent
(95%) of the aggregate Base Deutsche Mark Amount of all
outstanding advances of the Loan then denominated in U.S.
Dollars, and (C) no Default shall have occurred and be continuing
as of the last day of the Interest Period then ending, then each
Bank shall make available to the Agent, and the Agent shall make
available to the Borrower, on the last day of such Interest
Period then ending, such Bank's pro rata share (based upon its
Commitment as a percentage of the aggregate Commitments of all
Banks) of an amount of U.S. Dollars as will result in (after
giving effect to the delivery of such amount to the Borrower) the
aggregate Deutsche Mark
45
Amount of all outstanding advances of the Loan then denominated
in U.S. Dollars, as of the last day of the Interest Period then
ending, being equal to one hundred percent (100%) of the
aggregate Base Deutsche Mark Amount of all outstanding advances
of the Loan then denominated in U.S. Dollars. The obligation of
the Banks and the Agent to make such additional amounts available
to the Agent and the Borrower, respectively, shall be subject, in
all respects, to the condition precedent that no circumstances
described in SECTION 7.01, as determined in good faith by the
Agent, shall have occurred in the London interbank Euro-currency
market or otherwise on or about the last day of such Interest
Period then ending.
(d) In the event of any advance of the Loan being redenominated in
whole or in part in Deutsche Mark for the next succeeding
Interest Period and such advance having been denominated in U.S.
Dollars during the Interest Period then ending, each Bank will
make its advance in Deutsche Mark in an amount equal to such
Bank's pro rata share of the Base Deutsche Mark Amount of the
aggregate advance to commence on the first day of such next
succeeding Interest Period. The Agent shall, subject to the
provisions of SECTION 2.06(F), make each such amount of Deutsche
Mark available to the Borrower on such date and in like currency
and funds as received by the Agent in the manner provided in
SECTION 11.06, and the Borrower on the last day of the Interest
Period then ending shall repay the amount of such advance (or the
relevant portion thereof) outstanding in U.S. Dollars during the
Interest Period then ending (with accrued interest therein on
U.S. Dollars).
(e) In the event that, with respect to any tranche requested to be
denominated in U.S. Dollars, any of the events specified in
SECTION 7.01 shall occur relating to U.S. Dollar deposits, then
the Agent, with the consent of Majority Banks and by the giving
of notice to the Borrower, may require that (i) each advance
shall be made to the Borrower in Deutsche Mark in an amount equal
to such Bank's pro rata share of the Base Deutsche Mark Amount of
the aggregate advance requested to be made in U.S. Dollars, (ii)
each advance which shall have been denominated in Deutsche Mark
during the Interest Period then ending shall continue to be
denominated in Deutsche Mark and (iii) each Bank shall make
available to the Agent in Deutsche Mark the Base Deutsche Mark
Amount of its advance which shall have been outstanding in U.S.
Dollars during the Interest Period then ending on the first day
of the next succeeding Interest Period. The Agent shall, subject
to the provisions of SECTION 2.06(F), make such Base Deutsche
Mark Amount available to the Borrower on the same date and in
like currency and funds as received by the Agent from such Bank
in the manner provided in SECTION 11.06 and the Borrower on the
last day of the Interest Period then ending shall repay the
amount of such advance denominated in U.S. Dollars during the
Interest Period then ending (with accrued interest thereon in
U.S. Dollars).
46
(f) In the event the Borrower is required to repay any amounts on the
last day of any Interest Period pursuant to this SECTION 2.06,
the Agent shall make any amounts to be advanced by the Banks
available to the Borrower on the first day of the next succeeding
Interest Period only if the Agent receives, concurrently
therewith in accordance with this Agreement, the relevant amounts
to be repaid by the Borrower pursuant to this SECTION 2.06. The
Borrower hereby agrees that it shall indemnify the Agent and each
Bank, and hold the Agent and each Bank harmless from and against,
any and all funding or foreign exchange costs, losses or expenses
that the Agent and the Banks may suffer, sustain or incur as a
consequence of a failure by the Borrower to promptly pay, when
due, any amounts required to be paid by the Borrower.
ARTICLE 3. PURPOSE OF THE LOAN
The Borrower represents and warrants that the proceeds of the Loan
initially were used to refinance all of its then outstanding bank indebtedness
and certain of its then existing indebtedness (including principal and accrued
interest) to Kronos (US) (then known as Kronos, Inc.), and that the remaining
proceeds of the Loan in excess of the amount needed to refinance such
indebtedness were used exclusively for its general corporate purposes. The
Borrower shall use the entire proceeds of each reborrowing under the Revolving
Portion exclusively for its general corporate purposes (including, without
limitation, to make Restricted Payments permitted under SECTION 16.20).
ARTICLE 4. CONDITIONS PRECEDENT AND NOTICE OF BORROWING
4.01 (a) Reference is hereby made to Sections 4.01(a), 4.01(b) and
4.01(c) of the First Restated Agreement, which Section 4.01(a)
contains certain conditions of the First Restated Agreement, and
which Sections 4.01(a), 4.01(b) and 4.01(c) are incorporated
herein by reference.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, this Agreement shall
become effective when (and shall not become effective unless and
until) each of the following conditions precedent are satisfied
to the reasonable satisfaction of the Agent:
(i) The Agent shall have received the following documents, as
appropriately executed, delivered and (where applicable)
completed to its reasonable satisfaction (except that any
such condition precedent set forth in this CLAUSE (I) may
be waived by the Agent, subject to any post-closing
documentation requirements imposed by the Agent):
(A) amendment and restatement, amendment and/or
reaffirmation of each of the Pledge
Agreements executed by
47
the Borrower or, with respect to the Pledge
Agreement relating to the Stock of NL
Industries (Deutschland) GmbH pledged by NL
Industries, executed by NL Industries, each
of which amendments and restatements,
amendments and/or reaffirmations shall be in
the applicable form attached hereto as
EXHIBIT D, together with such agreements,
documents and instruments as may reasonably
be required by the Agent in connection what
the Pledge Agreements;
(B) amendment and/or reaffirmation of each of
the Guaranties (other than the NL/Kronos
Guaranty which has been fully performed)
executed by Kronos Canada, Inc., 2927527
Canada Inc. and 2969157 Canada Inc., each of
which amendments and/or reaffirmations shall
be in the applicable form attached hereto as
EXHIBIT E;
(C) Second Amended and Restated Technology and
Trademark Undertaking executed by Kronos and
Kronos (US), which agreement shall be in the
form attached hereto as EXHIBIT F;
(D) amendment and restatement, amendment and/or
reaffirmation of the Amended and Restated
Subordination and Contribution Agreement
executed by NL Industries, Kronos and the
Borrower, which amendment and restatement,
amendment and/or reaffirmation shall be in
the form attached hereto as EXHIBIT G;
(E) amendment and restatement, amendment and/or
reaffirmation of the Amended and Restated
Liquidity Undertaking executed by NL
Industries, Kronos and the Borrower, which
amendment and restatement, amendment and/or
reaffirmation shall be in the form attached
hereto as EXHIBIT H;
(F) amendment and restatement, amendment and/or
reaffirmation of (i) each of the agreements
executed by the Borrower, NL Industries and
Kronos pursuant to which it appoints Dr.
Wienand Meilicke to accept service of
process in Germany pursuant to the
applicable Loan Documents, and (ii) each of
the agreements executed by Prentice-Hall
Corporation System, Inc. pursuant to which
it agrees to act as agent for the Borrower,
NL Industries and Kronos to accept service
of process in New York pursuant to the
48
applicable Loan Documents, which amendments
and restatements, amendments and/or
reaffirmations shall be in form and
substance reasonably satisfactory to the
Agent;
(G) an Acknowledgment of Limitation of Special
Damages executed by Kronos World Services
S.A./N.V., which acknowledgment shall be in
the form attached hereto as EXHIBIT I;
(H) the NL Guaranty, which Guaranty shall be in
the form attached hereto as EXHIBIT J;
(I) the Canadian Security Documents executed by
Kronos Canada, Inc., 2927527 Canada Inc. and
2969157 Canada Inc., which Canadian Security
Documents shall be in the forms attached
hereto as EXHIBIT K;
(J) the Nordenham Mortgage executed by Kronos
Titan, which Nordenham Mortgage shall secure
only the indebtedness, liabilities and
obligations of Kronos Titan relating to the
Kronos Titan Revolving Portion and shall be
in the form attached hereto as EXHIBIT L;
(K) the Cash Pledge Agreements executed by the
Borrower, which Cash Pledge Agreements shall
be in the forms attached hereto as EXHIBIT
M;
(L) the Cash Pledge Agreements executed by
Kronos Canada, Inc., 2927527 Canada Inc. and
2969157 Canada Inc., which Cash Pledge
Agreements shall be in the forms attached
hereto as EXHIBIT N;
(M) a certificate of the Secretary, Assistant
Secretary or other appropriate officer,
director or other representative of each of
the Borrower, its Subsidiaries, NL
Industries, Kronos and Kronos (US) (as
applicable) as to the authorization of the
Loan Documents to be executed by such Person
pursuant to this Agreement and as to other
corporate matters;
(N) a true and correct photocopy of each of the
Subordinated Loan Documents as executed by
all parties thereto, which photocopies shall
be certified by the Secretary or an
Assistant Secretary of each of the parties
thereto as being
49
true, correct and complete photocopies
thereof, all of which Subordinated Loan
Documents shall be in form and substance
satisfactory to the Agent;
(O) such legal opinions of counsel to the
Borrower and its Subsidiaries and counsel to
the Agent as the Agent may require, all of
which opinions shall be in form and
substance reasonably satisfactory to the
Agent;
(P) such other agreements, documents and
instruments relating to the Loan Documents
and/or the parties thereto as the Agent may
reasonably request.
(ii) Any and all invoiced fees, costs or expenses to be paid or
reimbursed, as of the Second Restatement Date, by the
Borrower to the Agent or any Bank with respect to this
Agreement or any other Loan Document or any transaction
contemplated hereby or thereby (including, without
limitation, charges and expenses for which the Borrower is
obligated pursuant to the Original Agreement, the First
Restated Agreement and/or this Agreement), shall have been
paid in full.
(iii) All corporate proceedings taken in connection with the
transactions contemplated by this Agreement, and all legal
matters incident to this Agreement, shall be reasonably
satisfactory to the Agent.
(iv) The Borrower shall have paid to the Agent all fees
required to be paid to the Agent or any Bank on or before
the Second Restatement Date pursuant to SECTION 19.01 and
SECTION 19.02.
(v) The NL Subordinated Loan shall have been made in
accordance with the terms and provisions of the
Subordinated Loan Documents.
(vi) DM 57,287,585 (Deutsche Mark Fifty-Seven Million Two
Hundred Eighty-Seven Thousand Five Hundred Eighty-Five) of
the Tax Refund shall have been drawn under the Tentative
Tax Refund Availability Amount of the Revolving Portion
Availability and paid to the Agent to be applied to the
Term Portion in accordance with SECTION 8.01(D).
(vii) The Agent shall have received (A) from NL Industries and
for the account of the Banks ratably in proportion to
their portion of the Loan and for application against the
outstanding principal amount of the Term Portion of the
Loan in accordance with SECTION 2.01(B), the Second
Prepayment from the proceeds of the NL Subordinated Loan,
and (B) a Solvency Certificate
50
executed by NL Industries and Kronos, which certificate
shall be in the form attached hereto as EXHIBIT O.
(viii) The Borrower shall have received DM 110,000,000 (Deutsche
Mark One Hundred Ten Million) of the proceeds of the NL
Subordinated Loan (i.e., the entirety of the proceeds of
the NL Subordinated Loan in excess of the Second
Prepayment Amount) in accordance with SECTION 2.01(B).
(c) The Borrower shall (except to the extent waived as permitted by
this Agreement) cause the conditions precedent set forth in
SECTION 4.01(B) to be satisfied concurrently with the Borrower's
execution of this Agreement, and the Borrower shall, concurrently
with its execution of this Agreement, so certify to the Agent and
the Banks.
4.02 Each Drawdown of the Revolving Portion (including, without limitation,
the Kronos Titan Revolving Portion) is subject to:
(a) no Default having occurred;
(b) all representations and warranties made by the Borrower and/or
any Affiliate in the Loan Documents being true and correct as of
the Drawdown Date (other than the representations and the
warranties that are expressly made only in reference to another
specific date);
(c) the receipt by the Agent of a notice of borrowing in the form set
forth in EXHIBIT P ("Notice of Borrowing"), duly completed, not
less than 5 (five) Business Days prior to the proposed Drawdown
Date;
(d) the conditions that (i) immediately prior to giving effect to
such drawdown, the outstanding principal amount of the Loan is
not less than DM 100,000 (Deutsche Mark One Hundred Thousand),
(ii) the Agent, as Agent for the Banks, shall have a first
priority perfected security interest in the Stock of the
respective Subsidiaries pledged under the Pledge Agreements as
security for the Loan (including, without limitation, the
Revolving Portion and any reborrowings of the Revolving Portion
to be advanced on the date of any drawdown thereof), which Stock
shall be free and clear of all Liens (other than such security
interest securing the Loan) except for any Permitted Liens
referred to in CLAUSE (D), (E), (F) OR (I) of the definition of
such term in this Agreement, and (iii) the Agent, as Agent for
the Banks, shall have the additional Liens as security for the
Loans (including, without limitation, the Revolving Portion and
any reborrowings of the Revolving Portion to be advanced on the
date of any drawdown thereof) provided in SECTION 17.05, which
Liens shall have the priority specified in such SECTION 17.05;
and
51
(e) the condition that no Excess Adjusted Restricted Payments have
been directly or indirectly paid or made by the Borrower or any
of its Subsidiaries to any Affiliate of the Borrower (other than
the Borrower or Subsidiaries of the Borrower) from and after
January 1, 1996 (subject to the 30 (thirty) day cure period
specified in the definition of "Excess Adjusted Restricted
Payments").
4.03 Each Notice of Borrowing shall be irrevocable and the Borrower shall be
bound to borrow in accordance with such notice.
4.04 Upon the Agent's receipt of each (a) Notice of Borrowing, (b) notice of
selection of a new Interest Period pursuant to SECTION 5.02 or (c)
request that any tranche be denominated (or redenominated) in U.S.
Dollars pursuant to SECTION 2.05, the Agent shall promptly notify each
Bank of the contents thereof and, if applicable, of such Bank's pro rata
share of any advance of the Loan to be made. Furthermore, upon the
determination of the interest rate applicable to any tranche, the Agent
shall promptly notify each Bank of such interest rate.
ARTICLE 5. INTEREST PERIODS
5.01 The Loan proceeds shall be made available to the Borrower in no more
than 4 (four) tranches for Interest Periods of 1 (one), 3 (three), 6
(six) or 12 (twelve) months with respect to each such tranche, except as
provided in SECTION 5.04 and provided that the Borrower may select
Interest Periods of 1 (one) month or 3 (three) months only with respect
to any tranche denominated or to be denominated in U.S. Dollars. Each
tranche shall be in a minimum principal amount of DM 100,000,000
(Deutsche Mark One Hundred Million) and integral multiples of DM
10,000,000 (Deutsche Mark Ten Million) in excess thereof (or the
Equivalent Amount thereof in U.S. Dollars); provided, however, that any
tranche evidencing a reborrowing of the Revolving Portion pursuant to
SECTION 2.04 shall be in a minimum principal amount of DM 5,000,000
(Deutsche Mark Five Million) and integral multiples of DM 1,000,000
(Deutsche Mark One Million) in excess thereof (or the Equivalent Amount
thereof in U.S. Dollars) and provided, further, however, that any
concurrent reborrowing under the Kronos Titan Revolving Portion and
reborrowing under the Revolving Portion that does not constitute the
Kronos Titan Revolving Portion shall be aggregated for purposes of the
immediately preceding proviso. Each tranche shall be denominated in
Deutsche Mark or, if permitted by SECTION 2.05 and upon compliance by
the Borrower with SECTION 2.05, U.S. Dollars, provided, however, that
each tranche shall be entirely denominated in either Deutsche Mark or
U.S. Dollars.
5.02 The Borrower shall inform the Agent no later than 10:00 a.m., Luxembourg
time, on the 4th (fourth) Business Day prior to the beginning of the
relevant Interest Period of the tenor of the next Interest Period,
including, without limitation, the duration of such Interest Period and
the currency (whether Deutsche Mark or U.S. Dollars) in which the
tranche to be outstanding during such Interest Period is to be
denominated. Unless the Agent is notified to the contrary by such time,
the relevant Interest Period shall have a duration of
52
1 (one) month and the currency in which the tranche to be outstanding
during such Interest Period is to be denominated shall be the same
currency in which the corresponding tranche was denominated for the
Interest Period then ending.
5.03 Each Interest Period for any tranche, other than the initial Interest
Period, shall commence on the expiration of the immediately preceding
Interest Period for such tranche. If an Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such day falls into the next
calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day. If any other date on which interest
is payable under this Agreement is not a Business Day, then payment
shall be due on the next succeeding Business Day unless such day falls
into the next calendar month, in which event payment shall be due on the
immediately preceding Business Day.
5.04 The Borrower may not select an Interest Period which begins prior to a
Repayment Date and ends after such Repayment Date unless the aggregate
amount of the tranches which have Interest Periods ending on or prior to
such Repayment Date shall at least equal the principal amount of the
Loan required to be paid on such Repayment Date. Notwithstanding
anything herein to the contrary, the Borrower may select an Interest
Period other than one, three or six months, but not to exceed six months
(subject to the ability of the Reference Banks to determine the
Interbank Rate for such period), for that portion of the Loan not in
excess of the amount of the Loan which is scheduled to come due pursuant
to ARTICLE 9 within six months of the first day of such Interest Period
and which Interest Period shall end on such scheduled Repayment Date.
ARTICLE 6. INTEREST
6.01 On each Interest Payment Date, the Borrower shall pay to the Agent for
the account of the Banks for the Interest Period ending thereon, accrued
interest, on the applicable tranche as provided in this Agreement,
provided, however, that if any Interest Period is longer than 3 (three)
months, accrued interest shall be payable (a) on the date in the third
succeeding calendar month numerically corresponding to the commencement
date of such Interest Period, or, if there exists no date numerically
corresponding to the commencement date of such Interest Period in any
such third succeeding month, such accrued interest shall be payable on
the last Business Day of such third succeeding calendar month after the
first day of such Interest Period and (b) on the Interest Payment Date.
Interest shall be paid in the currency in which the applicable tranche
is denominated on the applicable Interest Payment Date.
6.02 The rate of interest applicable to each tranche of the Loan during any
Interest Period relating thereto shall be the Interbank Rate plus the
Margin.
53
6.03 Interest payable pursuant to this Agreement shall be calculated for the
actual number of days elapsed on the basis of a 360 (three hundred
sixty) day year.
6.04 The Agent shall promptly notify the Borrower and each Bank of each
determination of an interest rate made by the Agent under this
Agreement.
6.05 All agreements between the Borrower, the Agent and the Banks, whether
now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of the Loan or otherwise, shall the
interest contracted for, charged or received by the Agent, the Banks or
any of them from the Borrower exceed the maximum amount permissible
under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to the Agent, the Banks or any of them in
excess of the maximum lawful amount, the interest payable to the Agent,
the Banks or any of them shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Agent,
the Banks or any of them shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction
of the principal of the Loan and to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of the Loan,
such excess shall be refunded to the Borrower. All interest paid or
agreed to be paid to the Agent, the Banks or any of them shall, to the
extent permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full period until payment in full of the
principal (including the period of any renewal or extension hereof) so
that the interest on the Loan for such full period shall not exceed the
maximum amount permitted by applicable law. This paragraph shall control
all agreements between the Borrower, the Agent, the Banks or any of
them.
ARTICLE 7. SUBSTITUTE BASIS
7.01 If any of the following should occur:
(a) the Reference Banks determine and notify the Agent that, at or
about 11:00 a.m. (London time) on the Interest Determination Date
for an Interest Period, no Deutsche Mark deposits (as to the
portion of the Loan proposed to be denominated in Deutsche Mark)
or no U.S. Dollar deposits (as to the portion of the proposed
Loan to be denominated in U.S. Dollars) in the required amount
for the required Interest Period are being offered to the
Reference Banks by prime banks in the London interbank
Euro-currency market;
(b) before the close of business in Luxembourg on the Interest
Determination Date for an Interest Period, the Majority Banks
determine and notify the Agent that the rate at which such
deposits were being so offered does not accurately reflect the
cost to them of obtaining such deposits; or
54
(c) the Reference Banks shall determine and notify the Agent that, by
reason of circumstances affecting the London interbank
Euro-currency market generally, such deposits are not available
to banks in such market or that adequate and reasonable means do
not or will not exist for ascertaining the interest rate
applicable to the next succeeding Interest Period;
then, notwithstanding the provisions of ARTICLES 5 and 6, the Agent
shall forthwith give notice of any such event to the Borrower and each
Bank.
7.02 With respect to the circumstances described in SECTIONS 7.01(A) or
7.01(B) above, the Borrower may, subject to the rights of the Agent and
the Banks pursuant to SECTION 2.06(E):
(a) elect to prepay the applicable portion of the Loan, without
premium or penalty, at the end of the then current Interest
Period; or
(b) select an alternative Interest Period, to the extent available as
determined by the Reference Banks 2 (two) Business Days prior to
the first day of the next succeeding Interest Period, during
which Interest Period the applicable interest rate for the
applicable portion of the Loan shall be the Interbank Rate, if
available for such alternative Interest Period, plus the
applicable Margin; or
(c) request that the Agent, on behalf of the Banks, enter into
negotiations regarding the applicable interest rate, in which
event the Interest Period for the applicable portion of the Loan
shall be one month and during such Interest Period the Agent, on
behalf of the Banks, and the Borrower shall negotiate in good
faith to agree upon an interest rate that will adequately reflect
the cost to the Banks of maintaining or funding the applicable
portion of the Loan for such Interest Period, and if the Borrower
and the Majority Banks (662/3%) are able to agree on such
interest rate, the interest rate that shall apply to the
applicable portion of the Loan for such Interest Period shall be
the sum of the applicable Margin and the interest rate so agreed.
If the Borrower and the Agent, on behalf of the Banks, are unable
to agree upon an interest rate by the day which is 2 (two)
Business Days before the end of the one-month Interest Period
referred to above, the interest rate that shall apply to the Loan
for such Interest Period shall be (i) the rate determined by the
Agent to be the arithmetic mean (rounded upwards, if necessary,
to the nearest four decimal places) per annum of the respective
rates notified to the Agent by each Reference Bank as that which
expresses as a percentage rate per annum the cost to such
Reference Bank of obtaining such deposits from such sources as it
may select having reasonable regard to the interests of the
Borrower, plus (ii) the applicable Margin.
55
7.03 With respect to circumstances described in SECTION 7.01(C) above, the
duration of such next succeeding Interest Period shall be one month or,
if the period until the next Repayment Date is less than one month,
shall end on the next Repayment Date and, during such Interest Period,
the Borrower and the Agent, on behalf of the Banks and subject to the
consent of the Majority Banks (662/3%), shall negotiate in good faith in
order to redenominate the applicable portion of the Loan in an
alternative currency which is freely convertible into Deutsche Mark
(which alternative currency may include, without limitation, Deutsche
Mark as to the portion of the Loan proposed to be denominated in U.S.
Dollars) and in which deposits are available to the Reference Banks for
determining the interest rate from time to time applicable thereto (but
excluding any such currency for which any central bank or other
governmental authorization in the country of issue is required to permit
use of such currency by a Bank for lending hereunder, if such authori
zation has not been obtained and any currency the use of which as
contemplated hereunder is restricted or prohibited pursuant to any
request, directive, regulation or guideline of any governmental
authority (whether or not having the force of law) with which any Bank
is accustomed to act), and the interest rate that shall apply to the
applicable portion of the Loan for such Interest Period shall be the sum
of the applicable Margin and the interest rate for the alternative
currency so agreed. If the Borrower and the Agent, on behalf of the
Banks and with the consent of the Majority Banks (662/3%), are unable to
agree on such alternative currency or an interest rate for such
alternative currency by the day which is 2 (two) Business Days before
the end of the Interest Period referred to above, the Borrower shall
repay the applicable portion of the Loan together with accrued interest
thereon at the rate determined by the Agent to be the arithmetic mean
(rounded upwards, if necessary to the nearest four decimal places) of
the respective rates notified to the Agent by each Reference Bank as
being that which expresses as a percentage rate per annum the cost to
such Reference Bank of obtaining such deposits from such sources as it
may select having reasonable regard to the interests of the Borrower,
plus the applicable Margin, on the next Interest Payment Date, without
premium or penalty except as otherwise provided in SECTION 12.04.
7.04 During the period when any alternative interest rate or Interest Period
or redenomination of the Loan or any applicable portion thereof is in
force pursuant to SECTION 7.02 or 7.03 above, the Agent, in consultation
with the Banks, shall periodically review whether circumstances are such
that an Interbank Rate may again be determined in accordance with
ARTICLES 5 and 6. If such a determination may again be made, the Agent
shall forthwith give written notice thereof to the Borrower and each
Bank and the Interbank Rate, plus the applicable Margin, shall be the
applicable interest rate commencing with the beginning of the next
Interest Period for the Loan or the applicable portion thereof.
ARTICLE 8. PREPAYMENT
8.01 From and after the Prepayment Date, the Borrower shall make mandatory
prepayments of the Loan as follows:
56
(a) An amount equal to the Net Proceeds (with respect to CLAUSES (2)
and (3) below, only to the extent that the aggregate Net Proceeds
exceed DM 15,000,000 (Deutsche Mark Fifteen Million) during any
calendar year, from:
(1) the Disposition by the Borrower or any of its Subsidiaries
of any Stock of any Subsidiary, other than:
(i) Dispositions of Stock of any of the Subsidiaries
from the Borrower to any Subsidiary, from a
Subsidiary to the Borrower, or between
Subsidiaries; or
(ii) Dispositions which constitute Restricted Payments
permitted in accordance with SECTION 16.20 or
Dispositions permitted in accordance with SECTION
16.15(C);
(2) the Disposition by the Borrower or any of its Subsidiaries
of any assets, individually or in the aggregate, or of any
Stock of any Subsidiary (other than a Major Subsidiary or
a Pledged Subsidiary), other than:
(i) Dispositions of assets in the ordinary course of
business;
(ii) Dispositions from the Borrower to any Subsidiary,
from a Subsidiary to the Borrower or between
Subsidiaries;
(iii) Dispositions which constitute Restricted Payments
permitted in accordance with SECTION 16.20 or
Dispositions permitted in accordance with SECTION
16.15(C);
(iv) Dispositions which constitute interest payments on
Subordinated Debt permitted in accordance with
SECTION 16.09(D);
(v) Dispositions or other events described in CLAUSES
(1) or (3) of SECTION 8.01(A); or
(vi) Dispositions prior to the Second Restatement Date
of the distributorship/marketing arrangements
existing as of the First Restatement Date between
Rheox, Inc. and/or its subsidiaries and certain
Subsidiaries of the Borrower; and/or
(3) the Disposition, termination, shortening or other
modification of the Leverkusen Lease or any agreement
providing for the Disposition, termination, shortening or
other modification of the Leverkusen Lease;
57
shall be used, to the extent permitted by law, to prepay the
Loan, without premium or penalty except as set forth in SECTION
12.04, on the Interest Payment Date(s) immediately following the
receipt by the Borrower or any Subsidiary of such Net Proceeds,
in accordance with SECTION 8.01(B). If the Net Proceeds from the
aforementioned Dispositions described in CLAUSES (2) or (3) of
this SECTION 8.01(A) or from other transactions described in
CLAUSE (3) of this SECTION 8.01(A) exceed DM 15,000,000 (Deutsche
Mark Fifteen Million) in any calendar year, or, if there are any
Net Proceeds from the aforementioned Dispositions described in
CLAUSE (1) of this SECTION 8.01(A), then the Borrower shall in
accordance with SECTION 8.01(B) make a mandatory prepayment in
cash equal to the amount of such excess in the case of CLAUSES
(2) and (3) or equal to the amount of such Net Proceeds in the
case of CLAUSE (1), in each case whether or not the Net Proceeds
are comprised of cash or non-cash proceeds. For purposes of this
SECTION 8.01(A), the value of the non-cash proceeds received
shall be determined in good faith by the chief financial officer
of the Borrower.
(b) Amounts payable under SECTION 8.01(A) shall be deposited promptly
into an interest bearing account maintained in the name of the
Banks with the Agent for the benefit of the Banks and shall
remain on deposit with the Agent until the next Interest Payment
Date(s), at which time such amounts together with interest
thereon shall be applied at the Borrower's request to interest
or, on a pro-rata basis, to reduce the remaining Repayment
Installments of the Term Portion or, after such installments are
paid in full, to permanently reduce the Revolving Portion.
(c) On the Interest Payment Date(s) immediately following delivery of
the financial statements in accordance with SECTION 16.01(A), the
Borrower shall prepay the Loan, without premium or penalty except
as set forth in SECTION 12.04, in an amount equal to 70% (seventy
percent) of the amount by which Excess Cash Flow for the
immediately preceding fiscal year exceeds DM 20,000,000 (Deutsche
Mark Twenty Million); provided, however, that this sentence shall
apply only to Excess Cash Flow for fiscal year 1996 and fiscal
years prior thereto. On the earlier to occur of (a) 5 (five) days
after the date upon which EBITDA for the immediately preceding
fiscal year (commencing with the fiscal year 1997) has been
finally determined or (b) 90 (ninety) days after the immediately
preceding fiscal year end, the Borrower shall prepay the Loan,
without premium or penalty except as set forth in SECTION 12.04,
in an amount equal to 70% (seventy percent) of Excess EBITDA for
the immediately preceding fiscal year. In addition, on or before
March 31, 1997, the Borrower shall prepay the Loan, without
premium or penalty except as set forth in SECTION 12.04, in an
amount equal to the amount (if any) by which EBITDA of NL
Industries and its subsidiaries for fiscal year 1996 exceeds
$140,000,000 (One Hundred Forty Million Dollars). All such
prepayments shall be applied to the Repayment Installments of the
Term Portion in the inverse order
58
of the maturities of such installments or, after such
installments are paid in full, to permanently reduce the
Revolving Portion.
(d) An amount equal to the amount of each payment received by the
Borrower with respect to the Tax Refund at any time shall be used
by the Borrower to prepay the Loan, without premium or penalty
except as set forth in SECTION 12.04, on the Interest Payment
Date(s) immediately following the date(s) upon which such
payment(s) is (are) received by the Borrower. Amounts payable
under this SECTION 8.01(D) shall be deposited promptly into an
interest bearing account maintained in the name of the Banks with
the Agent for the benefit of the Banks and shall remain on
deposit until the next Interest Payment Date(s), at which time
such amounts together with interest thereon shall be applied, on
a pro-rata basis, to reduce the remaining Repayment Installments
of the Term Portion or, after such installments are paid in full,
to permanently reduce the Revolving Portion. The Borrower
represents and warrants to the Agent and the Banks that all
amounts drawn under the Tentative Tax Refund Availability Amount
prior to the Second Restatement Date have been used to pay German
income taxes or have been paid to the Agent and applied to reduce
the Revolving Portion in accordance with paragraph 2 of the
Tentative Tax Refund Letter. Accordingly, the Borrower, the Agent
and the Banks hereby agree that (although the Final Determination
Date may not yet have occurred) DM 77,287,585 (Deutsche Mark
Seventy-Seven Million Two Hundred Eighty-Seven Thousand Five
Hundred Eighty-Five) shall be deemed to be the remaining amount
of the Tax Refund received by the Borrower as of the Second
Restatement Date and not previously applied to prepay the Term
Portion and that, on the Second Restatement Date, DM 57,287,585
(Deutsche Mark Fifty-Seven Million Two Hundred Eighty-Seven
Thousand Five Hundred Eighty-Five) of the Tax Refund shall be
drawn under the Tentative Tax Refund Availability Amount of the
Revolving Portion Availability and applied to the Term Portion in
accordance with this SECTION 8.01(D) and DM 20,000,000 (Deutsche
Mark Twenty Million) of the proceeds of the Second Prepayment
shall be applied to the Term Portion in accordance with this
SECTION 8.01(D). As of the Second Restatement Date, DM 20,000,000
(Deutsche Mark Twenty Million) of the Tentative Tax Refund
Availability Amount shall be deemed to have been cancelled by
virtue of the reduction in the maximum principal amount of the
Revolving Portion from DM 250,000,000 (Deutsche Mark Two Hundred
Fifty Million) to DM 230,000,000 (Deutsche Mark Two Hundred
Thirty Million).
(e) On March 15, 2000, the Borrower shall prepay, and permanently
reduce, the Revolving Portion in an amount equal to the positive
remainder (if any) of (i) the then outstanding principal amount
of the Revolving Portion minus (ii) DM 125,000,000 (Deutsche Mark
One Hundred Twenty-Five Million).
59
(f) Upon the occurrence of a "Change of Control", as such term is
defined in either of the Indentures, the Borrower shall promptly
so notify the Agent and each of the Banks of such occurrence and
shall (whether or not the Borrower complies with its obligation
to give such notice) prepay the Loans, and all accrued and unpaid
interest thereon to the date of the prepayment, in full on the
date upon which the holders of any of the NL Notes may receive
prepayment of any of the NL Notes as a result of such Change of
Control (assuming such holders elect to receive such prepayment
but whether or not such holders so elect) unless the Majority
Banks (662/3%) shall have expressly waived such right of
prepayment on or before the date upon which such prepayment is
required to be made.
(g) On or before 2 (two) Business Days after the last day of each
calendar month upon which the aggregate cash balances of the
Borrower and its Subsidiaries (excluding any cash balances of the
Borrower and its Canadian Subsidiaries which are pledged to the
Agent as security for the Loans and excluding U.S. Dollar cash
balances held in the ordinary course of business) exceed DM
40,000,000 (Deutsche Mark Forty Million) (or the equivalent
amount in any currency), the Borrower shall prepay, without
premium or penalty except as set forth in SECTION 12.04, the
outstanding principal amount of the Revolving Portion by the
entire amount of such excess; provided, however, that the cash
balances held by the Borrower immediately prior to a Repayment
Date or a date upon which payments are required to be made on the
Mirror Notes which are to be applied and are actually applied to
make repayments of the Loan or such required payments on the
Mirror Notes, respectively, shall be excluded for purposes of
determining the cash balances of the Borrower and its
Subsidiaries pursuant to this SECTION 8.01(G). For purposes of
this SECTION 8.01(G) and SECTION 16.40, "cash balances" shall
mean the aggregate of the collected cash balance in bank accounts
(net of checks issued and uncleared), other cash (exclusive of
petty cash maintained in reasonable amounts in the ordinary
course of business) and Temporary Cash Investments. Amounts
payable under this SECTION 8.01(G) shall be deposited, within
such 2 (two) Business Days, into an interest bearing account
maintained in the name of the Banks with the Agent for the
benefit of the Banks and shall remain on deposit with the Agent
until the next Interest Payment Date(s), at which time such
amounts together with interest thereon shall be applied to the
Revolving Portion as provided herein. The Borrower covenants and
agrees that it will not, and will not permit any of its
Subsidiaries to, convert non-U.S. Dollar cash balances to U.S.
Dollar cash balances except to the extent reasonably necessary in
the ordinary conduct of their business.
(h) On the Second Restatement Date, the Borrower shall prepay the
Loan, without premium or penalty except as set forth in SECTION
12.04, in the amount of DM 130,000,000 (Deutsche Mark One Hundred
Thirty Million). Such prepayment
60
shall be applied to the Repayment Installments of the Term
Portion in the direct order of the maturities of such
installments.
8.02 The Borrower may make optional prepayments (including the portion of the
First Prepayment applied toward the Revolving Portion pursuant to
SECTION 2.01(A) and optional prepayments deemed made with funds provided
by NL Industries and/or Kronos resulting from capital contributions made
or Subordinated Debt, other than the Kronos Subordinated Loan and the NL
Subordinated Loan, extended by NL Industries and/or Kronos to the
Borrower) as follows:
On giving not less than 5 (five) days prior written notice to the Agent,
the Borrower may prepay all or any part (but in any case not less than
DM 5,000,000 (Deutsche Mark Five Million) (or the Equivalent Amount
thereof in U.S. Dollars) and in integral multiples of DM 1,000,000
(Deutsche Mark One Million) (or the Equivalent Amount thereof in U.S.
Dollars) in excess thereof per prepayment) of the Loan on any Interest
Payment Dates, without premium or penalty, except as otherwise provided
in SECTION 12.04, provided that:
(a) except as expressly permitted by SECTION 2.04 with respect to the
Revolving Portion, each prepayment made under this Agreement may
not be reborrowed under this Agreement;
(b) unless the Borrower expressly informs the Agent, in connection
with the aforesaid notice of such prepayment, that such
prepayment shall be applied to the Revolving Portion, any
prepayment under this SECTION 8.02 shall be applied to the
outstanding Repayment Installments of the Term Portion in inverse
order of the maturities of such installments; and
(c) notice of prepayment given by the Borrower shall be irrevocable
and the Borrower shall be bound to prepay in accordance with each
such notice.
8.03 To the extent that the amounts available to prepay the Loan pursuant to
SECTIONS 8.01 or 8.02 shall exceed the principal of the tranche relating
to the immediately following Interest Payment Date, such amounts shall
be applied to prepay the principal of such tranche and the remainder, if
any, shall be applied to prepay the principal of the tranche relating to
the next immediately following Interest Payment Date or Dates, as the
case may be, until all amounts allocated for prepayment have been
applied. The requirement that prepayments be applied pro rata under
SECTION 8.01(B) or 8.01(D), in inverse order of maturity under SECTION
8.01(C) and SECTION 8.02 or in direct order of maturity under SECTION
8.01(H) shall not be affected by the fact that prepayments may be made
on an Interest Payment Date which is also a Repayment Date.
61
ARTICLE 9. REPAYMENT
Subject to the prepayment provisions set forth in ARTICLE 8, the Term
Portion shall be repaid in 6 (six) installments due and payable on each of the
following Repayment Dates in the following amounts:
REPAYMENT DATE REPAYMENT INSTALLMENT
March 15, 1997 DM 50,000,000
September 15, 1997 DM 50,000,000
March 15, 1998 DM 75,000,000
September 15, 1998 DM 75,000,000
March 15, 1999 DM 100,000,000 minus 50% (fifty percent) of the
Excess Term Prepayment (if any)
September 15, 1999 DM 100,000,000 minus 50% (fifty percent) of the
Excess Term Prepayment (if any)
Subject to the prepayment provisions set forth in ARTICLE 8, the Revolving
Portion (which shall be reduced to DM 105,000,000 (Deutsche Mark One Hundred
Five Million) on March 15, 2000) shall be repaid (as provided in SECTION
8.01(E)) on March 15, 2000 to the extent necessary to cause the outstanding
principal amount of the Revolving Portion, after giving effect to such
repayment, to equal DM 105,000,000 (Deutsche Mark One Hundred Five Million), and
shall be repaid in full on September 15, 2000. All amounts owed under this
Agreement with respect to the Term Portion shall be due and payable on or before
September 15, 1999, in accordance with the terms of this Agreement, and all
amounts owed under this Agreement with respect to the Revolving Portion shall be
due and payable on or before September 15, 2000, in accordance with the terms of
this Agreement.
After giving effect to the mandatory prepayments to be made on the
Second Restatement Date pursuant to SECTIONS 8.01(D) and 8.10(H) (including the
Second Prepayment), (a) the Repayment Installments of the Term Portion
previously (immediately prior to the Second Amendment Date) due on each of March
15, 1997, September 15, 1997, and March 15, 1998 shall have been paid in full
and (b) the Repayment Installments of the Term Portion previously (immediately
prior to the Second Amendment Date) due on each of September 15, 1998, March 15,
1999, and September 15, 1999, shall have been paid in part. Accordingly, after
giving effect to such prepayments, the remaining outstanding Term Portion shall
be payable in 3 (three) installments due and payable on the following Repayment
Dates in the following amounts:
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REPAYMENT DATE REMAINING REPAYMENT INSTALLMENT
September 15, 1998 DM 48,751,048
March 15, 1999 DM 70,785,415
September 15, 1999 DM 68,713,415
ARTICLE 10. EVIDENCE OF DEBT
10.01 Each Bank shall maintain, in accordance with its usual practice,
accounts evidencing the amounts from time to time lent by and owing to
it under this Agreement, including such amounts with respect to each of
the Term Portion and the Revolving Portion, which accounts shall be
prima facie evidence of such amounts. Such amounts shall be designated
in Deutsche Mark or U.S. Dollars, as appropriate, and, if designated in
U.S. Dollars, shall also be designated in the corresponding Base
Deutsche Mark Amount.
10.02 The Agent shall maintain on its books an account in which shall be
recorded:
(a) the amount of the Loan (and the currency in which each portion of
the Loan is denominated or redenominated from time to time),
including the amount of each of the Term Portion and the
Revolving Portion outstanding from time to time, and each Bank's
share therein;
(b) the amount of any principal or interest due or to become due from
the Borrower to the Banks under this Agreement (and the currency
in which such amount is denominated or redenominated from time to
time) with respect to each of the Term Portion and the Revolving
Portion and each Bank's share therein; and
(c) the amount of any sum received or recovered by the Agent (and the
currency in which such amount is denominated) under this
Agreement and each Bank's share therein.
10.03 In any legal action or proceeding arising out of or in connection with
this Agreement, the entries made in the accounts maintained pursuant to
SECTIONS 10.01 and 10.02 shall be prima facie evidence of the existence
and amounts of the obligations and the payments of the Borrower therein
recorded. In the case of any conflict between accounting under SECTION
10.01 and 10.02, the accounts of each Bank under SECTION 10.01 shall
control.
ARTICLE 11. PAYMENTS
11.01 Any and all payments by the Borrower and/or Kronos Titan under this
Agreement shall be made without setoff or counterclaim, and 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, whether under U.S. or German law or
otherwise,
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excluding, in the case of each Bank and the Agent, taxes imposed on its
overall net income and franchise taxes imposed on it by the jurisdiction
under the laws of which such Bank or the Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each
Bank, taxes imposed on its overall net income and franchise taxes
imposed on it by the jurisdiction of such Bank's Lending Office or any
political subdivision thereof (all such excluded taxes being hereunder
referred to as "Excluded Taxes" and all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower and/or Kronos Titan
shall be required by law (whether U.S. or German or otherwise) to deduct
any Taxes from or in respect of any sum payable hereunder to any Bank or
the Agent,
(a) and if the deductions are the result of a change in circumstances
after May 30, 1990 of the type described in CLAUSE (1) of SECTION
14.01(A), the sum payable shall be increased as may be necessary
so that, after making all required deductions, such Bank or the
Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made;
(b) the Borrower and/or Kronos Titan shall make such deductions; and
(c) the Borrower and/or Kronos Titan shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
Any Bank claiming any additional amounts payable pursuant to this
SECTION 11.01 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to transfer its portion of
the Loan to a Lending Office in another jurisdiction where no such
deductions are required. The Borrower and/or Kronos Titan shall forward
promptly to the Agent official receipts of the relevant taxation or
other authority or other evidence acceptable to the respective recipient
of the amount deducted or withheld as described above, when and as such
receipts or other evidence are made available to the Borrower and/or
Kronos Titan by the relevant authority.
11.02 From time to time upon the request of the Borrower, Kronos Titan or the
Agent,
(a) each Bank organized under the laws of a jurisdiction outside the
United States shall provide the Agent and the Borrower and/or
Kronos Titan with a certificate, signed by an officer of each
such Bank, stating that payments to be made to such Bank
hereunder are expected, in the reasonable judgment of such Bank,
to be exempt from United States withholding tax, if such Bank is
so exempt, and the forms (if any) prescribed by the Internal
Revenue Service of the United States certifying as to such Bank's
status; and
(b) each Bank organized under the laws of a jurisdiction outside
Germany shall provide the Agent and the Borrower and/or Kronos
Titan with a certificate, signed by an
64
officer of each such Bank, stating that payments to be made to
such Bank hereunder are expected, in the reasonable judgment of
such Bank, to be exempt from German withholding tax, if such Bank
is so exempt, and the forms (if any) prescribed by the
appropriate German governmental tax authority certifying as to
such Bank's status.
Unless the Borrower, Kronos Titan or the Agent (as applicable) has
received forms or other documents satisfactory to it indicating that
payments hereunder are not subject to United States or German
withholding tax, as applicable, the Borrower, Kronos Titan or the Agent
(as applicable) shall, unless the Borrower, Kronos Titan or the Agent
(as applicable) determines that no such withholding is required,
withhold taxes from such payments at the applicable statutory rate in
the case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States or the Federal Republic of
Germany, as the case may be. If any Bank fails to furnish to the
Borrower, Kronos Titan or the Agent (as applicable) forms or other
documents necessary for claiming exemption from United States or German
withholding tax, then payments to such Bank shall be net of any amounts
the Borrower, Kronos Titan or the Agent (as applicable) is required to
withhold under applicable law, provided, however, that, notwithstanding
anything in this Agreement to the contrary, any Bank that is subject to
withholding as a result of a change in circumstances occurring after May
30, 1990 of the type described in SECTION 14.01 shall be entitled to
payments pursuant to SECTION 11.01(A).
Each Bank hereby represents and warrants to the Borrower and Kronos
Titan that, on the date that it became or becomes a Bank in accordance
with the terms of the Original Agreement, the First Restated Agreement
or this Agreement, respectively (as may be applicable), its Lending
Office was or is entitled to receive payments of principal of, and
interest on, Loans made by such Bank from such Lending Office without
withholding or deduction for or on account of Taxes imposed by the
United States of America, Germany or any respective political
subdivisions of the United States of America or Germany.
11.03 If the Borrower and/or Kronos Titan makes an increased payment to any
Bank pursuant to SECTION 11.01 and such Bank determines in its
reasonable discretion that it has received or been granted a credit
against or relief or remission for, or payment of tax paid or payable by
it in respect of or calculated with reference to the deduction or
withholding giving rise to such payment, such Bank shall, to the extent
that it can in its sole discretion do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment,
pay to the Borrower and/or Kronos Titan (as applicable) such amount as
such Bank shall have calculated to be attributable to such deduction or
withholding. If Taxes are incorrectly or illegally paid or assessed, and
if any Bank or the Agent contests the payment or assessment of such
Taxes, such Bank or the Agent shall refund, to the extent of any refund
made to such Bank or the Agent, any amounts paid by the Borrower and/or
Kronos Titan under SECTION 11.01 in respect of such Taxes. Amounts
payable pursuant
65
to this SECTION 11.03 shall be paid within 30 (thirty) days from the
date of receipt of the relevant refund by such Bank or the Agent (as the
case may be).
11.04 All payments to be made by the Borrower and/or Kronos Titan under this
Agreement shall be made in the appropriate currency (Deutsche Mark or
U.S. Dollars, as applicable) and in immediately available funds not
later than 10:00 a.m. (local time at Munich) on the date upon which the
relevant payment is due, (a) with respect to payments in Deutsche Mark,
to the Agent's account no. 6450025141 with Bayerische Hypotheken-und
Wechselbank AG, Munich, or (b) with respect to payments in U.S. Dollars,
to the Agent's account no. 001 1 329 026 with The Chase Manhattan Bank
N.A., New York, or (in either case) to such other bank and account as
the Agent may from time to time designate by written notice to the
Borrower and/or Kronos Titan (as applicable). All payments (including
prepayments) of principal or interest accrued with respect to the
Revolving Portion of the Loans shall be applied (i) first, to the
payment of interest accrued with respect to the Revolving Portion other
than the Kronos Titan Revolving Portion (until such interest is paid in
full), (ii) second, to the payment of the outstanding principal amount
of the Revolving Portion other than the Kronos Titan Revolving Portion
(until such principal is paid in full), (iii) third, to the payment of
interest accrued with respect to the Kronos Titan Revolving Portion
(until such interest is paid in full), and (iv) fourth, to the payment
of the outstanding principal of the Kronos Titan Revolving Portion
(until such principal is paid in full).
11.05 All payments to be made by the Agent to the Borrower (or, with respect
to advances under the Kronos Titan Revolving Portion, Kronos Titan)
under this Agreement shall be made not later than 10:00 a.m. (local time
at Munich) on the date upon which the relevant payment is due and, at
the risk of the Borrower (and, with respect to advances under the Kronos
Titan Revolving Portion, Kronos Titan), remitted to, in the case of the
Borrower, an account in Munich or Luxembourg maintained at Hypobank
International S.A. or an affiliate of Hypobank International S.A. which
is pledged to secure the Loans in accordance with SECTION 16.40 or, in
the case of Kronos Titan, an account of Kronos Titan.
11.06 Each Bank shall make available to the Agent in the appropriate currency
(Deutsche Mark or U.S. Dollars, as the case may be) as the Agent may
from time to time designate its portion of the Loan hereunder prior to
10:00 a.m. (local time at Munich) on the Drawdown Date or, with respect
to any redenomination of any advance pursuant to SECTION 2.06, on the
first day of the next succeeding Interest Period, as the case may be, to
such account as the Agent may from time to time designate for the
account of the Borrower and/or Kronos Titan (as applicable). Not less
than 2 (two) Business Days prior to the effective date of any initial
advance of the Loan in U.S. Dollars, each Bank shall notify the Agent of
the identity and location of the Lending Office for such Bank in
relation to all advances and payments to be denominated in U.S. Dollars
in the event that such Lending Office is different from the Lending
Office previously designated for the
66
Loan, provided, however, that (a) each Bank shall utilize the Lending
Office previously designated for the Loan unless it is prohibited from
doing so by applicable regulatory requirements, (b) if the use of such
previously designated Lending Office is so prohibited, such Bank shall
use its best efforts to use a Lending Office entitled to an exemption
from United States and German withholding taxes (but no Bank shall be
required to establish an office or branch or obtain any authorization to
engage in banking activities in any jurisdiction in order to be entitled
to any exemption from United States withholding taxes), and (c) such
Bank shall give written notice to the Borrower and/or Kronos Titan (as
applicable) if it is unable to utilize its Lending Office previously
designated for the Loan and if its Lending Office utilized for the Loan
is not entitled to an exemption from U.S. and German withholding taxes,
and further provided that the Borrower shall not be in any way relieved
of any obligation to gross up any payments to be made to the Agent or
any Bank under this Agreement. All advances to be made by each Bank in
U.S. Dollars shall be made available through the Lending Office of such
Bank so designated for advances in U.S. Dollars.
11.07 Except for payments received by the Agent for its account or for the
account of a specific Bank in accordance with this Agreement, the Agent
shall promptly distribute in like funds and currency each payment
received by it for the account of the Banks ratably in proportion to
their portion of the Loan or, as the case may be, their respective
Commitments.
11.08 Where an amount is to be made available under this Agreement by the
Agent to a Person, the Agent shall not be bound to make such amount
available to such Person until the Agent has been able to establish
whether or not such amount has been made available to the Agent. If the
Agent makes an amount available to the Borrower and/or Kronos Titan
which has not, but should have, been made available to the Agent by a
Bank, the Borrower and/or Kronos Titan (as applicable) shall (without
prejudice to any rights the Borrower and/or Kronos Titan (as applicable)
may have against that Bank) refund that amount to the Agent on request.
If the Agent makes an amount available to a Bank which has not, but
should have, been made available to the Agent by the Borrower and/or
Kronos Titan, that Bank shall (without prejudice to any rights it may
have against the Borrower and/or Kronos Titan, as applicable) refund
that amount to the Agent on a date to be determined by the Agent after
consultation with such Bank. Where, in accordance with the foregoing, an
amount is to be refunded to the Agent, the Agent in addition shall be
indemnified by the Person who has failed to make an amount available as
required under this Agreement against any reasonable interest costs
actually incurred and paid by the Agent by reason of any lapse of time
between the date on which the amount was made available to any Person by
the Agent and the date on which the amount was refunded to the Agent in
full (including, without limitation, any interest paid by the Agent in
respect of funds borrowed by the Agent in order to fund such amount
during such period).
11.09 Any currency specified in accordance with this Agreement shall be the
currency of account and of payment in all events. The payment
obligations of the Borrower and Kronos Titan hereunder shall not be
discharged by an amount paid in another currency, whether
67
pursuant to a judgment or otherwise, to the extent that the amount so
paid upon conversion by the Agent or the Banks (as applicable) to the
specified currency under normal and reasonable banking procedures does
not yield at the place when payment is due the amount of the specified
currency due hereunder. In the event that any payment by or on behalf of
the Borrower and/or Kronos Titan, whether pursuant to a judgment or
otherwise, upon such conversion and after the deduction of all fees,
costs and expenses relating thereto does not result in payment of such
amount of the specified currency at the place payment is due, the Agent
and each Bank shall be entitled to receive from the Borrower and/or
Kronos Titan (as applicable), and shall have a separate cause of action
for, the deficiency in respect of the payments due to each,
respectively.
ARTICLE 12. DEFAULT INTEREST AND INDEMNITY
12.01 In the event of a failure by the Borrower to pay any sum on the date on
which such sum is due and payable pursuant to this Agreement and
irrespective of any notice by the Agent or any other Person to the
Borrower in respect of such failure, the Borrower shall pay interest on
such sum, on demand, from the date of such failure up to the date of
actual payment (both after and before any judgment) at the rate,
increased by the sum of the Margin plus 2% (two percent), determined by
the Agent to be the arithmetic mean (rounded upwards, if necessary, to
the nearest four decimal places) of the rates notified to the Agent by
the Reference Banks to be those at which deposits in Deutsche Mark or
U.S. Dollars as the Agent may select in its discretion (after
consultation with the Banks) for such period as the Agent may select in
its discretion (after consultation with the Banks) are so offered to
each Reference Bank by prime banks in the London interbank Euro-currency
market at or about 11:00 a.m. (London time) for value 2 (two) Business
Days after the Business Day immediately succeeding that on which the
Agent becomes aware of such failure and, so long as the failure
continues, such rate shall be recalculated on the same basis thereafter,
provided that:
(a) if any Reference Bank is unable or otherwise fails to furnish a
quotation for the purposes of this SECTION 12.01, the interest
rate shall be determined on the basis of the quotation(s)
furnished by the remaining Reference Bank(s); and
(b) if for any such period, none of the Reference Banks was offered
deposits in the required amount and for the required period, the
rate of interest applicable thereto shall be the weighted average
(having regard to the respective portions of such unpaid sum)
(rounded upwards, if necessary to the nearest four decimal
places) per annum of the respective rates notified to the Agent
by each Reference Bank as being that which expresses as a
percentage rate per annum the cost to such Reference Bank of
obtaining such deposits from such sources as it may select having
reasonable regard to the interests of the Borrower.
Interest accruing under this SECTION 12.01 shall be due and payable at
the end of each period by reference to which it is calculated.
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12.02 Without prejudice to the foregoing and irrespective of any notice by the
Agent or any other Person to the Borrower in respect of the Borrower's
failure to make any payment when due or in respect of any other matter
relating to this SECTION 12.02, the Borrower shall indemnify the Agent
and the Banks against any and all damages, losses or expenses
(including, without limitation, losses incurred in paying default
interest or in liquidating or employing deposits from third parties
acquired to make, fund or maintain the Loan or any part thereof,
including interest and penalties on unpaid Taxes, if any, and including
losses on foreign currency exchanges, if any, with respect to portions
of the Loan denominated in U.S. Dollars) which any of them may properly
and reasonably sustain or incur as a consequence of (a) the failure by
the Borrower to borrow pursuant to any Notice of Borrowing, (b) the
failure by the Borrower to pay any sum, including Taxes, if any, when
due and payable under this Agreement upon the occurrence of any Event of
Default, (c) the funding of the Loan or any portion thereof in U.S.
Dollars as opposed to Deutsche Mark or (d) the liquidation or employment
of amounts borrowed or contracted for relating to, or the termination or
unwinding of any contract entered into in order to fund, an advance in
U.S. Dollars requested by the Borrower that, by reason of the occurrence
of any event specified in SECTION 7.01, is not funded as requested.
12.03 If for the purposes of filing a claim or proof for obtaining or
enforcing any judgment in any court, it is necessary to convert a sum
due under this Agreement in Deutsche Mark or U.S. Dollars (as the case
may be) (the "Original Currency") into another currency (the "Other
Currency"), the parties hereto agree, to the fullest extent that they
may effectively do so, that the rate of exchange used shall be the rate
of exchange offered by any one or more of the Reference Banks to the
Agent, in respect of the relevant sums, at which, in accordance with
normal banking procedures, the Agent could purchase the greatest amount
of the Original Currency with the Other Currency at or about 11:00 a.m.
in London on the Business Day preceding that on which final judgment is
given. The obligation of the Borrower in respect of any sum due in the
Original Currency from it to any Bank or the Agent under this Agreement
shall, notwithstanding any judgment in any Other Currency, be discharged
only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be) of any sum adjudged to be so due
in such Other Currency, such Bank or the Agent (as the case may be) may
in accordance with normal banking procedures purchase the Original
Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due to such Bank
or the Agent (as the case may be) in the Original Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify immediately such Bank or the Agent (as the case may be)
against such loss, and if the amount of the Original Currency so
purchased exceeds the sum originally due to any Bank or the Agent (as
the case may be) in the Original Currency, such Bank or the Agent (as
the case may be) agrees to remit to the Borrower such excess. The above
indemnity shall constitute a separate and independent obligation of the
Borrower from its other obligations under this Agreement and shall apply
irrespective of any grace period granted by the Agent or the Banks.
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12.04 Any prepayment or repayment of principal made under this Agreement, if
made otherwise than on an Interest Payment Date relative to the amounts
prepaid or repaid, shall be made together with accrued interest thereon
and such additional amount as each Bank may certify as necessary to
compensate it for any damages or losses incurred or to be incurred by it
in connection with such prepayment or repayment (including loss of
Margin and losses on account of funds borrowed in order to make, fund or
maintain its proportion of the Loan or any part thereof prepaid or
repaid).
ARTICLE 13. SET-OFF AND REDISTRIBUTION OF PAYMENTS
13.01 Upon the occurrence and during the continuance of any Event of Default
specified in SECTION 18.01 consisting of the failure to pay principal of
the Loan or any portion thereof and subject to the prior written consent
of the Agent or the Majority Banks or upon the occurrence and during the
continuance of any Event of Default and the acceleration of the maturity
of the Loan pursuant to the provisions of ARTICLE 18, each Bank 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 Bank (at any
office or branch) to or for the credit or the account of the Borrower
against all or any portion of the Loan outstanding under this Agreement
and other amounts payable hereunder. Each Bank agrees promptly to notify
the Borrower after any such set-off and application made by such Bank,
provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under
this ARTICLE 13 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Bank may have.
Each Bank agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to any
portion of the Loan held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any portion of the Loan held
by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participation in the portion of the Loan
held by the other Banks, and such other adjustments shall be made, as
may be required so that all such payments of principal and interest with
respect to the Loans held by the Banks shall be shared by the Banks pro
rata; provided that nothing in this ARTICLE 13 shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have
and to apply the amount subject to such exercise to the payment of
indebtedness hereunder. Subject to SECTION 13.02 hereof, the Borrower
agrees, to the fullest extent such holder may effectively do so under
applicable law, that any holder of a participation in a Loan, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights
of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a
direct creditor of the Borrower in the amount of such participation.
Anything herein to the contrary notwithstanding, nothing in this ARTICLE
13 shall impair the right of the Borrower to receive notice and to have
the opportunity to cure certain Events of Default as provided in ARTICLE
18 or otherwise prior to the declaration of an acceleration of maturity.
70
13.02 Except for payments to a Bank from the Agent which were received by the
Agent for the account of such Bank in accordance with the provisions of
this Agreement, if any Bank shall at any time receive payment or
satisfaction of all or a part of its share of the Loan, interest thereon
or any other amount payable hereunder, whether by setoff, counterclaim
or otherwise, in a proportion which, in relation to any amounts received
by any other Bank or Banks at the same time, represents more than its
percentage participation in the Loan, then such Bank shall notify the
Agent thereof and shall pay to the Agent not later than 10 (ten) days
after request by the Agent for account of the other Banks such amount as
determined by the Agent as will ensure that each Bank will receive a
proportion of such payment equal to its percentage participation.
13.03 In the event that at any time any Bank shall be required to refund to
the Borrower any amount which has been paid to or received by it by
set-off, counterclaim or otherwise on account of any part of the Loan,
interest thereon or any other amount payable hereunder and which has
been paid to any other Bank pursuant to this ARTICLE 13, such other Bank
shall repay a proportionate amount of the amounts so refunded without
interest.
13.04 The Borrower and the Banks expressly agree that payments by or
recoveries from the Borrower shall be distributed in accordance with the
provisions of this ARTICLE 13 without the need for further consent or
the completion of any other formalities whatsoever.
13.05 If a Bank is required to make any payment to any other Bank pursuant to
this ARTICLE 13, then, subject to SECTION 13.02, the liability of the
Borrower to the Bank making such payment under this Agreement shall be
treated as not having been reduced by the amount of such payment and the
liability of the Borrower to any Bank receiving such payment shall be
treated as having been reduced by the amount of the payment received by
such Bank.
ARTICLE 14. CHANGE OF CIRCUMSTANCES; ILLEGALITY;
RESERVE REQUIREMENTS
14.01 Change of Circumstances
(a) If, after May 30, 1990, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the
interpretation or administration by any governmental authority,
central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or
comparable agency:
(1) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to the Loan or its
obligation to make such Loan, or any part thereof, or
shall change the basis of taxation of payments to any Bank
(or its Lending Office) of the principal of or interest on
its Loan, or any
71
part thereof, or any other amounts due under this
Agreement in respect of its Loan or its obligation to make
the Loan, or any part thereof (except for changes in the
rate of tax on the overall net income of such Bank or its
Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Lending Office is
located); or
(2) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement, (including,
without limitation, any such requirement imposed by the
Federal Reserve) against assets of, deposits with or for
the accounts of, or credit extended by any Bank (or its
Lending Office) or shall impose on any Bank (or its
Lending Office) or on the London interbank market any
other condition affecting its Loan, or any part thereof,
or other indebtedness under the Agreement or its
obligations to make the Loan;
and the result of any of the foregoing is to increase the cost to
such Bank (or its Lending Office) of making or maintaining the
Loan, or any portion thereof, or to reduce the amount of any sum
received or receivable by such Bank (or its Lending Office) under
this Agreement with respect thereto, then, within 15 (fifteen)
days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay promptly for the account of such Bank such
additional amount or amounts as will compensate such Bank for
such increased cost or reduction. Such Bank shall submit to the
Borrower and the Agent a certificate showing, in reasonable
detail, the calculation of the amount of such increased cost.
(b) If, after May 30, 1990, the adoption of any law, rule or
regulation of any general applicability regarding capital
adequacy, or any change therein, or any change in the
interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Bank
(or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency (including,
without limitation, and whether promulgated or made before or
after the Second Restatement Date, any law, regulation,
interpretation, guideline or request contemplated by the report
dated July 1988 entitled "International Convergence of Capital
Measurement and Capital Standards" issued by the Basle Committee
on Banking Regulations and Supervisory Practices), shall, in the
determination of a Bank, have the effect of reducing the rate of
return of such Bank's capital to a level below that which such
Bank could have achieved as a consequence of its obligations
hereunder but for such adoption, change or compliance (taking
into consideration such Bank's policies with respect to capital
adequacy), by an amount deemed by such Bank to be material in its
sole and absolute discretion, then, within 15 (fifteen) days
after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
72
(c) Each Bank will notify the Borrower and the Agent promptly of any
event of which it has knowledge, occurring after the First
Restatement Date, which will entitle such Bank to compensation
pursuant to this SECTION 14.01 and will designate a different
Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank.
A certificate of any Bank claiming compensation under this
SECTION 14.01 and setting forth the additional amount or amounts
to be paid to it under this Agreement shall be conclusive in the
absence of manifest error.
(d) Upon the occurrence of any of the events described in SECTION
14.01(A) or (B), the Borrower may prepay without premium or
penalty except as otherwise provided in SECTION 12.04 such Bank's
portion of the Loan together with all interest accrued thereon
and all fees and other amounts (including amounts payable under
SECTION 14.01(A) or (B) above) payable to such Bank hereunder, on
giving not less than 10 (ten) days prior written notice to the
Agent. Such Bank's Commitment shall be canceled on the giving of
such notice.
14.02 ILLEGALITY
(a) Notwithstanding anything to the contrary contained in this
Agreement, if any change in law, regulation or treaty or in the
interpretation or application thereof after May 30, 1990, by any
authority charged with the administration thereof shall make it
unlawful for any Bank to make, fund or maintain its portion of
the Loan (although such Bank may lawfully maintain its
Commitment) or to give effect to its obligations through its
Lending Office as contemplated hereby, such Bank may give written
notice thereof to the Agent to be forwarded by the Agent to the
Borrower and the other Banks. Before giving such notice to the
Agent, such Bank, to the reasonable extent possible, shall
designate a different Lending Office if such designation will
avoid the need for giving such notice.
(b) Until such Bank notifies the Borrower and the Agent that the
circumstances of the type described above no longer exist, the
obligation of such Bank to make its portion of the Loan shall be
suspended and the Borrower may, at its option, terminate such
Bank's Commitment, by notice to such Bank and to the Agent, to be
given within 30 (thirty) days after the date of notice by the
Agent to the Borrower, as provided above.
(c) If such Bank shall determine that it may not lawfully continue:
(1) to maintain and fund its portion of the outstanding Loan
to maturity; and
(2) to maintain its Commitment to maturity, and shall so
specify in such notice, the Borrower shall prepay, without
premium or penalty except as otherwise provided in SECTION
12.04, forthwith (or if permitted by law, on the next
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following Interest Payment Date) such Bank's portion of
the Loan, together with all interest accrued thereon and
all fees and other amounts payable to such Bank under this
Agreement. Such Bank's obligations under this Agreement
and its Commitment shall be canceled on the giving of such
notice.
14.03 RESERVE REQUIREMENTS
The Borrower shall pay to the Agent for the account of each Bank, so
long as such Bank shall be required under regulations of the Federal
Reserve to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, interest in
addition to the applicable interest rate plus the applicable Margin on
the unpaid principal amount of the applicable portion of the Loan
advanced by such Bank, from the date of such Loan until such principal
amount is paid in full, an amount equal to an interest rate per annum
equal at all times to the remainder obtained by subtracting (i) the rate
(not including the applicable Margin) for the Interest Period for such
Loan, from (ii) the rate obtained by dividing the rate described in
CLAUSE (I) of this SECTION 14.03 by a percentage equal to 100% (one
hundred percent) minus the Eurocurrency Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is
payable. A certificate of each Bank setting forth in reasonable detail
the calculation of the amount of such increased costs and such amounts
as shall be necessary to compensate such Bank for such costs, shall be
delivered to the Borrower and the Agent. The Borrower shall pay each
Bank the amount shown as due on any such certificate within 30 (thirty)
days after its receipt of the same.
Each Bank that became a "Bank" pursuant to the Original Agreement prior
to the Primary Syndication Completion Date waives the right to claim
additional amounts based upon reserve requirements in effect on the date
it became a Bank; provided, however, that such waiver does not apply
with respect to reserve requirements to which such Bank is entitled
pursuant to Regulation D.
ARTICLE 15. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as of the Second Restatement Date
(which representations and warranties shall be deemed to be repeated on the
first day of each Interest Period) and as of the date of each advance of the
Revolving Portion existing during the term of this Agreement (except to the
extent such representations and warranties are expressly made only in reference
to another specific date) that:
15.01 CORPORATE EXISTENCE OF BORROWER AND SUBSIDIARIES
The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with a registered
office in the Federal Republic of Germany. The Borrower has corporate
power and authority to own its assets and carry on business as it is now
being conducted in the United States and the Federal Republic of
74
Germany. Each of the Subsidiaries is a corporation or limited liability
company duly organized and validly existing under the laws of its
respective jurisdiction of incorporation, with the corporate power and
authority to own its assets and carry on business as it is now being
conducted.
15.02 POWER AND AUTHORITY OF BORROWER
The Borrower had, at the time of its execution of the Original
Agreement, the First Restated Agreement and the other Loan Documents
executed in connection with the Original Agreement and the First
Restated Agreement, the necessary corporate power and authority to enter
into the Original Agreement, the First Restated Agreement and such Loan
Documents to which it is a signatory and to exercise its rights and to
perform its obligations under the Original Agreement, the First Restated
Agreement and such other Loan Documents, and has duly taken all
corporate action required to authorize the execution and delivery of,
and the performance of its obligations under, the Original Agreement,
the First Restated Agreement and such Loan Documents. The Borrower has
the necessary corporate power and authority to enter into this Agreement
and the other Loan Documents executed in connection with this Agreement
to which it is a signatory and to exercise its rights and to perform its
obligations under this Agreement and such Loan Documents, and has duly
taken all corporate action required to authorize the execution and
delivery of, and the performance of its obligations under, this
Agreement and such Loan Documents.
15.03 POWER AND AUTHORITY OF PLEDGORS AND GUARANTORS
Each of the Pledgors has the necessary corporate power and authority to
enter into its respective Pledge Agreement and to perform its
obligations under its respective Pledge Agreement, and has duly taken
all corporate action required to authorize the execution and delivery
of, and the performance of its obligations under, its respective Pledge
Agreement; and each Guarantor has the necessary corporate power and
authority to enter into its respective Guaranty and to perform its
obligations under its respective Guaranty, and has duly taken all
corporate action required to authorize the execution and delivery of,
and the performance of its obligations under, its respective Guaranty.
15.04 RANK OF INDEBTEDNESS
The claims of the Agent and the Banks against the Borrower under this
Agreement will rank senior in respect of priority of payment to any
Subordinated Debt and will rank at least pari passu in respect of
priority of payment with all other present and future Indebtedness of
the Borrower (excluding rights of secured parties with respect to
Permitted Liens). As of the Second Restatement Date, under the laws in
force in the jurisdiction of incorporation of each of the Guarantors and
in the jurisdiction of its principal place(s) of business, the claims of
the Agent and the Banks against the Guarantors under the respective
Guaranties will rank at least pari passu in respect of priority of
payment with
75
all present and future Indebtedness of the Guarantors (excluding rights
of secured parties with respect to Permitted Liens) subject to matters
described on SCHEDULE 4.
15.05 NO CONDITIONS TO PERFORMANCE AND ENFORCEABILITY
As of the Second Restatement Date, under the laws in force, all acts,
conditions and things have been done, fulfilled and performed,
including, without limitation, obtaining all authorizations, permits and
consents, and making all filings and registrations, in order:
(a) to enable the Borrower, Guarantor and Pledgors lawfully to enter
into, to exercise rights under and to perform and to comply with
their respective obligations under the Loan Documents; and
(b) to ensure that the obligations assumed under the Loan Documents
are legal, valid, binding and enforceable except as set forth on
SCHEDULE 4.
15.06 NO FILINGS; NO STAMP TAXES
As of the Second Restatement Date, under the laws in force, it is not
necessary in order to be legal, valid, binding and enforceable (subject
to matters described in SCHEDULE 4):
(a) that the Original Agreement, the First Restated Agreement, this
Agreement or any of the other Loan Documents (except the Pledge
Agreement for Societe Industrielle du Titane, S.A.) be filed,
recorded or enrolled with any court or other authority in any
jurisdiction; or
(b) that any stamp, registration or similar tax be paid on or in
relation to the Original Agreement, the First Restated Agreement,
this Agreement or any other Loan Documents, except such actions
or payments that have been taken as of the date of the Original
Agreement or the First Restated Agreement or, with respect to
this Agreement and the Loan Documents executed in connection with
this Agreement, as of the Second Restatement Date.
15.07 LEGAL, VALID AND ENFORCEABLE OBLIGATIONS
The Loan Documents have been duly executed and delivered by the Borrower
and its Subsidiaries who are signatories thereto, and each of such Loan
Documents is a legal, valid and binding obligation of such entity and
enforceable against such entity in accordance with the terms thereof,
except to the extent that enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by principles of
equity and except as set forth in SCHEDULE 4. The execution and delivery
of the Loan Documents by the Borrower, and its Subsidiaries, as the case
may be, who are signatories thereto, do not contravene any provisions of
the Certificate of Incorporation and By-Laws, or corresponding
constitutive documents by whatever name, of the Borrower or its
Subsidiaries.
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15.08 BANKRUPTCY
Neither the Borrower nor any of its Subsidiaries has taken any corporate
action nor have any other steps been taken or legal proceedings been
started or (to the best of the Borrower's knowledge and belief) been
threatened against any of the Borrower or any of its Subsidiaries for
the winding-up, dissolution, administration or reorganization (in each
such case under bankruptcy or insolvency laws) or for the appointment of
a receiver, administrator, administrative receiver, trustee or similar
officer of it or them or of any or all of its or their assets or
revenues, except the dissolution of Subsidiaries which are not Major
Subsidiaries with respect to which notice is or has been given to the
Agent.
15.09 NO DEFAULTS; NO LITIGATION
Neither the Borrower nor any of its Subsidiaries is in breach of or in
default under any agreement to which it is a party or which is binding
on it or any of its or their assets, which breach or default could
reasonably be expected to have a Material Adverse Effect on the Borrower
and its Consolidated Subsidiaries, taken as a whole; and no action or
administrative proceeding before any court, arbitration tribunal or
governmental agency has been commenced or, to the Borrower's knowledge,
threatened against the Borrower or any Subsidiary, or any assets of any
of them, in which an adverse decision could reasonably be expected to
have a Material Adverse Effect on the Borrower and its Consolidated
Subsidiaries, taken as a whole. As of the Second Restatement Date,
SCHEDULE 5 sets forth a summary of each such action or administrative
proceeding before any court, arbitration tribunal or governmental agency
pending or, to the knowledge of the Borrower, threatened in writing, as
of the Second Restatement Date which action or proceeding may result in
liability to the Borrower and/or any Subsidiary in an amount in excess
of DM 10,000,000 (Deutsche Mark Ten Million). As of the Second
Restatement Date, except as may be set forth on SCHEDULE 5, neither NL
Industries nor Kronos nor any other Affiliate of the Borrower is in
breach of or default under any of (a) the Indentures or the senior
secured notes or senior secured discount notes issued by NL Industries
thereunder, (b) the "First-Tier Senior Mirror Note" or the "First-Tier
Discount Mirror Note" (as such terms are defined in the Indentures) or
(c) the Mirror Notes issued by the Borrower.
15.10 ENVIRONMENTAL COMPLIANCE
(a) Each of the Borrower and its Subsidiaries is in compliance in all
respects with all applicable Environmental Laws except where the
failure to do so would not have a Material Adverse Effect on the
Borrower and its Consolidated Subsidiaries, taken as a whole;
(b) Except where the failure to do so or absence thereof would not
have a Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries, taken as a whole, (1) each of the
Borrower and its Subsidiaries has obtained or applied for all
environmental, health and safety permits necessary for their
respective operations;
77
(2) with respect to all such permits which have been obtained,
all such permits are in good standing other than those which have
expired as to which applications for renewal or extension are
pending; (3) with respect to all such permits which have been
obtained, each of the Borrower and its Subsidiaries is in
compliance in all material respects with all terms and conditions
of such permits; and (4) with respect to those permits for which
applications are pending or renewals or extensions have been
requested, neither the Borrower nor any of its Subsidiaries is in
violation of any applicable law for the failure to have such
permit in good standing;
(c) Neither the Borrower nor any of its Subsidiaries nor any of their
respective properties or operations nor, to the best knowledge of
the Borrower, any of their formerly owned or operated properties
are subject to any outstanding written notice or order from or
agreement with any state, federal, foreign, territorial,
provincial, local or other court or governmental authority, nor
subject to any judicial or administrative proceeding respecting
any Environmental Law, the result of which notice, order,
agreement or proceeding would have a Material Adverse Effect on
the Borrower and its Consolidated Subsidiaries, taken as a whole;
and
(d) Except as described on SCHEDULE 5, there are no conditions or
circumstances associated with any property or operations of the
Borrower or any Subsidiary or, to the best knowledge of the
Borrower, property formerly owned or operated by the Borrower or
any Subsidiary or any of their predecessors or former operations
of the Borrower or its Consolidated Subsidiaries, including
offsite disposal practices, which could give rise to
Environmental Claims that would have a Material Adverse Effect on
the Borrower and its Consolidated Subsidiaries, taken as a whole.
As of the Second Restatement Date, SCHEDULE 5 also sets forth,
for each site or location, a brief description of all
Environmental Claims involving amounts in excess of DM 10,000,000
(Deutsche Mark Ten Million) (or the equivalent amount in any
currency).
15.11 FINANCIAL STATEMENTS
The consolidated and consolidating group financial statements of the
Borrower and its Subsidiaries as of December 31, 1995 and as of
September 30, 1996, respectively, and for the year and period then
ended, present fairly, in all material respects, the consolidated group
financial position and results of operations of the Borrower and its
Subsidiaries as of such dates and for such periods, all in conformity
with German GAAP, and neither the Borrower nor any of its Subsidiaries
had any material liabilities as of December 31, 1995 or as of September
30, 1996 (as applicable), which are not reflected in such financial
statements.
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15.12 NO MATERIAL ADVERSE CHANGE
Since the preparation of the consolidated group financial statements of
the Borrower and its Subsidiaries as of September 30, 1996, there has
been no change which has had a Material Adverse Effect on the Borrower
and its Consolidated Subsidiaries, taken as a whole.
15.13 ACCURATE INFORMATION
The financial projections for the Borrower and NL Industries contained
in the projection package dated January 15, 1997, were prepared in good
faith based on assumptions believed by the management of the Borrower to
be reasonable as of such date.
15.14 NO VIOLATION, DEFAULTS OR LIENS
The execution and delivery by the Borrower and its Subsidiaries, as the
case may be, of the Loan Documents and the exercise by the Borrower of
its rights, and the performance by the Borrower and its Subsidiaries of
their respective obligations, under the Loan Documents will not result
in:
(a) the creation of or require the imposition of any Lien in favor of
any Person other than the Agent and/or the Banks; or
(b) the existence of any event of default (howsoever called) under
any agreement or contract to which the Borrower or any Subsidiary
is a party or by which any of them or their properties are bound
which event of default would have a Material Adverse Effect on
any Company; or
(c) the violation of any law or regulation, or by any judgment,
decree or order, applicable to the Borrower or its Subsidiaries
which violation would have a Material Adverse Effect on any
Company.
15.15 ERISA
(a) Except as disclosed in SCHEDULE 6 A attached hereto, with respect
to all Pension Benefit Plans which are or have been maintained by
the Borrower or any member of the Controlled Group:
(1) there have not been any prohibited transactions, the
aggregate liability for which either has not been
satisfied in full or would have a Material Adverse Effect
on the Borrower and its Consolidated Subsidiaries, taken
as a whole;
(2) none of such plans has been terminated, the aggregate
liability for which either has not been satisfied in full
or the liability for which would have a Material Adverse
Effect on the Borrower and its Consolidated Subsidiaries,
79
taken as a whole, and if any of such plans has not been
terminated, the aggregate liability and potential
liability of the Borrower, if all such plans were to
terminate, would not have a Material Adverse Effect on the
Borrower and its Consolidated Subsidiaries, taken as a
whole;
(3) none of such plans has any accumulated funding deficiency,
whether or not waived, the aggregate liability for which
either has not been satisfied in full or would have a
Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries, taken as a whole;
(4) neither the Borrower nor any member of the Controlled
Group has incurred aggregate liabilities (excluding
premium payments made as and when due) to the PBGC with
respect to all such plans which liabilities would have a
Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries, taken as a whole;
(5) there have been no reportable events, the aggregate
liability for which either has not been satisfied in full
or would have a Material Adverse Effect on the Borrower
and its Consolidated Subsidiaries, taken as a whole.
For purposes of this SECTION 15.15, the terms "accumulated
funding deficiency" and "reportable event" shall have the
respective meanings assigned thereto by ERISA and/or the Code.
(b) Except as disclosed in SCHEDULE 6 B with respect to all Pension
Benefit Plans currently maintained or participated in by the
Borrower or another member of the Controlled Group, the amount
for which the Borrower would be liable pursuant to the provisions
of Section 4063 of ERISA would not have a Material Adverse Effect
on the Borrower and its Consolidated Subsidiaries, taken as a
whole, if all such plans had terminated.
(c) Except as disclosed in SCHEDULE 6 C, neither the Borrower nor any
other member of the Controlled Group is now, nor has the Borrower
or any other member of the Controlled Group during the preceding
10 (ten) years ever been, a contributing employer to a multiple
employer plan or a Multiemployer Plan with respect to which the
Borrower or any other member of the Controlled Group has:
(1) withdrawn as a substantial employer or otherwise so as to
become subject to the provisions of Section 4063 of ERISA
or to any liability for withdrawal from such plan under
either provisions of applicable non-U.S. laws or with
respect to the applicable plan document, unless the
aggregate liability and potential liability with respect
to all such withdrawals has been satisfied in full or
would not have a Material Adverse Effect on the Borrower
and its Consolidated Subsidiaries, taken as a whole;
80
(2) incurred or caused to occur a "complete withdrawal"
(within the meaning of Section 4203 of ERISA) or a
"partial withdrawal" (within the meaning of Section 4205
of ERISA) from a Multiemployer Plan that is a Pension
Benefit Plan so as to incur withdrawal liability under
Section 4201 of ERISA, or incurred or caused to incur a
similar event which could result in liability under
non-U.S. laws with respect to Non-U.S. Employee Plans
unless the aggregate liability and potential liability for
all such withdrawals has been satisfied in full or would
not have a Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries taken as a whole; or
(3) been a party to any transaction or agreement under which
the provisions of Section 4204 of ERISA were applicable,
unless Borrower can no longer be held liable for any
withdrawal liability with respect to a Multiemployer Plan
to be contributed to by the purchaser pursuant to such
transaction or agreement or the amount of the withdrawal
liability which could be imposed on Borrower if there were
a partial or complete withdrawal with respect to all such
Multiemployer Plans would not have a Material Adverse
Effect on the Borrower and its Consolidated Subsidiaries,
taken as a whole.
(d) Except as disclosed on SCHEDULE 6 D, the aggregate potential
withdrawal liability of the Borrower with respect to all
Multiemployer Plans and any similar liabilities of the Borrower
and its Subsidiaries and potential liabilities under applicable
non-U.S. laws or Non-U.S. Employee Plans would not have a
Material Adverse Effect on the Borrower and its Consolidated
Subsidiaries, taken as a whole, if the Borrower and all members
of the Controlled Group were to withdraw from all such
Multiemployer Plans and were to incur all such liabilities and
potential liabilities under applicable non-U.S. laws or with
regard to the Non-U.S. Employee Plans.
(e) Except as disclosed on SCHEDULE 6 E, there are no actions, suits
or claims pending (other than routine claims for benefits) or, to
the knowledge of the Borrower, threatened in writing which could
reasonably be expected to be asserted against any Employee Plan
maintained by the Borrower or against the Borrower or the assets
of any such plan, the liability for which in the aggregate could
have a Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries, taken as a whole.
(f) All of the Employee Plans maintained by the Borrower or by any
member of the Controlled Group comply or, upon amendment to
conform to legislation within any applicable remedial amendment
period, will comply in all material respects with their terms and
with all applicable provisions of ERISA and the Code, and all
other applicable laws, rules and regulations, except where the
failure to do so would not have a Material Adverse Effect on the
Borrower and its Consolidated Subsidiaries, taken as a whole.
81
15.16 NON-U.S. EMPLOYEE PLANS
Except as provided in SCHEDULE 6 F, with regard to Non-U.S. Employee
Plans for which assets are not required to be or have not been set aside
in a separate fund or trust, the reserves on the balance sheet of each
Subsidiary, respectively, equal or exceed the present value of all
accrued benefits under such Non-U.S. Employee Plans or the amount by
which such reserves are less than the present value of all such accrued
benefits would not have a Material Adverse Effect on the Borrower and
its Consolidated Subsidiaries, taken as a whole. The aggregate fair
market value of the assets of Non-U.S. Employee Plans which are required
to be funded by applicable law, or are funded to any extent (although
not required to be funded), is at least equal to the sum of the accrued
benefits and all other accrued liabilities provided for under such
Non-U.S. Employee Plans, or if such value is not at least equal to such
sum, the fact that, and the amount by which, the value is less than such
sum would not have a Material Adverse Effect on the Borrower and its
Consolidated Subsidiaries, taken as a whole. The Borrower, its
Subsidiaries and their Non-U.S. Employee Plans are in compliance in all
material respects with all applicable laws, regulations and reserve
and/or funding requirements concerning Non-U.S. Employee Plans, except
where the failure to so comply would not have a Material Adverse Effect
on the Borrower and its Consolidated Subsidiaries, taken as a whole.
15.17 INVESTMENT COMPANY
Neither the Borrower nor any Subsidiary is (a) an "investment company"
within the meaning of the Investment Company Act of 1940, as amended; or
(b) a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
15.18 SUBSIDIARIES
As of the Second Restatement Date:
(a) the Subsidiaries listed in SCHEDULE 7 are the only Subsidiaries
of the Borrower, and the Subsidiaries designated as Major
Subsidiaries in SCHEDULE 7 are the only Major Subsidiaries of the
Borrower;
(b) SCHEDULE 7 sets forth the jurisdiction of incorporation,
principal place of business and percentage of ownership of the
Borrower or any of its Subsidiaries in such Subsidiaries;
(c) The Borrower or its Subsidiaries have good and marketable title
to the shares of the Major Subsidiaries comprising the respective
percentages of ownership indicated on SCHEDULE 7, free and clear
of any Liens, except Liens in favor of the Agent and the Banks
under the Loan Documents;
82
(d) Neither the Borrower nor any of its Subsidiaries have sold or
agreed to sell or otherwise dispose of any right, title or
interest in any of its or their shares of any of the Subsidiaries
described on SCHEDULE 7;
(e) All of the shares of capital stock of the Pledged Subsidiaries
have been duly authorized and are fully paid and non-assessable
and, in the case of Pledged Subsidiaries issuing registered
shares, are in registerable form; SCHEDULE 7 sets forth, with
respect to the Pledged Subsidiaries, the number of shares of each
class of capital stock authorized, the number of shares of each
class of capital stock issued and outstanding and, if applicable,
the stock certificate numbers which evidence such issued and
outstanding shares; and, as of the Second Restatement Date, no
options, warrants, conversion or other rights, agreements or
commitments of any kind to a Person other than the Borrower or
its Subsidiaries or officers or directors thereof obligating any
of the Pledged Subsidiaries to issue or sell any shares of its
capital stock of any class, or any securities convertible into or
exchangeable for any of such shares, are outstanding, nor has any
authorization therefor been given;
(f) There are no contractual restrictions on the right to vote any
shares of the Major Subsidiaries owned by the Borrower or its
Subsidiaries, or the right to sell, transfer or otherwise dispose
of such shares; and
(g) The Pledge Agreements, which have been accompanied by any
required delivery of share certificates, create a valid first
priority perfected security interest in the shares of the
respective Subsidiaries pledged thereunder.
15.19 MARGIN STOCK
Neither the Borrower nor any Subsidiary is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
or margin securities (within the meaning of Regulations U or X of the
Federal Reserve) or owns any such margin stock or margin security, and
no part of the proceeds of any extension of credit under this Agreement
will be used by the Borrower or any Subsidiary to purchase or carry any
such margin stock or margin security or to extend credit to others for
the purpose of purchasing or carrying any margin stock or margin
security.
15.20 TAXES
The Borrower and its Subsidiaries have filed all income tax returns and
all other material tax returns that are required to be filed by them and
have paid all taxes due for the period covered by such returns or
pursuant to any material assessment received by the Borrower or any of
its Subsidiaries, except for those being contested in good faith by
appropriate proceedings against which adequate reserves are being
maintained if required in accordance with German GAAP. As of the Second
Restatement Date, except as may be specified on SCHEDULE 11, (i) none of
the tax returns of the Borrower or any of its
83
Subsidiaries is under audit, (ii) there is no dispute, action or
administrative proceeding by or before any court, arbitration, tribunal
or governmental authority pending or, to the Borrower's knowledge,
threatened in writing against the Borrower or any Subsidiary relating to
any income taxes or similar types of taxes involving amounts in excess
of DM 5,000,000 (Deutsche Mark Five Million) (or the equivalent amount
in any currency), and (iii) no Lien referred to in CLAUSE (E) of the
definition of the term "Permitted Lien" arising from income tax
assessments or similar types of tax assessments has been granted or
exists involving amounts in excess of DM 5,000,000 (Deutsche Mark Five
Million) (or the equivalent amount in any currency).
15.21 INTELLECTUAL PROPERTY RIGHTS
(a) Except as set forth on SCHEDULE 8 A, the Borrower and its
Subsidiaries either own or are licensed to use pursuant to the
license agreements with Affiliates of the Borrower set forth on
SCHEDULE 8 B (the "Affiliate License Agreements") or pursuant to
the license agreements with parties other than Affiliates of the
Borrower set forth on SCHEDULE 8 C (the "Third Party License
Agreements") the Intellectual Property Rights. Each of the
Affiliate License Agreements and the Third Party License
Agreements is presently in full force and effect, neither the
Borrower, any of its Affiliates nor any of its Subsidiaries is in
default under any Affiliate License Agreement or Third Party
License Agreement and, pursuant to the Affiliate License
Agreements and the Third Party License Agreements, the Borrower,
its Affiliates and its Subsidiaries hold (and following the
completion of the transactions contemplated by this Agreement
will continue to hold) licenses to all Intellectual Property
Rights material to the conduct of their businesses.
(b) Except for the Affiliate License Agreements and the Third Party
License Agreements and except as set forth on SCHEDULE 8 D, there
are no agreements pursuant to which the Borrower or its
Subsidiaries are licensed to use Intellectual Property Rights.
(c) SCHEDULE 8 E sets forth the owners among the Borrower's
Affiliates or Subsidiaries of Intellectual Property Rights which
are patented or for which patent applications have been filed.
(d) SCHEDULE 8 F sets forth the owners among the Borrower's
Affiliates or Subsidiaries of trademarks included in the
Intellectual Property Rights which are registered or for which
applications for registration have been filed.
(e) To the best knowledge of the Borrower, (i) the current
manufacturing operations of the Borrower's Subsidiaries as of the
Second Restatement Date do not infringe on any valid patent,
trade secret or copyright of any other Person and (ii) the
current marketing and sales operations of the Borrower and its
Subsidiaries as of the Second Restatement Date do not infringe on
any valid trademark or trade name of any other Person which, in
each case, if enforced would have a Material
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Adverse Effect on the Borrower and its Consolidated Subsidiaries,
taken as a whole.
(f) Except as set forth on SCHEDULE 8 G, no claims by any other
Person alleging infringement of any patent, trade secret,
trademark, trade name or copyright of such Person and relating to
the current manufacturing, marketing or sales operations of the
Borrower and its Subsidiaries as of the Second Restatement Date
have been communicated to an employee of Borrower or its
Subsidiaries charged with responsibility for Intellectual
Property Rights and are pending against Borrower or its
Subsidiaries, nor have any such claims been made and so
communicated within the twelve months preceding the Second
Restatement Date.
(g) The execution, delivery and performance of the Loan Documents to
which the Borrower is a party will not in any material manner or
to any material extent impair the ownership of or any rights
under or the license of, as the case may be, any of the
Intellectual Property Rights utilized by the Borrower and/or its
Subsidiaries.
15.22 KEY CONTRACTS
The Borrower has delivered to the Agent, true, correct and complete
photocopies of the Leverkusen Lease, the Service Contract and all
existing loan agreements, including all Project Financing agreements,
which, if terminated or materially modified, would have a Material
Adverse Effect on the Borrower and its Consolidated Subsidiaries, taken
as a whole. As of the Second Restatement Date, SCHEDULE 12 hereto
specifically identifies each of such loan agreements.
15.23 AFFILIATE TRANSACTIONS
SCHEDULE 9 sets forth all agreements or arrangements, whether or not in
the ordinary course of business, existing on the Second Restatement
Date, which involve payments or transfers of assets (other than
inventory in the ordinary course of business) in excess of DM 5,000,000
(Deutsche Mark Five Million) per calendar year by the Borrower and/or
its Subsidiaries to Affiliates (other than the Borrower and its
Subsidiaries).
15.24 NL DEBT OFFERING; MIRROR NOTES; SUBORDINATED LOANS; CONSIDERATION FOR
PREPAYMENTS
(a) The gross proceeds of the NL Debt Offering were not less than
$350,000,000 (Three Hundred Fifty Million U.S. Dollars), all of
which gross proceeds, less the NL Debt Offering Expenses, were
paid by NL Industries or Kronos to the Agent on behalf of the
Borrower as the First Prepayment pursuant to SECTION 2.01 of the
First Restated Agreement. The aggregate principal amount of the
Mirror Notes issued by the Borrower did not exceed the gross
proceeds of the NL Debt Offering. The only consideration received
or to be received by NL Industries, Kronos or any other Affiliate
of the Borrower from the Borrower in consideration for or
otherwise
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in connection with or relating to the First Prepayment is the
Indebtedness evidenced by the Mirror Notes, and there is no other
Indebtedness, liability or obligation due or owing, or that may
become due or owing, by the Borrower as consideration for, or in
any way in connection with or relating to, the First Prepayment.
(b) The amount of the Kronos Subordinated Loan made by Kronos to the
Borrower on December 31, 1996, was DM 25,000,000 (Deutsche Mark
Twenty-Five Million). The amount of the NL Subordinated Loan made
by NL Industries to the Borrower on or before the Second
Restatement Date was DM 260,000,000 (Deutsche Mark Two Hundred
Sixty Million), DM 150,000,000 (Deutsche Mark One Hundred Fifty
Million) of which proceeds of the NL Subordinated Loan are,
concurrently with the Second Restatement Date, being paid by NL
Industries to the Agent on behalf of the Borrower as the Second
Prepayment. The Subordinated Loan Documents evidence and
represent the entire agreement between NL Industries and the
Borrower relating to the Kronos Subordinated Loan and the NL
Subordinated Loan.
15.25 TAXES RELATING TO MIRROR NOTES
Under the laws in force at the First Restatement Date and the Second
Restatement Date, no Taxes were or will be required to be deducted or
withheld from or with respect to any sum payable or to be paid under the
Mirror Notes.
15.26 OWNERSHIP OF MATERIAL ASSETS
As of the Second Restatement Date, SCHEDULE 13 sets forth each tangible
property or asset (or group of related properties or assets), whether
real or personal property but exclusive of cash balances, inventory and
accounts receivable, of the Borrower or any of its Subsidiaries which
individual property or asset (or group of related properties or assets),
individually or in the aggregate, has a book value or estimated fair
market value of DM 20,000,000 (Deutsche Mark Twenty Million) (or
equivalent amount in any currency) or more, and also sets forth the
owner(s) of each such property or asset (or group of related properties
or assets).
15.27 OPTIONAL PREPAYMENTS
As of the Second Restatement Date, no optional prepayments of the Loan
have been made with funds provided by Kronos and/or NL Industries which
would allow for the making of Restricted Payments in accordance with
SECTION 16.20(B).
15.28 CERTAIN ADJUSTED RESTRICTED PAYMENTS
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The aggregate of all Adjusted Restricted Payments made by the Borrower
or any of its Subsidiaries to any Affiliate of the Borrower (other than
Subsidiaries of the Borrower) during 1996 did not exceed DM 47,000,000
(Deutsche Mark Forty-Seven Million).
15.29 SOLVENCY OF RHEOX, INC.
A condition to the closing of the January 1997 $150,000,000 loan to
Rheox, Inc. is the issuance by an independent valuation firm of a
solvency opinion with respect to the financial condition of Rheox, Inc.
after giving effect to such loan and a dividend in the maximum amount of
$130,000,000 from Rheox, Inc. to NL Industries.
ARTICLE 16. UNDERTAKINGS AND COVENANTS
The Borrower agrees that so long as the Loan or any portion thereof or
any Commitment therefor is outstanding, the Borrower shall do the following:
16.01 DELIVERY OF FINANCIAL STATEMENTS, ETC.
(a) As soon as the same become available, but in any event within 90
(ninety) days after the end of each of its fiscal years, deliver
to the Agent, in sufficient copies for distribution to all the
Banks, the audited consolidated group financial statements
(including a balance sheet and statements of operations,
stockholders' equity and cash flow) of the Borrower and its
Subsidiaries for such fiscal year, and, as unaudited supplemental
information:
(1) the related consolidating financial statements by country;
and
(2) separate balance sheets, as included in the consolidated
group balance sheet of the Borrower, for each of Kronos
Titan, Kronos Europe S.A./N.V., Titania A/S, Kronos Titan
A/S and Kronos Canada, Inc.;
all as prepared in accordance with German GAAP, consistent with
the preparation of the financial statements for the prior
financial period except to the extent that any inconsistent
practice is specified in the certificate described below,
together with a certificate executed by the chief financial
officer of the Borrower in the form of EXHIBIT Q including
calculations of the provisions of SECTIONS 16.18 through 16.25,
showing in reasonable detail the basis for such calculations.
(b) Within 60 (sixty) days after the end of each fiscal quarter
(excluding the fourth quarter), unaudited consolidating group
financial statements of the Borrower and its Subsidiaries, by
country, prepared in accordance with German GAAP, consistent with
the preparation of the financial statements for the prior
financial period except to the extent that any inconsistent
practice is specified in the certificate described below, and, as
supplemental information, separate balance sheets, as included in
the consolidating balance sheets of the Borrower and its
87
Subsidiaries, for each of Kronos Titan, Kronos Europe S.A./N.V.,
Titania A/S, Kronos Titan A/S and Kronos Canada, Inc., for each
fiscal quarter (excluding the fourth quarter, except as provided
below) and, commencing with the third fiscal quarter of 1993, a
certificate executed by the chief financial officer of the
Borrower in the form of EXHIBIT R including calculations of the
provisions of SECTIONS 16.18 through 16.25, showing in reasonable
detail the basis for such calculations and including (for each
fiscal quarter, including the fourth quarter) calculations of
Adjusted Restricted Payments made through the end of such fiscal
quarter, showing in reasonable detail the basis for such
calculations.
(c) Promptly deliver notice thereof to the Agent, upon the
commencement of any action or other proceedings by or against the
Borrower or any of its Subsidiaries under any bankruptcy,
insolvency or other similar law.
(d) Upon request of the Agent, furnish the Agent with such
information about the business, assets and financial condition of
each of the Borrower and/or any of its Subsidiaries as the Agent,
or any Bank through the Agent, may reasonably request; provided,
however, nothing in this Agreement shall entitle the Agent or the
Banks to request, nor require the Borrower or its Subsidiaries to
provide, (i) nonpublic confidential technical information and
knowhow or information relating to processes of or used by the
Borrower or its Subsidiaries or (ii) information relating to the
costs of manufacture (including, without limitation, raw
materials supply contracts) any of which, if made public, would,
in the reasonable opinion of the Borrower, impair its competitive
position, provided, however, that the restriction on information
set forth in CLAUSES (I) and (II) (A) shall not apply if an Event
of Default exists and is continuing and (B) does not include
information which:
(1) is or becomes generally available to the public other than
as a result of a disclosure by the Agent or the Banks
which are signatories to this Agreement or their
respective directors, officers, employees, Affiliates,
attorneys, accountants or other professional advisors in
violation of this provision;
(2) was available to the Agent or any Bank on a
non-confidential basis prior to its disclosure to any
other Bank; or
(3) becomes available to the Agent or any Bank on a
non-confidential basis from a Person (other than the
Borrower or its Affiliates) who, to the reasonable belief
of the Agent or such Bank, is not bound by a
confidentiality agreement and is not prohibited from
transmitting such information under applicable law.
(e) Upon the request of the Agent, and at the Bank's expense, permit
an auditor of the Agent to audit the financial statements and
review all the financial records of the
88
Borrower and/or any of its Subsidiaries and permit the Banks to
receive additional information from the auditors of the Borrower
and its Subsidiaries.
(f) Within 5 (five) days after the end of each month, (i) a report in
form and substance reasonably satisfactory to the Agent which
sets forth the maximum committed amount, the outstanding
principal amount and identities of the debtor and payee of all
Indebtedness of the Borrower or any of its Subsidiaries as of the
end of such immediately preceding month, and (ii) the Liquidity
Report (as such term is defined in the Liquidity Undertaking).
16.02 OPERATING PERMITS
Inform the Agent promptly about the refusal of (or written notice of
intent to refuse) any application for any operating permits and/or
licenses or the suspension or withdrawal of any operating permits or
licenses by governmental authorities having jurisdiction over the
Borrower or any of its Subsidiaries, as the case may be, if the refusal
of such application or the occurrence of such refusal, suspension or
withdrawal would have a Material Adverse Effect on any of the Companies.
16.03 ENVIRONMENTAL COMPLIANCE
Cause each of the Companies to comply in all material respects with all
applicable Environmental Laws and all other laws, rules, regulations and
orders relating to the disposal of Contaminants except to the extent
failure to comply would not have a Material Adverse Effect on such
Company.
16.04 COMPLIANCE WITH APPLICABLE LAW
Comply, and cause each of its Subsidiaries to comply, in all material
respects with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities (including, without limitation,
applicable Environmental Laws) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings and for
which adequate reserves are being maintained if required by German GAAP
or where noncompliance with such laws, ordinances, rules, regulations or
requirements would not have a Material Adverse Effect on any of the
Companies.
16.05 BOOKS AND RECORDS
Keep, and cause each of its Subsidiaries to keep, proper books and
records and accounts in which full, true and correct entries in
conformity with local standards shall be made of all material dealings
and transactions in relation to its business and activities; and subject
to SECTION 16.01(D) permit, and cause each of its Subsidiaries to
permit, representatives of any Bank, at such Bank's expense, to visit
and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records (including,
without limitation, all documents relating to environmental control of
the production of
89
titanium dioxide pigments) and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent accountants, and authorize and instruct and cause each of
its Subsidiaries to authorize and instruct said officers, employees and
accountants to so discuss the respective affairs, finances and accounts,
all of the foregoing at such reasonable times and as often as may
reasonably be requested with prior notice.
16.06 ENVIRONMENTAL REPORTS
(a) Notify the Agent and the Banks in writing, promptly upon the
Borrower or any of its Subsidiaries learning of any of the
following which could have a Material Adverse Effect on any of
the Companies:
(1) any Environmental Claim against the Borrower or any of its
Subsidiaries, including one to take a remedial, removal or
other action with respect to any Contaminants contained on
any property whether or not owned by the Borrower or
Subsidiary so notified;
(2) any notice of violation of any Environmental Law; and
(3) the commencement of any judicial or administrative
proceedings or investigation alleging a violation of any
Environmental Law.
(b) Upon written request by the Agent or any Bank submit, and cause
each of its Subsidiaries to submit, to the Agent or such Bank, at
reasonable intervals, a report providing an update of the status
of any environmental, health or safety compliance, hazard or
liability issue identified in any notice required pursuant to
this SECTION 16.06.
16.07 INTELLECTUAL PROPERTY RIGHTS
(a) Not permit any of its Subsidiaries to assign the Affiliate
License Agreements to which they are a party or to amend or
modify in any respect adverse to any Company or any Subsidiary,
or allow to expire, or terminate any of the Affiliate License
Agreements to which they are a party, provided that this
provision shall be without prejudice to the right of a party to
seek damages or specific performance for breach of any of the
Affiliate License Agreements; and
(b) maintain, protect and enforce, and require each Subsidiary to
take reasonable steps to maintain, protect and enforce, the
Intellectual Property Rights owned by it (if any), consistent
with prior practice by and among Kronos, Kronos U.S. and their
Affiliates and, in any event, consistent with prudent business
practices of the Borrower and the Subsidiaries.
16.08 LIENS
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Not create or permit to exist, or permit its Subsidiaries to create or
permit to exist, any Lien, except Permitted Liens.
16.09 DISPOSITIONS
Not make, nor permit any of its Subsidiaries to make, a Disposition of
any asset:
(a) other than in the ordinary course of business;
(b) for less than fair market value (other than a Disposition
described in SECTIONS 16.09(A), (C), (D), (F) or (G));
(c) other than transactions made in accordance with SECTION 16.15(C),
Restricted Payments made in accordance with SECTION 16.20 and
payments made under the Mirror Notes in accordance with the terms
of the Mirror Notes;
(d) other than interest payments on Subordinated Debt, if and to the
extent permitted by the Subordination Agreement, provided that
there exists no Default with respect to payment of any amounts
due and owing under this Agreement and no Default exists or would
result from such payment;
(e) except for cash, if the aggregate Net Proceeds of such
Dispositions (other than a Disposition described in CLAUSES (A),
(C), (D), (F) or (G) of this SECTION 16.09), either alone or in
the aggregate, during any calendar year during the term of this
Agreement exceeds DM 100,000,000 (Deutsche Mark One Hundred
Million);
(f) other than Dispositions between and among the Borrower and its
Subsidiaries or between and among the Subsidiaries; provided,
however, that with respect to Kronos Canada, Inc., Kronos Europe
S.A./N.V., Kronos Titan, Kronos Titan A/S and Titania A/S (the
"Operating Subsidiaries"), without approval of the Majority
Banks, the Borrower shall not make, nor permit its Operating
Subsidiaries to make, a Disposition to the Borrower or another
Subsidiary of assets in such Operating Subsidiaries consisting of
production capacity, inventory (other than in the ordinary course
of business), accounts receivable (other than to Kronos World
Services S.A./N.V. (and as long as it remains a Subsidiary) for
cash) or Intellectual Property Rights (other than licenses and
sub-licenses of such Intellectual Property Rights), and further
the Borrower shall not transfer, nor permit any of its
Subsidiaries to transfer, to any other Subsidiary the Stock of
any Pledged Subsidiary without the approval of the Majority
Banks;
(g) notwithstanding anything in this Agreement to the contrary, other
than Dispositions, termination or shortening of the term, or
modifications, of the Leverkusen Lease for full, fair and
reasonable consideration; or
91
(h) other than Dispositions prior to the Second Restatement Date of
the distributorship/marketing arrangements existing as of the
First Restatement Date between Rheox, Inc. and/or its
subsidiaries and certain Subsidiaries of the Borrower.
Not use, or allow to be used, directly or indirectly, the proceeds of
any Disposition permitted by this Section 16.09 to make any payment or
other transfer of funds to or for the benefit of any Affiliate of the
Borrower other than the Subsidiaries of the Borrower (if and to the
extent that such payment or transfer to Subsidiaries is not otherwise
prohibited by this Agreement); provided, however, that, subject to
compliance with the other terms of this Agreement, the proceeds of any
such permitted Disposition may be used to make Restricted Payments if
and to the extent that such Restricted Payments are permitted pursuant
to Section 16.20 and to make payments under the Mirror Notes in
accordance with the terms of the Mirror Notes.
16.10 MERGER; CONSOLIDATION
(a) (i) Not merge or consolidate with any other Person whereby
the Borrower shall be the surviving corporation without
the prior written consent of the Majority Banks.
(ii) Not merge or consolidate with or into any other Person
whereby any other Person would be the surviving entity
without the prior written consent of the Majority Banks
(662/3%).
(b) Not permit Kronos Canada, Inc., 2927527 Canada Inc., 2969157
Canada Inc. or Kronos Europe S.A./N.V. to merge or consolidate
with or into any other Person (other than, as to 2927527 Canada
Inc. only, the Borrower), unless the survivor shall (i) be a
corporation organized under the laws of Canada (with respect to
Kronos Canada, Inc., 2927527 Canada Inc. or 2969157 Canada Inc.)
or Belgium (with respect to Kronos Europe S.A./N.V.); (ii) have a
net worth approximately equal to or greater than that of Kronos
Canada, Inc., 2927527 Canada Inc., 2969157 Canada Inc. or Kronos
Europe S.A./N.V., as the case may be; (iii) have assumed all of
the liabilities of Kronos Canada, Inc., 2927527 Canada Inc.,
2969157 Canada Inc. or Kronos Europe S.A./N.V., as the case may
be; and (iv) be a Subsidiary directly Controlled by the Borrower.
(c) Not permit Kronos Titan, Kronos Titan A/S or Titania A/S to merge
or consolidate with or into any Person unless the survivor shall
(i) be a corporation organized under the laws of Germany (with
respect to Kronos Titan) or Norway (with respect to Kronos Titan
A/S or Titania A/S); (ii) have a net worth approximately equal to
or greater than that of Kronos Titan, Kronos Titan A/S or Titania
A/S, as the case may be; (iii) have assumed all of the
liabilities of such entity; and (iv) be a Subsidiary either
directly Controlled by the Borrower or directly Controlled by a
Subsidiary of the Borrower;
92
provided, however, that any other Subsidiary may merge with or
into any other Subsidiary.
16.11 EMPLOYEE MATTERS
(a) DISCHARGE OF ERISA LIABILITY
Pay and discharge promptly or cause any Subsidiary to pay and
discharge promptly any liability imposed upon it pursuant to the
provisions of Title IV of ERISA or the provisions of any similar
applicable Non-U.S. law or similar provisions provided for in any
applicable plan or document relating to such plan; provided,
however, that neither the Borrower nor any Subsidiary shall be
required to pay any such liability if:
(i) the amount, applicability or validity thereof shall be
diligently contested in good faith by appropriate
proceedings; and
(ii) the Borrower or the Subsidiary, as the case may be, shall
establish and maintain reserves, if required in accordance
with German GAAP which, in the opinion of the Borrower's
independent accountants, are adequate with respect
thereto.
(b) ERISA NOTICES
Deliver to the Banks promptly, and in any event within 10 (ten)
working days:
(i) when the Borrower or any member of the Controlled Group
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Pension Benefit Plan that might
constitute grounds for a termination of such Pension
Benefit Plan under Title IV of ERISA, or knows that the
plan administrator of any Pension Benefit Plan has given
or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given
or required to be given to the PBGC;
(ii) when the Borrower or a member of the Controlled Group, or
an administrator of any Pension Benefit Plan files with
participants, beneficiaries or the PBGC a notice of intent
to terminate any such plan in a distress termination
pursuant to Section 4041(c) of ERISA, a copy of any such
notice;
(iii) upon the receipt of notice by the Borrower or member of
the Controlled Group or an administrator of any Pension
Benefit Plan from the PBGC of
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the PBGC's intention to terminate any Pension Benefit Plan
or to appoint a trustee to administer any such plan, a
copy of such notice;
(iv) when the Borrower knows or has reason to know of any event
or condition which might constitute grounds under the
provisions of Section 4042 of ERISA for the termination of
(or the appointment of a trustee to administer) any
Pension Benefit Plan or when Borrower or any member of the
Controlled Group files an application under Section 412(d)
of the Code for a waiver of the minimum funding standards
with respect to a Pension Benefit Plan, an explanation of
such event or condition or a copy of such application, as
the case may be; or
(v) upon the receipt by the Borrower or by a member of the
Controlled Group of aggregate assessments in excess of
$1,000,000 (U.S. Dollars One Million) of withdrawal
liability under Section 4201 of ERISA from Multiemployer
Plans, a copy of each such assessment.
(c) ERISA TRANSACTIONS
Not engage in any transaction or permit any Subsidiary to engage
in any transaction which could subject the Borrower or any
Subsidiary to a civil penalty assessed pursuant to the provisions
of Section 502 of ERISA or tax imposed under the provisions of
Section 4975 of the Code, which civil penalty or tax would have a
Material Adverse Effect on the Borrower and its Consolidated
Subsidiaries, taken as a whole.
(d) NO TERMINATION OF EMPLOYEE PLANS
Not terminate any Pension Benefit Plan of the Borrower or any
member of the Controlled Group in a "distress termination" under
Section 4041 of ERISA, or take any other action or have any event
occur with respect to an Employee Plan, including, without
limitation, any action or event for which the Borrower must
provide the Banks with a copy of a notice, an explanation of an
event or condition, or a copy of an assessment under this SECTION
16.11, which would have a Material Adverse Effect on the Borrower
and its Consolidated Subsidiaries, taken as a whole.
(e) NON-U.S. EMPLOYEE PLANS
Not permit any condition to exist with respect to a Non-U.S.
Employee Plan which would have a Material Adverse Effect on any
Company.
94
16.12 INTEREST RATE PROTECTION AGREEMENTS
Shall, with financial institutions and at rates reasonably acceptable to
the Agent, maintain Interest Rate Protection Agreements with respect to
a minimum of 45% (forty-five percent) of the amount of the Loans
outstanding at any time through May 31, 1995.
16.13 INDEBTEDNESS TO SUBSIDIARIES
Shall not make any payments with respect to any Indebtedness owed by the
Borrower to any Subsidiary if a Default exists and is continuing, or
would result from the making of such payment.
16.14 MAINTENANCE OF SEPARATE CORPORATE IDENTITIES
Shall, for so long as the Loan or any portion thereof or any Commitment
therefor is outstanding,
(a) provide, that at all times, at least one (1) member of its board
of directors or at least one (1) of its officers will be a Person
who is not an officer, director or employee of any corporation
which Controls the Borrower;
(b) maintain corporate records and books of account separate from
those of any corporation which Controls the Borrower and separate
from those of any Major Subsidiary;
(c) not commingle its funds or assets with those of any corporation
which Controls the Borrower or with those of any Major
Subsidiary; and
(d) provide that its board of directors will hold all appropriate
meetings, which will not be jointly held with any corporation
which Controls the Borrower, to authorize and approve the
Borrower's corporate actions.
16.15 AFFILIATE TRANSACTIONS
Not, nor permit any of its Subsidiaries, directly or indirectly, to pay
any funds (including, without limitation, payments of principal or
interest on Indebtedness or Subordinated Debt to any Affiliate) to or
for the account of, make any investment in, lease, sell, transfer or
otherwise dispose of, any assets, tangible or intangible, grant loans,
guarantees, suretyships to, enter into management, consulting,
brokerage, advisory or similar agreements or arrangements with, or
participate in or effect any transaction in connection with any joint
enterprise or other joint arrangement with, any Affiliate (other than
the Borrower and its Subsidiaries), provided, however, that the
foregoing shall not restrict:
(a) transactions which are on terms and conditions no less favorable
to the Borrower and its Subsidiaries than would apply in
comparable arm's-length transactions
95
(involving comparable circumstances) with a Person not an
Affiliate; provided that (i) in no event shall payments provided
for in any management, consulting, advisory or similar agreements
or arrangements (other than the existing agreements and
arrangements described in SCHEDULE 9) exceed, in the aggregate,
DM 10,000,000 (Deutsche Mark Ten Million) in any calendar year;
(ii) in no event shall amounts paid to Affiliates as brokerage
fees in connection with Dispositions to non-Affiliates exceed the
lesser of (A) 3% (three percent) of the Gross Proceeds or (B)
customary fees and expenses which would be incurred pursuant to
an arm's length agreement or arrangement); and (iii) with respect
to sales or transfers of product or similar assets by the
Borrower or any of its Subsidiaries to Affiliates of the Borrower
(other than the Borrower and its Subsidiaries) (A) all such sales
or transfers shall be on payment terms that provide for full
payment in cash on or before 45 (forty-five) days after the date
of such sale or transfer and (B) the aggregate amount owing to
the Borrower and its Subsidiaries for all such sales or transfers
(net of any amounts owing by the Borrower and its Subsidiaries
with respect to sales or transfers of product or similar assets
to such Affiliates of the Borrower) shall not at any time exceed
$15,000,000 (Fifteen Million Dollars) (or the equivalent amount
in any currency);
(b) Restricted Payments made in accordance with SECTION 16.20;
(c) transactions by the Borrower or any Subsidiary with any Affiliate
(including, without limitation, loans and advances), to the
extent that the aggregate amount of such transactions when
aggregated with Restricted Payments shall not exceed the limit on
payments in the periods specified under SECTION 16.20 and shall
otherwise be made in accordance with SECTION 16.20;
(d) the Affiliate License Agreements and transactions by the Borrower
or any Subsidiary pursuant to the Affiliate License Agreements;
or
(e) the issuance and payment of the Mirror Notes in accordance with
the terms of the Mirror Notes.
16.16 TRANSACTIONS WITH SUBSIDIARIES
If the Borrower or any Subsidiary, or a Subsidiary and another
Subsidiary, creates or enters into any agreement with a Subsidiary which
is on terms and conditions more favorable to such Subsidiary than would
apply in a similar agreement with a Person which is not an Affiliate,
then, in the event that any such benefitted Subsidiary merges or
consolidates with another entity such that the surviving entity is no
longer a Subsidiary, or such agreement is, or the benefits of such
agreement are, sold (in one transaction or a series of transactions to a
Person that is not a Subsidiary), any such agreement involving such
benefitted Person must, prior to such merger, consolidation or sale of
assets, be modified so that the terms and conditions thereof would be no
more favorable than would apply with a Person which is not an Affiliate.
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16.17 NOTICE OF DEFAULT; CHANGE OF LAW
Advise the Agent promptly upon the Borrower becoming aware of (i) any
Default under this Agreement or any of the other Loan Documents or (ii)
any change in law which would cause any representation or warranty in
SECTION 15.04, 15.05, 15.06, 15.07, or 15.14 of this Agreement to be
incorrect if such change in law were in effect on the Second Restatement
Date.
16.18 LIMITATION OF INDEBTEDNESS
Not incur any Indebtedness other than Permitted Indebtedness.
16.19 SUBSIDIARY INDEBTEDNESS
Not allow any Subsidiary to incur any Indebtedness other than (a)
Permitted Indebtedness or (b) subject to the limitations of SECTION
16.18, Indebtedness in respect of unfunded vested benefits under any
laws governing non-U.S. Employee Plans.
16.20 RESTRICTED PAYMENTS
Not make or declare any Restricted Payments except for the following
Restricted Payments if no Default exists or would result after giving
effect thereto:
(a) As a result of the First Prepayment, the Borrower may make
Restricted Payments to Kronos in an aggregate amount not to
exceed DM 75,000,000 (Deutsche Mark Seventy-Five Million),
provided that (i) none of such Restricted Payments may be made
prior to January 1, 1995 and (ii) the aggregate of all such
Restricted Payments made during calendar year 1995 shall not
exceed DM 50,000,000 (Deutsche Mark Fifty Million); and
(b) The Borrower may make Restricted Payments to Kronos and/or NL
Industries if and to the extent that such payments do not exceed,
at any time when paid, the positive remainder, if any, of (i) the
sum of (A) the optional prepayments of the Loan made with funds
provided by Kronos and/or NL Industries as described in SECTION
8.02, exclusive of any optional prepayments directly or
indirectly made with funds constituting capital contributions
made or Subordinated Debt advanced to the Borrower and satisfying
all or any portion of the "Maximum Required Investment Amount" as
such term is defined in the Liquidity Undertaking and exclusive
of the First Prepayment, the Second Prepayment and any other
prepayments made with the proceeds of the NL Subordinated Loan or
the Kronos Subordinated Loan, plus (B) interest accrued, at a
rate not to exceed the average rate of interest applicable to the
Loans plus 0.50% (one-half of one percent) as of the Business Day
upon which such Restricted Payment is made, on any Subordinated
Debt borrowed by the Borrower from Kronos and/or NL Industries
and incurred to finance such optional prepayments of the Loan
referred to in
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CLAUSE (A) preceding minus (ii) the amount of Restricted Payments
then previously paid by the Borrower to Kronos and/or NL
Industries pursuant to this CLAUSE (B); for purposes of this
CLAUSE (B), no such optional prepayment (or portion thereof)
shall be deemed to have been made with funds provided by Kronos
and/or NL Industries unless, in connection with the prior written
notice of such optional prepayment given pursuant to SECTION
8.02, the Borrower notifies the Agent that such optional
prepayment (or portion thereof) shall be made with funds provided
by Kronos and/or NL Industries and, at the time of such
prepayment, the Agent receives evidence reasonably satisfactory
to it that such optional prepayment (or portion thereof) was in
fact paid with funds provided by Kronos and/or NL Industries and
placed into the Special Purpose Account (or, if so agreed by the
Agent, into another special, restricted account of the Borrower
maintained at, and acceptable to, the Agent from which the
Borrower may not make withdrawals or otherwise direct
distributions except with respect to any interest to accrue
thereon) and then applied against the Loan pursuant to SECTION
8.02.
Notwithstanding the foregoing, the Borrower may make Restricted
Payments, even if the foregoing conditions are not met, but only if and
to the extent that, prior to or concurrently with the making of any such
Restricted Payment, a cash equity capital contribution is made to the
Borrower by the Person to whom such Restricted Payment is to be made
such that the sum of Consolidated Equity plus Subordinated Debt of the
Borrower is at least equal to the sum of Consolidated Equity plus
Subordinated Debt of the Borrower if such Restricted Payment had not
been made.
16.21 MAXIMUM FUNDED DEBT RATIO; MAXIMUM INDEBTEDNESS
Maintain for each fiscal quarter during the fiscal years set forth below
a Funded Debt Ratio not exceeding the maximum Funded Debt Ratio
specified opposite each such fiscal year:
YEAR MAXIMUM FUNDED DEBT RATIO
1996 0.95 to 1.00
Effective as of the Second Restatement Date, allow to exist or remain
outstanding Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis, exclusive of the Indebtedness evidenced by the
Mirror Notes, that does not, at any time during any particular fiscal
year, exceed the aggregate amount set forth in the table below
applicable to such year:
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Maximum Aggregate
YEAR AMOUNT OF INDEBTEDNESS
1997 DM 430,000,000
1998 DM 430,000,000
1999 DM 400,000,000
2000 DM 300,000,000
16.22 MINIMUM CONSOLIDATED EQUITY
Maintain for each fiscal quarter during the fiscal years set forth below
Consolidated Equity of not less than the minimum Consolidated Equity
specified opposite each such fiscal year:
YEAR MINIMUM CONSOLIDATED EQUITY
1997 DM 1,600,000,000
1998 DM 1,325,000,000
1999 DM 1,175,000,000
2000 DM 1,100,000,000
16.23 CURRENT ASSETS TO CURRENT LIABILITIES RATIO
Maintain a ratio of Current Assets to Current Liabilities of not less
than 1.50 to 1.00.
16.24 INTEREST COVERAGE RATIO
Maintain for the four fiscal quarters then ended an Interest Coverage
Ratio of not less than the minimum Interest Coverage Ratio specified
opposite each date as set forth below:
Four Fiscal Minimum Interest
QUARTERS ENDED COVERAGE RATIO
March 31, 1997 0.65 to 1.00
June 30, 1997 0.35 to 1.00
September 30, 1997 0.30 to 1.00
December 31, 1997 0.30 to 1.00
March 31, 1998 0.30 to 1.00
June 30, 1998 0.50 to 1.00
September 30, 1998 0.80 to 1.00
December 31, 1998 1.00 to 1.00
March 31, 1999 1.05 to 1.00
June 30, 1999 1.15 to 1.00
September 30, 1999 1.25 to 1.00
December 31, 1999 1.60 to 1.00
March 31, 2000 1.75 to 1.00
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June 30, 2000 2.00 to 1.00
16.25 MINIMUM EBITDA
Have or achieve, for each fiscal year set forth below, EBITDA that is
not less than the minimum EBITDA specified opposite each such fiscal
year below:
FISCAL YEAR ENDED MINIMUM EBITDA
1997 DM 20,000,000
1998 DM 90,000,000
1999 DM 195,000,000
For purposes of determining compliance with the minimum EBITDA
requirements set forth in the immediately preceding sentence, there
shall be added to EBITDA during any fiscal year the positive remainder,
if any, of (a) the sum of (i) the amount, if any, of contributions to
the equity of the Borrower in the form of cash (as distinguished from
the conversion of debt to equity) made by NL Industries or Kronos during
such fiscal year plus (ii) the amount, if any, of loans made by NL
Industries or Kronos as Subordinated Debt during such fiscal year minus
(b) the sum of (i) the increase in the Restricted Capital Amount during
such fiscal year, plus (ii) the aggregate amount of Restricted Payments
made during such fiscal year pursuant to SECTION 16.20(B); provided,
however, that such addition to EBITDA may occur during no more than two
separate fiscal years of the Borrower during the term of this Agreement
and any such addition occurring during any fiscal year shall be wholly
excluded for purposes of determining EBITDA during any other fiscal
year.
16.26 REGISTERED OFFICE IN GERMANY
Maintain a registered office in Germany.
16.27 SERVICE CONTRACT OF KRONOS TITAN
Cause Kronos Titan to maintain the Service Contract or obtain a renewal
or renewals, or a replacement or replacements, thereof providing for
comparable services during the term of the Leverkusen Lease.
16.28 RESTRICTION ON DIVIDENDS FROM SUBSIDIARIES
(a) Without the consent of the Majority Banks, the Borrower shall not
permit any of its Subsidiaries to incur any Indebtedness not
existing as of the First Restatement Date, which Indebtedness
includes a consensual encumbrance or restriction on the ability
of a Subsidiary to pay dividends or distributions or make similar
payments on its Stock to the Borrower or to any other Subsidiary.
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(b) Without the consent of the Majority Banks, the Borrower shall
not, nor permit any of its Subsidiaries to, amend or refinance
any Indebtedness if such amendment or refinancing includes a
consensual encumbrance or restriction on the ability of any
Subsidiary to pay dividends or distributions or make similar
payments on its Stock to the Borrower or to any other Subsidiary
to a greater extent than exists with respect to such Indebtedness
at the time of such amendment or refinancing.
16.29 INVESTMENTS
Except as otherwise expressly permitted under SECTIONS 16.09 or 16.10 of
this Agreement, neither the Borrower nor any of its Subsidiaries will
make or acquire any Investment in any Person other than:
(a) Temporary Cash Investments;
(b) Investments by a Subsidiary in the Borrower, or by the Borrower
or any of the Subsidiaries in any of the Major Subsidiaries;
(c) Investments by the Borrower or by any of its Subsidiaries in any
Subsidiary which is not a Major Subsidiary if, immediately after
such Investment is made or acquired, the aggregate net book value
of all Investments permitted by this CLAUSE (C) does not exceed
DM 105,000,000 (Deutsche Mark One Hundred Five Million); and
(d) any Investment not otherwise permitted by the foregoing clauses
of this SECTION 16.29 if, immediately after such Investment is
made or acquired, the aggregate net book value of all Investments
permitted by this CLAUSE (D) does not exceed DM 25,000,000
(Deutsche Mark Twenty-Five Million);
and provided, however, that neither the Borrower nor any of its
Subsidiaries shall, if a Default exists and is continuing, make or
acquire any Investment in any Person other than pursuant to CLAUSES (A)
and (B) of this SECTION 16.29.
16.30 LIMITATION ON RESTRICTED PAYMENTS
Not make any Restricted Payment to any Person if any one or more of the
following Persons shall fail to make payments when due and payable of
any of their Indebtedness in an aggregate amount exceeding DM 20,000,000
(Deutsche Mark Twenty Million) with respect to each such Person: NL
Industries, the Principal Shareholder, or any corporation Controlled by
NL Industries and Controlling the Principal Shareholder.
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16.31 MAINTENANCE OF PROPERTY; INSURANCE
Except as otherwise permitted under this Agreement, keep, and cause each
of its Subsidiaries to keep, all property useful and necessary in its
business in good working order and condition, ordinary wear and tear
excepted and maintain, and cause each of its Subsidiaries to maintain
(either in the name of the Borrower or in such Subsidiary's own name),
with financially sound and reputable insurance companies, insurance on
all their property in at least such amounts and against at least such
risks as are usually insured against in the same general area by
companies of established repute engaged in the same or a similar
business; and furnish to the Agent, upon written request from the Agent,
full information as to the insurance carried. SCHEDULE 10 attached
hereto is a description of the types and amounts of insurance carried by
the Borrower and its Subsidiaries as of the Second Restatement Date.
16.32 CONTINUATION OF BUSINESS
Except as otherwise permitted under this Agreement, continue, and cause
each of its Major Subsidiaries to continue, to engage in business of the
same general type as conducted by each of them as of the First
Restatement Date, and preserve, renew and keep in full force and effect,
and cause each of its Major Subsidiaries to preserve, renew and keep in
full force and effect its respective corporate existence and its
respective rights, privileges and franchises necessary or desirable in
the normal conduct of business.
16.33 TAXES
File, and cause each of its Subsidiaries to file, all income tax returns
and all other material tax returns that are required to be filed by
them; and timely pay and cause each of its Subsidiaries to pay timely
all taxes due and payable for the period covered by such returns or
pursuant to any assessment received by the Borrower or any of its
Subsidiaries, except for those being contested in good faith by
appropriate proceedings and against which adequate reserves are
established and maintained if required in accordance with German GAAP.
16.34 ADDITIONAL GUARANTIES, PLEDGED SUBSIDIARIES, ETC.
(a) Cause any Subsidiary which is not a Guarantor as of the Second
Restatement Date (including, without limitation, a Subsidiary
which becomes a Subsidiary after the Second Restatement Date) to
become a Guarantor hereunder and thereupon promptly execute a
Guaranty in form and substance reasonably satisfactory to the
Agent, to the extent permitted by applicable law; provided,
however, that no such Subsidiary shall be required to execute
such a Guaranty if, in the opinion of its independent counsel or
counsel for the Agent, the execution of such Guaranty could
subject the directors or officers of such Subsidiary to civil or
criminal liability; provided, further, however, that each such
Subsidiary which is not required to execute such a Guaranty in
accordance with the preceding proviso shall
102
be required to execute such Guaranty if and when (and within a
reasonably prompt time after the occurrence of) any change in or
clarification of applicable law would permit the execution of
such Guaranty without the imposition of such civil or criminal
liability.
(b) Cause any Subsidiary which is not a Pledged Subsidiary as of the
Second Restatement Date (including, without limitation, any
Subsidiary which becomes a Subsidiary after the Second
Restatement Date) to become a Pledged Subsidiary and if it or any
Subsidiary owns shares of a Subsidiary which becomes a Pledged
Subsidiary, it shall, or shall cause such Subsidiary to, become a
Pledgor with respect thereto and promptly execute a Pledge
Agreement in form and substance reasonably satisfactory to the
Agent, to the extent permitted by applicable law; provided,
however, that neither the Borrower nor any Subsidiary shall be
required to execute a Pledge Agreement if, in the opinion of its
independent counsel or counsel for the Agent, the execution of
such Pledge Agreement could subject the directors or officers of
the Borrower or such Subsidiary to civil or criminal liability;
provided, further, however, that if and to the extent that the
Borrower or any Subsidiary is not required to execute such a
Pledge Agreement in accordance with the preceding proviso, the
Borrower or such Subsidiary (as applicable) shall be required to
execute such Pledge Agreement if and when (and within a
reasonably prompt time after the occurrence of) any change in or
clarification of applicable law would permit the execution of
such Pledge Agreement without the imposition of such civil or
criminal liability.
16.35 PLEDGED STOCK
(a) Except as otherwise permitted by this Agreement, not effect nor
permit any reduction in, or limitation on, by charter, by-law or
otherwise, voting rights, rights to dividends or other
distributions, or rights of sale by pledgees in foreclosure, with
respect to the Stock of any Pledged Subsidiaries.
(b) Except as otherwise permitted by this Agreement, not effect any
sale, pledge, hypothecation, mortgage of, nor grant an option
with respect to, or otherwise transfer, assign or encumber, any
of the Stock of any Pledged Subsidiary.
(c) Not permit a Pledged Subsidiary to issue Stock to the Borrower or
other Pledgor that is not subject to a Pledge Agreement or as
otherwise permitted under this Agreement.
(d) Not effect or permit, by charter, by-laws, contract or other
arrangement, any restriction on the rights of the pledgees under
the Pledge Agreements to exercise their rights of sale or other
rights or remedies in accordance with the terms of such
agreements.
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16.36 PRINCIPAL SHAREHOLDER WAIVER
If Kronos is no longer the Principal Shareholder of the Borrower, then
any such Person which becomes a Principal Shareholder shall promptly
execute, to the extent not prohibited by applicable law, an
Acknowledgement of Limitation of Special Damages substantially in the
form of EXHIBIT J to the First Restated Agreement.
16.37 MAXIMUM CAPITAL EXPENDITURES
Not make or allow any Consolidated Subsidiary to make any Capital
Expenditures, provided, however that Capital Expenditures may be made
if, after giving effect thereto, the aggregate Capital Expenditures made
during any fiscal year do not exceed the maximum aggregate Capital
Expenditures specified opposite each such fiscal year below:
Maximum Aggregate
YEAR CAPITAL EXPENDITURES
1996 DM 90,000,000
1997 DM 70,000,000
1998 DM 60,000,000
1999 DM 60,000,000
2000 DM 60,000,000
2001 DM 60,000,000
2002 DM 60,000,000
and provided further, however, that Capital Expenditures exceeding the
amount thereof set forth in the preceding table may be made during any
fiscal year if and to the extent that (a) such Capital Expenditures are
reasonably required to comply with applicable Environmental Laws and the
Borrower provides reasonable evidence of such requirement to the Agent
and (b) such Capital Expenditures have not been previously budgeted or
otherwise planned to occur during such fiscal year, and provided
further, however, that the Borrower may, in addition to the maximum
aggregate Capital Expenditures allowed in the table above for any
particular fiscal year, make Capital Expenditures during such fiscal
year of an amount equal to the positive remainder (if any) of (i) the
maximum aggregate Capital Expenditures allowed in the table above for
the immediately preceding fiscal year minus (ii) the aggregate Capital
Expenditures actually made during such immediately preceding fiscal
year. In addition, and notwithstanding anything to the contrary
contained in the immediately preceding sentence, the Borrower and its
Consolidated Subsidiaries shall, during each fiscal year subsequent to
1996, make Capital Expenditures of not less than DM 40,000,000 (Deutsche
Mark Forty Million) (or the equivalent amount in any currency) in
aggregate amount.
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16.38 MIRROR NOTES; SUBORDINATED LOANS
(a) Not make any payment (whether principal, interest or other
payment in any form) of, on or with respect to the Mirror Notes,
the NL Subordinated Loan or the Kronos Subordinated Loan, except
for payments of principal and interest on or with respect to the
Mirror Notes in amounts not to exceed the amounts then due made
on or after the due dates for such payments, which payments of
principal are (in the absence of any acceleration of maturity
upon the occurrence of a default) due, respectively, on October
20, 2003 and October 20, 2005; and
(b) Not amend or modify any of the Mirror Notes or the Subordinated
Loan Documents without the prior written consent of the Majority
Banks (662/3%) (i) to increase the principal amount of any of the
Mirror Notes or the NL Subordinated Loan or the Kronos
Subordinated Loan, (ii) to shorten the maturity of, or any date
for the payment of any principal of or interest on, any of the
Mirror Notes or the NL Subordinated Loan or the Kronos
Subordinated Loan, (iii) to increase the rate of interest on or
with respect to any of the Mirror Notes or the NL Subordinated
Loan or the Kronos Subordinated Loan, (iv) to otherwise amend or
modify any of the payment terms of the Mirror Notes or the NL
Subordinated Loan or the Kronos Subordinated Loan other than to
waive or cancel any payment obligations of the Borrower with
respect thereto or to contribute such Indebtedness to the equity
capital of the Borrower or a Subsidiary, (v) to increase any
cost, fee or expense payable by the Borrower, (vi) to add any
collateral as security for payment or collection of any of the
Mirror Notes or the NL Subordinated Loan or the Kronos
Subordinated Loan or (vii) in any other respect that would
reasonably be expected to be adverse to the Borrower or any
Subsidiary.
16.39 NOTIFICATION OF INDENTURE DEFAULTS
Promptly notify the Agent of the occurrence of any "Default" or "Event
of Default", as such terms are defined in either of the Indentures.
16.40 BANK ACCOUNTS
The Borrower shall cause all cash balances of the Borrower and its
Subsidiaries, other than Kronos World Services S.A./N.V., to be
maintained at Hypobank International S.A. (or any affiliate of Hypobank
International S.A. acceptable to the Agent) or another Bank (party to
this Agreement) or branch of such Bank acceptable to the Agent;
provided, however, that an aggregate amount of cash balances not to
exceed DM 30,000,000 (Deutsche Mark Thirty Million) (or the equivalent
amount in any currency) may be maintained by the Borrower or
Subsidiaries of the Borrower at other financial institutions if and to
the extent that it is not feasible for the Borrower or such Subsidiaries
to maintain cash balances with Hypobank International S.A. or its
affiliates or another Bank or branch of such Bank. The Borrower shall,
and shall cause each of its Canadian Subsidiaries to, from time to time
as may be necessary, pledge to the Agent as security for the Loans,
105
pursuant to agreements, documents and instruments in form and substance
reasonably satisfactory to the Agent which shall create first priority
Liens (except as provided in SECTION 17.05), all cash balances of the
Borrower and its Canadian Subsidiaries, and the Borrower will, and will
cause each of its Canadian Subsidiaries to, at all times cause its cash
balances to be so pledged.
ARTICLE 17. COLLATERAL
17.01 As security for the repayment of the Loans and the performance of all
other obligations of the Borrower to the Banks (and in addition to
certain undertakings, covenants and other agreements), the following
documents were executed and delivered in connection with the Original
Agreement or the First Approval Agreement:
(a) Pledge dated as of May 30, 1990, executed by the Borrower to and
in favor of the Agent relating to the Stock of NL Industries
(Deutschland) GmbH, Kronos Chemie GmbH and Schraubenfabrik
Neustadt Goetz & Cie. GmbH, as amended and reaffirmed;
(b) Pledge dated as of May 30, 1990, executed by NL Industries to and
in favor of the Agent relating to the Stock of NL Industries
(Deutschland) GmbH, as amended and reaffirmed;
(c) Deed of Security dated as of May 30, 1990 and as of June 19,
1992, executed by the Borrower, the Agent and Societe
Industrielle du Titane S.A., Assignment of Dividends dated as of
May 30, 1990 and as of June 19, 1992, executed by the Borrower,
the Agent and Societe Industrielle du Titane S.A. and Declaration
of Pledge dated as of June 19, 1992, executed by the Borrower and
Societe Industrielle du Titane S.A. to and in favor of the Banks,
all relating to the Stock of Societe Industrielle du Titane S.A.;
(d) Pledge Agreement of Registered Shares dated as of May 30, 1990,
executed by the Borrower to and in favor of the Agent relating to
the Stock of Kronos S.A./N.V. (including power of attorney and
notice of assignment relating thereto), as amended and
reaffirmed, and Pledge Agreement of Registered Shares dated as of
May 28, 1993, executed by the Borrower to and in favor of the
Agent relating to the Stock of Kronos Europe S.A./N.V. (including
power of attorney and notice of assignment relating thereto);
(e) Pledge Agreement dated as of May 30, 1990, executed by the
Borrower to and in favor of the Agent relating to the Stock of
Kronos Norge A/S, as amended and reaffirmed;
(f) Legal Mortgage of Shares dated as of May 30, 1990, executed by
the Borrower to and in favor of the Agent relating to the Stock
of Kronos Limited (including power of attorney relating thereto),
as amended and reaffirmed;
106
(g) Pledge of Shares dated as of May 30, 1990, executed by the
Borrower to and in favor of the Agent relating to the Stock of
Kronos Canada, Inc., as amended and reaffirmed;
(h) Stock Pledge Agreement dated as of May 30, 1990, executed by the
Borrower to and in favor of the Agent relating to the Stock of
Kronos Europe, Inc., as amended and reaffirmed;
(i) Guaranty dated as of May 30, 1990, executed by Kronos Europe,
Inc. to and in favor of the Agent, as amended and reaffirmed;
(j) Guaranty dated as of March 22, 1991, executed by NL Industries
and Kronos (US) to and in favor of Agent, as amended and
reaffirmed (which Guaranty has been fully performed);
(k) Guarantee Agreement dated as of May 10, 1991, executed by Kronos
Canada, Inc. to and in favor of the Agent, as amended and
reaffirmed;
(l) Special Purpose Account Agreement dated as of May 15, 1992,
executed by NL Industries, Kronos (US) (then known as Kronos,
Inc.) and the Borrower to and in favor of the Agent relating to
the Special Purpose Account;
(m) Declaration dated as of June 15, 1992, executed by the Borrower,
NL Industries and Kronos (US) relating to the pledge of the
Special Purpose Account (and additional documents relating
thereto);
(n) Pledge of Shares dated as of September 30, 1993, executed by the
Borrower to and in favor of the Agent relating to the Stock of
2927527 Canada Inc.; and
(o) Guarantee Agreement dated as of September 30, 1993, executed by
2927527 Canada Inc. to and in favor of the Agent.
17.02 As additional security for the repayment of the Loans and the
performance of all other obligations of the Borrower to the Banks, the
documents referred to in CLAUSES (I)(A) through (C) of SECTION 4.01(A)
of the First Restated Agreement were executed and delivered concurrently
with the First Restatement Date.
17.03 As additional security for the repayment of the Loans and the
performance of all other obligations of the Borrower to the Banks, the
documents referred to in Paragraphs 3(h), 3(i) and 3(k) of the First
Approval Agreement, if required to be executed under such agreement,
were executed and delivered in accordance with, and at the times
specified in, the First Approval Agreement.
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17.04 As additional security for the repayment of the Loans and the
performance of all other obligations of the Borrower to the Banks, the
following documents have been, or will be concurrently with the Second
Restatement Date, executed and delivered:
(a) (i) Pledge of Shares dated as of November 5, 1993,
executed by the Borrower to and in favor of the Agent
relating to the Stock of 2969157 Canada Inc., as amended
and reaffirmed;
(ii) Guarantee Agreement dated as of November 5, 1993, executed
by 2969157 Canada Inc. to and in favor of the Agent, as
amended and reaffirmed;
(iii) Amendment and Reaffirmation of Pledge Agreement dated as
of January 28, 1994, executed by the Borrower and the
Agent confirming the pledge of 48,313 new shares of Stock
of Kronos Norge A/S issued by Kronos Norge A/S to the
Borrower;
(iv) Pledge Agreement of ZCON and ZCON Agreement dated as of
February 2, 1994, executed by the Borrower to and in favor
of the Agent relating to the pledge of the Subordinated
Zero Coupon Option Note dated March 15, 1993, in the
principal amount of NOK 110 million issued by Kronos
Europe S.A./N.V. (then known as Kronos S.A./N.V.) to
Kronos Norge A/S and the Agreement dated January 29, 1993,
between Kronos Europe S.A./N.V. and Kronos Norge A/S and
the ZCON Amendment Agreement dated March 15, 1993;
(v) Amendment and Reaffirmation of Pledge of Shares dated as
of January 1, 1994, executed by the Borrower and the Agent
relating to the Stock of 2927527 Canada Inc.; and
(vi) Amendment and Reaffirmation of Pledge of Shares dated as
of January 1, 1994, executed by the Borrower and the Agent
relating to the Stock of 2969157 Canada Inc.;
(b) Amended and Restated Pledge Agreement dated as of June 26, 1996,
executed by the Borrower to and in favor of the Agent relating to
the pledge of 53,427 newly issued shares and 532,196 newly issued
shares of Stock of Kronos Norge A/S and that certain Promissory
Note and Agreement dated June 26, 1996, in the original principal
amount of NOK 200,000,000 made by Kronos Norge A/S payable to the
order of the Borrower; and
(c) (i) the Nordenham Mortgage executed by Kronos Titan to and
in favor of the Agent, which Lien document shall secure
only the principal amount of the Kronos Titan Revolving
Portion which has at any time been advanced directly to
Kronos Titan and which is outstanding at any time
(including the principal thereof, interest accrued thereon
and fees incurred with respect
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thereto) and the priority of which Lien shall be
subordinate only to (A) the existing Lien in favor of
Westdeutsche Landesbank securing an actual (as opposed to
nominal) aggregate amount not to exceed DM 4,000,000
(Deutsche Mark Four Million) of principal Indebtedness at
any time outstanding, (B) the existing Lien in favor of
the German tax authorities securing claims for taxes
(including interest) of the Borrower and its Subsidiaries
owed to the German tax authorities for fiscal year 1990
not to exceed DM 100,000,000 (Deutsche Mark One Hundred
Million) and (C) any (if any) Permitted Liens referred to
in CLAUSES (D) and (E) of the definition of the term
"Permitted Liens";
(ii) the Canadian Security Documents executed by Kronos Canada,
Inc., 2927527 Canada Inc. and 2969157 Canada Inc. (as
applicable) to and in favor of the Agent;
(iii) the Cash Pledge Agreements executed by the Borrower,
Kronos Canada, Inc., 2927527 Canada Inc. and 2969157
Canada Inc. (as applicable) to and in favor of the Agent;
and
(iv) the NL Guaranty executed by NL Industries to and in favor
of the Agent.
17.05 The Borrower covenants and agrees that, pursuant to the Pledge
Agreements, the Nordenham Mortgage, the Canadian Security Documents and
the Cash Pledge Agreements, the Agent, as Agent for the Banks, shall
have a Lien in and to (a) the Stock of the Pledged Subsidiaries, (b) the
Nordenham plant of Kronos Titan, (c) all material assets and properties
of Kronos Canada, Inc., 2927527 Canada Inc. and 2969157 Canada Inc.
(including, without limitation, the Varennes, Quebec, Canada plant of
Kronos Canada, Inc. and the Kronos Canada Note held by 2969157 Canada
Inc. but excluding the stock of Kronos World Services S.A./N.V. owned by
Kronos Canada, Inc.), and (d) certain bank accounts of the Borrower,
Kronos Canada, Inc., 2927527 Canada Inc. and 2969157 Canada Inc., all as
security for the Loans (including, without limitation, the Revolving
Portion and any reborrowings of the Revolving Portion to be advanced on
the date of any drawdown thereof). The Borrower further covenants and
agrees that all of such Liens referred to in the immediately preceding
sentence shall constitute perfected first priority Liens in favor of the
Agent for the benefit of the Agent and the Banks and the properties and
assets affected thereby shall not be subject to any other Liens other
than Permitted Liens referred to in CLAUSE (D), (E), (F) or (I) of the
definition of the term "Permitted Liens" in this Agreement; provided,
however, that (A) the Lien created by the Nordenham Mortgage may have
the priority specified in CLAUSE (I) of SECTION 17.04(C), (B) the Lien
referred to in CLAUSE (B) preceding may be subordinate to any (if any)
Permitted Liens referred to in CLAUSES (D) and (E) of the definition of
the term "Permitted Liens", and (C) the Liens referred to in CLAUSE (C)
preceding may be subordinate to any (if any) Permitted Liens referred to
in CLAUSES (D), (E), (F) and, as to Liens affecting assets or properties
of Kronos Canada, Inc. only, (H) of the term "Permitted Liens", and the
Banks hereby expressly authorize the Agent to take all actions and
execute all instruments
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on their behalf necessary to subordinate its Liens referred to in CLAUSE
(C) preceding affecting assets or properties of Kronos Canada, Inc. to
the Liens referred to in CLAUSE (H) of the term "Permitted Liens".
ARTICLE 18. EVENTS OF DEFAULT
If, for whatever reason, any of the following shall occur and be
continuing:
18.01 The Borrower shall fail to pay principal of the Loan or any portion
thereof on the due date therefor; shall fail to pay any interest with
respect to the Loan or any portion thereof within five (5) days of the
due date therefor; or shall fail to pay any fee or any other sum which
shall have become due under this Agreement or any other Loan Document
within five (5) days after notice from the Agent; provided, however,
that no failure of the Borrower to pay principal on the due date
therefor shall be an Event of Default (as hereinafter defined) if, and
only if, NL Industries or Kronos pays such principal on such due date;
18.02 The Borrower ceases to be, directly or indirectly, a majority-owned
subsidiary of NL Industries.
18.03 The Leverkusen Lease is voluntarily modified, or is terminated or
shortened or there is a Disposition of the Leverkusen Lease, or an
agreement providing for the Disposition, modification, termination or
shortening of the Leverkusen Lease shall be entered into during the term
of the Loan or while any payments due and payable by the Borrower remain
outstanding, unless such Disposition, modification, termination of or
agreement with respect to the Leverkusen Lease will result in the
payment of full, fair and reasonable consideration to Kronos Titan.
18.04 The lessor under the Leverkusen Lease exercises or has the right to
exercise immediately any remedies or rights of reversion or termination
thereunder or, with respect to rental payments required in accordance
with the Leverkusen Lease, the lessee fails to make rental payments for
a period of 2 (two) quarters or, if there is a bona fide dispute, the
lessee fails to make rental payments for a period of 4 (four) quarters.
18.05 The Service Contract is terminated, modified or Disposition is made
thereof during the term of the Leverkusen Lease unless replaced or
renewed with a contract or provisions providing for comparable services
which replacement continues during the term of the Leverkusen Lease or
unless the Disposition of the Service Contract or any such replacement
occurs concurrently with the Disposition, termination, shortening or
modification of the Leverkusen Lease in accordance with the terms of
this Agreement.
18.06 Any representation, warranty, certification or statement made by the
Borrower or any Affiliate (including, without limitation, NL Industries,
Kronos (US), Kronos and the Subsidiaries) in any Loan Document shall
prove to have been incorrect in any material respect when made or deemed
to have been made or repeated, as the case may be.
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18.07 Except as set forth on SCHEDULE 4, any Loan Document or any of the
obligations of the Borrower or any Affiliate (including, without
limitation, NL Industries, Kronos (US), Kronos and the Subsidiaries)
thereunder shall cease in any material respect to be legally valid,
binding and enforceable in accordance with the respective terms of such
Loan Document, or any Guarantor shall state its intention, in writing,
to revoke its Guaranty.
18.08 The Borrower and/or any Subsidiary shall fail to observe or perform in
any material respect any covenant or agreement contained in SECTION
16.08 (to the extent that Borrower or any of its Subsidiaries
voluntarily creates or permits to exist any Lien, except a Permitted
Lien) or SECTIONS 16.09, 16.10, 16.17 through 16.25, 16.30 or 16.38 of
this Agreement.
18.09 The Borrower and/or any Affiliate (including, without limitation, NL
Industries, Kronos (US), Kronos and the Subsidiaries) shall fail to
observe or perform in any material respect any other covenant or
agreement contained in any Loan Document (and not constituting an Event
of Default under any other clause of this ARTICLE 18) and such failure
shall continue for 30 (thirty) days after written notice thereof has
been given to the Borrower by the Agent.
18.10 Any Company, NL Industries, Kronos, the Principal Shareholder or any
corporation which is Controlled by NL Industries and Controls the
Principal Shareholder becomes insolvent for the purposes of any relevant
law, or shall commence a voluntary action or other proceedings seeking
liquidation, reorganization or other relief with respect to itself, its
properties or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any relief
or to the appointment of or taking or possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assign ment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing.
18.11 An involuntary action or other proceedings shall be commenced against
any Company, NL Industries, Kronos, the Principal Shareholder or any
corporation which is Controlled by NL Industries and Controls the
Principal Shareholder seeking liquidation, reorganization or other
relief with respect to it or its debt under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 75 (seventy-five) days; or an order of relief
shall be entered against any such corporation under any bankruptcy laws
as now or hereafter in effect;
18.12 Indebtedness of (i) the Borrower and/or any Subsidiary or (ii) the
Principal Shareholder, in either such case in an aggregate amount
exceeding DM 20,000,000 (Deutsche Mark Twenty Million) (or the
equivalent amount in any currency) is not paid when due after any
111
applicable grace period or is not paid if it becomes due and payable
prior to its specified maturity, or any creditor or creditors of the
Borrower or any of its Subsidiaries or the Principal Shareholder becomes
entitled immediately to declare any such Indebtedness due and payable
prior to its specified maturity;
18.13 One or more final judgments or non-appealable orders for the payment of
money in excess of DM 10,000,000 (Deutsche Mark Ten Million) (or the
equivalent amount in any currency) for all such judgments or orders
shall be rendered against the Borrower and/or any of its Major
Subsidiaries, and such judgments or orders shall continue unsatisfied
and in effect for a period of 10 (ten) consecutive days;
18.14 Any other event occurs or circumstances arise with respect to the
Borrower and/or its Subsidiaries which in the reasonable opinion of the
Majority Banks is likely to materially adversely affect the ability of
the Borrower to perform its obligations with respect to payments,
Collateral or Liens under the Loan Documents;
18.15 The occurrence of an "Event of Default" (whether or not such an "Event
of Default" is declared or any remedy is exercised with respect
thereto), as such term is defined in either of the Indentures; or
18.16 (a) Either of the Indentures or any of the NL Notes shall be amended or
modified without the prior written consent of the Majority Banks
(662/3%) (i) to increase the principal amount of any of the NL Notes,
(ii) to shorten the maturity of, or any date for the payment of any
principal of or interest on, any of the NL Notes, (iii) to increase the
effective rate of interest or discount on or with respect to any of the
NL Notes, (iv) to increase any cost, fee or expense payable by NL
Industries or any of its subsidiaries, (v) to add any collateral as
security for payment or collection of any of the NL Notes, or (vi) in
any other respect that would be materially adverse to NL Industries or
any of its subsidiaries, (b) NL Industries shall elect to make any
optional redemption or optional prepayment of principal of, interest on
or other amount with respect to the NL Notes (or any of such notes)
without the prior written consent of the Majority Banks (662/3%), or (c)
the Borrower shall voluntarily or involuntarily make a payment of
principal of, interest on or other amount with respect to the NL
Subordinated Loan or the Kronos Subordinated Loan without the prior
written consent of the Majority Banks (662/3%); or
18.17 The First Prepayment or any portion thereof or the Second Prepayment or
any portion thereof, for any reason, is determined by a court of
competent jurisdiction to be void or invalid as a fraudulent transfer, a
preference or the like or is otherwise required to be disgorged;
then unless such an event (an "Event of Default") shall have been cured
or waived in accordance with the applicable terms of this Agreement,
except for an event under SECTIONS 18.10 or 18.11, the Agent may, and
upon instruction of the Majority Banks shall, at any time after the
occurrence of such Event of Default by notice in writing to the
Borrower, declare that the Loan and all outstanding balances hereunder,
together with
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accrued interest thereon, and all other sums whatsoever payable pursuant
to this Agreement and/or any other Loan Document have become immediately
due and payable and that the Commitment of any Bank under this Agreement
shall have terminated, without presentment, demand, protest or any other
notice of any kind, all of which are expressly waived by the Borrower,
and exercise any and all other rights or remedies of the Agent and/or
the Banks under the Loan Documents or otherwise available under
applicable law (none or which rights or remedies are waived). Upon the
occurrence of any event in SECTION 18.10 or 18.11 above, the Commitments
of the Banks shall automatically terminate and the Loan and all
outstanding balances hereunder, accrued interest thereon and all other
sums whatsoever payable pursuant to this Agreement and/or any other Loan
Document shall automatically become due and payable, without
presentment, demand, protest or notice of any kind, all of which are
expressly waived by the Borrower. The occurrence of an Event of Default
shall entitle the Agent and the Banks to enforce their rights and
remedies under the Loan Documents and against any Collateral, and
otherwise as permitted by applicable law, and the same shall be
cumulative, non-exclusive and concurrent against the Borrower, its
Affiliates or any other obligated party for payment of and/or
performance under the Loan or any of the Loan Documents, or any part
thereof, or against any one or more of them, or against the Collateral,
at the sole discretion of the Agent and the Banks, and may be exercised
as often as occasion therefor shall arise, it being agreed by the
Borrower that the exercise of or failure to exercise any of same shall
in no event be construed as a waiver or release thereof or of any right,
remedy or recourse.
ARTICLE 19. FEES
19.01 On or before the Second Restatement Date, the Borrower shall pay to the
Agent, for distribution amongst the Banks, a closing fee in an amount
equal to 1/2 of 1% (one-half of one percent) of the sum of, for each
such Bank and as of the Second Restatement Date, the outstanding
principal amount of the Term Portion of the Loans of such Bank plus the
maximum amount of such Bank's Revolving Commitment (in each case after
giving effect to the prepayments and the reduction in the maximum amount
of the Revolving Portion to occur on the Second Restatement Date). On or
before January 29, 1997, the Borrower shall pay to the Agent, for
distribution amongst each of the Banks who consents to this Agreement on
or before January 24, 1997, whether or not this Agreement is executed by
the Majority Banks, an additional closing fee in an amount equal to
1/10th of 1% (one-tenth of one percent) the sum of, for each such Bank
and as of the Second Restatement Date, the outstanding principal amount
of the Term Portion of the Loans of such Bank plus the maximum amount of
such Bank's Revolving Commitment (in each case after giving effect to
the prepayments and the reduction in the maximum amount of the Revolving
Portion to occur on the Second Restatement Date). On or before January
29, 1997, the Borrower agrees to pay 40% (forty percent) of the closing
fee referred to in the first sentence of this SECTION 19.01 preceding to
each of the Banks who consents to this Agreement on or before January
24, 1997, whether or not this Agreement is executed by the Majority
Banks.
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19.02 The Borrower shall pay to the Agent for its own account an annual agency
fee in Deutsche Mark in the amounts and on the dates stated in the
letter dated as of May 30, 1990 to the Agent from the Borrower, as such
letter may be amended from time to time. In addition, and in connection
with this Agreement, the Borrower shall pay to the Agent for its own
account the fees in the amounts and on the dates stated in the letter
dated December 30, 1996 to the Agent from the Borrower.
19.03 The Borrower shall pay to the Agent for distribution amongst the Banks
pro rata according to each Bank's Revolving Commitment a commitment fee,
with respect to the Revolving Portion, equal to one-half of one percent
(0.50%) per annum of the average Revolving Portion Availability during
the applicable period. Such commitment fee shall be payable, for the
period from the First Restatement Date through June 30, 2000, on the
last day of each calendar quarter during the term of the First Restated
Agreement or this Agreement (commencing December 31, 1993) and on August
15, 2000, and shall be calculated for the actual number of days elapsed
on the basis of a 365 (three hundred sixty-five) day year.
19.04 All of the fees paid or payable by the Borrower pursuant to the Original
Agreement, the First Restated Agreement, this Agreement and the other
Loan Documents shall be nonrefundable.
ARTICLE 20. EXPENSES AND DUTIES
20.01 The Borrower shall reimburse the Agent on demand for all reasonable
out-of-pocket charges and expenses incurred by the Agent in connection
with the preparation, negotiation and execution of the Original
Agreement, the First Restated Agreement, this Agreement and the other
Loan Documents (including, without limitation, fees and expenses of
legal advisors) and reimburse the Agent on demand for reasonable
out-of-pocket charges and expenses in connection with the publication of
this transaction. The Borrower shall reimburse the Agent on demand for
fees and expenses of legal advisors, financial consultants and other
consultants in connection with the preparation, negotiation and
execution of the Original Agreement, the First Restated Agreement, this
Agreement and the other Loan Documents.
20.02 The Borrower shall reimburse the Agent and the Banks on demand for all
reasonable, out-of-pocket charges and expenses (including legal fees)
reasonably incurred by them or any of them in, or in connection with,
any modification of, the enforcement of, or preservation of rights under
the Original Agreement, the First Restated Agreement, this Agreement and
the other Loan Documents, provided that prior to an Event of Default the
Borrower shall not be obligated to pay the fees and expenses of more
than one law firm (unless questions arise under laws of jurisdictions in
which the principal firms engaged are not authorized to practice law),
and, after an Event of Default, the Borrower shall reimburse the Banks
for the fees and expenses of counsel for each such Bank in connection
with the modification, enforcement or restructuring of this Agreement
and the other Loan Documents, and provided further that the Borrower
shall not be obligated to pay under the
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Original Agreement, the First Restated Agreement, this Agreement or any
of the other Loan Documents losses, costs or expenses arising from or
relating to disputes solely among the Agent and the Banks, or losses,
costs or expenses of the Agent or any Bank resulting from its gross
negligence or wilful misconduct.
20.03 The Borrower shall pay any and all stamp, registration and similar
taxes, duties and charges of whatsoever nature (but excluding all
Excluded Taxes) which may be payable or determined to be payable on, or
in connection with, the execution, registration, notarization,
performance or enforcement of the Original Agreement, the First Restated
Agreement, this Agreement and the other Loan Documents. The Borrower
shall indemnify the Agent and the Banks against any and all liabilities
with respect to or resulting from delay or omission on the part of the
Borrower to pay any such taxes, duties or charges.
20.04 The Borrower shall reimburse the Agent on demand for all reasonable,
out-of-pocket charges and expenses (including, without limitation, legal
fees and fees of financial consultants and other consultants) reasonably
incurred by it in, or in connection with, periodic monitoring and
determination of on-going compliance (or non-compliance, as the case may
be) with the terms and provisions of this Agreement and the other Loan
Documents. The Borrower acknowledges and agrees that, in addition to
legal advisors, such consultants may include, without limitation,
industry, tax, accounting and environmental consultants.
ARTICLE 21. THE AGENT AND THE BANKS
21.01 Each Bank hereby irrevocably appoints the Agent to act as its agent in
connection with this Agreement and the Loan Documents and authorizes the
Agent to exercise such rights, remedies, powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and
the Loan Documents together with all such rights, powers and discretion
as are reasonably incidental thereto.
21.02 When acting in connection with the Loan Documents, the Agent may:
(a) assume that no Default has occurred and that the parties thereto
are not in breach or default of their respective obligations
thereunder unless the officers of the Agent immediately
responsible for matters concerning this Agreement shall have
actual knowledge or shall have been notified in writing by a Bank
that such Bank considers that a Default exists and is continuing
and specifying the nature thereof;
(b) assume that each Bank's Lending Office is that identified with
its signature below and on SCHEDULE 1 until it has received from
such Bank written notice designating some other office of such
Bank as its Lending Office and continue to act upon such notice
until the same is superseded by a further such notice;
115
(c) subject to the provisions of SECTION 20.02, engage and pay for
the advice or services of any lawyers, accountants or other
experts whose advice or services may to it seem necessary,
expedient or desirable and fully rely upon any advice so
obtained;
(d) rely as to any matters of fact which might reasonably be expected
to be within the knowledge of the Borrower or any of its
Affiliates upon a certificate signed by an officer on behalf of
such entity;
(e) rely upon any communication or document believed by it to be
genuine;
(f) refrain from exercising any right, power or discretion vested in
it hereunder unless and until instructed by the Majority Banks as
to the manner in which such right, power or discretion should be
exercised; and
(g) refrain from acting in accordance with any instructions of the
Majority Banks to begin any legal action or proceeding arising
out of or in connection with the Loan Documents until it shall
have been indemnified by the Banks to its reasonable satisfaction
against any and all costs, claims, expenses (including legal
fees) and liabilities which it will or may expend or incur in
complying with such instructions.
21.03 The Agent shall:
(a) subject to the provisions of this Agreement, promptly inform each
Bank of the contents of any written notice or document received
by it from the Borrower hereunder;
(b) promptly notify each Bank of the occurrence of any Default under
this Agreement of which the Agent has received written notice
from a Bank pursuant to SECTION 21.02;
(c) subject to the provisions of this Agreement, act in accordance
with any written instructions given to it by the Majority Banks;
(d) if so instructed by the Majority Banks in writing, refrain from
exercising any right, power or discretion vested in it hereunder;
and
(e) administer and service the Loan in accordance with its customary
procedures and practices in the administration and servicing of
loans of a similar nature made by the Agent, and the Agent shall
have the authority to make decisions hereunder in connection with
the day-to-day administration and servicing of the Loan, and each
Bank shall be bound thereby.
21.04 Neither the Agent nor any of its directors, officers, employees, agents
or Affiliates, shall:
116
(a) be bound to inquire as to the occurrence or otherwise of any
Default or Event of Default or as to any failure of the Borrower
or any Affiliate duly to perform its obligations hereunder or
under the Loan Documents;
(b) be bound to account to any Bank for any sum or the profit element
of any sum received by it for its own account;
(c) be bound to disclose to any other Person any information relating
to the Borrower or any of the Borrower's Affiliates received by
it if such disclosure would or might in the opinion of any of the
above Persons constitute a breach of any law or regulation or be
otherwise actionable by suit of any Person;
(d) be under any fiduciary duty towards any Bank or under any
obligations other than those for which express provision is made
herein;
(e) be liable for any action taken or omitted to be taken except for
their own gross negligence or wilful misconduct; or
(f) be liable for any error in computing any amount payable to any
Bank, provided, that the Agent, the Borrower and any affected
Bank, upon discovery of such error, shall make such adjustments
as may be required to correct such error.
21.05 Each Bank agrees to indemnify the Agent and its directors, officers,
employees, agents and Affiliates to the extent not reimbursed by the
Borrower in the proportion of its share in the Loan (or, if no amount is
outstanding, its Commitment) for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent and its directors,
officers, employees, agents or Affiliates in any way relating to or
arising out of the First Restated Agreement, this Agreement or any other
Loan Documents, or any other documents contemplated by or referred to
herein or the transactions contemplated hereby (including, without
limitation, the costs and expenses which the Borrower is obligated to
pay under ARTICLE 20 but excluding, unless an Event of Default has
occurred and is continuing, normal administrative costs and expenses
incident to the performance of its Agent's agency duties hereunder) or
the enforcement of any of the terms of the First Restated Agreement,
this Agreement, the Loan Documents or of any such other documents,
provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the Agent's gross negligence or wilful
misconduct.
21.06 Each Bank agrees that the Agent shall not be responsible for the
accuracy or completeness of any representation made (whether orally or
otherwise) herein or in connection herewith, for the proper form,
validity, effectiveness, adequacy or enforceability of the Original
Agreement, the First Restated Agreement, this Agreement, any Guaranty,
the Pledge Agreements, the Nordenham Mortgage, the Canadian Security
Documents, the Cash Pledge Agreements or any of the other Loan Documents
or for the creditworthiness of the Borrower, any Guarantor, Pledgor,
Pledged Subsidiary or any Affiliate of the foregoing
117
entities. Neither the Agent nor any of its directors, officers,
employees, agents or Affiliates shall be under any liability for or in
respect of any action taken or omitted by any of them in relation to the
Original Agreement, the First Restated Agreement, this Agreement, any
Guaranty, the Pledge Agreements, the Nordenham Mortgage, the Canadian
Security Documents, the Cash Pledge Agreements or any of the other Loan
Documents except for their gross negligence or wilful misconduct.
21.07 The Agent may accept deposits from, lend money to and generally engage
in any kind of banking or other business with the Borrower or any
Affiliate, independently of the transactions contemplated herein.
21.08 It is understood and agreed by each Bank that it has been, and will
continue to be, solely responsible, without reliance upon the Agent, for
making its own independent appraisal of and investigations into the
financial condition, creditworthiness and affairs of the Borrower, any
Guarantor, the Pledgors, Pledged Subsidiaries and Affiliates of the
foregoing entities and the value of the Collateral or the validity,
enforceability or genuineness of the Original Agreement, the First
Restated Agreement, this Agreement or any of the Loan Documents and
accordingly each Bank confirms to the Agent that it has not relied, and
will not hereafter rely, on the Agent:
(a) to check or inquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Borrower or any
Affiliates, director, officer, employee or agent thereof in
connection with the Loan Documents or the transactions therein
contemplated whether or not such information has been or is
hereafter circulated to such Bank by the Agent; or
(b) to assess or keep under review on its behalf the financial
condition, creditworthiness or affairs of the Borrower or its
Affiliates and the value and/or enforceability of the Collateral.
21.09 The Agent may at any time be removed by the Majority Banks upon at least
30 (thirty) days prior written notice to such Agent of such removal but
only for cause consisting of gross negligence or wilful misconduct or
following a declaration of insolvency by the appropriate regulators. The
Agent may at any time resign from the agency upon not less than 45
(forty-five) days' notice to the Banks of its intention to do so and, if
any such notice is given by the Agent, the Agent shall, upon the
appointment of a successor agent as hereinafter provided for, cease to
be under any further obligation as Agent hereunder. Within such period,
the Majority Banks may appoint a successor agent with the consent of the
Borrower, which consent will not be unreasonably withheld or delayed and
if, before the expiry of such notice, such successor agent notifies the
parties hereto that it accepts such appointment:
(a) each reference herein to the "Agent" shall thereafter be
construed as a reference to the successor agent; and
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(b) the successor agent and the parties hereto other than the
retiring Agent shall thereafter have such rights and obligations
inter se as they would have if the successor agent had been named
herein as the Agent. If no successor agent, appointed by the
Majority Banks, notifies the parties hereto, prior to the expiry
of the Agent's notice of its intention to retire from the agency
giving rise to the need to appoint the same, of its acceptance of
such appointment, the Agent may appoint any experienced and
reputable bank having offices in London, Munich, New York City or
Luxembourg to be the successor agent and, if it does and such
successor agent notifies the parties hereto that it accepts such
appointment:
(i) each reference herein to the "Agent" shall thereafter be
construed as a reference to the successor agent so
appointed; and
(ii) the successor agent so appointed upon execution of a
counterpart of this Agreement and the parties hereto other
than the retiring Agent shall thereafter have such rights
and obligations inter se as they would have if the
successor agent so appointed had been named herein as the
Agent.
Until the Borrower receives written notice of the appointment of
a new Agent, the Borrower shall be entitled to continue to send
notices and payments to the previously appointed Agent and
otherwise to treat such Agent as the Agent for purposes of this
Agreement.
21.10 If any Reference Bank shall be prepaid under this Agreement or shall
cease to have any Commitment or after the Second Restatement Date cease
to have any principal or interest owing to it hereunder, the Agent may
in consultation with the Banks and the Borrower appoint a substitute
Reference Bank.
21.11 The provisions of this ARTICLE 21 are solely for the benefit of the
Agent and the Banks and neither the Borrower nor any Subsidiary or
Affiliate of the Borrower shall have any rights (whether as third party
beneficiary or otherwise) except as specifically provided herein.
ARTICLE 22. NO WAIVER
No failure to exercise and no delay in exercising on the part of the
Agent or any Bank of any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or future exercise thereof, or the exercise of any
other right, power or privilege. The rights and privileges herein provided are
cumulative and not exclusive of any rights or remedies provided by law in equity
or otherwise. This Agreement may be amended and any provision of this Agreement
may be waived only with the consent of the Majority Banks, provided, however,
that no amendment or waiver shall, unless in writing and signed by each Bank
affected thereby, do any of the following:
(1) reduce the principal or the rate of interest payable by
the Borrower on any Loan or reduce any fees payable to the
Banks under this Agreement;
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(2) postpone the date fixed for the payment of principal of or
interest on the Loan or any fees to the Banks under this
Agreement;
(3) increase the Commitment of any Bank or subject any Bank to
any additional obligation to make Loans; or
(4) amend this ARTICLE 22;
provided, further, that no amendment or waiver shall be effected which releases
or impairs or otherwise compromises any Collateral or substitutes Collateral
without the prior written consent of the Majority Banks (662/3%) other than in
the case of the NL Undertaking for which the consent of the Majority Banks shall
be required; and provided further that no such amendment or waiver or consent,
as the case may be, which has the effect of (i) increasing the duties or
obligations of the Agent under this Agreement or of the Agent under any other
Loan Document, or (ii) increasing the standard of care or performance required
on the part of the Agent under this Agreement or of the Agent under any other
Loan Document, or (iii) reducing or eliminating the indemnities or immunities to
which the Agent is entitled hereunder (including any amendment or modification
of this ARTICLE 22), shall be effective unless the same shall be signed by or on
behalf of the Agent.
ARTICLE 23. PARTIAL INVALIDITY; CHANGE IN ACCOUNTING PRINCIPLES
23.01 If at any time any provision of this Agreement or other Loan Documents
to which the Borrower or any of its Affiliates is a signatory is or
becomes illegal, invalid or unenforceable in any respect under the law
of any jurisdiction, the legality, validity or enforceability of the
remaining provisions under this Agreement or such Loan Document shall
not in any way be affected or impaired thereby. Such illegal, invalid or
unenforceable provisions shall be replaced by legal, valid and
enforceable provisions, the economic and legal effects of which are as
close as possible to that of the invalid illegal or unenforceable
provisions.
23.02 If any changes in German GAAP or other applicable accounting principles
after the First Restatement Date result in a change of the
interpretation, calculation or method of calculation of financial
covenants, ratios, standards or terms contained in this Agreement (the
"Financial Covenants") which is materially different from the
interpretation, calculation or method of calculation of the Financial
Covenants on the First Restatement Date, the parties hereto agree to
enter into negotiations with a view to amending the Financial Covenants
so that the criteria for evaluating the financial condition of the
Borrower and its Subsidiaries shall be the same as if such change had
not been made.
ARTICLE 24. ASSIGNMENTS, PARTICIPATION
24.01 The Borrower may not assign or transfer all or any of its rights,
benefits and obligations under this Agreement without the prior written
consent of the Majority Banks (662/3%); provided, however, that nothing
in this SECTION 24.01 shall affect the ability of the
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Borrower to merge or consolidate in accordance with the terms of SECTION
16.10.
24.02 (a) Notwithstanding any other provision contained in this
Agreement or any other documents, no Bank may assign or transfer
any of its interests under this Agreement except in accordance
with the provisions of this SECTION 24.02 and no Bank may
transfer, assign or grant participations in its rights and/or
delegations under this Agreement except in accordance with this
SECTION 24.02; provided, however, that nothing in this SECTION
24.02 or in this Agreement shall prevent, subject to SECTION
24.03, any Bank assigning or granting participations in such
Bank's interests under this Agreement to such Bank's parent bank
holding company or to any affiliate in which such Bank or parent
bank holding company has the power to vote at least 33 1/3% of
the voting securities issued by such affiliate for the election
of the board of directors (or members of an equivalent governing
body), provided, however, that such affiliate assignee may only
further assign or subparticipate its interests in Loans pursuant
to the terms of this ARTICLE 24 and provided, however, that such
affiliate assignee cannot further assign or subparticipate its
interests in Loans to any Person which is an affiliate pursuant
to the provisions of SECTION 24.02(A).
(b) Each Bank shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and
obligations under this Agreement on the basis and subject to the
conditions set forth below in this SUBSECTION 24.02(B).
(i) Each Bank may assign all or a portion of its rights and
obligations under this Agreement to any Person in
accordance with the terms of this SECTION 24.02. The
parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording, an
Assignment and Acceptance substantially in the form of
EXHIBIT A together with a processing and recordation fee
of DM 1,000 (Deutsche Mark One Thousand). Upon such
execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least 5
(five) Business Days after the execution thereof (or such
earlier date as shall have been agreed to by the assignor
Bank, the assignee and the Agent), (A) 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 Bank hereunder and (B) the
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 Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
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(ii) Each Bank may sell participations to one or more banks or
other financial institutions in all or a portion of its
rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and
the Loans owing to it); provided, however, that (A) such
Bank shall remain a "Bank" for all purposes of this
Agreement and the transferee of such participation shall
not constitute a Bank hereunder, (B) such Bank's rights
and obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder)
shall remain unchanged, (C) no notice to or filing
(including the filing of any registration or similar
statement) with any governmental authority or regulatory
body is required in connection with any participation, (D)
such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(E) the Borrower, the Guarantors, the Agent and the other
Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
under this Agreement and (F) any agreement pursuant to
which any Bank grants a participation in its rights with
respect to the Loan shall provide that, with respect to
such Loan, such Bank shall retain the sole right and
responsibility to exercise the rights of such Bank, and
enforce the obligations of the Bor rower relating to such
Loan, including without limitation the right to approve
any amendment, modification or waiver of any provision of
this Agreement or any other Loan Documents and the right
to take action to have the Loan declared due and payable
pursuant to ARTICLE 18, provided that such participation
agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement or any
of the other Loan Documents without the consent of the
participant that would:
(1) reduce the principal or the rate of interest
payable by the Borrower on any Loan or reduce any
fees payable under this Agreement;
(2) postpone any date fixed for the payment of
principal of or interest on the Loan or any fees
under this Agreement;
(3) increase the Commitment of any Bank or subject any
Bank to any additional obligation to make Loans; or
(4) amend ARTICLE 22 or any other provision of this
Agreement requiring the consent or other action of
all the Banks.
No participant shall have any rights under this Agreement
to receive payments pursuant to SECTION 11.01 AND 14.01.
24.03 Assignments under this Agreement, including assignments made to an
Affiliate of a Bank in accordance with SECTION 24.02(A), are subject to
the condition that if, at the time of such assignment, the assignee
would be subject to any greater Taxes than those to which
122
the assignor Bank is then subject, or thereafter, if the assignee would
at any time be subject to any greater Taxes than those to which the
assignor Bank would at such time have been subject, the assignee Bank
shall and does hereby waive any right to claim and receive Taxes and
additional amounts payable pursuant to SECTIONS 11.01 AND 14.01 in
respect of the excess of the Taxes and additional amounts applicable to
it over the Taxes and additional amounts applicable to the assignor
Bank.
24.04 By executing and delivering an Assignment and Acceptance, the assignor
Bank 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 assignor Bank 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 the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the
Loan Documents, the Collateral or any other instrument or document
furnished pursuant hereto; (ii) such assignor Bank makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower, any Pledgor, any Guarantor or
their Affiliates or the performance or observance by the Borrower or any
such Pledgor, Guarantor or Affiliate of any of its obligations under
this Agreement, other Loan Documents or any other instrument or document
furnished pursuant hereto or 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 15.11 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 assignor Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement or any of the other Loan Documents; (v) such
assignee appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vi) 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
Bank.
24.05 The Agent shall maintain at its address referred to below a copy of each
Assignment and Acceptance delivered to and accepted by it and records of
the names and addresses of the Banks and the Commitment (including the
Revolving Commitment) of, and principal amount of the Loan (including
each portion thereof) owing to, each Bank from time to time. The entries
in such records shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Banks may treat each
Person whose name is recorded in such records as a Bank hereunder for
all purposes of this Agreement. The records shall be available for
inspection by the Borrower or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
24.06 Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, the Agent shall, if such Assignment and
Acceptance has been completed and is
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in substantially the form of EXHIBIT A hereto, as the case may be, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein, and (iii) give prompt notice thereof to the Borrower.
24.07 Each of the Agent and each Bank which is a signatory to this Agreement
shall execute a Confidentiality Agreement in the form of EXHIBIT S
attached hereto on or prior to the date of its execution of this
Agreement. Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
ARTICLE 24 disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower or its
Affiliates furnished to such Bank by or on behalf of the Borrower or its
Affiliates; provided that, prior to the disclosure of confidential
information concerning the Borrower or its Affiliates, the assignee or
participant or proposed assignee or participant shall execute and
deliver to the Borrower a Confidentiality Agreement in the form of
EXHIBIT S.
ARTICLE 25. LANGUAGE
Each document, instrument, certificate and statement referred to herein
or to be delivered hereunder shall, if not in the English language, be
accompanied by an English translation thereof. In the case of conflict between
any original document not in the English language and the English translation
thereof, the language of the original document shall prevail.
ARTICLE 26. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by courier service or
first class prepaid mail (airmail if to an address in a foreign country from the
party writing) and shall be deemed to have been given when delivered in person
or by courier service, upon transmission of a telecopy or telex or four (4) days
after deposit in the mail (registered, with postage prepaid and properly
addressed). Notices to Agent shall not be effective until received by the Agent.
For the purposes hereof, the addresses of the parties hereto (until 15 (fifteen)
days' prior written notice of a change thereof is delivered as provided in this
ARTICLE 26) shall be as set forth below each party's name on the signature pages
hereof.
ARTICLE 27. LIMITATION ON SPECIAL DAMAGES
EACH OF THE BORROWER AND KRONOS TITAN HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, SUFFERED BY THE
BORROWER OR ANY AFFILIATE, IN CONNECTION WITH ANY CLAIM (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED
WITH THIS AGREEMENT AND/OR ANY OTHER LOAN DOCUMENTS, WHETHER SUCH CLAIM IS
ASSERTED BEFORE OR AFTER REPAYMENT IN FULL OF ALL OF THE BORROWER'S AND/OR
KRONOS TITAN'S OBLIGATIONS.
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ARTICLE 28. APPLICABLE LAW; JURISDICTION; SERVICE OF PROCESS
THIS AGREEMENT, AND THE RELATIONSHIP OF THE PARTIES ESTABLISHED BY THIS
AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
GERMANY. EACH OF THE BORROWER AND KRONOS TITAN HEREBY AGREES THAT ALL CLAIMS OR
SUITS OF ANY NATURE, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES ESTABLISHED BY
THIS AGREEMENT SHALL BE RESOLVED EXCLUSIVELY BEFORE THE LANDGERICHT MUENCHEN I
(COURT OF MUNICH), IN GERMANY, AND EACH OF THE BORROWER AND KRONOS TITAN HEREBY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF SAID COURT. NOTHING IN THIS ARTICLE 28
SHALL AFFECT (I) THE RIGHT OF THE AGENT AND THE BANKS TO BRING AN ACTION OR
PROCEEDING AGAINST THE BORROWER OR KRONOS TITAN OR ANY OF ITS PROPERTIES OR
AGAINST ANY OF ITS SUBSIDIARIES IN THE COURT OF ANY OTHER JURISDICTION OR (II)
THE RIGHT OF THE BORROWER OR KRONOS TITAN TO BRING AN ACTION OR PROCEEDING
AGAINST THE AGENT OR THE BANKS ARISING UNDER ANY CONFIDENTIALITY AGREEMENT
EXECUTED PURSUANT TO SECTION 24.07. The Borrower, in connection
with the Original Agreement, and pursuant to a Form of Designation of Process
Agent dated May 30, 1990, designated, appointed and empowered Dr. Wienand
Meilicke, with offices at Poppelsdorfer Allee 106, 5300 Bonn 1, Germany, as its
designee, appointee and agent to secure, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. The Borrower hereby ratifies and confirms such designation,
appointment and empowerment, and hereby agrees to appoint a substitute person
upon the death or removal of Dr. Meilicke pursuant to a designation
substantially identical to that previously delivered to the Agent or otherwise
in form and substance reasonably satisfactory to the Agent.
ARTICLE 29. COUNTERPARTS
This Agreement may be executed and delivered in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same instrument and shall become
effective when copies thereof, bearing the signatures of each of the parties
hereto, shall have been received by the Agent and the Borrower.
ARTICLE 30. FURTHER ASSURANCES
In addition to the acts recited herein and contemplated to be performed,
executed and/or delivered by the Borrower, the Borrower hereby agrees, at any
time, and from time to time, to perform, execute and/or deliver to the Agent
upon request, any and all such further acts, additional agreements, documents
and instruments (including, without limitation, estoppel certificates stating
that the Loan is in full force and effect and that there are no defenses,
counterclaims or offsets thereto), or further assurances as may be necessary or
proper to assure the rights and remedies intended to be granted or conveyed to
the Agent and the Banks under this
125
Agreement or any of the other Loan Documents; and create, perfect, preserve,
maintain and protect the liens and security interests created or intended to be
created by the Loan Documents.
ARTICLE 31. CONSTRUCTION
The terms and provisions of this Agreement and the wording used herein
shall in all cases be interpreted and construed simply in accordance with their
fair meanings and not strictly for or against any party hereto.
ARTICLE 32. ENTIRE AGREEMENT
This Agreement and the other Loan Documents constitute the entire
agreement with respect to the matters set forth herein and therein, and all
prior negotiations, drafts and other writings that do not constitute a part of
the Loan Documents but which relate to the subject matter of this Agreement or
the other Loan Documents are merged herein and therein and are superseded,
nullified and canceled by this Agreement and the other Loan Documents; provided,
however, that the Original Agreement shall remain in effect as to the period
from May 30, 1990 to the First Restatement Date and the First Restated Agreement
shall remain in effect as to the period from the First Restatement Date to the
Second Restatement Date. This Agreement shall become effective as of the Second
Restatement Date when executed by the Borrower, Kronos Titan, the Agent and the
Majority Banks and, if and when so executed, shall constitute an amendment and
restatement of the First Restated Agreement.
ARTICLE 33. SURVIVAL OF WARRANTIES AND AGREEMENTS
All statements contained in this Agreement or any of the other Loan
Documents, or any certificate, financial statement or other written material
delivered by the Borrower to the Agent or the Banks pursuant to or in connection
with this Agreement or any other Loan Document shall constitute representations
and warranties made under this Agreement. All agreements, representations and
warranties made herein shall survive, and shall not be waived by, the execution
and delivery of this Agreement and the other Loan Documents, and any
investigation by the Agent or any Bank. The obligations of the Borrower under
ARTICLES 11, 12, 14, 19 and 20 shall survive, and not be waived by, the
repayment of Borrower's obligations under this Agreement.
ARTICLE 34. NO THIRD PARTY BENEFICIARIES
The covenants contained herein and in all other Loan Documents to be
kept by Borrower and/or Kronos Titan or the Agent and the Banks are intended
solely for the benefit of the Borrower, the Agent and the Banks, respectively,
and are not intended for the benefit of any other Person. No Person other than
Borrower may compel the disbursement of Loans hereunder. No provisions in this
Agreement or actions taken by the Agent or the Banks under this Agreement shall
be construed as an assumption of any undertaking to protect third parties and
all such provisions and actions are solely for the protection of the Agent and
the Banks.
126
ARTICLE 35. NO NOVATION
This Agreement shall not result in or be deemed to be a novation of the
Loan or any portion thereof. Without limiting the generality of the foregoing,
the division of the Loan into the Term Portion and the Revolving Portion, and
the division of the Revolving Portion into the Kronos Titan Revolving Portion
and the portion that is not the Kronos Titan Revolving Portion, shall not result
in or be deemed to be a repayment or an extinguishment of any portion of the
Loan.
ARTICLE 36. MISCELLANEOUS
36.01 The parties hereto agree that a matter that is not a breach of the
representation set forth in SECTION 15.21(E) shall not be, or be claimed
to be, a breach of the representation set forth in SECTION 15.21(A).
36.02 The Banks hereby agree that the consummation of the Kronos (US)/Kronos
Flip shall not, in and of itself, be deemed to result in a "Kronos MAC"
as such term is defined in the Original Agreement.
36.03 Subject to the Borrower's compliance with Section 8.01(a) and the other
terms of this Agreement, the Agent shall have the authority and
obligation to release any Collateral (a) consisting of the Stock of any
Pledged Subsidiary, which Stock is transferred to another Subsidiary
with the approval of the Majority Banks pursuant to Section 16.09(f)
(except to the extent that such approval is conditioned upon there not
being a release of such Collateral), (b) consisting of the Stock of any
Pledged Subsidiary that is a party to a merger permitted by (and
approved in accordance with, if applicable) Section 16.10 if (i) such
Pledged Subsidiary is not the surviving entity in such merger, (ii) such
release occurs concurrently with or after such merger and (iii)
concurrently with such release, the Agent (on behalf of the Banks)
receives a valid and enforceable first priority perfected security
interest in the Stock of the entity surviving such merger, and (c)
consisting of all of the issued and outstanding Stock of any Pledged
Subsidiary owned by the Borrower if (i) such Stock is sold, in
compliance with this Agreement, to a Person who is not an Affiliate of
the Borrower for an amount equal to or greater than its fair market
value and (ii) all Net Proceeds from such sale shall be, promptly upon
the occurrence of such sale and concurrently with such release, applied,
first, as a prepayment of the principal of the Loan in the manner stated
in Section 8.01(b), second (if any such Net Proceeds remain after all
principal of the Loan is paid in full) to interest accrued and unpaid on
the Loan and, third (if any such Net Proceeds remain after all interest
accrued on the Loan is paid in full), to pay any additional amounts due
and owing to the Agent and/or any Bank under the Loan Documents.
127
36.04 If and to the extent that such approval is necessary, the Banks hereby
approve consummation of the following transactions:
(a) the cross-licensing and transfer of technology between the
"Kronos Group" and the "Tioxide Group", and the licensing of
technology to the joint venture that will acquire the plant of
Kronos Louisiana, Inc., pursuant to that certain Master
Technology Exchange Agreement dated October 15, 1993 among
Kronos, the Borrower, Kronos Louisiana, Inc., Tioxide Group
Limited and Tioxide Group
Services Limited;
(b) the execution of an amendment to that certain Trademark Use
Agreement among Kronos (US), Kronos, Kronos Titan and Kronos
Titan A/S dated as of May 30, 1990 to take account of the
assignment of trademarks from Kronos (US) to Kronos;
(c) the execution of an amendment to that certain License Agreement
between Kronos and Kronos Titan A/S dated as of October 1, 1966,
pursuant to which the royalty rate payable by Kronos Titan A/S to
Kronos is reduced from 7% to 5% of annual net sales; and
(d) the execution of supplementary agreements dated as of December
27, 1990 and July 16, 1991 implementing the mechanism for
paragraphs II.G and II.H of the Amended and Restated Technology
Transfer and License Agreement between Kronos and Kronos Titan
dated as of May 30, 1990.
IN WITNESS WHEREOF the hands of the duly authorized representatives of
the parties hereto the day and year first before written.
128
THE BORROWER KRONOS INTERNATIONAL, INC.
By: /s/ E. Gaertner
Name: E. Gaertner
Title: President
By: /s/ V. Roth
Name: V. Roth
Title: Vice President/Controller
Address for Notices:
Peschstrasse 5
51373 Leverkusen 1
Germany
Attention: Volker Roth
Telefax: 0214-42150
Copy to:
NL Industries, Inc.
70 East 55th Street
New York, New York 10022
Attention: Susan E. Alderton
Telefax: 212-421-7209
129
The undersigned, Kronos Titan - GmbH, executes this Agreement for the
limited purposes of agreeing to all of the terms and provisions contained in
this Agreement in any way relating to or in connection with (a) the Kronos Titan
Revolving Portion, including, without limitation, the borrowing of the Kronos
Titan Revolving Portion and the repayment of the principal of the Kronos Titan
Revolving Portion, the payment of interest accrued on such principal and the
payment of all fees accrued with respect to the Kronos Titan Revolving Portion
in accordance with SECTION 2.04, ARTICLE 8 and SECTION 19.03 and (b) ARTICLES 27
and 28.
KRONOS TITAN KRONOS TITAN - GMBH
By: /s/ E. Gaertner
Name: E. Gaertner
Title: Company Manager
By:
Name:
Title:
Address for Notices:
51373 Leverkusen 1
Germany
Attention: Volker Roth
Telefax: 0214-42150
Copy to:
NL Industries, Inc.
70 East 55th Street
New York, New York 10022
Attention: Susan E. Alderton
Telefax: 212-421-7209
130
THE AGENT AND A BANK HYPOBANK INTERNATIONAL S.A.
By: /s/ Michael Bisch
Name: Michael Bisch
Title: Charge de Service
By: /s/ Erwin Moos
Name: Erwin Moos
Title: Vice President
Address for Notices:
4, rue Alphonse Weicker
L-2099 Luxembourg
Attention: Michael Bisch
Phone: 011-352-4272-2151
Fax: 011-352-4272-4510
Lending Office:
4, rue Alphonse Weicker
L-2099 Luxembourg
Attention: Michael Bisch
Phone: 011-352-4272-2151
Fax: 011-352-4272-4510
131
ABN-AMRO BANK (DEUTSCHLAND) AG
NIEDERLASSUNG DUESSELDORF
By:
Volker Haubrich
Title:
By:
Roland Lukas
Title:
ADDRESS FOR NOTICES:
Berliner Allee 41
D-40212 Duesseldorf
Attention: Volker Haubrich
Roland Lukas
Phone: 49-211-8770-117
Fax: 49-211-8770-125
LENDING OFFICE:
Berliner Allee 41
D-40212 Duesseldorf
Attention: Volker Haubrich
Roland Lukas
Phone: 49-211-8770-117
Fax: 49-211-8770-125
132
ARAB BANKING CORPORATION B.S.C.
By: /s/ Wahid O. Bugaighis
Name: Wahid O. Bugaighis
Title: Fist Vice President
By: /s/ Stephen A. Plauche
Name: Stephen A. Plauche
Title: Vice President
ADDRESS FOR NOTICES:
277 Park Avenue, 32nd Floor
New York, New York 10172
Attention: R. Hassan/Susan Williams
Phone: 212-583-4770/71
Fax: 212-583-0921/32
LENDING OFFICE:
Arab Banking Corporation (B.S.C.)
Grand Cayman Branch
c/o 277 Park Avenue, 32nd Floor
New York, New York 10172
Attention: R. Hassan/Susan Williams
Phone: 212-583-4770/71
Fax: 212-583-0921/32
133
BAHRAIN MIDDLE EAST BANK E.C.
By: /s/ Albert I. Kittaneh
Name: Albert I. Kittaneh
Title: Chief Executive
ADDRESS FOR NOTICES:
BMB Centre, Diplomatic Area
P. O. Box 797
Manama, Bahrain
Attention: K.S. Ganesh
Vice President
Phone: 973-528138
Fax: 973-536312
LENDING OFFICE:
BMB Center, Diplomatic Area
P. O.Box 797
Manama, Bahrain
Attention: K.S. Ganesh
Vice President
Phone: 973-528138
Fax: 973-536312
134
BANK HAPOALIM BM
By: /s/ Conrad Wager
Name: Conrad Wagner
Title: First Vice President
By: /s/ Shaun Breidbart
Name: Shaun Breidbart
Title: Assistant Vice President
ADDRESS FOR NOTICES:
1177 Avenue of the Americas
New York, New York 10036
Attention: Conrad Wagner
Phone: 212-782-2176
Fax: 212-782-2187
LENDING OFFICE:
1177 Avenue of the Americas
New York, New York 10036
Attention: Conrad Wagner
Phone: 212-782-2176
Fax: 212-782-2187
135
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ A. G. Tucker
Name: A. G. Tucker
Title: Vice President
ADDRESS FOR NOTICES:
1, Alie Street
London EC1 8DE
England
Attention: A. G. Tucker
Phone: 44-171-634-4728
Fax: 44-171-634-4968
LENDING OFFICE:
1, Alie Street
London EC1 8DE
Attention: A. G. Tucker
Phone: 44-171-634-4728
Fax: 44-171-634-4968
136
BANK OF MONTREAL
By: /s/ Michael J. Solski
Name: Michael J. Solski
Title: Director
ADDRESS FOR NOTICES:
115 South LaSalle Street, 11th Floor
Chicago, Illinois 60603
Attention: Farid Ali
Phone: 312-750-3727
Fax: 312-750-3798
LENDING OFFICE:
Corporate and Institutional Financial Services
24th Floor, First Bank Tower
First Canadian Place, P. O. Box 1
Toronto, Ontario M5X 1A1
Attention: Michael J. Solski
Phone: 416-867-6968
Fax: 417-867-6366
137
BANK OF SCOTLAND
By: /s/ Catherine M. Oniffrey
Name: Catherine M. Oniffrey
Title: Vice President
ADDRESS FOR NOTICES:
565 Fifth Avenue, 5th Floor
New York, New York 10017
Attention: Catherine M. Oniffrey
Fax: 212-557-9460
WITH A COPY TO:
Bank of Scotland
Houston Representative Office
1750 Two Allen Center
1200 Smith Street
Houston, Texas 77002
Attention: Justin M. Alexander
Phone: 713-651-1870
Fax: 713-651-9714
LENDING OFFICE:
Bank of Scotland
Grand Cayman Branch
565 Fifth Avenue, 5th Floor
New York, New York 10017
Attention: Catherine M. Oniffrey
Fax: 212-557-9460
138
BANKERS TRUST COMPANY
By: /s/ Michael Dent
Name: M. Dent
Title: Managing Director
ADDRESS FOR NOTICES:
1 Appold Street, Broadgate
London EC2A 2HE
Attention: Simon Alloway/Robert Foulston
Phone: 44-171-982-3302
Fax: 44-171-982-1902
LENDING OFFICE:
1 Appold Street, Broadgate
London EC2A 2HE
Attention: Simon Alloway/Robert Foulston
Phone: 44-171-982-3302
Fax: 44-171-982-5833
139
BANQUE ET CAISSE D'EPARGNE DE L'ETAT,
LUXEMBOURG
By: /s/ John Dhur
Name: John Dhur
Title: Sous Director
ADDRESS FOR NOTICES:
1, place de Metz
L-2954 Luxembourg
Attention: Jean Pierre Thein
Phone: 352-4015-4337
Fax: 352-4015-4284
LENDING OFFICE:
1, place de Metz
L-2954 Luxembourg
Attention: Jean Pierre Thein
Phone: 352-4015-4337
Fax: 352-4015-4284
140
BANQUE INDOSUEZ
By: /s/ Jerome Sanzo
Name: Jerome Sanzo
Title: First Vice President
By: /s/ Jaime Silver
Name: Jaime Silver
Title: Vice President
ADDRESS FOR NOTICES:
1211 Avenue of the Americas
New York, New York 10036
Attention: Jaime Silver/Raymond Wright
Phone: 212-278-2544
Fax: 212-278-2759
LENDING OFFICE:
1211 Avenue of the Americas
New York, New York 10036
Attention: Raymond Wright
Loan Department
Phone: 212-278-2000
Fax: 212-278-2502
141
BANQUE INTERNATIONALE A LUXEMBOURG
S.A.
By: /s/ Yves Lahaye
Name: Yves Lahaye
Title: Vice President
By: /s/ Claude Lehnertz
Name: Claude Lehnertz
Title: Vice President
ADDRESS FOR NOTICES:
69, route d'Esch
L-2953 Luxembourg
Attention: Guy Denys/Simon Hauxwell
Phone: 352-4590-2564
Fax: 352-4590-3855
LENDING OFFICE:
69, route d'Esch
L-2953 Luxembourg
Attention: Guy Denys/Simon Hauxwell
Phone: 352-4590-2564
Fax: 352-4590-3855
142
CHRISTIANIA BANK OG KREDITKASSE ASA
By: /s/ Stein H. Offenberg
Name: Stein H. Offenberg
Title: Senior Vice President
ADDRESS FOR NOTICES:
P. O. Box 1166 Sentrum
N-0107 Oslo
Norway
Attention: Stein H. Offenberg
Phone: 47-22-48-69-59
Fax: 47-22-56-40-83
WITH A COPY TO:
International Loan Administration
P. O. Box 1166 Sentrum
N-0107 Oslo
Norway
Attention: Aud Sandnes
Phone: 47-22-48-47-26
Fax: 47-22-48-54-97
LENDING OFFICE:
P. O. Box 1166 Sentrum
N-0107 Oslo
Norway
Attention: Stein H. Offenberg
Phone: 47-22-48-69-59
Fax: 47-22-56-40-83
143
DLJ CAPITAL FUNDING, INC.
By: /s/ Stephen P. Hickey
Name: Stephen P. Hickey
Title: Managing Director
ADDRESS FOR NOTICES:
525 Washington Boulevard
Newport Tower
Jersey City, NJ 07310
Attention: Ed Vowinkel
Phone: 201-610-1971
Fax: 201-610-1965
WITH A COPY TO:
c/o DLJ International
Moorgate Hall, 155 Moorgate
London, EC 2M 6XB
Attention: Pam Carter
Phone: 44-171-628-0869
Fax: 44-171-814-7224
and
DLJ Capital Funding, Inc.
277 Park Avenue, 9th Floor
New York, New York 10172
Attention: Mr. Donald Pollard
Phone: 212-892-5475
Fax: 212-892-5286
LENDING OFFICE:
525 Washington Boulevard
Newport Tower
Jersey City, NJ 07310
Attention: Ed Vowinkel
Phone: 201-610-1971
Fax: 201-610-1965
144
FUJI BANK (LUXEMBOURG) S.A.
By: /s/ Tadashi Omiya
Name: Tadashi Omiya
Title: Managing Director
ADDRESS FOR NOTICES:
29, Avenue de la Porte Neuve
2227 Luxembourg
Attention: Loan Department
Phone: 352-474-681
Fax: 352-474-688
WITH A COPY TO:
The Fuji Bank, Limited
One Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Philip C. Lauinger, III
Phone: 713-650-7852
Fax: 713-759-0048
LENDING OFFICE:
29, Avenue de la Porte Neuve
2227 Luxembourg
Attention: Loan Department
Phone: 352-474-681
Fax: 352-474-688
145
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Frederik W. Aase
Name: Frederik W. Aase
Title: Vice President
By:
Name:
Title:
ADDRESS FOR NOTICES:
Grand Cayman Branch
One State Street
New York, New York 10004
Attention: Frank DeLillo/Frederik W. Aase
Phone: 212-858-2786
Fax: 212-858-2115
LENDING OFFICE:
Grand Cayman Branch
One State Street
New York, New York 10004
Attention: Frank DeLillo/Frederik W. Aase
Phone: 212-858-2786
Fax: 212-858-2222
146
MERITA BANK LTD.
By: /s/ Esa Tuomi
Name: Esa Tuomi
Title: Vice President
By: /s/ Aimo Vitie
Name: Aimo Vitie
Title: Vice President
ADDRESS FOR NOTICES:
2627 International Credits
FIN-00020 Merita
Attention: Pirkko Relander/Borje Lindblom
Phone: 358-9-165-55590
Fax: 358-9-165-52820
LENDING OFFICE:
2627 International Credits
FIN-00020 Merita
Attention: Pirkko Relander/Borje Lindblom
Phone: 358-9-165-55590
Fax: 358-9-165-52820
147
SCHRODER MUENCHMEYER HENGST & CO.
By: /s/ Thomas W. Benger
Name: Thomsa W. Benger
Title:
By: /s/ David E. Watson
Name: David E. Watson
Title:
ADDRESS FOR NOTICES:
Friedensstrasse 6-10
D-60311 Frankfurt am Main
Attention: Thomas W. Benger
Phone: 49-69-2179-562
Fax: 49-69-2179-591
LENDING OFFICE:
Friedensstrasse 6-10
D-60311 Frankfurt am Main
Attention: Thomas W. Benger
Phone: 49-69-2179-562
Fax: 49-69-2179-591
148
SWISS BANK CORPORATION
New York and Cayman Islands Branches
By: /s/ Nicolas T Erni
Name: Nicolas T. Erni
Title: Director
By: /s/ William A. Roche
Name: William A. Roche
Title: Restructuring
ADDRESS FOR NOTICES:
New York and Cayman Islands Branches
222 Broadway
New York, New York 10038
Attention: Elizabeth Burnett
Phone: 212-574-3000
Fax: 212-574-3162
LENDING OFFICE:
New York and Cayman Islands Branches
222 Broadway
New York, New York 10038
Attention: Nicolas T. Erni
Phone: 212-574-3443
Fax: 212-574-3162
149
THE BANK OF NOVA SCOTIA
By: /s/ R. A. Millard
Name: R. A. Millard
Title: Relationship Manager
ADDRESS FOR NOTICES:
1100 Louisiana Street
Houston, Texas 77002
Attention: Bryan Bulawa
Phone: 713-752-0900
Fax: 713-752-2425
LENDING OFFICE:
Scotia House
33 Finsbury Square
London EC2A 1BB
Attention: R. A. Millard/J.W. Stevens
Phone: 44-171-454-5758
Fax: 44-171-454-9019
150
THE CHUO TRUST AND BANKING CO., LTD.
By: /s/ Mr. Y. Ueda
Name: Mr. Y. Ueda
Title: Deputy General Manager
ADDRESS FOR NOTICES:
Woolgate House
Coleman Street
London EC2R 5AT
Attention: Paul Glynn/R. Weir
Phone: 44-171-726-6050
Fax: 44-171-606-8061
LENDING OFFICE:
Woolgate House
Coleman Street
London EC2R 5AT
Attention: Paul Glynn/R. Weir
Phone: 44-171-726-6050
Fax: 44-171-606-8061
151
SCHEDULE 1
152
SCHEDULE 2
INDEBTEDNESS
153
SCHEDULE 3
LIENS
154
SCHEDULE 4
CERTAIN LEGAL MATTERS
155
SCHEDULE 5
LITIGATION
156
SCHEDULE 6
ERISA AND NON-U.S. EMPLOYEE PLANS
157
SCHEDULE 7
SUBSIDIARIES
158
SCHEDULE 8
LICENSE AGREEMENTS AND INTELLECTUAL PROPERTY RIGHTS
159
SCHEDULE 9
AFFILIATE TRANSACTIONS
160
SCHEDULE 10
INSURANCE
161
SCHEDULE 11
TAX INFORMATION
162
SCHEDULE 12
CERTAIN LOAN AGREEMENTS
163
SCHEDULE 13
CERTAIN MATERIAL ASSETS
164
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
165
EXHIBIT B
FORM OF MIRROR NOTES
166
EXHIBIT C
SUBORDINATED LOAN DOCUMENTS
167
EXHIBIT D
FORMS OF AMENDMENTS AND/OR REAFFIRMATIONS
OF PLEDGE AGREEMENTS
168
EXHIBIT E
FORMS OF AMENDMENTS AND/OR
REAFFIRMATIONS OF GUARANTIES
169
EXHIBIT F
FORM OF SECOND AMENDED AND RESTATED TECHNOLOGY
AND TRADEMARK UNDERTAKING
170
EXHIBIT G
FORM OF AMENDMENT AND/OR REAFFIRMATION OF
SUBORDINATION AND CONTRIBUTION AGREEMENT
171
EXHIBIT H
FORM OF SECOND AMENDED AND
RESTATED LIQUIDITY UNDERTAKING
172
EXHIBIT I
FORM OF ACKNOWLEDGMENT OF LIMITATION
OF SPECIAL DAMAGES
173
EXHIBIT J
FORM OF NL GUARANTY
174
EXHIBIT K
FORM OF CANADIAN SECURITY DOCUMENTS
175
EXHIBIT L
FORM OF NORDENHAM MORTGAGE
176
EXHIBIT M
FORMS OF CASH PLEDGE
AGREEMENTS OF THE BORROWER
177
EXHIBIT N
FORMS OF CASH PLEDGE AGREEMENTS
OF THE CANADIAN SUBSIDIARIES
178
EXHIBIT O
FORM OF SOLVENCY CERTIFICATE
179
EXHIBIT P
FORM OF NOTICE OF BORROWING
180
EXHIBIT Q
FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER
OF BORROWER AS TO ANNUAL FINANCIAL STATEMENTS
181
EXHIBIT R
FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER OF
BORROWER AS TO QUARTERLY FINANCIAL STATEMENTS
182
EXHIBIT S
FORM OF CONFIDENTIALITY AGREEMENT
183