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Exhibit 10.20
Conformed Copy
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GUARANTEE
made by
THE GEON COMPANY
in favor of
THE PURCHASERS
of
SUNBELT CHLOR ALKALI PARTNERSHIP
GUARANTEED SECURED SENIOR NOTES DUE 2017
SERIES 0
Dated as of December 22, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions .................................................... 1
Section 1.2. Other Definitional Provisions .................................. 8
ARTICLE II
GUARANTEE
Section 2.1. Guarantee ..................................................... 8
Section 2.2. Mandatory Purchase and Optional Purchases ..................... 9
Section 2.3. Right of Contribution ......................................... 10
Section 2.4. Limitation on Contribution and Subrogation .................... 10
Section 2.5. Amendments, etc. with respect to the Issuer Obligations........ 11
Section 2.6. Guarantee Absolute and Unconditional .......................... 12
Section 2.7. Reinstatement ................................................. 14
Section 2.8. Payments ...................................................... 15
Section 2.9. Ranking ....................................................... 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Organization; Power and Authority ............................. 15
Section 3.2. Authorization, etc ............................................ 15
Section 3.3. Disclosure .................................................... 16
Section 3.4. Financial Statements .......................................... 16
Section 3.5. Compliance with Laws, Other Instruments, etc .................. 16
Section 3.6. Governmental Authorizations, etc .............................. 17
Section 3.7. Status under Certain Statutes ................................. 17
ARTICLE IV
COVENANTS
Section 4.1. Statements by Officers as to Default .......................... 17
Section 4.2. Existence ..................................................... 18
Section 4.3. Maintenance of Properties ..................................... 18
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Section 4.4. Payment of Taxes and Other Claims ............................. 18
Section 4.5. Limitations on Liens .......................................... 19
Section 4.6. Limitation on Sale and Leaseback Transactions ................. 20
Section 4.7. Limitation on Consolidations, etc ............................. 20
ARTICLE V
MISCELLANEOUS
Section 5.1. Amendments in Writing ......................................... 24
Section 5.2. Notices 24
Section 5.3. No Waiver by Course of Conduct, Cumulative Remedies ........... 25
Section 5.4. Enforcement Expenses, Indemnification ......................... 25
Section 5.5. Successors and Assigns ........................................ 26
Section 5.6. Counterparts .................................................. 26
Section 5.7. Severability .................................................. 26
Section 5.8. Section Headings .............................................. 26
Section 5.9. Integration ................................................... 26
Section 5.10. Governing Law ................................................. 27
Section 5.11. Litigation; Waivers ........................................... 27
Section 5.12. WAIVER OF JURY TRIAL .......................................... 27
SCHEDULES
Schedule 3.3- DISCLOSURE OF ADDITIONAL INFORMATION
Schedule 5.2- NOTICE ADDRESSES OF GUARANTOR
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GUARANTEE
GUARANTEE, dated as of December 22, 1997, made by THE GEON COMPANY, a
Delaware corporation (the "Guarantor"), in favor of each of the holders of the
Guaranteed Secured Senior Notes due 2017, Series G (the "Series G Notes") issued
by Sunbelt Chlor Alkali Partnership (the "Issuer") pursuant to the Note Purchase
Agreements, each dated December 22, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Note Purchase Agreements"), between the Issuer
and each of the Purchasers.
RECITALS:
WHEREAS, pursuant to the Note Purchase Agreements, each of the
Purchasers has severally agreed to purchase its respective Series G Notes upon
the terms and subject to the conditions set forth therein;
WHEREAS, the Issuer is a Delaware general partnership between a
Subsidiary of the Guarantor and a Subsidiary of Olin; and
WHEREAS, it is a condition precedent to the obligation of the Purchasers
to purchase the Notes under the Note Purchase Agreements that the Guarantor
shall have executed and delivered this Guarantee for the ratable benefit of the
holders of the Series G Notes;
NOW, THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Note Purchase Agreements and to induce the
Purchasers to purchase their respective Notes, the Guarantor hereby agrees with
each Purchaser, for the ratable benefit of the Purchasers and the holders of the
Series G Notes, as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions. (a) Unless otherwise defined herein, terms
defined in the Note Purchase Agreements and used herein shall have the meanings
given to them in the Note Purchase Agreements.
(b) The following terms shall have the following meanings:
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"Attributable Value" means, as to any particular lease under which any
Person is at the time liable and at any date as of which the amount thereof is
to be determined, the total net amount of rent required to be paid by such
Person under such lease during the initial term thereof as determined in
accordance with generally accepted accounting principles, discounted from such
initial term date to the date of determination at a rate per annum equal to the
discount rate which would be applicable to a Capital Lease Obligation with like
term in accordance with generally accepted accounting principles. The net
amount of rent required to be paid under any such lease for any such period
shall be the lesser of: (1) the aggregate amount of rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of insurance, taxes, assessments, utility, operating and labor costs
and similar charges and (2) in the case of any lease which is terminable by the
lessee upon the payment of a penalty, the net amount calculated pursuant to (1)
but adjusted to also include the amount of such penalty and to exclude any rent
which would otherwise be required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
Indebtedness arrangements conveying the right to use) real or personal property
of such Person, which are required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of such Person under
GAAP.
"Debt" means any notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed.
"ERISA Affiliate" means any trade or business (whether or not incorpo-
rated) that is treated as a single employer together with the Guarantor under
section 414 of the Code.
"Guarantee" means this Guarantee, as the same may be amended, supple-
mented or otherwise modified from time to time.
"Guarantor" is defined in the preamble.
"Guarantor Event of Default" with respect to the Guarantor shall exist
if any of the following conditions or events shall occur and be continuing:
(a) the Guarantor defaults in the payment of any Guarantor
Obligation for more than five Business Days after the same becomes due
and payable; or
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(b) the Guarantor defaults in the performance of or compliance
with any term contained herein (other than those referred to in clause
(a)) and such default is not remedied within 30 days after the earlier
of (j) a Responsible Officer of the Guarantor obtaining actual
knowledge of such default and (ii) the Guarantor receiving written
notice of such default from any holder of a Note (any such written
notice to be identified as a "notice of default" and to refer
specifically to this clause (b) of this definition); or
(c) any representation or warranty made in writing by or on
behalf of the Guarantor in this Guarantee or any Related Document to
which it is a party or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(d) (j) the Guarantor or any of the Guarantor's Significant
Subsidiaries is in default (as principal or as guarantor or other
surety) in the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $25,000,000 beyond any period
of grace provided with respect thereto, or (ii) the Guarantor or any
of the Guarantor's Significant Subsidiaries is in default in the
performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least
$25,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been
declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder
of Indebtedness to convert such Indebtedness into equity interests),
(x) the Guarantor or any of the Guarantor's Significant Subsidiaries
has become obligated to purchase or repay an aggregate principal
amount of at least $25,000,000 of Indebtedness before its regular
maturity or before its regularly scheduled dates of payment, or (y)
one or more Persons have the exercisable right to require the
Guarantor or any of the Guarantor's Significant Subsidiaries to so
purchase or repay an aggregate principal amount of at least
$25,000,000 of Indebtedness; or
(e) the occurrence of a Bankruptcy Event with respect to the
Guarantor or any of the Guarantor's Significant Subsidiaries;
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(f) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 are rendered against the
Guarantor or any of the Guarantor's Significant Subsidiaries, which
judgments (j) are not within 60 days after entry thereof bonded,
discharged or stayed pending appeal; or (ii) are not discharged within
60 days after the expiration of such stay; or
(g) the Guarantee of the Guarantor shall cease to be in full
force and effect or the Guarantor or any person acting on behalf of
the Guarantor shall contest in any manner the validity, binding nature
or enforceability of this Guarantee.
"Guarantor Material Adverse Effect" means a material adverse effect on
(a) the financial condition or operations of the Guarantor and its Subsidiaries
taken as a whole, or (b) the ability of the Guarantor to perform its obligations
under this Guarantee, or (c) the validity or enforceability of this Guarantee or
any other Related Document to which the Guarantor is a party.
"Guarantor Obligations" means with respect to the Guarantor, the collec-
tive reference to (j) the Series G Issuer Obligations, (ii) the Guarantor
Portion of the Miscellaneous Issuer Obligations and (iii) all obligations and
liabilities of the Guarantor which may arise under or in connection with this
Guarantee or any other Related Document to which the Guarantor is a party, in
each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, out of pocket costs and expenses or otherwise
(including, without limitation, all reasonable fees and disbursements of
counsel to the Collateral Agent or to the Noteholders that are required to be
paid by the Guarantor pursuant to the terms of this Guarantee or any other
Related Document to which the Guarantor is a party).
"Guarantor Portion" means (a) at any time when the Olin Guarantee is no
longer in full force and effect, 100% or (b) Olin or any person acting on behalf
of Olin shall be contesting the validity, binding nature or enforceability of
the Olin Guarantee, 100%, provided that, if the foregoing occurs after a Default
or an Event of Default has occurred, 50%, or (c) after the occurrence of a
Bankruptcy Event in respect of Olin, 100%, or (d) if an Issuer Affiliate
acquires all of the outstanding Series G Notes or the Series G Notes are prepaid
or repaid in full, in each case together with all Miscellaneous Issuer
Obligations that the Guarantor would have been obligated to pay as of the date
of such purchase or payment, 0%, and (e) at any time when none of the preceding
clauses of this definition shall be applicable, 50%.
"Guarantor Transfer" is defined in Section 5.5.
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"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume as a direct obligation or a Contingent Obligation, or otherwise become
liable in respect of such Indebtedness or other obligation or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Indebtedness or other obligation on the balance sheet of any such
Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided, that a change in generally
accepted accounting principles that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an Incurrence of
such Indebtedness, and "Incur" means with respect to any Lien, to create, incur
or assume such Lien on any asset or property (and "Incurrence," "Incurred,"
"Incurable" and "Incurring" shall have meanings correlative to the foregoing).
"Issuer" is defined in the preamble.
"Issuer Affiliate" means the Guarantor, the Other Guarantor, the Issuer,
or any Affiliate of any of them.
"Issuer Obligations" means the collective reference to the unpaid
principal of and interest on the Series G Notes and all other obligations and
liabilities of the Issuer in respect of the Series G Notes (including, without
limitation, interest accruing at the then applicable rate provided in the Note
Purchase Agreements after the maturity of the Series G Notes and interest
accruing at the then applicable rate provided in the Note Purchase Agreements
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Issuer, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) and Make Whole Amount, if any, on the Series G Notes and all other
obligations and liabilities of the Issuer to the Collateral Agent or any
Noteholders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of' or in connection with, the Note Purchase Agreements and the other Issuer
Related Documents, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, out-of-pocket costs and expenses
or otherwise (including, without limitation, all reasonable fees and
disbursements of counsel to the Collateral Agent or to the Noteholders that are
required to be paid by the Issuer pursuant to the terms of any of the foregoing
agreements).
"Lien" means with respect to any property or asset, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential
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arrangement of any kind or nature whatsoever on or with respect to such property
or assets (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of
the foregoing).
"Material" or "material" means material in relation to the financial
condition or operation of the Guarantor.
"Miscellaneous Issuer Obligations" means the collective reference to all
obligations and liabilities of the Issuer to the Collateral Agent or any
Noteholders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Note Purchase Agreements and the other Issuer
Related Documents, in each case whether on account of reimbursement obligations,
fees, indemnities, out-of-pocket costs and expenses or otherwise (including,
without limitation, all reasonable fees and disbursements of counsel to the
Collateral Agent or to the Noteholders that are required to be paid by the
Issuer pursuant to the terms of any of the foregoing agreements), provided that
Miscellaneous Issuer Obligations shall not mean or include any Series 0 Issuer
Obligations or Series G Issuer Obligations.
"Note Purchase Agreements" is defined in the preamble.
"Notes" is defined in the Note Purchase Agreements.
"Obligations" means (j) in the case of the Issuer, the Issuer
Obligations, and (ii) in the case of the Guarantor, its Guarantor Obligations.
"Olin" means Olin Corporation, a Virginia corporation, in its capacity
as guarantor under the Olin Guarantee.
"Olin Guarantee" means the Guarantee, dated the date hereof, made by
Olin in favor of the Purchasers.
"Opinion of Counsel" means a written opinion of general counsel of the
Guarantor or other inside counsel for the Guarantor, who shall be acceptable to
the Required Holders.
"Other Guarantee" means the Olin Guarantee and any other guarantee by
any other Person of any portion of the Issuer Obligations.
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"Other Guarantor" means Olin, in its capacity as guarantor under the
Olin Guarantee, and any guarantor under any Other Guarantee.
"Sale and Leaseback Transaction" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor (or
pool thereof) or to which such lender or investor (or pool thereof) is a party,
providing for the leasing by such Person or any of its Subsidiaries of any
property or asset of such Person or any of its Subsidiaries which has been or is
being sold or transferred by such Person or such Subsidiary more than 270 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset.
"Series G Issuer Obligations" means the collective reference to the
unpaid principal of and interest on the Series 0 Notes and all other obligations
and liabilities of the Issuer in respect of the Series G Notes (including,
without limitation, interest accruing at the then applicable rate provided in
the Note Purchase Agreements after the maturity of the Series 0 Notes and
interest accruing at the then applicable rate provided in the Note Purchase
Agreements after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the Issuer,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) and Make-Whole Amount, if any, on the Series G Notes.
"Series G Notes" is defined in the preamble.
"Series O Notes" is defined in the Note Purchase Agreements.
"Series 0 Issuer Obligations" means the collective reference to the
unpaid principal of and interest on the Series 0 Notes and all other obligations
and liabilities of the Issuer in respect of the Series 0 Notes (including,
without limitation, interest accruing at the then applicable rate provided in
the Note Purchase Agreements after the maturity of the Series 0 Notes and
interest accruing at the then applicable rate provided in the Note Purchase
Agreements after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the Issuer,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) and Make-Whole Amount, if any, on the Series 0 Notes.
"Significant Subsidiary" means any Subsidiary of the Guarantor whose
assets exceed the greater of (1) $100 million, or (2) 15% of the consolidated
total assets
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of the Guarantor, determined in accordance with GAAP as of the most recent
fiscal quarter end.
"Subsidiary" is defined in the Note Purchase Agreements; provided how-
ever, that unless the context otherwise clearly requires, any reference to a
"Subsidiary" herein is a reference to a Subsidiary of the Guarantor.
"Tangible Assets" of any Person means, at any date, the gross book value
as shown by the accounting books and records of such Person of all its property
both real and personal, less the net book value of (i) all its licenses,
patents, patent applications, copyrights, trademarks, trade names, goodwill,
non-compete agreements or organizational expenses and other like intangibles,
(ii) unamortized Indebtedness discount and expense, (iii) all reserves for
depreciation, obsolescence, depletion and amortization of its properties and
(iv) all other proper reserves which in accordance with generally accepted
accounting principles should be provided in connection with the business
conducted by such Person; provided, however, that with respect to the Guarantor
and its Subsidiaries, adjustments following the date of this Guarantee to the
accounting books and records of the Guarantor and its Subsidiaries resulting
from the acquisition of control of the Guarantor by another Person in accordance
with Accounting Principles Board Opinions Nos. 16 and 17 or otherwise shall not
be given effect to.
Section 1.2. Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Guarantee shall refer to this Guarantee as a whole and not to any particular
provision of this Guarantee, and Section and Schedule references are to this
Guarantee unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
GUARANTEE
Section 2.1. Guarantee. (a) The Guarantor hereby unconditionally and
irrevocably, guarantees to each Purchaser and each Noteholder, for the ratable
benefit of the Purchasers and the Noteholders and their respective permitted
successors, permitted endorsees, permitted transferees and permitted assigns,
the prompt and complete payment and performance by the Issuer when due (whether
at the stated maturity, by acceleration
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or otherwise) of (i) the Series G Issuer Obligations and (ii) the Guarantor
Portion of the Miscellaneous Issuer Obligations.
(b) The guarantee contained in this Article II shall be a continuing
guarantee and remain in full force and effect until all the Guarantor
Obligations shall have been satisfied by cash payment in full, subject to
reinstatement pursuant to Section 2.7.
Section 2.2. Mandatory Purchase and Optional Purchases. (a) The
Guarantor agrees, upon the occurrence of a Guarantor Event of Default (as
defined herein), that the Guarantor shall immediately purchase all Series G
Notes then out- standing ratably from each Noteholder at a price in cash equal
to 100% of the principal amount of such Noteholder's Series G Notes, and
together with interest on such purchased principal amount which is accrued and
unpaid on the date of such purchase (including, without limitation, interest
accruing at the then applicable rate provided in the Note Purchase Agreements
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Issuer, whether
or not a claim for post-filing or post-petition interest is allowed in such pro-
ceeding) and any Make-Whole Amount on such purchased principal amount computed
as of the date of such purchase;
(b) The Guarantor or an Affiliate of the Guarantor may at any time
(subject to the applicable provisions of the Note Purchase Agreements) purchase
the Notes ratably from each Noteholder in whole or in part (including as all or
part of a Series) at a purchase price in cash equal to 100% of the principal
amount so purchased, plus accrued and unpaid interest on the principal amount so
purchased and the Make-Whole Amount determined for the purchase date with
respect to such principal amount, provided that following any such purchase at
any time when a Default, Event of Default, Guarantor Default or Guarantor Event
of Default (as each such term is defined in the Note Purchase Agreements) shall
have occurred and be continuing, such Purchaser may not transfer any such Notes
to any Person other than an Affiliate of the Guarantor.
(c) The Guarantor or an Affiliate of the Guarantor or the Person
referred to in Section 8.2(d) of the Note Purchase Agreements may at any time
purchase the Notes held by the non-consenting holders as provided in Section
8.2.(d) of the Note Purchase Agreements.
(d) The Guarantor will not purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any or all of the outstanding Notes (including
as all or any part of a Series) except upon the purchase, redemption, payment or
prepayment of the
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Notes in accordance with the terms of this Guarantee and the Note Purchase
Agreement or pursuant to an offer made pro rata and on the same terms to the
holders of all of the Notes.
(e) Any Notes purchased by the Guarantor pursuant to this Section shall
be held by it (or its Affiliates) subject to Section 17.4 of the Note Purchase
Agreements and the Subordination Agreement.
Section 2.3. Right of Contribution. The Collateral Agent, on behalf of
the Noteholders, acknowledges that a right of contribution may exist as among
the Guarantors with respect to payments made by the Guarantors under the
Guarantees. The Guarantor hereby agrees that to the extent the Guarantor shall
have any right to seek and receive contribution from and against any Other
Guarantor, such right of contribution shall be subject to the terms and
conditions of Section 2.4. No such right of contribution shall in any respect
limit the obligations and liabilities of the Guarantor to the Collateral Agent
and the Noteholders, and the Guarantor shall remain liable to the Collateral
Agent and the Noteholders for the full amount guaranteed by the Guarantor
hereunder.
Section 2.4. Limitation on Contribution and Subrogation. (a) Not-
withstanding any payment made by the Guarantor hereunder or any set-off or
application of funds of the Guarantor by the Collateral Agent or any Noteholder,
the Guarantor shall not be entitled to be subrogated to any of the rights of the
Collateral Agent or any Noteholder against the Issuer or any collateral security
or guarantee or right of offset held by the Collateral Agent or any Noteholder
for the payment of any portion of the Issuer Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution from the Issuer, until
all amounts owing to the Collateral Agent and the Noteholders by the Issuer on
account of the Issuer Obligations are paid in full. Unless and until all of the
Issuer Obligations and the Guaranteed Obligations shall have been discharged in
full, the Guarantor will not assign or otherwise transfer any such claim against
the Issuer to any other Person. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Issuer
Obligations shall not have been fully bonded or paid in full, such amount shall
be held by the Guarantor in custody for the Collateral Agent and the
Noteholders, segregated from other funds of the Guarantor, and shall, forthwith
upon receipt by the Guarantor, be turned over to the Collateral Agent in the
exact form received by the Guarantor (duly endorsed by the Guarantor to the
Collateral Agent, if required), to be applied against the Issuer Obligations,
whether matured or unmatured, in such order as the Collateral Agent may
determine.
(b) Notwithstanding any payment made by the Guarantor hereunder or any
set-off or application of funds of the Guarantor by the Collateral Agent or any
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Noteholder, the Guarantor shall not be entitled to be subrogated to any of the
rights of the Collateral Agent or any Noteholder against any Other Guarantor,
nor shall the Guarantor seek or be entitled to seek any contribution from any
Other Guarantor in respect of payments made by the Guarantor hereunder, until
either (i) all amounts owing to the Collateral Agent and the Noteholders by the
Issuer on account of the Issuer Obligations relating to the Series of Notes
guaranteed by such Other Guarantor are paid in full (an "Other Series
Discharge") or (ii) there has been an Effective Cure described in paragraph (x)
or (y) of the definition thereof with respect to the Series of Notes guaran-
teed by such Other Guarantor ("Other Guarantee Cure"). Unless and until there
has been either an Other Series Discharge or an Other Guarantee Cure, the
Guarantor will not assign or otherwise transfer any such claim against such
Other Guarantor to any other Person. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when there has not
been either an Other Series Discharge or an Other Guarantee Cure, such amount
shall be held by the Guarantor in custody for the Collateral Agent and the
Noteholders, segregated from other funds of the Guarantor, and shall, forthwith
upon receipt by the Guarantor, be turned over to the Collateral Agent in the
exact form received by the Guarantor (duly endorsed by the Guarantor to the
Collateral Agent, if required), to be applied against the Issuer Obligations,
whether matured or unmatured, in such order as the Collateral Agent may
determine.
Section 2.5. Amendments, etc. with respect to the Issuer Obligations.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Issuer Obligations
made by the Collateral Agent or any Noteholder may be rescinded by the
Collateral Agent or such Noteholder and any of the Issuer Obligations continued,
and the Issuer Obligations, or the liability of any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Collateral Agent or any Noteholder, and the Note
Purchase Agreements and the other Issuer Related Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent (or the Required Holders or all Noteholders, as the case may be) may deem
advisable from time to time (provided, however, that the Guarantor shall not
become liable for any increase in principal outstanding pursuant to the Series 0
Issuer Obligations or principal outstanding pursuant to the Series G Issuer
Obligations, in either case pursuant to an amendment to the Notes or the Note
Purchase Agreements, without its express consent), and any collateral security,
guarantee or right of offset at any time held by the Collateral Agent or any
Noteholder for the payment of the Issuer Obligations may be sold, exchanged,
waived,
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surrendered or released. Neither the Collateral Agent nor any Noteholder shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Issuer Obligations or for the guarantee contained
in this Article II or any property subject thereto.
Section 2.6. Guarantee Absolute and Unconditional. Subject to the terms
of the Note Purchase Agreement, the Guarantor unconditionally waives any and all
notice of the creation, renewal, extension or accrual of any of the Issuer
Obligations and notice of or proof of reliance by the Collateral Agent or any
Noteholder upon the guarantee contained in this Article II or acceptance of
the guarantee contained in this Article II; the Issuer Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Article II; and all dealings between the Issuer, the Guarantor
and Olin on the one hand, and the Collateral Agent and the Noteholders, on the
other hand, likewise shall be conclusively presumed to have been had or consum-
mated in reliance upon the guarantee contained in this Article II. The Guarantor
unconditionally waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment or any other notice that may be required, by
statute, rule of law or otherwise to preserve any rights of any Noteholder
against the Guarantor, to or upon any of the Issuer, the Guarantor or any Other
Guarantor with respect to the Issuer Obligations; any right to the enforcement,
assertion, exercise or exhaustion by any holder of any right, power, privilege
or remedy conferred in any Related Document; any requirement to mitigate the
damages resulting from any default under any Related Documents, any notice of
any sale, transfer or other disposition of any right, title to or interest in
any Note by any holder thereof or in any other Related Document, any release of
the Guarantor from its obligations hereunder resulting from any loss by it or
its rights of subrogation hereunder and any other circumstance whatsoever which
might constitute a legal or equitable discharge, release or defense of a
guarantor or surety or which might otherwise limit recourse against the
Guarantor. The Guarantor understands and agrees that the guarantee contained in
this Article II shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of
the Note Purchase Agreements or any other Related Document, any of the Issuer
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Collateral Agent or any Noteholder, (b) any defense, set-off, counterclaim,
deduction, diminution, abatement, suspension, deferment or reduction (other than
a defense of payment or performance) which may at any time be available to or be
asserted by the Issuer or any other Person against the Collateral Agent or any
Noteholder, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Issuer or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Issuer for the
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Issuer Obligations, or of the Guarantor under the guarantee contained in this
Article II, in bankruptcy or in any other instance, including, without
limitation:
(i) any amendment of or change in, or termination or waiver of,
any of the Related Documents (other than by an effective agreement in
writing expressly amending this Guarantee as provided in Section 5.1);
(ii) any furnishing, acceptance or release of any of the Issuer
Obligations;
(iii) any failure, omission or delay on the part of the Issuer to
conform or comply with any term of any of the Related Documents or any
other instrument or agreement referred to in paragraph (i) above;
(iv) any waiver of the payment, performance or observance of any
of the obligations, conditions, covenants or agreements contained in
any Related Document (other than by an effective agreement in writing
expressly waiving any provision of this Guarantee as provided in
Section 5.1), or any other waiver, consent, extension, indulgence,
compromise, settlement, release or other action or inaction under or
in respect of any of the Related Documents or any other instrument
or agreement referred to in paragraph (i) above;
(v) any failure, omission or delay on the part of any Noteholder
to enforce, assert or exercise any right, power or remedy conferred on
it in this Guarantee;
(vi) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshalling of assets and liabilities or
similar proceedings with respect to the Issuer or the Guarantor or any
other person or any of their respective properties or creditors, or
any action taken by any trustee or receiver or by any court in any
such proceeding;
(vii) any limitation on the liability or obligations of the
Issuer or the Guarantor or any other person under any of the Related
Documents, or any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part,
of any of the Related Documents or any other agreement or instrument
referred to in paragraph (i) above or any term hereof;
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(viii) any merger or consolidation of the Issuer or the Guarantor
into or with any other corporation, or any sale, lease or transfer of
any of the assets of the Issuer or the Guarantor to any other person;
(ix) any change in the ownership or partnership structure of the
Issuer, or any change in the corporate relationship between the Issuer
and the Guarantor, or any termination of such relationship; or
(x) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might
otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or which might otherwise limit
recourse against the Guarantor.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against the Guarantor, the Collateral Agent or any Noteholder may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Issuer, any Other Guarantor
or any other Person or against any collateral security or guarantee for any of
the Issuer Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent or any Noteholder to make any such demand, to
pursue such other rights or remedies or to collect any payments from any Issuer,
any Other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Issuer, any Other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Collateral Agent or any Noteholder against the Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
Section 2.7. Reinstatement. The guarantee contained in this Article II
shall continue to be effective, or be automatically reinstated, as the case may
be, if at any time payment, or any part thereof, of any of the Issuer
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or any Noteholder upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Issuer or the Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Issuer or the Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made. If an event permitting the acceleration of any Issuer Obligations shall at
any time have occurred and be continuing, and such acceleration of any Issuer
Obligations shall at such
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time be prevented by reason of the pendency against the Issuer or any other
Person of a case or proceeding under a bankruptcy or insolvency law, the
Guarantor agrees that, for purposes of this Guarantee and the Guarantor
Obligations hereunder, such Guarantor Obligations shall be deemed to have been
accelerated with the same effect as if such Guarantor Obligations had been
accelerated in accordance with the terms hereof, and the Guarantor shall
forthwith pay the full amount of the Guarantor Obligations hereunder without
further notice or demand.
Section 2.8. Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Collateral Agent without set-off or counterclaim
in United States dollars to each Noteholder as provided in the Note Purchase
Agreements, or if pursuant to Section 2.2, at the office specified in Section
14.1, or by the method specified in Section 14.2 (if applicable) of the Note
Purchase Agreement.
Section 2.9. Ranking. This Guarantee shall rank at least pari passu with
all other unsecured and senior unsubordinated Indebtedness of the Guarantor.
Without limiting the generality of the foregoing, this Guarantee shall rank at
least pari passu with any other guarantee by the Guarantor in favor of any
creditors of the Issuer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Purchasers to enter into the Note Purchase Agreements and
to induce the Purchasers to purchase the Notes thereunder, the Guarantor hereby
represents and warrants to the Collateral Agent, each Purchaser and each
Noteholder that:
Section 3.1. Organization; Power and Authority. The Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Guarantor Material Adverse Effect. The Guarantor has the
corporate power and authority to execute and deliver this Guarantee and to
perform the provisions thereof.
Section 3.2. Authorization. etc. Execution and delivery of this
Guarantee has all due authorization by all necessary corporate action on the
part of the Guarantor, and this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as such enforce-
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ability may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
Section 3.3. Disclosure. The Guarantor, through its agent, Citicorp
Securities, Inc., has delivered to each Purchaser a copy of a Private Placement
Memorandum, dated August 27, 1997, including Supplement No.1 (the
"Memorandum"), relating to the transactions contemplated hereby. Except as
disclosed in Schedule 3.3, this Guarantee, the Geon Portion of the Memorandum,
the documents, certificates or other writings delivered to the Purchasers by or
on behalf of the Guarantor in connection with the transactions contemplated
hereby, taken as a whole, do not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 3.3, or in one
of the documents, certificates or other writings identified in Schedule 3.3,
since December 31, 1996, there has been no change in the financial condition or
operations of the Guarantor or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Guarantor
Material Adverse Effect. There is no fact known to the Guarantor that could
reasonably be expected to have a Guarantor Material Adverse Effect that has not
been set forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to the Purchasers by or on behalf of
the Guarantor specifically for use in connection with the transactions
contemplated hereby.
Section 3.4. Financial Statements. The Guarantor has delivered to each
Purchaser copies of the financial statements of the Guarantor contained in
Exhibit B of the Memorandum. All of such financial statements (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Guarantor as of the respective dates
specified in such Schedule and the consolidated results of its operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
Section 3.5. Compliance with Laws. Other Instruments. etc. The execu-
tion, delivery and performance by the Guarantor of this Guarantee will not (j)
contravene, result in any breach of, or constitute a default under, or result
in the creation of any Lien in respect of any property of the Guarantor under,
any indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other
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agreement or instrument to which the Guarantor is bound or by which the
Guarantor may be bound or affected, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling or any court, arbitrator or Governmental Authority applicable to the
Guarantor or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Guarantor except
where such contraventions, breaches, defaults, Liens, conflicts or violations
would not reasonably be expected to have, in the aggregate, a Guarantor Material
Adverse Effect.
Section 3.6. Governmental Authorizations. etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by (a) the Guarantor of this Guarantee or (b the Issuer of the Series G Notes
except where failure to make or do such consents, approvals, authorizations,
registrations, filings or declarations, would not, in the aggregate, be
reasonably expected to have a Guarantor Material Adverse Effect.
Section 3.7. Status under Certain Statutes. Neither the Guarantor nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
ARTICLE IV
COVENANTS
The Guarantor covenants and agrees with the Collateral Agent, the
Purchasers and the Noteholders that, from and after the date of this Guarantee
until all the Guarantor Obligations shall have been satisfied by cash payment in
full;
SECTION 4.1. Statements by Officers as to Default. The Guarantor will
deliver to the Purchasers, within 120 days after the end of each fiscal year of
the Guarantor ending after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the Guarantor is in
default in the performance and observance of any of the terms, provisions and
conditions of this Guarantee (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Guarantor shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
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The Guarantor will, so long as any of the Notes are outstanding, deliver
to the Purchasers, forthwith upon any Responsible Officer becoming aware of (i)
any Default, Event of Default, Guarantor Default or Guarantor Event of Default
or (ii) any default or event of default under any other mortgage, indenture or
instrument, an Officers' Certificate specifying such Default, Event of Default,
Guarantor Default, Guarantor Event of Default or default and what action the
Guarantor is taking or proposes to take with respect thereto.
SECTION 4.2. Existence. Subject to Section 4.7, the Guarantor will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Guarantor shall not be required to preserve any such right or
franchise if the Board of Directors of the Guarantor shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Guarantor and that the loss thereof would not be reasonably likely to have a
Guarantor Material Adverse Effect.
SECTION 4.3. Maintenance of Properties. The Guarantor will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Guarantor may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Guarantor from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Guarantor,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Purchasers.
SECTION 4.4. Payment of Taxes and Other Claims. The Guarantor will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Guarantor or any Subsidiary or upon the income, profits or
property of the Guarantor or any Subsidiary, and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Guarantor or any Subsidiary, provided, however, that the
Guarantor shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
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SECTION 4.5. Limitations on Liens. The Guarantor shall not, and shall
not permit any of its Subsidiaries to, Incur or suffer to exist any Lien on
property or assets now owned or hereafter acquired to secure Indebtedness
without making, or causing such Subsidiary to make, effective provision for
securing the Guarantor Obligations (and, if the Guarantor shall so determine,
any other Indebtedness of the Guarantor which is not subordinate to the
Guarantor Obligations or of such Subsidiary) equally and ratably with such
Indebtedness as to such property or assets for so long as such Indebtedness
shall be so secured.
The foregoing restrictions will not apply to Liens in respect of
Indebtedness existing at the date of the Indenture or to; (i) Liens on any
property existing at the time of acquisition thereof, (ii) Liens on property of
a Person existing at the time such Person is merged into or consolidated with
the Guarantor or any Subsidiary; (iii) Liens on property of the Guarantor or any
Subsidiary in favor of the United States of America, any state thereof, or any
instrumentality of either to secure certain payments pursuant to any contract or
statute; (iv) Liens to secure Indebtedness Incurred for the purpose of financing
all or any part of the purchase price or the cost of construction or improvement
of the property subject to such Liens, and securing only the property so
purchased, constructed or improved; (v) Liens for taxes or assessments or other
governmental charges or levies, Liens imposed by law, such as mechanics' and
materialmen's Liens, for sums not due or sums being contested in good faith and
with respect to which adequate reserves are being maintained, to the extent
required by generally accepted accounting principles and Liens securing
reimbursement obligations with respect to trade letters of credit, banker's
acceptances and sight drafts incurred in the ordinary course of business which
encumber documents and other property relating to such trade letters of credit,
banker's acceptances and sight drafts; (vi) Liens to secure obligations under
worker's compensation laws or similar legislation, including Liens with respect
to judgments which are not currently dischargeable; (vii) Liens created by or
resulting from any litigation or other proceeding which is being contested in
good faith by appropriate proceedings, including Liens arising out of judgments
or awards against the Guarantor or any Subsidiary with respect to which the
Guarantor or such Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment Liens which are satisfied within 15 days
of the date of judgment; or Liens incurred by the Guarantor or any Subsidiary
for the purpose of obtaining a stay or discharge in the course of any litigation
or other proceeding to which the Guarantor or such Subsidiary is a party; and
(viii) Liens to secure any extension, renewal or refinancing (or successive
extensions, renewals or refinancings), in whole or in part, of any Indebtedness
secured by Liens referred to in the foregoing clauses (i) to (vii) so long as
such Liens do not extend to any other property and the Indebtedness so secured
is not increased.
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In addition to the foregoing, the Guarantor or any Subsidiary may Incur
a Lien to secure Indebtedness or enter into a Sale and Leaseback Transaction,
without equally and ratably securing the Guarantor Obligations, if the sum of
(a) the amount of Indebtedness subject to a Lien entered into after the date of
the Indenture and otherwise prohibited by the Indenture, and (b) the
Attributable Value of Sale and Leaseback Transactions entered into under Section
4.6(i) does not exceed five percent of Consolidated Tangible Assets of the
Guarantor at the time of such determination.
SECTION 4.6. Limitation on Sale and Leaseback Transactions. The
Guarantor shall not, and shall not permit any of its Subsidiaries to enter into
any Sale and Leaseback Transaction (except for a period not exceeding 36 months)
unless (i) the Guarantor or such Subsidiary would be entitled to Incur a Lien to
secure Indebtedness in an amount equal to the Attributable Value of the Sale and
Leaseback Transaction in accordance with Section 4.5, without equally and
ratably securing the Guarantor Obligations; or (ii) the Guarantor or the
Subsidiary applies or commits to apply within 120 days an amount equal to the
net proceeds of the property sold pursuant to the Sale and Leaseback Transaction
to the redemption or repurchase of Notes or, if no Notes are redeemable or
available for purchase, to the redemption or repayment of Guarantor Indebtedness
which is pari passu to the Guarantor Obligations or, if no pari passu
Indebtedness is redeemable or payable, other Guarantor or Subsidiary
Indebtedness which is redeemable or payable.
SECTION 4.7. Limitation on Consolidations. etc. (a) The Guarantor shall
not consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, and the
Guarantor shall not permit any person to consolidate with or merge into the
Guarantor or convey, transfer or lease its properties and assets substantially
as an entirety to the Guarantor, unless;
(i) in case the Guarantor shall consolidate with or merge into
another person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the person formed by such
consolidation or into which the Guarantor is merged or the person
which acquires by conveyance or transfer, or which leases, the
properties and assets of the Guarantor substantially as an entirety
shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume,
by an agreement supplemental hereto, executed and delivered to the
Noteholders, in form reasonably satisfactory to the Required Holders,
the due and punctual payment of the Guaranteed Obligations and the
performance or observance of every covenant of this Guarantee on the
part of the Guarantor to be performed or observed;
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(ii) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Guarantor or any
Subsidiary as a result of such transaction as having been incurred by
the Guarantor or such Subsidiary at the time of such transaction, no
Guarantor Default or Guarantor Event of Default shall have happened
and be continuing;
(iii) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Guarantor
would become subject to a mortgage, pledge, lien, security interest
or other encumbrance which would not be permitted by this Guarantee,
the Guarantor or such successor Person, as the case may be, shall take
such steps as shall be necessary effectively to secure the Guarantor
Obligations equally and ratably with (or prior to) all Indebtedness
secured thereby; and
(iv) the Guarantor has delivered to the Noteholders an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental agreement is required in connection with such
transaction, such supplemental agreement, comply with this Section and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) Upon any consolidation of the Guarantor with, or merger of the
Guarantor into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Guarantor substantially as an entirety in
accordance with clause (a), the successor Person formed by such consolidation or
into which the Guarantor is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Guarantor under this Guarantee with the same effect as
if such successor Person had been named as the Guarantor herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Guarantee and the other Related Documents.
SECTION 4.8. Financial and Business Information; SEC and Other Reports.
The Guarantor shall deliver to each holder of Notes that is an Institutional
Investor
(a) within 75 days alter the end of each quarterly fiscal period in each
fiscal year of the Guarantor (other than the last quarterly fiscal period of
each such fiscal year), a copy of,
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(i) a balance sheet of the Guarantor as at the end of such
quarter, and
(ii) statements of income, changes in stockholders' equity and
cash flows of the Guarantor, for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Responsible Officer of the Guarantor as fairly presenting, in all
material respects, the financial position of the entity being reported on and
its results of operations and cash flows, subject to changes resulting from
year-end adjustments provided that it is understood and agreed that the delivery
of the Guarantor's Form 10-Q containing the Guarantor's quarterly financial
statements as filed with the Securities and Exchange Commission shall satisfy
the requirements of this paragraph (a);
(b) within 120 days after the end of each fiscal year of the Guarantor
ending after the date hereof, a copy of:
(i) a consolidated balance sheet of the Guarantor, as at the end
of such year, and
(ii) consolidated statements of income, changes in stock-
holders' equity and cash flows of the Guarantor, for such year.
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the entity being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances provided that
it is understood and agreed that the delivery of the Guarantor's Form 10-K
containing the Guarantor's
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annual financial statements as filed with the Securities and Exchange Commission
shall satisfy the requirements of this paragraph (b); and
(c) promptly upon their becoming available, one copy of (i) each
financial statement, report, notice or proxy statement sent by the
Guarantor or any Subsidiary to public securities holders generally,
and (ii) each regular or periodic report, each registration statement
(without exhibits except as expressly requested by such holder), and
each prospectus and all amendments thereto filed by the Guarantor or
any Subsidiary with the Securities and Exchange Commission and of all
press releases and other statements made available generally by the
Guarantor or any Subsidiary to the public concerning developments that
are Material.
SECTION 4.9. Inspection. If a Guarantor Event of Default exists and if
the Guarantor has not complied with its obligations pursuant to Section 2.2 of
the Guarantee within three days of the Guarantor Event of Default first
occurring then the Guarantor shall permit the representatives of each holder of
Notes that is an Institutional Investor at the expense of the Guarantor to visit
and inspect any of the offices or properties of the Guarantor, to examine all
of its books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss its affairs, finances and accounts with
representatives of the Guarantor, the independent public accountants of the
Guarantor (and by this provision the Guarantor authorizes such accountants to
discuss the affairs, finances and accounts of the Guarantor), all at such times
and as often as may be requested, provided, that the Guarantor shall not be
required to disclose information from a non-affiliated third party which is
subject to a confidentiality agreement nor waive any reasonable claim of
privilege, and provided further, that the holders will attempt in good faith
(such good faith to take into account that a Guarantor Event of Default then
exists) to coordinate their inspections so as not to cause an unnecessary burden
on the Guarantor.
SECTION 4.10. Restrictions on Payment. The Guarantor will not and will
not permit any of its Affiliated to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes except upon the
purchase, redemption, payment or prepayment of the Notes in accordance with
the terms of the Note Purchase Agreements and the Notes or Section 2.2 of this
Guarantee, or pursuant to an offer made pro rata and on the same terms to the
holders of all the Notes.
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ARTICLE V
MISCELLANEOUS
Section 5.1. Amendments in Writing. (a) None of the terms or provi-
sions of this Guarantee may be waived, amended, supplemented or otherwise
modified except in accordance with Section 17 of the Note Purchase Agreements,
including without limitation Section 17.4 thereof.
(b) The Guarantor will not and will not permit any of its Affiliates to
pay or cause to be paid, directly or indirectly, any remuneration, whether by
way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any of the
terms and provisions hereof or of the Note Purchase Agreements or any other
Related Document unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
(c) The Guarantor will provide each holder of the Notes (irrespective of
the amount of Notes then owned by it) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable such holder to make
an informed and considered decision with respect to any proposed amendment,
waiver or consent in respect of any of the provisions hereof or of any Related
Document. The Guarantor will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of Section 17
of the Note Purchase Agreements to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the Required Holders.
(d) The Guarantor agrees that upon the timely occurrence of an Effective
Cure described in clause (x) or (y) of the definition thereof following the
occurrence of a Bankruptcy Event with respect to the Guarantor, all rights and
remedies of the holders under this Guarantee shall be automatically assigned to
the Non-Defaulting Guarantor and the Non-Defaulting Guarantor, and not the
holders, the Required Holders or the Collateral Agent, shall have the right to
consent to any amendment or waiver of this Guarantee.
Section 5.2. Notices. All notices, requests and demands to or upon the
Collateral Agent or the Guarantor hereunder shall be effected in the manner
provided for in Section 18 of the Note Purchase Agreements; provided that any
such notice, request or
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demand to or upon the Guarantor shall be addressed to the Guarantor at its
notice address set forth on Schedule 5.2.
Section 5.3. No Waiver by Course of Conduct. Cumulative Remedies.
Neither the Collateral Agent nor any Purchaser or Noteholder shall by any act
(except by a written instrument pursuant to Section 5.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default, Event of Default or Guarantor Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any Purchaser or any Note- holder, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent or any Purchaser or any Noteholder of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such Purchaser or Noteholder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
Section 5.4. Enforcement Expenses, Indemnification. (a) The Guarantor
agrees to pay or reimburse each Purchaser, each Noteholder and the Collateral
Agent for all its reasonable out-of-pocket costs and expenses incurred in
collecting against the Guarantor under the guarantee contained in Article II or
otherwise enforcing or preserving any rights under this Guarantee and the
other Related Documents to which the Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of one firm of counsel to the
Purchasers, the Noteholders and the Collateral Agent.
(b) The Guarantor agrees to pay, and to save the Collateral Agent, the
Purchasers and each Noteholder harmless from, any and all liabilities with
respect to (or resulting from any delay in paying) any and all stamp,
documentary, excise, sales or other taxes, assessments, levies or governmental
charges (other than income taxes and franchise taxes) which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Guarantee.
(c) The Guarantor agrees to pay, and to save the Collateral Agent, the
Purchasers and the Noteholders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
out-of-pocket costs and expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery,
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enforcement, performance and administration of this Guarantee to the extent the
Issuer would be required to do so pursuant to the Collateral Agreement.
(d) The agreements in this Section 5.4 shall survive repayment of the
Obligations and all other amounts payable under the Note Purchase Agreements and
the other Related Documents. The Guarantor's obligations in this Section 5.4 are
in addition to its obligations under Article IV.
Section 5.5. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantor and shall inure to the benefit
of the Collateral Agent, the Purchasers and the Noteholders and their permitted
successors and permitted assigns; provided that the Guarantor may not assign,
transfer or delegate any of its rights or obligations (a "Guarantor Transfer")
under this Guarantee without the prior written consent of all the Noteholders.
Notwithstanding the foregoing, if holders of at least 80% of the outstanding
principal amount of the Notes (exclusive of Notes then owned by the Guarantor,
the Other Guarantor, the Issuer or any of their respective Affiliated) consent
to a Guarantor Transfer, and the Issuer prepays the Notes of the nonconsenting
Noteholders pursuant to Section 8.2(d) of the Note Purchase Agreements, then
such Guarantor Transfer may be effected.
Section 5.6. Counterparts. This Guarantee may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
Section 5.7. Severability. Any provision of this Guarantee that is pro-
hibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 5.8. Section Headings. The Section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
Section 5.9. Integration. This Guarantee and the other Related Docu-
ments represent the agreement of the Guarantors, the Collateral Agent, the
Purchasers and the Noteholders with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Collateral Agent, any
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Purchaser or any Noteholder relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Related Documents.
Section 5.10. Governing Law. This Guarantee shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York, without giving effect to its principles or
rules of conflict of laws to the extent such principles or rules would require
the application of the laws of another jurisdiction.
Section 5.11. Litigation; Waivers. The Guarantor hereby irrevocably and
unconditionally;
(a) submits in any legal action or proceeding relating to this
Guarantee and the other Related Documents to which it is a party, or
for recognition and enforcement of any judgment in respect thereof,
whether in tort, in contract or at law or in equity, to the exclusive
general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof,
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding brought in any such
court or the jurisdiction of any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (return receipt requested), postage prepaid, to the
Guarantor at its address referred to in Section 5.2 or at such other
address of which the Collateral Agent shall have been notified
pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law.
Section 5.12. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER RELATED DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
be duly executed and delivered as of the date first above written.
THE GEON COMPANY
By:/s/Jean M. Mikiosko
----------------------
Title; Treasurer
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GUARANTEE
SCHEDULE 3.3
DISCLOSURE
Guarantor's Form 1OQ for quarter ended September 30, 1997 is incorporated herein
by reference.
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GUARANTEE
SCHEDULE 5.2
NOTICES
The Geon Company
One Geon Center
Avon Lake, OH 44012
Attn: Secretary
Facsimile: (440) 930-3830
With copy to:
The Geon Company
One Geon Center
Avon Lake, OH 44012
Attn: Treasurer
Facsimile: (440) 930-3727