EXECUTION COPY
$50,000,000
CREDIT AGREEMENT
dated as of
December 23, 1999
among
CK Witco Corporation,
Each of the financial institutions
as are or may become parties hereto as a Bank,
and
Merrill Lynch Capital Corporation,
as Administrative Agent
____________________________________________
Merrill Lynch Capital Corporation,
as Lead Arranger and Syndication Agent
TABLE OF CONTENTS
-----------------
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 10
SECTION 1.03. Types of Borrowings 11
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend 11
SECTION 2.02. Method of Borrowing 11
SECTION 2.03. Interest Elections 11
SECTION 2.04. Notice to Banks; Funding of Loans 12
SECTION 2.05. Notes 13
SECTION 2.06. Maturity of Loans 14
SECTION 2.07. Interest Rates 14
SECTION 2.08. Fees 16
SECTION 2.09. Optional Termination or Reduction of Commitments 17
SECTION 2.10. Mandatory Termination of Commitments 17
SECTION 2.11. Prepayments 17
SECTION 2.12. General Provisions as to Payments 18
SECTION 2.13. Funding Losses 18
SECTION 2.14. Computation of Interest and Fees 19
SECTION 2.15. Taxes 19
SECTION 2.16. Judgment Currency 20
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness 21
SECTION 3.02. Borrowings 22
i
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power 22
SECTION 4.02. Corporate and Governmental Authorization; No Contravention 22
SECTION 4.03. Binding Effect 23
SECTION 4.04. Financial Information 23
SECTION 4.05. Litigation 23
SECTION 4.06. Compliance with ERISA 23
SECTION 4.07. Environmental Matters 24
SECTION 4.08. Taxes 24
SECTION 4.09. Subsidiaries 24
SECTION 4.10. Not an Investment Company or a Public Utility Holding
Company 24
SECTION 4.11. Full Disclosure 24
SECTION 4.12. Year 2000 25
ARTICLE 5
COVENANTS
SECTION 5.01. Information 25
SECTION 5.02. Payment of Obligations 27
SECTION 5.03. Maintenance of Property; Insurance 27
SECTION 5.04. Conduct of Business and Maintenance of Existence 27
SECTION 5.05. Compliance with Laws 27
SECTION 5.06. Inspection of Property, Books and Records 28
SECTION 5.07. Financial Covenants 28
SECTION 5.08. Negative Pledge 28
SECTION 5.09. Consolidations, Mergers and Sales of Assets 29
SECTION 5.10. Use of Proceeds 29
SECTION 5.11. Additional Subsidiaries 29
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default 29
SECTION 6.02. Notice of Default 31
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization 31
ii
SECTION 7.02. Agents and Affiliates 31
SECTION 7.03. Action by Agents 32
SECTION 7.04. Consultation with Experts 32
SECTION 7.05. Liability of Agents 32
SECTION 7.06. Indemnification 32
SECTION 7.07. Credit Decision 32
SECTION 7.08. Successor Administrative Agents 33
SECTION 7.09. No Fiduciary Relationship 33
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair 33
SECTION 8.02. Illegality 34
SECTION 8.03. Increased Cost and Reduced Return 34
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans 35
ARTICLE 9
[Reserved]
ARTICLE 10
[Reserved]
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices 36
SECTION 11.02. No Waivers 36
SECTION 11.03. Expenses; Indemnification 36
SECTION 11.04. Sharing of Set-offs 37
SECTION 11.05. Amendments and Waivers 37
SECTION 11.06. Successors and Assigns 37
SECTION 11.07. Collateral 39
SECTION 11.08. Governing Law; Submission to Jurisdiction 40
SECTION 11.09. Counterparts; Integration 40
SECTION 11.10. Waiver of Jury Trial 41
SECTION 11.11. Confidentiality 41
iii
PRICING SCHEDULE
EXHIBIT A Note
EXHIBIT B Opinion of John T. Ferguson, II, Esq.,
General Counsel of the Borrower
EXHIBIT C Opinion of Wachtell Lipton Rosen & Katz,
Special Counsel for the Borrower
EXHIBIT D Assignment and Assumption Agreement
EXHIBIT E Form of Subsidiary Guarantee Agreement
EXHIBIT F Form of Indemnity, Subrogation and Contribution Agreement
iv
CREDIT AGREEMENT
AGREEMENT dated as of December 23, 1999 among CK WITCO CORPORATION, each of
the financial institutions as are or may become parties hereto as a Bank, and
MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent.
WHEREAS, the Borrower wishes to have a term loan credit facility under
which it may on one occasion borrow funds, denominated in Dollars, from the
Banks ratably in proportion to their respective Commitments;
WHEREAS, the Banks are willing to extend said credit facility to the
Borrower on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Administrative Agent" means Merrill Lynch Capital Corporation, in its
capacity as administrative agent for the Banks hereunder, and its successors in
such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent,
duly completed by such Bank and submitted to the Administrative Agent (with a
copy to the Borrower).
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified.
"Agents" means the Administrative Agent, the Syndication Agent and Merrill
Lynch Capital Corporation, as Lead Arranger hereunder, and "Agent" means any of
the foregoing.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Applicable Percentage" means, with respect to any Bank, the percentage of
the total Commitments and outstanding Loans represented by such Bank's
Commitment and outstanding Loans.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 11.06(c).
"Availability Period" means the period from and including the Effective
Date to and including the Termination Date.
"Bank" means each Person listed on the signature pages hereof, each
Assignee or other Person which becomes a Bank pursuant to Section 11.06(c), and
their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
Base Rate Loan" means a Loan to be made by a Bank as a Base Rate Loan, or
converted into or continued as a Base Rate Loan, pursuant to the applicable
Notice of Borrowing, Interest Election Request or Article 8.
"Base Rate Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
"Borrower" means CK Witco Corporation, a Delaware corporation.
"Borrower's S-4" means the Borrower's registration statement on Form S-4,
as filed on July 28, 1999 with the Securities and Exchange Commission.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Loan to be made by a Bank as a CD Loan, or converted into
or continued as a CD Loan, pursuant to the applicable Notice of Borrowing or
Interest Election Request.
"CD Reference Bank" means the financial institution acting as the
Administrative Agent.
"Closing Date" means the date on which Loans are made pursuant to Section
2.01.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.09 or 2.10 and as such amount
may be reduced or increased from time to time pursuant to assignments to or by
such Bank in accordance with Section 11.06. The initial aggregate amount of the
Commitments is $50,000,000.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date.
2
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except (a) trade accounts payable arising in the ordinary course of
business, (b) obligations incurred in the ordinary course of business in
connection with additions to property, plant or equipment which are deferred for
no more than 120 days after the later of the acquisition or completion of
installation of such additions, (c) other obligations arising in the ordinary
course of business which are deferred for no more than 120 days after the date
on which they would first be reflected as liabilities on a balance sheet of such
Person and (d) obligations in connection with the compensation for services of
officers, directors or employees of such Person, (iv) the capitalized amount of
all obligations of such Person as lessee which are capitalized in accordance
with generally accepted accounting principles, (v) all Debt of others secured by
a Lien on any asset of such Person, whether or not such Debt is assumed by such
Person, (vi) all Debt of others Guaranteed by such Person and (vii) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit or letters of guaranty.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or other similar transaction (including any option with respect to any of the
foregoing transactions) or any combination of the foregoing transactions.
"Dollars" and the sign "$" mean lawful money of the United States.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section 2.07(b).
"Domestic Subsidiary" means each Subsidiary that is organized under a
jurisdiction which is any of the United States, any State thereof or the
District of Columbia.
3
"EBITDA" means, for any period, the consolidated net income of the Borrower
and its Consolidated Subsidiaries for such period plus, to the extent deducted
in computing such consolidated net income for such period, the sum (without
duplication) of (a) income tax expense, (b) Interest Expense, (c) depreciation
and amortization expense, (d) non-recurring restructuring charges in an amount
not to exceed $65 million in any fiscal year of the Borrower, (e) extraordinary
and other non-recurring losses and (f) any other non-cash charges (including
merger-related purchase accounting adjustments in an amount not to exceed $289
million made as a result of the merger of Crompton & Knowles Corporation and
Witco Corporation), minus, to the extent added in computing such consolidated
net income for such period, (a) consolidated interest income, (b) extraordinary
and other non-recurring gains and (c) any other non-cash income. Anything
contained in this definition or elsewhere in this Agreement to the contrary
notwithstanding, in calculating EBITDA for the four fiscal-quarter periods
ending on December 31, 1999, March 31, 2000 and June 30, 2000, respectively,
EBITDA in fiscal quarters ended March 31, 1999, June 30, 1999 and September 30,
1999 shall be deemed to equal the combined EBITDA of Crompton & Knowles
Corporation and Witco Corporation for such fiscal quarters, as adjusted on a pro
forma basis to give effect to the merger of Crompton & Knowles Corporation and
Witco Corporation as if such merger had occurred on December 31, 1998.
"Effective Date" means the date the obligations of the Banks to extend
credit under this Agreement become effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" at any time means the Borrower and 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 at such time as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
4
"Euro-Dollar Loan" means a Loan that bears interest at a Euro-Dollar Rate,
pursuant to the applicable Notice of Borrowing or Interest Election Request.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Bank" means the principal London office of the
financial institution acting as the Administrative Agent.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreements" means (i) the Five-Year Credit Agreement dated
as of October 28, 1999, among CK Witco Corporation, the Banks party thereto, The
Chase Manhattan Bank, as Syndication Agent, Citibank, N.A., as Administrative
Agent, and Bank of America, N.A. and Deutsche Bank Securities, Inc., as
Co-Documentation Agents and (ii) the 364-Day Credit Agreement dated as of
October 28, 1999, among CK Witco Corporation, the Banks party thereto, The Chase
Manhattan Bank, as Syndication Agent, Citibank, N.A., as Administrative Agent,
and Bank of America, N.A. and Deutsche Bank Securities, Inc., as
Co-Documentation Agents.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.
"Fee Letter" means the confidential fee letter dated as of December 23,
1999, between Merrill Lynch Capital Corporation and the Borrower.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or any combination
of the foregoing.
5
"Guaranty" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided that the term
Guaranty shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Indemnity, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit F
hereto, among the Borrower, the Subsidiary Guarantors and the Administrative
Agent.
"Interest Coverage Ratio" means, on any date, the ratio of (a) EBITDA for
the period of four consecutive fiscal quarters ended on or most recently prior
to such date to (b) Interest Expense for the period of four consecutive fiscal
quarters ended on or most recently prior to such date.
"Interest Election Request" means a request by the Borrower to continue or
convert a Borrowing in accordance with Section 2.03.
"Interest Expense" means, for any period, the interest expense of the
Borrower and its Consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting principles,
including (i) the amortization of debt discounts to the extent included in
interest expense in accordance with generally accepted accounting principles,
(ii) the amortization of all fees (including fees with respect to interest rate
protection agreements or other interest rate hedging arrangements) payable in
connection with the incurrence of Debt to the extent included in interest
expense in accordance with generally accepted accounting principles and (iii)
the portion of any rents payable under capital leases allocable to interest
expense in accordance with generally accepted accounting principles. Anything
contained in this definition or elsewhere in this Agreement to the contrary
notwithstanding, in calculating Interest Expense for the four fiscal-quarter
periods ending on December 31, 1999, March 31, 2000 and June 30, 2000,
respectively, Interest Expense in fiscal quarters ended March 31, 1999, June 30,
1999 and September 30, 1999 shall be deemed to equal the combined Interest
Expense of Crompton & Knowles Corporation and Witco Corporation for such fiscal
quarters, as adjusted on a pro forma basis to give effect to the merger of
Crompton & Knowles Corporation and Witco Corporation as if such merger had
occurred on December 31, 1998.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing,
the period commencing on the date of such Borrowing and ending one, two, three
or six months thereafter (or nine or twelve months thereafter if, at the time of
the relevant Borrowing, an interest period of such duration is available to all
Banks), as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
6
(a) any Interest Period (except an Interest Period determined pursuant
to clause (c) below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day in a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day in a calendar month; and
(c) any Interest Period which begins before the Maturity Date and
would otherwise end after the Maturity Date shall end on the Maturity Date.
(2) with respect to each CD Borrowing, the period commencing on the date of such
Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) any Interest Period which begins before the Maturity Date and
would otherwise end after the Maturity Date shall end on the Maturity Date.
(3) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) any Interest Period which begins before the Maturity Date and
would otherwise end after the Maturity Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit or otherwise.
"Leverage Ratio" means, on any date, the ratio of (a) Total Debt on such
date to (b) EBITDA for the period of four consecutive fiscal quarters ended on
or most recently prior to such date.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
7
"Loan" means a Domestic Loan or a Euro-Dollar Loan, and "Loans" means
Domestic Loans or Euro-Dollar Loans or any combination of the foregoing.
"Loan Documents" means this Agreement, the Subsidiary Guarantee Agreement
and the Indemnity, Subrogation and Contribution Agreement.
"Loan Parties" means the Borrower and the Subsidiary Guarantors.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Material Debt" means Debt (other than the obligations under this
Agreement) of the Borrower and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, in an aggregate principal or face
amount exceeding $25,000,000.
"Material Financial Obligations" means a principal or face amount of Debt
and/or payment or collateralization obligations in respect of Derivatives
Obligations of the Borrower and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, in an aggregate amount exceeding
$25,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $25,000,000.
"Material Subsidiary" means at any time any Subsidiary, except Subsidiaries
which at such time have been designated by the Borrower (by notice to the
Administrative Agent, which may be amended from time to time) as nonmaterial,
none of which singly would meet the definition of a "significant subsidiary"
contained as of the date hereof in Regulation S-X of the Securities and Exchange
Commission and all of which, if aggregated and considered as a single
Subsidiary, would not have total assets (determined on a consolidated basis for
such Subsidiaries and their consolidated subsidiaries) in excess of 15% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries at such
time.
"Maturity Date" means December 23, 2000, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group (i) is then making or accruing an obligation to make contributions
or (ii) for purposes of Section 6.01(i) only, has within the preceding five plan
years made contributions, including for purposes of this clause (ii) any Person
which ceased to be a member of the ERISA Group during such five year period.
"New York Office" means, at any time, the office of the Administrative
Agent in New York specified in or pursuant to Section 11.01 at such time.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
8
"Notice of Borrowing" is defined in Section 2.02.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) for purposes of Section
6.01(i) only, has at any time within the preceding five years been maintained,
or contributed to, by any Person which was at such time a member of the ERISA
Group for employees of any Person which was at such time a member of the ERISA
Group.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest publicly announced by Citibank,
N.A. in New York City from time to time as its Prime Rate.
"Principal Officer" means any of the following officers of the Borrower:
the Chairman of the Board, the President, the chief executive officer, the chief
financial officer, the treasurer, the controller and the general counsel. If the
titles of the Borrower's officers are changed after the date hereof, the term
"Principal Officer" shall thereafter mean any officer performing substantially
the same functions as are presently performed by one or more of the officers
listed in the first sentence of this definition.
"Reference Bank" means the CD Reference Bank or the Euro-Dollar Reference
Bank, as the context may require.
"Refunding Borrowing" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the outstanding principal amount
of Loans made by any Bank to the Borrower.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
9
"Required Banks" means at any time Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, having Loans amounting to more than 50% of the aggregate unpaid
principal amount of the Loans.
"Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee Agreement
substantially in the form of Exhibit E hereto, among the Borrower, the
Subsidiary Guarantors, and the Administrative Agent.
"Subsidiary Guarantors" means, collectively, each Domestic Subsidiary of
the Borrower that is a party to the Subsidiary Guarantee Agreement and the
Indemnity, Subrogation and Contribution Agreement as of the date hereof, and
each Domestic Subsidiary that, pursuant to Section 5.11, becomes a party to such
agreements by execution of supplements in the forms provided therein.
"Syndication Agent" means Merrill Lynch Capital Corporation, in its
capacity as syndication agent for the Banks hereunder.
"Termination Date" means the earlier of (i) December 20, 1999 and (ii) the
Closing Date.
"Total Debt" means, at any date, all Debt of the Borrower and its
Consolidated Subsidiaries at such date to the extent such Debt should be
reflected on a consolidated balance sheet of the Borrower at such date in
accordance with generally accepted accounting principles.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefit liabilities under
such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such liabilities (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary
all of the shares of capital stock or other ownership interests of which (except
directors' qualifying shares or nominal shares of foreign entities) are at the
time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in
10
Article 5 to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Banks wish to amend Article 5 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes an
aggregation of Loans to be made by the Banks to the Borrower pursuant to Section
2.01, or converted or continued pursuant to Section 2.03, on the same day, all
of which Loans (i) are of the same type (subject to Article 8) and (ii) have the
same initial Interest Period.
Borrowings may be classified for purposes of this Agreement by reference to
the pricing of the Loans comprising such Borrowing (e.g., a "Euro-Dollar
Borrowing" is a Borrowing comprised of Euro-Dollar Loans).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make term loans to the Borrower
on the Closing Date in an aggregate amount equal to the Commitment of such Bank.
The Borrowing under this Section shall be made from the several Banks ratably in
the amounts of their respective Commitments. Amounts repaid in respect of Loans
may not be reborrowed.
SECTION 2.02. Method of Borrowing. The Borrower shall give the
Administrative Agent notice (the "Notice of Borrowing") not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
Closing Date, specifying:
(i) in the case of a Domestic Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(ii) whether the Loans comprising each Borrowing to be made on the
Closing Date are to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iii) in the case of each Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
SECTION 2.03. Interest Elections. (a) Each Borrowing initially shall be of
the type specified in the Notice of Borrowing and shall have an initial Interest
Period as specified in such Notice of Borrowing. Thereafter, the Borrower may
elect to convert such Borrowing to a different type or to continue such
Borrowing and may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Banks, and the Loans comprising each such portion
shall be considered a separate Borrowing.
11
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by (w) the date of the
effectiveness of such election, in the case of a Borrowing converted to or
continued as a Base Rate Borrowing, (x) the second Domestic Business Day before
the effectiveness of such election, in the case of a Borrowing converted to or
continued as a CD Borrowing, and (y) the Third Euro-Dollar Business Day before
the effectiveness of such election, in the case of a Borrowing converted to or
continued as a Euro-Dollar Borrowing. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02 of this Section:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Euro-Dollar Business Day or a Domestic
Business Day, as applicable;
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing,
a CD Borrowing or a Euro-Dollar Borrowing; and
(iv) the Interest Period to be applicable thereto after giving effect
to such election, which shall be a period contemplated by the definition of
the term "Interest Period".
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Bank of the details thereof and of such
Bank's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be continued as a Base Rate Borrowing.
No Borrowing may be converted to or continued as a CD Borrowing or a Euro-Dollar
Borrowing if after giving effect thereto the Interest Period therefor would end
after the Maturity Date. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Banks, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Euro-Dollar Borrowing and (ii) unless repaid, each Euro-Dollar
Borrowing shall be converted to a Base Rate Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of
the contents thereof and of
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such Bank's share of such Borrowing and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.
(b) On the date of each Borrowing, each Bank shall make available its share
of such Borrowing in Dollars not later than 12:00 Noon (New York City time), in
Federal or other funds immediately available in New York City, to the
Administrative Agent at its New York Office. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Administrative Agent will make the funds so received from the
Banks available to the Borrower in its bank account maintained at the
Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
(b) of this Section and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal
to the interest rate applicable thereto pursuant to Section 2.07 and (ii) in the
case of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement. In no event shall any payment by the Administrative Agent, or
repayment by the Borrower, of any amount pursuant to this Section relieve the
Bank that failed to make available its share of the related Borrowing of its
obligations hereunder.
SECTION 2.05. Notes. (a) The Loans of each Bank to the Borrower shall, upon
request of the applicable Bank, be evidenced by a single Note of the Borrower
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank's Loans to the Borrower.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent,
request that its Loans of a particular type to the Borrower be evidenced by a
separate Note of the Borrower in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact that
it evidences solely Loans of the relevant type. Each reference in this Agreement
to the "Note" of such Bank shall be deemed to refer to and include any or all of
such Notes, as the context may require.
(c) Upon receipt of each Bank's Note requested pursuant to Section 2.05(a),
the Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it to the
Borrower and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in connection
with any transfer or enforcement of its Note, endorse on the schedule forming a
13
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Notes and to attach to
and make a part of any Note a continuation of any such schedule as and when
required.
SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing shall
mature, and the principal amount thereof shall be due and payable, on the
Maturity Date.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the sum of the
Base Rate Margin for such day plus the applicable Base Rate for such day. Such
interest shall be payable for each Interest Period on the last day thereof. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the CD Margin for such day plus the applicable
Adjusted CD Rate; provided that if any CD Loan shall, as a result of clause
(2)(b) of the definition of Interest Period, have an Interest Period of less
than 30 days, such CD Loan shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period. Such interest shall
be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, at intervals of 90 days after the first
day thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to such Loan and (ii) the rate applicable
to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to a day during any Interest Period means
a rate per annum determined pursuant to the following formula:
CCBR
ACDR = -------- + AR
1.00-DRP
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
____________
* The amount in brackets being rounded upward, if necessary, to the next higher
1/100 of 1%.
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
14
certificate of deposit dealers of recognized standing for the purchase at face
value from the CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of the CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period.
"CD Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
"Domestic Reserve Percentage" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in Dollars in New York City having a maturity
comparable to the related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of the effective
date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
adequately capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R.
Section 327.4(a) (or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United States of
America. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Euro-Dollar Margin for such day plus the
applicable Adjusted London Interbank Offered Rate. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the first
day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits are offered to the Euro-Dollar
Reference Bank in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of the Euro-Dollar Reference Bank to which such Interest Period
is to apply and for a period of time comparable to such Interest Period.
15
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at a rate per annum
equal to the sum of 2% plus the higher of (i) the sum of the Euro-Dollar Margin
for such day plus the Adjusted London Interbank Offered Rate applicable to such
Loan and (ii) the sum of the Euro-Dollar Margin for such day plus the quotient
obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which one day (or, if such amount
due remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than one month as the Administrative Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to the Euro-Dollar Reference Bank are offered to the Euro-Dollar
Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(e) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated hereby. If any Reference
Bank does not furnish a timely quotation, the provisions of Section 8.01 shall
apply.
SECTION 2.08. Fees. (a) The Borrower shall pay to the Administrative Agent
for the account of each Bank a facility fee calculated for each day at the
Facility Fee Rate for such day (determined in accordance with the Pricing
Schedule). Such facility fees shall accrue from and including the Effective Date
to but excluding the Maturity Date, on the daily aggregate amount of the
Commitments (whether used or unused) or, if the Commitments have terminated, on
the outstanding amount of the Loans. Accrued fees under this Section shall be
payable quarterly in arrears on each March 31, June 30, September 30 and
December 31 and on the date of termination of the Commitments in their entirety
(or, if later, the date the Loans shall be repaid in their entirety).
(b) For each day on or after the Closing Date until the Loans shall have
been repaid in full, the Borrower shall pay to the Administrative Agent for the
account of each Bank a utilization fee at the per annum rate indicated in the
Pricing Schedule on the aggregate amount of each Bank's outstanding Loans on
such day. Accrued and unpaid utilization fees, if any, shall be payable on the
last day of each March, June, September and December and on the date on which
all Loans shall have been repaid in full. All utilization fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent the fees payable
in the amounts and at the times separately agreed upon in the Fee Letter.
16
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and utilization fees, to the Banks entitled thereto.
Fees paid shall not be refundable under any circumstances.
SECTION 2.09. Optional Termination or Reduction of Commitments. During the
Availability Period, the Borrower may, upon at least three Domestic Business
Days' notice to the Administrative Agent, terminate at any time, or
proportionately reduce from time to time by an aggregate amount of at least
$10,000,000 or any larger multiple of $1,000,000, the unused portions of the
Commitments.
SECTION 2.10. Mandatory Termination of Commitments. Unless previously
terminated, the Commitments shall terminate at 5:00 p.m., New York City time, on
the last day of the Availability Period.
SECTION 2.11. Prepayments. (a) The Borrower may, upon at least one Domestic
Business Day's notice to the Administrative Agent, prepay any Borrowing in whole
at any time, or from time to time in part in amounts aggregating $5,000,000 or
any larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment and, in the
case of any prepayment of a Fixed Rate Borrowing, any breakage costs due under
Section 2.13. Each such optional prepayment shall be applied to prepay ratably
the Loans of the several Banks included in such Borrowing.
(b) If the Borrower becomes obligated to indemnify any Bank or the
Administrative Agent for Taxes or Other Taxes pursuant to Section 2.15(c) and
actions taken pursuant to Section 2.15(f) do not or will not eliminate such
indemnity payments, then (i) the Borrower may, upon at least one Domestic
Business Day's notice to the Administrative Agent, prepay all Borrowings in
whole by paying the principal amount together with accrued interest thereon to
the date of prepayment or (ii) the Borrower may, at its sole expense and effort,
upon notice to such Bank and the Administrative Agent, require such Bank to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 11.06(c)), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Bank, if a Bank accepts such
assignment); provided that (A) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (B) such Bank shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding Principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (C) such assignment will
result in a reduction to the indemnity payable pursuant to Section 2.15(c). A
Bank shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Bank or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
(c) In the event and on each occasion that any cash proceeds are received
by or on behalf of the Borrower or any Subsidiary in respect of any incurrence
of Debt for borrowed money by the Borrower or a Subsidiary in any offering or
placement of bonds, debentures, notes or similar securities, the Borrower shall,
immediately after such cash proceeds are received, prepay Loans
17
in an aggregate amount equal to such proceeds (net of any applicable discounts
or fees received by or payable to underwriters, initial purchasers or placement
agents).
(d) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder not later than 11:00 A.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its New York Office. The Administrative Agent will
promptly distribute to each Bank its ratable share of each such payment received
by the Administrative Agent for the account of the Banks. Whenever any payment
of principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time. All payments by the Borrower
shall be made without deduction for any counterclaim, defense, recoupment or
setoff.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due from the Borrower to the
Banks hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article 2, 6 or 8 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to Section
2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.04(a) or 2.11,
the Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow or prepay, provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
18
SECTION 2.14. Computation of Interest and Fees. Interest based on the Prime
Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). All other interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
SECTION 2.15. Taxes. (a) For the purposes of this Section 2.15, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by any Loan
Party pursuant to any Loan Document or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and the Administrative
Agent, taxes imposed on its income, and franchise or similar taxes imposed on
it, by a jurisdiction (or any subdivision thereof) under the laws of which such
Bank or the Administrative Agent (as the case may be) is organized or in which
its principal executive office is located or, in the case of each Bank, in which
its Applicable Lending Office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only to the extent
that such Bank is subject to United States withholding tax at the time such Bank
first becomes a party to this Agreement or changes its Applicable Lending
Office.
"Other Taxes" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to any Loan Document or under any Note or from
the execution or delivery of, or otherwise with respect to, any Loan Document or
any Note.
(b) Any and all payments by any Loan Party to or for the account of any
Bank or the Administrative Agent under any Loan Document or under any Note shall
be made without deduction for any Taxes or Other Taxes except as required by
law; provided that, if any change in law occurring after any Bank or the
Administrative Agent first becomes a party to this Agreement requires any Loan
Party to deduct any Taxes or Other Taxes from any payments to any such Bank or
the Administrative Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Bank or the Administrative
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Party shall make such
deductions, (iii) such Loan Party shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law
and (iv) such Loan Party shall furnish to the Administrative Agent, at its
address referred to in Section 11.01, the original or a certified copy of a
receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative Agent
for the full amount of Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section because of a change in law
occurring after such Bank or the Administrative Agent first becomes a party to
this Agreement paid by such Bank or the Administrative Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto as certified in good faith to the Borrower by
each Bank or the Administrative Agent seeking indemnification pursuant to this
Section 2.15(c). This indemnification
19
shall be paid within 30 days after such Bank or the Administrative Agent (as the
case may be) makes demand therefor; provided, however, that the indemnification
obligations of the Borrower under this Section 2.15 shall be reduced
appropriately to take into account any Tax deduction, credit or benefit or Other
Tax deduction, credit or benefit to which a Bank or the Administrative Agent is
entitled as a result of its payment of Taxes or Other Taxes. If a Bank or the
Administrative Agent receives a refund of indemnified Taxes or Other Taxes with
respect to which the Borrower has made payment to such Bank or the
Administrative Agent pursuant to this Section 2.15(c), such Bank or the
Administrative Agent shall pay over such refund to the Borrower within 10 Days
after receipt of such refund.
(d) Each Bank organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other Bank, from time to
time thereafter if requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), and at any time it changes its
Applicable Lending Office, shall provide the Borrower and the Administrative
Agent with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide the
Borrower or the Administrative Agent with the appropriate form pursuant to
Section 2.15(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 2.15(b) or (c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If any Loan Party is required to pay additional amounts to or for the
account of any Bank pursuant to this Section, then such Bank will change the
jurisdiction of its Applicable Lending Office if, in the judgment of such Bank,
such change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Bank.
SECTION 2.16. Judgment Currency. If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due from any Loan Party under any
Loan Document in the currency expressed to be payable herein or therein (the
"specified currency") into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the specified currency with such other
currency at the Administrative Agent's New York office on the Euro-Dollar
Business Day preceding that on which final judgment is given. The obligations of
each Loan Party in respect of any sum due to any Bank or the Administrative
Agent under any Loan Document or under any Note shall, not-
20
withstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Euro-Dollar Business Day following
receipt by such Bank or the Administrative Agent (as the case may be) of any sum
adjudged to be so due in such other currency, such Bank or the Administrative
Agent (as the case may be) may in accordance with normal banking procedures
purchase the specified currency with such other currency; if the amount of the
specified currency so purchased is less than the sum originally due to such Bank
or the Administrative Agent, as the case may be, in the specified currency, the
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Bank or the Administrative Agent, as the case may be, against such loss, and if
the amount of the specified currency so purchased exceeds (a) the sum originally
due to any Bank or the Administrative Agent, as the case may be, in the
specified currency and (b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate payment to such Bank under
Section 11.04, such Bank or the Administrative Agent, as the case may be, agrees
to remit such excess to the Borrower.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. The obligations of the Banks to extend credit
under this Agreement shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in accordance with
Section 11.05):
(a) receipt by the Administrative Agent of counterparts hereof and of each
Loan Document signed by each of the parties hereto and thereto (or, in the case
of any party as to which an executed counterpart shall not have been received,
receipt by the Administrative Agent in form satisfactory to it of telex,
facsimile transmission or other written confirmation from such party of
execution of a counterpart hereof or thereof by such party);
(b) receipt by the Administrative Agent of an opinion of John T. Ferguson
II, Esq., General Counsel of the Borrower, substantially in the form of Exhibit
B hereto, and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(c) receipt by the Administrative Agent of an opinion of Wachtell Lipton
Rosen & Katz, special counsel for the Borrower, substantially in the form of
Exhibit C hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request;
(d) receipt by the Administrative Agent of evidence satisfactory to it that
all fees and expenses payable for the account of the Banks and the
Administrative Agent and their affiliates on or before the Effective Date have
been paid in full in the amounts previously agreed upon on or prior to the
Effective Date; and
(e) receipt by the Administrative Agent of all documents it may reasonably
request relating to the existence of the Loan Parties, the corporate authority
for and the validity of this
21
Agreement, the other Loan Documents and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Administrative
Agent;
provided that the Banks shall have no obligation to extend credit hereunder and
their commitments under this Agreement shall become null and void unless all of
the foregoing conditions are satisfied not later than January 5, 2000. The
Administrative Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 3.02. Borrowings. The obligations of any Bank to make a Loan on the
occasion of the initial Borrowing are subject to the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the sum of the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing;
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true and correct on and as of the date of
such Borrowing; and
(e) the Agents shall have been paid all fees and reimbursed for all
expenses as required under the Fee Letter.
The initial Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing that the facts specified
in clauses (b), (c) and (d) of this Section are true and correct.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by each Loan Party of each Loan Document
to which such Loan Party is a party are within the corporate powers of such Loan
Party, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or Regulation or of the certificate of incorporation or by-laws
of
22
any Loan Party or of any agreement, judgment, injunction, order, decree or other
instrument binding upon any Loan Party or result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement and each Loan Document
constitutes a valid and binding agreement of each Loan Party that is a party
thereto and each Note, when executed and delivered in accordance with this
Agreement, will constitute a valid and binding obligation of the Borrower.
SECTION 4.04. Financial Information. (a) The consolidated balance sheets of
the Borrower and its consolidated subsidiaries as of September 30, 1999
(unaudited) and December 26, 1998 and the related statements of operations and
cash flows, a copy of each of which has been delivered to the Administrative
Agent, and the unaudited pro forma combined statements of operations and the
other financial and operating information contained in the report of the
Borrower on Form 8-K filed with the Securities and Exchange Commission on
October 15, 1999, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Borrower and
its consolidated subsidiaries as of such dates and their consolidated results of
operations for the applicable periods.
(b) Since September 30, 1999, there has been no material adverse change in
the business, financial position or results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
(c) the Management Projections contained in the Confidential Information
Memorandum dated September, 1999, relating to the Existing Credit Agreements,
were prepared in good faith on the basis of assumptions believed to be
reasonable at the time such assumptions were made.
SECTION 4.05. Litigation. Except as disclosed in the Borrower's S-4, there
is no action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood of an adverse decision which
would materially adversely affect the business (taken as a whole), consolidated
financial position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries or which in any manner draws into question the
validity or enforceability of any Loan Document or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
respect with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan, except for such noncompliance which
would not have a material adverse effect on the business, financial position or
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan, or made any amendment to any Plan, which has resulted or
could result in the imposition of a Lien or the posting of a bond or other
security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Ti-
23
tle IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA, except in the case of clause (iii) above for such liabilities
which do not exceed $5,000,000 in the aggregate during the term of this
Agreement.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Borrower has reasonably concluded that, except as disclosed in the
Borrower's S-4, Environmental Laws are unlikely to have a material adverse
effect on the business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns of Crompton &
Knowles Corporation and Witco Corporation have been examined and settled through
December 31, 1997, for Crompton & Knowles Corporation, and through December 31,
1995, for Witco Corporation. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, except for items being diligently contested in good faith and by
appropriate proceedings. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's Material Subsidiaries is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company or a Public Utility Holding
Company. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Full Disclosure. All information heretofore furnished by the
Borrower to the Administrative Agent or any of its Affiliates or any Bank in
writing for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent or any of its Affiliates or any Bank in
writing will be, taken as a whole, true and accurate in all material respects on
the date as of which such information is stated or certified. The Borrower has
disclosed to the Banks in writing any and all facts which materially and
adversely affect or may affect (to the extent the Borrower can now reasonably
foresee) the business, operations or financial condition of the Bor-
24
rower and its Consolidated Subsidiaries, taken as a whole, or the ability of the
Borrower or any other Loan Party to perform its obligations under this Agreement
or any other Loan Document.
SECTION 4.12. Year 2000. The Borrower and its Subsidiaries are taking
commercially reasonable steps to ascertain the extent of, and to quantify and
successfully address, business and financial risks facing the Borrower and its
Subsidiaries as a result of what is commonly referred to as the "Year 2000
Problem" (i.e., the inability of certain computer applications to recognize
correctly and perform date-sensitive functions involving certain dates prior to
and after December 31, 1999), (b) the Borrower and its Subsidiaries reasonably
believe that any remedial actions required to permit the proper functioning of
any systems critical to the operations of the Borrower and its Subsidiaries,
taken as a whole, despite the Year 2000 Problem have been or will be performed
on or prior to December 31, 1999 and (c) the Borrower and its Subsidiaries
reasonably believe that the Year 2000 Problem (including any preparations or
remediations in response thereto) will not have a material adverse effect on the
business, financial position or results of operations of the Borrower and its
Consolidated Subsidiaries, taken as a whole.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any Loan is outstanding:
SECTION 5.01. Information. The Borrower will deliver to the Administrative
Agent for distribution to each of the Banks:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, cash flows and shareholders'
equity for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in accordance with
generally accepted accounting principles by KPMG LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of operations
for such quarter and consolidated statements of operations and condensed cash
flows for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of the statement of operations in comparative
form the figures for the corresponding quarter, in the case of the statements of
operations and cash flows the figures for the corresponding portion of the
Borrower's previous fiscal year and in the case of the balance sheet the figures
for the previous year end, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer, treasurer or the
controller or other chief accounting officer of the Borrower;
25
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer, treasurer or the controller or other chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Sections 5.07 to 5.08, inclusive, on the date of such financial statements and
(ii) stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default existed on the date of
such statements relating only to Sections 5.07, 5.08(a), 5.08(c), 5.08(f),
5.08(g)(i), 5.08(g)(ii) and 5.08(h) and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously therewith pursuant
to clause (c) above;
(e) within five Domestic Business Days after any Principal Officer of the
Borrower obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the controller or other chief
accounting officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy, statements so
mailed;
(g) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a
26
certificate of the chief financial officer or the controller or other chief
accounting officer of the Borrower setting forth details as to such occurrence
and action, if any, which the Borrower or applicable member of the ERISA Group
is required or proposes to take; and
(i) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity (or,
in the case of tax liabilities, if later, before the same become subject to
penalties), all their respective obligations and liabilities (including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings) if the failure to so pay and discharge would
have a material adverse effect on the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries considered as a
whole, and will maintain, and will maintain for each Material Subsidiary or
cause each Material Subsidiary to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.
SECTION 5.03. Maintenance of Property; Insurance. The Borrower will keep,
and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted; will maintain, and will cause each Material Subsidiary to
maintain (either in the name of the Borrower or in such Material Subsidiary's
own name) with insurance companies which at the time such insurance is purchased
or renewed are financially sound and reputable, insurance on all their property
in at least such amounts (including self-insurance retentions) and against at
least such risks as are usually insured against (including self-insurance
retentions) in the same general area by companies of similar size engaged in the
same or a similar business; and will furnish to the Banks, upon written request
from the Administrative Agent, full information as to the insurance carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower and its Material Subsidiaries (on a consolidated basis) will continue
to engage in business of the same general types as now conducted by the Borrower
and its Material Subsidiaries, and will preserve, renew and keep in full force
and effect, and will cause each Material Subsidiary to preserve, renew and keep
in full force and effect their respective corporate existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.04 shall
prohibit (i) the merger of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Wholly-Owned Consolidated Subsidiary
and if, in each case, after giving effect thereto, no Default shall have
occurred and be continuing, (ii) the termination of the corporate existence,
rights, privileges or franchises of any Subsidiary if the Borrower in good faith
determines that such termination is in the best interest of the Borrower and is
not materially disadvantageous to the Banks or (iii) any disposition of assets
not prohibited by Section 5.09 hereof.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws
27
and ERISA and the rules and regulations thereunder and all applicable laws,
ordinances, rules, regulations and requirements of governmental authorities
relating to the acquisition referred to in Section 5.10) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where failure to comply would not materially adversely affect the
business (taken as a whole), consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Material Subsidiary 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 and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all upon such reasonable
notice, at such reasonable times and as often as may reasonably be desired.
SECTION 5.07. Financial Covenants. (a) The Borrower will not permit the
Leverage Ratio at any time to exceed 3.50 to 1.00.
(b) The Borrower will not permit the Interest Coverage Ratio at any time to
be less than 3.00 to 1.00.
SECTION 5.08. Negative Pledge. Neither the Borrower nor any Subsidiary will
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt outstanding
on the date of this Agreement in an aggregate principal amount not exceeding
$75,000,000 (exclusive of Liens permitted by clause (h) of this Section);
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the purpose
of financing all or any part of the cost of acquiring, constructing or improving
such asset, provided that such Lien attaches to such asset concurrently with or
within 180 days after the acquisition thereof or completion of the construction
or improvement thereto, as the case may be;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by the
Borrower or a Subsidiary and not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
28
(g) Liens not otherwise permitted by the foregoing clauses of this Section
arising in the ordinary course of its business which (i) do not secure Debt,
(ii) do not secure obligations in an amount exceeding $100,000,000 in the
aggregate and (iii) do not materially impair the use of the assets subject
thereto in the operation of the business of the Borrower and its Subsidiaries;
or
(h) Liens not otherwise permitted by the foregoing clauses of this Section
securing Debt or interest rate and currency swaps in an aggregate principal
amount, notional principal and final exchange amount at any time outstanding not
to exceed $50,000,000.
SECTION 5.09. Consolidations, Mergers and Sales of Assets. The Borrower and
its Subsidiaries will not (i) consolidate or merge with or into any other Person
or (ii) sell, lease or otherwise transfer, directly or indirectly, any of the
assets of the Borrower and its Subsidiaries, to any other Person; provided that
(A) the Borrower or a Subsidiary may merge with another Person if (x) the
Borrower or, in the case of a merger not involving the Borrower, a Subsidiary
Guarantor is the corporation surviving such merger and (y) immediately after
giving effect to such merger, no Default shall have occurred and be continuing,
(B) each of the Borrower and its Subsidiaries may sell, lease or otherwise
transfer any of its inventory in the ordinary course of business and any of its
assets which, in the judgment of its officers, are obsolete, excess or
unserviceable and (C) the Borrower and its Subsidiaries may sell, lease or
transfer any of their assets with a market value that does not, in the aggregate
together with all other sales, leases and transfers pursuant to this clause (C),
exceed 25% of the total assets of the Borrower and its Subsidiaries as of the
date hereof.
SECTION 5.10. Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for general corporate purposes. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.
SECTION 5.11. Additional Subsidiaries. The Borrower will ensure at all
times that Domestic Subsidiaries are (or become within 10 Domestic Business Days
of being formed or acquired) Subsidiary Guarantors so that (a) the total assets
of the Borrower and the Subsidiary Guarantors comprise at least 85% by book
value of the total assets of the Borrower and the Domestic Subsidiaries and (b)
the total revenues of the Borrower and the Subsidiary Guarantors, as of the most
recently ended fiscal quarter, comprise at least 85% of the total revenues of
the Borrower and the Domestic Subsidiaries for such fiscal quarter; provided,
that only Domestic Subsidiaries shall be required to become Subsidiary
Guarantors.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan, or
shall fail to pay within three Domestic Business Days of the due date thereof
any interest on any Loan, any fees or any other amount payable hereunder;
29
(b) the Borrower shall fail to observe or perform any applicable covenant
contained in Sections 5.07 to 5.10, inclusive;
(c) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by clause (a)
or (b) above) for 30 days after written notice thereof has been given to the
Borrower by the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by any
Loan Party in any Loan Document or in any certificate, financial statement or
other document delivered pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) a "Default" occurs under either of the Existing Credit Agreements or
the Borrower or any Subsidiary shall fail to make any payment of principal, face
amount, interest, premium, fees or any similar obligation in respect of any
Material Financial Obligations when due or within any applicable grace period;
(f) any event or condition shall occur which results in the acceleration of
the maturity of any Material Debt or enables the holder of such Debt or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Material Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself 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 such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment 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;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Material Subsidiary seeking liquidation, reorganization or other
relief with respect to it 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, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $25,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the
30
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of $25,000,000;
(j) a judgment or order, or judgments or orders, for the payment of money
in excess in the aggregate of $25,000,000 (in excess of available insurance
coverage) shall be rendered against the Borrower or any Material Subsidiary and
such judgment or order, or judgments or orders, shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of common stock of the Borrower; or, during any period of
twelve consecutive calendar months commencing after September 1, 1999,
individuals who were directors of the Borrower on the first day of such period
shall cease to constitute a majority of the board of directors of the Borrower;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments and they shall thereupon terminate and
(ii) if requested by Banks holding more than 50% of the aggregate amount of the
Loans, by notice to the Borrower declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; provided that in the case of
any of the Events of Default specified in clause (g) or (h) above with respect
to the Borrower, automatically, without any notice to the Borrower or any other
act by the Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes each Agent to take such action as its agent on its behalf and to
exercise such powers under the Loan Documents and the Notes as are delegated to
such Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of the Agents shall have the same
rights and powers under this Agreement as any other Bank and may exercise or
refrain from exercising the
31
same as though it were not an Agent, and each of the Agents and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as if
it were not an Agent hereunder or an Affiliate thereof.
SECTION 7.03. Action by Agents. The obligations of the Agents hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, none of the Agents shall be required to take any action with respect
to any Default, except as expressly provided with respect to the Administrative
Agent in Article 6.
SECTION 7.04. Consultation with Experts. Each Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable to any Bank for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. None of the Agents nor any of their
respective affiliates or any of their respective directors, officers, agents or
employees shall be liable to any Bank for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or willful misconduct. None
of the Agents nor any of their respective affiliates or any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of any
Loan Document, the Notes or any other instrument or writing furnished in
connection herewith. No Agent shall incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other writing (which may be
a bank wire, telex, facsimile transmission or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify each Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except in the case of each indemnitee
such as result from such indemnitee's gross negligence or willful misconduct)
that such indemnitees may suffer or incur in connection with any Loan Document
or any action taken or omitted by such indemnitees hereunder or thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent 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 any action under this Agreement.
32
SECTION 7.08. Successor Administrative Agents. The Administrative Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent, which successor shall (unless an Event
of Default shall have occurred and be continuing) be reasonably acceptable to
the Borrower. If no successor Administrative Agent shall have been so appointed
by the Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent gives notice of resignation, then the
retiring Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which successor shall (unless an Event of Default shall
have occurred and be continuing) be reasonably acceptable to the Borrower, and
which shall be a commercial bank or financial institution organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance by a successor Administrative Agent of its appointment as
Administrative Agent hereunder, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Administrative Agent.
SECTION 7.09. No Fiduciary Relationship. Neither of the Lead Arranger nor
the Syndication Agent shall have or be deemed to have any fiduciary relationship
with any other Bank in connection herewith.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any CD Loan or
Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Bank that deposits
in dollars (in the applicable amounts) are not being offered to the Reference
Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the principal amount of outstanding Loans
advise the Administrative Agent that the Adjusted CD Rate or the Adjusted London
Interbank Offered Rate, as the case may be, as determined by the Administrative
Agent will not adequately and fairly reflect the cost to such Banks of funding
their CD Loans or Euro-Dollar Loans, as the case may be, for such Interest
Period,
(c) the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended. Unless the Borrower notifies the Administrative
Agent at least two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to bor-
33
row on such date, such Borrowing shall instead be made as a Base Rate Borrowing
in the same aggregate amount as the requested Borrowing.
SECTION 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive promulgated on or after the date hereof
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans to
the Borrower and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans to the
Borrower shall be suspended. Before giving any notice to the Administrative
Agent pursuant to this Section, each Bank will use reasonable efforts to
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to the Borrower to maturity and shall so specify in such notice, the
Borrower shall immediately prepay in full the then outstanding principal amount
of each such Euro-Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency made
or promulgated after the date hereof shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding (A) with respect
to any CD Loan any such requirement included in an applicable Domestic Reserve
Percentage and (B) with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans or its Note or its obligation to make Fixed Rate Loans and the result
of any of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount
34
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or Regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
use reasonable efforts to designate a different Applicable 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 and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. If
(i) the obligation of any Bank to make Euro-Dollar Loans to the Borrower has
been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03(a) with respect to its CD Loans or Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Administrative Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans to the Borrower which would otherwise be made by such Bank as
CD Loans or Euro-Dollar Loans, as the case may be, to the Borrower shall be made
instead as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may be,
has been repaid, all payments of principal which would otherwise be applied to
repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
35
ARTICLE 9
[Reserved]
ARTICLE 10
[Reserved]
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower, at its address, facsimile number or telex number set forth
on the signature pages hereof, (b) in the case of the Administrative Agent, at
its address, facsimile number or telex number in New York City set forth on the
signature pages hereof, (c) in the case of any Bank, at its address, facsimile
number or telex number set forth in its Administrative Questionnaire or (d) in
the case of any party, such other address, facsimile number or telex number as
such party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower. Each such notice, request or other communication shall
be effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answer back is received,
(ii) if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is received, (iii)
if given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (iv) if given by any
other means, when delivered at the address specified in this Section; provided
that notices under Article 2 or Article 8 shall not be effective until received.
SECTION 11.02. No Waivers. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 11.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Administrative Agent and the Syndication
Agent, including reasonable fees and disbursements of special counsel for the
Administrative Agent, in connection with the preparation and administration of
the Loan Documents, any waiver or consent hereunder or thereunder or any
amendment hereof or thereof or any Default or alleged Default hereunder or
thereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by any of the Administrative Agent and each Bank, including fees and
disbursements of counsel (which counsel may be an employee of such Bank or the
Administrative Agent), in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
36
(b) The Borrower agrees to indemnify the Administrative Agent, the
Syndication Agent and each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing (each, an
"indemnitee") and hold each indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel (which counsel may
be an employee of such indemnitee), which may be incurred by such indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of any Loan Document or any actual or
proposed use of proceeds of Loans hereunder; provided that no indemnitee shall
have the right to be indemnified hereunder for its own gross negligence or
willful misconduct or breach of its obligations under any Loan Document as
determined by a court of competent jurisdiction.
SECTION 11.04. Sharing of Set-offs. 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 the Loans owed to 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 Loans owed to such other Bank, the Bank receiving such
proportionately greater payment shall purchase participations in such Loans 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 Section 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 of the Borrower other than its
indebtedness hereunder. The Borrower agrees, to the fullest extent it 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.
SECTION 11.05. Amendments and Waivers. Any provision of this Agreement, the
other Loan Documents or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks (and, if the rights or duties of the Administrative Agent are affected
thereby, by the Administrative Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder or for any scheduled reduction or termination of any Commitment, or
(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks which shall be required
for the Banks or any of them to take any action under this Section or any other
provision of this Agreement, or (v) release all or any substantial portion of
the Subsidiary Guarantors from their Guarantees under the Subsidiary Guarantee
Agreement, except as provided therein.
SECTION 11.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and
37
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 11.05 without the consent of
the Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto executed by
such Assignee and such transferor Bank, with (and subject to) the consent of the
Borrower and the Administrative Agent, such consents not to be unreasonably
withheld; provided that if an Assignee is an affiliate of a Bank or was a Bank
immediately prior to such assignment, no such consent shall be required, and if
an Event of Default has occurred and is continuing, the consent of the Borrower
shall not be required; and provided further that any assignment shall not be
less than $10,000,000, or if less, shall constitute an assignment of all of such
Bank's rights and obligations under this Agreement and the Notes. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the Assignee. In connection with any
such assignment, the transferor Bank shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall, prior to the first date on which interest or fees
are payable hereunder for its account, deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 2.17.
38
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Notes to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 than such Bank
would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02 or 8.03 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
(f) Notwithstanding anything to the contrary contained herein, any Bank (a
"Granting Bank") may grant to a special purpose funding vehicle (an "SPC") of
such Granting Bank, identified as such in writing from time to time by the
Granting Bank to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to Section 2.01;
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Bank shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Bank to the
same extent, and as if, such Loan were made by the Granting Bank. Each party
hereto hereby agrees that no SPC shall be liable for any payment under this
Agreement for which a Bank would otherwise be liable, for so long as, and to the
extent, the related Granting Bank makes such payment. In furtherance of the
foregoing, each party hereto hereby agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof. In addition, notwithstanding anything to
the contrary contained in this Section 11.06 any SPC may (i) with notice to, but
without the prior written consent of, the Borrower or the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interest in any Loans to its Granting Bank or to any financial institutions
providing liquidity and/or credit facilities to or for the account of such SPC
to fund the Loans made by such SPC or to support the securities (if any) issued
by such SPC to fund such Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of a surety, guarantee or credit or liquidity
enhancement to such SPC. This section may not be amended with respect to any SPC
without the written consent of such SPC's Granting Bank. Notwithstanding any
grant of rights to an SPC pursuant to this paragraph, the Granting Bank shall
retain the sole right to approve any amendment, modification or waiver of any
provision of this Agreement or the other Loan Documents; provided that the
Granting Bank may enter into and perform any agreement with the SPC as to the
manner in which it will exercise such right.
SECTION 11.07. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
39
SECTION 11.08. Governing Law; Submission to Jurisdiction. (a) This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York.
(b) The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
(c) The Borrower irrevocably designates and appoints CT Corporation System,
having an office on the date hereof at 1633 Broadway, New York, New York 10102
as the Borrower's authorized agent, to accept and acknowledge on its behalf
service of any and all process which may be served in any suit, action or
proceeding referred to in subsection (b) above in any federal or New York State
court sitting in New York City. The Borrower represents and warrants that such
agent has agreed to accept such appointment. Said designation and appointment
shall not be revocable by the Borrower until all principal, interest and other
amounts payable hereunder shall have been paid in full in accordance with the
provisions hereof. If such agent shall cease to act as agent for the Borrower,
the Borrower agrees to designate irrevocably and appoint without delay another
such agent satisfactory to the Administrative Agent.
(d) The Borrower consents to process being served in any suit, action or
proceeding referred to in subsection (b) above in any federal or New York State
court sitting in New York City by service of process upon its agent appointed as
provided in subsection (c) above; provided that, to the extent lawful and
possible, notice of said service upon such agent shall be mailed by registered
or certified air mail, postage prepaid, return receipt requested, to the
Borrower at its address specified in or pursuant to Section 11.01. The Borrower
irrevocably waives, to the fullest extent permitted by law, all claim of error
by reason of service in such manner and agrees that such service shall be deemed
in every respect effective service of process upon the Borrower in any such
suit, action or proceeding and shall, to the fullest extent permitted by law,
constitute valid and personal service upon and personal delivery to the
Borrower.
(e) Nothing in this Section shall affect the right of the Administrative
Agent or any Bank to serve process in any other manner permitted by law or limit
the right of the Administrative Agent or any Bank to bring proceedings against
the Borrower in the courts of any jurisdiction or jurisdictions.
SECTION 11.09. Counterparts; Integration. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement, the other Loan Documents and the Fee Letter constitute the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
40
SECTION 11.10. Waiver of Jury Trial. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.11. Confidentiality. Each Bank agrees to exercise all reasonable
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Bank
from disclosing such information (i) to any other Bank, (ii) to its affiliates
and its and their officers, directors, employees, agents, attorneys and
accountants who have a need to know such information in accordance with
customary banking practices and who receive such information having been made
aware of the restrictions set forth in this Section, (iii) upon the order of any
court or administrative agency, (iv) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (v) which has
been publicly disclosed, (vi) to the extent reasonably required in connection
with any litigation to which the Administrative Agent, any Bank, or their
respective affiliates may be a party, (vii) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (viii) to such Bank's
legal counsel and independent auditors, and (ix) to any actual or proposed
participant or assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this Section.
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CK WITCO CORPORATION
By______________________________________
Name: John R. Jepsen
Title: Treasurer
By______________________________________
Name: Robert Marchitello
Title: Assistant Treasurer
CK Witco Corporation
One American Lane
Greenwich, CT 06831
Attention: Treasurer
Copy to: Vice President and General
Counsel
Facsimile number: 203-552-2202
42
MERRILL LYNCH CAPITAL
CORPORATION, individually and as
Administrative Agent, Syndication Agent
and Lead Arranger,
By______________________________________
Name:
Title:
Commitment: $50,000,000
250 Vesey Street
World Financial Center, 16th Floor
New York, New York 10281-1316
Attention of:
For Amendments, Financials, etc:
Cesar Apostol
Phone: 212-449-7441
Fax: 212-449-2372
or
Carol Feeley
Phone: 212-449-8414
Fax: 212-738-1649
43
For Loan Activity and Interest:
Mark Campbell
Phone: 212-449-6996/7019
Fax: 212-738-1719
44
PRICING SCHEDULE
Each of "FACILITY FEE RATE", "EURO-DOLLAR MARGIN", "BASE RATE MARGIN" and
"CD MARGIN" means, for any day, the rate set forth below in the row opposite
such term and in the column corresponding to the Pricing Level that applies on
such day as determined based on the ratings by Moody's and S&P:
Level I Level II Level III Level IV Level V
Pricing Level A-/A3 BBB+/Baa1 BBB/Baa2 BBB-/Baa3 <BBB-/Baa3
Facility Fee Rate .090% .110% .125% .150% .200%
Euro-Dollar Margin .335% .390% .500% .725% 1.050%
CD Margin 1.585% 1.640% 1.750% 1.975% 2.300%
Utilization Fee 0.125% 0.125% 0.125% 0.250% 0.250%
Base Rate Margin 0.000% 0.000% 0.000% 0.000% 0.050%
For purposes of this Schedule, the following terms have the following
meanings:
"MOODY'S" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement, and any rating assigned to any other
debt security of the Borrower shall be disregarded. The ratings in effect for
any day are those in effect at the close of business on such day. In the case of
split ratings from S&P and Moody's, the rating to be used to determine the
applicable Pricing Level is the higher of the two ratings (e.g., A-/Baa1 results
in Level I Pricing) or, if the ratings differ by more than one Level indicated
above, the rating one above the lower of the two ratings; provided that if one
of such ratings is below Level III, the Pricing Level will be based on the lower
of such ratings.
EXHIBIT A
NOTE
New York, New York
, 19
For value received, CK Witco Corporation, a Delaware corporation (the
"Borrower"), promises to pay to the order of [name of Bank] (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan
or as otherwise provided in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Merrill Lynch
Capital Corporation, 250 Vesey Street, World Financial Center, 16th Floor, New
York, NY 10281-1316.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof, provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated as
of December 23, 1999 among CK Witco Corporation, each of the financial
institutions as are or may become parties thereto as a bank, and Merrill Lynch
Capital Corporation, as Administrative Agent (as the same may be amended from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the Credit Agreement
for provisions for the prepayment hereof and the acceleration of the maturity
hereof.
CK WITCO CORPORATION
By _____________________________________________________________________
Name:
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Date Amount of Type of Principal Maturity Notation
Loan Loan Repaid Date Made By
2
EXHIBIT B
OPINION OF JOHN T. FERGUSON, II, ESQ.,
GENERAL COUNSEL OF THE BORROWER
December 23, 1999
To the Banks and the Administrative
Agent Referred to Below
[ ]
Dear Sirs:
I am General Counsel of CK Witco Corporation (the "Borrower"). This opinion
is being rendered to you pursuant to Section 3.01(b) of the Credit Agreement
dated as of December 23, 1999 (the "Credit Agreement") among the Borrower, each
of the financial institutions as are or may become parties thereto as a Bank and
Merrill Lynch Capital Corporation, as Administrative Agent. Terms defined in the
Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and officers of the Borrower and its Subsidiaries and other
instruments and have conducted such other investigations of fact and law as I
have deemed necessary or advisable for purposes of this opinion. I have assumed,
with your permission, that the signatures (other than those of officers of the
Borrower and its Subsidiaries) on all the documents that I have examined are
genuine.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and has all corporate
powers required to carry on its business as now conducted. Each of the
Borrower's Subsidiaries which is a "significant subsidiary" within the meaning
of Regulation S-X of the Securities and Exchange Commission is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers required to carry on its business as
now conducted.
2. The execution, delivery and performance by each Loan Party of the Loan
Documents to which it is a party are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and require no
action by or in respect of, or filing with, any governmental agency or official.
3. The execution, delivery and performance by the Borrower of the Credit
Agreement and by the other Loan Parties of the Loan Documents to which they are
parties will not contravene, or constitute a default under, any provision of
applicable law or Regulation or of the
articles of incorporation or bylaws of any Loan Party or any agreement or
instrument evidencing Debt of any Loan Party or, to the best of my knowledge,
any other agreement, judgment, injunction, order, decree or other instrument
binding upon any Loan Party or, to the best of my knowledge, result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
4. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the other Loan Documents constitute valid and binding
agreements of the Loan Parties that are party thereto.
5. Except as disclosed in the Borrower's S-4 as filed with the Securities
and Exchange Commission on July 28, 1999, there is no action, suit or proceeding
pending against, or to the best of my knowledge threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business or consolidated financial position of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or which in any manner draws into question
the validity of the Credit Agreement, any other Loan Document or the Notes. For
the purposes hereof, I have not regarded an action, suit or proceeding to be
"threatened" against the Borrower or any of its Subsidiaries unless the
potential litigant has manifested to the management of the Borrower in writing
an intention to institute the same.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by any other person without my prior written consent.
Very truly yours,
2
EXHIBIT C
OPINION OF
WACHTELL LIPTON ROSEN & KATZ,
SPECIAL COUNSEL FOR THE COMPANY
December 23, 1999
To the Banks and the Administrative Agent
Referred to Below
[ ]
[ ]
Dear Sirs:
We have acted as special counsel to CK Witco Corporation, a Delaware
corporation (the "Borrower"), in connection with the Credit Agreement (the
"Credit Agreement") dated as of December 23, 1999 among the Borrower, each of
the financial institutions as are or may become parties thereto as a Bank (the
"Banks") and Merrill Lynch Capital Corporation, as Administrative Agent. This
opinion is being delivered pursuant to Section 3.01(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the Credit
Agreement and its Notes are within the corporate powers of the Borrower, and
have been duly authorized by a necessary corporate action.
2. The Loan Documents constitute valid and binding agreements of the
Borrower and the Loan Parties party thereto, in each case enforceable against
the Borrower and such Loan Parties in accordance with their respective terms,
except to the extent the same may be limited by applicable bankruptcy,
moratorium, insolvency, reorganization or similar laws of general application
and by general principles of equity (whether considered in a proceeding at law
or in equity).
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving the foregoing opinion, we
express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
2
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _______, 19_ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), [CK WITCO CORPORATION (the "Borrower")] and MERRILL
LYNCH CAPITAL CORPORATION, as Administrative Agent.
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to the Credit Agreement dated as of December 23, 1999 among the Borrower, the
Assignor, each of the financial institutions as are or may become party thereto
as a Bank, and the Administrative Agent (as the same may be amended or modified
from time to time, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans in an aggregate amount at any time
outstanding not to exceed $________________;
WHEREAS, Loans made by the Assignor under the Credit Agreement in the
aggregate amount of $_____ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
[Commitment/outstanding Loans] thereunder in an amount equal to $_________ (the
"Assigned Amount"), and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Loans made by the Assignor outstanding at the date hereof. Upon the execution
and delivery hereof by the Assignor, the Assignee, [the Borrower] and the
Administrative Agent and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the obligations of a
Bank under the Credit Agreement with [a Commitment/outstanding Loans] in an
amount equal to the Assigned Amount, and (ii) the [Commitment/outstanding Loans]
of the Assignor shall, as of the date hereof, be reduced by a like amount and
the Assignor released from its obligations under the Credit Agreement to the
extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof, in Dollars (in Federal Funds), the amount heretofore agreed between
them.1 It is understood that facility fees accrued to the date hereof are for
the account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Administrative Agent. This
Agreement is conditioned upon the consent of the [Borrower] and the
Administrative Agent pursuant to Section 11.06(c) of the Credit Agreement. The
execution of this Agreement [by the Borrower] and the Administrative Agent is
evidence of this consent. Pursuant to Section 11.06(c) the Borrower agrees, if
requested by the Assignee, to execute and deliver a Note payable to the order of
the Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
2
1 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any up
front fee to be paid by the Assignor to the Assignee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By____________________________
Name:
Title:
[ASSIGNEE]
By____________________________
Name:
Title:
[CK WITCO CORPORATION
By____________________________
Name:
Title: ]
MERRILL LYNCH CAPITAL
CORPORATION, as Administrative
Agent
By____________________________
Name:
Title:
3
EXHIBIT E
SUBSIDIARY GUARANTEE AGREEMENT (together with instruments
executed and delivered pursuant to Section 19, this "Agreement") dated
as of December 23, 1999, among each of the subsidiaries of CK Witco
Corporation (the "Borrower") listed on Schedule I hereto (the
"Subsidiary Guarantors"), and Merrill Lynch Capital Corporation
("Merrill Lynch"), as administrative agent (in such capacity, the
"Administrative Agent") for the Banks (as defined in the Credit
Agreement referred to below).
Reference is made to the Credit Agreement dated as of December 23, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, each of the financial institutions as are or
may become parties thereto as a Bank and the Administrative Agent. Capitalized
terms used and not defined herein are used with the meanings assigned to such
terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrower pursuant to, and upon
the terms and subject to the conditions specified in, the Credit Agreement. Each
of the Subsidiary Guarantors is a Subsidiary of the Borrower and acknowledges
that it will derive substantial benefit from the making of the Loans by the
Banks to the Borrower. The obligations of the Banks to make Loans are
conditioned on, among other things, the execution and delivery by the Subsidiary
Guarantors of a Subsidiary Guarantee Agreement in the form hereof. As
consideration therefor and in order to induce the Banks to make Loans, the
Subsidiary Guarantors are willing to execute this Agreement for the benefit of
the Administrative Agent, the Banks and each counterparty to a Derivatives
Obligation with the Borrower which was an Affiliate of a Bank at the time such
Derivatives Obligation was entered into (collectively, the "Lending Parties").
Accordingly, the parties hereto agree as follows:
SECTION 1. Subsidiary Guarantee. Each Subsidiary Guarantor unconditionally
guarantees, jointly with the other Subsidiary Guarantors and severally, as a
primary obligor and not merely as a surety, the due and punctual payment of (i)
the principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower to the Lending Parties under this
Agreement, the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Borrower under or pursuant to this Agreement, the Credit Agreement and
the other Loan Documents, (c) the due and punctual payment and performance of
all the covenants, agreements, obligations and liabilities of each Loan Party
under or pursuant to this Agreement and the other Loan Documents, and (d) unless
otherwise agreed upon in writing by the applicable Bank party thereto, the due
and punctual payment and performance of all obligations of the Borrower,
monetary or otherwise, under each Derivatives Obligation entered into
with any counterparty that was a Bank (or an Affiliate of a Bank) at the time
such Derivatives Obligation was entered into (all the monetary and other
obligations referred to in the preceding lettered clauses of this paragraph
being referred to collectively as the "Obligations"). Each Subsidiary Guarantor
waives notice of and hereby consents to any agreements or arrangements
whatsoever by the Lending Parties with any other person pertaining to the
Obligations, including agreements and arrangements for payment, extension,
renewal, subordination, composition, arrangement, discharge or release of the
whole or any part of the Obligations, or for the discharge or surrender of any
or all security, or for the compromise, whether by way of acceptance of part
payment or otherwise, and the same shall in no way impair such Subsidiary
Guarantor's liability hereunder.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, each Subsidiary Guarantor waives presentment to, demand of
payment from and protest to the Borrower or any other person of any of the
Obligations, and also waives notice of acceptance of its guarantee, notice of
protest for nonpayment, and all other formalities. To the fullest extent
permitted by applicable law, the obligations of each Subsidiary Guarantor
hereunder shall not be affected by (a) the failure of any Loan Party to assert
any claim or demand or to enforce or exercise any right or remedy against the
Borrower or any other Subsidiary Guarantor under the provisions of the Credit
Agreement, any other Loan Document or otherwise, (b) any extension, renewal or
increase of or in any of the Obligations, (c) any rescission, waiver, amendment
or modification of, or any release from, any of the terms or provisions of this
Agreement, the Credit Agreement, any other Loan Document, any guarantee or any
other agreement or instrument, including with respect to any other Subsidiary
Guarantor under this Agreement, (d) the release of (or the failure to perfect a
security interest in) any of the security held by or on behalf of the
Administrative Agent or any other Lending Party or (e) the failure or delay of
any Lending Party to exercise any right or remedy against any other guarantor of
the Obligations.
SECTION 3. Security. Each of the Subsidiary Guarantors authorizes the
Administrative Agent to, subject to the terms of any security agreement that may
hereafter be entered into by the Administrative Agent and any Subsidiary
Guarantor or Borrower, (a) take and hold security for the payment of this
Subsidiary Guarantee and the Obligations and exchange, enforce, waive and
release any such security, (b) apply such security and direct the order or
manner of sale thereof as it in its sole discretion may determine subject to the
terms of any other Loan Documents and (c) release or substitute any one or more
endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Subsidiary Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Lending Party to any of the security held for
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Lending Party in favor of the
Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations of
each Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense (other than a defense of payment) or
setoff, coun-
2
terclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent or any other Lending Party to assert any
claim or demand or to enforce any remedy under the Credit Agreement, any other
Loan Document, any guarantee or any other agreement or instrument, by any
amendment, waiver or modification of any provision of the Credit Agreement or
any other Loan Document or other agreement or instrument, by any default,
failure or delay, wilful or otherwise, in the performance of the Obligations, or
by any other act, omission or delay to do any other act that may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or that would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of all the
Obligations) or which would impair or eliminate any right of such Subsidiary
Guarantor to subrogation.
SECTION 6. Defenses Waived. To the fullest extent permitted by applicable
law, each of the Subsidiary Guarantors waives any defense based on or arising
out of the unenforceability of the Obligations or any part thereof from any
cause or the cessation from any cause of the liability (other than the final and
indefeasible payment in full in cash of the Obligations) of the Borrower or any
other person. The Administrative Agent and the other Lending Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other guarantor or exercise any
other right or remedy available to them against the Borrower or any other
guarantor, without affecting or impairing in any way the liability of any
Subsidiary Guarantor hereunder except to the extent the Obligations have been
fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each
of the Subsidiary Guarantors waives any defense arising out of any such election
even though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Subsidiary Guarantor against the Borrower or any other guarantor or any
security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing
and not in limitation of any other right that the Administrative Agent or any
other Lending Party has at law or in equity against any Subsidiary Guarantor by
virtue hereof, upon the failure of the Borrower or any other Loan Party to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Subsidiary Guarantor
hereby promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent or such other Lending Party as designated thereby in cash
an amount equal to the unpaid principal amount of such Obligations then due,
together with accrued and unpaid interest and fees on such Obligations. Upon
payment by any Subsidiary Guarantor of any sums to the Administrative Agent or
any Lending Party as provided above, all rights of such Subsidiary Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower or any Subsidiary now or hereafter held by any Subsidiary Guarantor is
hereby subordinated in right of payment to the prior payment in full of the
Obligations. If at any time when any Obligation then due and owing has not been
paid, any amount shall be paid to any Subsidiary Guarantor on account of (i)
such subrogation, contribution, reim-
3
bursement, indemnity or similar right or (ii) any such indebtedness, such amount
shall be held in trust for the benefit of the Lending Parties and shall
forthwith be paid to the Administrative Agent to be credited against the payment
of the Obligations, whether matured or unmatured, in accordance with the terms
of the Loan Documents.
SECTION 8. Information. Each of the Subsidiary Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
such Subsidiary Guarantor assumes and incurs hereunder and agrees that none of
the Administrative Agent or the other Lending Parties will have any duty to
advise any of the Subsidiary Guarantors of information known to it or any of
them regarding such circumstances or risks.
SECTION 9. Representations and Warranties. Each of the Subsidiary
Guarantors represents and warrants as to itself that all representations and
warranties relating to it contained in the Credit Agreement are true and
correct.
SECTION 10. Termination. The Guarantees made hereunder (a) shall terminate
when (i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on all Loans and (ii) all other obligations then due and owing, have
in each case been indefeasibly paid in full and the Banks have no further
commitment to lend under the Credit Agreement and (b) shall continue to be
effective or be reinstated, as the case may be, if at any time any payment, or
any part thereof, on any Obligation is rescinded or must otherwise be restored
by any Lending Party upon the bankruptcy or reorganization of the Borrower, or
any Subsidiary Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments; Releases.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Subsidiary
Guarantors that are contained in this Agreement shall bind and inure to the
benefit of each party hereto and their respective successors and assigns. This
Agreement shall become effective as to any Subsidiary Guarantor when a
counterpart hereof (or a Supplement referred to in Section 19) executed on
behalf of such Subsidiary Guarantor shall have been delivered to the
Administrative Agent and a counterpart hereof (or a Supplement referred to in
Section 19) shall have been executed on behalf of the Administrative Agent, and
thereafter shall be binding upon such Subsidiary Guarantor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Subsidiary Guarantor, the Administrative Agent and
the other Lending Parties, and their respective successors and assigns, except
that no Subsidiary Guarantor shall have the right to assign its rights or
obligations hereunder or any interest herein (and any such attempted assignment
shall be void). This Agreement shall be construed as a separate agreement with
respect to each Subsidiary Guarantor and may be amended, modified, supplemented,
waived or released with respect to any Subsidiary Guarantor without the approval
of any other Subsidiary Guarantor and without affecting the obligations of any
other Subsidiary Guarantor. The Administrative Agent is hereby expressly
authorized to, and agrees upon request of the Borrower it will, release any
Subsidiary Guarantor from its obligations hereunder in the event (i) that all
the capital stock of such Subsidiary Guarantor shall be sold,
4
transferred or otherwise disposed of to a person that is not an Affiliate of the
Borrower in a transaction permitted by Section 5.09 of the Credit Agreement or
(ii) the Borrower requests such release in writing accompanied by a certificate
of a Principal Officer certifying that no Default shall have occurred and be
continuing and that the requirements of Section 5.11 of the Credit Agreement
shall be met immediately following such release.
SECTION 12. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent
hereunder and of the other Lending Parties under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Subsidiary Guarantor therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Subsidiary Guarantors to which such waiver, amendment or modification relates
and the Administrative Agent with consent required under the Credit Agreement.
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 11.01 of the Credit Agreement. All
communications and notices hereunder to each Subsidiary Guarantor shall be given
to it at its address set forth in Schedule I with a copy to the Borrower.
SECTION 15. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by the Subsidiary Guarantors
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Administrative Agent and the other
Secured Parties and shall survive the making by the Banks of the Loans
regardless of any investigation made by the Lending Parties or on their behalf,
and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any other fee or amount payable under this
Agreement or any other Loan Document is outstanding and unpaid.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision
5
in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 16. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 11. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each
Subsidiary Guarantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any Subsidiary Guarantor or its properties in the courts
of any jurisdiction.
(b) Each Subsidiary Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
by mail to the address provided in Section 14. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 18. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
6
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
SECTION 19. Additional Subsidiary Guarantors. Pursuant to 5.11 of the
Credit Agreement, the Borrower must ensure that Subsidiaries are (or become
within 10 Domestic Business Days of being formed or acquired) Subsidiary
Guarantors so that certain asset and revenue criteria are met. Upon execution
and delivery after the date hereof by the Administrative Agent and such a
Subsidiary of a Supplement in the form of Annex 1, such Subsidiary shall become
a Subsidiary Guarantor hereunder with the same force and effect as if originally
named as a Subsidiary Guarantor herein. The execution and delivery of any
Supplement adding an additional Subsidiary Guarantor as a party to this
Agreement shall not require the consent of any other Subsidiary Guarantor
hereunder. The rights and obligations of each Subsidiary Guarantor hereunder
(other than any Subsidiary Guarantor released pursuant to Section 11 hereof)
shall remain in full force and effect notwithstanding (a) the addition of any
new Subsidiary Guarantor as a party to this Agreement or (b) the release of any
other Subsidiary Guarantor pursuant to Section 11 hereof.
SECTION 20. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lending Party 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 Lending Party to or
for the credit or the account of any Subsidiary Guarantor against any or all the
obligations of such Subsidiary Guarantor now or hereafter existing under this
Agreement and the other Loan Documents held by such Lending Party, irrespective
of whether or not the Administrative Agent or any Lending Party shall have made
any demand under this Agreement or any other Loan Document and although such
obligations may be unmatured. The rights of each Lending Party under this
Section 20 are in addition to other rights and remedies (including other rights
of setoff) which such Lending Party may have.
7
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO,
By_____________________________
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION, as Administrative Agent,
By_____________________________
Name:
Title:
8
Schedule I to the
Subsidiary Guarantee Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc.
World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex to the
Subsidiary Guarantee Agreement
SUPPLEMENT NO. dated as of , to the Subsidiary Guarantee
Agreement dated as of December 23, 1999 (the "Subsidiary Guarantee
Agreement"), among each of the subsidiaries of CK Witco Corporation
(the "Borrower") listed on Schedule I thereto (the "Subsidiary
Guarantors"), and Merrill Lynch Capital Corporation ("Merrill Lynch"),
as administrative agent (in such capacity, the "Administrative Agent")
for the Lending Parties (as defined in the Subsidiary Guarantee
Agreement).
A. Reference is made to the Credit Agreement dated as of December 23, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, each of the financial institutions as are or
may become parties thereto as a Bank and the Administrative Agent.
B. Capitalized terms used and not otherwise defined herein are used with
the meanings assigned to such terms in the Subsidiary Guarantee Agreement and
the Credit Agreement.
C. The Subsidiary Guarantors have entered into the Subsidiary Guarantee
Agreement in order to induce the Banks to make Loans. Pursuant to Section 5.11
of the Credit Agreement, the Borrower must ensure that Domestic Subsidiaries are
(or become within 10 Domestic Business Days of being formed or acquired)
Subsidiary Guarantors so that certain asset and revenue criteria are met.
Section 19 of the Subsidiary Guarantee Agreement provides that additional
Subsidiaries may become Subsidiary Guarantors under the Subsidiary Guarantee
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary of the Borrower (the "New Subsidiary
Guarantor") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Subsidiary Guarantor under the Subsidiary
Guarantee Agreement in order to induce the Banks to make additional Loans and as
consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Subsidiary Guarantor
agree as follows:
SECTION 1. In accordance with Section 19 of the Subsidiary Guarantee
Agreement, the New Subsidiary Guarantor by its signature below becomes a
Subsidiary Guarantor under the Subsidiary Guarantee Agreement with the same
force and effect as if originally named therein as a Subsidiary Guarantor and
the New Subsidiary Guarantor hereby (a) agrees to all the terms and provisions
of the Subsidiary Guarantee Agreement applicable to it as a Subsidiary Guarantor
thereunder (including its guarantee of the Obligations) and (b) represents and
warrants that the representations and warranties made by it as a Subsidiary
Guarantor thereunder are true and correct on and as of the date hereof. Each
reference to a "Subsidiary Guarantor" in the Subsidiary Guarantee Agreement
shall be deemed to include the New Subsidiary Guarantor.
SECTION 2. The New Subsidiary Guarantor represents and warrants to the
Administrative Agent and the other Lending Parties that this Supplement has been
duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Subsidiary Guarantor and the
Administrative Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Subsidiary
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Subsidiary Guarantee Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision hereof in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction). The
parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 14 of the Subsidiary Guarantee Agreement. All
communications and notices hereunder to the New Subsidiary Guarantor shall be
given to it at the address set forth under its signature below, with a copy to
the Borrower.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse the
Administrative Agent for its out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Administrative Agent.
2
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the Administrative
Agent have duly executed this Supplement to the Subsidiary Guarantee Agreement
as of the day and year first above written.
[Name Of New Subsidiary Guarantor],
by
_______________________________
Name:
Title:
Address:_________________________
____________________________
____________________________
MERRILL LYNCH CAPITAL
CORPORATION, as Administrative
Agent,
by
_______________________________
Name:
Title:
3
EXHIBIT F
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT (together with
instruments executed and delivered pursuant to Section 11, this
"Agreement") dated as of December 23, 1999, among CK WITCO
CORPORATION, a Delaware corporation (the "Borrower"), each subsidiary
of the Borrower listed on Schedule I hereto (the "Subsidiary
Guarantors") and MERRILL LYNCH CAPITAL CORPORATION, as administrative
agent (in such capacity, the "Administrative Agent") for the Lending
Parties (as defined below).
Reference is made to (a) the Credit Agreement dated as of December 23, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, each of the financial institutions as are or
may become parties thereto as a Bank and the Administrative Agent and (b) the
Subsidiary Guarantee Agreement dated as of December 23, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Guarantors and the Administrative Agent.
Capitalized terms used herein and not defined herein are used with the meanings
assigned to such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrower pursuant to, and upon
the terms and subject to the conditions specified in, the Credit Agreement. The
Subsidiary Guarantors have guaranteed such Loans and the other Obligations (as
defined in the Subsidiary Guarantee Agreement) pursuant to the Subsidiary
Guarantee Agreement. The obligations of the Banks to make Loans are conditioned
on, among other things, the execution and delivery by the Borrower and the
Subsidiary Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Subsidiary Guarantor and the Administrative
Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Subsidiary Guarantors may have under applicable
law (but subject to Section 3), the Borrower agrees that in the event a payment
shall be made by any Subsidiary Guarantor under the Subsidiary Guarantee
Agreement, the Borrower shall indemnify such Subsidiary Guarantor for the full
amount of such payment and, until such indemnification obligation shall have
been satisfied, such Subsidiary Guarantor shall be subrogated to the rights of
the person to whom such payment shall have been made to the extent of such
payment.
SECTION 2. Contribution and Subrogation. Each Subsidiary Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Subsidiary Guarantor under the Subsidiary
Guarantee and such other Subsidiary Guarantor (the "Claiming Guarantor") shall
not have been fully indemnified by the Borrower as provided in Section 1, the
Contributing Guarantor shall, to the extent the Claiming Guarantor shall not
have been so indemnified by the Borrower, indemnify the Claiming Guarantor in an
amount equal to the amount of such payment multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto
pursuant to Section 11, the date of the Supplement hereto
executed and delivered by such Subsidiary Guarantor) and the denominator shall
be the aggregate net worth of all the Subsidiary Guarantors on the date hereof
(or, in the case of any Subsidiary Guarantor becoming a party hereto pursuant to
Section 11, the date of the Supplement hereto executed and delivered by such
Subsidiary Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights
of such Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this Agreement
to the contrary, all rights of the Subsidiary Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations. No failure on the part of the Borrower or any
Subsidiary Guarantor to make the payments required by Sections 1 and 2 (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Subsidiary Guarantor with respect
to its obligations hereunder, and each Subsidiary Guarantor shall remain liable
for the full amount of the obligations of such Subsidiary Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full force
and effect so long as the Subsidiary Guarantee Agreement has not been
terminated, and shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of any Obligation is rescinded
or must otherwise be restored by any Lending Party upon the bankruptcy or
reorganization of the Borrower, any Subsidiary Guarantor or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
Administrative Agent or any Subsidiary Guarantor to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any Subsidiary Guarantor preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law. None of the Administrative Agent and the Subsidiary
Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Borrower, the Subsidiary Guarantors and the Administrative Agent, with any
consent required under the Credit Agreement.
SECTION 7. Notices. All communications and notices hereunder shall be in
writing and given as provided in the Credit Agreement or the Subsidiary
Guarantee Agreement, as applicable, and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns
2
of such party; and all covenants, promises and agreements by or on behalf of the
parties that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns. Neither the Borrower nor any
Subsidiary Guarantor may assign or transfer any of its rights or obligations
hereunder (and any such attempted assignment or transfer shall be void) without
the prior written consent of the Required Banks. Notwithstanding the foregoing,
at the time any Subsidiary Guarantor is released from its obligations under the
Subsidiary Guarantee Agreement in accordance with the Subsidiary Guarantee
Agreement and the Credit Agreement, such Subsidiary Guarantor will cease to have
any rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by the Borrower and each Subsidiary Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or the other Loan Documents shall be considered to have been relied
upon by the Administrative Agent, the Banks and each Subsidiary Guarantor, shall
survive the making by the Banks of the Loans and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loans or
any other fee or amount payable under the Credit Agreement, this Agreement or
any of the other Loan Documents is outstanding and unpaid or the Commitments
have not been terminated.
(b) In case any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed in counter parts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall be effective with respect to any
Subsidiary Guarantor when a counterpart bearing the signature of such Subsidiary
Guarantor shall have been delivered to the Administrative Agent. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Additional Subsidiary Guarantors; Release. Pursuant to Section
5.11 of the Credit Agreement, the Borrower must ensure that Domestic
Subsidiaries are (or become within 10 Domestic Business Days of being formed or
acquired) Subsidiary Guarantors so that certain asset and revenue criteria are
met. Upon execution and delivery, after the date hereof, by the Administrative
Agent and such a Subsidiary of an instrument in the form of Annex 1 hereto, such
Subsidiary shall become a Subsidiary Guarantor hereunder with the same force and
effect as if originally named as a Subsidiary Guarantor hereunder. The execution
and delivery of any instrument adding an additional Subsidiary Guarantor as a
party to this Agreement shall not require the consent of any Subsidiary
Guarantor hereunder. The rights and obligations of each Subsidiary Guarantor
hereunder (other than any Subsidiary Guarantor released pursuant to this Section
11) shall remain in full force and effect notwithstanding (a) the addition of
any new Subsidiary Guarantor as a party to this Agreement or (b) the release of
any other Subsidiary Guarantor pursuant to Section 11 of the Subsidiary
Guarantee Agreement. Each Subsidiary Guarantor
3
shall be released from its obligations under this Agreement without further
action upon its release from its obligations under the Subsidiary Guarantee
Agreement in accordance with Section 11 thereof.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
CK WITCO CORPORATION,
By____________________________
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO,
By____________________________
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION, as Administrative Agent,
By____________________________
Name:
Title:
5
SCHEDULE I
to the Indemnity, Subrogation
and Contribution Agreement
Subsidiary Guarantor Address
Uniroyal Chemical Company, Inc.
World Headquarters
Benson Road
Middlebury, CT 06749
Attn: Chief Financial Officer
Annex 1
to the Indemnity, Subrogation
and Contribution Agreement
SUPPLEMENT NO. (this "Supplement") dated as of [ ], to the
Indemnity, Subrogation and Contribution Agreement dated as of December
23, 1999 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Indemnity, Subrogation and
Contribution Agreement"), among CK Witco Corporation, a Delaware
corporation (the "Borrower"), each subsidiary of the Borrower listed
on Schedule I thereto (the "Subsidiary Guarantors") and Merrill Lynch
Capital Corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the Banks.
A. Reference is made to (a) the Credit Agreement dated as of December 23,
1999, (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Borrower, each of the financial institutions as
are or may become parties thereto as a Bank and the Administrative Agent and (b)
the Subsidiary Guarantee Agreement dated as of December 23, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Guarantors and the Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.
C. The Borrower and the Subsidiary Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Banks
to make Loans. Pursuant to Section 5.11 of the Credit Agreement, the Borrower
must ensure that Subsidiaries are (or become within 10 Domestic Business Days of
being formed or acquired) Subsidiary Guarantors so that certain asset and
revenue criteria are met. Section 11 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries may become
Subsidiary Guarantors under the Indemnity, Subrogation and Contribution
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Guarantor") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Subsidiary Guarantor under the Indemnity, Subrogation and Contribution
Agreement in order to induce the Banks to make additional Loans and as
consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 11 of the Indemnity, Subrogation and
Contribution Agreement, the New Guarantor by its signature below becomes a
Subsidiary Guarantor under the Indemnity, Subrogation and Contribution Agreement
with the same force and effect as if originally named therein as a Subsidiary
Guarantor and the New Guarantor hereby agrees to all the terms and provisions of
the Indemnity, Subrogation and Contribution Agreement applicable to it as a
Subsidiary Guarantor thereunder. Each reference to a "Subsidiary Guarantor" in
the
Indemnity, Subrogation and Contribution Agreement shall be deemed to include the
New Guarantor.
SECTION 2. The New Guarantor represents and warrants to the Administrative
Agent and the Banks that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Administrative Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 7 of the Indemnity, Subrogation and Contribution
Agreement. All communications and notices hereunder to the New Guarantor shall
be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Administrative Agent.
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[Name Of New Guarantor],
by
_________________________________
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION, as Administrative
Agent,
by
_________________________________
Name:
Title:
3