FIRST AMENDMENT dated as of September 24, 2001,
(this "Amendment") to the FIVE-YEAR CREDIT AGREEMENT
dated as of October 28, 1999 (as amended, supplemented or
otherwise modified from time to time, the "Five-Year Credit
Agreement"), among CROMPTON CORPORATION (formerly
known as CK Witco Corporation) (the "Company"), the Eligible
Subsidiaries referred to therein, the BANKS listed on the
signature pages thereof, THE CHASE MANHATTAN BANK, as
Syndication Agent, CITIBANK, N.A., as Administrative Agent,
BANK OF AMERICA, N.A. and DEUTSCHE BANC ALEX.
BROWN INC. (formerly known as DEUTSCHE BANK
SECURITIES INC.), as the Co-Documentation Agents, and J.P.
MORGAN SECURITIES INC., as Lead Arranger and Sole
Bookrunner.
WHEREAS, the Company, the Eligible Subsidiaries, certain Banks,
the Co-Documentation Agents, the Syndication Agent and the
Administrative Agent are parties to the
Five-Year Credit Agreement;
WHEREAS, pursuant to the Five-Year Credit Agreement, the Banks
have agreed to make certain loans to the Company; and
WHEREAS, the Company has requested that certain provisions of the
Five-Year Credit Agreement be modified in the manner provided in this
Amendment by (i) amending the definitions set forth in Section 1.01
of the Five-Year Credit Agreement, (ii) deleting the
references to the utilization fee in Section 2.08 of the Five-
Year Credit Agreement, (iii) amending the prepayment provisions
set forth in Section 2.11 of the Five-Year Credit
Agreement, (iv) amending the representations and warranties set
forth in Article 4 of the Five-Year Credit Agreement,
(v) amending Article 5 of the Five-Year Credit Agreement and
(vi) amending the Pricing Schedule attached to the Five-Year
Credit Agreement, all as provided below;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, the Company and the
undersigned Banks hereby agree as follows:
SECTION 1. Defined Terms. Capitalized terms used but not
defined herein have the meanings assigned to them in the Five-Year
Credit Agreement as amended hereby.
SECTION 2. Amendment to Section 1.01. Section 1.01 of the Five-
Year Credit Agreement is hereby amended by:
(a) replacing the definition of "364-Day Credit Agreement" in its
entirety with the following:
'"364-Day Credit Agreement' means the 364-Day Credit Agreement
dated as of October 28, 1999 as amended and restated on October
26, 2000 and September 24, 2001, among
the Company, the eligible subsidiaries named therein, Citibank,
N.A. as administrative agent, the banks named therein, The Chase
Manhattan Bank, as syndication agent, and the co-
documentation agents named therein, as may be further amended
from time to time."
(b) replacing the definition of "Company" in its entirety with
the following:
"'Company' means Crompton Corporation, a Delaware corporation,
and its successors."
(c) adding the following defined terms in the correct
alphabetical order:
"'Asset Sale' means the sale, transfer or other disposition (by
way of merger or formation of a joint venture or otherwise) by the
Company or any of the Subsidiaries to any
person (other than a sale, transfer or other disposition to the
Company or any Subsidiary) of (a) any capital stock of or other
equity interest in any Subsidiary or (b) any other assets, whether
real or personal and whether tangible or intangible, of the
Company or any Subsidiary; provided that the following shall not
be deemed to be "Asset Sales" for purposes of this Agreement: (i) any
sale, transfer or other disposition of inventory in the ordinary
course of business, (ii) sales of accounts receivable, (iii) any
disposition of damaged, obsolete, surplus or worn out assets, in
each case in the ordinary course of business, (iv) any asset sale
described in clause (a) above resulting in Net Cash Proceeds
not in excess of $10,000,000 and (v) any asset sale described in
clause (b) above resulting in Net Cash Proceeds not in excess of
$10,000,000.
'Company's 10-K Report' means the Company's annual report on Form
10-K as filed with the Securities and Exchange Commission.
'Company's 10-Q Report' means the Company's quarterly report on
Form 10-Q as filed with the Securities and Exchange Commission.
'Long Term Incentive Plan' means the Company's 1998 Long Term
Incentive Plan effective as of October 14, 1998, any replacement
thereof and any additional long term incentive plan for its
management, as such may be amended or supplemented from time to time.
'Net Cash Proceeds' means, with respect to any Asset Sale, the
gross cash proceeds thereof, including any cash received in
respect of any non-cash proceeds, but only as
and when received, less legal expenses, commissions, taxes and
other fees and expenses reasonably incurred in connection therewith.
'Required Leverage Ratio' means the covenant level for the
Leverage Ratio that the Company is required to meet in accordance
with Section 5.07(a)."
SECTION 3. Amendment to Section 2.08. Section 2.08 of the Five-
Year Credit Agreement is hereby amended by:
(a) replacing Section 2.08(c) of the Five-Year Credit Agreement
in its entirety as follows:
(c) The Company agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times
separately agreed upon between the Company and the Administrative
Agent.
(b) deleting the words "and utilization fees" from the
penultimate sentence of Section 2.08(d).
SECTION 4. Amendment to Section 2.11. Section 2.11 of the Five-
Year Credit Agreement is hereby amended by adding a new clause
(f) at the end thereof as follows:
(f) In the event and on each occasion that the Company or any
Subsidiary shall complete any Asset Sale, the Company shall, not
later than the third Business Day following any
receipt by the Company or any Subsidiary of Net Cash Proceeds
with respect to such Asset Sale (i) prepay Total Debt in an amount
equal to (A) if the Required Leverage Ratio is greater than
3.50 to 1.00, 100% of such Net Cash Proceeds and (B) if the
Required Leverage Ratio is equal to or less than 3.50 to 1.00,
0% of such Net Cash Proceeds (ii) if the Required Leverage
Ratio is greater than 3.50 to 1.00, provide a certificate
executed by a financial officer of the Company
(a) describing the asset sold, (b) setting forth the aggregate
amount of Net Cash Proceeds received and the calculation
thereof and (c) setting forth the application of such Net Cash
Proceeds.
SECTION 5. Amendments to Article 4.
(a) Section 4.04 of the Five-Year Credit Agreement is hereby
replaced in its entirety as follows:
SECTION 4.04. Financial Information. (a) The unaudited
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of June 30, 2001 and the related
consolidated statement of operations for the six months then
ended, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Company
and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations for such periods.
(b) Since December 31, 2000, there has been no material adverse
change in the business, financial position or results of operations
of the Company and its Consolidated Subsidiaries, considered
as a whole.
(c) the Management Projections contained in the Confidential
Information Memorandum dated August 2001, relating to the credit
facility hereunder, were prepared in good
faith on the basis of assumptions believed to be reasonable at
the time such assumptions were made.
(b) Section 4.05 of the Five-Year Credit Agreement is hereby
replaced in its entirety as follows:
SECTION 4.05. Litigation. Except as disclosed in the Company's
10-K Report for the fiscal year ended December 31, 2000 as
supplemented by the Company's 10-Q Report for
the fiscal quarter ended March 31, 2001 and the Company's 10-Q
Report for the fiscal quarter ended June 30, 2001, there is no
action, suit or proceeding pending against, or to the knowledge
of the Company threatened against or affecting, the Company 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 Company and its Consolidated Subsidiaries
or which in any manner draws into question
the validity or enforceability of any Loan Document or the
Notes.
(c) Section 4.07 of the Five-Year Credit Agreement is hereby
replaced in its entirety as follows:
SECTION 4.07. Environmental Matters. In the ordinary course of
its business, the Company conducts an ongoing review of the effect
of Environmental Laws on the business, operations and properties
of the Company 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
Company has reasonably concluded that, except as disclosed in the
Company's 10-K Report for the fiscal year ended
December 31, 2000 as supplemented by the Company's 10-Q Report
for the fiscal quarter ended March 31, 2001 and the Company's 10-Q
Report for the fiscal quarter ended June 30, 2001,
Environmental Laws are unlikely to have a material adverse effect
on the business, financial position or results of operations of the
Company and its Consolidated Subsidiaries, considered as
a whole.
SECTION 6. Amendments to Article 5.
(a) Section 5.07(a) of the Five-Year Credit Agreement is hereby
replaced in its entirety as follows:
(a) The Company will not permit the Leverage Ratio at any time
during any period beginning on a date set forth below and ending
on a date immediately preceding the next such date to be in excess
of the ratio set forth below opposite such initial date:
Date Ratio
July 1, 2001 4.25 to 1.00
April 1, 2002 4.00 to 1.00
October 1, 2002 3.75 to 1.00
January 1, 2003 3.50 to 1.00
provided that, if the Company receives Net Cash Proceeds from
Asset Sales after the date of this Amendment and Restatement
in an aggregate amount (i) greater than or equal to
$100,000,000 and less than $200,000,000, the required Leverage
Ratio shall thereafter be the greater of (x) 3.50 to 1.00 and
(y) the appropriate covenant level as set forth above
minus 0.25, (ii) greater than or equal to $200,000,000 and less
than $300,000,000, the required Leverage Ratio shall thereafter
be the greater of (x) 3.50 to 1.00 and (y) the
appropriate covenant level as set forth above minus 0.50 and
(iii) greater than or equal to $300,000,000, the required
Leverage Ratio shall thereafter be the greater of (x) 3.50 to
1.00 and (y) the appropriate covenant level as set forth above
minus 0.75.
(b) Article 5 of the Five-Year Credit Agreement is hereby
amended by adding the following language at the end of
Article 5:
SECTION 5.12. Restricted Payments. At any time when the
Required Leverage Ratio is greater than 3.50 to 1.00, the Company
will not, and will not permit any of its
Subsidiaries to, make any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit,
on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any shares
of any class of capital stock of the Company or any option, warrant
or other right to acquire any such shares of
capital stock of the Company; provided that the Company shall be
permitted to purchase shares of capital stock of the Company that
may be required as a result of existing derivative contracts
relating to the Company's Long Term Incentive Plan.
SECTION 7. Amendment to Pricing Schedule. The Pricing Schedule
attached to the Five-Year Credit Agreement is hereby replaced
in its entirety with the Pricing Schedule attached hereto.
SECTION 8. Representations and Warranties. To induce the other
parties hereto to enter into this Amendment, the Company hereby
represents and warrants that, after giving effect to this
Amendment:
(a) The representations and warranties set forth in Article 4
of the Five-Year Credit Agreement, as amended by this Amendment,
shall be deemed to have been repeated in this Amendment on and as
of the date hereof, with all references to "this Agreement" being
deemed to refer to the Five-Year Credit Agreement, as
amended by this Amendment;
(b) No Default or Event of Default has occurred and is
continuing; and
(c) This Amendment has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
SECTION 9. Amendment Fee. The Company agrees to pay to the
Administrative Agent, for the account of each Bank that shall
have executed and delivered to the Administrative Agent a counterpart
of this Amendment a nonrefundable amendment fee equal to
0.125% of the aggregate amount of such Bank's Commitment, whether
used or unused, on the date hereof, payable in immediately available funds.
SECTION 10. Conditions to Effectiveness. This Amendment shall
become effective on the date on which (i) the Syndication Agent shall
have received counterparts of this Amendment that, when taken together,
bear the signatures of the Company, the Required Banks
and the Syndication Agent, (ii) the Administrative Agent shall
have received the Amendment Fees payable to the Banks under Section 9
above and (iii) the Administrative Agent shall have
received an opinion of John T. Ferguson II, Esq., General Counsel
of the Company in form and substance acceptable to it.
SECTION 11. Amendment. On the date of effectiveness of this
Amendment (which date is September 25, 2001) (the "Amendment Effective
Date"), the Five-Year Credit Agreement is amended hereby. On and after
the Amendment Effective Date, each reference in
the Five-Year Credit Agreement to "this Agreement", "hereunder",
"herein", or words of like import shall mean and be a reference to
the Five-Year Credit Agreement, as amended hereby.
SECTION 12. Effect of Amendment. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of or otherwise affect the rights and
remedies of the Banks under the Five-Year Credit Agreement or
any other Loan Documents, and shall not alter, modify, amend or
in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Five-Year Credit
Agreement or any other Loan Documents, all of which are ratified
and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle the
Company to a consent to, or a waiver, amendment, modification or
other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Five-Year Credit
Agreement or any other Loan Documents in similar or different
circumstances. This Amendment shall apply and be effective only
with respect to the provisions of the Five-Year
Credit Agreement specifically referred to herein.
SECTION 13. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original,
but all of which when taken together shall constitute but one
contract. Delivery of an executed counterpart of a signature
page of this Amendment by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof.
SECTION 14. APPLICABLE LAW. THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
SECTION 15. Headings. Section headings used herein are for
convenience of reference only, are not part of, and are not to be
taken into consideration in interpreting, this Amendment.
SECTION 16. Five-Year Credit Agreement. Except as expressly
amended hereby, the Five-Year Credit Agreement shall continue in full
force and effect in accordance with the provisions thereof.
SECTION 17. Expenses. The Company shall reimburse the
Syndication Agent for its expenses in connection with this
Amendment as separately agreed with the Syndication Agent,
including the reasonable fees, charges and disbursements of
Cravath, Swaine & Moore.
IN WITNESS WHEREOF, the Company, the Administrative Agent and the
undersigned Banks have caused this Amendment to be duly executed
by their duly authorized officers, all as of the date first above written.
CROMPTON CORPORATION,
By
/s/ John R. Jepsen
Name: John R. Jepsen
Title: Vice President & Treasurer
By
/s/Peter Barna
Name: Peter Barna
Title: Senior Vice President & Chief
Financial Officer
Each of the Subsidiary Guarantors hereby
acknowledges receipt of, and consents to the terms
of, this Amendment
CROMPTON MANUFACTURING COMPANY,
INC.,
By
/s/ John R. Jepsen
Name: John R. Jepsen
Title: Treasurer
CITIBANK, N.A., individually and as
Administrative Agent,
By
/s/ Carolyn A. Sheridan
Name: Carolyn A. Sheridan
Title: Managing Director
388 Greenwich Street, 21st Floor
New York, NY 10013
THE CHASE MANHATTAN BANK,
By
/s/ Stacey Haimes
Name: Stacey Haimes
Title: Vice President
270 Park Avenue
New York, NY 10017
BANK OF AMERICA, N.A.,
By
/s/ Wendy J. Gorman
Name: Wendy J. Gorman
Title: Principal
335 Madison Avenue
New York, NY 10017
DEUTSCHE BANK AG NEW YORK BRANCH
a/o CAYMAN ISLANDS BRANCH,
By
/s/ Jean M. Hannigan
Name: Jean M. Hannigan
Title: Director
By
/s/ Stephanie Strohe
Name: Stephanie Strohe
Title: Vice President
31 W. 52nd Street
New York, NY 10019
MELLON BANK, N.A.,
By
/s/ Michael T. Anselmo
Name: Michael T. Anselmo
Title: First Vice President
One Mellon Bank Center
Pittsburgh, PA 15258
ABN AMRO BANK N.V.,
By
/s/ David A. Mandell
Name: David A. Mandell
Title: Senior Vice President
By
/s/ Patricia Christy
Name: Patricia Christy
Title: Vice President
500 Park Avenue
New York, NY 10022
COMMERZBANK AG
NEW YORK AND GRAND CAYMAN
BRANCHES,
By
/s/ Robert J. Donohue
Name: Robert J. Donohue
Title: Senior Vice President
By
/s/ Robert S. Taylor, Jr.
Name: Robert S. Taylor, Jr.
Title: Senior Vice President
FOUR WINDS FUNDING CORPORATION,
as Designee,
By
/s/ Carl H. Jackson
Name: Carl H. Jackson
Title: Senior Vice President
By
/s/ James F. Ahern
Name: James F. Ahern
Title: Senior Vice President
Address:
BANK HAPOALIM B.M.
By
/s/ Shaun Breidbart
Name: Shaun Breidbart
Title: Vice President
By
/s/ Laura Anne Raffa
Name: Laura Anne Raffa
Title: Senior Vice President & Corporate
Manager
Address: 1177 Avenue of the Americas
New York, NY 10036
THE BANK OF NEW YORK,
By
/s/ Kenneth P. Sneider
Name: Kenneth P. Sneider
Title: Vice President
Address: 1 Wall Street, 22nd Floor
New York, NY 10286
FIRST UNION NATIONAL BANK,
By
/s/ Jorge A. Gonzalez
Name: Jorge A. Gonzalez
Title: Senior Vice President
301 W. College Street, TW-5
Charlotte, NC 28288-0760
FLEET NATIONAL BANK,
By
/s/ Esteban Arrondo
Name: Esteban Arrondo
Title: Vice President
1 Federal Street
Boston, MA 02110
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
By
/s/ P. Donnelly
Name: P. Donnelly
Title: Vice President
1251 Avenue of the Americas
New York, NY 10020-1104
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
By
/s/ Barry S. Wadler
Name: Barry S. Wadler
Title: Associate Director
By
/s/ Lisa Walker
Name: Lisa Walker
Title: Associate Director
1211 Avenue of the Americas
New York, NY 10036
THE BANK OF NOVA SCOTIA,
By
/s/ Todd Meller
Name: Todd Meller
Title: Managing Director
Address: One Liberty Plaza
New York, NY 10006
BNP PARIBAS,
By
/s/ William Van Nostrand
Name: William Van Nostrand
Title: Director
By
/s/ Nanette Baudon
Name: Nanette Baudon
Title: Vice President
787 Seventh Avenue
New York, NY 10019
`BANCA NAZIONALE DEL LAVORO S.P.A. -
NEW YORK BRANCH,
By
/s/ Leonardo Valentini
Name: Leonardo Valentini
Title: First Vice President
By
/s/ Juan J. Cortes
Name: Juan J. Cortes
Title: Vice President
25 West 51st Street
New York, NY 10019
SUNTRUST BANK,
By
/s/ Todd Sheets
Name: Todd Sheets
Title: Assistant Vice President
711 Fifth Avenue, 16th Floor
New York, NY 10022
INTESABCI NEW YORK BRANCH,
By
/s/ Frank Maffei
Name: Frank Maffei
Title: Vice President
By
/s/ J. Carlani
Name: J. Carlani
Title: Vice President
Address: One William Street
New York, NY 10004
ING (U.S.) CAPITAL LLC,
By
/s/ Ludwig Hoogstoel
Name: Ludwig Hoogstoel
Title: By Power of Attorney
1325 Avenue of the Americas
8th Floor
New York, NY 10019
BANCA MONTE DEI PASCHI DI SIENA S.P.A.,
By
/s/ S.M. Sondak
Name: S.M. Sondak
Title: F.V.P. & Dep. General Manager
By
/s/ Brian R. Landy
Name: Brian R. Landy
Title: Vice President
55 East 59th Street
New York, NY 10022
PEOPLE'S BANK,
By
/s/ Frank D. Cory
Name: Frank D. Cory
Title: Vice President
350 Bedford Street
Stamford, CT 06901
HIBERNIA NATIONAL BANK,
By
/s/ Corwin Dupree
Name: Corwin Dupree
Title: Bank Officer
313 Carondelet Street
New Orleans, LA 70130
PRICING SCHEDULE
Each of "Facility Fee Rate", "Euro-Dollar 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:
Pricing Level I Level II Level III Level IV Level V
Level A-/A3 BBB+/ BBB/B BBB- <BBB-
Baal aa2 /Baa3 /Baa3
Facility 0.100 0.125 0.150 0.200 0.250
Fee Rate % % % % %
Euro- 0.575 0.625 0.725 1.050 1.375
Dollar % % % % %
Margin
CD 1.825 1.875 1.975 2.300 2.625
Margin % % % % %
Base 0.000 0.000 0.125 0.250 0.500
Rate % % % % %
Margin
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 Company without third-party credit
enhancement, and any rating assigned to any other debt security
of the Company 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-/Baal results in Level
I Pricing) or, if the rating 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.